House prices fall from peak amid signs of cooling property market

Is the Covid-induced property boom coming to an end for regional Victoria? See the 33 towns and suburbs where median house prices have declined from their peak.

HOUSE prices have declined from their peak in suburbs across Victoria’s biggest regional cities in a sign that the property market is cooling after the pandemic.

Median house prices in six suburbs across Ballarat, five in the Geelong region and three in Bendigo have dropped by as much as $135,000 since hitting individual price peaks.

While the declines in most suburbs have been more marginal they paint an overall picture that the rate of growth is moderating as house prices ease from record levels.

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Newington in Ballarat has dropped 16 per cent since a peak at $825,000 in June, 2021, with the median house price in March at $690,000.

The median house price at Elliminyt, near Colac, has lost $60,000 since January, falling to $520,000.

Jan Juc is the most expensive suburb to pass its peak, declining from more than $1.35 million in October to $1.33 million in March.

REA Group director of economic research Cameron Kusher predicted more suburbs would experience value declines as the months progress.

“But when we look at the price falls, they are still minor and it is still early days,” Mr Kusher said.

“It could also reflect the types of properties selling.”

But Mr Kusher said the inflationary impact from buyers escaping Melbourne during the depths of Covid-19 lockdowns had lifted easing demand across Victoria’s three biggest regional cities.

In Ballarat, six suburbs have declined from a peak, with another three suburbs in Bendigo.

“We are living with Covid now so a lot of people who were going to make a move to the regions have probably already done it,” he said.

Six suburbs were identified in Ballarat where the median price has declined from a recent peak.

“The demand for lifestyle properties near Sydney and Melbourne has likely eased.”

Buxton, Geelong director Ben Riddle said the data showed the market was flattening after an period of enormous growth.

“If you asked me again in three months there will be 14 suburbs (in Geelong),” he said.

“The market has found its level and is going through an adjustment process where you are seeing minor decreases creeping in.”

Mr Riddle said rising in interest rates, speculation in an election year and other macro issues were also influencing decision-making.

“The Covid bubble is now over where people were buying homes irrationally without seeing them. That was like putting gasoline on a fire,” he said.

“Those people are now seeing properties from a more holistic point of view and making more rational decisions.”

Mr Riddle said auction results also suggested that change.

“They are still strong, but they are not what they were.

“You are seeing a few more properties pass in and still sell, if they are priced well. You are seeing more properties sit closer to guides.”

The figures for the six Ballarat suburbs were a surprise for Buxton agent Mark Nunn, but did correlate with a softening in the number of buyers active in the market this year.

“Last year was an abnormal year, so I think that benchmark from last year was a bit of a false economy anyway, because it jumped so much in the last year, that market is just correcting itself marginally,” he said.

Mr Nunn said affordability put Ballarat on the map.

“You get some real estate up here for $150,000 to $200,000 less than say Geelong, for example,” he said.

But he said the migration has slowed as restrictions for Covid eased.

“It was happening pre-Covid as well, I think that is was amplified and people definitely put Ballarat on the map.

“The whole work from home thing was very real. If I don’t have to work in the office in the city, places like Geelong, Ballarat and Bendigo have been options people have been considering because if they only needed an internet connection, they might as well spend less on a house to buy or a house to rent in a regional place.”

Originally published as House prices fall from peak amid signs of cooling property market