Geelong’s next $1m suburbs by 2025 revealed
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Three Geelong suburbs would hit $1m median house prices by 2025 if Victorian price forecasts come to fruition.
Consultancy firm KPMG’s property price predictions suggest the Melbourne’s median house price will hit $1,024,495 by June 2025.
Applied to suburban PropTrack data, the forecast would lift house prices past the seven-figure mark in Geelong, Geelong West and Highton over the same timeframe.
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KPMG chief economist Brendan Rynne said the predictions were based on a range of factors likely to continue pushing property prices up, including the lack of housing supply.
“Despite high interest rates, constrained supply will likely dominate the factors influencing property prices in the short term and result in continued price gains,” Dr Rynne said.
“House and unit prices will then accelerate further in the next financial year as dwelling supply continues to be limited, due to scarcity of available land, falling levels of approvals and slower or more costly construction activity.”
Other contributing factors included higher demand as a result of heavier migration, anticipated rate cuts in the 2025 financial year, potential relaxed lending conditions, more renters looking to buy due to increased rents, and foreign investor demand.
While the predictions could see more than $200,000 added to the median value of homes in a string of Surf Coast hot spots, rises of around $150,000 would put Geelong, Geelong West and Highton above $1m for the first time.
Geelong had a $894,000 median value in June, with Highton and Geelong West both above $850,000.
They would join Newtown, Rippleside and Wandana Heights above $1m, with the median house price at Manifold Heights to be pushed well above $1.1m.
Jellis Craig Geelong director Marcus Falconer said it would be easy to compare the multiplier on house prices for a 5km of Melbourne’s CBD with a 5km ring around central Geelong.
“The key drivers working in Geelong’s favour are the migration pattern continues to be quite significant,” Mr Falconer said.
“There is still a lot of people moving to regional Victoria, probably driven by flexible working arrangements and obviously people reconnecting with friends and family.”
Mr Falconer said lower stock levels were boosting prices, but the suburbs remained relatively affordable compared to parts of Melbourne.
“One of the trends that we’re really seeing is people following friends who have moved down here and have no connection, are following people they have known professionally or just friendship circles.
“Most demographers are certainly saying that not only are we retaining our professional, millennial demographic, we’re expanding on it.”
He said the inner city’s education hub was a real drawcard for families.
The predictions are also likely to mean a hit for young buyers, with suburbs where median values are presently below the threshold where stamp duty concessions begin to cut out for first-home buyers moving well beyond $600,000.
Mortgage Choice broker David Thurmond said to afford a deposit for a $600,000 property, home buyers would need incomes of at least $75,000 to $80,000.
Dr Rynne added that state governments across the country needed to review first-home buyer caps regularly – at least every three years – to reflect the demographic’s purchasing power.
“The short-term fix could be that you lift the cap for first-home buyer support to another threshold and escalate it by an amount that reflects the general price escalation so they’re still targeting properties at the lower cost spectrum,” Dr Rynne said.
Originally published as Geelong’s next $1m suburbs by 2025 revealed
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