VIC Ballarat Boom 2018!

Hi fellow PCers,
We’ve seen Melbourne’s boom. We’ve seen Geelong’s boom. Depending on how one defines the definition of boom, we can definitely see the boom period has just started in Ballarat now. If 20%-30% growth within 3-5 years is what we think the definition of a boom, it is now!

• If it is purely based on council valuations, my IP(a Victorian period home) in Ballarat East has gained more than 27% growth over the 3 years I've owned it. It was valued by the council for $220,000 in July 2015. Last week I received a council rate notice, mentioning capital improved value of $281,000 in August 2018.

Council rate from 2015


Council rate from 2018

• If it is based on bank's valuation from the purchase price to last month's desktop valuation, the one in Ballarat North has gained at least 25% growth over the last 3 years. I bought the property for $250,000 in Feb 2015 and recently got a CBA desktop valuation of $313,000.

CBA Valuation in 2018

• If we want to base on median price of Ballarat Central in general, it's around $325,000 in 2015 to $460,000 in July 2018. This is more than 40% growth over the last 3 years.

Median price of Ballarat Central in 2015 on Realestate.com.au


Median price of Ballarat Central in 2018 on Realestate.com.au

I believe we are now seeing what we predicted since August last year about the ripple effect of Melbourne's boom in another Ballarat thread. So long-awaited boom of the Rat has finally arrived, as it says "Good thing comes to those who wait"

On the other hand, Ballarat has now become a CG playing ground, rather than a CF playing ground. Although there are some renovate-able properties that can be purchased for those who want to add values through renos and aim for some good cash flow, decent rentable-as-is properties are long gone if you are looking for CF properties.

What do you guys think? Is there anything else to pick up from the remaining stocks before the boom ends(if it is still rising but not yet peaked)? How long will the boom last before we see price stagnation or fall?

Would love to know your thoughts too. @Toon @Beelzebub @TMNT @C-mac @G TOWN @Tony3008

 

regionals are where money is moving.

Consider the best performing areas of the last 12 months... Geelong, Ballarat, Orange, Bathurst... all large regionals outside Melbourne and Sydney . Tree changers and young families. We are just at the beginning of a transfer of wealth from big cities to big regionals. Plenty of cashed up retirees who can sell up in the big smoke and move to a regional . It will give them loads of spare cash for their retirement. If just a tiny percentage of these people move to large regionals it’s enough to get them cooking

 

If you go back to the 70s and 80s the price differential between the regionals and the city was not as significant as it is today. Given that the regionals are starting to get to a size that can sustain a professional working class and given the fact that people want to move to the regionals not just for cheap housing but for lifestyle reasons: who knows where it could go. @euro73 has a point wealth might start moving back to the regionals. Will prices go close to parity like they were decades ago? Probably not, but I think the gap will close somewhat in the coming decades.

So still plenty of room to move.

 

Well.. My 2 cents.

Youre right. Ballarat is booming for its standards.

You've put your rates as comparisons, well done.
Have you seen that rates have gone up as welll.
Also water rates have gone up too
So for a property in that price total rates are now like 3k per year. So it's not cheap.

I have the most ips in Ballarat so I have a soft spot for the area. I predicted that due to cycles the boom was coming about 2014. Unfortunately it's 4 yrs later.
Had I invested that in Melbourne it would have done better. But no point looking at hindsight

I'm very happy that Ballarat is finally moving. But it's been a long time coming. Even the agents back in 2014 were saying the boom has to come soon!

 

I hope you are right,, Howver what I'm a little unconfident is that regionals in the past have done well in a medium strength economy after the metro boom.
It seems that we are heading for a rate rise and economic uncertainty I can't see decent growth in that environment so i feel the growth now might be the peak

Anyone else agree/disagree

 

Yes, the rates have gone up a bit. But, compared to my Logan rates, this is still 1/3. I'm paying like $3,200 per year for each of my Logan properties. Either way, happy to hold them long-term as they don't cost me anything to hold.

A different story to me was, back in 2014, I was ridiculed by a lot of people I met, saying why one would invest in a regional area like Ballarat. Having so much time here and on the ground in Ballarat provide me with invaluable knowledge and confidence to invest there. CF+ since day one and CG now is a big bonus!

 

Attending opens on the ground, I can see that properties with scope for adding value/renovation/development are attracting large crowds for rat standard. There was one last month where I had to drive a block away just to get parking. Another had an offer 50k above asking before the first open.

What's picking up seems to be Melbourne investors looking for value. The big question for me is how long will the growth last for. Lending conditions might get worse before it gets better.

 

I couldn't care less what other people say unless they say I was buying a dud. I guess it depends who you were talking to. If you were a herd followed you'd be raving on about Ballarat right now

You say your rates are 1/3 Logan, but in logan the 3.2 k covers water as well.
In Ballarat, you have another 1200 to 1300 per year in water rates.

 

Oh yeah, forgot about the separate water rates. So it's more like 2/3 now.

 

I've just received my PPoR rates notice today and the valuation has increased 7.5% on last year. This is in Canadian, so not seeing the big % increases like Soldier's Hill etc. yet, however I hope the ripple is still increasing and will further boost this area too.

 

Yep definitely a sellers market when the selling agent doesn't even return your calls

 

107 Eureka Street Ballarat East Vic 3350 - House for Sale #129139110 - realestate.com.au

!!!

 

The property was sold for $250,000 in March 2017. I'm not sure whether it was purchased as it is currently in the photos or not. Say, less approx. 5% purchase cost, the current vendor has room to move around with $237,500, if it is sold for $500,000. After taking renos and selling expenses out, I think the vendor will be walking away with approx. $150,000 in his pocket, if it is sold for $500,000. Not too bad for 17-month holding period, right?

P.S., Eureka st is a main busy street across the southern Ballarat East. I wouldn't personally live on that street and wouldn't recommend for investment purpose either. But buyers in Ballarat are seriously in love with perfectly-renovated Victorian homes like that. So can't say anything wrong for lifestyle choice.

 

The property was in poor condition - and $250k was a fair price given the condition. However - depending on how much the owners did themselves - it wouldn’t have cost that much to bring it to its current standard. I’m seriously in love with these sorts of homes and in general I shy away from newer homes and prefer older homes with timeless appeal - of which there are many in Ballarat East!

Location is good too - being on a busy street notwithstanding. Walk a few blocks and you’re at the bottom of Sturt St. Drive up Princes St Sth and you’re on the main route to Melbourne. This is truly such a good spot if you are originally from Melbourne, work there or otherwise head there often.

The biggest thing is - this seems pricey for those that know the market here. But for a Melbournite used to seeing seven figure price tags for a home like that, it’s a bargain.

I thought this was a good result too: 6 Princes Street South, Ballarat East, Vic 3350 - Property Details
Especially considering 2 bedrooms, small block, poor condition and it has lost many heritage features.

 

Why first-home buyer grants for new builds in regional Victoria are on the rise

"Entry level house prices in Victoria’s regional centres have significantly increased since grants and concessions were introduced – with the two largest, Geelong and Ballarat, recording double-digit year on year growth, according to Domain Group data."

"GJ Gardner Homes Ballarat director Rob McMaster has seen more first-home buyers from Melbourne and overseas building in Ballarat in the past year. He puts it down to the government incentives.

“There’s still plenty of well-priced land, and overall people can get into a really good home for a lot less than what they can in the suburbs of Melbourne,” Mr McMaster says."​

 

Mmm... a bit of media hype there actually. I started noticing the boom in Ballarat like at the beginning of this year and in Geelong like at the beginning of last year. I feel Geelong’s boom didn’t last long though and now it’s like stagnant. Hopefully, the Rat will hang on to it’s boom period longer.

 

Definitely a seller market. REA pushing hard to find properties. Combination of investors and (mainly) people who wants to live there (priced our by Melbourne). All started mid/end of last year. I placed few offers however always outbid by 5/10% by OO. Honestly I don`t think the prices will keep going for ever, people want to live in Melbourne, this is where the big migration is. I see a retiree moving to Geelong, Philip Island, Peninsula, Ballarat with a ???

 

What you miss is that there is a sizeable chunk of people who no longer want to live in Melbourne. The regionals 10-15 years ago only had affordability going for them. What has changed in the last 10-15 years is a shift in the demographics of the regionals toward a more professional class and a growing decline in the amenity and liveability of capital cities such a Melbourne. Both of these trends will continue.

The exodus to the regionals is driven by multiple factors, affordability plays a large a part in this but is not the only component.

 

Another factor, I’d say, is daily commute. Longer commute in a large city like Melbourne will give you less time with family or less leisure time for yourself. Not everybody enjoy hours spent in a jammed packed train or on road traffic if one drives to work everyday.

 

107 Eureka St under offer...can’t wait to see what it goes for...

Edit: The lamestream media loves to talk about doom and gloom for property investors. I just sit back and smile