The property market in Mildura and Regional Victoria continues to be performing exceptionally well. According to CoreLogic, home values in Regional Victoria have increased 2.4% for the quarter, achieving a median sales price of $570,000.
Even though Regional Victoria has seen significant lockdowns over the past few months, Mildura has experienced a 9.39% median price rise over the past 12 months, with the median sales price currently being $350,000.
Is this current price trajectory likely to continue? What is likely to happen now that many parts of Victoria are “re-opening”? What does this mean for vendors and the local market? Let’s delve into how this is translating to sales and prices locally.
What is happening within the local real estate market?
Melbourne’s exodus to attractive sea and tree-change regional areas is predicted to continue, with demand for regional property likely to remain high. Like Melbourne, property markets across Regional Victoria have been largely in hibernation since auctions and inspections moved entirely online – which is now likely to change.
Within Regional Victoria, buyers are very confident and are out in force – owner-occupiers, upgraders, investors, and first home buyers – at a time when good quality supply is extremely low, putting upwards pressure on prices.
According to realestate.com.au, the June quarter Regional Movers Index revealed the local government areas recording the largest growth in migration from city dwellers were all within a three-hour drive from Melbourne’s CBD.
This is seeing ‘commutable and accessible’ Regional Victoria hurled into a rental crisis, as new data reveals prices have increased by more than 20% in some towns in the space of 12-months. This makes logical sense, as many Melbournians seek to find rental accommodation first, then sell their Melbourne-based home, and finally purchase a new home within Regional Victoria.
The buyer segment that is truly driving this demand, and subsequent price growth in Mildura and Regional Victoria, is upgraders. It’s the family buyer, looking to take advantage of Regional Victoria’s affordability, and purchase a well-presented ready-to-move-in family home. This demand has contributed to the average days on market metric declining to 32 days. This is down from 42 days in the previous quarter, highlighting how ‘hot’ the current market is.
Buyers’ preferences have changed – family buyers are looking for homes where one or both parents can work-from-home semi-permanently, and where children can have space for home-schooling commitments; should a wide-spread lockdown occur again. As such, it’s the vendors who are listing their well-presented ready-to-move-in family homes that are the big winners here.
Despite the double-digit price increase, the median house price in Regional Victoria is $570,000, according to the REIV (up $10,000 from the previous quarter). For buyers who have come up against affordability constraints in larger cities, such as Melbourne, this median house price-point is now providing relatively affordable purchasing opportunities.
We are also seeing healthy investor activity in the region too. The median rent for houses in Mildura is currently $360 per week, which translates to an annual rental yield of approximately 5.3% (up from 5.1% in the previous quarter). In addition, the median rent for units is $285 per week, which translates to an annual rental yield of approximately 6.4% (up from 6.2% in the previous quarter). Not so long ago, this would have been considered an average return, but with record low interest rates (and some very sharp fixed interest rates), that perception has certainly changed. So much so, that many investors are purchasing investment properties that are positively geared from day one.
Our projections for the next 3 months
Throughout the past quarter, we have seen some terrific sales results in Regional Victoria. Unsurprisingly, seven-figure sales results are becoming more and more common in Victoria’s regions, with more than a dozen suburbs and towns joining the million-dollar median club.
Deep-pocketed Melburnians continue their plan to escape – which will continue to push up prices in regional areas – and those looking to make a sea or a tree-change, will now face premium price tags.
We are seeing demand “dramatically increase” from Melbourne buyers who have bought forward their future tree-change plans, as many rushed to market with a heightened “fear of missing out”.
Furthermore, we are now starting to see an increase in good-quality supply come onto the market. Traditionally the property market slows down during Summer, however as we race towards Christmas and the New Year, demand is expected to remain very strong from committed buyers.
Vendors will continue to cash in on very strong pent-up demand from buyers – seeking commutable rural retreats, amid the exploding work-from-home phenomenon.
Naturally, the dynamic of strong and committed consumer demand, and low supply, continues to create some urgency, and FOMO, among buyers. As other parts of Victoria and Melbourne continue to become out-of-reach for most buyers, Regional Victoria and Mildura will continue to be in demand for prospective buyers who see value in the region.
This is likely to result in continued price growth, and strong prices being paid for good quality, well-located property, where buyers can immediately begin to enjoy an exciting new lifestyle.
Always seek advice from a trusted professional.
Purchasing and investing in real estate is exciting and when done well, can significantly transform your life. Now is a great time to get started on your property journey, or continue climbing the property ladder, as interest rates are at an all-time low. Our agency is also seeing high-quality family-oriented supply begin to come onto the market, and this is set to continue as we progress through Spring and approach Summer.
To learn more about the benefits of real estate investing and what prices may do long-term, please contact us at One Agency. With One Agency being one of Mildura’s most trusted real estate agencies, we are well placed to provide you with our view of the current market based on our local experience. We’ll thoroughly guide you through the process and help you take advantage of this opportune time in the property market.