Warrnambool house prices reached record levels in June 2022, new data shows.
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The median price rose by 49.4 per cent in the period between the onset of COVID-19 in March 2020 and June 2022 when the median hit $637,170.
CoreLogic's executive research director Tim Lawless said the growth phase added about $185,550 to the median house price in the city.
Mr Lawless said since peaking in June 2022, house values in Warrnambool had generally been trending lower, falling 10.8 per cent to December 2023.
"Taking the upswing and recent downturn into account, house values across the region remain one third (33.3 per cent or approximately $125,000) higher than pre-COVID levels," Mr Lawless said.
The south-west town which recorded the lowest decline in values between the market peak and December 2023 was Koroit, Mr Lawless said.
Its median value fell by 3.2 per cent.
Homeseeka Warrnambool senior adviser Peter Herbert said he was surprised Koroit's median house price of $620,000 had overtaken Warrnambool's, which is sitting at $590,000.
Mr Herbert said it was the first time he had seen the median price in the town higher than Warrnambool in 35 years in the industry.
"It's unheard of," Mr Herbert said.
He said he believed the lack of houses available in Warrnambool and Koroit's proximity to Port Fairy - which was a tightly held market - had driven up the price of properties in the town.
"Koroit's always been popular and now it's showing its worth," Mr Herbert said.
He said property across the south-west had proved popular in 2023.
"It's quietened off a bit after COVID but now it's kicking along quite well," Mr Herbert said.
"Warrnambool is quite resilient - we're still the cheapest along the coast and people see it as a great place to live."
Mr Lawless said an increase in the number of properties listed for sale had seen a decline in prices in the city.
"Based on data to the end of November, the total number of properties advertised for sale across the Warrnambool and south-west region has increased by 60 per cent from the lows of 2021 to be 6.9 per cent above the previous five-year average," he said.
"The rise in advertised stock is mostly a reflection of lower levels of buyer demand with annual sales activity down an estimated 45 per cent from the recent peak in activity in June 2021.
"The higher level of advertised supply provides buyers with more choice, less urgency in their decision making, and a better ability to negotiate on price."
Portland house prices increased by 50.8 per cent from the onset of COVID-19 to the peak in 2022.
However, the median price is now 36.7 per cent above that of March 2020 at $380,060.
Hamilton house prices increased by 54.8 per cent from the onset of COVID-19 to the peak in 2022.
The median price is 39 per cent higher than it was in March 2020 at $351,997.