The markets currently attracting our focus at Hotspotting are the ones we call “the second wind markets”.

These are locations which experienced strong capital from 2020 to 2022, have been in the post-boom pause/correction phase for the past 18 months or so, and are now poised for another period of price growth.

There are few better places to find second-wind markets than Regional Victoria, as many of the key centres have exhibited that pattern over the past 3-4 years and are now showing the early signs of revival.

Many of the suburbs of Ballarat are classic examples. The median house price for Sebastopol rose from $330,000 in 2020 to $475,000 by the end of 2022. There has been a price correction in the past 18 months but market activity is rising again and another period of price growth is expected.

Eaglehawk in Ballarat rose from $325,000 in mid-2020 to $520,000 in early 2023, before the price graph evened out over the following 12-18 months.

Bendigo displays similar patterns. The suburb of California Gully had a median house price of $300,000 in 2020, rising to $465,000 late in 2022. The price graph has flatlined since then, before showing the first signs of new growth in mid-2024.

Similarly, Flora Hill lifted its median house price from $255,000 in 2020 to $450,000 in early 2023 – but the price graph has been flat over the past 12 months. Now sales activity is rising again, which is a forward indicator of impending price growth.

Other markets in Regional Victoria have this pattern, which is a common one in real estate cycles with a period of strong growth followed by a period of correction or no growth, before the market embarks on the next growth cycle.

Shepparton, Traralgon, Mildura, Wodonga, Warrnambool and many other Victoria regional centres have this pattern.

They’re all places with solid local economies and credentials for future growth.

Most of them commonly have houses in the $400,000s and $500,000s, with low vacancy rates, so they present attractive features for property investors.