Internal migration a boon for regional housing markets

CoreLogic’s Home Value Index (HVI) for January 2025 has revealed national home values were steady during the month, decreasing by a meager 0.03 per cent, a result that was weighed down by a 0.2 per cent fall in capital city values.

However, across the combined regional areas, home values rose 0.4 per cent in January, reaching new record highs.

Although regional markets have shown a slowdown in value growth, the “combined regionals” index has recorded stronger monthly growth trends in relation to their capital city counterparts as seen throughout 2024 and now into the beginning of 2025.

CoreLogic’s research director Tim Lawless said the regional markets appear to be benefiting “from a second wind of internal migration, along with an affordability advantage in some markets, and what looks to be some permanency in hybrid working arrangements across some occupations and industries”.

Meanwhile, three of the nation’s capitals recorded falls in home values over January, with Melbourne recording the largest decline of 0.6 per cent, followed by the ACT (0.5 per cent) and Sydney (0.4 per cent).

Perth (0.4 per cent) and Brisbane (0.3 per cent) kept up with strong value growth; however, these capitals have clearly lost momentum, particularly in detached housing sectors.

Lawless said: “Perth is now recording a slower rate of growth than Brisbane and Adelaide over the rolling quarter.

“In the June quarter of 2024, growth in Perth home values was 7.1 per cent, easing back to just 1.0 per cent growth in the three months to January.”

CoreLogic said that with the first rate cut possibly coming during the February monetary policy meeting, along with improved consumer sentiment, there could be renewed support for housing prices over the next few months.

The belief in a February rate cut was particularly bolstered on the heels of the Australian Bureau of Statistics revealing further evidence of moderating inflation, with annual CPI inflation rising by 0.2 per cent to 2.4 per cent in the December quarter of 2024.

“Lower mortgage rates and a subsequent lift in borrowing capacity as well as an under supply of newly built housing could be setting the foundations for a relatively shallow housing downturn,” Lawless said.

“But the easing cycle for interest rates is likely to be a gradual one, and we also have the ongoing headwinds of affordability constraints, normalising population growth and generally soft economic conditions to contend with.

“All things considered, the likelihood of a significant growth cycle over the coming year remains low.”

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Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.