REGIONAL areas continue to offer prime real estate growth with the total median price rise for the past financial year at 4.1 per cent to $327,000.
REIV chief executive Enzo Raimondo said analysis of home sales in regional areas, according to property type and size, showed the biggest growth in the most recent quarter was in the price of a three-bedroom house – up 2.4 per cent to $295,000. The next-highest growth was for four-bedroom houses in regional Victoria, up by 1.2 per cent for the quarter to a median price of $415,000.
Major regional centres Bendigo, Ballarat and Geelong remained in positive territory for the three months to 30 June:
- 1.5 per cent to $335,000 for the City of Greater Bendigo
- 0.3 per cent growth to a median of $301,000 for the City of Ballarat, and
- 0.2 per cent for the City of Greater Geelong.
In each case, Mr Raimondo said solid growth was recorded across the financial year, with Ballarat 3.9 per cent, Bendigo 7.9 per cent and Geelong 6.7 per cent.
Dr Andrew Wilson, senior economist with Australian Property Monitors (APM) and the Domain Group, said the increase showed these three centres were no longer towns but “significant cities” .
“There is growth in these local economies directly and specifically through government initiatives through decentralisation in the past two decades,” Dr Wilson said. “These markets are less volatile than the overall Melbourne market and not subjected to affordability shifts such as percentage rates. They are robust since the GFC (global financial crisis).”
He said Bendigo and Ballarat were tracking as a smaller market “in terms of volume immunity to volatility compared to the Melbourne market in the past five to six years.”
As for variation in price growth across the state, Mr Raimondo said while it was “substantial”, it was to be expected. “Regional Victoria (is) not a single market but comprised of many individual markets with a range of factors – including the type and quality of housing stock, local employment opportunities, and proximity to the city or the sea - having a bearing on house prices,” he said. “For example, in the Colac-Otway area the $280,000 median price was up 8.3 per cent on the previous quarter, and there was four per cent growth to $540,000 in the Macedon Ranges, with these areas remaining in demand from Melburnians seeking a sea change or a tree change.”
On a national level, APM reported last month the median house price increased by 10.9 per cent for the financial year, and 1.9 per cent over the June quarter, to $627,940.
In Melbourne, house prices increased by 1.7 per cent over the quarter, a marginally stronger result than the 1.4 per cent increase seen in the three months to March, Dr Wilson said. The median unit price rose by 0.7 per cent during the June quarter.
Overall, Sydney and Melbourne reported the highest annual median house price growth rates. Sydney was up by 17 per cent and Melbourne by 10.3 per cent.
“Sydney, Melbourne and Perth have led the market over the past year, however, annual outcomes for these cities is likely to be around half of the exceptional 2013 results,” Dr Wilson said.
However, for other Victorian regions while the price growth was slower in the last quarter it remained strong for the overall year, REIV reported.
In South Gippsland growth for the quarter was just 1.3 per cent, but for the financial year it was 10.3 per cent; and in Wodonga, quarterly growth was just 0.4 per cent, but for the year it was 11.6 per cent.
“There were also some areas where prices appear to be improving,” Mr Raimondo said. While City of La Trobe median prices were 1.5 per cent lower in the past 12 months, “recovery appears to be underway”.
“Median prices across the region increased by 1.3 per cent in the three months to 30 June,” he said. “These variations illustrate why researching an area, its housing stock, opportunities and property prices are so important before buying.
“While the overall regional figures offer an interesting comparison with Melbourne and an indication of the savings to be made by moving to the country, much depends on where you buy.”
Dr Wilson said a six months’ trend showed growth was "more organic" in Bendigo and Ballarat housing market levels compared with Melbourne.
“Ballarat and Bendigo, while tracking considerably against each other, remain different markets. Ballarat is a commuting city - it’s closer to Melbourne - with people from the western suburbs fine to travel for work, whereas Bendigo is more a green-change environment.”
There were 693 auctions statewide reported to the REIV last weekend, with 497 selling and 196 being passed in, 94 of those on a vendor bid.
This was a clearance rate of 72 per cent, compared with 72 per cent the previous weekend and 74 per cent the same weekend last year.
Mr Raimondo said REIV collected 97 per cent of auction results last weekend with a total of 719 results, including 17 postponed and nine withdrawn.
REIV compiles data on regional Victoria median house prices by municipality and suburb for the 12 months ending June 2014.