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  • Domain News by Rachel Wells

Country Victoria’s house price boom: Every region in the state records price growth

House prices in every regional area of Victoria experienced price growth over the past year, with some regions up by as much as 18 per cent, according to the latest Domain House Price Report.

COVID-19 and a widespread move to remote working saw a growing number of people turn their backs on the city for coastal and country areas located within an easy commute of the city, boosting prices in a number of those areas by more than 15 per cent.

Real estate agents in some regional areas say low interest rates combined with generous government incentives, particularly for first-home buyers, has also driven local buyer activity and prices in some areas.

House prices in the southern Grampians, which includes towns such as Hamilton and Dunkeld, more than three hours west of Melbourne, have experienced the strongest year-on-year growth, of 18 per cent.

Prices in the northern Grampians, including Stawell and St Arnaud in the Wimmera, also rose by 15.3 per cent over the year to a median of $245,000.

Jo Frost, of Elders Real Estate Hamilton, says she was not surprised the southern Grampians, with a median house price of $295,00, recorded some of the strongest growth in the state.

“It’s no surprise at all, pretty much since about May, we have not stopped running,” she says.

She believes activity in the area has been driven by three key factors, including “people panicking after the pandemic hit and pulling their money out of the stock market and putting it into bricks and mortar”, low interest rates and government stimulus, and more recently, a growing number of tree changers.

“The thing is, houses in Hamilton and the surrounding areas are still cheap. So, early on in the pandemic we had a lot of people buying up properties as an investment,” she says.

“Then with the interest rates so low and some of those government incentives coming on, we saw a lot of local movement with people selling and upgrading to something bigger and better and first home buyers getting into the market while they could.

“Only now are we starting to see a bit of a flow-on of people from the city and outer suburbs. At this time of year, you do tend to get that transition with new employment, such as teachers and nurses and police moving to the areas, but this is unprecedented,” she says.

Greater Bendigo had the second-largest spike in house price growth in the state, with median house prices increasing 16 per cent in the year to $435,000.

Domain senior research analyst Nicola Powell says regional Victoria has “really been the star performer”.

“There was no regional area that has missed out on growth and I think a lot of the growth that we’ve seen, particularly since the pandemic, reflects the fact that Melbourne came out of one of the strictest lockdowns in the country and the impacts that has had on our lifestyles since and the ability to work remotely has simply changed our ideas on where we want to reside,” Dr Powell said.

One of the most surprising things to come out of the data was the large jumps in house prices in areas some distance from Melbourne.

While much has been written about so-called covid-changers seeking a lifestyle change in coastal and regional towns within an easy commute of the city, several of the fastest-growing regions in the state over the past year are more than 250 kilometres from Melbourne and up to 350 kilometres away.

The Gannawarra region, for example, in the far north of the state, which takes in towns such as Cohuna and Kerang, a three-hour drive from Melbourne, had house price growth of 15.9 per cent over the year.

Swan Hill, about four hours north of Melbourne, saw its median house price increase by 15.4 per cent to $337,500.

Dr Powell says some of the stronger price increases in regional areas could also be due to many areas not experiencing the extended strict lockdown that existed in metropolitan Melbourne.

“That just meant that people already living in those areas could continue to buy and sell property as normal and even take advantage of some of the government incentives, especially for first-home buyers,” she says.

Tanya Harvey, of Nutrien Harcourts Cohuna, says while local buyer activity has been strong over the past year, city based tree changers have driven much of the recent price growth in the region.

“Over the last five years, we’ve seen an increase in the number of people buying in the area and we’ve seen some pretty steady price growth, but definitely since March last year, we’ve seen a much steeper increase in prices,” she said.

“I would say that previously about 50 per cent of buyer inquiries were from people thinking about a tree change, as part of a five or 10-year plan, whereas in the last couple of months, people have been saying to me ‘forget the five-year plan, let’s do it now’.”

She says many tree changers are lured by a combination of the “quietness” and the affordability. The median price of a house in the region is $254,500.

“It is definitely being driven by people looking for a tree change and I think increasingly people are discovering that not only is it still affordable here but we also have all the amenities people need, such as good doctors, supermarkets, and shopping, and we’re within 45 minutes of major hubs like Echuca and Swan Hill.”

“In fact, we’re probably a bit quieter and more affordable than some of those places and so people are really attracted to our laidback lifestyle,” she says.

Some of the state’s most popular covid-change regions also recorded strong house price growth over the year to December 2020, including the Macedon Ranges with 13.5 per cent growth to record a median house price of $792,000; the Surf Coast, with 12.8 per cent growth to a median of $980,000; and the Bass Coast, which includes Phillip Island and coastal towns such as Inverloch, which saw its median house price grow by 14.6 per cent to $590,000.

Dr Powell says there is no doubt that a move to more flexible and remote working is driving price growth in popular lifestyle-change areas, closer to Melbourne.

“We are seeing that shift to remote working really driving that post-pandemic exodus from Melbourne, particular among people who are perhaps on higher wages and they are the ones who are pushing up prices in some of those more expensive areas along the coast, for example, that are still close to the city,” she says.

The regions with the slowest house price growth over the last year included the Colac-Otway region (0.9 per cent); Moorabool, including Ballan and Bacchus Marsh, just west of Melbourne, which saw price growth of just 1.7 per cent; and Golden Plains, including Bannockburn and Meredith, west of Melbourne, which saw the median house price grow by 3.5 per cent to $585,000.


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