Brought to you by Chris Crouch, of Opteon Property Valuers, Shepparton
The residential property market throughout the Goulburn Valley has been strong with record growth through 2020/2021, and into 2022 during the Covid period. This was largely driven by record low interest rates, government incentives, and non-local tree change buyers looking to escape the Metropolitan lockdowns.
There was a significant increase in values from the beginning of Covid (March 2020) until the first interest rate rise (May 2022) with Shepparton showing a median price increase of 40.91% on all residential property during this period. Other regional centres in the Goulburn Valley were much the same with Seymour (40.7%), Echuca (41.8%), Benalla (41.4%), Yarrawonga (57.9%) and Kyabram (34%) experiencing record median price growth.
For perspective, Shepparton over a similar period (January 2018 to March 2020) the median price growth was 6.3%. The number of residential sales also increased from previous years. Demand well and truly exceeded supply with properties selling within days or even prior to going to market with multiple interested parties.
In recent times however, the residential market has certainly eased, due to a general weakening of confidence and therefore demand. We attribute this dynamic to multiple interest rate increases (with the prospect of more to come), reduction/withdrawal of government incentives, surging building costs, and locally, a major flood in October 2022.
Although demand has slowed, at this stage, we are yet to see any evidence of significant downward price pressure, unlike some metropolitan areas. This is attributable to the slowly correcting demand/supply imbalance experienced during 2021 and 2022. In fact there is still steady growth in median prices evident – similar to pre-covid levels. Demand for existing housing, and to a lesser extent vacant land is still evident with properties generally selling within acceptable and more standard marketing periods when advertised at reasonable prices. Prices are supported by extremely high rental demand, particularly in localities and surrounding areas affected by flood.
Future performance will largely depend on the extent of further interest rate rises and cost of living pressures, with many homeowners coming out of fixed rate terms and needing to refinance through the second half of 2023.
