Regional Victoria median house prices (Nov)
The REIV’s September quarter market update shows that the median house price in regional Victoria has dropped to $310,000 from $320,000 in the June quarter. The 3.1 per cent drop is very similar to the 2.8 per cent fall recorded in the metropolitan area.
It is clear that concerns about the international economy and negative consumer sentiment have translated into reduced demand and a lower median. This serves as another reminder that the state of the housing market is directly linked to the health of the economy. Despite evidence that the local economy continues to outperform many of our trading partners, we are now experiencing a soft housing market.
Of the main regional centres, Geelong has recorded a very healthy increase of 5.7 per cent to a median house price of $390,000. In Ballarat prices were stable, with a median of $285,000, and in Bendigo there was a 2.6 per cent reduction to $277,500.
Looking at smaller regional centres shows that median prices increased in the Shire of Mount Alexander, the Surf Coast Shire, the City of LaTrobe and to a minor degree in Wodonga. Falls were recorded in Shepparton, the Heapburn Shire and the Shire of Macedon Ranges.
The lesson from the GFC, when the median fell by 14 per cent, is that the market will remain subdued until confidence in the economy improves or there is stimulus in the form of lower interest rates.