Why Ararat is worth considering

It is not as isolated as you might think

Ararat has a population of more than 11,000 across the Rural City and sits about 198km west of Melbourne on the Western Highway.

It is also connected by rail to Ballarat and Melbourne, with services continuing further west towards Adelaide.

That matters because regional markets can become difficult when they are too dependent on one nearby town or have poor access to larger centres.

Ararat has healthcare, schools, shops and local employment, while Ballarat is close enough for people who need access to a larger regional city.

The Western Highway is another advantage. It is the main road between Melbourne and Adelaide and is important to the region’s farming, tourism and manufacturing industries. It is a small town, but it is not isolated.

The local economy is not built around one employer

This is one of the first things I would look at before buying anywhere regionally.

Where do the jobs come from?

• Ararat has a mix of industries.

Healthcare is an important part of the local economy, with East Grampians Health Service providing services across the region. Corrections is another major employer through the Hopkins Correctional Centre, which has been part of the local economy for decades.

• Manufacturing is also significant.

Ararat Rural City Council says manufacturing is the largest contributor to economic output in the region, generating around $406 million, or about 25 per cent of total output.

• Agriculture, construction, retail and tourism also contribute.

It does not mean the local economy cannot slow down, but it does mean Ararat is not relying on just one industry or employer.

But it does give Ararat a broader employment base than a town relying heavily on one industry or one major employer. Ultimately, those jobs support the local housing market.

There is also a lot happening around energy

Ararat is already home to the Ararat Wind Farm, a 242MW project with 75 turbines that generates enough electricity to power around 120,000 homes.

Iberdrola acquired the wind farm in March 2026 as part of its expansion in Australia’s renewable energy market.

Iberdrola is also the development partner for the Victorian section of VNI West, a major transmission project that will connect renewable energy generation in Victoria with the wider electricity grid.

Ararat is the proposed location for a $400 million biomethane project being developed by Valorify, which is expected to use agricultural waste to produce renewable gas.

I would not buy a property based on any of these projects. A proposed project isn’t the same as a built project, and a built project won’t necessarily create the local jobs people expect.

But if you are trying to understand where a regional economy might be heading, these are things that are good to know about.

The property numbers are interesting

Current data puts the median house price at around $440,000, with prices up by roughly 12.7 per cent over the past year.

Realestate.com.au’s latest suburb data has the median house price at $423,000 for the 12 months to July 2026, with growth of 15.1 per cent over that period.

Different data providers use different timeframes and methodologies, so I would not get too caught up in the exact number. The important point is that Ararat has had a strong year.

And it is not just the sale prices that stand out. Vacancy is around 1.3 per cent, which indicates a tight rental market.

Current REA data shows rental yields of around 5.4 per cent for three-bedroom houses and 4.6 per cent for four-bedroom houses.

This combination makes the market worth actually looking at. The entry price is relatively low. Rental demand is strong. And the market has recorded solid recent growth.

That does not mean it will keep growing at 13 or 15 per cent every year. But you do not need that sort of growth for a property to be a worthy buy. 

More houses will be there

One thing I would be wary about is that Ararat is not going to have limited supply forever.

At the former Prestige Fabric Mill site on Queen Street, Council has secured $7.3 million in federal funding for infrastructure that will support up to 90 new homes.

Around 70 per cent of those homes are planned to be social, community or affordable housing.

There is also development happening at Greenhill Lake Estate, where infrastructure has been put in place to support up to 160 residential lots.

New housing is not a bad thing. In fact, a growing town needs new homes. But if I were buying an established property, I would want to know what competing stock is likely to come onto the market nearby.

A good property in the right location can still perform well. I just would not assume that limited supply will always protect the property prices.

So what would I actually buy?

Ararat is a smaller market, so I would not try to find the cheapest house I could buy.

I would be looking for an established home with a practical layout, good presentation and a location that appeals to both owner-occupiers and tenants.

Being close to the town centre, schools, shops and key services is a bonus. Access to healthcare is a definite consideration too.

I would be less interested in a property where the main selling point is simply a big block or a cheap purchase price. 

A three or four-bedroom home that works for a local family, a couple or a tenant gives you a much bigger pool of potential buyers than a property that only appeals to a very specific type of investor. I would focus on that especially during the due diligence.

The risks are still there

Ararat is a small regional market. That means liquidity can be lower than in a major city, population growth needs to be watched and individual streets can perform very differently.

A property can look cheap on paper and still be a poor investment if there is little demand for that particular type of home. Which is why I would not look at the median price or rental yield and stop there.

You need to understand the street, the surrounding properties, the local rental demand and what is likely to be built nearby.

Final word

I would not describe Ararat as a market where you can buy anything and expect it to work out well for you. However, Ararat has enough going for it to warrant a closer look.

You have relatively affordable housing, a tight rental market, a broad employment base, good road and rail connections and a number of infrastructure and energy projects in the wider region.

For an investor looking for a regional property with a reasonable entry price and solid rental fundamentals, Ararat is a market I would put on the list.