It's official: Ballarat has been named Australia's worst-performing market so far this year.
But although sellers are fetching less for their properties than during the pandemic peak, the slump means buyers are in a strong position.
The annual change in property value for the city is -6.3 per cent, which was the poorest performance out of all regional markets in Australia, according to CoreLogic's market update to October 2024.
In the three months to October, Ballarat's property value growth further deteriorated by 1.7 per cent to $530,700.
But Ray White sales consultant Jo Thornton said the sustained slump has been a great opportunity for first home buyers to get into the market before expected growth in 2025.
"It genuinely is a brilliant opportunity to get in and secure some real estate if they can," she said.
"I'm sort of telling any first-home buyer that if you've got your pre-approval, buy something this side of Christmas and lock something in."
First-home buyers might purchase around Ballarat's median price which could secure them a property similar to a Eureka Street home which sold in November.
The three-bedroom Ballarat East home sold for $520,000 and is within walking distance from the CBD.
Why people are still selling
Although Ballarat's housing market has deteriorated since reaching its peak in May 2022, there were 2500 sales in the past 12 months, an increase of 16.4 per cent on the previous year.
This was also one per cent above the five-year average for the region.
Ms Thornton said people will always be selling due to deaths, marriages and divorces.
But she said some people are also selling their homes to get out of mortgage stress.
"They're not selling because they have to but if a rate cut is not coming until September next year ... they're doing the smart thing in that they're offloading the asset to reduce the mortgage," Ms Thornton said.
Yet she said appraisal numbers have been down although there is a "strong pipeline" of properties coming onto the market for early 2025.
Ms Thornton expects the market to adjust next year with interest rate cuts and believes Ballarat will go back to becoming "a seasoned performer".
"I'm optimistic and confident about 2025," she said.
"We're just going to get some stability in the market but one or two rate cuts is not going to cause a property boom."
Investors are back, agent says
Investors have been "coming in droves" since mid-October, according to Ms Thornton, who saw the investment market dry up after the pandemic.
"I didn't even really see an investor for the best part of 18 months to two years," she said.
"But they are out in full swing, we have buyers agents from Melbourne and Sydney."
Median rent increased by 1.2 per cent in the three months to October but the annual rental change of 2.3 per cent is the second-lowest out of Australia's regional cities according to the CoreLogic report.
Paying the median rent of $429 per week, a Ballarat renter could afford a three-bedroom home in the city's centre.
Other Victorian regional centres that saw a downturn in property values include Warragal-Drouin, Bendigo, Castlemaine and Geelong.
The decrease in these areas has been attributed to a stabilisation after unusually high demand during the pandemic according to CoreLogic economist and report author Kaytlin Ezzy.
"While these markets thrived during the early stages of COVID, reduced affordability and a range of headwinds have since softened conditions," she said.
"There's certainly been a slowdown in demand for these areas and more stock on the market and that's in addition to higher interest rates, cost of living pressures, and limited borrowing capacity."
Warrnambool had the second-worst performance for quarterly property value growth in the country recording a decrease of 2.6 per cent.
However, the southern Victorian city recorded no annual change.
