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Everyone assumes all of Victoria offers the same investment opportunities, but that’s a costly mistake. We analysed the data from Arjun Paliwal’s deep dive into Melbourne vs Victoria, and the differences? They’re mind-blowing. Here’s what every investor needs to understand.
1. Capital Growth Trends:
These numbers made us do a double-take:
- Regional Victoria property market: 76.9% growth over 7 years
- Greater Melbourne property market: Just 31% over the same stretch
And there’s more. Look at 10 years: Regional smashed it with 95.3% while Melbourne managed 63.8%. Yes, recent one-year figures are both pretty average (Melbourne squeezed out 0.2%, regional dropped 0.9%), but come on – those longer trends don’t lie.
Regional Victoria basically lapped Melbourne twice. Twice!
2. Rental Yields and Returns:
We crunched the yield numbers and, wow:
- Melbourne’s sitting at 3.42% yields
- Regional Victoria? A solid 4.41%
- 10-year rental growth tells the same story: Regional 65.2% vs Melbourne’s 51.4%
That’s almost a full percentage point gap in yields, plus way better rental growth.
If you’re chasing cash flow, the Greater Melbourne property market is probably not the smartest option.
3. Market Cycles and Timing:
Now, here’s where things get really interesting. These aren’t just different markets, they’re running on completely different clocks:
Melbourne: Stuck in “early adopter” mode. Seven years of pretty ordinary performance, which (plot twist) might actually mean good things ahead.
Regional Victoria property market: Living its “second wind” moment. Had its fun, caught its breath, and some spots are getting ready for round two.
Getting these cycle positions wrong? That’s expensive.
4. Budget Considerations for Investors:
We dug into what your dollar actually buys, and it’s brutal. Hunting for something under $700,000 in the Greater Melbourne property market? Tougher than it seems, as only 8 out of 40 areas even qualify.
But the Regional Victoria property market has tons of options in that $450,000 – $750,000 range. Plus, you get:
- Way bigger blocks
- Better yields (obviously)
- Decent value for your money
Your budget doesn’t just influence your choice, it basically makes it for you.
5. Regional vs City Investment Opportunities:
Even within Regional Victoria, you can’t just throw darts at a map. Take Ballarat, for instance. It’s been struggling, down 4.9% over 12 months.
Signs it’s still struggling:
- Properties sitting on the market longer
- Too much stock floating around
- No real recovery in sight
But then there’s Bendigo and Mildura showing some genuine promise:
- Bendigo’s finally stabilising
- Mildura’s delivering 5.13% yields with vacancy rates going as low as 0.3%
The point is, not every Regional Victoria property market location is great.
6. The Cycle Truth:
This whole Melbourne vs Victoria debate misses the bigger picture completely. It’s not about picking Team Melbourne or Team Regional – it’s actually about timing.
Melbourne’s been underperforming for years, which historically means it might be winding up for something big. Regional areas are giving you solid cash flow right now, but knowing when to jump in (and out) – that’s where the real money gets made.
7. Current Market Validation:
Recent data backs up what the cycle analysis suggested. Both Melbourne (-3.0%) and Regional Victoria (-2.7%) took hits, proving they’re moving in similar patterns now.
Where things stand:
- Regional Victoria median: $569,295
- Melbourne median: $940,000
But here’s the interesting part: some regional spots like Mildura-Buronga, Swan Hill, and Horsham still managed +3.0% to +6.1% growth. Meanwhile, 25 Melbourne suburbs saw increases of over $100,000 (Deepdene recorded a significant $602,000 rise).
Regional Victoria’s new listings increased by +42.6%. Classic “second wind” market behaviour – exactly what we expected.
Why This Matters Long-Term
Understanding these market cycles isn’t just useful today, it’s what separates investors who build wealth from those who just get lucky occasionally. Markets move in predictable patterns, but timing everything correctly? That’s where the skill comes in.So, study the cycles, understand the data, invest for the long game, and have a strategic partner by your side. The fundamentals don’t change, even when the headlines do, and that’s exactly why working with Australia’s #1 Buyer’s Agency makes all the difference in building your property portfolio the right way.
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Disclaimer: The information provided in this podcast is general in nature and should not be considered as personal financial advice. The podcast host, guests, and contributors are not licensed financial advisors. Please seek professional financial advice that is tailored to your situation and circumstances before making any financial decisions.