Regional land prices skyrocket across Victoria as demand soars in 2021

A new report has shown home prices are soaring in Victoria, with some postcodes in high demand. See which suburbs are the hottest here.

Whether it be land, homes or units, demand for regional property in Victoria has skyrocketed, causing prices to jump to unprecedented highs.

A CoreLogic report, ‘Best of the Best 2021’, released this month, detail which parts of regional and rural Victoria have seen the largest increase in demand and value.

Stretching from the state’s northeast down to the southwest, Victoria has seen significant 12-month change in the value of homes in regional Victoria.

Some of the most notable areas include Mount Beauty which has seen a 50.1 per cent rise, while Mortlake has seen a 43.5 per cent increase in value.

Rise in home value over 12 months (regional Victoria)

• Mount Beauty, Hume. Change: 50.1%. Median value: $521,494
• Myrtleford, Hume. Change: 47.1%. Median value: $529,486
• Tawonga South, Hume. Change: 44.7%. Median value: $607,727
• Mortlake, Warrnanmbool and South West. Change: 43.5%. Median value: $325,220
• Cobden, Warrnambool and South West. Change: 40.7%. Median value: $363,579
• Venus Bay, Latrobe -- Gippsland. Change: 38.4%. Median value: $578,683
• Cape Woolamai, Latrobe -- Gippsland. Change: 36.8%. Median value: $783,746
• Eildon, Hume. Change: 36.4%. Median value: $394,346
• Mirboo North, Latrobe -- Gippsland. Change: 36.1%. Median value: $598,711
• Sunset Strip, Latrobe -- Gippsland. Change: 36.0%. Median value: $833,584

The dramatic price shifts have also been recorded in the state’s northwest, with an experienced auctioneer seeing it first hand.

Harcourts Horsham auctioneer Tim Coller, who has worked in regional real estate for more than 30 years, said he has never seen property demand like what has been recorded in 2021.

And that demand was on display in December when he and his team took the Jenkinson Estate, an 18-block opening, to an auction.

With vacant blocks ranging from 703 to 804 sqm, prices ranged from $191,000 to a staggering $232,000.

Mr Coller said just 12 months ago blocks of similar size and nature would’ve been on the market for around $130,000-$140,000, but that has all changed now

“I have been selling real estate in Horsham for 35 years and I have never seen interest like this before,” Mr Coller said.

“It has been absolutely phenomenal.

“For blocks and estates like this we would generally release them privately, but after such strong inquiry we decided to declare an auction format and as part of that we notified 80 interested parties.

“All the blocks went in one morning and the interest came from both local and metropolitan, home buyers, family and investors.”

He also pinpointed a series of factors which mean this strong demand for regional property was here to stay.

“We have recently seen the demand for building allotments reach an highest due to a lack of supply caused by low interest rates, government incentive schemes targeting building and a severe shortage of established homes on the market,” he said.

“The auction prices certainly showed a marked increase.

“The demand for lots, put under pressure with Covid recovery assistance, absorbed all available lots.

“And it is not isolated to Horsham, it is a statewide thing.”

Alongside the regional property market, rural property in 2021 has also been booming.

Inside the CoreLogic report, which analyses housing transaction data, it said 2021 was a positive year for property growth in Australia.

“In the 12 months to November 2021, the Australian housing market recorded outstanding figures,” the report said.

“Distinct growth trends seen since the onset of the pandemic, along with the institutional responses to it, have been carried through to 2021.”

This increase in property value has been witnessed in the state’s north west in the rental market.

Towns of Warracknabeal, Nhill and Kerang top the CoreLogic charts for the places where the highest increase in rental yields have been recorded.

Highest increases in rental yields (regional Victoria)

• Warracknabeal, North West. Change: 8.7%. Median value: $287
• Nhill, North West. Change: 7.7%. Median value: $285
• Kerang, North West. Change: 6.4%. Median value: $292

The CoreLogic report also issued a message for 2022, urging those in the market to be prepared for change.

“The beginning of 2022 may be marked by a surge in demand for regional lifestyle markets, similar to the surge which followed the 2020 lockdowns,” the report said.

“It is likely that 2021 marked the peak of value growth across Australian dwellings, and may have also marked a peak for sales and listings activity.

“Affordability constraints have worsened, vendor activity has surged toward the end of the year, and the housing finance space is currently showing signs of tightening and slowing.

“The accumulated force of these individual headwinds have led many of the major banks to forecast softer growth outcomes for 2022.”