Brought to you by Chris Crouch, of Opteon Property Valuers, Shepparton
THE residential property market throughout the Goulburn Valley has been relatively subdued over the past 12 months, albeit showing signs of imminent positivity.
After unprecedented growth throughout the Covid period due to many factors including record low interest rates, residential growth trajectory continued from the first interest rate rise in May 2022, to a peak in early 2023. Since then, in line with continuous interest rate rises in 2023 (13 in total from May 2022), in an attempt to slow persistently high inflation, increased cost of living pressures, along with the effects of major flooding, market confidence weakened.
Demand reduced in the residential market with general oversupply and extended selling periods, however existing house and unit market values stayed relatively steady in the greater Goulburn Valley area with no evidence of significant value reductions. In the past 12 months, some areas in fact evidenced slight continued median price increase trajectories including Shepparton (4.6% increase), Kyabram (15.1%) and Echuca (8.6%), with Seymour (-0.4%), Benalla (-3.6%) and Yarrawonga (-3.3%) showing slight reductions.
High new building costs due to residential construction supply chain disruption has seen a reduction of new homes being built in the area. This has had an adverse effect on residential vacant land sales, resulting in a slight reduction in values from peak levels in 2023.
Noted factors have particularly adversely affected the first home buyer market sector, however rental demand has remained extremely high even after a peak in localities and surrounding areas affected by flood, largely due to a general shortage of housing in the area.
So far in 2024, interest rates have not increased, with some economists predicting rate cuts late in 2024, depending on inflation reducing to acceptable levels. Due to the likelihood that interest rates have peaked, a subsequent increase in consumer confidence has ensued, and we are now seeing evidence of an increase in residential market activity with an uplift in demand, the first home buyer sector included, as well as an increase in new home building in some areas.
With predictions of interest rates remaining steady and reductions on the horizon, if cost of living pressures can be kept in check, we would expect to see ongoing consumer confidence and further increase in demand, and therefore strengthening values across residential markets in the Goulburn Valley likely during the rest of 2024 and into 2025.
