It was followed by the Hilltops council region in the south-west slopes, Singleton in the Hunter region, and Uralla, also in the New England region, where median prices jumped by a third over the year. Values in Lithgow also lifted more than 30 per cent.

Selling agent Brian Orvad, from Ray White Glen Innes, said the region had fielded increased buyer demand in recent years. Some were taking advantage of remote working to relocate to a more affordable area, while others were moving from regions hit by flooding or bushfires.

Homes were selling before officially hitting the market and sight unseen during the peak, Orvad said, and out-of-area buyers came from capital cities, south-east Queensland and coastal markets such as Coffs Harbour. It left some hopeful home buyers priced out and contending with an increasingly competitive rental market.

Orvad noted that demand and prices had eased in more recent months, but the market was still relatively strong, due to its more affordable price point.

“The number of enquiries has reduced, but our sales seem to be still ticking along at a steadier rate,” he said.

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In the Lithgow region, prices soared after strong local and out-of-area demand from tree-changers, holiday home buyers and investors, said Kristie Trouchet-Nilsson, principal of Hartley Realty & Lifestyle Properties.

Some who made a tree change had relocated back to Sydney and made sizeable profits on homes they bought and sold within a year.

While the market had cooled, good prices were still being achieved for most homes.

“There are some properties that have sat on the market for a while and have had a price drop, but others have been on the market for a day and are selling, generally [the market now is] stable,” she said.

Annual growth was more subdued, but still high, in more expensive markets that had high growth earlier in the boom. Median prices in Newcastle, Wollongong and Byron Bay were up by 10 per cent or less year-on-year.

Regional Australia Institute chief economist Kim Houghton said popular sea- and tree-change locations that recorded phenomenal price growth earlier in the boom were first to see a pullback in demand, resulting in stronger annual price growth in more affordable regions.

The boom had been driven by increased demand from out-of-areas buyers, a decrease in the number of homes for sale — as fewer regional Australians relocated to cities — and record low-interest rates, he said.

“We had increasing buyer interest at a time of decreased supply, which coincided with lower fixed rates, and that drove the sharp price rise, but all those factors have changed now,” he said.

Houghton expected price declines in regional Australia would be more subdued than in the capitals. While the number of people relocating to regional areas had reduced, record job vacancies were continuing to attract new people. Limited supply would also put a floor under price falls.

Houghton added that more supply would still be needed to address the housing and rental affordability crisis.

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