By Herron Todd White
Mildura Property Update
At the start of 2020 we never imagined that the year would unfold the way it has. Lockdowns, social distancing and wearing masks while inspecting homes and visiting the supermarket were all unimaginable concepts ten months ago. We also never expected that Australia would enter a recession and that interest rates would fall to the level they have. However, despite the year’s unpredictability, many of the local property market forecasts we made in February have turned out to be reasonably accurate.
While there was a hiccup in sales activity during April and May, the local market proved remarkably resilient, with the relative affordability of housing in the Mildura region and sustained low interest rates working in our favour. Demand proved strongest for modern homes in the $350,000 to $450,000 range suited to owner-occupation and with buyers being a mix of first home buyers and buyers trading up from older homes.
There were times when we wondered whether the reduced intrastate migration of teachers, police officers, health workers etc. would lead to reduced demand, however this does not seem to have reduced values. It is clear that there has been greater movement of people from Melbourne to some surrounding regional areas and while this may not benefit Mildura directly due to our more remote location, it is possible that there will be a ripple effect.
While we predicted at the start of the year that the cost of vacant residential lots would rise, in part due to a shortage of serviced lots being available, we failed to forecast the extent of the higher demand. Values rose at a faster rate than we expected, attributed to the additional government stimulus on offer. Developers have seen their subdivisions sell at a much faster than usual rate. The big question for 2021 will be to what extent the government stimulus has brought forward sales activity and whether there will be a resulting dip in sales once the stimulus is withdrawn.
At the start of 2020, most parts of south-eastern Australia were in severe drought, with our local horticultural industries battling the impact of reduced water allocations and high water leasing costs. We predicted that if this weather pattern continued, there could be reduced demand for rural lifestyle property, due to the higher cost of keeping them green.
Fortunately, it started raining early in the year and we now have replenished irrigation dams and removal of water restrictions. This has helped maintain values for large lot residential properties surrounding Mildura, particularly in Irymple, Nichols Point and Gol Gol. In most cases buyers have been owner-occupiers looking to upgrade from smaller, in town allotments, with the majority of this market being younger families. As seen in the graph below, the median sale price for stand-alone homes in Mildura has continued to rise, particularly over the previous two years.
Residential Valuation Manager
Shepparton Property Update
What a year 2020 has been. We went from a society that had no idea what social distancing was, to one where wearing masks became the norm so much so that not wearing one outside now feels somewhat wrong.
Back in February, I stated that “all signs point to another strong year for growth”. The outcome was accurate, but the method was definitely unforeseen.
The local market has gone from strength to strength. Prior to COVID, there was around three years’ worth of land already developed, based on council average building approval rates. Fast forward to July and almost every block of land offered to the market is gone, as well as land that is yet to title. At the time of writing, most of the land titling before June or July 2020 is optioned or under contract. This sentiment has carried across almost all price points for investors and owneroccupiers. Consequently, the rising tide has lifted all ships.
Naturally, this has seen prices rise faster than what happened since the boom of the early 2000s. The interest has been a mixture of locals and buyers from metro areas, but the overall feeling of the fear of missing out is really driving the prices we’re seeing.
Warrnambool Property Update
Warrnambool’s residential market performed strongly this year with the median house price rising to approximately $395,000, up from $375,000 in 2019. This increase can be attributed to increased investor activity spurred on by an ever-lowering cash rate and solid rental returns across a range of price points. The investor profile in Warrnambool continues to have a strong local presence but 2020 has seen a noticeable increase in metro-based investors entering the market.
Perhaps the most surprising aspect of the market is the speed at which properties are transacting after initial listing and the willingness of prospective purchasers to pay the asking price. In years past, it was uncommon to see the asking price paid in Warrnambool, however it now appears that purchasers in 2020 were likely to be successful only if they were willing to meet the advertised price.
Certified Practising Valuer
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