Regional areas not immune from housing downturn

CoreLogic head of research Eliza Owen said housing values were likely to trend lower following the Reserve Bank of Australia's warning it would keep lifting interest rates to tame inflation.

"This is a trend we can expect to see playing out at least until interest rates top out," she said.

At the February meeting, the central bank lifted the cash rate for the ninth time and flagged at least two more increases to bring down soaring inflation.

Ms Owen said sellers would need to be realistic about their pricing and expect to negotiate with 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."

The regional market report also revealed a fading sheen on upmarket regional markets.

The premium hinterland and coastal Richmond-Tweed region in NSW recorded the weakest house price performance over the last 12 months.

But during the pandemic, house prices in the region soared 50 per cent.

"Since then much has changed with borders reopening, outbound travel returning, workers returning to the office not to mention the overlay of nine rate rises," Ms Owen said.    

The hot spot has since observed an 18.6 per cent decline in the 12 months to January.

Several regional areas observed growth, however, with the southeast region in South Australia recording annual value growth of 15.7 per cent.

The NSW region of New England and northwest surged 11.5 per cent and the Riverina lifted 10.1 per cent. 

"The surge in demand for areas such as New England and northwest 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," Ms Owen said.