Rise in listings blamed for ‘weak’ Geelong home price result

Geelong’s home prices remain stubbornly weak, but it isn’t a sign that the regional bubble has burst, a senior economist explains.

Geelong house prices remain in negative territory, according to the PropTrack Home Price Index.

Geelong recorded one of the weakest home price results across Australia in July, but it isn’t a sign that the regional bubble has burst.

PropTrack senior economist Eleanor Creagh said the 2.4 per cent decline for the three months to July was among the weakest results in the latest Home Price Index.

The decline in home prices accelerated in July, taking the median dwelling price down 5.54 per cent over the year to $753,000.

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House prices contributed most to the quarterly fall, declining 2.6 per cent, compared to a .35 per cent drop in unit values.

“We have seen that homebuyer demand in the regions has eased off the incredibly elevated levels that we saw throughout the pandemic period, which wasn’t necessarily a surprise,” Ms Creagh said.

“At the same time some of the extreme constraints that were present over the past three years with respect to the supply of stock on market have also begun to change.

“Whereas in the capital city markets we’ve seen the flow of new listings has been very soft and demand has been a bit stronger, the reverse is broadly true in regional Victoria and Geelong.”

PropTrack data shows there are about 600 more properties on the market in Geelong now compared to at the same time last year.

Ms Creagh said the Geelong figures needs to be seen in the context with the big rise in value during the pandemic.

Despite the 5.54 per cent annual decline, Geelong dwelling values remain 27.7 per cent higher than the start of the pandemic.

PropTrack senior economist Eleanor Creagh Photo: Supplied

“We are continuing to see the capital city markets have really been quite a bit stronger than regional areas this year.

“But for the most part, the regions have still recorded a smaller decline from peak because prices held up a lot better last year. That’s still the trend that’s in play.

“Whilst we’re seeing demand to buy in the regions has eased off, it’s not like some people have said a regional bubble is bursting, when you weigh up the facts, it’s not like that.

“There’s still demand – it’s just not meeting the flow of stock that’s continuing to come to market.”

Ms Creagh said a strong flow of listings was still expected this spring, at a national level.

“Auction activity has been picking up, clearance rates are holding pretty firm, we’ve seen at a national level seven months of price growth, and that’s likely to buoy seller confidence.

“So I think we’ll probably see that the flow of new listings starts to pick up I think that could certainly mean that the pace the prices have been growing in the capital city markets could ease off a bit.”

Originally published as Rise in listings blamed for ‘weak’ Geelong home price result