Affordable regional Victorian property markets 'selling like hot cakes'
Regional towns within a relatively short drive from Melbourne are witnessing strong sales volumes and outperforming the Victorian capital.
Regional Victorian properties look set to hold strong though the current national market downturn, with tourist towns and areas within a couple of hours drive from Melbourne set to fare best.
That’s the verdict of regional real estate agents with two decades experience selling homes in Victoria, who spoke to API Magazine.
The REIV’s December Quarterly Median Report reveals that regional Victorian house prices grew 8.0 per cent over the year to $610,000 while the annual median for Units and Apartments rose 6.5 per cent to $425,000.
Laura Waites, Director of OBrien Real Estate in East Gippsland, said while her agency had experienced a small drop, certain properties were still selling strong.
OBrien Real Estate saw 220 sales in 2021 and ended last year with 151. This partially came down to a “massive jump in the average sale price,” Ms Waites said.
The most popular properties of late were those under the $500,000 mark, which “sold like hot cakes”, with first home buyers eager to wedge their way into the property market.
East Gippsland proved strong with the Melburnian crowd, especially among younger families, many of whom flocked from the outer suburbs.
“A lot of our buyers are still coming from the outer suburbs of Melbourne.
“Mornington Peninsula in particular is where we get a lot of our buyers from,” Ms Waites said.
“Typically about 40 per cent of our buyers are from areas other than East Gippsland where we are based.”
Wine areas red hot
Asked about her buyer’s demographic, Ms Waites said OBrien Real Estate saw a mixed crowd.
“The ones that are moving to the areas are predominantly a mixture of retirees and young families,” she said.
“The locals are more like first home buyers, whereas retirees are in the area to downsize.”
Ms Waites said East Gippsland’s proximity to the Victorian wine country had attracted more and more buyers over the years.
The connection between strong property markets and vineyards was consistent with CoreLogic data, which found that the Barossa region in South Australia had delivered some of the best growth in the country, up 23 per cent over the past 12 months.
That rise is vastly different to the national housing market, which ended the year weaker, with CoreLogic’s Home Value Index showing property values fell 1.1 per cent last month.
The drop represented about one fifth of the damage done to the property market over the last year, which ended down 5.5 per cent over all. It was the first time since 2018 the housing market had fallen over the calendar year.
Regions outperforming the capital
While metropolitan cities have suffered the greatest declines, with Melbourne almost wiping out all of its pandemic gains, regional markets have fared much better than their more populated peers.
“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,” Tim Lawless, Research Director, CoreLogic, said.
The standout regional suburbs for quarterly growth were Kyneton, which added an impressive $100,000 to its median house price (topping out at $1,040,000), and the historic town of Stawell, growing 8.7 per cent this quarter and 21 per cent annually (to $375,000).
Regional Victoria saw a drop of just 1.3 per cent over the past year. This amount is a drop in the ocean compared to the 35 per cent peak the region saw through the pandemic. Regional Victorian properties have since dropped 6 per cent.
Houses earned a gross yield of 3.7 per cent on CoreLogic’s value index behind units with a gross yield of 4.5 per cent. The median home in regional Victoria was valued at $601,473 compared to the median unit at $409,666.
On the other side of the state, in the ever-popular seaside town of Torquay, McCartney Real Estate owner Tim Carson said tourists kept his market alive.
“Here in Torquay, and on the surf coast, we’re finding that our market is remaining pretty steady at the moment,” he said.
“There were really good numbers on the weekend at the first open for inspections that resulted in four sales. Throughout the week, we had another couple of offers again.”
Torquay sits about 97km southwest of Melbourne, or 21km south of Geelong, with a population of about 18,500.
Mr Carson said while he didn’t have a crystal ball, he did have confidence Torquay would bounce back from the slower period that arrived late in 2022.
“We found that by the end of 2022 things were a little bit slow. Those interest rate hikes that we got and went up really quickly certainly put a bit of fear in the market and I think that’s what the Reserve Bank and the government wanted to do,” he said.
“From my experience over the past 12 years, Torquay always levels off, so for now, I think things will plateau over the next 12 months.”
Mr Carson said many buyers had been planning their move for years and weren’t reliant on bank loans.
“We’re lucky here because we’re a tourist destination and we’re relatively close, an hour and 15 minutes, from Melbourne via the West Gate highway,” he said.
“We do have a lot of people that don’t purely rely on banks to buy properties.”
Torquay often attracted buyers from industries such as agriculture, automotive, construction and pharmaceuticals.
“These people have had surplus funds to be able to go ahead and buy that holiday home or investment property or relinquish a little bit of capital from their investment properties in Melbourne and move down.”