Real estate: Victoria’s most affordable locations

Looking for a country escape? Here are five regional Victorian destinations where you can still find a reasonably priced home.

Regional property and rental markets are experiencing a hefty hike due to increased demand since the pandemic hit according to property insight business, CoreLogic.

CoreLogic’s research director, Tim Lawless said regional Victoria has shown a much stronger capital gain over the past year relative to Melbourne.

“Dwelling values are up 11.3 per cent over the 12 months ending April 2021 across regional Victoria compared with a 2.2 per cent lift in Melbourne dwelling values over the same time,” he said.

Mr Lawless said part of this stronger regional performance had been the resilience of values though the worst of the Covid period.

“Regional Victorian home values fell by only 1.5 per cent through the worst of the Covid period, while Melbourne values were down a more substantial 5.6 per cent,” he said.

“But the upswing has also been more rapid across regional Victoria.

“Since October, when Melbourne home values started to recover, Melbourne home values are up 8 per cent compared with a 12.3 per cent rise across regional Victoria.”

Mr Lawless said there were a few factors helping to support demand across the regional areas including housing affordability.

“The median house value across regional Victoria, at $481,600, is 45 per cent lower than Melbourne’s median house value of $869,700,” he said.

Another factor is the rise in popularity of remote and flexible working arrangements that have empowered more people to look further afield for housing options.

Lifestyle location is another factor, with regional coastal markets and rural locations becoming more popular.

Rental markets are also responding to increased demand against a backdrop of low supply.

“With a surge in population growth to the regions, rental demand has risen while supply is likely to have been relatively inelastic, pushing vacancy rates down and rental rates higher,” Mr Lawless said.

Homes in Gippsland are some of the most affordable in Victoria with a median dwelling price of $525,639.

FIVE OF VICTORIA’S MOST AFFORDABLE AREAS

Looking for a country escape – here are five regional Victorian destinations where house prices haven’t hiked as much, and you can still find reasonably priced dwellings.

Real estate agents report there are small pockets in regional Victoria where you can purchase houses that don’t reflect general price increases, but there aren’t many.

The rural trend was initially focused in regional areas one to two hours from Melbourne. Now, it’s spread beyond into further distanced regional areas.

Working from home has been a big factor with many swapping city life for country homes and a more relaxed lifestyle.

BENDIGO, LODDON

The medium dwelling price is $232,918 that represents an 8.3 per cent increase over 12 months.

HUME, TOWONG

The medium dwelling price is $296,547 that represents a 3.6 per cent increase over 12 months.

LA TROBE, BAW BAW, GIPPSLAND

The medium dwelling price is $525,639 that represents a 5.6 per cent increase over 12 months.

SHEPPARTON AND GREATER SHEPPARTON

The medium dwelling price is $318,208 that represents an 8.0 per cent increase over 12 months.

WARRNAMBOOL AND GLENELG, SOUTHWEST

The medium dwelling price is $292,694 that represents a 5.7 per cent increase over 12 months.

VICTORIA’S BIGGEST GROWTH AREAS

Some of the biggest increases in house prices over the past year have occurred in the same corner of regional Victoria: the northwest.

Data from property analysts at CoreLogic show housing values in pockets of the Wimmera and Grampians have increased by more than 20 per cent in 12 months.

Skyrocketing prices were driven by movers looking for a tree change following city lockdowns, said CoreLogic.

Rise up: Goroke Silo Art, West Wimmera Shire. House prices increased 23.7 per cent in the past year. The shire’s median dwelling price is still one of the most affordable in Victoria, at $156,445.

HINDMARSH

The median dwelling value is $159,257 which represents a 26.8 per cent price hike.

ARARAT

Median dwelling value is $271,919, up 25 per cent.

WEST WIMMERA

Median dwelling value is $156,445, a 24.6 per cent increase in house value.

YARRIAMBIACK

Median dwelling value is $150,006, representing a 23.7 per cent increase.

HORSHAM

The median dwelling value is $290,602, up 22.3 per cent.

Many house prices in North East Victoria have also increased by at least $100,000 according to Wodonga Real Estate senior property manager specialist Donna Martin.

“We are looking at small towns where real estate has had little movement for years but since Covid, houses have suddenly increased by up to $100,000 for modest houses, strictly due to the demand,” she said.

Mansfield business owner, Dean Belle, said it was practically impossible to rent or buy in the Mansfield area these days.

RATES, GRANTS DRIVE HOUSING RUSH

First-time buyers are rushing to take advantage of low interest rates and government grants, but new builds are being delayed because of material shortages.

Wodonga Real Estate senior property manager specialist Donna Martin said there was definitely a rush to snap up properties and land for new builds.

Donna Martin from Wodonga Real Estate.

“There’s a feeling that first-time buyers have to find something quickly while the interest rates are low and there are special grants available,” she said.

“The problem with new builds is that many are waiting for up to six months for timber trusses and other materials held up due to Covid.”

Figures released by the Australian Bureau of Statistics for March showed new loan commitments for housing rose 5.5 per cent that month, to a new record high of $30.2 billion.

Lending to investors accounted for more than half of that month’s rise.

ABS head of finance and wealth Katherine Keenan said: “Investor lending has seen a sustained period of growth since the 20 year low seen in May 2020. The rise in March is the largest recorded since July 2003 and was driven by increased loan commitments to investors for existing dwellings.”

Investor pressure seems to be contributing to the strong demand from first-home buyers.

ABS data showed the number of owner occupier first-home buyer loan commitments actually fell 3.1 per cent in March, but were still at a historically high level, 58.3 per cent up on March last year.

The value of new loan commitments to first-home buyers funded in March rose 12.2 per cent for variable rate loans, and 34 per cent for fixed rate.

Ms Martin said home seekers were investing in off the plan, knock down rebuilds and established property just to get a foot in the door.

“Many of the places we are selling are sold before they go to auction, buyers are so keen to find something,” she said.

“The whole property market in the North East Victoria area is insane – housing has gone through the roof.”

Ms Martin said there had been an increase in sales from investors, who were nervous about tenancy law changes and wanted to cash in on the market swing.