Regional Victoria real estate offering better bang for buck

Housing affordability and reducing debt are two major factors luring city slickers to Victoria's regions – but how much cheaper is it?

The quaint 14 Park Street, Trentham, sold for $900,000 earlier this year – affordable by city standards, given its 802sq m block.

The opportunity to score “better bang for buck” is one of the biggest drawcards for city slickers considering a regional move.

And despite property prices rising in regions across the country, fuelled partially by Covid-driven demand, realestate.com.au data shows they remain much more affordable alternatives to the state capitals.

A median-priced house in regional Victoria costs $455,000 – substantially cheaper than the Melbourne figure of $800,000.

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Property Mavens’ Miriam Sandkuhler said people had been seeking affordability in the regions long before Covid-19. Picture: Beth Jennings

Some regions are even more achievable, led by the North West at $272,000, Shepparton at $355,000, and Warrnambool and the South West at $385,000.

A typical regional unit also costs $340,000 compared to $600,000 in the capital.

A recent Regional Australia Institute survey of more than 1000 capital city dwellers considering moving to a regional area found reducing the cost of living was one of the top-three factors driving people’s desire to leave big cities.

Four out of five Melbourne-based respondents said they would move for affordability and two-thirds, to reduce debt. These were the highest proportions of all the capitals.

Property Mavens chief executive Miriam Sandkuhler said these motivations had been in play long before the pandemic.

“People have been flocking to the regions for years, even pre-Covid-19, due to lack of affordability in Melbourne,” the buyer’s advocate said.

“Lower land values regionally ensure buyers get much better bang for buck and a better quality lifestyle.”

Further boosting affordability outside Melbourne for first-time buyers were government incentives, like stamp duty exemptions for purchases below $600,000 and the $20,000 First Home Owner Grant for new homes built in regional Victoria, she noted.

No. 10 Grattan St, North Bendigo, sold for $658,000 in June.

Ms Sandkuhler said Geelong, Ballarat and Bendigo had been the state’s “strongest performers for several years now”. But while Covid-19 had “rapidly accelerated demand and property prices”, they still offered better value than large chunks of Melbourne.

She said Bendigo remained particularly affordable, with a three-bedrom house on a 500sq m block achievable for less than $400,000, while a buy like this in Ballarat required at least $600,000 and Geelong, $800,000.

“The biggest danger for buyers is they compare regional property prices to Melbourne prices when assessing value, instead of comparing to local prices, and frequently overpay for property by tens of thousands of dollars,” Ms Sandkuhler said.

“Local pricing research and an understanding of the local suburbs is essential to making a good property decision.”

REA Group economic research executive manager Cameron Kusher said the opportunity to have a “lower mortgage” by buying regionally had become a bigger lure in the Covid era – which had also normalised working from home to make this a reality.

Elders Camperdown agent Jane Allen said her region had been flooded with Melbourne buyers over the past year.

The median house price had soared 63 per cent in Mortlake in that period, to make it regional Victoria’s top annual growth star according to realestate.com.au – but it remained cheap by city standards at $277,000.

“(Melbourne buyers) are certainly not holding back,” Ms Allen said.

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