By Herron Todd White
Geelong Property Updates
Geelong has entered 2020 with a solid foundation to make sustainable capital growth this year. The final CoreLogic Home Value Index for 2019 revealed a rising rate of growth over the past three months that had pushed the city’s median dwelling value to almost $560,000. This is just 1.5 percent shy of the price recorded at the end of its boom in 2018, as the market restored falls in value that continued into winter.
This rebound in Geelong’s property market was borrower serviceability assessments, improved housing affordability and certainty around property tax laws. Geelong should see a stronger rate of capital growth in 2020 compared to larger scale cities such as Melbourne and Sydney due to it being far more affordable and with improving economic conditions.
In terms of the best regions within Greater Geelong to invest in, Bell Park, Belmont, Torquay and Curlewis were among the highest growing areas. These regions were strong in both the rental yield and median house price department, with Curlewis in particular increasing by 13.23 percent in median house price throughout 2019. These developing and affordable regions should continue to show growth in 2020.
All signs are pointing to Geelong tracking along well in 2020. Nothing suggests that the market will fall and there are a number of upsides that Geelong’s economic and property markets are portraying leading into 2020. Expect moderate growth in housing prices of between five and eight percent over the course of the year.
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Mildura Property Updates
We expect 2020 to maintain the positive momentum of 2019, with the relative affordability of housing in the Mildura region and low interest rates working in our favour. Demand will be strongest for modern homes in the $350,000 to $450,000 range, with buyers being a mix of first home buyers and buyers trading up from older homes.
The higher cost of buying land and building new homes will maintain demand for older homes in central Mildura. It is possible to buy an older home in a reasonable location in Mildura for under $275,000. The older properties often have a larger land size and are within walking distance of schools and shops etc.
Rental demand is expected to remain strong throughout 2020, with the limited supply contributing to rents increasing slightly.
There has been a shortage of serviced residential lots in Mildura during the past 18 months, with many buyers instead looking to other nearby towns such as Irymple, Red Cliffs and Gol Gol. A number of larger subdivisions are expected to be developed in Mildura during 2020, which will hopefully result in a more balanced market.
Weighing on everyone’s minds however, is the real risk that Mildura will be placed on higher level water restrictions during 2020 unless significant rainfall fills Hume and Dartmouth dams. We are currently only on stage 1 restrictions, but any move to more onerous restrictions would impact the ability to keep gardens alive during our long, hot summer. When higher restrictions last occurred in 2007 and 2008, we saw reduced demand for houses on large lots, which are obviously much harder to maintain without easy access to water. Ongoing water shortages would also inevitably slow the local economy and potentially slow demand for housing.
Shepparton Property Updates
The Shepparton property market has continued to thrive over recent times due to the affordability the region offers. Median house prices have steadily risen by 17 per cent over the past five years to $294,500, up from $275,000 this time last year (source: Corelogic)
Representing a median price house is a 1960s brick veneer in an established residential area with adequate services. Sometimes, a renovated kitchen or bathroom is featured in these properties which are sought after by owner-occupiers as well as being of particular interest to the investor market. The below property sold for $286,000 and features an updated kitchen, pergola with deck, and an updated bathroom within a stone’s throw from the Goulburn Valley health complex.
These properties are renting for $320 to 350 per week, with some achieving up to $375 for fully renovated accommodation in a good location. This represents a gross yield of around 5.8 percent, but higher yields can be achieved, especially with newer properties.
Although Shepparton has performed strongly, Mooroopna’s modern homes have suffered somewhat. Caution should be exercised if buying or constructing a dwelling over the $375,000 mark as it may take some time to realise any capital gains, however the rental returns are strong.
All signs point to another strong year for growth, with some major projects coming to fruition and two large scale housing developments opening up in Shepparton North East and Shepparton South East which are set to offer some 4000 blocks of land over the coming years.