PRD Real Estate chief economist Dr Diaswati Mardiasmo said annual growth was almost in line with wage growth, and was less strong than she expected.
“I expected it to be slightly higher just because of the rental supply and lower vacancy rates, but I do know in the more regional areas rentals are stabilising,” she said. “Even though there is less supply there is less demand.
“They’re not getting as many people moving to regional areas as when COVID was happening. They’re moving back to a more stable market.”
The strongest annual growth in regional Victoria was in the Swan Hill (13.5 per cent), Golden Plains (13.5 per cent), Macedon Ranges (11.8 per cent) and Moorabool (11 per cent) council areas.
Other than Swan Hill, which borders NSW, the other three fastest-growing council areas were located on Melbourne’s fringe. AMP chief economist Dr Shane Oliver said growth in these city-edge council areas was comparable to the annual growth rate in greater Melbourne, which was 11.5 per cent in the year to June.
“They’re still strong growth numbers and given the [rents] are much higher [in the city] they’re having the effect of driving the price up in Golden Plains, Moorabool and Macedon Ranges,” he said. “You could be getting a trickle out into the regions that are nearby.”
Mardiasmo agreed the strong growth in those councils was likely due to a spillover of growth from Melbourne.
“With Melbourne the stock for houses is quite low; there are more units up for rent,” she said. “If you are able to find a house it will be really expensive, so people do have to go an hour out of the CBD to find those houses.”
Raine & Horne Gisborne director Ken Grech said the Macedon Ranges was attracting fewer Melburnians than during the lockdown era, and the rate of tree-changers heading to the council had returned to more normal levels.
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He believed the high rate of growth was due to a perennial shortage of rentals in the council area. The median weekly asking rent was $590.
“Our area of Gisborne and really the Macedon Ranges has always been in high demand but not many properties come up for rent because people purchase to live in them and not rent them,” Grech said. “When [rentals] do come up there’s always high demand for them.”
The Alpine region had the steepest decrease across regional Victoria; during the lockdown period it was among the strongest performing regions. There, prices fell 10.1 per cent to $468 per week.
Powell said she was surprised to see the once-star performer take a hit. “I find it hard to believe we’ve ever gone into a snow season where we’ve seen rent lower year-on-year,” she said.
Oliver said it may have been over-valued during the COVID period. “It’s possible they benefited more in the pandemic, and they’re having a pullback,” he said.
“There were a lot of people who decided ‘I’m not going to stay in the city, and I’ll rent in the regions for some time’, and pushed up the rent, so it is possible they were overvalued.”