Key regional centres in Victoria have featured among the most prolific property markets in Australia over the past three to four years.
Regional cities including Geelong, Ballarat and Bendigo have had exceptional price uplift, including in the past year, with many suburbs increasing well above 20%. The dominant trend in Australian real estate – the ‘Exodus to Affordable Lifestyle’ – first became noticed in these markets, with buyers from Melbourne targeting them and hill change towns north of the capital city.
More recently, the trend has spread east to the towns of Latrobe Valley, north to Shepparton and Albury-Wodonga at the New South Wales border, and west to more distant regional centres such as Warrnambool and Mildura.
Many of the smaller towns of Regional Victoria have also experienced exceptional growth in house prices over the 12 months to 1 August. Regional Victoria got on its growth path ahead of the pandemic boom that has swept the nation and many of its locations have had exceptional growth already over multiple years.
The 10 best suburbs in Regional Victoria to invest in
- Beaconsfield
- Belmont (Geelong)
- Corio (Geelong)
- Cowes
- Flora Hill (Bendigo)
- Kyneton
- Shepparton
- St Albans Park (Geelong)
- Traralgon
- Warrnambool
With so much major capital growth already in locations across Regional Victoria, it’s more difficult to isolate markets with the potential to excel on price uplift in the near future. Locations which have had consecutive years of 20%-plus price growth are unlikely to keep performing at that level.
Nevertheless, there remain good possibilities among the locations listed in our Top 10. These are mostly places where sales volumes are still rising strongly, against the general trend across Regional Victoria.
Geelong has been a growth market for the past three years or more, but some of its suburbs are continuing to deliver upward momentum. At the more affordable end of the Geelong market, Corio (median price $410,000) has doubled the number of house sales in the past year and prices are still rising. With vacancies close to zero, rents are also increasing. St Albans Park is another affordable suburb (median price $495,000) where sales activity is rising and prices continue to head north, with an undercurrent of low vacancies and rising rents.
More expensive but also still moving forward strongly is Belmont with a median price of $645,000. Sales activity is double the levels of a year ago and prices continue to rise. Belmont has a corridor of green spaces, including golf courses, and is well-situated between the Geelong CBD and the major education precinct centred on Deakin University.
Bendigo, like Geelong and Ballarat, has been attracting buyers out of Melbourne, boosting sales volumes and prices. The inner suburb of Flora Hill has seen sales levels double in the past year and prices have responded, with a 6.4% increase in the median price to $415,000 in the most recent quarter. Just 3km from the Bendigo CBD, Flora Hill is home to Bendigo South East College and La Trobe University’s Bendigo Campus.
Cardinia Shire just outside Melbourne in the south east has a number of locations, including Pakenham and Officer, where vacancies are ultra-low, rents are rising and the number of home sales has risen exponentially in the past year. Beaconsfield is poised for further price growth, with demand from both buyers and tenants rising. Beaconsfield is next to Berwick, which contains a major education hub including Monash University, TAFE, colleges and schools.
In the Bass Coast region, the level of sales in Cowes has trebled in the past year, with more and more buyers targeting affordable lifestyle areas outside of Melbourne. Low vacancies and rising rents are putting further pressure on prices, which have jumped in the latest quarter to a median price of $595,000. Cowes, on Phillip Island, has major recreational amenities and is the kind of destination being targeted by Exodus buyers.
There has been prolific price growth in the towns of the Latrobe Valley and the largest population centre Traralgon has joined the trend in an area where a lot is being spent on new infrastructure. Vacancies are below 1%, sales activity is rising and the median price moved another 5% in the latest quarter to $360,000. Traralgon benefits from major upgrades to road and rail links, the ongoing expansion of Latrobe Regional Hospital and major energy and resources projects in the broader region.
Hill change towns north of Melbourne continue to attract buyers out of Melbourne. Kyneton is a key part of the trend, with sales activity rising and vacancies close to zero creating strong growth in rentals. The median price moved a further 5.7% in the latest quarter to $695,000. Kyneton is part of the Macedon Ranges Shire, a key target for Exodus buyers, and sits on the rail line that links Melbourne to Bendigo.
The ‘Exodus to Affordable Lifestyle’ trend, which initially targeted regional centres within one to two hours of Melbourne, has spread further to key centres such as Shepparton, the centre of a key agricultural region and a target for major infrastructure spending. Major demand from tenants has pushed vacancies well below 1% and rising demand is putting upward pressure on the median price.
Also part of this trend is the seaside regional city of Warrnambool, where prices are following the pattern set by rising rents and sales activity. Warrnambool offers good infrastructure and the affordable lifestyle sought by many buyers, putting upward pressure on its median house price, currently sitting at $425,000. It rose by 13.2% in the 12 months to 1 August.
The 10 best suburbs in Regional Victoria to invest in
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| Suburb | Median house price | 1-yr growth | 10-yr average annual growth (%pa) |
Vacancy rate | Median rental yield |
|---|---|---|---|---|---|
| Beaconsfield | $825,000 | 15.9% | 5.9% | 0.7% | 2.6% |
| Belmont (Geelong) |
$645,000 | 15.6% | 6.4% | 0.9% | 3.2% |
| Corio (Geelong) |
$410,000 | 13.5% | 6.3% | 0.3% | 4.0% |
| Cowes | $595,000 | 12.3% | 5.9% | 0.9% | 3.3% |
| Flora Hill (Bendigo) |
$415,000 | 10.4% | 4.1% | 1.3% | 4.3% |
| Kyneton | $695,000 | 14.6% | 7.2% | 0.3% | 3.3% |
| Shepparton | $325,000 | 14.3% | 2.8% | 0.6% | 5.2% |
| St Albans Park (Geelong) | $495,000 | 16.4% | 5.2% | 0.7% | 3.8% |
| Traralgon | $360,000 | 12.3% | 3.2% | 0.7% | 5.3% |
| Warrnambool | $425,000 | 13.2% | 3.2% | 0.5% | 4.6% |
Sources: Median price, growth and rental yield: CoreLogic data sourced from yourinvestmentpropertymag.com.au dated 1 August 2021. Vacancy rates: SQM Research as at September 2021.
Cover image source: FiledIMAGE/Shutterstock.com
About Terry Ryder
About Terry is the founder and Managing Director of hotspotting.com.au, which he created in 2006 to help investors find the best places to buy. Terry has been a specialist researcher and writer on Australian residential property in a career spanning four decades. During that time he has published four books.
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