Where house prices grew fastest during the COVID-19 pandemic

House prices in the Far West and Orana region in NSW, which includes the city of Dubbo, have grown faster than any other regional location during the pandemic. Photo: Shutterstock
House prices in the Far West and Orana region in NSW, which includes the city of Dubbo, have grown faster than any other regional location during the pandemic. Photo: Shutterstock

New research has revealed the regional markets where house values have grown the fastest since the beginning of the COVID-19 pandemic, with one region clocking a 50 per cent price increase.

The figures, compiled by agency Ray White, measure price growth since March 2020, when the World Health Organisation declared COVID-19 a global pandemic.

The Far West and Orana region, which counts Dubbo, Broken Hill and Bourke among its major centres, recorded the highest price growth, with prices jumping by 57.3 per cent between March 2020 and September 2021.

Prices in the region currently sit at $275,174, up from $174,955 at the start of the pandemic.

While the 'lifestyle market', including sea and tree changers, was responsible for growth in most of the regions listed, that wasn't the case in all areas, according to Ray White Chief Economist Nerida Conisbee.

For example, Ms Conisbee said that it was a "mix of three factors - mining, agriculture and lifestyle" that had been driving growth in the Far West and Orana region.

Strong performance in the agriculture industry as well as an element of 'lifestyle' buyers relocating the region was likely behind Warrnambool's inclusion at seventh position on the list, according to Ms Conisbee.

Warnambool agent Penny Adamson, of Charles Stewart Real Estate, said that strong returns from agricultural commodities and renewable energy projects in the region had trickled through to the real estate market during the pandemic.

"We're finding there's a lot of surplus cash flow in the market from high commodity prices, as well as from people who aren't travelling overseas [and spending money on holidays]," she said.

"People are very cash flow strong - there's record low interest rates, record commodity prices across sheep, cattle, wool, dairy - all market sectors are aligning like we haven't seen before," she added.

Ms Adamson, who sells properties in the $800,000-plus bracket, said that inquiry from Melbourne-based buyers had also increased during the pandemic.

"Predominantly those buyers [in that price bracket] are cash buyers and we've got buyers upgrading their current homes, purchasing investment properties and purchasing escape properties," she said.

Price growth in the Warrnambool area had been subdued in the decade prior to 2020, said Ms Adamson, and she predicted the hot market had further to run.

In the Newcastle and Lake Macquarie region, which occupied tenth place on the list, an influx of Sydney buyers into suburbs traditionally shunned by locals had helped contribute to significant price growth, according to Ray White Newcastle Lake Macquarie director Darren Penn.

The region recorded a 34.2 per cent increase in prices during the pandemic, with a current median house price of $780,765.

"We're selling property to people who don't even know the suburbs they're buying in, they just want to get in the market," Mr Penn said.

Out of town interest had been strong at the beginning of the pandemic but had dropped off before a "groundswell" of activity during the 2021 NSW lockdowns.

The trend had been "interesting to watch," according to Mr Penn, with out of town buyers adopting a very different buying strategy to Novocastrians, who tended to be very "suburb specific".

"As we get the new buyers suburbs that were never that popular have scores that are keen on them because that out of town buyer is region specific, not suburb specific," he said.

Demand for Newcastle and Lake Macquarie property during the pandemic wasn't down to a single driver but a confluence of factors, according to Mr Penn.

As well as low stock stock levels and low interest rates, the region's proximity to Sydney was a major factor for buyers who wanted to enjoy regional living without moving far from Australia's largest city.

"The location of Newcastle itself, we're in a great spot but we're also located in close proximity to a very global city while remaining in a small regional space, with quality of life and space," he said.

"You put all of that together and the natural result of that is it [the market] has to go nuts. It's gone nuts but it will continue to go nuts," he added.

Other regions to record high growth included the Richmond Tweed, home to lifestyle hotspot Byron Bay.

Prices there were up 44.6 per cent since March 2022, with the median house price sitting at $883,488.

This story Where house prices grew fastest in the regions during the COVID-19 pandemic first appeared on Newcastle Herald.