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Tamworth has quietly become one of Australia's best performing regional markets. Yet the population growth is slowing down, the vacancy rate is edging higher, and the affordability is deteriorating. But what is really driving the growth? And where is it going from here? Now let's let the data speak.
Welcome back to another episode of our city by city market pressure review series. And now as you can see, we're moving it to let the data speak. Today, let's look at Tamworth, the regional center in North New South Wales. Tamworth has been growing well in the past one or two years. In the past 12 months, the total growth was actually a whopping 19%, easily one of the best performing markets across Australia.
And now what's going to happen next? Will the strong growth continue? Let's find it out by 10 charts. Now as usual, the 10 charts will be covering demographic and economic conditions, the sales market conditions, the rental market conditions, and as well as affordability. And then in the end, I'll be giving you our outlook on Tamworth's property market for the next six to 12 months.
Now let's get into the charts. Chart one here is an overview of the market performance. Price pressure and income and supply are scoring five out of five, meaning that both the established supply and income and supply are tight. In the rental market, rental pressure and rental yield are both scoring four out of five, still quite strong. Affordability now has dropped to three out of five as interest rates stay high and the prices have grown so much in the past two years.
Cycle position is now scoring three out of five. As we can see, Tamworth is well into its fast growing phase, so it is not in the most favorable position as some early cycle markets. Population growth rate has been trending downward since 2022. Instead of calling it weakening, I would say it's more likely because of a normalization after the surge in 2022 and 2023 in first internal migration and then overseas migration. While population growth rate has been trending downward, the local economy stays strong and resilient.
Job market is quite active. Unemployment rate has been trending upward since 2024. However, it is still just 3. 4% as of now, much lower than its past decade average of 4. 6%.
In the past two years, the number of job opportunities has been staying elevated compared to pre-COVID times. And also we are looking at this upward trend, especially in mid-2026. And at the same time, we are seeing this upward trend. In mid-2026, there is a surge in number of job opportunities, reaching almost the highest points in history. It's not necessarily a job market boom.
It could be because the natural increase in job ads towards the end of a financial year and the beginning of the next. Plus, Tamworth is a small market, so even a small number of new job ads could be causing that surge. However, it is definitely a strong signal that the local job market is staying strong and active. And the strong local economy and active job market in Tamworth is going to provide the city with a sustainable housing market in the medium to long term. Now let's look at chart four, and we are entering the sales market conditions.
Number of listings has been increasing in the past few months, especially in July 2026. It is actually very much in line with what we see across Australia in response to the new, I mean, in response to the tax reforms and high interest rates. But at the same time, sales volume has been steadily increasing since the end of 2025. That's a clear signal that as listings increase, the market is at the same time becoming more active. We can also see that in the inventory trend line.
While the number of listings has been increasing, inventory is staying low because of the sales volume is actually catching up with the supply increase. The strong demand can be seen in days on market trend as well. In chart five, you can see days on market has been trending downward steadily since the end of 2025. And now the trend is ongoing. As a result of the tight supply levels relative to demand, prices have been growing quite strongly over the past year, achieving a 18.
9% year on year growth. If we look at the dotted line, which is the three month rolling median price trend line, it is still well above the 12 month rolling median trend line. And in recent months, it's been going up consistently. That is a good sign that price growth in Tamworth is remaining strong. Now chart six, income and supply.
Tamworth's new house building approval rates have been quite consistent in the past decade, always staying low at around one to 1. 5%. This is giving us confidence that we wouldn't be seeing a large amount of new supply coming to the market at the same time, which could cause oversupply risks. Chart seven, long term growth or cycle position. In the past two decades, Tamworth's property markets performance has been aligning with many other big regional cities, as we can see in the similar numbers or similar growth rates over the past 20 years and over the past 10 years.
In the past five years, Tamworth's growth was exceptionally strong, achieving a 12% annualized growth. And as we see in the trend line, after a short slowdown in 23 and 24, it is trending up really strongly again. Moving forward, we wouldn't say that Tamworth is going to slow down just because of the high or strong growth in the past five years. In fact, looking at the tight supply in the sales market now, we will say Tamworth still has plenty of momentum to go ahead. Now chart eight and nine, we're talking about the rental markets conditions.
Vacancy rate has been trending upward since late 2025. It could be reflecting that more investors are entering the Tamworth market. But the thing with Tamworth is that it's a small market. We do not have a lot of rental stock. So even a small number of rental properties entering the market could cause an increase in vacancy rates.
But the thing with Tamworth is that it's a small rental market. It's a small property market, and we do not have a lot of rental stock anyway. So even it's just a small amount of new rental properties coming into the markets, it could cause an increase in vacancy rates. As we can see in the vacancy rates level, 1. 3% is still a low level for high pressure markets.
So the rental market condition is still quite tight. And that tightness has actually caused 10. 6% rental increase in the past year. Chart nine, rental yield or rental return rates for investors. This actually explains why, or at least partly explains why Tamworth has become one of the most popular markets for investors.
Rental yield, even after a bit decline, is still at a very healthy level of 4. 9%. That is much higher than many large regional cities in both New South Wales and other states. Now chart 10, affordability. Sales market affordability has deteriorated a lot since 2021 as the house prices boomed during COVID and during the past one year.
For local income earners, that's not good news. Of course, it's also because of the high interest rates we are having now. This is not good news for local income earners. If we look at affordability relatively instead of absolutely, Tamworth is actually still one of the most affordable markets or regional centers across Australia. Not just compared to New South Wales cities, but also compared to many other hotspot cities such as in Queensland or Western Australia.
Rental market affordability is much better than sales market affordability. As of now, median rental prices are still considered 20% undervalued compared to the local income levels. So moving forward, it is very likely that demand in the rental markets would stay strong because of the relative affordability. Now, what's going to happen in the next six to 12 months? As we have seen in the 10 charts, sales market remains tight in supply and strong in demand.
Days on market continues to go down and affordability is favorable compared to other regional centers. So while buyers' confidence might be slightly depressed because of the high interest rates and the tax reforms, we still expect very healthy growth to occur in Tamworth. So we would still expect very healthy above average or even double digit growth in Tamworth. As in the rental markets, vacancy rate stays low. Rental affordability is looking better than sales market affordability.
As a result, we would expect rental growth to remain strong as well. And in the medium to long term, we do not see oversupply risks and the strong local economy and active job market is going to provide Tamworth with a sustainable housing demand. So as a result, Tamworth will remain a resilient market for long term investors. So that was Tamworth in 10 charts. I hope you find it helpful.
If you have any questions, any thoughts, leave your comments below. As always, if you're serious about property investments, knowing data itself is not enough. If you are ready and not so sure where to go for yet, InvestorKit offers a 15 minute free discovery call. Find the info below. I'm Junge, the Senior Research Analyst at InvestorKit.
I'll see you next time.
