Mortlake leads 'extraordinary' growth in region's housing boom

The CoreLogic data showed property values in many towns across the south-west had risen above the regional average which statewide was 15.9 per cent.

Mortlake properties - which includes houses and units - have risen 39.3 per cent over the past year to a median of $290,000. In the past three months alone prices have gone up 5.2 per cent.

Port Fairy also showed major growth - jumping 21.5 per cent to a median of $748,700. Warrnambool properties have risen 17.7 per cent over the past year to a median of $468,346. Prices in Camperdown were also driven up to a median of $328,749 - an 18.6 per cent rise.

A 15.6 per cent rise in property values drove the median price to $280,442.

CoreLogic Head of Research for Australia Eliza Owen said the price boom in regional Victoria was part of a larger trend in regional areas across the country.

"As with many parts of regional Victoria, these suburbs have seen extraordinary price growth over the past 12 months, with the biggest 12 month increase occurring in Mortlake," she said.

"Listings volumes have tightened over June 2021 compared with the same month last year, which has contributed to an acceleration in prices as less people have migrated away from regions over the year, and there has been an uplift in internal migration from Melbourne to regional Victoria."

Ms Owen said Mortlake was coming off a relatively low base, but for housing alone it had the biggest percentage rise in the state - only units in Portarlington and Ocean Grove had bigger percentage rises.

"I think Mortlake has a lot of room to grow but it's not what you would see in a usual year, that's for sure," she said.

Ms Owen said there were a number of factors at play behind the soaring property prices and people not being able to spend their money on overseas travel was one factor.

"This is part of the broader upswing that has been produced by record low mortgage rates," she said.

"There has been a lot of savings accumulated through COVID and that's meant that as restrictions have eased people have been able to spend those saving on high value assets, things like housing, but there has also been a big uptick in things like motor vehicle sales."

Lack of migration from regional areas to the city was also another strong factor in the strong housing data in in Warrnambool and the south-west.

"Where you usually see migration going from regional Victoria to Melbourne, that hasn't happened as much this year," she said.

"People are not really wanting to go to the city for obvious reasons and the result of that lack of internal migration has meant there's not as much stock coming up on the market."

Cheryl and Ray Butler have lived in Warrnambool, Portland and in Gippsland and bought a home in Mortlake in March.

"We came from a very small place in Gippsland. That's the reason we didn't want to move into a big town," Ms Butler said.

"It was just the vicinity of it; only 30 minutes from Warrnambool. Ray goes gold detecting and he is a couple of hours from where he wants to be."

She said the town was "nice and quiet" and easy to settle into.

Wilson Real Estate agent Lucas Wilson said Mortlake had been going from strength-to-strength. He said property in Mortlake was just as sought after as a house in Warrnambool.

"If you looked at the prices that they were bought for in recent times, they do correlate to that roughly 40 per cent growth," he said.

"Mortlake has got a better name for itself than what it did 10 years ago. We've sold a lot of houses to people who have moved there from the likes of Geelong and Melbourne and they've really loved it and that word has spread."

Mr Wilson said Mortlake was growing at a time when a lot of small towns were shrinking.

"The place's appeal and reputation has improved, not that it was ever bad. We've always sold properties in Mortlake," he said. "We might have sold one every couple of months but now we are selling three or four a month and selling them readily."

He said Mortlake had a lot going for it with pubs, shops and facilities drawing people in.

"There's some good little eateries there. The livestock exchange, since that went in, is bringing people regularly to Mortlake as opposed to a one-off," he said.

The windfarm projects, Mr Wilson said, had brought people to town but that was more for its rental accommodation rather than buyers. He said affordability was a big factor in the market. It's not just dwellings that have increased in price but land.

A quarter-acre block in Mortlake for years was worth about $30,000 which slowly rose to be worth about $50,000, he said, but about six months ago one sold for $70,000 and a block went for $110,000.

"It's a buyer who knows their stuff. It's not just someone randomly that's got no idea of values. These stories keep happening," he said.

Elders Mortlake real estate agent Jane Allen said it was hard to get properties in Mortlake with very little on the market.

"I've got lots of inquiries of people wanting to move to the area but I just can't get enough places to sell," she said. "I've got a unit and a house and that's it."

Ms Allen said it was not just retirees looking to move there but younger people as well.

"It's been really good for the town. Mortlake was cheap but it's not now," she said.

She said she was fielding calls not just from Melbourne but further north of the state.

"I did a virtual tour today because they couldn't get down here," Ms Allen said.

It's in stark contrast to where she thought the market would be with the impact of COVID. "You wouldn't believe it," she said.

While the number of sales in Terang was on par with Mortlake, it had not experienced the same jump in values - although the median prices were now similar.

While the CoreLogic data shows a 17.7 per cent increase in values in Warrnamboool, Mr Wilson said the rise felt like it had actually gone up more.

"When you go and list a house for sale, you've got this data but by the time we've got the data the market's jumped again. You've sort of got to be in front of it a bit," he said.

"You list a house what you think is a starting at a strong high figure and they're getting above that again. It can be a bit hard to keep up with."

He said there had been some commentary about there being signs the housing market was cooling off nationally.

"We're not seeing that here," he said.

He said he had just come from a housing inspection at a property where 10 people had turned up and offers were already coming in over the asking price.

"We're already looking at offers above the first asking price which was set at what they thought was high. It's been on the market for four days.

"There's lots of up sides with it but it's not good for everyone though. I feel so much for the ones that are trying to break into the market and if you can't or leave it too late, then the rentals is so tough as well.

"It's alright if you are lucky enough to be already in the market and own it and watching your wealth increase with the increased values, and sellers are getting great prices, but there's a whole segment of the population that it's crippling for."

Ms Owen said the number of properties on the market in towns across the south-west had fallen.

"The lack of stock available for sale has contributed to a particular acceleration in prices as well. Also I think for these suburbs, there is an affordability aspect," she said.

"Even though a lot of locals are probably getting priced out of their markets, there would be people who would be more free to move to regional Victoria, particularly higher paid professionals that would be using that higher income on property purchases as well."

There were also signs investors were returning to the property market.

"We have seen a bit of investment growth in the Victorian market more broadly since the start of 2021," she said.

"With investors becoming more confident in the housing sector and rental markets generally tightening in regional Australia, that could be encouraging some investment in these areas as well."

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