The Advocates specialises and is experienced in property sourcing inclusive of residential and commercial property for occupancy or Investment throughout Geelong, the Bellarine Peninsula, the Surf Coast and Melbourne. We also offer clients the services of auction bidding, negotiation and vendor advocacy.
The major news last week was obviously the interest rate rise. Given the inflation results prior, and general free-for-all spending from the government and the public I didn’t see this as a big surprise. In talking to colleagues since however and reading the headlines of REB’s newsletter it was obviously a shock to many. More embarrassment also to constitutional economists who predicted 3 rate drops this year. It would seem the Government and the public have little or no restraint on spending. Unavoidable however, to the public spending were the quarterly increases of many household expenses including health, housing, food and electricity, putting pressure on meeting loan repayments.
Housing affordability is a major part of the cost of living crisis in Melbourne states the REIV. Hundreds of thousands of Victorian households are in mortgage or rental stress. Again I am bemused how this could be – given 3 rate drops and one rise, are these borrowers being appropriately advised? I do feel for the renters where vacancy rates are low and there is no bargaining to secure a property. Even though headline inflation has come down from peak levels, prices remain much higher than a few years ago. For the third of the population with a mortgage, I strongly suggest you create a budget with utility increases built in and buckle yourself in for another rate rise in the first half of this year.
Melbourne continues to lag behind most other cities witnessing a lackluster 5 year property appreciation of 17% due to onerous taxes, horrific debt and minimal investor confidence. The housing market has only increased an average of 3.4% a year and 0.1% in January, which is higher than the past average but hardly worth a high five! Comparatively Brisbane and Adelaide have witnessed impressive growth for the 5 year period of 80% and 93% respectively.
Melbourne house prices are at a record high, peaking for the first time in four years as interest rates and first home buyer support strong demand. Even so, the median price has only increased approximately $200,000 in 5 years. For all its pessimistic comment, Melbourne could still be worthy of considering for investment whilst it is affordable. As is customary Melbourne led the auction numbers in January with volumes up 33% on this time last year and held firm on clearance rate of 69%. Units rose 4.4 per cent to a median of just over $600,000, coming within $3,000 of their December 2021 record and growing faster than houses over the final quarter of the year. Melbourne unit price appreciation outperformed house price increases with 3.8% and 1.6% respectively.
Michael Ramsay
Principal
The Advocates
GEELONG
Geelong’s housing market this year is already becoming increasingly popular, ranked as a top 10 Australian real estate hotspot due to its blend of lifestyle, relative affordability compared to Melbourne, and strong regional growth. As the second most popular regional destination for capital city movers, it attracts families and investors seeking sustainable growth and strong rental yields.
The amount of potential buyers attending open for inspections is staggering in all suburbs. Two that I attended recently had over 40 groups each through a half hour period. This does not include the cowboy buyers advocates from Sydney who request the selling agents take a 2 minute video before they recommend the property to their client. Sight unseen. This should be outlawed. Five days on market is becoming the norm throughout Geelong which I feel in turn will witness a property spike and leave first home buyers disheartened. In regards to value the sweet spot seems to be $750,000 – $800,000.
With a population of over $300,000 Geelong is now known as the second Victorian city and not so much a regional town, and is predicted to hit $400,000 over the next 15 years. The fact that Geelong has many large industries to support employment gives it a huge edge together with its proximity to fabulous beaches and high ranking golf courses (golf participation continues to grow at 5% with youth memberships increasing last year by 17% and the Get into Golf programme which increases 10% a year having 88% of their participants being woman) and parks will see this regional hub and its popularity flow onto the Bellarine Peninsula and the Surf Coast shires. From here I expect the entire area to serge in occupation and investment especially once the Geelong Railway Station and the service to Melbourne lifted out of the eighteenth century. From Lorne to Portarlington, it really is a wonderful area to call home and invest.
Victorian Statistics
| MEDIAN HOUSE PRICE MELBOURNE | $1,100,000 |
| MEDIAN UNIT PRICE MELBOURNE | $600,000 |
| MEDIAN PRICE REGIONAL VICTORIA | $643,000 |
| MEDIAN UNIT PRICE REGIONAL VICTORIA | $435,000 |
| AUCTION CLEARANCE RATE | 82% |
| CASH RATE | 3.85% |
| INFLATION RATE | 3.8% |
| RENTAL VACANCY RATE | 2.3% |
From the team at The Advocates
Tip
In many areas the market is hotting up, so you need to be on your starting blocks and fully prepared. Properties are selling between 5 and 30 days in the Geelong, Bellarine Peninsula and Surf Coast regions. Have your financier, conveyance company and building inspector at the ready. You would be surprised how quickly (not recklessly) you can move if you have to. Especially with the guidance of a buyers advocate. Don’t be intimidated and stay calm.
P.S.
We welcome input to our newsletters so please contact us with any experiences you’d like to share – positive or otherwise! Disclaimer: the information contained in this newsletter is based on personal opinion and experience, it should not be considered professional financial investment advice. Statistics are sourced from the REIV and RP Data