Recent figures from both CoreLogic RP Data and Domain have cast a positive light over Melbourne’s market, but there are signs that market improvement is not contained to within the Victorian capital’s city limits.
Figures from the Real Estate Institute of Victoria (REIV) show the December 2015 was a positive one for both houses and unit in the state’s regional markets, with solid median price increases occurring.
According to the REIV, the median house price in regional Victoria increased by 2.2% to $353,000 over the three-month period, while the median price for a unit in regional area rose 2.3% to $263,500.
REIV chief executive officer Enzo Raimondo believes increased attention from owner-occupiers is likely behind the improvements.
We’ve seen prices in major regional areas within 90 minutes of Melbourne grow in price, suggesting city commuters are looking further afield for lifestyle and value reasons,” Raimondo said.
“Many regional centres within commuting distance of Melbourne are increasingly sought-after by those priced out of the Melbourne market,” he said.
But Mark Ribarsky, director at Wise Real Estate Advice, said investors are too showing a strong interest in the state’s markets.
“It’s split pretty evenly between investors and home buyers,” Ribarsky said.
“We’re seeing a lot of interest from home owners who want to get out of the city and knock a fair bit off their mortgage and there are also a lot of investors at the moment who are looking for somewhere they can crack into the market,” he said.
After somewhat of a slowdown over the Christmas and New Year period, Ribarsky said buyer interest is again on the rise, with affordability the main attraction.
“Affordability is the definitely the main driver. Melbourne’s median is pushing up to around $1 million, while the regional centres are well below that and presenting excellent value.
“The regional markets aren’t going to see the same levels of capital growth that you get in city markets, so it’s definitely a bit of longer term investment. In saying that, the rental yields in some of the regional areas are fantastic compared to the city.”
While there is strong interest in a number of regional areas, Ribarsky said two in particular seem to be attracting buyers.
“We’re seeing a lot of interest in Bacchus Marsh. It’s not too far from Melbourne and has some great private schools in proximity to it.
“The other one is Geelong, again it’s not very far from Melbourne, but it’s a lot more affordable and there seems to be some good prospects there.”