Fast risers fall hardest in market slowdown

GEELONG property values have stabilised alongside other hotspots in regional Australia, new figures show.

But industry watchers say the current slowed growth is predictable following its unprecedented rise during the pandemic and that the market remains in good shape despite the negative trends.

Prices and property sales showed signs of decline in CoreLogic’s quarterly regional market update.

There were 6,695 dwelling sales in the year to August, which was 13.3 per cent lower than a year ago but still 2.9 per cent above the region’s five-year average.

House sales suffered most, down 14.2 per cent in the period, while unit sales were more steady down 8.3 per cent.

The report found Geelong’s median house value has remained steady in the past year, now at $801,562 – up 0.4 per cent from October 2021.

High-end properties dragged the figure higher, with the upper quartile of properties worth 1.8 per cent more during the period.

Median unit value for Geelong was $575,816.

While growth has largely plateaued, Geelong still fared better than other popular lifestyle markets interstate such as in south-east Queesnland and New South Wales’ mid-north coast, where prices were down between 6 and 11 per cent.

CoreLogic economist said industry headwinds that impacted city markets earlier this year had filtered through to regional areas, with areas that had seen the highest growth during COVID expectedly showing the steepest decline now.

“Consecutive interest rate rises, persistently high inflation, and waning consumer sentiment saw the pace of value declines accelerate across regional Australian property markets.”

PropTrack senior economist Eleanor Creagh said the recent fall was a predictable correction from the region’s high-flying performance during the pandemic.

“It’s often the case that the upper end of the market experiences larger price declines, and at the moment, much like the trend we see across the capitals, it’s the comparatively higher value regions within regional Australia that are seeing steeper price falls.

“However, in most of these markets, home prices are still up more than a staggering 50 per cent on pre-pandemic levels.”

Ms Creagh similarly warned of further falls in coming months in line with predicted national trends.

“The combination of interest rates moving sharply higher, rising mortgage costs, and expectations of continued price falls, has weighed on buyer demand and is clearly contributing to slowing activity.

“As mortgage affordability worsens with interest rates continuing to rise this will weigh on demand and property prices in the period ahead.

While the regions overall continue to outperform the capital cities, as interest rates rise and borrowing capacities are reduced, prices will continue to fall – including in those markets that have held up well to date.”