THE residential property market throughout the Goulburn Valley has remained relatively subdued over the past two years since the peak in late 2023 following the COVID boom period. However, we are now beginning to see some signs of improved sentiment, flowing through to positive price impacts.
Reduced consumer confidence prevailed through 2024, largely due to economic factors such as interest rate hikes, cost of living increases, and global economic volatility. Some markets in the Goulburn Valley saw a reduction in median house prices, such as Kyabram (-3.6 per cent), Echuca (-13.9 per cent), Seymour (-9.1 per cent) and Yarrawonga (-7.3 per cent). However, Shepparton (3.4 per cent) and Benalla (1.3 per cent) showed increases over this period. Despite these broader headwinds, we have seen an increase in the number of houses sold since early 2024 right across the Goulburn Valley, as well as reduced selling periods – signs of gently increasing demand in the residential housing market. We expect that this will continue going forward, underpinning a gradual recovery across the region, supporting residential asset values more broadly.
Rental demand has remained very high, with all localities indicating an increase in median rents, with value-based yields generally indicating rates of return between 4.5 per cent to 5.5 per cent. The strong rental demand and positive yields have resulted in a rise in investor activity, with further increased demand across the entry to mid-level housing segments in particular.
Residential construction supply chain disruption and trades shortages have resulted in higher building costs; therefore, an ongoing reduction in the number of new homes being built in the area has occurred. As a result, reductions of residential vacant land sales, along with values, have continued from late 2023, through 2024, with further reductions over the past twelve months. However, we are detecting some early signs that demand does appear to now be gently increasing.
So far in 2025, one interest rate cut has been made, which drove a small spike in demand, however this was not significant enough to really impact market values. Some economists are predicting further rate cuts in mid to late 2025, on the proviso that inflation remains at acceptable levels. Further cuts will add to the pace of the recovery.
When combined with increased certainty post federal election, predicted multiple interest rate cuts, and providing inflation and cost of living pressures can be kept in check, it could be expected that an increase in consumer confidence and demand should result in a strengthening of values across residential markets in the Goulburn Valley for the rest of 2025 and into 2026.
