Buyers seizing their chance for growth as rent hikes slow in Geelong suburbs

The rate of growth in rent prices is easing as the number of people looking to lease properties returns to long-term trend levels in Geelong.

New PropTrack figures reveal the rate of growth in median asking rents is slowing at the same time more investors are returning to Geelong.

The data, which shows asking rents for homes across every suburb showed the biggest increases were felt in suburbs with fewer rental properties, including $70 a week in Bannockburn and Point Lonsdale.

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The three-bedroom house at 21 Vaughan Drive, Armstrong Creek, is listed to rent for $490 a week.

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The three-bedroom house at 22 Boolarong Drive, Belmont, is listed for rent for $490 a week.

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But in the suburbs holding the biggest share of the region’s rental homes, the level of growth is more sedate, with $20 a week annual rises recorded in Armstrong Creek, Belmont, Grovedale, Highton, Norlane and Torquay.

Rents climbed $10 or less a week in Corio, Geelong, Lara and Newcomb.

Rents were flat in Geelong and Ocean Grove and fell in Herne Hill, Thomson and Waurn Ponds.

The growing number of homes being advertised for lease in bigger suburbs was keeping a lid on rent price hikes, Harcourts North Geelong business development manager Hayley Hodgson said.

The spikes in rents seen in previous years occurred during a dramatic rise in the number of people looking for homes to lease, but the market had returned to normal, she said.

“Geelong’s very different to Melbourne in terms of the way that rent prices goes,” Ms Hodgson said.

“We’ll never see people lining up out the front of rentals. If you get anything above 10 at an open you would say that’s good.”

Meanwhile, the number of rental homes is increasing on several fronts.

“I do a lot of the appraisals for new business and a lot of the people I work with are people who have bought another home or they’re looking to move elsewhere.

“They’re not quite ready to sell the house they’ve got in Geelong, so they’re wanting to hold onto it and rent it and see how that goes.

“We’ve noticed too that investors are starting to get back into the market on properties that will require renovations which they’ll do to get it rented out.”

Realestate.com.au economist Anne Flaherty

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The three-bedroom house at 166 Aberdeen St, Geelong West, is listed to rent for $500 a week.

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PropTrack economist Anne Flaherty said the volatility in rent prices had eased as demand for rental homes returned to the long-term average in Geelong.

“We had a really dramatic few years where, during the pandemic we saw the demand for lifestyle suburbs lead to a surge in demand for people wanting to rent in Geelong and that massively drove up rents.”

While more investment buyers were increasing the rental pool, they were seeing the opportunity for future capital growth.

“There’s a lot of opportunities in Geelong in the sense that the yields are pretty attractive,” Ms Flaherty said.

“The prospects for longer-term capital growth are really positive because we know there is an undersupply of housing in the region that is going to intensify over the coming years which is going to support that capital growth.”

The three-bedroom house at 1 Raydon Court, Grovedale, is listed to rent for $550 a week.

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The three-bedroom house at 84 The Boulevard, Norlane, is listed to rent for $380 a week.

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Increased costs heaped on landlords through higher state government taxes and compliance measures had seen about 21,000 property investors sell their Victorian rental homes in a 12-month period, Ms Flaherty said.

But with prices at the bottom of the market cycle and the region seeing the nation’s second-fastest population growth, buyers were still seeing Geelong as a good place to invest.

“With every challenge comes opportunity. Victoria is the most challenged state to be a landlord,” she said.

“A lot of investors might be doing the maths and saying, ‘you know what, even though I do pay higher property taxes in Victoria, the prices here are very affordable’.

“Despite the fact that obviously Victoria’s economy has been challenged by the Covid hangover and all of that debt, if you actually look at the fundamentals of Victoria in as much as it relates to demand for property, it’s very strong.”

GEELONG’S BIGGEST AND SMALLEST RENT HIKES

Source: PropTrack. Annual change in rent over 12 months to February, 2025.