Market holding up despite the doom and gloom

BALLARAT’S residential property market continues to remain buoyant despite much of the negative press emanating from the Melbourne and Sydney markets.

The buying frenzy that resulted in a record number of sales transactions throughout Ballarat in 2017 and 2018 appears to have slowed in 2019, although real estate agents are still reporting strong attendance numbers at open homes and good enquiry levels.

With the Federal election now locked in for 18 May, the outcome may play a significant role in the housing market. If elected, Labor is proposing to limit negative gearing on investment properties to new housing only (with investments purchased prior to 1 January 2020 to be fully grandfathered), as well as to halve the capital gains tax discount for all assets.

This is aimed at slowing property price growth, although it is unknown what consequences may arise if such policy is implemented in an already slowing market.

If history is to go by, there is also likely to be a lull in the national property markets in the lead up to the election, which may result is a slight softening of housing prices in the immediate term.

There has also been a notable increase in borrower’s finance approval times due to the tighter lender requirements imposed on some institutions following the Royal Commission into the Banking, Superannuation and Financial Services Industry.

We have taken the opportunity to take a brief look at the depth of Ballarat’s premium residential market and investigate how it compares to our closest regional competitors, Geelong and Bendigo.

The Depth of Ballarat’s Premium Residential Market

The days of $1 million buying only Ballarat’s most prestigious residential properties are well and truly behind us. There were more than 50 residential properties sold for over the magical mark in 2018 alone. Already in 2019, we have seen a record sale price of $4,250,000 for an architecturally designed, seven-bedroom, four-bathroom residence on Lake Wendouree’s foreshore, continuing the trend of big prices being paid for Ballarat’s premium dwellings and locations.

Delving further into the premium residential market, we have looked at the number of sale transactions above $1.5 million.

We have excluded rural lifestyle and coastal properties to focus solely on the urban house market.

There’s been 15 settled residential sales above $1.5 million in Ballarat from April 2017 to April 2019, although we are aware of several other sale transactions above this mark which have not yet settled. There are also five dwellings currently on the market, with an asking price in excess of $1.5 million.

By contrast, Bendigo achieved settled residential sales over $1.5 million, with the top price of $1,973,000 being achieved for a fully renovated, two-storey Victorian era dwelling, positioned in central Bendigo. There are currently seven dwellings currently on the market, with asking prices in excess of $1.50 million.

Unsurprisingly, Geelong, being a substantially stronger market, outperforms both Ballarat and Bendigo in this sector. There have been 20 settled sales over $1.5 million since April 2018 alone, with the top recorded price of $3,300,000. Interestingly, despite the healthy volume of sales, the top sale price was below the historical Geelong residential benchmark of around $5 million. There are currently 17 dwellings on the market, with an asking price over $1.5 million.

The data shows that from both a value and volume perspective, Ballarat (per capita) is more than holding its own in the premium residential market, by comparison to Geelong and Bendigo. We consider that this in turn has had a positive flow on effect to the balance of Ballarat’s residential property market, with good buyer confidence also remaining in the mid and lower market segments.

To find out more contact Preston Rowe Paterson Ballarat on 5334 4441 or [email protected] or visit prp.com.au.