• While median Regional house prices sit below the peaks achieved 12 months earlier, current levels remain still 17% higher than the levels recorded two years’ ago according to the REIV;
• The vacancy rate for Regional Victoria remains very tight at 2.1% and below the Melbourne metropolitan average, led by Ballarat (1.5%) followed by Bendigo at 1.6% and Geelong 3.1%;
• Regional Victorian weekly rental levels for both houses and units have risen to all-time highs as at March 2023, having increased by 5% and 6% over the year respectively.

Victorian Regional Residential Market Summary

Although prices have not fallen to the extent of those in the Melbourne metropolitan area, Victorian Regional housing prices have declined for four consecutive quarters for the first time since 2014 according to the REIV. Victorian Regional house prices fell by 0.2% over the March 2023 quarter, the most modest decline of the quarterly decreases which suggest that prices may be stabilising.

Prices

Although prices have not fallen to the extent of those in the Melbourne metropolitan area, Victorian Regional housing prices have declined for four consecutive quarters for the first time since 2014 according to the REIV. Victorian Regional house prices fell by 0.2% over the March 2023 quarter, the most modest decline of the quarterly decreases which suggest that prices may be stabilising. As at March 2023, median Regional house prices sit at $602,000, 3.6% below the peaks achieved 12 months earlier but still 17% higher than the levels recorded two years’ ago. According to the REIV, median house prices of the regional cities of Ballarat ($580,000) and Bendigo ($570,000) both reached all-time highs as at March 2023 for the third consecutive year however Geelong median house prices declined over the year to March 2023 to $759,500. While there is some downside risk to median dwelling prices for Victorian regional properties, given the relative affordability compared to metropolitan properties, Urban Property Australia expects that the Regional housing markets will outperform the metropolitan housing market in the short term.

Regional Dwelling Prices

Demand / Vacancy

According to the ABS, Victoria’s regional population increased by 16,700 over the year to June 2022 with Geelong, Ballarat and Bendigo accounting for 53% of the population growth across the regional area. Over the 12 months to June 2022, Geelong experienced the greatest population growth of all regional cities across Victoria followed by Ballarat. The pandemic and working from home has made a regional move more possible for those in capital city-based jobs, with the flexibility of work never been so recognised as previously considered. According to the REIV, as at March 2023, the vacancy rate for Regional Victoria remains very tight at 2.1% (albeit higher than the rate of 1.4% recorded a year earlier) in comparison to the metropolitan average of 2.2%. The vacancy rates of the major Regional Cities also remain very low, led by Ballarat (1.5%) followed by Bendigo at 1.6% and Geelong (3.1%).

Residential Vacancy by Region

Rents

Reflecting the strong population growth outpacing the supply of housing, rental levels in the Regional markets continued to increase across most regions. According to the REIV, Regional Victorian weekly rental levels for both houses and units rose to all-time highs as at March 2023. Over the year to March 2023, the weekly median rent for houses in Regional Victorian increased 5%, rising to $440 per week. Similarly, rents for Regional units rose to $370 per week, up from $350 per week a year earlier. By regional city, Geelong outperformed both Ballarat and Bendigo with the weekly median rent for houses up 6.7% to $480 as at March 2023. In comparison weekly median rents for houses in Bendigo increased by 4.8% to $440 with rents for Ballarat houses increasing by 3.4% to $393 per week as at March 2023.

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