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Headlines
Winter/26
Regional Victoria Residential
Economy
Residential sales
Sales
Regional Victoria recorded a higher number of residential sales over the past year Sales trended up 20% with a total of 37,417 transactions in the year ending Q1/26, outpacing the five year annual average of 31,432 sales A change in sales activity can be influenced by interest rates, economic confidence, housing supply, government policies and shifting population trends which impacts buyer demand. Isolating the 8,940 sales in the Q1/26 quarter, this was 13% below the previous quarter, whilst lower than the 7,796 five year quarterly average
Share of state annual sales
Regional Victoria made up 27% of the total number of annual residential sales recorded in Victoria at the end of Q1/26 This was higher than one year ago when the proportion was 26%, whilst below the 34% share recorded five years ago A change in residential sales activity over the year to Q1/26 saw Regional Victoria (+20%) outpacing Melbourne (+12%)
Rolling tally of annual residential sales
Regional Victoria
Share of state annual sales, by number
Regional Victoria
Regional Victoria, Q1/26 by Local Government Area
Residential sales
Sales velocity -11 days
Regional Victoria homes are taking less time to sell than one year ago Residential homes averaged 55 days on market in Q1/26, from the time they were listed, to the day they went under contract This average duration was 57 days the quarter before (-2 days) and 66 days one year ago (-11 days) A lower number of days on market typically indicates that homes are selling more quickly, often reflecting strong buyer demand and well priced, desirable properties. In contrast, a higher number of days on market may signal slower buyer activity or that homes are priced above current market expectations Looking back over the past five years, it has taken 48 days on average, to sell a home
Average days on the market
More Regional Victoria homes have been newly listed for sale than this time last year. Newly advertised listings in Regional Victoria were 0 1% higher in the month of March 2026 than the equivalent period last year, according to Cotality This change in new listings trended above the Australian average of -3 3% but below the 2 5% across Australian capital cities
Overall, the total number of homes listed for sale in Regional Victoria is down on last year. Regional Victoria's total number of listings in the month of March 2026 were 12 9% below the equivalent period last year, according to Cotality. By comparison, the Australian average change for total listings was -11 5% and across Australian capital cities was -15 7%
Regional Victoria, Q1/26
Residential prices
Regional Victoria residential property prices have trended lower than a year ago Prices across Regional Victoria fell by 1 7% in the year ending Q1/26, with a 2 0% decrease recorded in the most recent quarter As a result, the average residential value reached $698,800. Residential values shift with changes in interest rates, supply and demand, economic conditions, population trends and local infrastructure which influences market appeal and buyer capacity Annual residential price growth has averaged 9 6% over the past five years
Looking ahead, Regional Victoria residential prices are likely to rise over the coming year McGrath Research forecast Regional Victoria residential property prices to increase by 3% at the end of 2026, followed by a stable outlook in 2027 Residential price forecasts consider borrowing capacity, the balance of supply and demand, economic conditions, population trends and local infrastructure which shapes affordability, demand and market direction.
Forecast for average prices
Regional Victoria, Q1/26
Residential rents
Vacancy 2.3%
The number of residential rental homes in Regional Victoria is currently undersupplied Regional Victoria rental vacancy was recorded at 2 3% at the end of Q1/26, rising 20 bps in the quarter whilst rising 20 bps over the past year. Generally, around 3% vacancy is considered a balanced market between rental supply and demand. Below this equilibrium is considered to be an undersupplied pool of rental homes, which places upward pressure on weekly rents For the past five years, Regional Victoria residential rental vacancy has averaged 1 9%
Yield -9 bps
Regional Victoria gross rental yields have trended lower over the past year Residential yields fell 5 bps in the Q1/26 quarter to be 4.40% across Regional Victoria, whilst 9 bps lower compared to a year ago A yield pushing beyond 4% is more desirable for investment properties located in capital cities, while below this, tends to show higher property values relative to rental income Regional Victoria gross rental yields have averaged 4 19% over the past five years
Residential rental vacancy
Regional Victoria
from a quarter ago
from a year ago
Gross rental yield
Regional Victoria
Residential rents Update
Tracking average weekly rents Regional Victoria Average weekly rent
Residential rents across Regional Victoria trended similar to the weekly rate recorded a year ago Regional Victoria rents remained stable in Q1/26, whilst increasing 5 2% over the past year, to stand at an average $505 per week Rent changes are driven by rental supply, tenant demand, migration trends, economic conditions and investor activity which together impact the vacancy rate For the past five years, Regional Victoria rents grew an average 6.7% per annum
Forecast for average rents Regional Victoria Rental outlook +9%
The Regional Victoria residential market is continuing to experience upward pressure on weekly rents McGrath Research forecast Regional Victoria rents to rise 9% at the end of 2026, with a further 8% rise likely in 2027 The rental forecast takes into consideration new and existing supply levels, population changes, economic conditions and upgraded local infrastructure which can influence future tenant demand, vacancy rates and rental growth
Regional Victoria, Q1/26
Definitions
Regional Victoria
Regional Victoria refers to the area outside of ‘Greater Melbourne’ or ‘Rest of State’ for Victoria as defined by the Australian Bureau of Statistics.
Interest rate target
The cash rate target is the interest rate set by the Reserve Bank of Australia to influence borrowing costs, economic activity, and inflation across the economy
Economic growth
Economic growth is the rise in a country’s production of goods and services over time, reflecting how much the economy is expanding
Unemployment
The unemployment rate measures the share of people in the labour force who are willing and able to work but currently without employment
Sales velocity
The length of time a property spends on the market from listing to exchange, with the duration measurement represented as being number of days.
Average price
Average price is the calculation of prices or values divided by the number of properties It represents the overall price level across a market and is useful for tracking trends over time
Yield
Gross rental yield is the annual rental income of a property divided by its market value, showing the return before expenses.
Local Government Area
A Local Government Area (LGA) is a defined geographic region administered by a local council responsible for community services, planning, and local regulations.
To be included in this publication, each regional LGA was required to have at least 7,500 residential dwellings within its council boundary This threshold helps ensure that the area provides a sufficiently robust and reliable sample size for meaningful analysis
Population growth
Population growth increases the number of people needing homes, boosting housing demand and influencing supply, prices, and future development needs
Sales
Sales of residential homes refers to the number of houses or apartments sold within a specific area and time period, most commonly being reported within the quarter or year
Listing
New listings are recently advertised homes, while total listings represent all properties currently for sale in the housing market at a given time.
Vacancy
Total residential vacancy refers to the proportion of rental properties unoccupied and available for tenants at a specific point in time
Average weekly rent
Average weekly rent is the calculation of rentals divided by the number of properties It represents the overall rent level across a market and is useful for tracking trends over time.
Guiding you home
Michelle Ciesielski National Head of Research, McGrath Research
www.mcgrath.com.au/research
