Local figures paint promising picture

BY GARETH KENT

Director, Preston Rowe Paterson Geelong

Who doesn’t love ‘secret modelling’ predicting doom and gloom?

The Reserve Bank (RBA) modelling leaked this week predicting a 20 per cent property downturn by the end of 2024 is nearly as good as reading our Mr Chalmers’ “responsible budget” or the most amusing merry-go-round of UK Prime Ministers.

The best outcome will be for future trivia questions: who was the Prime Minister when Queen Elizabeth II died?

With all this pessimism, is there any truth to it?

There are signs that things have slowed.

Data released by the CBA Regional Movers Index indicates that internal migration out of the major capital cities has decreased by 22 per cent compared to last year.

The time property spends on the market throughout the south-west region of Victoria has also increased, in line with the increases in the cash rate.

With another RBA meeting looming, it is likely another 0.25-per-cent increase is on the cards. Access to capital and fewer people moving means less demand on prices.

This, coupled with a considerable increase in listings on the market, could provide an oversupply situation throughout the spring selling season and put downward pressure on sales results.

There are 28.7 per cent fewer properties on the market this spring than last year. Recent CoreLogic reports indicate that clearance rates for the previous weekend across the country were 61.3 per cent, whilst in the local Geelong and Surf Coast region, we recorded 69 per cent compared to 81 per cent at the same time last year.

Yes, that’s lower, but it is still very strong and above the national average.

Agents have started to report a clear picture of ‘hard selling’; that is, properties with no identified purchaser after a typical four-to-six week selling campaign.

Ladies and gentlemen, if you are an investor, this is the time you have been waiting for and are likely excited by the opportunities it presents!

Astute investors should now be getting ready to pounce.

Money in property is made when you buy, not sell.

Hence, a demand drop should be the signal to get active. Attend auctions and pick up those properties that get no bids.

Keep an eye on the time a property has been on the market and use this information as leverage with real active offers.

Look for properties in areas close to linkages, shops and services.

The northern suburbs of Geelong are very attractive right now! Another idea is to look for locations where second homes, such as holiday homes, are prevalent.

These are always the first properties to be offloaded when times get challenging or uncertain, and they are also the first to bounce back.

I have spent some time looking at the September 2022 quarter results (Domain house price index), suburb by suburb, for the Geelong region.

Interestingly, only five suburbs indicated negative growth (Leopold -2.7 per cent, Clifton Springs -0.9, Portarlington -0.6, Rippleside -0.3 and Newcomb -0.2).

However, this is dwarfed by the fact that the other 17 suburbs all showed positive growth.

Not surprisingly, Ocean Grove topped the charts with 9.1-per-cent growth, followed closely by Hamlyn Heights at 6.7 per cent.

The average annual growth for the financial year to date is recorded as 14 per cent across the Geelong region and 21 per cent across the Surf Coast, with the Surf Coast region being in the top 10 growth regions in the country.

Although the price gap between Melbourne and Geelong has closed, the region still represents good buying and long-term growth prospects.

Happy hunting!

I want to finish with a little call out to our friends in flood-impacted areas; take care and keep safe. You are in our thoughts and prayers.

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