Housing affordability is prompting buyers to look further towards inland regional areas, with these markets providing an in-reach option, even though the biggest price jumpers are not in traditional lifestyle destinations.
Outback area Broken Hill, which is more than a 12-hour drive from Sydney, recorded the largest five-year median house price growth of any local government area in the state, according to Domain’s most recent House Price Report.
The remote region recorded a 100 per cent spike since 2021. Five years ago, a typical Broken Hill house cost $125,000, but now the median is $250,000.
“What’s really compelling about the regional LGAs in New South Wales is that the top performers weren’t all coastal lifestyle destinations over the past five years,” said Domain’s chief residential economist, Dr Nicola Powell.
Rounding out the top five are Cessnock LGA (towns including Kurri Kurri and Pokolbin, up 96.1 per cent), Dungog LGA (Paterson and Greford, up 95.4 per cent), Narrandera (Barellan and Grong Grong, up 94 per cent) and Muswellbrook (Denman and Wybong, up 88.6 per cent).
Many more affordable markets were probably benefiting from owner-occupier-driven demand and investor demand, Powell said.
“If you think of any LGA that is linked to mining or energy sectors, they tend to have high rental yields and lower entry pricing, which is attractive to an investor.”
However, investment demand alone doesn’t explain the phenomenal price growth.
“Mining and energy regions dominate in that top 10, so they benefit from stronger incomes and therefore housing demand,” Powell said.
KPMG urban economist Terry Rawnsley said the past five years had encompassed COVID lockdowns, which led the market to reassess regional housing.
“In some places, like Broken Hill, there’s just been a bit of a rising tide across the whole country … places like Cessnock, No. 2 on the list, that has had pretty good strong population growth over the last five years,” Rawnsley said.
“There might be teachers or nurses who are going: ‘Well, look, I can get a job in these places, and well, if I only pay $400,000 for a house to live in Liverpool Plains, that sounds great to me’.”
The Liverpool Plains LGA, about 350 kilometres north-west of Sydney, has recorded a 68.1 per cent jump in median house price growth since 2021.
Rawnsley said city buyers were helping money flow to regional areas.
“If you’ve cashed out from a Sydney property, you’re probably not too fussed about paying $650,000 or $700,000.”
Buyers, he said, help fill jobs, and more money spent in the community led to more vibrant cafes, bars and restaurants.
“Having young families come in revitalises those schools – the young people are great to the local footy clubs and netball clubs.
“Towns would much rather see their population growing than declining.”
Selling agent Matthew Handberg of Century 21 McLeod’s Broken Hill said of the LGA’s growth: “It doesn’t hugely surprise me.”
“Mainly because the previous 10 years prior to that the growth was very negligible, so it was due for an increase at some stage.”
Handberg noted that Broken Hill is still quite affordable compared with most places.
“I would say under $300,000, we’re seeing the most interest,” Handberg said, adding that the median price point of $250,000 could buy a 60-year-old, three-bedroom, two bathroom home.
“Very livable, comfortable enough without being brand new, but not being in need of full replacement or anything,” he said.
As a local resident, Handberg said the area had enough services and facilities for a family.
“Of course it’s not the same as a major regional centre or a capital city, but I think the livability here is quite good.”
Two hours up the M1 from Sydney, Cessnock is an almost “commutable to Sydney” location. The median house price in the LGA sits at $799,000.
Selling agent Bryce Gibson of LJ Hooker Cessnock said: “You’ll still get a very bread-and-butter home for that median house price.”
He said that a buyer could expect to purchase an older but renovated home, with three or four bedrooms.
“The surge in demand is coming from people chasing value … we are seeing a big portion of our purchases from the Sydney basin, Central Coast, Newcastle.”
Gibson also said the revolution has been people working from home, and that he had noticed some tradespeople working longer hours over a four-day workweek.
“You could still do a job that you were possibly doing in Sydney or Newcastle and be living in Cessnock while you’re doing it … particularly if you’re not afraid to do some kilometres.”
Gibson said buyers could get the benefits of nearby Newcastle too, while enjoying lower property prices at Cessnock.
“We’ve got the vineyard … award-winning wineries, restaurants, golf courses … We’ve got major hospitals, major sporting facilities all within an hour of us.”
