Property prices in the Shoalhaven and Southern Highlands region grew more than four times faster than in the Illawarra over March, a sign of the increasingly fragmented nature of the regional property market.
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The figures, reported by CoreLogic, show the Shoalhaven and Southern Highlands continuing to outperform most other markets in the country, with prices there growing by 3 per cent.
Median values in the Illawarra were up by a more subdued 0.7 per cent, the slowest rate of growth in NSW outside of Sydney, which posted a fall in prices of -0.2 per cent.
The median dwelling price in the Illawarra is now $974,762 and in the Shoalhaven and Southern Highlands it is $1,017,815.
CoreLogic head of research Eliza Owen said that the disparity in growth figures could reflect the scarcity of property listings in the Southern Highlands and Shoalhaven.
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"Price growth is probably being supported by high end regional markets but it is becoming a bit more of a mixed bag," she said.
Despite the slower rate of growth in the Illawarra, as well as in comparably-sized population centres like the Newcastle and Lake Macquarie region, she expected regional values to remain resilient for some time.
Prices across regional Australia grew by 1.7 per cent over March, compared to 0.3 per cent in the capital cities.
Regional dwelling values increased 5.1 per cent in the three months to March, compared with the 1.5 per cent recorded across the combined capital cities. The quarterly growth rate in regional markets has not dipped below 5 per cent since February 2021.
"I think it [price growth] will stay elevated, regional markets continue to show very resilient growth. It's not at its peak that we saw in early 2021, where the quarterly growth rate to April was 8.6 per cent, that quarterly growth rate has eased but is holding up at 5.1 per cent," Ms Owen said.
Ms Owen said that regional prices typically lagged capital city movements by three to 12 months, but population changes and infrastructure investment meant it was difficult to predict when prices in the regions would stop growing.
"Historically there has been a lead-lag relationship where it has taken anywhere between three months and a year for major centres to follow the Sydney market," Ms Owen said.
"I think that lag could be a little more drawn out through the current cycle, just because of the extraordinary migration trends that we've seen to regional Australia and some of the major structural shifts happening through COVID."
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Jack Needham
Jack has been writing about real estate since 2015, covering residential and commercial property markets throughout Australia for the likes of Smart Property Investment and Domain. He has also spent time in the United States researching real estate trends, with a focus on housing affordability issues, for the California Association of Realtors.
Jack has been writing about real estate since 2015, covering residential and commercial property markets throughout Australia for the likes of Smart Property Investment and Domain. He has also spent time in the United States researching real estate trends, with a focus on housing affordability issues, for the California Association of Realtors.
