The return of a key buying group to the streets of suburban Geelong is a sign of growing sentiment of a turnaround in the fortunes of home prices.
PropTrack’s monthly Home Price Index reveals a lift in values in Geelong over the past three months, the first quarterly rise recorded in more than two years.
It’s been 29 months since the last peak in the market in Geelong.
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PropTrack senior economist Eleanor Creagh said Geelong dwelling values have fallen 10.6 per cent since that peak.
The 0.54 per cent rise to $735,264 over three months to October 31 comes as Melbourne recorded the best monthly growth for a capital city.
Geelong’s median house value rose 0.48 per cent to $766,842, while the median unit value slipped .47 per cent to $532,950.
But median dwelling values remain 25.7 per cent above pre-Covid levels.
Ms Creagh said it could be sign market sentiment was improving.
“We know that October is typically the peak of the spring selling season,” she said.
“Selling activity has been strong this year and buyers are out taking advantage of the increase in choice coming to market.”
Ms Creagh said housing stock had accumulated amid subdued market conditions.
“High property taxes and probably slightly higher unemployment also playing into that relative weakness in price momentum.”
But interstate and Melbourne investors are becoming more active across Geelong in a sign buyers are locking in prices at the bottom of the market, Geelong real estate agents and buyers advocates have reported.
HOME PRICES IMPROVE IN GEELONG
Property type | Quarterly growth | Annual growth | Median value |
All dwellings | 0.54% | -3.35% | $735,264 |
Houses | 0.64% | -3.51% | $766,842 |
Units | -0.47% | -1.77% | $532,950 |
Source: PropTrack Home Values Index
McGrath, Geelong agent Jasmin Jurkovic said investor groups from Sydney, Brisbane and Melbourne had return their gaze to Geelong over the past few months.
“Probably in the past three months, I’ve had more interest than I have in two years with particularly investor groups from Brisbane, Sydney, Melbourne, and they are really honing in on Bell Park, Bell Post Hill and North Geelong,” Ms Jurkovic said.
She said they were looking for value for money, spotting that properties have been sitting on the market for a longer period of time in areas including the west of Norlane.
Investors now made up 40 per cent of her buyers after being out of the market for some time, she said.
“Investors have recognised that price point under $700,000 brings them lots of value with size of the block to develop down the track, so they are land banking.
“(They are looking for) houses that don’t need a lot of work, they’re really still probably a little bit picky. They don’t pick up rubbish,” she said.
”For $550,000 to $600,000 you can still pick up some deals in Bell Post Hill,” she said.
Henning Property buyers advocate John O’Brien said the $600,000 to $650,000 price range appears to be particularly appealing at the moment.
“Interestingly, most of these investors have cited affordability as a key factor in their decision to look beyond Sydney,” Mr O’Brien said.
“Many are finding it increasingly difficult to enter the market in their home state, prompting them to explore Geelong as a viable starting point for their property portfolios and essentially rent-vesting.
“They are drawn to our region’s spacious blocks, freestanding homes, and the potential for future development, such as subdivisions, duplex builds, or granny flats.”
Ms Creagh said investors buying now might see the value proposition of buying at the bottom of the market, with long-term growth prospects expected to outweigh property taxes.
“That gives me more confidence in kind of saying that potentially now is the time that relative value proposition has kicked in.”