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Why Geelong house prices are ready to grow in 2019

By Emma Smith
07 SEP 2019

EXPERTS have put Geelong’s property market on target for steady growth this year.

The positive sentiment at the start of spring comes after financial regulators relaxed rules affecting how much homebuyers could borrow.

Herron Todd White, Geelong manager Mark Harmer said providing buyers with better access to cash meant helped the market pivot from downturn to steady growth in the months after the federal election.

Agents have seen more people inspecting properties, while auction clearance rates rose. There had also been strong sales in suburbs like Newtown, Highton, Belmont and Geelong West.

“We are getting back to the (number of) buyers that we had early last year where it was quite strong,” Mr Harmer said.

“It seems to be a real positive outlook at the moment, and that’s how we’re seeing it.

“If there’s not an influx of properties and we’re flooded, it will continue at a good level and sustainable at the moment too.”

Mr Harmer said the return to steady growth meant it would be easier for buyers to pick the price of properties.

“We don’t foresee that it will jump through the roof like it did a few years ago. When the market steadied, it became a bit easier to read.”

The change to lending rules and a lift in buyers means Geelong’s market should avoid the 10 per cent price drop experienced in Melbourne, where the post $1 million to $3 million price bracket was worst hit, Mr Harmer said.

“If you look in Geelong at where the average house price is, it would be far from that.”

Geelong’s relative affordability was also a factor in the turnaround, according to a report for insurer QBE.

The QBE Australian Housing Outlook was produced by forecaster BIS Oxford Economics, who forecast about 4 per cent growth to 2022.

First-home buyers are a key group driving population growth in Geelong. Picture: Mike Dugdale

The report charted a 4 per cent decline in house prices in 2018/19 following a 12 per cent rise the previous year, with population growth mitigating the magnitude of the fall.

First-home buyers taking advantage of stamp duty concessions under the $600,000 threshold is expected to continue drawing more buyers from Melbourne, though the price impetus is likely to be less as capital city prices became more affordable.

Other factors driving the positive outlook included job and population-boosting infrastructure projects, like the new CBD office tower for health insurer GMHBA, the emergence of new housing estates at Lara West and plans to build a new prison at Lara.

“You look all around and you only have to go for a walk around town to see what’s happening,” Mr Harmer said “It’s positive and money is coming into the economy and as long as that continues that’s where the growth will be.”

CoreLogic’s monthly Home Value Index this week reported a 1 per cent rise in home values over the past three months.

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