Welcome to our Autumn property market report.
Currently there is a high level of intrigue around what is happening in the property markets, with plenty of distractions in the world at present, so let’s try and break down what is actually occurring.
The coastal and regional markets in Victoria are generally influenced sentiment wise by what is happening in the Melbourne property market. If you look at the statistics, you will find that despite healthy transaction volumes (the number of properties changing hands), the Melbourne property market has essentially shown no price growth since May 2022, which was when interest rates started to rise. Values are still up approximately 15% over the past five years, however. Statistics vary between data providers, however the overall trends are consistent.
Increased costs of living pressure (including interest rates) affect how much buyers can borrow and this is reflected in the auction clearance rates across Melbourne. Suburbs with median prices under $1,000,000 have significantly higher clearance rates than those above that level. There is also evidence to suggest that the lower price points are being influenced by the Federal Government’s 5% deposit scheme for first home buyers.
Local economies have a significant bearing on the health of a property market and the Victorian Government’s management of the state economy has been a factor in the loss of confidence experienced by some potential real estate market participants, both buyers and sellers, relative to what is currently being seen in other states.
The more discretionary coastal markets have felt this loss of confidence more noticeably, resulting in lower turnover and price reductions relative to the 2022 peak. The emotional attachment to the coast and the high quality lifestyle it provides remains intact. It is the backdrop of economic uncertainty, both locally and internationally, that is making potential coastal buyers cautious and increasingly price sensitive.
If we use Anglesea as an example, in the 2020–2021 financial year there were 100 house sales, which was the highest number ever recorded in a single financial year. In the 2024–2025 financial year there were 69 house sales and so far in the current 2025–2026 financial year (to the end of February) there have been 45. Given that we have recently experienced an interest rate rise, with potentially one more to come (according to CBA), we do not expect this figure to reach the previous year’s total.
Aireys Inlet, Fairhaven and Lorne are all following similar trends. We have not included Torquay in this analysis as it now attracts primarily an owner-occupier market and is not a directly comparable market to the other towns along the Great Ocean Road, which tend to attract more holiday house or lifestyle buyers.
If we look at who is currently buying and taking advantage of what can reasonably be described as a buyer’s market, it is those who are in a position to comfortably do so. Although some of these buyers are borrowing, many either have the funds available or are asset swapping.
One previous impediment to the market has reduced somewhat as values have come back from the 2022 peak. Outgoings such as rates and land tax have also reduced. When first introduced, based on the values at the time, land tax was seen as a significant impediment to purchasing a coastal property and at the upper end of the market this is still the case. In the middle and lower price brackets, however, it has moved more into the “annoyance” category rather than being prohibitive.
Looking forward, it is difficult to predict exactly what will occur in the coastal markets, although a continued cautious approach from buyers seems likely given current international events, stock market volatility and the possibility of another interest rate rise.
Properties with strong emotional appeal that are priced sensibly will continue to attract buyers, particularly those with the capability to act without significant borrowings. In a rising interest rate environment, larger borrowers often sit on their hands until it is clear that interest rates have peaked. Typically this type of buyer is looking for a clearer path ahead in terms of economic stability before making a large financial decision.
On the flip side, we also see buyers who, due to their stage of life, simply want to move forward rather than wait. These buyers often have the financial capacity to act and are motivated by lifestyle rather than short-term economic cycles.
From an agent’s perspective, there is currently a significant psychological component involved in bringing transactions to a successful conclusion. In many ways the market feels more complex than it has since the early 1990s, which was also a challenging period. In these conditions, experience in guiding both vendors and buyers through the process becomes particularly important. For many property owners the current market conditions are creating an interesting moment of reflection about long term property decisions and future plans. Potential vendors are seeking sensible advice, while buyers often need constant reassurance to give them the confidence to proceed.
What will always underpin the Great Ocean Road coastal market is the area’s natural beauty, its limited supply (with most towns surrounded by National Park and unable to expand), and its proximity and accessibility from Melbourne and regional centres. Like most property markets, it will continue to be influenced by the economic conditions of the day, as has always been the case.
We hope you found this report informative. If we can be of any assistance with any real estate matter, please do not hesitate to contact us on 5220 0000.