Daylesford-Hepburn Property Market Shows Signs of Stabilising After Pandemic Surge

After several years of volatile growth, new data suggests the property markets in Daylesford and Hepburn Springs may be entering a phase of stabilisation. Following on from last week’s article, “More Local Properties Available and Prices Softening”, a closer analysis by The Wombat Post highlights recent trends in local property values and provides insights from industry sources on what it means for buyers and sellers.

Between 2020 and 2023, property prices in both Daylesford and Hepburn Springs surged to historic highs, fuelled in part by the COVID-era migration from metropolitan areas and a sharp increase in demand for regional properties.

In Daylesford, the median house price jumped from $647,500 in May 2020 to a peak of $945,000 in April 2023—a 45.9% increase, representing an annual compound growth rate of 13.4%. Hepburn Springs saw even sharper growth, with its median price rising 65.1% in the same period, from $545,000 to $900,000, an annual compound growth rate of 18.2%.

However, since the 2023 peak, prices have begun to cool. Daylesford’s median fell 10.5% to $845,000 by April 2025, while Hepburn Springs saw a slight rebound this year to $813,000 after a 12.2% drop in 2024.

The following tables detail the median prices changes over the last 5 years for Daylesford and Hepburn Springs (source realestate.com.au)

Despite these corrections, both towns still show solid long-term growth. Daylesford’s annual compound increase since 2020 remains a healthy 5.5%, and Hepburn Springs is holding steady at 8.3%.

Local real estate sources emphasise that the price surge during the pandemic was a once-in-a-generation event. The rapid appreciation created unrealistic “paper gains” for property owners, many of whom continue to base price expectations on the market highs of 2021–2022.

In addition, several newly introduced property-related taxes have subdued investor interest, particularly in the holiday rental segment which was once a major driver of local property demand.

The market under $800,000, however, is seeing increased activity, particularly from first-home buyers and young families. These buyers are helping to sustain the lower end of the market while higher-priced properties face longer selling times and greater resistance.

Analysis of current listings suggests that many homes are being offered at discounted prices—some by as much as 30% below the original asking price. This may indicate that overquoting is being used by some agents to secure listings, potentially leading to inflated expectations for sellers and disengagement from buyers.

Industry professionals advise sellers to be cautious when selecting an agent and to ensure that listing prices reflect realistic market conditions. Understanding the target market—whether local residents or metropolitan buyers—is key to successful marketing.

Sellers whose properties have been on the market for more than six months are encouraged to reassess their pricing and sales strategies. A fresh approach or even a new agent may be warranted to align with shifting market dynamics.

While the rapid price growth of recent years is unlikely to return in the short term, the current stabilisation phase could offer a more sustainable environment for both buyers and sellers.

For prospective buyers, especially those priced out during the height of the COVID boom, this could be a window of opportunity. For sellers, realistic expectations and strategic marketing will be critical in navigating a more cautious and value-driven market.