Regional Victorian prices have been much more stable during the recent downturn than the Melbourne capital city, according to the Real Estate Institute of Victoria.
Geelong's median is 1.8% below peak; in Ballarat, it is 2.1% below; and in Bendigo, prices are only slightly (0.1%) below peak.
"Melbourne's inner city is where buyers will find the best bargains in 2013," says REIV chief Enzo Raimondo while suggesting 2012 was ending with the market in a better position than it was a year ago.
“Affordability is at reasonable levels with prices remaining below their peak and interest rates at historical lows," he said.
The inner city median is 10.4% below its peak compared to 9.3% in the middle suburbs and 7.9% in the outer suburbs.
“If consumer confidence continues to slowly improve it should encourage more buyers into the market and that will drive capital growth. As supply and demand is in much greater balance, any capital growth in 2013 will only be moderate.
“First home buyers have clearly responded to lower prices and interest rates with around 18 per cent more than in 2011. With stamp duty cuts increasing to 30 per cent on 1 January, conditions will continue to improve for them,” Mr Raimondo concluded.