Regions on the rise
As property prices continue to increase in the city, country Victoria is looking more and more attractive to astute investors
The fact that home values have risen so much that more than 50 suburbs in Melbourne now have median house prices above the $1m mark has left many investors looking at regional alternatives.
But it’s not just the cheaper dwelling prices that are attracting attention to country Victoria. It’s the lifestyle too. Many country areas offer a coastal location, brilliant bushland, and peaceful settings that can’t be matched by Melbourne’s densely populated urbanised suburbs.
Moreover, Victoria’s regions are continuing to attract workers. In fact, regional employment grew by 5,100 over the three months to August, according to the ABS. This was led by the Hume region, which benefits from agriculture in the west, and the alpine, wine and gourmet food in the east that help make tourism a key pillar of its economy. And as the Australian dollar continues to soften and more Asian tourists visit the area, this can only be good news for this industry and the region.
Hume’s population growth is already projected to grow by over 38% over the 20 years to 2031.
Aside from Hume, there has also been a reported employment increase in Latrobe-Gippsland, Shepparton, Geelong and Warrnambool, and Southwest Victoria.
There are now 26,300 more people employed in regional Victoria since November 2010. And over the three months to August, Victoria’s regional unemployment rate was 6.6%, which is actually below the statewide average of 6.8%.
Further job creating infrastructure projects in regional Victoria include the following:
• the Murray Basin Rail Project (up to $220m)
• the Shepparton Courts redevelopment ($73m)
• Latrobe Regional Hospital ($73m)
Additionally, the western section of the East West Link will also provide an alternative route to the West Gate Bridge for Geelong and Western Victoria, which should support export industries with improved freight and logistics networks.
Mildura and the Murray Outback
The northwestern regional city of Mildura is one area that’s catching the eye of investors.
Apart from being a significant service centre for Northwest Victoria, as well as for parts of SA and NSW (providing transport and warehousing services, professional services, health services and tertiary education), it is also a producer of premium agricultural and aquacultural products for the domestic and international markets. In fact, food and beverage manufacturing are among Mildura’s major exports, as the region’s arid climate creates the perfect conditions for citrus and grape growing.
Mildura Airport is also the busiest regional airport in Victoria for passenger services, and the number of passengers has doubled over the past decade.
According to the latest Herron Todd White report, a buyer looking for an average home in Mildura would need to spend about $275,000 to $350,000 for a three- or possibly four-bedroom brick veneer dwelling constructed between 1985 and 2005.
“Improved demand in the past 12 months has the seen values of this type of property increase by around 7% and we see no reason why this growth won’t be maintained,” says the report.
“Our experience has been that buyers seeking this type of property tend to value being close to either the centre of Mildura or the Murray River and sale prices reflect this.”
The sale prices of better-quality townhouses have also increased by around 7% during the past year.
SUBURB TO WATCH
Jacana: Rare affordable option near Melbourne
Despite being only 16km north of Melbourne’s CBD, Jacana has a median house price of just $334,000, making it a very appealing spot for people looking to buy their first home or investment property.
This quiet suburb has all the essentials, plus the excellent Broadmeadows Shopping Centre is nearby. Moreover, its friendly and peaceful neighbourhood, coupled with the great schools in and around the area, makes this suburb a popular choice for families. The transport system is excellent, with bus and train services available and the airport in close proximity.
Houses in Jacana typically spend just 67 days on the market, indicating solid demand. And even though prices have only grown by 5% in the last 12 months, demand looks to be putting increasing pressure on the shortage of supply, suggesting that house prices could grow more rapidly in the medium term. Rental yields are also a healthy 5%, which is quite good for the general Melbourne area.
Jacana is small, both in size and population (it only has 1,939 people, according to the ABS), and there is not a huge difference in prices across the suburb. Nevertheless, some of the most sought after streets include Freeland Grove, Langton Street and Lorraine Crescent. A two-bedroom, one- bathroom home on Lorraine Crescent can be bought for less than $350,000 and is close to the Broadmeadows Shopping Centre, schools and the train station.
There are also plenty of older houses on large blocks which are perfect for renovation.
Can you afford to buy in this suburb? Find out how much you can borrow