Why Delacombe and Alfredton's house market dropped as our population boomed

PRD Real Estate chief economist Diaswati Mardiasmo said a population increase would usually stimulate the housing market.

Residential Research head Eliza Owen from CoreLogic analysed the population change and house values of 2103 areas across the country based on the Australian Bureau of Statistic's Statistical Area Level 2 (SA2) - that is, suburb by suburb.

On the SA2 boundaries, Delacombe includes Winter Valley, and Alfredton includes Lucas and Cardigan.

"Delacombe ranked 81st (and) Alfredton ranked 102nd," Dr Owen said. "That's extremely high to be among the top 100 places [of migration change]."

In the 2022-23 financial year, the estimated resident population in Delacombe increased 9.1 per cent to 12,869 and Alfredton's population grew 5.5 per cent to 18,997, according to the ABS.

The April median house price in Delacombe was down 2.5 cent to $537,734 and the median rent price was up 0.1 per cent to $435 in three months, according to CoreLogic.

Alfredton's median house price dropped about 2.2 per cent to $666,465 and its median rent price grew 0.1 per cent to $458 in three months, CoreLogic data shows.

Corey Smith moved from Black Hill to the city's west in 2022 because of the land availability.

"You can buy land in these areas," he said. "My wife bought a block of land in Winter Valley - and then we built our house."

Ray White real estate agent Giovanni Piazza, who himself moved from Ballarat East to Delacombe four years ago, said the area was more affordable.

"It cost me $320,000 to enter the market, buying land and building on it," Mr Piazza said.

He said school catchments were why some people moved to Alfredton, with easy access to Ballarat Clarendon College, Ballarat Grammar and Ballarat High School.

Dr Owen said the vast majority of migration to Delacombe and Alfredton came from people moving from other areas in Australia, including other areas in Ballarat, which was called internal migration.

A total of 938 migrants moved to Delacombe in the past financial year, which was 88 per cent of the area's population increase. Out of every 100 people, 96 are from internal migration, according to the ABS.

In Alfredton, 160 newcomers were from overseas and 695 people came from other places in Australia.

Dr Owens said there was not a statistical relationship between internal migration and the rental market.

She said the area with a growing population from outside of Australia would tend to have strong rent increases.

She said people usually bought a property long before they moved to the growing areas so the population increase would not affect the recent house values.

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Dr Mardiasmo said besides interest rates becoming stable, the "sticky" property market could improve if Ballarat could attract more people.

"It really does depend on whether or not the local council in Ballarat, and surrounding Ballarat, starts to invest in commercial development or infrastructure development that draws more and more people into Ballarat," Dr Mardiasmo said.

"The more people that are attracted to the area will overall help the the property market, whether it is the rental or sales market."