The town where almost every home makes a profit, but not everyone wins

Of the homes that changed hands during the September quarter in the regional Victorian city, 99.8 per cent traded for a paper gain, CoreLogic research found.

Bendigo’s market has jumped amid demand from a wave of tree-changers in the pandemic, as well as ultra-low interest rates and government grants that sparked demand from local buyers.

Home values rose 21.3 per cent during 2021, to a median $577,352, on CoreLogic data.

Drawcards include the affordable options compared to Melbourne, reasonable commuting distance for those who could largely work from home but still need to be in the capital one or two days a week, the restaurant scene and local infrastructure such as the airport, university, state government offices and hospital.

The growth has been welcome to sellers, who are then able to upgrade nearby, but also made it more challenging for some locals to save a deposit as the market runs away from them.

“There’s been this unbelievable change with land values which has snowballed to established properties,” PH Property director Brad Hinton said. “Most people [selling] have been pleasantly surprised at their results.”

First-home buyers bought up affordable blocks of land and took advantage of the $25,000 federal HomeBuilder grant and the $20,000 state First Home Owner Grant for regional properties, he said.

Then first-home buyers who missed out on the land borrowed at low interest rates and bought established homes for about $650,000, allowing those sellers to upgrade to the $850,000 family home bracket, and those sellers in turn to buy an even more spacious home.

Combined with demand from tree-changers cashing in on the sale of their higher-priced Melbourne homes, and interest from investors, the market boomed.

Local buyers were having “a little bit of argy bargy” with out-of-area buyers, he added.

“There is an element of people getting out of Melbourne and coming back to their grassroots, or wanting a lifestyle change.”

The growth is welcomed by Bendigo Mayor Andrea Metcalf, who is pleased to see skilled workers arriving in the area, while trying to plan for a population that could nearly double in the next three decades.

But tree-changing Melburnians have a different idea of what is an affordable property compared to locals, she said.

“It does make it a little less affordable then for people who live here, and have in their mind, ‘we’ll buy a house’, or ‘we’ll build a house’,” she said. “It gets pushed a bit further out of their reach, so it might take a bit longer for them to get to that point.”

She welcomed funds set aside by the state government to improve social housing in Bendigo, but said there was a broader need for more supply at lower price points.

There are opportunities for local developers to include some affordable housing in their projects, she said, or for owners of family homes to subdivide their blocks and build a villa unit with a garden that might suit downsizing retirees.

Over the longer term, she is looking for opportunities to clean up former mining sites and turn them into residential land, in partnership with state government.

For now, given the limited homes for sale, listings have been selling fast.

McKean McGregor principal Glenn Rea said pre-pandemic, properties could regularly take 120 days to sell, especially at the higher end of the Bendigo market.

“You put that property, now, in the mix, you’re having 30 or 40 inspections [and] eight to 10 offers,” he said.

The inspections had dropped off a little over the Christmas break, he added.

“You think about someone who’s grown up and lived in Bendigo and seen this sharp rise, it just seems too dear,” he said. “To the tree-changer and someone coming from metro [areas], it still seems exceptional value.”

First National Real Estate Tweed Sutherland principal Craig Tweed said values had risen “dramatically” over the past year and there was a lack of listings for sale.

Now, buyers looking for a modern home on a 600-square-metre block could expect to pay about $700,000 to $750,000 he said, although entry-level homes began at $450,000.

“We’re still affordable [compared to Melbourne],” he noted. “We’re an affordable market and we’ve been that way for a long time.”