Batemans Bay has been listed as one of the towns with the largest decline in dwelling values, according to new data.
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The CoreLogic Regional Market update data shows many areas in regional Australia have lagged capital city counterparts over the past year for rent and value growth.
The data analyses value and rent changes across the country's largest 50 non-capital Significant Urban Areas (SUAs) and shows rising interest rates, higher cost of living pressures and normalising internal migration patterns appear to have hit the regions harder.
Batemans Bay recorded the largest annual decrease of -6.9 per cent for property value growth.
CoreLogic Economist and report author Kaytlin Ezzy said there are other areas also experiencing similar decreases.
"These markets are now seeing weaker growth conditions after strong gains during the pandemic upswing," she said.
While Batemans Bay experienced a decrease in property value, St Georges Basin and Sanctuary Point recorded a quarterly growth increase of 4.3 percent and 3.9 percent respectively.
However, property markets in the Southern Highlands and Shoalhaven had some of the worst selling conditions over the past three months.
"St Georges Basin and Sanctuary Point offered the highest vendor discounts at -6.9 per cent and the Bowral and Mittagong area recorded the highest median time on market at 71 days," Ms Ezzy said.
Rental markets
Ms Ezzy said similar to values, growth in regional rents has also lagged.
Batemans Bay recorded some of the weakest rental growth, with rents dropping -5.4 percent over the quarter - the largest decrease across the regional markets.
Batemans Bay also recorded the highest annual decline in rental values, falling -9.3 per cent over the year.
"Mining and port regions were well represented in the top 10 list for the highest gross rental yields," Ms Ezzy said.
Following the RBA's decision to lift the cash rate another 25 basis points and the upwards revision in inflation forecasts, Ms Ezzy said there was a good chance of softer housing market conditions ahead.
"We're already seeing an easing in the pace of monthly growth across our largest cities, and this is a trend we can expect to see playing out more broadly at least until interest rates top out," she said.
"Higher interest rates, higher housing prices, higher rents and high cost of living pressures are likely to weigh on buyer sentiment leading into 2024."
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