Why Ballarat is Victoria’s next sizzling hotspot: Chris Christofi
EXPERT OBSERVER
Despite the well-documented cooling of Melbourne house prices in recent months, down almost two percent over the June quarter, Melbourne’s median house price is still an eye-watering $882,082 according to Domain’s latest research. For the vast majority of first-time buyers, whether owner-occupiers or investors, that puts Melbourne property ownership way out of their financial reach.
So where else can these hopeful buyers get a foothold into the property market?
Reventon has been securing property for clients in Geelong for a number of years now. However, land prices have appreciated over $150,000 in the last two years, making it difficult for investors and first home buyers to continue purchasing in Geelong.
For those buyers who purchased an investment property or family home in Geelong one to two years ago, they now have generated enough equity in their property to look at their next investment purchase. But where should that be?
Ballarat is the next hotspot. Land prices are low, from $130,000, making it affordable for first home buyers and investors alike to purchase. We have seen a significant increase in land value over the last three months’ alone, and this is likely to continue alongside the growing market demand.
So why is Ballarat my top pick?
1. Affordability – With land prices averaging between $130,000 -$150,000, Ballarat land is at a far lower price point than in any of the major capital cities or in Melbourne's outer suburbs. Full turnkey House & Land packages start from $410,900, again still very affordable.
2. Transportation – Ballarat has the benefit of an express train service. Those who work in the city can commute to Melbourne in around 60 minutes, which is faster than many outer suburban commutes.
3. Population growth – Increasing numbers of new residents to the city are fuelling demand. Ballarat has experienced a massive growth of 27.9 percent within the past 24 months due to growing employment opportunities and the regional lifestyle appeal it offers to many city dwellers.
4. Infrastructure spend – The Victorian Government has committed to spending billions of dollars on infrastructure investment in the Ballarat region. This spending includes:
o Road infrastructure projects - $7 billion
o Rail upgrades - $551.7 million
o City transformation and relocation of government departments - $47.8 million
o Health investment including hospital refurbishment - $461 million
o Private sector investment is also contributing to the creation of thousands of new jobs
5. Lifestyle - Ballarat has so much to offer in the way of lifestyle, cultural, culinary, sporting and entertainment options. It is Victoria's third largest precinct and only one hour from Melbourne.
6. Low stamp duty - Due to the current low base land price, average stamp duty is only around $3,200, adding to the overall affordability for buyers. This is far lower than duty paid for higher priced locations and especially apartments, where investors now have to pay full stamp duty on an off the plan purchase, which equates to 5.5 percent or $27,500 in stamp duty payable on a $500,000 apartment, even more for foreign buyers once additional taxes are added.
7. Rental Demand – Ballarat has a population of just over 100,000 people, and around 27 percent of its occupants live in rental accommodation, so plenty of demand, especially for new properties. Ballarat’s vacancy rates are low also, at around 1.1 percent.
8. Rental Yields – Investors are attracted by attractive yields, which are averaging 4.4 percent* on houses and 5.2 percent on townhouses and units,* which compares favourably to Melbourne’s ever-dropping yields as house prices increase.
So, there are my eight sizzling reasons why Ballarat is Victoria’s next property hotspot. For those looking to secure their first property in the region, my advice is to move sooner rather than later...
Chris Christofi is the Founder and CEO, Reventon, a company he built from the ground up in 2005