REGIONAL real estate value in Victoria has fared much better than in Melbourne in 2022, according to a CoreLogic report released last week, and Hamilton is still proving a great place to live.

Melbourne recorded the second-biggest capital city decline nationally for the year with 8.1 per cent, but regional Victoria only lost 1.3 per cent, with the market peaking in May 2022.

Almost 90 per cent of Melbourne suburbs lost value in the last three months of the year and much of the downturn has been attributed to rising interest rates.

Sydney recorded Australia’s largest annual value fall for 2022 with 12.1 per cent.

The 5.3 per cent drop in housing values through 2022 marks the first time since 2018 where national home values fell over the calendar year.

The 12 months to December also mark the largest calendar year decline since 2008, when values were down 6.4 per cent amid the Global Financial Crisis, and successive interest rate rises.

For perspective, the drop has come off a high base - the sharp decline in dwelling values follows an upswing of 28.9 per cent between September 2020 and May 2022, which was the fastest rise in home values nationally on record.

The fall in national home values may be the largest peak-to-trough decline on record, but at the end of 2022 home values were still 16.0 per cent higher than they were 5 years ago, and 59.8 per cent higher than they were 10 years ago.

Southern Grampians Real Estate residential property consultant, Nic Cullinane, said the relatively stable regional value was certainly reflected in the local market, but any peak occurred later.

“We peaked later in the year but have seen no downturn yet,” he said.

“Houses aren’t selling same day - for example - but still selling at same prices as peak.”

He said the disruption of COVID-19 lockdowns – “more like a bonanza in sales” – might be over but there was “still high demand for rentals”.

CoreLogic research director, Tim Lawless, said this has been a year of contrasts, with housing values mostly rising through the first four months of the year, but falling sharply as the RBA commenced the fastest rate tightening cycle on record.

“Our daily index series saw national home values peak on May 7, shortly after the cash rate moved off emergency lows,” he said.

“Since then, CoreLogic’s national index has fallen 8.2 per cent, following a dramatic 28.9 per cent rise in values through the upswing.”

Although housing values across the combined regional areas of Australia were roughly unchanged over the year (+0.1 per cent), results were more mixed across the states.

Annual falls across Regional NSW (2.7 per cent) and Regional Victoria (1.3 per cent) offset annual gains across the remaining regional markets.

“Regional SA has been the standout for growth conditions over the past year, with values up 17.1 per cent through 2022,” Mr Lawless said.

“The well-known Barossa wine region led the capital gains with a 23 per cent rise in values over the calendar year.”

Despite the downturn across many areas of the country, housing values generally remain well above pre-COVID levels.

Across the combined capital cities, dwelling values remained 11.7 per cent above where they were at the onset of COVID-19 (March 2020), while values across the combined regional markets are still up 32.2 per cent.

“Melbourne is the only capital city where the current downwards trend is getting close to wiping out the entirety of Covid gains, with dwelling values only 1.5 per cent above March 2020 levels,” Mr Lawless said.

“The relatively small difference between March 2020 and December 2022 levels can be attributed to a number of factors, including a larger drop in values during the early phase of Covid, a milder upswing through the growth cycle and the 8.3 per cent drop since values peaked in February.”

Migrants may also play a greater part of the future picture of regional areas.

The Regional Australia Institute (RAI) said increasing overseas migration will be vital to the growth and sustainability of regional Australia following the release of the 2022 Population Statement last Friday from the Centre for Population.

RAI chief executive, Liz Ritchie, welcomes the government’s focus on immigration and cited a renewed call to establish a national population plan in its recent submission to the Department of Home Affairs’ review of migration systems.

“The 2022 Population Statement projects in 2022-23 that less than 17 per cent of net overseas migration will flow to regional Australia,” she said.

“Regional Australia deserves a far greater share of Australia’s biggest driver of population growth.

“At a time when our regional cities and towns are crying out for skills and labour, reaching a record of over 96,000 job vacancies in late 2022, we need to be collectively looking at the systems and processes supporting migrants, so we have more calling regional Australia home.

“Migration will be critical to the growth and sustainability of regional Australia over the next decade.”

Mr Cullinane said the ‘treechange’ from the big smoke was still a factor, with the big selling point the space.

“We are still affordable with median price at 380k,” he said.

“Work from home opportunities are now a real option for much of the workforce so why not sell up in the city and move to the relative safety and larger land size of regional - especially Hamilton.”