Western Australia has led national regional growth, with demand from Perth spilling over into non-metropolitan areas, while conditions ease in the east due to an affordability squeeze.

According to Cotality’s latest Regional Market Update, values in regional Western Australia rose 5.9 per cent over the three months to April, up from 5.6 per cent in the previous quarter.

Busselton recorded the largest quarterly growth of any Significant Urban Area (SUA) nationally at 7.5 per cent, followed closely by Albany (7.2 per cent), Geraldton (6.8 per cent), and Bunbury (5.8 per cent).

Regional Western Australia also recorded substantial annual gains, with values in Kalgoorlie-Boulder rising by 23.1 per cent, followed by Bunbury (22.3 per cent) and Busselton (22.0 per cent).

Cotality’s head of research for Australia, Gerard Burg, said the data showed that strength in south-west Western Australia was particularly notable.

“Busselton’s growth is occurring despite it having a higher median value than Greater Perth, which suggests this performance is being driven by more than just affordability,” he said.

“We’re seeing a significant spillover of demand from the Perth market into nearby regional hubs.”

The findings came as Perth’s dwelling values have surged due to low supply and above-average population growth, fuelling high demand.

Apart from Western Australia, strong conditions were also seen in Queensland, with Townsville (4.9 per cent), Maryborough (4.5 per cent), and Toowoomba (3.8 per cent) leading the quarterly growth.

Tasmania also saw renewed strength, primarily driven by Burnie-Somerset (4.8 per cent) and Launceston (4.8 per cent).

Contrastingly, NSW and Victoria saw localised declines across the quarter, with Bowral-Mittagong dropping 1.2 per cent and Albury-Wodonga, the only other major SUA to record a decline, falling by 0.2 per cent.

Burg said there was ultimately a clear loss of momentum at the national level, but regional markets remained more resilient than their capital counterparts.

“Affordability remains a central driver, with internal migration patterns continuing to favour regional areas where buyers can find greater value and a different pace of life,” he concluded.

This article was first published on Real Estate Business, a sister-brand of Property Buzz.