The sale of a central Warrnambool property at auction on Saturday is pointing to positive signs that the market is starting to heat up, a real estate agent says.
Senior sales manager Chris Thomas said the auction of a three-bedroom weatherboard home at 64 Canterbury Road for $395,000 was a strong result, "there's no two ways about it".
Mr Thomas said a combination of low interest rates and a lack of supply meant demand for properties was high.
"The market's a lot more buoyant than it has been. We're certainly seeing prices come up over the past six to 12 months," he said.
Mr Thomas said there were plenty of first home buyers keen to cash in on the low interest rates.
Mr Thomas said the federal election had changed the state of the market with investors - who were spooked at the prospect of changes to negative gearing - now returning to the market.
He said he hoped that with investors keen to buy that it would help ease the rental crisis.
"We're getting a lot more inquiries from people outside of Warrnambool hoping to invest," Mr Thomas said.
He said retirees traditionally put their money in the bank and lived off the interest but with rates being so low they were now looking to other things such as property investment because it's a better return for their money.
Mr Thomas said the Warrnambool property market had turned from a buyers market to a balanced market.
Units, which were traditionally hard to move, were selling quickly, he said.
More people were also turning out to open houses and buyers are now having to make decisions quicker, he said.
The strong result of the Canterbury Road auction comes on the back of another recent auction in Jackman Avenue which sold for $63,000 above the reserve.
Bidding opened with vendor's bid at $320,000 for the Canterbury Road property, then rose in three $20,000 bids before a final $15,000 bid to sell for $395,000.
Have you signed up to The Standard's daily newsletter and breaking news emails? You can register below and make sure you are up to date with everything that's happening in the south-west.