Regional VIC September 2018

The month in review: Regional VIC

By Herron Todd White
September 2018

Gippsland/Phillip Island

Throughout the later part of spring we typically see increased listings and increased demand in Phillip Island for more holiday or investor type properties which is driven predominantly by capital city based buyers who holiday in the area.

The market for this type of property tends to ease throughout the winter months and pick up again throughout the warmer periods, particularly during the summer school holiday period more than September due to the area being a holiday destination.

This type of market is typically looking for lower to median priced properties within close proximity of the beach and local shopping rather than owneroccupied properties and newly developed dwellings located within new housing estates.

Mildura

There a number of factors affecting selling activity in the Mildura area and while spring may have traditionally been the busiest period, we suspect that this trend is reducing. While there is no doubt that gardens and swimming pools look their most inviting in the warmer months, buyers appear to now be just as motivated by other factors such as location and the standard of the dwelling and external improvements.

We still find that December and January are often the busiest time for people relocating either to or from Mildura, with families wanting to coincide moving with the beginning of the school year. This does increase the number of homes listed for sale in late spring and early summer. For people moving from cooler climates, the sight of a swimming pool on a 40 degree day can make a difference.

In summary, if a property has above average landscaping or a good pool, it probably does make sense to show it off in spring or summer, when it looks its best. For other properties, it probably makes little difference.

We expect to see our residential market remain buoyant over the remainder of the year. Vacant lots in new subdivisions continue to sell well at prices that are now 20% above what was being achieved two to three years ago Established housing, particularly in the $300,000 to $500,000 bracket, also is in strong demand.

With interest rates appearing to be on hold for the time being and our local economy growing steadily, it is hard to envisage anything causing a down turn over the next six months.

Echuca

The spring season for Echuca Moama is likely to be significantly impeded by an ongoing lack of stock. Almost all agents are reporting limited listings and generally strong demand with the market still punctuated by off market transactions. This is likely to continue in the spring and has the potential to see several strong results, notwithstanding a softening in sentiment nationally.

Shepparton

Spring is a special time of the year – the weather is warming up, the days are getting longer and there is a burst of organic colour around the Goulburn Valley (and with it, the dreaded hay fever cloud).

The mindset of spring has sprung – and so has an abundance of new housing stock on the market is a hard one to buck. Typically it is the time of year that homes are looking their best and the buyers are coming out of hibernation, however the genuine buyers aren’t deterred during winter and they can often snap up a good deal. Locally, selling agents are hoping that there will be a rush of new stock to enter the market as strong demand over 2018 has resulted in a lack of appropriately priced homes being offered.

At the moment, homes priced in the sub-$300,000 bracket are gaining the attention of out of town investors (mainly from the capital cities). Because a number of these properties are already tenanted (and merely just changing landlords), there hasn’t been a major influx of additional rental stock. Some agents are reporting that properties are being let to quality tenants before they hit the online portals. Rental demand always has a strong uptick during spring over the winter quarter, which means it’s a great time of year to freshen up that investment property between tenants and possibly attract a higher paying tenant.

Construction demand in the area remains strong, however we are seeing a number of new homes where the house and construction cost is in excess of $450,000 being representative of an overcapitalisation for certain housing estates.

The market within the Goulburn Valley is continually shaping up to see strong periods of growth for the remainder of 2018 and will most likely carry over into 2019.

Wodonga

With spring around the corner after a long cold winter, local real estate agents begin to ready themselves for what traditionally signals the start of increased activity as buyers and sellers shake off the winter blues and look to capitalise on the optimism that comes with the warmer months.

Having said that, the market has performed well over the past 12 months with sales activity increasing around 20% on the previous 12 months, however sales prices experienced only modest uplift over the same period with the median dwelling price increasing around 3.2%. The vast majority (72%) of all dwelling sales occurred in the $200,000 to $400,000 price bracket.

Unit sales have experienced a slight median price increase of around 4% from December 2017 ($211,250) to April, 2018 ($220,000), however sales activity within this market has remained soft at around 65 sales annually over the past two years, down from around 80 sales in 2015 and 2016.

Construction demand in the area remains strong, however construction costs have increased generally from around $1,200 to $1,350 per square metre for a standard project style home to around $1,350 to $1,550 per square metre with a large variability between builders large and small. The result of this is an increase in new builds being representative of an overcapitalisation within some housing estates.

Wodonga land sales have experienced a 4% increase over the past 12 months rising from a median sales price of $139,300 in May 2017 to $145,000 in April 2018. Sales volumes have fluctuated significantly over the past five years peaking in 2015 at 219 sales to 102 over the 12 months to April 2018. We do anticipate an increase in activity during the drier months and as a result of an increase in the first home buyers market.

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