Housing affordability is slipping further out of reach as mortgage rates and the cost of living rise.
By December, Melbourne’s median house price had risen to $1,111,084. But for those prepared to seize opportunities in regional Victoria, here are some overlooked value-for-money housing markets within a couple of hours of Melbourne.
Ararat
About 200 kilometres west of Melbourne, Ararat is the gateway to the Grampians and Pyrenees wine regions. The median house price is $417,500 for the Ararat local government area, on Domain data.
Bradley Jensen, director of Nutrien Harcourts Ararat, says the biggest drawcard of living in Ararat is the lifestyle.
“It’s a very easy and affordable lifestyle compared to some of the big cities,” he said.
“It’s also easy to get around – we’ve got very good public transport and the V/Line train to and from Melbourne.”
Additionally, quality healthcare attracts many retirees.
“We do get a lot of retirees moving up this way, and the first question they ask is, ‘What’s the hospital like?’” Jensen said.
“They can sell their house in the city or other areas of Victoria and buy something in Ararat for much cheaper, so affordability is important too.”
Homes start from about $280,000 on the lower end, typically ex-commission homes, while mid-range sits at about $400,000, which Jensen said was attracting a lot of investors. He said $950,000 would get you “an amazing house”.
Jensen cited the five-bedroom property at 123 Picnic Road, set on about 4000 square metres with a self-contained studio, which recently sold for $970,000.
Benalla
Benalla, a small town in Victoria’s High Country, sits by the Broken River, about 2½ hours’ drive from Melbourne. Benalla LGA has a median house price of $503,500.
Shenlyn Green, from Living Here Benalla, said the town offered a balanced lifestyle with the conveniences of a regional hub, attracting tree-changers.
“They are selling their properties in the city and are able to purchase a property in the country, and getting better value for their money,” she said.
The price range for an entry-level home, typically older-style homes offering two to three bedrooms on established blocks, is $300,000 to $400,000.
“These properties may require renovation and are well suited to investors or first-home buyers entering the market,” Green said.
Mid-range, well-presented, updated three-to-four bedroom homes on larger blocks with outdoor entertaining areas are about $450,000 to $650,000.
At the higher end, a modern or near-new home in a desirable pocket featuring four-plus bedrooms, multiple living zones, and premium finishes on a larger block would cost about $700,000 to $900,000-plus, said Green.
Shepparton
On the Goulburn River in northern Victoria, Shepparton is an agricultural and manufacturing hub known for its quality food, wine and Mediterranean weather.
Just under 200 kilometres north of Melbourne, the city of Greater Shepparton has relatively affordable housing, at a median price of $535,000, albeit buyers are likely to keep in mind the pockets of flood risk seen in the area in recent years.
Rocky Gagliardi, director of Gagliardi Scott Real Estate in Shepparton, said the country feel, weather and location close to other major tourist townships such as Echuca, Yarrawonga, Cobram/Barooga, Strathbogie and Nagambie drew buyers to the area.
“We have natural rivers and lifestyle features that allow you to enjoy the wonderful climate that the city does not experience,” Gagliardi said.
“Employment is always easier to achieve with so much diversity in choice from unskilled labour with high wages, where you can work the farm or a factory like SPC or Campbell’s soups, to executive roles,” he added.
Gagliardi said that the main buyers Shepparton attracted were families and first home buyers.
“We have large lifestyle blocks to small blocks that are still larger than the inner-city property,” he said.
“First home buyers can actually live and enjoy the lifestyle without paying huge house prices and mortgages.”
Gagliardi said buyers would probably pay about $200,000 to $300,000 for a home on the lower end – “ex-ministry located on former ministry areas” – while a mid-range property would set you back about $700,000 to $800,000.
A four-bedroom house with a pool at 24 Harrier Street sold for $697,000 in October 2025.
Hepburn LGA
Hepburn Shire Council, which includes the towns of Daylesford, Creswick and Hepburn, is in central Victoria and has natural springs, spa resorts and the Wombat State Forest.
The median house price in the LGA is $735,000, up 25.6 per cent from December 2020.
Tom Shaw, director of Biggin Scott Daylesford, says buyers have shifted from the pandemic, when Melbourne commuters were active, to more of a “hybrid lifestyle buyer”.
“[Buyers are] people working from home most of the week and heading into the city occasionally,” he said.
“Buyers are typically a mix of tree-changers, downsizers and investors looking at short-stay accommodation.”
The biggest drawcards of Hepburn are lifestyle and amenity.
“Daylesford and Hepburn Springs have a strong reputation for wellness, food and natural beauty,” Shaw said.
Shaw said that for an entry-level home, buyers would usually spend about $550,000 to $700,000 for a two-to-three-bedroom property that might be older, smaller or in need of work.
Family homes with a price guide of $750,000 to $1.1 million were considered mid-range, with three to four bedrooms and some level of renovation, he said.
Higher-end homes can cost from $1.2 million to $2 million-plus.
“These are high-quality homes, often architecturally designed or fully renovated, sometimes with views, larger land holdings, or strong short-stay appeal,” Shaw said.
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