The month in review: Regional VIC
By Herron Todd White
The lazy half a million buys a very good standard residence on a standard block in most of Echuca and Moama and those shopping around are even likely to find ancillary improvements such as a pool and sheds depending on how much quality they are prepared to trade off. While the rental market has been a little slow, whether this is seasonal or a consequence of building supply coming on line to cater for tighter rental markets over the past 12 months is hard to tell though the market typically tightens up coming into spring when new people are coming to town and are on the hunt for reasonable accommodation.
When we last tackled the question of how best to invest $500,000, we suggested buying a pair of 3-bedroom dwellings. This advice is still considered sound. The median house price in Mildura is around $250,000. For this price it is possible to buy a 3-bedroom brick dwelling, probably with only 1-bathroom, that might now be 20 years old and with a dated appearance.
We suggest concentrating on one of the better parts of Mildura or the well regarded satellite towns of Irymple, Buronga or Gol Gol. These towns are within 8 kilometres of Mildura and generally track house values in Mildura. In one of these towns, $250,000 might get a similar age dwelling, but with 2-bathrooms.
In the past 12 months the balance of supply and demand for rental accommodation has evened out, however vacancy rates are still low and gross yields have stayed at around 6%. The houses at this price bracket will most likely now be more than 20 years old and so some upgrading will eventually be required. For this reason, we recommend that investors ensure that, where possible, they hang on to some funds to allow a cosmetic upgrade at some future stage, and ideally prior to any future sale.
Values in Mildura have remained stable over the past 12 months and while we aren’t forecasting any significant capital appreciation in the short term, we also expect that values will hold at least at their current levels. Some of the key local agricultural industries are enjoying stronger returns and this is expected to help underpin the local economy