The promise of fleeing the high cost of living in Australia’s capital cities and finding reprieve in the regions is fast evaporating, with rental prices in nearly every part of the country hitting record highs.

Real estate analysts CoreLogic found rents in three quarters of Australia’s biggest regional areas were now higher than ever.

Batemans Bay in New South Wales had the biggest increases over the past three months, with rents going up the equivalent of $32 a week, or 6 per cent.

Bunbury in Western Australia and the Sunshine Coast in Queensland each had rental prices increase by more than 4 per cent in recent months, with Bunbury prices increasing by 20 per cent in the past year alone.

Across the country, there was not a single major regional centre that recorded a significant fall in rental prices.

Where the rent did fall, it was by a tiny amount.

The Pilbara mining hub of Karratha in WA fell 0.8 per cent to an average rent of more than $1,000, while the Maryborough in Queensland fell by 0.2 per cent to $478.

Costs ‘pushed through’ to renters

CoreLogic economist Kaytlin Ezzy said rental prices rarely went backwards unless forced down by an economic slowdown, but the increases were still unusual.

“We’re seeing rents rise at a pace much facer than the sort of typical pace, pre-COVID,” she said.

“Rents are rising at about 6 per cent across combined regional markets at a time when you would typically see rents rise annually by 2 per cent.

She said another likely reason was consistently high interest rates, which have remained above 4 per cent after steadily rising since 2022.

“[That is] putting a lot of pressure on both renters and also your investors,” Ms Ezzy said.

“Having to continue to service those higher mortgage costs are likely seeing some of that excess interest rates being pushed through to your renters.”

Renting across biggest 50 regions

Regional Victoria ‘worst performers’

Beyond the rental market, the CoreLogic data also examined house prices across the country’s biggest regional areas.

Western Australia dominated the quarterly numbers with Geraldton going up 8.8 per cent in three months, followed by Busselton (7.7pc) and Bunbury (6.4pc).

Homes in Bunbury also sold the fastest at an average of 14 days.

Queensland’s Rockhampton, Gladstone, Gold Coast-Tweed and Townsville were among the top 10 for quarterly growth, while New South Wales and Victoria had just one spot each.

The worst performing regional areas for house prices over recent months were Ballarat, outside Melbourne, and Port Macquarie on NSW’s Mid North Coast.

Port Macquarie and Ballarat house prices fell 2 per cent in the past three months.

Ballarat was also down 4.2 per cent in the past year, with average home prices now hovering at just over $540,000.

“Regional Victoria has been sort of one of the worst performers over the past couple of months,” Ms Ezzy said.

But she added it could simply be because there was not the same lack of homes that had been plaguing other areas.

She said while most places might have far fewer homes on the market, regional Victoria had 15 per cent above average.

Ms Ezzy said aside from WA properties that were “leaving everybody in the dust”, Queensland was the next top contender for value growth.

“Gladstone and Emerald and Rockhampton have seen some of the strongest growth over the past year. In fact, Rockhampton values are up about 16 per cent over the past year alone,” she said.

She said the consistent increase in property prices seemed “a bit contrary” given cost-of-living concerns, high interest rates and low consumer sentiment.

“[They] are all things that are generally correlated with a falling market,” Ms Ezzy said.

“But at the moment the mismatch between that supply and demand is kind of outweighing some of those more negative factors, and pushing values higher when most other factors say they should be falling.”