WITH Australia's COVID-induced whirlwind love affair with the country's hottest regional cities slowly coming to an end, Western Australia continues to buck country-wide trends.
CoreLogic's regional market update, which examines Australia's 25 largest non-capital city regions, shows 13 areas recorded an increase in house values over the year to January 2023, down from 21 over the year to October 2022.
However, WA's home value index (HMI) over the past 12 months has recorded a gradual rise in property prices, with only three towns - East Pilbara, Katanning and Kalgoorlie - reporting a decrease in prices.
The biggest climbers were Shark Bay, with a 23.7 per cent increase in HMI, Northampton, with a 16.8pc increase, and Dandaragan, with a 14.7pc increase.
Median days on the market continue to stay low, with Dardanup averaging only 13 days.
However, there has been an increase in the median vendor discounting for houses - the measure of the difference between listing price and selling price - with Greater Geraldton recording a -4.8pc difference.
Bunbury was the best performer Australia-wide, in comparison to the
25 largest non-capital city regions, for shortest day on the market - at a mere 24 days.
Elders Real Estate sales specialist Anthony Schirripa said it was common for him to sell properties within five days.
He said buyers were beginning to see how promising the South West region was, given the large infrastructure projects the government had begun implementing in the area.
"We still have the Bunbury Outer Ring Road being built, that's going to open up a massive opportunity to connect the whole South West region," Mr Schirripa said.
"I also have the feeling that the Busselton Airport will eventually open up to Brisbane, Adelaide, Darwin and Broome, which will allow a massive amount of people to enter the region."
Rental prices have skyrocketed in comparison to relatively low property prices, making the region perfect for investment.
"It's a very, very strong market at the moment - it's crazy," Mr Schirripa said.
In comparison, the rest of the country isn't performing as well.
The upmarket coastal and hinterland Richmond-Tweed region in New South Wales recorded the weakest performance across all metrics registering the lowest annual growth rate, largest drop in sales volumes, longest days on market and highest vendor discounts.
CoreLogic Head of Research Eliza Owen said the country's most popular lifestyle markets had been hardest hit by softer market conditions and rate increases.
"It is unsurprising the Richmond-Tweed region recorded the strongest decline in house values and a sharp increase in other important metrics," Ms Owen said.
"This was the region where values skyrocketed, with houses increasing more than 50pc during COVID, taking the median house value to more than $1.1 million.
"Since then much has changed with borders reopening, outbound travel returning, workers returning to the office - and the overlay of nine rate rises.
"It's been a swift and significant shift."
She said those regional areas where double-digit annual growth rates were still occurring were predominantly areas that had emerged from a long period of subdued capital growth performance.
"The COVID-boom unlocked enormous value across more affordable regional tree-change markets such as South Australia's South East region.
"The surge in demand for areas such as New England and North West was also likely to have been due to a spill over from nearby markets, such as Richmond-Tweed, where the strong migratory sea-change trend and low interest rates priced out many lower income households."
Richmond-Tweed's house market value fell 18.6pc in the year to January, with sales volumes down -36.1pc (in the year to November) and houses sitting on the market for 71 days.
Vendor discounting hit -8.3pc for the same period.
Despite the drastic shift in market conditions, houses in the region are still up 23.7pc on pre-COVID levels.
Following the Reserve Bank of Australia warning that further rate hikes would be necessary to curb inflation, Ms Owen said there was a good chance housing values will continue to trend lower and regional areas would not be immune from softer conditions.
"This is a trend we can expect to see playing out at least until interest rates top out," she said.
"With this in mind, sellers will need to be realistic about their pricing expectations, make sure they have a quality marketing campaign behind the property and be ready to expect some negotiation from buyers.
"Considering some of these regional values will have only moved through a peak in the cycle more recently, it's likely there will be a lag between buyers and sellers, and it may take some time for vendors to adjust their expectations."
However, Ms Owen noted that while some regional markets were experiencing sharp price falls, regional market performance overall remained more resilient than capital city dwelling markets.
Since the rate hiking cycle commenced in May, monthly value changes have averaged -0.8pc across regional Australia through to January, compared to -1.1pc in the capitals.
This also follows a larger price boom in the regions of 41.6pc compared to the combined capital's increase of 25.5pc.
Sign up for our newsletter to stay up to date.