The property market in a Victorian region is expected to bounce back with renewed confidence in 2024.

The new year has been off to a soft start in the Geelong area, according to Buxton Newtown director Dylan Taggert.

“Buyers are still sitting on the fence because of the possibility of another interest rate rise in February,” he said.

“However, we anticipate this will be the last of the increases and the market will bounce back and power through to 2025.” 

With interest rates on hold and some confidence restored, first-home and second-home buyers plus investors are expected to return to the market.

A rise in buyer activity and more competition will impact property values, which are tipped to spike in the region, according to Mr Taggert.

“We expect prices to increase from the third or fourth quarter of this year,” he said.

Strong demand and limited stock will continue to drive up sales and prices, according to the PropTrack Property Market Outlook.

Buxton Geelong North director Matt Plunkett said prices for established homes increased last year because of high demand and limited new housing construction.

Renovated properties were sought after and achieved good gains for sellers in 2023, and he anticipated this trend would continue this year.

“Last year these homes were popular and sold well, within an average of four to six weeks,” Mr Plunkett said. 

Mr Taggert noted that in 2023, there was a significant drop in the number of land sales.

“Vacant blocks were the toughest to sell last year,” he said.

Buyers looking to build their own homes lost confidence in construction companies, prices of materials rose by 20 to 30 per cent, and homes took longer to build.

“Building was no longer in vogue and there was a move to buying brand new or renovated homes,” Mr Taggert said.

Restored period homes in the inner-city suburbs also increased in popularity and achieved good prices, according to Mr Plunkett.

“They were sought after by Melbourne buyers, who were also keen on the lifestyle and coastal properties on the outskirts of Geelong,” he said.

While the first half of 2023 was challenging for Buxton’s seven offices in the Geelong region, mainly due to the interest rate rises, the second half of the year saw a rise in listing numbers.

“They were predominantly investment properties being sold off because of rate and land tax increases, and compliance laws,” Mr Plunkett said.

Both Mr Plunkett and Mr Taggert observed an oversupply of stock in coastal areas, particularly towards Ocean Grove, Torquay, the Surf Coast and Bellarine Peninsula. 

Annual sales volumes peaked across these areas at the height of the pandemic, when many city buyers moved to regional Victoria.

“They escaped the Melbourne lockdowns to the country, and they could work from home,” Mr Taggert said.

“But now, many have sold up and returned to the city.”

Armstrong Creek, Geelong’s biggest growth corridor and a haven for entry-level buyers, also experienced a rise in stock levels last year.

“Many homeowners were forced to sell because of interest rate increases and cost of living pressures,” Mr Taggert said.

“This has resulted in a levelling off of values and price corrections, which has attracted more buyers.”

With a median house price of $675,000, Amstrong Creek was Geelong’s top-selling suburb, according to PropTrack data.

A total of 283 houses were sold in the 12 months to January 2024, a 30.4 per cent increase in sales from the previous year.

Other top-selling Geelong suburbs included Highton with a median price of $919,500, Ocean Grove ($990,000) and Torquay ($1.25 million).