HOUSE prices are predicted to decline from next year but Bendigo could remain a sanctuary for investors – and a magnet for new homeowners.
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On Monday investment firm Macquarie Group released a research note forecasting a 7.5 per cent reduction in house prices as of March next year, from "peak to trough". But local real estate agents predict Bendigo will be shielded from the wilder price fluctuations.
Darryn Mawby of Mawby Property said he was “skeptical” house prices here would decline at all.
“Certainly, markets in the capital cities are extremely overheated and there’s definitely space for their prices to come down,” he said.
“But I would not be pessimistic about prices here at all, we have quite a stable market.
“In fact, that’s one of the things which characterises Bendigo’s property market – we don’t have those peaks and troughs.”
Real Estate Institute of Victoria (REIV) Bendigo chairman Craig Webster described a major drop in prices as “unlikely,” but left the door ajar for slight declines.
“It’s very hard to predict what will happen over the next 12 months and I don't have crystal ball, but it will be interesting to see how things pan out,” he said.
“Supply outweighs demand at moment and, if that continues, there will have to be adjustments.”
Mr Webster said the local property market had been receiving good results over the last 12 months and was still seeing steady growth.
“The capital cities will come back a lot more, say 10 or 20 per cent but, in Bendigo, if [house prices] do not continue to increase they will likely just plateau,” he said.
The REIV local chairman said the soaring house prices in Sydney and Melbourne over the last year-and-a-half had caused prospective home owners to look to places like Bendigo for a more affordable entry into the property market.
“We’re getting greater numbers outside of Bendigo focusing on investing here because of the return on their investment, because of the steady market and because of lower vacancy rates,” he said.
“Over the last 12 or 18 months there has been a huge focus on Bendigo for those reasons.”
Despite local optimism, several leading investment banks have tipped the nation’s housing market is close to peaking as household budgets are stretched and supply outstrips demand.
Although softening prices would make the market more accessible to aspiring home owners, they could trap highly leveraged buyers and push up unemployment as the sector cooled.
