Victoria Property Market & House Prices
The real estate market in Victoria, Australia is extremely strong and stable. Despite concerns about the global economy, the market in Victoria has remained strong, with prices continuing to rise. This is good news for investors, as Victoria is one of the most popular investment destinations in Australia.
There are many reasons for the strong market in Victoria. One is the state’s strong economy, which is one of the strongest in the country, and has helped to drive up property prices. The state is also home to a number of major industries, including finance, manufacturing, and tourism. This provides a lot of stability to the market.
Another reason for the strong market is the state’s population growth. Victoria is one of the fastest-growing states in the country, and this is fuelling demand for property. This population growth is being driven by strong immigration numbers, as well as people moving from other parts of Australia to Victoria.
Investors should be confident about the future of the real estate market in Victoria. The state’s economy is strong, and population growth is strong. This means that prices are likely to continue to rise in the future. Victoria is a great place to invest in property, and it is likely to continue to be a good investment in the future.
The heatmap above visualises yearly house price changes in Victoria. The heatmap is shaded from lighter blue (indicating lower growth) to darker blue (indicating higher growth).
One way to gain a more thorough understanding of which areas may have a lower risk is by toggling the “Lower Risk” view of the heatmap. This view shades areas with a lower risk score more prominently for a clearer visualization of the data. Learn more about HtAG’s property market risk criterion here.
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Snapshot of Key Metrics & Market Comparison Table
We start with a snapshot of the Victoria market that provides an overview of key real estate metrics. The data in this snapshot illustrates typical price, median rent and gross yield metrics for the state.
Use the Houses/Units toggle buttons below to view the market snapshot for different property types in Victoria. Houses are free standing houses (excl. townhouses and villas). Units are apartments, studios, flats, units (excl. unit blocks).
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Rent
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Rent
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You are able to drill down to LGA-level data and charts which visualise these 3 key metrics as well as other important indicators in the table that follows.
Enable additional columns in the table by clicking on the buttons underneath it. Toggle between LGA and Suburb views in the table’s navigation bar. The data in the table represents key real estate metrics as of the current quarter and is updated on a monthly basis i.e. 3 times per quarter.
Clicking on an LGA or Suburb links in the table will take you to the relevant LGA page where you can drill-down to the next level of data.
Victoria House Prices
Victoria has a diverse housing market, with a wide range of prices and styles of properties on offer. There are a number of areas in Victoria that have seen particularly strong growth in house prices in recent years. Melbourne’s inner-city suburbs have been popular with buyers, as they offer a great lifestyle and easy access to the city’s many amenities.
The typical house in the Victoria have seen plateaus but not peaks and throughs over the past 10 years. The interactive chart below shows typical price for both houses and units as well as the sales volume per quarter. Toggle additional views of prices per number of bedrooms by clicking on BR2, BR3 etc underneath the graph. You can also drill down to LGA charts using the dropdown in the chart navigation bar.
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The Mornington Peninsula and the Yarra Valley are also popular with buyers, as they offer a more relaxed lifestyle and beautiful natural surroundings. These areas have seen strong growth in median house prices, as buyers are willing to pay a premium for these desirable lifestyle locations.
Victoria Rental Prices
Victoria, Australia is a great place to live. The cost of living is relatively low, and the weather is great. One of the biggest expenses in Victoria is rent.
The average cost of rent in Victoria may seem like a lot, but it is actually very affordable when you compare it to other Australian cities such as Sydney.
Use the interactive chart below to explore the rental prices in detail.
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There are a number of factors that contribute to the high cost of living in Victoria, but the most significant is the fact that the state contains a number of large and expensive cities, such as Melbourne and Geelong. The high cost of living in these cities is offset by the relatively low cost of living in rural areas of the state.
The demand for housing is expected to continue to grow, while the supply remains constrained. This is likely to cause rents to continue to rise in the coming years.
Gross Yield on Investment Properties in Victoria
Investment properties in Victoria’s capital city of Melbourne tend to have lower gross yields than those in other parts of the state. This is due to the strong demand for real estate in Melbourne, which drives up house prices and therefore decreases the gross income potential for investors.
Gross yield is the percentage of the purchase price that the investor receives in income each year. In Victoria, gross yields for property investment ranges from 1% to 8.7% depending on the location. Lower priced suburbs typically offer higher yields. However, there are exceptions to this rule.
At a high level Gross Yield in Victoria reached its’ local peak of 4% in 2019 as house prices declined in that year.
Explore the chart below to visualise the gross yield trends for Victoria LGAs in detail.
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Of course, gross yield is only one factor to consider when assessing an investment property. Other important factors include the property’s location, condition, and potential for capital growth. Nevertheless, gross yield can be a helpful indicator of a property’s potential return on investment, and should be considered alongside other factors when making any investment decision.
For investors looking for high returns, gross yield is an important consideration when assessing investment properties in Victoria, Australia.
Victoria Property Type Demand Profile
There is no definitive answer when it comes to the most in-demand property type in Victoria, Australia. This is because demand can vary greatly depending on a number of factors, including location, market conditions, and buyer preferences.
That being said, there are certain property types that are generally more popular than others. For example, detached houses are typically in high demand, as they offer more privacy and space than other types of dwellings.
As far as residential property market is concerned, the most in-demand Victoria real estate are 3 and 4 bedroom houses, followed by 2 bedroom units. The units are dominant in CBD of urban centres, whereas other LGAs are mostly rural and have 3 and 4 bedroom house preferences.
Use the chart below to understand which property types have the highest demand in Victoria real estate market.
Townhouses and apartments are also popular choices, especially among first-home buyers and investors. These types of properties are often more affordable than detached houses, and they offer a low-maintenance lifestyle.
Whatever type of property you’re looking for, it’s important to consult the demand indicator for the type of property to ensure you find the perfect home to return the best possible ROI.
Victoria Property Market Buy & Rent Search Index
Victoria, Australia, is a beautiful place to live. The weather is great, the people are friendly, and there are plenty of things to do. If you’re thinking about moving to Victoria, you’re not alone. In fact, search interest for houses in Victoria is trending up.
In the last few years, there has been a significant increase in the number of people searching for houses online in Victoria, Australia. This is likely due to a combination of factors, including the increasing popularity of online search tools such as Google and real estate websites, and the increasing demand for housing in Victoria.
The chart below illustrates the trends for “buy” and “rent” online searches in Victoria. You’ll notice that searches for rental properties have increased over the years. Both “Buy” and “Rent” searches peaked towards the end for 2020 and have since returned to average historical levels.
The black lines on the chart highlight the search index, which is calculated by apportioning the LGA “buy” or “rent” searches to the state average.
The overall search index for Victoria is calculated as an average of all LGA indexes. It has historically hovered between 3.5 and 4.0 for houses. Notably the search index for Victoria units is historically somewhat lower than that for houses, favouring the index of 3.0.
The combination of strong economic growth and high population growth has made Victoria an increasingly popular destination for people looking to rent a property. This has resulted in a corresponding increase in online search interest for properties to rent in Victoria, Australia.
Renting a property in Victoria is a great option for those who want the flexibility and freedom that comes with not owning a home. There are plenty of beautiful and well-appointed properties available to rent in Victoria, and the state offers a wide range of rental options to suit all budgets.
Property Market Growth Rate Cycles in Victoria
The Australian property market is cyclical, with prices rising and falling in cycles. Victoria, like the rest of Australia, has experienced several property market cycles over the years.
The Victoria property market has entered the growth phase in early 2020. The market has been performing well since then, with house prices and rents increasing. The market is expected to continue to grow in the short-term.
The chart below illustrates the year on year changes in Victoria property prices. We can see that the Victoria housing market growth rate was in decline 2018-2019, with house prices in some LGAs dropping by as much as 5%.
A similar pattern can be observed for units with trough in some LGAs reaching negative 5% in 2018-1019.
Confidence: High, Medium, Low
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There are a number of factors that contribute to Victoria’s growth cycles, including:
Supply and demand: Victoria is a highly sought-after destination for both local and interstate buyers, which can drive prices up. However, a sudden increase in the number of properties on the market can lead to a sharp drop in prices.
Economic conditions: A strong economy usually results in higher property prices, as more people can afford to buy or invest in property. However, an economic downturn can lead to a decrease in prices as people lose their jobs or have their incomes reduced.
Interest rates: Changes in interest rates can have a big impact on the property market, as they can make buying a property more or less affordable. A decrease in interest rates usually leads to an increase in prices, as more people can afford to buy, while an increase in rates can lead to a decrease in prices.
Population growth: An increase in population can lead to an increase in demand for housing, which can drive prices up. However, a sudden influx of people can also put strain on infrastructure and services, which can lead to a decrease in prices.
Ratio of Renters to Owners in Victoria LGAs
Overall, the ratio of owner-occupied to rented dwellings in Victoria is slightly higher than the national average, and this is due to a number of factors including the type of dwellings and the age of the population.
A high renter to owner ratio indicates that there are more renters than owners, which could be a sign that the market is unaffordable for many people. A low renter to owner ratio, on the other hand, could indicate that the market is ripe for investment.
Furthermore, the importance of having more owners than renters in a property market is that it gives people a sense of stability. Owners are incentivised to maintain their property and contribute to the community, increasing the appeal of the neighbourhood as a whole.
Renting gives people the flexibility to move around more easily, and it is often more affordable than buying a home. It can also be a good option for people who are not ready to commit to a long-term mortgage.
As a rule of thumb, there should be no more than 45% renters in an area for it to be considered to have a good investment potential. Interestingly the overall percentage of renters in Victoria is at 25% which is well below the threshold.
Ratio of Units to Houses in Victoria Property Market
There are many reasons why people choose to live in apartments instead of houses. For some, it is a matter of convenience and proximity to work or school. Others may prefer the amenities that apartments offer, such as gyms or swimming pools.
Despite the fact that apartments make up a minority of dwellings in Victoria, they are still an important part of the state’s housing market. This is because they provide a more affordable option for those looking to live in urban areas, and they also offer a different lifestyle choice for those who don’t want to live in a house.
If you’re thinking of moving to Victoria, or are already living in the state, then it’s worth considering both houses and apartments as options. Ultimately, the decision of which to choose will come down to your personal preferences and needs.
Inner-city living is also becoming increasingly popular, as people seek to be closer to work, entertainment, and amenities. This has led to strong growth in unit construction in Melbourne’s CBD and surrounding inner-city suburbs.
However the trend towards units is not uniform throughout the state, with the regional markets still dominated by free standing houses.
The increasing ratio of apartments to houses in Victoria is having a few impacts on the state. However, compared to other states and territories, the overall ratio of units to houses is well under the threshold at with just 18% of dwellings sold being units.
Property Market Socio-Economics in Victoria
Victoria is one of the most socio-economically diverse states in Australia. Its population includes a wide range of socio-economic statuses, from the very wealthy to the very poor.
There is a high concentration of wealth in Melbourne’s inner eastern and southern suburbs, where household incomes are significantly above the Victorian average. However, there are also many pockets of disadvantage, particularly in the city’s north and west, where household incomes are below the state average.
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Victoria’s high socio-economic status is due in large part to its strong economy. The state’s unemployment rate is well below the national average. Victoria’s economy is also quite diversified, with industries such as agriculture, manufacturing, mining, tourism and finance all playing a significant role.
The state’s high standard of living is also reflected in its housing market. Victoria has the second-highest house price in the country. However, it should be noted that Victoria also has the second-highest population density in Australia, so housing is in high demand.
Overall, Victoria is a very prosperous state with a strong economy and high standard of living. It is an attractive place to live and work, and is sure to continue to prosper in the years to come.
Conclusion
Victoria has a strong and stable real estate market, with prices continuing to rise despite concerns about the global economy. This makes Victoria a popular destination for investors.
The state’s strong economy and population growth, fuelled by strong immigration and people moving from other parts of Australia, is driving property prices up.
Gross yield for property investments range from 1-8.7%, with higher yields common in lower-priced suburbs.
Houses and 3 and 4 bedroom houses are particularly in demand, as well as townhouses and apartments for first-home buyers and investors. The ratio of owner-occupied to rented dwellings is slightly higher than the national average and the majority of dwellings sold are houses.
Growing interest in inner-city properties has led to strong unit construction in Melbourne. Victoria has a diverse socio-economic status and a strong economy, making it attractive for people looking to move and invest.
Doing your due diligence before investing in real estate is important. With the tools from HtAG Analytics, you can swiftly analyse the entirety of the property market across Australia to gain a better understanding of the risk, capital growth, and potential cashflow. Our Relative Composite Score (RCS™) integrates traditional market data points into a single score, saving you time and energy.
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More about Victoria Property Market
The state government of Victoria, Australia has announced a number of infrastructure upgrades that are planned to take place over the coming years. These include upgrades to the state’s transport infrastructure, as well as improvements to the state’s road network. You can find out more about these projects on the Victoria government website.