Regional VIC Property Market Update July 2019

Shepparton Property Updates

In the Shepparton region, a lazy half million dollars still buys you far more than in most regional centres. Most of the ex-display homes are selling for around the $500,000 mark with a considerable upgrades list, which is up from around the $450,000-mark last year. Unfortunately, due to the oversupply of land in the area, it is still quite easy for builds to be an overcapitalisation in their respective estates.

Many out of town investors are still being drawn to the Shepparton region because of the strong rental yields exhibited by the sub-$300,000 market, of which most appear to be investment properties merely changing hands, rather than an influx of rental stock. There are still a number of former housing commission properties being sold with yields up around 7.5 to eight per cent with tenants in place. Typically, these properties don’t last more than a fortnight on the market.

Inner-city buying is still very competitive, however I personally see this as the area with the most growth potential as the government spending starts rolling into the area over the next two to three years with the hospital redevelopment, arts museum and rail upgrades. Character homes in these areas will see a significant upswing in values as properties with equivalent amenity in other towns are fetching far higher prices.

Units are still struggling with falling prices over the past five years to the tune of -13.5 per cent (Core Logic), however rental yields are strong, giving investors positive cash flow.

The best buying in Shepparton at the moment is a 1960s to 1980s dwelling that could use some cosmetic refinement. These are at very affordable prices with good prospects for value uplift after works have been completed. These properties are always sought after by owner-occupiers, investors and tenants, mainly due to their location and the bang for buck.

Mildura Property Updates

The median price for a detached dwelling in Mildura is just under $300,000, however there are numerous sales at around $500,000 and sales activity at this level appears to be increasing.

A quick glance at our records suggests that the number of sales over $480,000 in the Mildura postcode has increased from around 20 per year in 2015/2016 to around 50 per year now.

Last year we predicted a strong outlook for better standard homes in the Mildura region and the evidence suggests this has proven true, with this sector showing more value growth than the lower end of the market.

$500,000 will buy a modern four-bedroom home on a larger than average size lot, with good external improvements such as sheds or pools. Buyers are typically owner-occupiers, with investors more likely to buy cheaper housing in the $250,000 to $400,000 bracket, due to their higher rental yield.

The improved sales activity in the $500,000 segment is due to a combination of ongoing strong economic conditions in the local farming sector and low interest rates. The outlook for the farming sector remains generally positive and we expect our economy to remain buoyant in the next one to two years, although we note the potential for low irrigation allocations in the coming year to curb this confidence.

The other alternative for investors with $500,000 to spend is to buy a complex of three or maybe four units. Rents have been increasing in recent years, and this has maintained gross yields of around 6.5 to seven per cent. Older complexes will be more affordable, however these come with a need for ongoing maintenance and buying a better standard three-unit complex may prove the better long term investment.

Wodonga Property Updates

The Wodonga, and indeed West Wodonga, residential dwelling markets have been characterised by a spread of sales which have predominantly occurred within the $200,000 to $400,000 price bracket, followed by the $400,000 to $600,000. It’s not insignificant to point out that while the number of sales overall has remained stable over the past two years, the number of sales within the $400,000 to $600,000 price bracket has increased to 28 per cent of all sales over the past 12 months.

In terms of newer dwellings, $500,000 certainly goes a long way in Wodonga. At this level of value, you could expect to purchase a large 200 square metre dwelling with a high quality fit-out, situated on an allotment of between 550 and 850 square metres located within a well-regarded residential estate with either elevated views or situated close to schools, shopping and recreation facilities. Generally, these properties are of a display home type standard.

Older established properties at around $500,000 will secure the purchaser a large renovated period style dwelling located within close proximity to the CBD and situated on a large allotment of between 800 and 1,000 square metres.

If you’re looking for a tree change and are seeking a rural lifestyle property within the surrounding district, $500,000 will not get you much in the way of newer quality improvements, rather one should expect an older style dwelling most likely requiring renovation or updating.

With regard to vacant rural lifestyle land, you should expect to pay a minimum of $250,000 for allotments in excess of one hectare. Unfortunately the tyranny of distance does not help in lowering the price point, particularly the closer you get to Yackandandah, Beechworth and Kiewa, all of which are well regarded and sought after localities.

In terms of investors within this market, $500,000 will most likely allow you to purchase two 1990 twobedroom strata titled units in original condition with lock-up garage and private rear yard. Unfortunately there are very few blocks of flats within Wodonga, let alone at this price point. The last block of units sold had six one-bedroom barracks style flats built circa 1970, which was purchased for $625,000 at a gross yield of just under 6.1 per cent.