Regional VIC Property Market Update September 2019

Geelong Property Updates

According to Australian census data, Geelong’s population is continually growing in size. Looking back on the last eight years of Geelong’s population change to 2016, the growth rate was very strong, ranging annually from 1% to 2%.

Geelong’s demographic profile continues to diversify. In 2011, the top five countries of birth for people in Geelong apart from Australia were England, Italy, New Zealand and Croatia. In 2016, the structure of the top five countries of birth had changed with India taking fourth place in the chart and making up almost 1% of the total population of Geelong. Those born in South-East, North-East Asia, Southern and Central Asia have increased significantly in numbers and percentage not only in Geelong but across Melbourne and Victoria as a result of overseas migration.

Geelong is characterised by the recently revitalised Waterfront precinct and newer residential areas of Geelong further out of the city’s CBD. Geelong is still affordable for buyers representing strong opportunities for investors and owner-occupiers. Though the median house price for greater Geelong as at June 2019 was between $400,000 and $600,000, buyers could still get a near-new, three or four-bedroom house for close to $400,000.

The recent local infrastructure projects including an extension of railways, continuous improvement of Geelong’s activity centres together with Geelong based Deakin University community operations undoubtedly influence the growth of the local economy and stimulate potential property market participants.

Speak with a Geelong Mortgage Broker today.

South-Eastern Suburbs Property Updates

The outer south-eastern suburbs (OSES) have been a culturally diverse region of Victoria’s rapid population growth for several years now, with newly settling migrant families taking advantage of the affordability of land prices in the area representing approximately 20% of the population of the cities of Casey and Cardinia. The population has been steadily growing in the OSES at approximately 6.5% year-on-year for the preceding three years, underpinned by Victoria’s robust migration both domestically and internationally. The age group which dominates this area is 25 to 34 year olds. This is generally the period where couples are starting families and are forced further out of the centre of Melbourne due to the affordability issues faced within the inner south-eastern suburbs. The population of the outer south-east corridor is expected to continue to grow, being underpinned by housing affordability and Melbourne’s strong migration.

Melbourne’s Central Business District (CBD) and inner ring have always attracted interstate and international buyers who have been priced out of their respective markets. This is especially the case with Chinese occupants and purchasers, comprising 25% of the population within Melbourne’s CBD as of 2017, whilst only 14.5% of residents living in the CBD were born in Australia. Interest reached a peak in 2017 and somewhat subsided throughout 2018 due to legislative changes in Australia as well as Chinese capital controls and taxes which have restricted demand in the past 12 to 24 months. We expect the population within Melbourne’s inner ring to continue to rise.

Mildura Property Updates

Mildura’s population is expected to continue growing at around 1% per annum, with this growth coming from people moving here for either work or retirement. Unfortunately, some of this growth will be at the expense of smaller towns and rural communities within a 300 kilometre radius, with both younger and older people drawn to the better employment, lifestyle and health facilities on offer in Mildura.

We also expect to see some people moving here from capital cities, drawn by the cheaper cost of living and less congestion. The idea of spending less than ten minutes commuting to work and being able to buy a good standard home for less than $500,000 is an attractive proposition, and while many of our young folk head to a city to attend university or seek alternative employment opportunities, a reasonable percentage eventually return, often with young families, in order to be closer to family or attracted by the regional lifestyle.

The recent growth in the area planted to horticultural crops, in particular, table grapes, has created a need for additional seasonal labour, which we expect to be largely met from overseas workers and recently arrived migrants. Mildura has a proud history of settling migrants, with many people from Mediterranean countries arriving here in the 1950s. More recently we have seen an influx of people from Pacific islands, India, Iraq and Afghanistan, knowing they can obtain work for most of the year. Finding suitable accommodation is a challenge for these workers and there is a growing need to build affordable accommodation, either on farms or in town. There is virtually no cheap housing now available for rent at present.

This shortage of affordable accommodation has been evident for well over a decade in the nearby town of Robinvale, located approximately 85 kilometres south-east of Mildura, where a large percentage of Australia’s table grapes are grown. Robinvale has been in the news lately, following the release of an independent population review commissioned by Swan Hill Council in order to help lobby for appropriate funding for health and other services in the town.

This review, undertaken by Geografia, relied primarily on eftpos records to match the number of regular financial transactions at local businesses. They also cross-checked their population estimate by comparing domestic water consumption figures. Geografia’s data suggests the real population of Robinvale is between 7,205 and 7,725, which is more than double the 2016 ABS census figure of 3,316. This highlights the difficulty in accurately measuring the population in some locations.

Shepparton Property Updates

The Goulburn Valley Health redevelopment is well underway as the major infrastructure upgrade for the region. The hospital upgrade is said to require an additional 600 jobs in the near future and there is a fair amount of buzz amongst the surrounding estates. The jobs require a range in skill sets and pay scales, as will the properties that these people and their families require. There is no doubt that this will draw people and families from across the state and possibly the country.

As it currently stands, the rental market is very tight with a number of large real estate agencies quoting vacancy rates close to 1%. Houses in Shepparton are in relatively short supply as it is and that is before the jobs are advertised for the hospital. There are enough new land subdivisions on offer from developers for our city to continue to grow, however we are already in a building boom and building companies will most likely require additional trades to keep up with demand.

Many out of town investors are still being drawn to the Shepparton region because of the strong rental yields exhibited by the sub-$300,000 market, of which most appear to be investment properties merely changing hands, rather than an influx of rental stock. There are still a number of former housing commission properties that are being sold with yields up around 7.5% to 8% with tenants in place. Typically, these properties don’t last more than a fortnight on the market.