There are hopes Ballarat's housing market could flatten out soon, as house prices continue a five-month drop.
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The average home price, including both house and unit prices, has declined 0.3 per cent in April to $552,650, which is down 4.3 per cent on a year ago, according to CoreLogic's latest home value index.
Real estate statistics agency CoreLogic research head Eliza Owen said "this decline in April marks a fifth consecutive month of price falls across Ballarat".
According to CoreLogic, Ballarat's average home prices have fallen from $572,593 to $552,650 since last November.
"One thing that is worth noting is that the pace of price falls has slowed down since February," Dr Owen said.
Home prices fell 1.1 per cent in February and 0.8 per cent in March, according to CoreLogic.
"Even though prices are declining, the rate at which they're falling is easing," Dr Owen said. "It's getting slower and slower - the market could actually flatten out soon."
'A stock piles up'
Ray White Ballarat director Peter Ludbrook said there had been an imbalance in the city's housing market.
"There are more sellers than buyers," he said.
According to CoreLogic, regional Victoria's home prices declined 0.1 per cent, and was the only state record a decline in values over the rolling quarter.
Dr Owen said the demand across regional Victoria was softer than other states and territories, which made it a buyer's market.
"A stock piles up," she said. According to CoreLogic, there are 15,000 properties available for sale in regional Victoria now.
"It is far higher than the historic average, which was about 12,000 properties for the past five years of this time of year," Dr Owen said.
Low market interest
Mr Ludbrook said Ballarat landlords had been putting rental properties on the market for sale - meanwhile, very few investors had been looking for properties.
"They are not interested in investing in residential real estate in Victoria anymore because of the cost involved," he said.
As part of the Victorian Government's COVID Debt Repayment Plan, the land tax rate has been raised to $975 plus 0.1 per cent of an investors' properties valued at more than $300,000 in the beginning of 2024.
Mr Ludbrook said some people started selling the properties because they had been experiencing mortgage stress and struggled to afford to maintain their properties.
Dr Owen said Ballarat's housing market had been gradually declining across the region since mid-2022 when interests rates started to rise.
Buyers beware
Mr Ludbrook said this year's average time from listing to sale had lengthened to 74 days, compared to 14 days two years ago.
"We've had our best month in April that we've had for six or seven months - because the sellers have adjusted their expectations to meet the market that the buyers are prepared for," he said.
Dr Owen said the additional supply gave buyers more time to negotiate and more power at the bargaining table.
"It is definitely a market for people who are ready to buy and want to buy," she said. "The only thing to be conscious of is that buying in a falling market can affect the equity position of the household over time, which is only an issue when it comes to mortgage serviceability."