Real estate experts detail ‘frantic’ regional property market in 2022

Victoria’s regional property prices are continuing to fire but with interest rate changes on the horizon, what’s ahead for the booming market?

Record prices and demand levels are continuing to define a regional and rural Victorian housing market that is white-hot and shows no signs of slowing down.

In the three months to January 2022, regional Victorian property prices outperformed their metropolitan Melbourne counterparts by a staggering 4.5 per cent according to CoreLogic’s housing market January update report.

During the three-month period to the end of January there was a 5.3 per cent increase in regional Victorian dwelling values, whereas metropolitan Melbourne recorded dwelling value increases of just 0.8 per cent.

In this period regional Victorian property price growth also significantly outperformed the national rate of dwelling value growth which was 3.4 per cent.

Century 21- Rich River Real Estate sales consultant Josh Wilson said he had witnessed remarkable price growth across northern Victoria.

He said a combination of low interest rates, government incentives and people chasing a tree change caused a surge in demand.

“The market here has been pretty frantic and the prices have shot through the roof,” he said.

“The Melbourne market of buyers has been a huge driver of price.

“People have been wanting to move to regional hubs and after selling their place in the city they have been a lot more cashed up.

“They have been spending all those dollars and for the same price they have been able to get a beautiful new home in the country.”

During the past 12 months the western Victorian property market has also recorded dramatic price increases.

Ararat Ballarat Real Estate sales consultant Aidan Moar said towns like Ararat had received huge interest from investors based in Melbourne, Geelong and Ballarat.

“Over the last six months we have seen more sales where buyers are going over asking prices because of the competition in the market,” he said.

“With such growth it has been hard to set a guide because the competition is having such a big impact.”

In the Western District land had also been hard to come by, but Mr Moar said housing estate openings in the works should keep the market motoring along.

This home at 33 Vincent Street, Ararat, was sold for $540,000.

“Between government schemes and the First Home Owner Grant any land lots that were available were snapped up,” he said.

“Land has become scarce and hard to come by, but with some developments coming up in the last three-six months there is some more becoming available.”

But could a change be on the way?

INTEREST RATES

Even though there is 250km between Mr Wilson and Mr Moar’s office they both share a similar vision for what might happen if interest rates begin to rise from the current record lows.

In February the RBA held the cash rate target at 0.1 per cent, and acknowledged that growth in housing values was easing.

However, Mr Wilson said if there was an interest rate rise he expected it to initially lead to greater demand in the regional market.

“The demand has got to level out at some point, but I’m not overly worried about interest rates,” he said.

“Even though we have seen such price growth here, it is not an overly inflated market and our buyers are not heavily mortgaged.

“So if there is a rate rise, I’m expecting those who have bigger mortgages, might get pushed into the regions if they can’t afford to live in the city.”

Meanwhile Mr Moar shared a similar point of view.

“We are very confident in the regional property market regardless of potential interest rate changes,” he said.

“If there’s a rate change we feel more people will be looking to move regionally and get settled and enjoy that country life.”