Thinking of investing in the regional Victoria property market in 2025?

While regional Victoria housing prices took a hit in 2024, some suburbs outperformed others, making gains in an otherwise cooler market. Add tight rental conditions into the mix and there are still investment opportunities to be found in the regional Victorian property market if you know where to look.

Let’s do some analysis below.

What did the regional Victorian property market look like in 2024?

The regional Victorian property market faced headwinds in 2024, with CoreLogic’s January 2025 HVI Report revealing a -2.7 per cent annual decline in property values. This closely mirrored Melbourne’s performance of -3.0 per cent, marking Victoria as the only state to record an annual drop in dwelling values. As of December 2024, the median property price in regional Victoria sat at $569,295—the third highest among all states’ regional markets.

Despite the overall downturn, pockets of opportunity remained for investors. Affordable regions such as Mildura—Buronga, Swan Hill, Shepparton—Mooroopna, and Horsham bucked the trend, recording annual gains of between +3.0 and +6.0 per cent. These markets showcased the potential for capital growth, particularly for investors seeking properties within a more accessible price range.

One contributing factor to the state’s softer market may have been policy changes, as highlighted in The McGrath Report 2025. The Victorian Government’s decision to lower the land tax-free threshold for investment properties from $300,000 to $50,000 in January 2024 likely discouraged investor activity. 

By April 2024, investor lending accounted for just 30.7 per cent of the state’s total housing finance commitments, well below the national average of 37.0 per cent and significantly lower than states like New South Wales (42.2 per cent). High interest rates and policy shifts may have also spurred a sell-off, with new sale listings in regional Victoria rising by +42.6 per cent in the year to May 2024—among the largest increases nationally.

Regional Victoria property market predictions and price forecasts 2025

The outlook for regional Victoria in 2025 suggests a cautiously optimistic trajectory, with experts highlighting a mix of challenges and opportunities.

Miriam Sandkuhler, CEO of Property Mavens, notes a revival of interest in Victorian regional centres, even extending to smaller hamlets. Speaking to Australian Property Investor, she attributed this trend to a rise in first-home buyer activity across the state, which is benefiting major hubs like Geelong, Ballarat, Bendigo, and the Mornington Peninsula. These areas remain attractive due to their affordability and higher rental yields compared to Melbourne, where the median house price sits at $940,000, compared to $550,000 in Ballarat and $726,000 in Geelong. 

However, Ms Sandkuhler pointed out that this renewed interest has been partly “masked” by the sell-off of investment properties caused by higher land tax obligations. She believes this is a transitional phase and expects the market to stabilise into a more balanced state in 2025.

NAB’s Regional Victoria Property Market Update offers a more tempered perspective, suggesting that growth in regional Victoria may remain subdued due to muted demand and increased housing supply. Key factors influencing the market include uncertainty over the timing of interest rate cuts, affordability concerns, and inflation. However, there are positive indicators, including steady interstate migration, rental market growth, and record-low vacancy rates, which are likely to provide some support to housing values.

Meanwhile, Belle Property’s 2025 Property Outlook paints a more optimistic picture, forecasting continued growth across regional Victoria in 2025. They emphasise that buyers, investors, and developers stand to gain by paying close attention to local demand trends, infrastructure developments, and area-specific dynamics. This data-driven approach to decision-making is expected to position stakeholders for success in the year ahead.

Together, these insights reflect a market in flux, where affordability, infrastructure, and rental demand present opportunities, while macroeconomic factors such as interest rates and supply levels remain potential hurdles.

What are the best Victorian regional towns to invest in 2025?

While the regional Victorian property market has been underperforming as a whole when compared to the rest of the country, there are still a number of spots tipped as strong opportunities for investors around the state. 

Spring Gully, VIC 3550

Spring Gully, located on the outskirts of Bendigo, saw its median house price rise by +11.5 per cent in the year to June 2024, reaching $680,000. This suburb offers a blend of city convenience and country charm, being closer to Melbourne than the Bendigo CBD and surrounded by lush greenery. According to The McGrath Report 2025, Spring Gully is poised for further growth, driven by upcoming developments, including new housing, a school, and a general store, making it an attractive option for families and investors.

Mansfield, VIC 3722

Mansfield, a picturesque town just under three hours from Melbourne, offers a relaxed lifestyle amidst stunning natural scenery. While the median house price fell -4.7 per cent in 2024 to $810,000, units saw annual growth of +4.9 per cent, reaching $585,000. Known for its outdoor activities and proximity to Shepparton and Wangaratta, Mansfield is highlighted in Smart Property Investment’s Fast 50 report for its appeal to both investors and lifestyle buyers seeking a peaceful yet connected regional location.

Bairnsdale, VIC 3875

Nestled in East Gippsland, Bairnsdale is a gateway to the Gippsland Lakes and alpine villages, combining natural beauty with a rich cultural and commercial scene. Despite a slight dip in house (-2.7 per cent) and unit (-2.8 per cent) prices in 2024, with medians of $445,000 and $340,000 respectively, rental yields remain strong, with a median house rent of $450 per week. According to REA’s Hot 100 Suburbs 2025, Bairnsdale’s proximity to wineries, markets, and industries like wool and dairy continues to make it a high-yield opportunity.

Geelong West, VIC 3550

Geelong West offers a suburban lifestyle with proximity to Melbourne, just 75 minutes away, while boasting its own vibrant cafés, boutique shops, and parks. The suburb’s median house price declined by -4.6 per cent in 2024 to $859,000, but units grew slightly by +1.0 per cent to $490,000. Highlighted in REA’s Hot 100 list, Geelong West is attracting young professionals and first-home buyers, with renewed interest fueled by its strong amenities, period homes, and forecasted population growth.

Shepparton, VIC 3550

Set along the Goulburn River, Shepparton recorded a +3.4 per cent increase in house prices to $455,000 and a +9.9 per cent rise in units to $390,000 in 2024. Known as “Australia’s food bowl,” this regional centre is home to major food manufacturers like SPC Australia and Campbell’s Soup. REA’s Hot 100 Suburbs highlights its affordable property options, ongoing infrastructure upgrades, and family-friendly atmosphere, making it a standout for both investors and first-home buyers.