Regional VIC April 2017

The month in review: Regional VIC

By Herron Todd White
April 2017

March has been a busy month for the property market in Ballarat. A key performer has been period homes in Ballarat Central and Lake Wendouree.

Demand is being driven by buyers moving out of the Melbourne market into the Ballarat market to get more perceived value for money, as well as seasoned Ballarat investors and owner-occupiers.

The $700,000-plus price bracket appears to be the hottest price point with demand currently exceeding supply. In this price bracket properties attracting the greatest demand are renovated period dwellings on around 600 to 800 square metres in an A-grade location.

Notable sales in this price bracket are:
– 315 Ligar Street, Soldiers Hill – $734,500
A circa 1930 renovated brick veneer dwelling with 3 bedrooms, 1 bathroom and a single garage on 690 square metres.

– 13 Talbot Street North, Ballarat Central – $810,000
A circa 1930 renovated weatherboard Californian bungalow with 3 bedrooms, 2 bathrooms and a double garage on 680 square metres.

Properties with quality renovations in prime locations are achieving $1 million-plus prices. There have been $3 million-plus sales recorded in Ballarat Central and Lake Wendouree this month, and it is evident that buyers are confident in these central, well-regarded locations that are within close proximity of Lake Wendouree and a number of private schools.

With the Ballarat population projected to continue to grow and with the rapidly rising Melbourne property market pushing buyers out of Melbourne and into regional cities, it appears the current market levels are sustainable.

Units are less preferred in the Ballarat market as they do not offer the same relaxed, country lifestyle feel that motivates so many buyers to make the move to Ballarat.

The most sought after accommodation appears to be 3- or 4-bedroom dwellings with the key being 2 bathrooms and off-street car accommodation.

Overall, the Ballarat Central and Lake Wendouree residential markets are expected to continue to perform well.

Central Bendigo and expanding suburbs such as Strathfieldsaye seem to be the most desired by buyers at present. Epsom and Huntly remain the preferred entry-level suburbs for house and land packages. This demand is being driven by the expansion of residential development on the outskirts of Bendigo and the strength of the new construction market. A new build (house and land package) in Strathfieldsaye ranges between mid-$400,000 and low $600,000, and buyers are generally local people upsizing, and outside investors buying or building rental properties. In the near term this level of market activity is quite steady throughout Bendigo.

The majority of the new constructions are of a contemporary design; however, many of the inner Bendigo properties attract the renovator looking to update an older home with external period features.

Generally, the strongest price points are the historical and period homes in central Bendigo and the low-density lifestyle properties on the outskirts of the township.

A couple of key segments locally are the upper end of the market off-river (particularly in Moama) along with mortgage belt properties in West Echuca. Starting with Moama, recent results for properties have seen several off-river properties push in excess of $750,000 with one topping in excess of $900,000 (with excellent landscaping but nothing by way of a pool or shed). These results represent a marked shift upwards and it will be interesting to see if a lack of stock continues to support levels of value for these holdings.

Meanwhile, in Echuca West tight supply is resulting in prices for new dwellings in excess of their cost providing small windfalls for the developer or owner. Typically, the price bracket sits at $350,000 to $400,000.

The Baw Baw, South Gippsland and Cardinia regions are on the move. Places like Warragul, Drouin, Nyora, Lang Lang, Garfield and Koo Wee Rup are getting closer to Melbourne every day. Melbourne and Peninsula residents are moving to these regions as they are seen as affordable and growing locations. New building and construction is seen as affordable and land prices are increasing in these regions. Picturesque regions such as Nar Nar Goon North, Tynong North, Bunyip North and Tonimbuk are starting to see more $1 million plus sales with incredibly high-quality, modern design homes on land varying from 4,000 square metres to 25-plus hectares.

Specifically, lands in good estates in Warragul are still in the $170,000 to $190,000 bracket. Koo Wee Rup land has increased from $180,000 to $240,000 in less than two years. Nyora rural residential properties on 4,000 square metres-plus are in good demand.

Bass Coast and Southern Gippsland have remained steady with minimal changes in market values over the past two years. The most desirable location is Inverloch for coastal localities, with vacant land not in close proximity to the town site or the beach selling for approximately $200,000 to $300,000.

The Horsham residential market remains relatively balanced between supply and demand for dwellings and units. However, with new incentives for first home owners about to be introduced by the government we should see a rise in demand, leading to a potential increase in residential property prices.

The median house price is currently approximately $245,000 for an average-quality 3-bedroom home, mainly sought after by owner-occupiers. A high percentage of sales is occurring in the Horsham West area, of older-style properties (circa 1980) and some newer (circa 2000).

The unit property market is experiencing a two-tier market with inferior location and quality ranging from $150,000 to $175,000, and units of a superior quality and location ranging from $250,000 to $300,000. The lower-priced units are attractive to potential investors whilst the higher-priced units are sought after by retirees looking to downsize.

Land prices have also remained steady with plenty of new subdivisions being developed around the area and attractive house and land packages on offer. Again, demand is set to increase with the government’s First Home Owners Incentive available.

The sector that seems to be ticking along the best at present is modern 3- or 4-bedroom homes with good external improvements such as outdoor living areas, pools or sheds. The most active price point is considered to be between $300,000 and $450,000; however, we are still seeing a number of sales of good standard homes at above $500,000, suggesting there is some depth of buyers waiting to buy a prestigious home that suits their needs.

Mildura accounts for the majority of sales above $300,000; however, the smaller population centres of Irymple, Nichols Point and Gol Gol are also in favour with buyers, and have median prices that are slightly higher than Mildura. Homes in these locations typically have larger land sizes than in Mildura and are within eight kilometres of the city centre.

Buyers at this price point appear to almost always be owner-occupiers. Often, they are local buyers who have in many cases traded their way up through cheaper housing. There is also a significant buyer segment made up of people who have moved to Mildura either for work or retirement.

We see no reason why the current level of activity should slow in the short term. Mildura’s economy has improved in the past three years due to improved returns from most of our local agricultural enterprises, and this improved confidence is likely to continue working its way through the local economy.

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