Geelong: Low rates, vacancies attracting buyers back to property
Record low interest and rental vacancy rates has created good conditions for property investors returning to the market in Geelong.
Record low interest and rental vacancy rates has created good conditions for property investors returning to the market in Geelong.
A string of recent sales in a pocket of Belmont traditionally a rich hunting ground for buyers looking for good returns has shown that investors are returning to the market in Geelong.
It provides more evidence the region’s property market was passing the slump brought on by COVID-19.
RELATED: Real estate rush as restrictions reeled back
Strong bids corner big East Geelong block
Four bidders vie for ‘worst house in best street’
A Melbourne buyer was the latest to add to a property portfolio, securing a three-bedroom house at 75 Apex Avenue, Belmont, for $606,000, sight-unseen.
Buyers advocate Tony Slack acted for the purchasers at the auction, which finished $26,000 above the reserve price.
Two more Belmont houses — one in nearby Marjorie Avenue and another in Kidman Ave — sold before auctions to investors.
Barry Plant, Highton auctioneer Kieron Hunter said with another rate cut possible, investors with the capital were looking at the strength of regional property markets, which have proved resilient amid the pandemic.
“If you’re liquid and you want to put your money somewhere, property looks like it’s going forward,” Mr Hunter said.
“We’ve had a pretty good past couple of months in probably the toughest times, so I think people think we’ll see blue skies more than anything.
“Regional is the pick. That’s out of the bag that you would rather buy regional than capital cities at the moment.”
Belmont house prices have started to climb, rising 4.7 per cent in three months to $580,000, according to realestate.com.au data.
The median house price has jumped $48,000 in 12 months.
Across Geelong, the market is more stable, with the median house price 3.6 per cent up on last year at $570,000.
Mr Slack also signed up the pre-auction sale of a 950sq m property in Kidman Ave for local buyers, who were purchasing their second investment.
He said while banks were offering cheaper, easier access to money, confidence was a key factor.
“When buyers, particularly investors see other people buying, like at public auctions, it provides social proof,” he said.
But he said the fact there’s not many for lease boards around also boost confidence, he said.
“You jump on realestate.com.au, there is not much for rent in Belmont for those types of properties. Buyers say ‘that gives me good confidence if I buy a good property as an investment chances are I’m going to get a tenant for it.”
Maxwell Collins, Geelong agent Nick Lord said there was plenty of evidence that the market was about to rise, while rental vacancy rates also provided confidence to buyers of steady incomes.
“We’ve got a portfolio of just under 1000 properties (under management) and I think we’ve got seven for rent at the moment. Vacancy rates are very tight,” Mr Lord said.
“Investors are quite prevalent normally, but when the market plateaus, the urgency to buy a property hoping that it grows in value is not there.
“I think we are on the tail end of that. The market is about to increase in value, so we will now see investors entering the market.
“As the market starts to increase in value, investors will jump in to the market because they want to buy at the bottom as it rises, knowing that the rental return is quite safe from a rental yield point of view.”
Originally published as Geelong: Low rates, vacancies attracting buyers back to property