The year 2020 brought with it many things that we could not predict, but it was not all negative! Despite the considerable uncertainties that accompanied the pandemic, the Geelong property market accelerated with rising demand from new buyers and continuous construction. Geelong is consistently one of the fastest-growing regional areas in the country and momentum is proving to be a strong predictor of how it will continue to perform in 2021.
Here are some of the key themes that are unfolding.
Property demand will continue to skyrocket
Despite unemployment caused by the pandemic and the challenges that many small businesses continue to face, interest in residential property remains strong and the price of real estate in Geelong continues to increase. Geelong home values rose three times as fast as Melbourne’s in January 2021. Geelong recorded a 1.5 per cent rise – more than triple the 0.4 per cent recorded in Melbourne.
Additionally, Geelong’s median dwelling value rose 5.5 per cent to $618,987 over the last 12 months to January 31 (CoreLogic Home Value Index). The attractive lifestyle that the Geelong region offers is obvious, with easy access to the Surfcoast and the Bellarine Peninsula and affordability in comparison to Melbourne. It continues to be such an incredibly popular place to buy that investors are purchasing Geelong properties without even seeing them first. This increased demand has contributed to many recent auctions for Geelong to sell for well above reserve prices. This is forecasted to continue throughout 2021.
First home buyers will continue to dominate the market
The appealing incentives and grants from the State and Federal Government, especially concerning building, have allowed the aspiration of owning property in Geelong to be realised by first home buyers sooner than they thought. Nationwide, first home buyers made up more than 50% of the housing market in 2020 (Scott, 2021). With fees suspended and commuting, appointments, and travel not an option, the deposit savings of those who worked during the lockdown grew healthily. Coupled with record low interest rates and the assurance from the Reserve Bank of Australia that these will not rise for at least the next 3 years until the target for wage growth is reached, the confidence of first home buyers to get into the Geelong property market is at an all-time high.
City dwellers will continue to seek a sea change
With working from home becoming the new normal and therefore more time spent inside smaller spaces, priorities for those living in the city continue to change. Those making the move from Melbourne to Geelong are getting more for their money and an ideal lifestyle change, all within a place that remains a commutable distance to the city. Many city dwellers are willing to pay a premium for property in neighbourhoods that still allow them the metropolitan feel with modern conveniences, in addition to the coastal escape. And whilst the idea of a sea change has been trending for some time, the pandemic has only increased its desirability, which means that the competition with Melbourne buyers will remain.
With thanks to our guest author:
Michael De Stefano
Real estate expert and principal