The established port city of Geelong, 75km southwest from Melbourne, has an illustrious history of being rich in goldfields in the 1800s. Today, it’s seeing increased interest due to the Victorian government’s moves of mass cuts to payroll tax and doubling of the FHOG, and here’s why.
To create a city that can accommodate Melbourne’s population oversupply and insatiable demand for new housing.
The ripple effect is nothing but feverish: massive job growth at a time where the population is already booming, compounded by the relatively recent redevelopment of the inner cities and gentrification of the inner suburbs. Not surprisingly, demand is outstripping supply and property prices are rising sharply, and are expected to continue, at minimum, for the short to medium future. Equally not surprising is that the area is well and truly on the radar of home owners to realise their patch of land, and for investors alike.
To expand on the investor front, to consider investing in Geelong could be considered a no-brainer. Decision made. Or not quite… If we take a look at the stats, there are 62 suburbs in the Geelong region, with the median house price ranging from $330,000 to $1,000,000, with annual changes of -25.8 per cent to +34.2 per cent. The conclusions drawn from this information could lead to a variety of very different outcomes.
The top areas of growth are Newcomb, followed by Norlane, Corio, Breakwater, Manifold Heights and , which have a median house price of $330,000 to $791,000. That’s a pretty big difference, in itself. Conversely, the suburbs along the Bellarine Peninsula demonstrate much less annual growth but are a lifestyle destination on pristine beachfront and right next door to proposed infrastructure (hence have the writing on the wall of being a growth area).
So, which suburb do you acquire in? The age-old chestnut of investing in the cheapest suburb with the highest growth? The “worst house on the best street” in a more affluent suburb? Or, conversely, the area which has the greatest growth potential (assuming the infrastructure planned goes ahead as proposed)?
To help refine your decision making, consider:
There’s no silver bullet. Statistics have their place, but “kicking the dirt” is where the insight comes. On this note, our pick of the crop is Ocean Grove. Situated on the desirable Bellarine Peninsula, this little gem is under-priced compared to the rest of the Peninsula. In addition, there’s a sizeable shopping centre scheduled for construction in the area. But the biggest clincher is that Ocean Grove will be a stone’s throw away to Link Road, which will quicken the transit time to Geelong (and therefore Melbourne) by 20 minutes, and thus significantly broaden its appeal.
Finally, don’t underestimate getting “down to ground” to attend open homes, speak with local agents and get a general feel for the area. If you don’t have the time or resources to do this, seek the counsel of a professional who does (or can connect you). More often than not, this is done through an accountant or planner — particularly for SMSF purchases, where property is the primary investment class. If you go down this path, be sure to question investment versus return, along with the corresponding basics such as yield and risk. Anything shy of 10 per cent growth is probably not the right purchase.