Bairnsdale has been tipped by a leading property expert to be Victoria’s most improved market this year, narrowly beating out Mildura.
Propertyology head of research Simon Pressley said the East Gippsland city had the potential to notch house price gains close to 10 per cent in 2019, after experiencing a 3.1 per cent rise in the year to October 31 and 17.1 per cent over five years to a $300,000 median.
But a local real estate agent wasn’t quite as bullish about Bairnsdale’s prospects.
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Mr Pressley said: “Everything’s going to depend on how soon we get back to sensible credit — I’m confident of that happening soon though.”
He didn’t expect Bairnsdale to be regional Victoria’s biggest growth star this year, but the one to show the biggest improvement on past performances.
While the city’s market started to pick up about two years ago, it still had plenty of room to grow, he said.
Likely to help boost it was the “ripple effect” of people being priced out of regional towns closer to Melbourne, like Geelong, Ballarat and Warragul.
“With the swell of Melbourne’s population and housing affordability problems, people are thinking, ‘where can I live where I’m happy from a lifestyle perspective, housing is affordable and I can get employment?’” Mr Pressley said.
He said vacancy rates below 1 per cent should appeal to investors, while the region also recorded a 10 per cent increase in house sale volumes last year.
But Harcourts Bairnsdale director Michael Enever said the same factors that had curbed the Melbourne housing market were in play in the Bairnsdale area, albeit to a smaller degree.
These included tight lending conditions sparked in part by the royal commission into banking, and low confidence among would-be buyers and sellers.
He said demand from outside the region had fallen away, from investors in particular, despite the 7-8 per cent rental yields on offer.
“In spring 2017, you could not get enough property to satisfy buyers,” he said.
“When people are selling for good prices in the city and coming out this way, there’s more competition.”
But he was “optimistic” about the future of the region, with continued upsides being strong demand for affordable sub-$200,000 homes, and consistent interest in lifestyle properties.
There was also an opportunity for rural property owners to cash in.
“They look at it as not a good time to sell, but it might actually be, because there’s nothing else being listed,” he said.
“Our infrastructure is getting better and I certainly hope the government looks at putting big industry down here.”
Mr Pressley said he almost picked Mildura for Victoria’s most improved market of 2019, as it ticked economic boxes with a “really strong agricultural sector” and offered vacancy rates “among the lowest in Australia at about 0.8 per cent”.
He said the city bordering the Murray notched 5.2 per cent median house price rises last year, and he “wouldn’t be surprised at all if Mildura had double-digit growth in 2019”.
Neighbouring Irymple notched 9.8 per cent gains, to a $351,000 median, in the December 2018 quarter alone, according to the Real Estate Institute of Victoria.