PROPERTY prices in the region have taken a stumble during the last three months with data showing average sale numbers at settlement down both south and north of the river.
Data for the three months to the end of September gathered by real estate information firm PropTrack showed prices in the North West region that includes Mildura down 1.47 per cent, while in the Murray area of New South Wales which takes in places like Wentworth and Buronga they were off 0.58 per cent.
Yet the dips haven’t put annual fluctuations in the red with average property prices in the North West up 1.87 per cent for the year to the end of last month and an even more robust 2.87 per cent across the river.
Ben Ridley, director at First National Collie & Tierney put the median price decreases down to a range of factors.
“It doesn’t’ surprise me,” he said.
“We’re probably finding at the moment there’s certainly a slowdown in regard to local buyers in the market, especially homeowners and first home buyers.
“But we’re finding there’s a real uptick in out of town investors. Generally investors are going to be buying on a return basis of five per cent to 5.5 per cent.
“I reckon that lack of competition in the market may have just seen a couple of those prices go beneath where vendors’ expectations were initially.”
According to Mr Ridley there’s also two other major issues at play in the Mildura market.
The first is a nationwide challenge, the other a locally grown problem.
“I think the cost of living has really hit home,” he said. “People are really just starting to rein in their spending.
“You can see that in cafes around town that people are just not going out and spending that excess money.
“The other thing is there’s a lot about construction costs, usually we have quite a bit of construction going on this time of year as people try to get land to be in by Christmas, and the land portion has completely and utterly stopped.”
Even though it’s only a matter of meters, Mr Ridley said there were some simple key differences north of the Murray keeping average price growth in places like Wentworth, Buronga and Gol Gol above Mildura.
“It’s land tax,” he said.
“All the extra taxes that they don’t have in New South Wales at the moment make it really appealing to people, especially people who are still looking to build.
“There’s still a bit of construction on that side of the river because there’s extra things like land tax they don’t have to worry about.
“You find that your rates are generally a little bit cheaper over there, and the lack of taxes compared to Victoria, it just adds up.”
North West Victoria’s current annual growth rate of 1.87 per cent, which is best of any of the state’s regions or metropolitan Melbourne, is something Mr Ridley said further underscored Mildura as a different beast.
“Usually we find that out if town investors look to buy into a market they still feel there’s going to be some capital growth in, and I reckon regionally they are looking at Mildura as a really strong chance of capital growth over the next 12 months,” he said.
“With that trend of out of town buyers coming in, local buyers should probably start to look to get into the market sooner rather than later, as I think it’s probably at its cheapest right now.
“Mildura for that long term investment is always going to hold, that’s why a lot of these buyers from out of town come to Mildura based on the knowledge they are still going to get a comfortable amount of capital growth but their also getting a really strong return on investment.
“We just don’t have the highs and the lows the capital cities have and that’s why people like the Mildura market.”
Despite the dips, Mr Ridley said he was optimistic the market would rebound quickly, although his advice in the short term was for some sellers to hit pause if they could.
“Anyone who’s looking to sell from $550,000 upwards, I would probably hold off until an interest rate reduction comes into play,” he said.
“If you’re under $550,000, with all the buyers’ agents in town at the moment, I’d probably go to the market right now because there’s a healthy amount of competition for properties under the $550,000 mark.”
Since March 2020 overall property prices in regional Victoria are up 39.2 per cent and 15.2 per cent metro Melbourne.
However, more recently the statewide trend was also down, with the regions collectively off 0.02 per cent for September and 1.32 per cent year-on-year.
Senior economist at PropTrack Eleanor Creagh echoed Mr Ridley’s comments on Victorian fees and charges.
“Price momentum is weaker in Melbourne as buyers have consistently enjoyed more choice relative to other markets, higher property taxes in Victoria are also playing a role,” she said.
“At the same time, in the past decade construction rates relative to population growth in Victoria have been more balanced compared to other parts of the country.”
Nationwide prices were up a modest 0.04 per cent, with the capital cities up 5.88 per cent for the 12 months to the end of September.
“The upswing in Australia’s home prices has persisted into the spring selling season, though growth has slowed with buyers enjoying more choice,” Ms Creagh said.
“Housing demand remains resilient, defying affordability constraints with prices lifting across much of the country in September, albeit at a slower pace in most markets.
“However, the pace of growth remains varied with differing supply and demand conditions driving diverse performance across the country.
“Buyers now have more properties to choose from, though uncertainty around the timing of interest rate cuts is likely also having an impact on the pace of growth.
“Ahead, prices are expected to lift through the typically busier spring selling season, albeit at a slower pace.”
