Tweed Valley market reflections
MARKET ANALYSIS
CoreLogic Head of Research Australia Eliza Owen provides an analysis of the Tweed Valley market, four years on from the pandemic.
The median dwelling value across Tweed Valley was $966,027 in April, with overall dwelling market values having increased 1.0% in the three months to April. This included a 0.3% lift in detached house values, with a median of $1,081,535, and a 3.3% rise in the unit sector, where the median value was $747,422.
Like most big regional centres, growth in Tweed Valley was characterised by an extraordinary uplift between the onset of the pandemic, and a peak in early 2022 before the start of rate rises. The onset of COVID in March 2020 to the cyclical peak in March 2022 saw Tweed Valley dwelling values increase 62.0%, or the equivalent of a $366,000 rise in the median dwelling value. This was definitely one of the larger COVID upswings across the country, as desirable sea change markets saw a surge in demand amid the normalisation of remote work trends.
The market saw a corrective period between March 2022 and January 2023. The peak-to-trough fall in value through this period was -12.3%, amid rising interest rates, affordability constraints, deep lows in consumer sentiment readings and high cost of living pressures.
However, the market entered ‘recovery mode’ in 2023. As of April this year, values continued to rise, and were just -2.4% below the record high in March 2022. This recovery in home values is quite remarkable considering interest rates and cost of living pressures are still high, but this has proven to be a broad-based phenomenon across the Australian housing market. It is generally thought that tight supply levels have contributed to the floor under home values, where high migration has added to demand, and a slowdown in the completion of dwellings means supply is not keeping up. This is also reflected in total listings volumes across Tweed Valley, which was 566 properties for sale in the month of March, down 27% year-on-year.
“As we move further from the pandemic period, a lasting structural change in housing and work-life preferences seems to have made extraordinary value gains stick across the region.”
Since the onset of COVID, the cumulative change in dwelling values across the Tweed Valley was 58.1% through to the end of April this year. This is an outperformance of the broader Richmond Tweed region (where values have increased 48.9% in the same period), and the Australian dwelling market (up 34.4%). Tight rental markets have also contributed to upward pressure on prices, where rents have increased 7.9% in the past year, and have risen a cumulative 47.3% since the start of the pandemic.
While market conditions remain resilient in terms of rising value, there is some evidence that more demand is being skewed to slightly ‘cheaper’ pockets of the market. In the past 12 months, most of the highest growth rates have been in suburbs with a median value of less than $1,000,000. These include Bilambil Heights, both up 17.8%, Tweed Heads West which was up 15.8%, and Tweed Heads, up around 15.2% in the past 12 months. The reason for higher rates of growth in this segment may be the limited borrowing capacity of prospective buyers under high interest rates. At the other end of the spectrum, the lowest suburb-level growth rate observed in the past 12 months was across Kingscliff, where home values are relatively high for the region, and rose just 2.5% in the past 12 months. Values across Kingscliff were also flat in the March quarter.
Overall, the Tweed Valley market has tipped back in favour of sellers, after a brief decline in market conditions through 2022. Selling times have reduced to a median of 35 days in the three months to April, from 56 days a year prior. Sales volumes have risen over 15.6% in the past year. As we move further from the pandemic period, a lasting structural change in housing and work-life preferences seems to have made extraordinary value gains stick across the region.
