Regional VIC March 2018

The month in review: Regional VIC

By Herron Todd White
March 2018


In Ballarat, the middle ring is formed from a price point rather than geography. It comprises properties ranging from Victorians built in the 1880s to brand new dwellings. The price point is a band from around $350,000 to 450,000. We would consider that it is within this price range that the lion’s share of transactions in the Ballarat residential market takes place primarily due to the fact there is a deep pool of buyers with this amount of money to spend on real estate. The purchaser demographic in the area includes young couples, investors, families new to Ballarat, families relocating within Ballarat and downsizers.

Suburbs considered in the middle ring include Lucas, Alfredton, Brown Hill, Canadian, Mt Pleasant, Ballarat East, Mt Clear, Mount Helen and Golden Point. These suburbs have endured mixed fortunes over the past 12 months.

Areas which have recently been developed and still have significant land for sale have seen limited growth due to a continuing supply of new dwellings coming onto the market. These areas include Lucas, Alfredton, Canadian, Mt Clear, Mt Helen and Mt Pleasant. Areas with a fixed supply such as Golden Point and Ballarat East have seen strong growth in the past 12 month, so much so we would not be surprised if by this time next year they would no longer be considered as being within the middle ring.

Agents report rental demand within these areas has increased in the past 12 months. Through 2015 and 2016, a boom in the supply of townhouses and services lots onto the market increased supply to such an extent that rental prices began to suffer. However the supply of property onto this market eased in 2017 which combined with further population increases in the area saw the over supply soaked up and some modest increases in rental rates.

The opportunities within this sector almost certainly lie within the established sections of Alfredton, Ballarat East and Golden Point. Their proximity to the CBD and infrastructure in addition to the generally fixed supply of land dictate that with current demand levels, values should appreciate in these areas. Other opportunities in the area include the development of units which are again attracting good demand.

The ongoing challenge to the sector is to ensure that any new supply of land is brought on line in a manner which does not flood the market. Additionally developers and governing bodies need to ensure they fulfil their obligations to provide services to the new areas to ensure these estates develop in a manner which adds to the overall appeal of the area.


The middle ring in Bendigo is based on distance to the CBD. The middle ring suburbs include Flora Hill, Golden Square, Strathdale, North Bendigo, Kennington, Ironbark, East Bendigo and Long Gully.

The majority of properties within this middle ring are standard residential properties with a large variance in median price due to proximity to the CBD and buyer demand.

Regional VIC

Flora Hill has only seen two sales in recent months that have exceeded the $600,000 price point, both of which were larger allotments with large established homes. Flora Hill is a rental dominated market with a high level of unit and apartment style accommodation to house students who attend the nearby La Trobe University.

Golden Square and Kennington have a mixture of older established residential and new developments with a varied size of allotments. They are currently very popular with families. Many homes in these areas are being renovated or removed for unit development.

Strathdale is a more tightly held suburb of Bendigo with many larger properties selling in excess of $500,000. The highest sale seen in Strathdale recently was $770,000 for a 4-bedroom contemporary, double storey home on a 960 square metre allotment.

North Bendigo has a younger demographic and comprises mostly older, established homes however does have some small new residential developments. The strongest sales in this suburb have been new constructions or older homes that have been renovated or have notable period features.

East Bendigo households are primarily couples with children in an owner occupier dominated market.

The Long Gully median price is $260,000 and is considered the entry level suburb for this middle ring category. Long Gully is dominated by ex-commission style basic dwellings and is considered to be a less desirable market than the other middle ring suburbs.

Most properties within the middle ring market are single occupancy dwellings or units. Vacant land closer to the CBD is rare, so we have seen many older dwellings demolished to make way for unit developments or a new single dwelling construction. Land values continued to strengthen throughout 2017, especially land closer to the CBD.

The middle ring sector in 2017 remained quite steady in Flora Hill whilst North Bendigo and Golden Square saw slight increases in their median sale prices and Strathdale saw a small decline in median sale price. Flora Hill has always been an area driven by the rental market with good returns on properties whilst the other areas have primarily been driven by the owner occupier and renovator markets. Generally the market in Bendigo as a whole remained steady in 2017 and we would expect this to continue in 2018.

Rental demand in the middle ring suburbs is high with limited stock available for rent. The development of unit and townhouse properties in the subject suburbs have the potential to demand high rentals due to their proximity to the CBD.

The predominant demographic in the middle ring are younger families and professionals looking to buy closer to the CBD. The first home market is still the strongest in Epsom and Huntly which are both considered to be outer suburbs.

Currently there are many properties on the market with varied price points, ranging from units available in the low $200,000s to new or renovated single family homes in the $800,000s. Within the true inner middle ring suburbs the most active market ranges between $300,000 and $450,000.

The middle ring suburbs are well equipped with public transport and other public facilities. Public Open Spaces has been identified in the Greater Bendigo Community Plan 2017-2021 as an area requiring improvement, however this is to ensure equal amenities for all areas and isn’t specific to central Bendigo.

The Bendigo Mosque is now endorsed to be developed in East Bendigo and includes a large prayer hall, sports hall, and common facilities which despite being located within an industrial estate has the potential to attract more families to the area in a residential capacity.

Major projects currently underway are the Bendigo Stadium expansion, Bendigo Tennis Centre redevelopment, Bendigo Botanic Gardens extension, Gurri Wanyarra Wellbeing Centre project (indoor aquatic, leisure and wellness facility) and the RSL Soldiers Memorial Institute revitalisation project.

Long term prospects for the middle ring market in Bendigo are nothing but positive. As the CBD market strengthens, this will flow on to the middle ring market. Families will continue to desire to be closer to the CBD to utilise the great facilities and schools nearby and we will see a continued growth in the renovation market as well.

Baw Baw Region

The Baw Baw region and its two major cities of Warragul and Drouin have seen strong price growth across all residential property types and all markets. The pressure is predominantly being caused by a shortage of land and an increased demand from home buyers leaving the eastern suburbs of Melbourne of Dandenong, Cranbourne and Berwick. A majority of the new land development is on the fringe of these cities and land prices have been increasing significantly. A 700 square metre vacant lot, which in 2015 would have cost approximately $140,000 to $150,000 is now selling in the region of $220,000 to $230,000. As a result the demographics of Warragul appear to be changing with both young families and retirees moving to the area to take advantage of the relatively cheap property prices in comparison to the Melbourne market.

A prime example is a vacant lot in Amelia Court of 4,000 square metres which sold in August 2016 for $258,000 and was resold in October 2017 for $343,000 or approximately a 30% increase in value in 14 months.

There are plans for a commercial development, including a K Mart and large Bunnings store to be constructed near the town site which will increase interest in the area as there is no significant commercial shopping centre development in either Warragul or Drouin. Increased train services to Melbourne in recent months may also increase interest in the area for those willing to commute to the Melbourne CBD on a daily basis.

The prospects for 2018 are strong with numerous real estate agents reporting that there is limited stock listed for sale due to the speed at which properties are selling, typically within a month, and demand is high. The future growth of Warragul and Drouin is dependent on continued high value and price growth in the Melbourne metropolitan area and thus a ten year outlook is uncertain. Only a few years ago, this development boom was unforeseeable and price growth of this nature has not been experienced in recent memory. As more land is developed through the Urban Growth Zone of both cities prices may ease back to a more sustainable long term growth trend.

Unfortunately with rapid expansion the town centres are becoming congested during peak periods such as school pick up and drop off times. The construction of bypasses, new schools and potentially a new hospital to be constructed between Warragul and Drouin would ease the pressure on current infrastructure.

Overall, the Warragul and Drouin markets are buoyant with strong confidence in the residential market and impressive price growth.


After what was considered a tough 2017 for the Latrobe Valley region, the past three months has seen increased activity and consumer confidence. Discussions with local real estate agents indicate more Melbourne and peninsula buyers are entering the market. Middle ring properties for Traralgon would be 1980s to 1990s brick in the west end in the $250,000 to $350,000 price range.

The Sale market remains stable with generally good interest at all price points. The middle ring would be the well regarded East Sale area with popular first home buyer homes including 1980s to 1990s brick which always hold value well.

The future of the power generation industry in the Latrobe Valley left investors taking a cautious wait and see approach, which is expected to continue in 2018.

East Gippsland

The East Gippsland middle ring has recently showed increased prices due to reduced supply and increased demand. Local agents are reporting increased asking prices over the previous couple of months, for example from $240,000 to $260,000, for basic 3-bedroom older dwellings in the middle ring in Bairnsdale. We anticipate settled sales over the next two to three months will show the increases in value accordingly.


The Wodonga property market has experienced strong growth over the past five years with median dwelling prices rising from $250,000 in January 2013 to $330,000 in October 2017 (source: Corelogic). Sales volumes in Wodonga have generally remained steady at around 360 to 390 sales annually over the past five years. The vast majority of dwelling sales (280) occurred within the $200,000 to $400,000 price bracket, followed by around 60 sales within the $400,000 to $600,000 price bracket.

Wodonga unit sales have experienced a slight softening of sale prices of around 4.5% over the past year, falling from $200,000 in November 2016 to $193,000 in October 2017.

Wodonga land sales have experienced around 6% growth in the past 12 months rising from a median sales price of $136,000 in November 2016 to $144,500 in October 2017. Sales volumes have fluctuated significantly over the past five years peaking in 2014 at 219 sales to 98 in 2017. This is anticipated to rise due to increases in the first home owner’s grant.

The Wodonga West property market has also experienced strong growth over the past five years with median dwelling prices rising from $265,000 in January 2013 to $315,000 in October 2017 (source: Corelogic). Sales volumes in Wodonga West have generally remained steady at around 220 to 230 sales annually over the past five years. The vast majority of dwelling sales (183) occurred within the $200,000 to $400,000 price bracket, followed by around 38 sales within the $400,000 to $600,000 price bracket.

Wodonga West unit sales have experienced a slight softening of sale prices of around 1.9% over the past year falling from $206,250 in November 2016 to $202,500 in October 2017.

Wodonga West land sales have experienced a 5.4% decline in the past 12 months falling from a median sale price of $135,000 in November 2016 to $127,750 in October 2017. Sales volumes have generally increased over the past five years from 34 in 2014 to 60 in 2017.

Generally, building costs have increased from around $1,150 to $1,250 per square metre in early 2016 to around $1,350 to $1,550 per square metre for standard project style dwellings.

Anecdotally, agents have reported a decrease in absentee investor activity, however these investors are still predominantly active in the Whitebox Rise Estate.

The middle ring in the Wodonga market is characterised by the satellite suburbs of Killara and Baranduda. Increasing land and dwellings in the Whitebox Estate over the past 18 months have pushed new home builders to new developing estates within these satellite suburbs. Killara has become particularly popular over the past two years as new allotments set back from the Riverina Highway have become available. The estate is located approximately seven kilometres from the Wodonga CBD. Standard 500 to 650 square metre allotments are selling at around $130,000 to $145,000 and larger lots are achieving as high as $160,000. Improved 4-bedroom, 2-bathroom dwellings are generally achieving $400,000 to $450,000 which is comparable to Whitebox Estate however the estate enjoys a quieter lifestyle with views of the surrounding hills.

In terms of price point, there are a couple of new estates within Baranduda which are offering the quieter lifestyle at a significantly lower price bracket. Generally 500 to 800 square metre allotments are achieving around $105,000 to $125,000 and larger lots in excess of 1,000 square metres are selling for around $140,000. Improved 4-bedroom properties are also selling around the mid $300,000 mark, despite being only ten to twelve kilometres from the Wodonga CBD. Baranduda also features St. Francis and Baranduda public schools and access to Wodonga is via the 100 kilometre per hour Baranduda Boulevard. In our opinion, this suburb is likely to see significant growth in the next five to ten years.


Tightening supply has lead to strong gains across most market segments particularly for mortgage belt properties in newer estates with sales in excess of $500,000 now common, particularly in the Highlands estate of Moama. There has been insufficient activity in central Echuca and Moama to determine any genuine market movement, though results for properties which have been offered to market tend to have struggled to meet vendor expectations in most instances, notwithstanding some isolated strong results in the past 12 months.

It seems likely that demand for new or modern dwellings will continue to be in undersupply in the short term and consequently, some firming is likely to continue in the marketplace until demand has caught up with supply. The tight supply appears to have precipitated increased demand for rural residential holdings, with buyers seemingly prepared to entertain properties which are on the fringe or further out of town at a sub $500,000 price point. The traditional seasonal influx of professionals for new school years and employment is largely over, though rental demand is likely to remain relatively strong on account of contractors associated with the second bridge crossing.

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