The regional Victorian suburb where rents rose the least in five years

On the outskirts of Greater Geelong, with its mix of owner-occupiers in new residential developments, university students in rooming houses and young families, Waurn Ponds has bucked the trend of out-of-reach rental rises.

Waurn Ponds, bordered by several Geelong suburbs including Armstrong Creek, Grovedale and Highton, had the smallest five-year rent rise of any regional Victorian suburb, based on Domain data.

A four-bedroom property in Waurn Ponds. The median rent for a house in the area hovers at $500 a week.Credit: Domain

Good news if you’re a tenant, not so good if you’re a landlord with an investment property.

The median weekly asking rent for a house in the area is hovering at $500 a week, only 13.6 per cent higher than five years ago.

Dr Nicola Powell, chief of research and economics at Domain, says the basis for the limited rental rise is largely due to an increase in new housing.

“Waurn Ponds, over recent years, has seen significant residential development and that has obviously increased the volume of new homes, and that in turn can also increase the volume of rental stock,” Powell says.

The Geelong waterfront. Waurn Ponds is on the city’s outskirts.Credit: Eddie Jim

“When you look at the demographic, it’s particularly popular among families and students because it’s close to the hospital and Deakin University.”

Suzi Gudasic, the head of property management at Buxton Geelong Group, says the majority of rental properties in Waurn Ponds are rooming houses, where rents are split across four or five people.

They’re international students and country kids living together to attend university, she says.

“Prices in rooming houses have not increased. That is steady,” says Gudasic, who adds that it’s “rare” in the suburb to lease out an entire house.

“The majority are rooming houses … rental providers think they profit more from a rooming house … they go down that path because they’re near Deakin, and they think they can fill the rooms quite quickly,” she says.

“Unfortunately, the rental returns are not going up to accommodate the costs the landlords have.”

Brad Seller, a licensed real estate agent and director at Compton Green Geelong, suggests the low rental rise is “skewed” by rooming houses.

“So you’re not seeing what the entire house price is, only what the room price is, so if the data has been drawn from that, it’s going to skew it,” he says.

Powell agrees: “The data can be skewed if you’ve got a volume of properties where they’re just subletting a single room in a house … in an area like Waurn Ponds, we know that there is a high proportion of students within that location.

“It can have an impact on the overall asking rent.”

Located just under 10 kilometres south of the Geelong CBD, Waurn Ponds appeals due to its proximity to the Great Ocean Road, to coastal holiday towns including Port Fairy and has a direct rail link to Melbourne.

Waurn Ponds appeals due to its proximity to the Great Ocean Road.Credit: Eddie Jim

“It’s an interchange between Melbourne, Colac and the Surf Coast … the houses are recently built within the past 10 years … it’s a popular place for people to live. There’s a new development under way now, just west of the train station, blocks of land being sold and houses going up,” Seller says.

The suburb, Seller says, is a younger demographic of students in share houses, white-collar workers and “tradie types”. “A lot of the blocks in some of the estates in Waurn Ponds are quite big, and they’ve traditionally attracted tradies with garages and sheds as owner-occupiers,” he says.

“People like to consider that area and the surrounding suburbs because of the proximity to the Waurn Ponds shopping complex, the schools, the railway station, Epworth Hospital and access onto the Geelong Ring Road.

“People see value in Waurn Ponds.”

Domain’s recent rental listings for Waurn Ponds include eight one-bedroom and one-bathroom options, and only four houses, and over the first quarter, only 69 listings.

The neighbouring suburb of Hamlyn Heights had 167 rentals, with cheaper weekly rents at about $485 for a house.

“Waurn Ponds rentals do reflect the localised high level of supply because it has seen development,” Powell says. “It also showcases that rebalancing of rental preferences as well, and that is coming out in lower rents where people are consolidating households, staying at home while they’re looking to other locations which offer cheaper rent.

“It could [also] be that people are renting out rooms to cost cut and share bills.

“That is very much a dynamic of today’s environment … when you see a significant rise in rents or a significant increase in the cost of living, what you then get in the rental market is a shift like this, where people rent out rooms. It’s all about cost-cutting.”