M:
The Big Picture
Spring/25
Regional Victoria Residential
The Economy Key Drivers
Residential Sales Update
Regional Victoria residential annual rolling sale transactions tallied to 34,680 in the second quarter of 2025, an upward movement of 2% from the previous quarter and 13% higher than a year ago This was influenced by a more favourable lending environment and ramped up market activity following a period of modest price performance As a benchmark, over the past five years, the annual average was 34,174 sales
Share of Victoria Annual Sales
The share of Victoria’s total number of annual residential sales recorded in Regional Victoria was 24% at the end of Q2 2025 This was higher than one year ago when the proportion was 22%, but remains on par with the 24% share recorded five years ago Over the past year, Regional Victoria (13%) outpaced Greater Melbourne (1%) in the annual growth of sales activity
Total Number of Annual Sales
Regional Victoria
Sales +13% 24%
Share of Victoria Annual Sales, by Number Regional Victoria
Regional Victoria, Q2/25
Duration +20 days
Regional Victoria residential homes took an average 120 days on market - from the time they were listed to the day they went under contract - in the year ending Q2 2025 This duration was 119 days a quarter ago (+1 day) and 100 days a year ago (+20 days) A lower number of days on market mean homes are selling fast with more desirable properties, while a higher number of days suggests a slower market with above market values. Looking back, the five-year average has taken 93 days to sell a home
Average Days on the Market Regional
Newly advertised property listings in Regional Victoria were 9.6% lower in the month of June 2025, than the equivalent period last year, as reported by Cotality This trended below the -9.3% for the combined regional areas of Australia and -7 0% across Australia
Regional Victoria’s total number of listings in the month of June 2025 were 2.3% below the equivalent period last year, according to Cotality By comparison, total listings were -5.6% across the combined regional areas of Australia and -2 1% Australian-wide
Residential Prices Update
Change in Average Prices Regional Victoria Average Price
Residential property prices across Regional Victoria fell by 2 3% in the year ending Q2 2025, with a 0 5% decrease recorded in the most recent quarter This brought the average residential value to $611,500, following softer population growth and modest housing demand. Annual residential price growth has averaged 7 5% over the past five years.
Forecast for Average Prices Regional Victoria Price Outlook 0%
Looking ahead, McGrath Research anticipates Regional Victoria residential property prices to remain stable at the end of 2025, followed by a stronger 1% rise in 2026. Factors taken into consideration include the reduction in mortgage interest rates encouraging stronger buyer confidence following subdued capital value performance over recent years
Regional Victoria Vacancy 1.9%
Change in Residential Rental Vacancy
Regional Victoria residential rental vacancy was recorded at 1 9% in Q2 2025, falling 20 bps in the quarter and in total, 20 bps lower over the past year Generally, 3% vacancy is considered a balanced market between rental supply and demand Below this benchmark is considered to be an undersupplied pool of rental homes. Over the past five years, rental vacancy has averaged 1 9% per year
+24 bps
Change in Gross Rental Yield
Regional Victoria Yield
Residential gross rental yields rose 8 bps in the Q2 2025 quarter to be 4 68% across Regional Victoria, while being 24 bps more than a year ago. Gross rental yields are a good initial measure of comparing the return of a property investment before expenses are deducted. Gross rental yields have averaged 4 48% over the past five years
Change in Average Weekly Rents Regional Victoria Average Weekly Rent $480
Regional Victoria residential rents rose 2.1% in Q2 2025, while increasing 5 5% over the past year, to stand at $480 per week Rising population growth and low vacancy are encouraging higher rents, although at a slower rate than previous years On average, over the past five years, rents grew 7.2% per year.
Forecast for Average Rents Regional Victoria Rental Outlook +7%
There remains an undersupply of new homes being added to the rental pool across Regional Victoria, while population growth remains on an upward trajectory As a result, McGrath Research forecast sustained upward pressure on rents of 7% at the end of 2025, with a further 6% rental growth likely in 2026
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.
Guiding you home
Michelle Ciesielski Head of Research, McGrath Research
michelleciesielski@mcgrath com au +61 414 694 220
www mcgrath com au