Daylesford house prices drop as The Block houses offer discounts

Home buyers could expect a six-figure discount on a typical property in the charming regional Victorian town of Daylesford, or as much as $400,000 on some top-end homes, as the wider market weakens.

Many other parts of the state are pricier than a year ago as investors and first home buyers flock to more affordable options – but those who might have looked for a weekender in Daylesford are pulling back. Buyers are now arriving from NSW, Queensland and SA as the town offers both high amenity and better value.

The median house price in Daylesford has fallen by $133,000 since it peaked at $925,000 in the March quarter of 2023, Domain data shows.

The typical house there now costs $792,000, a drop of almost 14 per cent from the peak three years ago. Separate figures show it had the third-weakest growth in house prices in regional Victoria over the past five years.

Some high-profile Daylesford homes have had hefty price cuts. The town hosted last year’s season of reality renovation TV show The Block, in which contestants transform a house, sell it at auction and pocket any premium over the reserve. The Block airs on Nine, owner of this masthead.

Two of the homes failed to sell at auction in October, when they had price guides of $3 million to $3.3 million. Hannah Thetford and Candice Wood’s house at 4 Cedar Lane now has a price guide of $2.59 million.

Emma Shanahan and Ben Cox’s home at 5 Cedar Lane now has a price guide of $2.6 million. It had attracted competitive bidding at auction up to $2.97 million, when a vendor bid of $3.1 million was placed and the home passed in.

McQueen Real Estate director Kim McQueen – who represented a Block home that sold under the hammer and is not involved in the remaining listings – said the town had a high volume of investor buyers and had been affected by changes to property taxes.

The Victorian government increased land tax on secondary properties, and recently the federal government introduced changes to the tax treatment of negative gearing and capital gains.

Buyers in the past may have used a home as a weekender and let it out as a holiday home at other times, but that had changed, McQueen said.

“It is certainly tougher. Things are on the market for a lot longer than they were a few years ago, but they do sell,” she said. “It is a buyer’s market.”

Prices have fallen, McQueen added, but standout homes still achieve exceptional results.

Belle Property Daylesford director Will Walton noted tax changes, plus rising interest rates that reduced borrowing capacity, the cost of living and the broader economy as reasons for the downturn.

He thought that that created opportunities for young families, first home buyers and pre-retirees.

Walton was now seeing buyers from Melbourne – as well as NSW, Queensland and South Australia – drawn to the temperate climate, good value, welcoming community and top hospitality options.

“Several buyers have said the cost of living has made relocating and selling a metro property, then purchasing a potentially larger premium home in Daylesford, an economic relief option,” he said, adding they see it as like an inner suburb without the expense.

Walton has the listing for 4 Cedar Lane and said it had received a lot more steady interest since the price adjustment, in line with the rest of the market.

Ray White Sunbury director Aaron Hill is handling the sale of 5 Cedar Lane and, while declining to comment on the property, spoke broadly about the area.

“It is a tough market out there in Daylesford and things are taking a lot longer to sell,” Hill said.

Another of the homes from The Block that did sell at auction in October is already up for sale again, also discounted.

Sonny and Alicia Aplin’s house at 2 Cedar Lane sold for $3.06 million. It is now on offer for $2.9 million to $3 million through BigginScott Daylesford’s Tom Shaw and Teagan Monaghan.

Monaghan said some extra assets and prizes were included in the home’s Block auction that did not form part of the current sale, so the two prices are not a like-for-like comparison.

“The property’s premium price point also means it appeals to a much smaller buyer pool,” she said.

Monaghan said the broader Daylesford market had stabilised compared to the rapid growth during and after lockdown years.

“While quality homes continue to attract strong interest, we have seen a modest softening in pricing over the past 12 months as buyers become more value-conscious and vendors adjust to current market conditions,” she said.

“Well-presented homes that are priced in line with current market conditions continue to perform strongly, while properties that are overpriced are generally taking longer to sell.”