From An Ache To An Acre

The Sunday Age

Sunday September 7, 2008

Mary Costello

City buyers are helping to turn the tide in regional markets, writes Mary Costello.

RESIDENTIAL real-estate values in country Victoria have generally mirrored the Melbourne market in the past few years, with the median house price rising from $105,000 in 2000 to $232,000 in 2007. As in Melbourne, regional areas have experienced a significant market slowdown with the drought, interest-rate hikes and fuel costs all affecting the rural economy. But real-estate professionals are optimistic about the state of the market following increased buyer confidence over the past few weeks.

Terry Clarke, of Ray White Real Estate in Bendigo, has seen a recent return of buyer enthusiasm following the best rains in 10 years. "The market is steady, after being way down for quite a few months. It's now moving along; not as heady as it was three or four years ago, but back to normality.

There's more interest in the $350,000 to $400,000 range.

"We have quite a lot of city buyers, with the Calder Highway upgrade closer to completion and the fast train making the commute to Melbourne about an hour and a half.''

Hobby farms within 20 minutes of Bendigo sell particularly well. "A lot of Melbourne people see Bendigo as the best place to have an investment,'' says Mr Clarke, "It's very affordable, there's a lot of culture that other regional cities don't have, with our terrific heritage architecture; and geographically, Bendigo is centrally located.'' He believes that Bendigo's open, friendly community strongly appeals to families looking for an alternative to the isolation that can be a feature of city living.

La Trobe University's Bendigo campus is another significant selling point. "Farmers will buy a unit for the kids to live in while they're studying, and then the parents have a good investment,'' says Mr Clarke.

Ken Tudball, of Jens Gaunt Real Estate in Ballarat, agrees that there has been more confidence in the marketplace over the past month. "Ballarat hasn't experienced the extremities of the Melbourne market. We haven't seen a big fall. There's more stability here; there's always demand. In fact, in some places we can't fulfil needs; we need more properties to sell.''

Mr Tudball believes that Ballarat offers excellent value for Melbourne buyers wanting a "rural residential lifestyle, with all the pleasures of country life, with a one-hour commute to the city.'' Depending on size and quality, a house on a couple of hectares will cost from $350,000 to $1million, while a three-bedroom townhouse in the centre of the city will fetch about $350,000.

In Alexandra, Joan Marshall, of L.J Hooker, says that the market has suddenly picked up in her area. "It has been very slow for the last few months, but for the last two weeks it's booming again. I'm not sure why. It may be that interest rates have peaked, but we're now seeing a few cashed-up buyers.''

Most sales are to Melbourne buyers, with property in this country region more affordable than anything on the coast.

"About 50% or even 75% of our buyers are from Melbourne - people looking for lifestyle properties, not in Alexandra itself, but in Marysville, Buxton or Taggerty. They want privacy, no neighbours, something remote and picturesque.''

With that wish-list, buyers will find that the small towns along the Maroondah Highway meet all their requirements, given their proximity to national parks, Lake Eildon, hills, rivers and the snowfields.

"City people are mostly looking for holiday properties. Baby-boomers often buy here and use the house as a holiday home, then, when they retire, they come to live here permanently. That's a common scenario. Almost 100% of sales in Marysville are to Melbourne people looking for a weekender that they can also use during holidays.''

Ms Marshall says the area has proved to be a good investment, "Values have been holding their own long-term. In the past six years we've seen prices here double. And EastLink is beginning to have an effect. We had a buyer from the Peninsula this week who says that EastLink has cut half an hour off his journey. We're now only an hour-and-a-half travel time from the CBD.''

Echuca, on the Murray River, is another destination offering Melburnians the option of buying an affordable holiday home that doubles as an investment. According to Gary Wood, of Charles L. King First National, holiday homes have been selling well, while there has been a downturn in the local first and second-homebuyer mortgage belts.

"Entry level for a holiday home here is about $140,000, with the average costing about $250,000. Rare river frontage will fetch between $400,000 and $800,000.''

Local developers have responded to demand for holiday properties by building small resorts with riverside cabins that fetch about $150,000.

"But you do not own the land,'' says Mr Wood, "It's a good option for families who haven't got $500,000 or $700,000. They can have their holiday and then rent out the cabin to pay the mortgage.''

Brooke Fletcher, of Alan Wilson Real Estate in Kilmore, says inquiries are down and believes that buyers are holding out for the expected cuts in interest rates. "We have some lovely homes on one to two acres that would have gone quickly earlier in the year. We were flat out from August 2007 to April this year. The market is unpredictable at the moment, and varies week to week. There are fewer buyers around, but they're genuine buyers.''

Kilmore mainly attracts inquiries from the northern suburbs, from Roxburgh Park to South Morang. "Kilmore offers value for money; you can get a large home on an acre or so for between $480,000 and $530,000. But it's the average family home on a quarter acre that's more in demand now, at around $260,000 to $300,000.''

Ms Fletcher says that the southern end of Kilmore, with its long main street, is more appealing. Newer estates here are only a 10-minute drive from the Hume Freeway via Wandong, and the Kilmore East train station is just two minutes from the town centre.

In Gippsland, Tony Bailey, of L.J. Hooker Sale, says that the market is improving following the slowdown. "Lack of listings is the biggest problem, and that controls prices, with no land to build on.''

According to Mr Bailey, the Sale economy has benefited from the investment of new companies involved in off-shore oil exploration, and from the relocation of the RAAF officer training school from Point Cook to East Sale this year.

"Sale is a strong centre. Prices had flattened out but the market started to pick up in June and values have rebounded well. It's coming back; you can only stay out of the market so long.''

© 2008 The Sunday Age

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