June 7th, 2025The state of play with the real estate market

by Kyle Barnes  

It is easy to speculate on the property market and to talk about anecdotal evidence, but when it comes time to list your property you want to be on the front foot before you knock on your agent’s door.

I imagine there would be many a buyer trying to get what they need or want for their property rather than what  it’s actually worth. In recent years we have experienced a huge uptick in growth mainly because of the pandemic, but as the saying goes what goes up must come down.

But  that saying isn’t all that relevant in the property market, as  what goes up always goes up. But sometimes it just takes a bit longer according to the graphs published, right, by matusik.com.au, which show price increases alongside  world events and key market drivers.  

According to domain.com.au, Hepburn Shire’s property  price has declined 10 per cent but we are not the worst hit.  

Indigo Shire which takes in places like Beechworth and Rutherglen, a particularly beautiful part of the world, has declined by a staggering 16 per cent. To get the reason for  these fluctuations and what the future might hold we talk to the experts.  

Provincial Group CEO and chief property advocate Max Waller  

Max said in regional Victoria, the property market remained subdued but had  shown early signs of stabilisation in the past three months following the sale price decreases observed in 2024.  

“Recent data from CoreLogic points to a gradual recovery, with early ‘green shoots’ indicating improvement.

“However, rising costs – including vacant residential land tax, short-stay levies (including Airbnb), and the new Emergency Services and Volunteer Fund levy – continue to challenge owners’ sustainability and dampen market momentum,” he said.  

“In contrast, Melbourne’s metropolitan market is showing signs of stronger recovery, driven by first-home buyer activity and a gradual return of upgraders transitioning to larger homes.  

“Regional areas maintain their unique lifestyle appeal, attracting buyers benefiting from flexible work-from-home arrangements, but overall, cost of living remains the dominant factor affecting market capacity and demand and we envisage this will  continue for the rest of 2025.

“With further potential interest rate decreases we expect improvement in buyer demand into 2026.”  

Mr Waller said while recent interest rate decreases had been welcomed, their positive impact has been largely offset by rising living costs and increasing property related taxes.  

“The anticipated further easing of rates is expected to gradually support market  activity, particularly in metropolitan areas where moderate growth of circa 3 per cent  is projected for 2025, with further acceleration into 2026.

Local regional markets  typically follow the trends set by metro areas, as greater population confidence begins to build.”  

Mr Waller said the filming and upcoming auctions of The Block had sparked  renewed excitement and attention for Daylesford and Hepburn Shire, potentially  leading to a short-term uplift in buyer enquiry and foot traffic.  

“However, for a sustained resurgence, the local fundamentals – such as  employment, cost of living, and lifestyle infrastructure – must align. The show’s focus effectively taps into the emotional appeal and rewards of regional living, which a great  highlight to share of our area.”  

Mr Waller said the past three months had seen a reduction in high-end sales across Hepburn Shire, with only about six sales recorded between $1 million and $1.5 million.

“Most transactions have occurred below $800,000, indicating price sensitivity in the current market. Nevertheless, unique and architecturally distinct homes continue to attract a niche buyer segment that is often less influenced by broader economic pressures.

“Savvy, high-net-worth investors are also leveraging the subdued market to secure quality assets.”  

Mr Waller said the impact of property-related taxes – including new levies – was best viewed as part of a broader equation: rising taxes, increasing cost of living, and  higher interest rates are collectively constraining market growth.  

“No single tax is solely responsible, but their cumulative effect can be significant.  Despite these pressures, Hepburn Shire continues to report strong longer-term rental  demand and steady returns due to continuing low supply.”  

Infolio Property Advisors Central Victorian buyer’s advocate Kathy Hodge  

Kathy said it state of play was better for her as a buyer’s advocate.  

“I am working with some clients at the moment who are making a permanent  move up here, so that’s not going to affect them. But as a buyer’s advocate it’s putting  us in a really good position, because it’s enabling us to really negotiate. There are fewer buyers, and I can be quite aggressive in where I’m seeing value in properties.  

“(But) I haven’t been buying in Hepburn Shire for a while. I’ve actually got a  couple of clients I’m working with at the moment and we’re looking the Castlemaine and Malmsbury areas but I think across the region, it is relatively similar in that  there’s still a hangover from Covid pricing in the minds of vendors.

“And it is a matter of constant education on the part of the agents. I think that  possibly they’re not conditioning the vendor to the change in the market. Well priced, realistically priced properties that are presented well, sell quickly. And that’s  always going to be the case.

“It’s the overpriced properties that are sitting on the  market for months, over 100 days. Then they go stale, and the vendor will get sick of  everything, and then they’ll take it offline.”  

Kathy says prices have dropped between 15-20 per cent, especially on properties  that were highly inflated during Covid.

“Probably on average, it’s 10-15 per cent at  least.” Recently introduced property and land taxes are also causing headaches.  

“If you’ve really got two markets, certainly in that sort of Castlemaine area,  because it’s more of a working town, we’ve got people buying and selling within the  same market but not so much people from Melbourne coming up.  

“I think it’s more hitting Daylesford, Trentham and the Hepburn areas, where  people are looking at second properties, and that’s where they’re getting hit with the  land tax, which has had a huge impact on the short-term rental market, which has  been a little bit oversupplied in those areas.  

“You do have cashed-up Melbourne buyers but they’re few and far between. But  the regular person looking to buy a holiday house somewhere is really feeling the  pinch and pulling back on that.”  

McRae Property Melbourne principal and buyer’s agent David McRae  

David said he had personally been hit by dropping prices in the shire.  

“We developed a very nice farm at Porcupine Ridge and I sold that in the middle of last year and missed the market by about $800,000 – but still did quite well.”  David said there were different markets.

“I think there’s a market up to $800,000  and then another to a million, and then a million to one and a half. The higher you  go the thinner the air gets. It’s as simple as that.  

“And I think people are frightened of anything that needs a lot of work – because  of builders and costs and the unknowns. If you want to buy something so you get  good value from you buy something that’s unrenovated.

“But then you’ve got to face  the challenge. The renovated properties are hanging on to their value much better.”  

David said the regional Victoria real estate market had long way to go before it  was healthy again although recently interstate investors were showing interest.  

“I don’t know about the regional areas, but it’s just started in Melbourne.”