A double digit percentage jump in Ballarat’s median house price could push low income buyers to the city’s fringes and increase the difficulty for first home buyers to enter the housing market, real estate agents say.
The City of Ballarat’s median house price increased 12 per cent last year, soaring from $345,000 in December 2017 to $386,500 in December 2018.
Real Estate Institute of Victoria data shows the Ballarat property market is becoming attractive to a wider range of purchasers, with price increases well above Bendigo and Geelong.
Median house prices in City of Greater Bendigo increased by 2.1 per cent last year, while City of Greater Geelong median house prices increased 10.8 per cent.
Central Ballarat has increased steadily over last five or six years while other suburbs have started to catch up.Mark Nunn, Buxton
Data shows the median house price for Regional Victoria increased 5.5 per cent in 2018 compared with an increase in Metropolitan Melbourne of 1.4 per cent.
Buxton Ballarat director Mark Nunn said 40 to 45 per cent of Buxton house sales were to Melbourne or out of town buyers either investing or relocating their families.
He said the growth of the housing market in Ballarat had raised house prices at the bottom end of the market which would impact low income and first home buyers, pushing them further from the city centre.
REIV data shows Mount Pleasant, Wendouree and Golden Point experienced the biggest median house price growth with respective increases of 26.2, 25.7 and 21.3 per cent.
Invermay Park, Mitchell Park and Black Hill also experienced high price growth.
Mr Nunn attributes the high growth in certain areas to buyers looking for bigger blocks and alternatives to increasing prices in Ballarat Central.
“Central Ballarat has increased steadily over last five or six years while other suburbs have started to catch up and buyers are realising other suburbs in Ballarat are just as viable options for them,” he said.
Lake Wendouree recorded the highest median house price in Ballarat in December 2018 at 690,000, but it was a median price drop of 9.8 per cent, down from $765,000 in December 2017.
Ballarat Central was the only other Ballarat suburb to record a median house price drop, decreasing 0.5 per cent from December 2017.
REIV chief executive Gil King said auctions proved successful in Ballarat with high clearance rates.
“While clearance rates in Metropolitan Melbourne were the lowest they’ve been in recent years, Ballarat actually managed a higher clearance rate in 2018 of 76.7 per cent compared with 66.4 per cent in 2017,” he said.
Ballarat Real Estate managing director Ron Morrison said he expected growth in the Ballarat housing market to continue as the city’s population grows.
“There seems to be a lot of people from out of town who appreciate the advantages of living in Ballarat with excellent medical and education facilities and the commuting distance from Melbourne,” he said.
“A further driver of this is the demand from investors who realise investments in Ballarat are worthwhile.”
REIV data shows rental prices are also rising while Ballarat has recorded the lowest rental vacancy rate in Victoria.
The rental vacancy rate in Ballarat dropped to 0.7 per cent in November and remained that rate throughout December.
Ballarat’s rental vacancy rate sits well below the regional Victorian total rate of 1.2 per cent and Victorian total rate of two per cent, with a rising median weekly cost of rent.