By Herron Todd White
Geelong Property Update
Geelong has managed not to enter into the new restrictions currently being enforced across Melbourne which has required all hospitality to once again shut up shop and everyone to stay at home unless they’re heading to an essential service. It’s unknown whether or not Geelong will also have to re-introduce these restrictions as Victorian cases soar higher by the hundreds every day.
Once again, the level of uncertainty we are currently facing is extremely high and it has caused many to take a more conservative approach to the property market over the past few months, holding off on making any investment purchase.
On a positive note, as Geelong has not slipped back into harsher COVID-19 restrictions, the economy continues to rebuild and this can only rub off positively on the property market. After months of waiting, many may now launch into that investment purchase they have been holding off on from prior months.
Geelong remains a seriously sought-after region as it continues to expand in just about every facet with affordability compared to Melbourne being the number one driving force. You can most definitely get much more bang for your buck sifting through Geelong’s property market compared to Melbourne’s and this is highly attractive to many possible investors such as first home buyers or those looking to upgrade or upsize their current home. It’s a very active region for all types of investors and for good reason.
Speak with a Geelong Mortgage Broker today.
Mildura Property Update
The local market continues to show some uncertainty with agents still reporting reluctance by many vendors to put their homes on the market. This is more evident in the higher value range due to concerns that buyers may not yet be willing to pay a substantial amount in this time of uncertainty. Sales which are occurring indicate that values have held up well so far. Agents are reporting that more recently they have seen an increase in listings from the low point in April and May, however the current listings continue to mostly comprise properties at the lower to middle price point of the market.
Meanwhile the number of sales of vacant house lots have held up well compared to historic levels. The current government stimulus packages have helped keep buyers motivated. The impact of this increased demand will be closely watched to see if it has any effect on the value of existing dwellings.
Given the Sunraysia region’s relatively low median house and unit value and strong rental demand, there continues to be a market for the investor and we have yet to see any impact on values from COVID-19. Gross rental returns of between five and six per cent are typical for detached houses with slightly higher gross returns of up to eight per cent available for units.
While we do see some investment from out of town buyers, the majority of investment comes from local buyers, who prefer the idea of being able to see their investment, rather than investing in shares or other investments. The expectation that low interest rates are here to stay is also boosting investor confidence.
Investors have tended to be attracted to 1980’s or 1990’s brick units when looking for the maximum return and least responsibility, or at older 1950’s or 1960’s detached dwellings if willing to do some renovation in order to secure a good tenant. Both of these categories offer potential for good returns. Our constant advice for landlords is to ensure that they do complete some regular maintenance to make sure they can attract and retain good tenants and to preserve the value of their asset.
With the recent announcement of the additional government stimulus package for building and renovation work, local builders are reporting a significant increase in enquiries. With several large residential subdivisions to open in the near future, this stimulus will likely bring forward building activity at a time when many markets are experiencing uncertainty.
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.