While in Melbourne the property market tends to go quiet over December and January, the same is not true for the areas surrounding Geelong. The influx of holiday-makers seeking sun, sea and sand mean that agents all around the Bellarine and Surfcoast are working hard all summer long.
And who can blame them! With ever-easier commutes to Melbourne and with Geelong holding its own as a cosmopolitan city, more and more people are making a sea change here.
And unlike Melbourne, there are far more private sales than auctions, particularly in more regional towns like Anglesea and Torquay. However there were some good auction results last weekend.
According to REIV, the overall clearance rate for the summer period (from 19 December to 4 February) was 79 per cent with 416 auctions held, 328 selling and 88 passed in at auction. This included a 3-bedroom townhouse in Ocean Grove that sold at auction for $1,010,000. Located steps away from the estuary the property offers spectacular views down to the bridge into Barwon Heads.
One of the bargains of the period was a 2-bedroom property located in up-and-coming South Geelong. It sold for $290,000.
As the holiday season wraps up down here, auction activity will begin to increase in the city next week, with over 1,000 properties set to go to auction in the last week of February.
Median house price hits new highs as Geelong continues to soar
Victoria had another very impressive year in 2016 in terms of house price growth.
REIV reported that overall, the state saw house price growth accelerate by 5.0 per cent in the three months leading up to 31 December 2016. This saw the median house price reach above $770,000.
The rapidly rising cost of housing in Melbourne is causing many people to seek beyond the cities boundaries for property. According to the REIV, regional Victoria saw the median price growth rise 2 per cent to $358,000 in the same period.
Geelong is attracting quite a few of these so-called ‘economic refugees’ who are attracted by the value for money property here offers. REIV recorded a median house price rise for Greater Geelong of 5.9 per cent to $450,000.
And suburbs with train stations such as Waurn Ponds and Marshall are also thriving in the current market conditions. The Geelong Advertiser reported that Waurn Ponds had an incredible growth rate of 19 per cent with the median house price reaching $487,850.
Focus on investor lending in attempt to dampen house price growth
The unexpected surge in house price growth has caused concerns with some economists.
Figures released by the ABS show that a large part of this growth was driven by investors looking to add property to their investment portfolios. According to the ABS, investor lending was up 21 per cent in the year leading up to November 2016.
This has led many to speculate on what the Australian Prudential Regulation Authority (APRA) may do. In 2015, APRA tighten the regulations surrounding investor lending and this saw a slow down in investor lending. However, the recent rise shows that these measures may be losing their effect.
Mortgage Business spoke to AMP Capital chief economist Shane Oliver who said he was ‘”surprised” that APRA hadn’t already made a move to dampen investor lending.
Mr Oliver said “they achieved initial success through 2015 going into early last year, but since the low point for lending to investors in April of last year, [investor lending] is up over 20 per cent”.
He anticipates that APRA will make a move in line with RBA expected move on interest rates in May.
Just what those moves will be remains to be seen, but it is clear that with historically low interest rates and good growth forecast for the year ahead, property remains a good investment.
If you’re looking to buy a home or an investment property, make sure you are well informed about your mortgage choices. There are plenty of opportunities out there for the savvy investor.