PORTLAND’S property market has cooled from the red-hot run during the pandemic.

Local estate agents say most housing is now priced right, after falling in value around 3% in the past 12 months.

Before COVID-19, Portland property was a bargain. Then the virus hit and sales boomed during the pandemic as locked-down Melburnians bought in regional areas for their rare bouts of freedom. Investors from near and far also cast their nets wide.

Suddenly, Portland’s attractions were discovered by a whole new market as a coastal area with cheap property, a rarity in Australia since the late 1990s when the ‘seachange’ phenomenon became part of the real estate vernacular.

For two decades, however, Portland largely remained a hidden gem, its five hours from Melbourne just a little too far.

Pre-pandemic the median house price had hovered around $230,000 for years. By mid-2021, it hit $318,000, rose to $377,000, then peaked at $450,000 in 2022.  

Prices started to ease around late July 2023.

As of last week, the median house price is $438,750 based on 154 sales in the past 12 months, a 2.8% drop. Buyer demand has decreased by 1% in the same period, according to realestate.com.au.

The median unit price is $368,000 based on 19 sales in the past 12 months, an increase of 23%. Buyer demand has decreased by 4% in the same period.

Ben Nash, director and sales manager, of Assets Real Estate, said the property market had cooled marginally over the past 18 months of rate increases.

“I like to say the market has corrected,” he said.

“House prices peaked at the end of COVID to about just over 12 months ago and have now had a slight dip - or correction - since. Portland is still an affordable place to buy or invest in.

“I think there is plenty of growth in this area still to come over the next five to 10 years, with the growth in industry, overall population and tourism.

“I can’t see house prices falling, although land isn’t selling. There isn’t much land available either so homes will hold their value because of the lack of new houses.

“Blocks sales have been the biggest drop, because of build cost and available builders and land tax.”

He said Portland was always going to be the next coastal town to attract new residents and investors, after Warrnambool boomed during the pandemic.

“There’s now an appreciation for the town and region, among locals and visitors. They realise just how much we have to offer.

“Plus we’re attracting more big business – big companies like Coles and Bunnings don’t decide to set up in a town unless they have done their numbers.”

As of last week, Assets had 100 homes for sale. “The average wait time to sell a property is one to four months if priced appropriately,” Mr Nash said.

The easiest properties to sell are new builds and easily maintained and looked-after homes.

Mr Nash said homeseekers should keep communicating with real estate agents and their bank.

Boyd Falconer, sales manager for A1 Real Estate Solutions, also believes the market is now priced correctly.

“During the pandemic, real estate reached a ‘false’ high,” he said.

“What’s happened now is an adjustment to what the market would have naturally grown to.

“Interest rate rises have also tempered the market.

“I’d say most properties are now priced correctly. Some owners may still hope for those pandemic prices, but they may have to be more realistic.”

Nikki Hudson, sales manager with Hudson Property, says property sales in Portland are steady.

“Buyers are cautious at the moment as there is still talk of inflation and more rate increases – add to that the increased cost of living,” she said.

“Local property prices did reach record highs during the pandemic but they have levelled out the last 12-18 months.

“Although the median rose to $450,000 during the pandemic, interest rates were at an all-time low so post COVID it has certainly levelled out and certainly dropped slightly.”

Ms Hudson says Portland is always a good investment. “There’s so much more room for growth and recognition as a tourist destination and we have great industry and retail as far as employment – I think COVID was only the beginning for our town.

“We still have affordable and quality investment properties for sale with quality tenants looking.

“True, a house you could buy for $270,000 six years ago is now worth $500,000, but when you look at the Melbourne, Geelong, Warrnambool – you certainly get more home or land size in Portland, not to mention better quality for a lot less.”

Ms Hudson can’t see prices falling any further. “I think they have dropped in the last few months to meet the current market – ample supply but not enough demand. I don’t see Portland ever going back to five-plus years ago.”

Hudson currently has 39 varying properties for sale, with 12 under contract.

On average, a property will take two to three months to sell, though it very much depends on the individual listing, Ms Hudson says. And the cheapest properties, unsurprisingly, are the easiest to sell.

“The hardest to sell are usually those that are possibly priced too high for the current market and of course there are always the quirky ones.”

Ms Hudson advises homeseekers to keep looking. “Try not to focus too much on how homes are priced at the market – look a little higher than your budget and don’t be frightened to look at everything.

“Looking online is a great idea but in order to get a feel for a home and how it is priced, take the time to call the listing agent and arrange to have a look as you just never know.”

Allan Barrett, director of Seaview Real Estate, is also finding the local market slow at the moment.

“We’re busy doing inspections and properties are selling, but it is a bit more of a buyer’s market,” he said.

“People are taking their time, looking at various properties and seeing what else comes on the market as well.”

Seaview has around 100 properties for sale, including new subdivision blocks, townhouses off the plan, lifestyle acreage and commercial properties.

“During COVID, buyers saw the property market as a secure investment or they just wanted to invest in property, so that’s why we had such a jump in property prices in 2021-22,” Mr Barrett said.

“We had a similar thing in 2005-06, for no particular reason, it just happened.

“But a lot of our market is retirees moving in from other areas. There were people who moved to the area during COVID, some have stayed, some have gone and sold their property.

“We also manage 40 holiday properties, so many of those property owners are looking long term to retire down here. It’s not about making a lot of money or the investment side, but about having a retirement property when they’re ready to move here.”

Mr Barrett believes the market will continue to level over the next 12-18 months. “And then we are expecting demand to increase, especially if a lot of expected projects go ahead. We will see more demand for housing stock.”