Geelong house prices remain in negative territory, lagging Melbourne where growth is the fastest in 15 months, PropTrack data shows. But there are signs things are turning around.
The latest PropTrack Home Price Index showed home values dropped 1.18 per cent in the three months to the end of May to reach a $767,000 median dwelling value.
The region’s median house price dipped 1.29 per cent, while unit values were close to steady, losing only .04 per cent in median value.
Market conditions have further improved in May following five consecutive months of price growth.
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PropTrack senior economist Eleanor Creagh said home price growth had been stronger in the capital cities than regional areas this year.
PropTrack senior economist Eleanor Creagh.
“This is a continuation of the trend that we’ve seen so far this year in terms of capital city markets really taking up the mantle with respect to price growth and outperforming regional markets,” Ms Creagh said.
“We saw in May that capital city markets recorded points .45 per cent growth whereas regional areas are at .03 per cent, so capital city markets are really driving the upswing in home prices at the moment. “
Melbourne house prices grew .22 per cent in May, the fastest monthly rise since February last year.
Ms Creagh said stronger housing demand in Melbourne was likely bolstered by very tight rental markets and the strong rebounding net overseas migration concentrated in capital cities.
“But also it has been the case in prior downturns, where markets that lead the downturn also lead the upswing,” she said.
“That would be another reason why we’re seeing capital city markets coming to the forefront or taking up the mantle with respect to price growth at the moment.
“Regional home prices really outperformed over the past three to four years, so I wouldn’t say it was unusual to potentially see a period of underperformance after such an extraordinary outperformance which was really infused by a very unique combination of circumstances.”
Harcourts North Geelong agent Joe Grgic said he felt the market was on the cusp of change in Geelong.
“There are still certain sectors of the market that are at different speeds, but we are seeing better numbers, more committed buyers,” he said.
Five bidders were in the crowd at this Belmont auction last weekend, one of two to attract such interest on the day in a sign of rising demand for homes in Geelong.
“People are really wanting to get a home, whether that’s more competition at auction, multiple buyers on a private treaty. It feels more like 2019.
Mr Grgic said there has been an increase in investor activity and more first-home buyers are comfortable with entering the market.
“Even though my belief is there probably will be another one or two more rate rises, buyers are sensing that the rate hike cycle is coming to an end,” he said.
“And because of that, now is the time to get in because once rates start dropping, there’s a lot of people who are holding back waiting to get into the market and they’ll jump in at the same time and that’ll cause prices to go up.”