Regional VIC

The Smartline Report – May Edition

The month in review: Regional VIC

By Herron Todd White
May 2015

The prestige market for residential properties in the Ballarat area kicks in around the $1 million mark. At this price point there are very limited transactions each year. The properties in this price bracket are usually found in Ballarat Central and Lake Wendouree where most prestige properties are Victorian style dwellings on large allotments which have been updated to a high standard. Many of the properties also have views of and very good access to Lake Wendouree. In addition to these properties the past five years has seen a material increase in demand and value of quality rural residential properties. Most of these properties which break into
the prestige market are five to 50 acres in size and are characterised as rural lifestyle properties. Most of these are found on the Melbourne side of Ballarat and feature large dwellings with good views and quality ancillary improvements such as pools, tennis courts and shedding. These are found in Buninyong, Invermay, Daylesford and several hamlets between Ballarat and Ballan.

The sector is performing reasonably well and has done over the past 24 months. The distinguishing factor of the sector is the amount of time the properties take to sell which is usually six to twelve months. Some fickle sales and over pricing agents can make a fair sale price hard to distinguish for some properties.

The top end of the market and its health or lack thereof is a good barometer for the health of the area as it means people in the area are generating more money or people from outside the area with significant money are moving to the area.

The next 12 months in the sector will be a period of consolidation. The local and global government and economic stability will assist the market underpin its growth over the past two years and give it a platform
to grow further in the future.

An example of a prestige sale in town is 309 Wendouree Parade in October 2014 for $2.7 million. It has a lap pool that runs around the entire dwelling.

Gippsland & Latrobe Valley
The prestige market through Gippsland is considered thinly traded and extremely tightly held. However,
when available on market, a keen interest is shown as people will pay for location.

Price points in Sale and Traralgon for prestige are considered to be $700,000 plus. For Traralgon, these are located close to the CBD, north and west, and north west. For Sale, these are located close to the CBD, south east and far south east rural residential.

Baw Baw Shire
Around Warragul there have been a number of sales recently in the $550,000 to $650,000 range for residential dwellings. This seems to be the top bracket for this area except for extremes.

There is a pocket of residential properties that back onto the golf course in Warragul that are attracting a $100,000 premium simply due to being in that location with direct access to the golf course.

East Gippsland
The prestige markets in East Gippsland are thinly traded at present. These include lake front properties located on Shaving Point in Metung with few properties tightly held and seldom coming to market commanding prices in the region of $2 million.

Other locations include the Paynesville Canals with a few sales, but most recent sales ranging from $800,000 to $1,250,000.

Further east, Lakes Entrance lake front properties have recently sold in the range of $800,000.

Town localities such as Bairnsdale have prestige up to around $650,000 with some exceptions and with the best rural residential getting in the $700,000 to $800,000 range.

As we approach the half way point of 2015 it is time to reflect on how the prestige property market is performing.

The lower market segments have been performing well. Throughout the early part of 2015 we have seen stable and healthy activity in the lower market segment. Consequently we have seen a flow on effect into the middle segment as vendors in the lower market segment look to trade up. As such we have seen a stable property market up to and around $800,000. So how is the prestige market going?

Unfortunately, the prestige market is considerably slower than the lower and middle market segments.

That being said we have not seen a decrease in values over the past 12 months, more so a levelling out. Properties above $1 million are selling if they are priced correctly and well presented, however extended selling periods of between six and twelve months are still common. This is a reflection of the limited amount of prospective purchasers in this price bracket. These numbers have appeared to decrease over recent months, especially with job losses in the mining sector.

The prestige residential market in Warrnambool is the most thinly traded market, with values for dwellings in excess of $800,000 and apartments in excess of $450,000 considered prestige. These properties generally comprise older pre-war renovated dwellings within close proximity of the CBD or modern architecturally designed buildings capturing ocean or river views. Prestige apartments are concentrated along Merri Street capturing ocean views. Low interest rates are having little influence in the market with the majority of owners being wealthy families or individuals who do not have financial stress. There have been limited transactions in the past 12 months, with notable sales being 32 Jamieson Street which transacted for $1,180,000 and 60 Merri Street for $839,000. It is expected that this trend will continue for the next 12 months.

The prestige property market in Horsham is generally considered to be homes above $500,000. These properties are generally located in modern subdivisions, have river frontage or are close to the CBD. They are traditionally large three to five bedrooms modern homes with all the features or large older well renovated period homes. Units are rarely considered to be part of the prestige market. This prestige sector is dominated by local professionals and business people and remains thinly traded with only a handful of transactions every year.

The demand in this sector is generally underpinned by local business performance and is not significantly impacted by small interest rate movements that impact the wider housing market. Other drivers in
this sector include the urbanisation of retiring local farmers who seek closer proximity to services. This market is expected to remain static into the near future.

Please note that information in this publication is subject to change without notice. Smartline assumes no responsibility for any errors, omissions or mistakes in this document. © Smartline Home Loans P/L 1999 – 2015. Australian Credit Licence Number 385325


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