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PRD Real Estate chief economist Dr Diaswati Mardiasmo said the annual growth rate was almost in line with wage growth and was not as strong as she had expected.
“I had expected rents to be slightly higher because there was ample rental supply and low vacancy rates, but I know in more regional areas rents are stabilising,” she said. “Demand has also decreased despite the reduction in supply.”
“There are fewer people moving to regional areas than during the pandemic. They are returning to more stable markets.”
The highest annual growth rates in regional Victoria were in the Swan Hills (13.5 per cent), Golden Plains (13.5 per cent), Macedon Ranges (11.8 per cent) and Moorabool (11 per cent) council areas.
With the exception of Swan Hill, which borders NSW, the other three fastest-growing council areas are all on Melbourne’s fringes. AMP chief economist Dr Shane Oliver said the growth in these city-fringe council areas was on par with the annual growth rate for Greater Melbourne, which was 11.5 per cent in the year to June.
“Those numbers are still growing strongly and given that rents are much higher (in the city), they’re pushing up prices in Golden Plains, Moorabool and the Macedon Ranges,” he said. “You might be getting a little bit of a benefit from the neighbourhoods.”
Madiasmo agreed the strong growth in those councils was likely due to spillover effects from Melbourne’s economic growth.
“Housing stock in Melbourne is quite low and there are more units available for rent,” she said. “If you can find a house it’s very expensive so people have to travel an hour out of the CBD to find these houses.”
Raine & Horne Gisborne director Ken Grech said the Macedon Ranges were attracting fewer Melbourne residents than during lockdown, and the proportion of tree replacements going to the council had returned to more normal levels.
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He attributed the high growth rate to a chronic shortage of rental properties in the council area, where the median weekly rent is $590.
“We’ve always had high demand in the Gisborne area, especially in the Macedon Ranges area, but there haven’t been many rental properties because people buy properties to live in, not to rent out,” Mr Grech said. “When (rentals) do come up, demand is always high.”
The Alpine region had the biggest fall in house prices in regional Victoria, having been one of the strongest performers during the lockdown. House prices in the region fell 10.1 per cent to $468 per week.
Powell said she was surprised to see the once-star company take a hit. “It’s hard for me to believe we ever saw year-over-year rental declines during the snow season,” she said.
Oliver said the stock may have been overvalued during the coronavirus pandemic. “They probably benefited more during the pandemic and now the stock is pulling back,” he said.
“A lot of people have decided ‘I’m not going to stay in the city, I’m going to rent in a regional area for a while’ and that’s caused rents to go up, so their homes are probably overpriced.”
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