Regional Victorian house prices achieve record gains

House prices across regional Victoria have had an impressive 12 months of growth, recording the largest annual increase since 2001.

Data from the Real Estate Institute of Victoria’s December quarter report shows the median house price across regional Victoria grew 27 per cent, taking the median price to $565,000.

Regional unit markets also had an impressive year, with values soaring 19.6 per cent to a median price of $395,950.

The strongest performed regional housing market in Victoria (with more than 50 sales) was Point Lonsdale, in Greater Geelong, where the median house price climbed 57.6 per cent to $1.15 million.

For the regional unit market, the best-performed location was again located in Greater Geelong, with Ocean Grove seeing its median price increase 46.9 per cent to $960,000.

REIV President Adam Docking said lockdowns played a big part in people choosing to look at regional property.

“The data reflects the enduring attraction of regional Victoria as a lifestyle choice following two years of COVID-19 restrictions,” Mr Docking said.

Metro markets across Melbourne, didn’t quite keep pace with the regional areas, however, the median house price did increase by 18.9 per cent to $1.125 million.

The metro unit market increased by 18.9 per cent, taking the median price to $692,000.

The best-performed metropolitaion suburb (with more than 50 sales) was Dromana, where the median price increased by 50.1 per cent to $1,465,250.

In terms of unit markets, the top performer over the past year was Bentleigh, where the median price rose 28 per cent to $1.452 million.

While all markets around the metro areas performed well, with the highest growth seen in a decade, there was a clear shift towards the outer and middle ring.

The report shows houses in middle Melbourne, the typical suburban family belt, achieved a $1.23 million median price with a reported annual increase of 18.3 per cent.

Houses in outer Melbourne have experienced price growth for six consecutive quarters and. with a median price of $815,000, are now 16.4 per cent more valuable than 12 months ago.

The number of homes that went under the hammer surged 144 per cent compared to 2020, with 15,954 auctions and 12,794 sales in the December quarter, which was the strongest ever performance for both auction volume and sales in any quarter.

Mr Docking expects the market will soon begin to stabilise as listing volumes continue to increase, however, he’s unsure how virus fears will impact property prices.

“At this stage it’s too early to tell,” he said.

“Virus safety is front-of-mind and Victorians are well-adjusted to the protocols they need to prepare for when attending inspections.

“Major factors influencing the residential real estate market continue to be low interest rates, lifestyle choices as more people work from home and pent-up demand after the series of lockdowns over 2020 and 2021.”

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Rowan Crosby

Rowan Crosby is a freelance journalist specialising in finance and real estate.