Warrnambool's property market will likely steam ahead amid record-breaking price growth for regional homes, but the city's rent hikes may slow despite one south-west local government area topping the charts.
Figures from the Real Estate Institute of Victoria's latest report for the December quarter have revealed the extent of the housing boom in regional Victoria, with the median price of a home in Warrnambool reaching $573,000, a 33 per cent increase on the previous year.
That growth was far higher than the record-breaking 27 per cent seen across the rest of the regions, where the median house price totalled $565,000.
Harris & Wood's Danny Harris said he expected growth in Warrnambool to continue.
"I don't think in our particular neck of the woods we're at peak growth," he said.
"I still think we're playing a lot of catch-up so I could still see some steam in the market for the next 12 months. I don't think interest rates are going to be significantly higher in the next year. I don't see mass unemployment either - in fact the opposite is happening.
"The demand for staff I've never seen higher and I can't see that changing soon and therefore I can still see some growth in the market."
Meanwhile, data from Domain's latest rental report for the December quarter showed the biggest annual increase in regional rents occurred in Corangamite, which saw weekly rent grow by 21.9 per cent or $63 a week to a median price of $348.
Warrnambool came in at tenth on the tally, increasing by 13.5 per cent or $50 to a median of $420.
Harris & Wood Real Estate property manager Melissa Mills said the results were not surprising, but despite a surge in rental demand over the Christmas period, weekly rent appeared to be levelling out.
"It doesn't surprise me," she said.
"Your rentals usually follow the sales market. But I think there's been a population shift which impacts on supply and demand issues.
"The supply part of the issue would have been for five to eight years investors hadn't participated majorly in the purchasing of properties.
"Now we've got a population shift, the percentage of properties which have been sold lately have been very much toward live-in owners and all of a sudden now there's a lack of investment properties to lease.
"In terms of the price rise, it seems to be plateauing. They don't appear to be increasing now as much as they did in the last four to five months. We seem to have found a consistent one despite demand.
"The expectations are we may not see another 14 per cent hike this year."
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