Geelong unit prices rose in March, while house values were flat. Picture: Alan Barber
Geelong homeowners can brace for more home price pain as rising interest rates and petrol prices begin to bite.
Geelong home values stalled in March, with PropTrack’s Home Price Index showing the median house price in Victoria’s second city was flat at $806,000, having climbed almost $42,000, or 5.14 per cent higher than the same time last year.
Townhouse and apartment owners faired better in march, with the median unit price reaching $585,000 in March.
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They’re the first figures since the Reserve Bank of Australia raised official interest rates for the second time this year, while Iran’s blockade of the Strait of Hormuz in its war with the United States and Israel has caused the biggest spike in petrol and diesel prices since the 1979 oil shock.
The city’s housing market remains 5.5 per cent below the previous peak in May 2022.
The $769,000 median value for a typical dwelling – which takes in both houses and units – is more than $42,000 below the peak during the Covid pandemic.
That deficit it set to remain stubbornly out of reach in 2026 as PropTrack senior economist Eleanor Creagh said the market absorbs potentially three more interest rate hikes in 2026, and continued cost of living pressures.
PropTrack senior economist Eleanor Creagh said Geelong home values were unlikely to recover this year. Picture: John Gass
Ms Creagh said Geelong’s outlook was for slower growth or potentially a correction amid expectations of as many as three more rate rises this year and resurgent cost-of-living concerns.
“There’s a lot of moving parts … but I’d say it’s unlikely Geelong will recover this year and it will be more of a slowdown,” she said.
The recent rate rises will weigh on buyer sentiment, borrowing capacity, and erode affordability, though Ms Creagh said a resilient labour market, population growth and first-home buyer support continue to underpin demand against limited supply.
The three-bedroom house at 21 Guthrie Ave, North Geelong, is listed for sale with price hopes from $800,000 to $840,000. A typical Geelong house is valued at $806,000.
First-home buyers, and interstate investors are among the better performing segments in the affordable end of the market.
The figures show Geelong’s median home price continues to close the gap with Melbourne, where the annual growth in dwelling values was pegged back to 3.2 per cent.
Ms Creagh said Melbourne’s housing market, and particularly more affluent areas in the capital’s inner suburbs, as well as its inner and outer eastern suburbs where monthly and quarterly data showed house values were falling.
“Premium markets are more exposed to higher borrowing costs, and that’s probably leading to a growth slow down – and we are seeing that in many other regions across the country,” Ms Creagh said.
The two-bedroom unit at 2/17 Laura Ave, Belmont, is listed for sale at $550,000 to $600,000. A typical Geelong unit is valued at $585,000.
However, more affordable units were holding up better, largely as a result of buoyant first-home buyer demand coming from the First Home Guarantee scheme.
Ms Creagh said this suggested that mortgages costs would be a factor.
Ms Creagh added that interstate buyers looking to relocate to Victoria would be possible as it had happened before when, ironically, people looked to buy in Brisbane and Adelaide for better value for money.
“So it wouldn’t surprise me that some are looking for value if they are able to expand their location choice and willing to do so,” she said.
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