Victorian regional hotspots that have joined the million-dollar club

Still dreaming of a sea-change for a better lifestyle and more affordable property? Be warned: the median house price has soared above $1 million in a string of coastal hotspots.

Victoria’s regional million-dollar club has been expanding fast, with several neighbourhoods posting double-digit price gains over the past year or doubling compared to five years ago.

Ocean Grove is among the pockets of regional Victoria where the median house price is at least $1 million.Credit: Bellarine Property

Six lockdowns drove demand from city buyers for beach retreats funded by ultra-cheap mortgages, in turn putting pressure on regional housing options for locals.

On the Bellarine Peninsula, Ocean Grove’s median house price is now $1.07 million, after a 26.6 per cent jump over the year to March, Domain figures show.

Nearby Point Lonsdale rose 53 per cent to a median $1.4 million, while Barwon Heads – already a pricier pocket – lifted another 29.7 per cent to $1.725 million.

In comparison, the median house price in Melbourne is $1.092 million.

RT Edgar Bellarine director Brock Grainger said over the past year about half his buyers have been from Melbourne and the rest are a mix of locals, buyers from elsewhere in regional Victoria, or Mornington Peninsula residents moving across to downsize their mortgage.

Many are young families or professional couples who have made permanent moves and can work from home or visit the office less often, even as the Melbourne CBD reopens.

“Ocean Grove in particular, it used to be seasonal. It’s basically a suburb of Geelong now,” he said.

“There’s a lot of buyers prioritising lifestyle. The market will come off a little bit but it will probably stay pretty strong for the long term.”

He warned that first-home buyers sometimes have to lower their expectations when they realise how high prices are now, but said there are options under $1 million in Portarlington, St Leonards, Drysdale and Clifton Springs.

Ocean Grove buyers looking for family homes could expect to pay $1 million to $1.5 million, while properties close to the beach in Barwon Heads and Point Lonsdale would be about $2 million.

Slightly further west, prices have also jumped on the Surf Coast.

Torquay’s median house price now sits at $1.26 million, up 40.4 per cent in the past year.

Torquay house prices have jumped, both by the water and in newer housing estates.Credit: Eddie Jim

Jan Juc is higher at $1.37 million, a 13.3 per cent rise, while Anglesea added 40.9 per cent to a median $1.62 million.

One Agency Surf Coast director Shaun O’Callaghan recalled that in the middle of last year properties in newer estates in the north of Torquay had been selling for about $950,000, but within four weeks jumped to $1.2 million and stayed at that level, spurred by Melbourne’s lockdown escapees.

The share of out-of-area buyers on the Surf Coast has since decreased slightly, but they still make up about half of buyers, he said, and many are owner-occupiers making a permanent move.

“Jan Juc, it is very difficult to get a house under $1.2 million,” he said. “$1.5 million to $1.8 million will buy someone a really nice home, but the closer to the beach, the more expensive they get.”

Buyers who can work remotely flocked to beach towns such as Torquay.Credit: iStock

For example, homes on The Esplanade in Torquay, opposite the water, sell for between $3 and $5 million, he said.

Nearby Geelong has a handful of neighbourhoods closing in on the seven-figure mark, and one already there.

The median house price in Newtown in inner Geelong sits at $1.13 million after an 18.9 per cent rise over the past year.

Geelong CBD is at $950,000 and East Geelong has a median of $927,500.

Newtown in Geelong is sought after for its period-style homes.Credit: Gartland

McGrath Geelong principal David Cortous said Newtown’s appeal is based on its larger blocks, period homes, tree-lined streets, sought-after schools and local boutiques and cafes.

A budget of $1 million there would buy a house that needed a full renovation, or a town house, he said.

But he said million-dollar sales are now being struck across Geelong, including in Geelong West, South Geelong, Highton, Belmont and Herne Hill.

He is still seeing about two in five buyers coming from out of area, and does not expect this demand to change.

“People used to move to Geelong out of affordability,” he said. “People are moving to Geelong now for lifestyle. It is a big change in the mentality of why people are moving here.”

On the other side of the bay, house prices on the Mornington Peninsula have rocketed since the pandemic hit.

Although technically part of Melbourne, city dwellers have been looking to spend more time on the peninsula by the beach, especially while working remotely.

Sorrento and Portsea, playgrounds of the ultra-wealthy, have median house prices of $2.3 million and $3.78 million respectively, but mansions there can sell for as much as $30 million.

Even their once-overlooked neighbours have taken off. Dromana’s median house price is $1 million, up 23.5 per cent in 12 months, while Rye’s sits at $1.2 million after spiking 37.9 per cent and Blairgowrie reached $1.67 million, up 23.7 per cent.

Don’t expect a bargain at the north end of the peninsula, as Mount Eliza and Mount Martha are each above $1.6 million and Mornington is north of $1.1 million now.

“I can’t remember the last time I sold something in Blairgowrie for $1 million,” Kay & Burton Portsea director Liz Jensen said.

She recently sold a home in Rye under $1 million, but it was a simple fibro three-bedder with one bathroom.

For a $1 million budget, she suggested looking at St Andrews Beach instead, while a renovator in Blairgowrie would cost in the low $1 millions, and in Sorrento and Portsea it would be rare that a house would sell under $2 million. Anything that cost $2 million in Portsea two years ago is now selling for $2.75 million, she added.

And don’t expect to scoop up a leftover beach house bargain in the winter, like so many hope for every year before realising if they want to purchase they need to accept the market’s price.

“It’s always the same. We think to ourselves we’re going to have time to breathe,” she said. “It doesn’t stop.”