Home prices look to beat COVID decline

GEELONG home values are expected to avoid larger declines predicted for capital cities amid the coronavirus pandemic, a leading property analyst says.

CoreLogic head of Australian research Eliza Owen said while COVID-19 had created a shock to demand for housing, changes to work habits, especially working from home, and the fact Geelong was a popular location for buyers leaving the capital cities would help the market long term.

New data shows median dwelling values have climbed 6.8 per cent in Geelong over 12 months to $593,850. But growth slowed to 0.1 per cent in May.

Melbourne values dropped 0.9 per cent in May, but were still 11 per cent higher than a year ago.

Ms Owen said while the ABS recorded a 7 per cent fall in payroll jobs in Geelong in April, the region was less exposed to the worst-hit sectors, such as food and accommodation, arts and recreation.

“Fundamentally some of the employment industries that we’ve seen impacted by COVID-19 don’t make up as much of the workforce in Geelong, so that could insulate the price decline that we might see across the region,” she said.

The State Government’s work-from-home order could have a long-term positive impact on Geelong housing demand as people realised location became less important for employment, Ms Owen said.

“And as many people have been forced to work from home, I think they realise how practical it can actually be so that might increase demand for areas like Geelong in the long term.

“Traditionally, it’s been a pretty popular area for internal migration. It’s not as reliant on overseas migration and that’s something that helps steady the market, relative to, say, inner city Melbourne where almost all of the housing demand is coming from overseas migration.”

Buxton agent Ben Riddle said liveability and affordability would continue to draw buyers to Geelong, softening the impact of COVID-19.

“If I had to paint a story of the past 10 years of Geelong, it was Melbourne people leaving the rat race getting great lifestyle, great schooling, great beaches and people commuting and spending one day a week being able to work from home,” Mr Riddle said.

“Geelong is a lot more insulated. The trade-off is we’ve never experienced massive upturns.

“We haven’t been afforded 15 per cent year-on-year growth for a decade like Melbourne and Sydney.

“Therefore the trade-off is I don’t think we’re going to be as susceptible to 10 to 15 per cent drops in 12 month because we’ve got those factors that are really appealing to buyers.”