LATROBE Valley’s residential property market is recovering from an extended period of buyer and investor uncertainty, brought about by the Federal Government’s ill-fated plans to close a local power station.
That was the consensus opinion from a range of Valley-based real estate agents, commenting on data within the Victorian Property Sales Report March 2013 quarterly report, which showed overall improvements in 12-month median house price movements.
According to the report, released by the Department of Environment and Primary Industries last week, Newborough has been the Valley’s biggest mover, with the median sale price jumping almost $30,000 over the year up to March 2013, followed by Traralgon, up $22,500 and Churchill, up $9000.
However the report delivered a surprise result for Moe, where the median house price dropped 24 per cent in the March 2013 quarter, from $197,500 to $150,000, contributing to an overall drop of 3.8 per cent over 12 months.
The March quarter turnaround comes after the town recorded one of the state’s strongest regional price growths in 2012, where median prices jumped 16.2 per cent in that year.
Moe real estate agent Robert Sim said while he was surprised by the scale of the town’s quarterly drop, he said it was an indication the cheaper end of the market had increased in popularity among investors during the record low interest rate period.
“I just don’t think there was that dramatic a fluctuation in prices; however it is clear the cheaper end of the market has been a little bit popular during that quarter because of the lower interest rate base,” Mr Sim said.
“Investors traditionally buy at the cheaper end, in the $150,000 to $170,000 bracket, because of their higher gross yields (percentage of rental income of purchase price) which is at around eight per cent.”
Morwell real estate agent Peter Rennie said while there were still significant differences between housing values across the Valley’s larger towns, he said sales rates had slowly begun to pick up in line with a gradual return of confidence.
“It is the investor market which has improved the most – it’s certainly been under-performing until recently, until we stopped talking about pulling down power stations,” Mr Rennie said.
Traralgon real estate agent Colin Gooding said the sentiment toward the Valley’s housing market changed like “the flick of a switch” when the Labor Government’s ‘Contracts for Closure’ policy was dropped.
“It’s been horrible in the last 18 months, but the dust has begun to settle; it’s been pretty hard and anyone that says we are going really well now would be exaggerating, but things are definitely beginning to turn around,” Mr Gooding said.
