Regional Australia's property market is regaining momentum, recording its strongest pace of quarterly value growth since the since the start of the rate tightening cycle.

Cotality's November Regional Market Update shows regional dwelling values rose 2.4% over the three months to the end of October, their highest rate of growth in more than three years.

Cotality Australia Economist Kaytlin Ezzy said although capital city values lifted 2.9% over the same period, the continued uplift in the regions quarterly growth trend confirms the return to an upswing phase.

Ms Ezzy said that while the height of the regional centres pandemic surge was driven by remote work, lifestyle shifts and a desire for space, drivers of the current increase are quite different.

“Demand is being shaped less by lifestyle changes and more by affordability, constrained supply and competitive buying conditions in the capitals. The latest results confirm a renewed uplift in value growth across the regions, with buyers seeking value and accessible price points,” she said.

The report shows of Australia's largest 50 non-capital Significant Urban Areas (SUA), around 60% recorded an acceleration in the rate of growth over the three months to October, compared to the previous comparable quarter.

Ms Ezzy attributed the broad-based improvement to several factors including a tightening in supply and renewed buyer activity, following rate cuts and the introduction of the First Home Guarantee.

“Just like the capitals, buyers have become increasingly  active across regional areas, with improved borrowing capacity coming up against constrained stock, helping to push values higher,” she said.

“Affordability is certainly playing a part with the strongest growth markets concentrated in regions where a buyer's dollar stretches further despite scarce stock. As they have done for the past few years, Regional Western Australia and pockets of inland Queensland continue to be some of the best performing areas, but we're also seeing renewed growth in some that had been flat since 2022.”

Widespread lift in key regional hubs

Western Australia continues to lead the regions, with Kalgoorlie–Boulder up 8.1%, Geraldton increasing 7.4% and Albany rising 6.2% over the three months to October. Mildura–Buronga on the NSW/Victorian border ranked fourth, with values rising 5.4% over the quarter, followed closely by Toowoomba in Queensland at 5.3%.

Of the top 20 quarterly performers, 19 had median dwelling values below $1 million, with the upmarket WA coastal region of Busselton the only exception at $1,000,130.

“The top 20 list last quarter is dominated by markets where median prices remain well below the nearest capital city, and that speaks to where buyers are looking for value,” Ms Ezzy said.

Ms Ezzy said many of the same regions also featured strongly in the annual results, with Albany's 23.3% rise over the 12 months to October (adding about $136,000 to its $721,253, median value) the largest increase among the top 50 regional SUAs.

Eight of the 16 other regions that recorded double-digit annual growth were in Queensland, three were in New South Wales, two each were in South Australia and Western Australia and one was in Victoria.

Albany also had the shortest median time on market of 11 days and a median vendor discount rate of 2.0% over the year, behind only Mount Gambier in South Australia at 1.9%. Eight other markets (six in Queensland and two in Western Australia) recorded median selling times under 20 days, including Busselton, Mackay and Rockhampton at 14 days each.

“WA's far south-west dominated many of the key indicators, yet momentum hasn't been limited to one region or one price bracket. Strength is emerging across inland centres, coastal regions and mining-adjacent areas,” she said.

“It comes down to where buyers can still find relatively affordable housing options and where stock remains tightly held.”

NSW the weakest regional link

The Bowral–Mittagong region in New South Wales recorded the only annual decline in values (-1.2%), the highest vendor discounting rate at 5.4% and the longest median selling time at 77 days.

“The southern highland region was a favourite among COVID era city leavers but since peaking at the start of the rate tightening cycle the once darling region has lagged behind,” said Ms Ezzy. “

Arguably affordability, or lack thereof, has been a factor tempering demand. Despite being -13.5% or $181,901 below its May 2022 peak, The Bowral–Mittagong region continues to record the highest median value among the top 50 at $1,159,226.”

Bowral–Mittagong was also one of only four regions to record a quarterly fall, down -1.1% alongside St Georges Basin–Sanctuary Point (-1.2%), Batemans Bay (-1.1%) and Bathurst (-0.4%).

Regional rents pick up pace as vacancy rates tighten

Regional rental growth conditions strengthened through the quarter, supported by vacancy rates tightening from 1.8% in July to 1.5% in October, with 41 of the country's largest 50 regionals markets recording lower vacancy rates. Ms Ezzy said 11 markets now have vacancy rates below 1%, including Port Macquarie at 0.4%, Victor Harbor–Goolwa at 0.5% and Forster–Tuncurry at 0.7%.

45 markets recorded quarterly rent rises with Launceston posting the strongest increase at 3.8%, equivalent to an additional $19 per week. Morisset–Cooranbong (2.8%), Lismore (2.7%), Geraldton (2.5%), Tamworth (2.3%), Kalgoorlie–Boulder (2.2%) and Albany (2.1%) also recorded firm results.

Only five markets recorded quarterly rental declines, led by Albury–Wodonga at -1.3%. All 50 markets recorded annual rental growth, with Albany and Busselton achieving double-digit increases of 14.7% and 10.0% respectively.

Although regional yields remain higher than those in the capitals, with  values rising faster than rents, gross rental yields have shifted lower, to 4.3% in October.

Demand drivers and outlook

Affordability will remain a key driver for regional areas into 2026, Ms Ezzy said, as demand grows across the middle and lower price points.

A combination of active owner-occupiers and rising investor participation will also continue to place upwards pressure across the strongest-performing regional markets.

“ABS lending data shows that a record level of investor interest is emerging alongside consistent demand from first home buyers and subsequent buyer households,” she said.

“That will continue to have a flow on effect in regions  offering accessible price points and strong returns which could translate into  shorter selling times and more modest discounting in areas where stock is tightest.”

Key Insights – November 2025 Regional Market Update

• Regional dwelling values rose 2.4% over the quarter, the strongest quarterly result since May 2022
• Three in five of Australia's largest 50 non-capital Significant Urban Areas (SUA) recorded an acceleration in the rate of growth in the three months to October, compared to the previous comparable quarter.
• The strongest quarterly increases were all in Western Australia with Kalgoorlie–Boulder (8.1%), Geraldton (7.4%) and Albany (6.2%) the top performers.
• Albany recorded the strongest annual growth at 23.3%, as well as the shortest  days on market and one of the lowest vendor discounting rates.
• Bowral–Mittagong in the NSW Southern Highlands recorded the only annual decline in values at -1.2%, along with the longest days on market at 77 days
• Regional rents rose 1.2% over the quarter, taking the annual increase to 6.1%.

Combined regional vacancy rates tightened to 1.5% in October and gross regional yields compressed from 4.4% to 4.3% over the quarter.