Property market on surge

More growth expected

GEELONG was Australia’s second most successful regional property market across the past five years, according to a new report.

A median valued Geelong house has gained more than $81,500 (24.1 per cent) over the period to reach $420,000 at the end of December last year, the CoreLogic RP Data Regional Market Update released last week said.

Only the Illawarra region in NSW pipped our municipality with a 25.2 per cent lift in median house values.

In Geelong, strong growth over the past 12 months has seen a median-valued house gain about $23,400 (5.9 per cent).

“The property market is a reflection of the local economy and there’s clearly been a lot of good things in Geelong and that has led to a favourable improvement in its property market,” RP Data CoreLogic Victorian spokesman Robert Larocca said.

Mr Larocca noted that it was a positive sign following poor economic news for the city in the early part of the fiveyear period.

“It is a significant regional centre with a lot of positive attributes and improved transport connections really have had a positive impact on the area,” he said.

“It has risen quite strongly in the past two years, but it is probably now back on the more steady growth trajectory that has historically been the case.”

The report revealed the region may be about to become more attractive to investors, the median indicative gross rental yield finishing 2014 at 4.9 per cent.

Following the Reserve Bank of Australia’s decision to cut the nation’s cash rate to 2.25 per cent earlier this month, it’s a higher margin than a number of home loan products and means the cost of making repayments for many homes across the region are below what those homes return in rent.

Gartland Real Estate residential sales manager Nathan Ashton said the figures weren’t a surprise to him.

He said investor activity had been strong in the past six to 12 months and was likely to grow as projects by Deakin University and Barwon Health continued to fuel the economy.

“The rental yield has been a fairly good constant denominator over the last 6-12 months and the cost of money is getting lower, and anything when you are around the 4.5 to 5 per cent yield is doing very, very well,” Mr Ashton said.

“I think the changing face of the Geelong economy has definitely driven the last three or four years and it doesn’t surprise me that we have seen that growth for the past five years.

“And I think that will continue for at least the next two years as there are so many projects still on the go.”

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