4 hours ago
3
Victoria’s regional housing prices have reached a record high, and a string of far-flung towns have notched double-digit gains over the past year.
The cost of a typical house in regional Victoria reached a record $600,000 in the September quarter, up 2.2 per cent from three months earlier, the latest Domain House Price Report shows.
That was a 5.3 per cent gain over the past year, and came as house prices in Melbourne have been picking up too.
“It’s actually the fourth consecutive quarter of growth, which is the longest stretch of gains we’ve seen since that pandemic upswing in that 2020 to 2022 period,” Domain chief of research and economics Dr Nicola Powell said.
More Victorian LGAs rose than fell this quarter, with some, mostly towns a distance from Melbourne, rising more than 10 per cent.
Loading
Mildura recorded the highest annual increase in median house prices, up 16.8 per cent to $510,000 in the September quarter.
The Northern Grampians LGA, which includes the towns of Stawell, Halls Gap, and St Arnaud, was the second highest, up 14 per cent.
Horsham was third, increasing 13.7 per cent. The Mansfield and Alpine LGAs were fourth and fifth, up 12 per cent and 10.1 per cent respectively.
On the other hand, more moderate gains were observed in the LGA of Ballarat, up 6.9 per cent to $545,000, while Warrnambool increased by 6.5 per cent to $609,500.
Geelong prices held steady over the year, while prices edged lower in a few popular spots such as the Surf Coast (down 2 per cent) and the Hepburn shire (down 3 per cent).
Powell said momentum is being pushed back into regional Victorian house prices, and one of the biggest factors is the lower cash rate after three rate cuts from the Reserve Bank this year.
“A lower cash rate is absolutely helping. I think that’s been the game changer,” she said.
“We were meant to see a cash rate reduction last year, and it didn’t happen, but it’s come to fruition this year.”
Loading
Ray White’s chief economist, Nerida Conisbee, said the rise in house values could also indicate a post-pandemic recovery of the market.
“Regional Victoria took a really big hit following COVID, so prices did drop quite a bit and it didn’t see the same recovery that we saw elsewhere in around Australia,” she said.
Conisbee said that local factors are likely contributors too.
“I think it’s catch up and property has probably been under-priced, but I do think there would be some local factors – like job opportunities – that are also driving interest,” she said.
Powell agreed, citing Mildura as a prime example.
“I think it’s probably local job creation. Mildura is very agriculturally focused, and I think that agriculturally based economic stability is probably helping.”
Robert Stephens, director of First National Real Estate Collie & Tierney in Mildura, said the area attracts a wide range of workers.
“We have big horticultural, food and beverage manufacturing industries, as well as tourism due to the Murray River and the weather,” he explained.
Loading
“We are a large transport hub, and also have a big construction and health care industry.”
Stephens said Mildura has “a large number of seasonal workers [citrus pickers and packers and grape harvesters who] move here for work with many remaining in the area”.
He observed that there was higher demand than normal in the local property market, citing the cut in interest rates and interest from investors.
“We have seen an unprecedented number of ‘out of town’ investors buying in the Mildura area,” he said, with the most popular properties being “low-maintenance, brick veneer, three- or four-bedroom houses or two- or three-bedroom units or townhouses”.
In the Northern Grampians LGA, which had the second-highest increase in median house prices this year, Matt Monaghan from Monaghan’s Real Estate in Stawell said most buyers are looking for turnkey homes.
“Most people are chasing established homes – neat, low-maintenance properties they can move straight into without needing to do much,” he said.
Monaghan said there are a mix of buyers including tree changers, first home buyers, locals, and downsizers.
Like Mildura, the agent observed more investors in the area.
“We see plenty of investors, because rentals are in high demand here thanks to employment opportunities at places like Thomas Foods, the gold mine, hospital, council, schools, hospitality and aged and disability care services,” he said.
Looking ahead, Powell believes that house prices will continue to rise in regional Victoria.
“Momentum now that has returned to regional Victoria, this tells me we’re likely to see prices rise,” she said.
“We’ve also got the expanded home guarantee scheme, so there are no income caps, and it is a scheme designed for all Australians to purchase their first home. That is going to bring a wave of buyers.”
Most Viewed in Property
Loading
