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VIC ballarat prospects?

Discussion in 'Where to Buy' started by jomi, 8th Oct, 2015.

  1. jomi

    jomi Member

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    Hi all, we have a Ballarat East IP for the last 4 years, always been tenanted. Thinking of selling but am unsure if its the right move? I think capital growth has stagnated somewhat but my partner wants to hold on for future growth and finds it low risk at the moment as its neutrally geared. Would be interested to hear what others thought of the region. Thanks!
     
  2. Truly Exotic

    Truly Exotic Well-Known Member

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    are we talking ballarat east or canadian or further out?

    also house? TH? unit, large block?

    price?

    ballarat has been a funny market, basically doing the opposite of what the experts have predicted
     
  3. Toon

    Toon Well-Known Member

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    If you don't need to sell I'd say hold if it's neutrally geared & low risk. Ballarat has been a bit flatter than I'd like, however there are positives such as lower than national average unemployment & higher than national average population growth. There has been a lot of development, particularly on the western side of the city, which I would think is the main reason prices haven't moved too much. Usually when Melbourne gets harder for people to buy into, there is a flow on to Ballarat as people see how comparatively cheap it seems here.

    Ballarat is at the 9 o'clock position on the HTW property clock, but I have no idea how long it will stay there before it moves up. I can't see it moving down though, as there are quite a lot of positives at the moment.
     
  4. Truly Exotic

    Truly Exotic Well-Known Member

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    I also cant see the market falling, however the agents there arent so positive about it

    however, when compared to some of hte gains in metro melb, ballarat seems like a not so great investment,

    part of the reason people do regionals is the high yields as well as higher %cg,

    however in this case the CG hasnt being particularly high

    obviously if the market were to rise significantly if melb metro got too pricey, then it would be good but if you bought then then its probably too late to get those big CGs
     
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  5. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Ballarat hasn't seen the growth that Bendigo has, nor Geelong, but it hasn't got some of the natural restraints that these cities have, nor the immediate growth drivers.

    That said, it does have a lot of industry and employment, it's well located to feed Melbourne with employment (a lot of people commute daily to the Melb CBD), some great schools and a low price point. For many people it is a good place to live.

    I think moving forward it will be seen as somewhere affordable and accessible. Decent houses in good areas (Ballarat also has plenty of diversity) will perform well over the long term.
     
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  6. jodes

    jodes Well-Known Member

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    We bought our first IP in Ballarat earlier this year based on a number of factors. It surprises me how cheap it is, especially compared to Bendigo and Geelong and it really is a beautiful little city with really everything you need, including proximity to Melbourne. Sometimes we discuss selling up in Sydney and moving to the simpler life in Ballarat :)
     
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  7. Truly Exotic

    Truly Exotic Well-Known Member

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    I would actually say that diversity as well as industry and employment ballarat would be superior to bendigo and a 50/50 for Geelong,
    however Geelong wins on proximity ! but im not a big fan of geelong to be honest...... just not a great feeling I get when Im there, I get more of a buzz in Ballarat , even though unemployment for young people is high
     
  8. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Geelong has enjoyed strong growth in the last year or two. It's kind of reflecting Melbourne's growth, abet 20% or so lower, which is reasonable given then size of the town and location to Melbourne.

    Ballarat has a significantly lower price point and whilst it has enjoyed modest growth, it hasn't been anywhere near as substantial. This might suggest that there's more growth the be had in the near future than Geelong.

    One verses the other:
    Ballarat is about 4 degrees colder than everywhere else. Freezing in winter but actually quite nice in summer. Geelong can be a bit warmer but sticky in Summer (although an ocean breeze works in its favour).
    Ballarat is the major town on the way to Adelaide and a lot of the business capitalises on the more central location. It also supplies a lot smaller of Western Victorian towns with various instratucture and logistics. Geelong is far more dependant on Melbourne for employment, but it has a significantly larger population.
     
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  9. adrian_christian

    adrian_christian Well-Known Member

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    I'm really torn about Ballarat.

    I am trying to keep to the capital cities on my long-term buy and hold strategy which has me neutral on 2 IPs in Melbourne. I'm attracted to Ballarat for proximity to Melbourne and the urban sprawl likely to be happening in the medium/long-term. Fundamentally it ticks a lot of boxes for reasons previously mentioned on SS etc, but for some reason I just can't compel myself to leap into Ballarat (or pockets within the 3350 postcode).

    I haven't heard too many success stories of late regarding Ballarat on the forums (unless you're talking about Sydney, Logan or Adelaide South), and judging by the lack of threads about Ballarat on PC I'm wondering why these fundamentals haven't translated into real capital growth the last 3 years or so.

    Finances aren't the issue for me buying around, or just below, median values for most of 3350, but I'm concerned about the stagnation that this might leave me with for the next 3-5 years to my portfolio as Melbourne inevitably slows down.

    Happy to hear people's opinions.
     
    Last edited: 12th Oct, 2015
  10. adrian_christian

    adrian_christian Well-Known Member

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    The silence is deafening :( and basically re-affirms what I said about the lack of success stories being shared about Ballarat, or even regional Victoria for that matter.
     
  11. Truly Exotic

    Truly Exotic Well-Known Member

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    my ones are doing ok, I have a few,

    if your expecting the current melbourne metro type of gains then id say you will be disappointed. Regionals usually follow metro, so who knows, I bought well for most of mine so it was a case good negotiations as well which make my deals ok
     
  12. Beelzebub

    Beelzebub Well-Known Member

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    I purchased three months ago. Time will tell
     
  13. adrian_christian

    adrian_christian Well-Known Member

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    Hi,
    No... Not expecting Melbourne metro gains, solid single figure capital growth long term is fine by me, my sweet spot is around the $230,000 - $280,000 type 3br house (no miners cottages) on a buy and hold with around 600m2
     
  14. adrian_christian

    adrian_christian Well-Known Member

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    Congrats, Which suburb did you buy in?
     
  15. Beelzebub

    Beelzebub Well-Known Member

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    Canadian close to Ballarat East. I was looking around for the same type as you. In the end I found a 4/2/2 for $275,000, corner block on a tad over 600sqm with a 6% yield
     
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  16. C-mac

    C-mac Well-Known Member

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    @Beezlebub during ypur DD did you get an understanding of zoning rules for the East Ballarat/Canadian area? For instance, are 600sqm corner blocks readily/easily able to be say split in two, or say have a 3-townhouse development on them?
     
  17. Beelzebub

    Beelzebub Well-Known Member

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    Yeh, the council is encouraging in fill development. My understanding is that doing a 300m2 subdivision is pretty straight forward but going any lower i.e. a 3 unit development would require a DA with plans of the buildings. Property is in a general residential zone.

    That being said I didn't purchase with the intention to knock down and sub divide. To be honest I haven't run the numbers, and I'm not 100% sure on where to start if I did, but my thinking would be at this stage knocking down places and putting up units probably wouldn't be worth it in the area. Maybe in 10-15 years when all the little bits of vacant infill are done and there is no way you can expand further East.

    One thing I did come up with during my DD is that the Canadian State Forest has just been declared basically creating a natural barrier to growth in the East. So as opposed to the Southern and Western Suburbs I figure that the place will be locked up in a decade or so when all the little bits of vacant infill are gone and at that point a development might make sense. Also, maybe in 10-15 years I will have learn't a bit more and might have a better idea of what the hell I'm doing.
     
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  18. Beelzebub

    Beelzebub Well-Known Member

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    Here you can see the hippies complaining about saving the trees: http://www.abc.net.au/local/audio/2014/03/13/3962535.htm

    Here you can see the new Labor government actually saving the trees: http://delwp.vic.gov.au/__data/assets/pdf_file/0006/299022/Creating-the-new-Canadian-Park.pdf

    Yay for hippies.

    This was actually a big factor for me deciding to buy on the Eastern side. Go look at Google Maps, you will see the East locked in with some vacant infill land and miles ad miles of farm land to the West.
     
  19. Toon

    Toon Well-Known Member

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    Also, the Ballarat City Council area doesn't extend very far east at all, so once you hit the Moorabool Council's border, it's rural/farming zoning with basically no chance of residential sprawling eastward within the foreseeable future. With their main offices in Ballan & Bacchus Marsh, the Ballarat border is just the fringe of their area and is not likely to have any rezoning by them.
     
  20. adrian_christian

    adrian_christian Well-Known Member

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    I've looked at a few properties online in or around my sweet spot...happy to hear thoughts..

    http://www.domain.com.au/10-dunn-street-golden-point-vic-3350-2012225962?sp=1 - a little on the high end for my budget at $290-$310K asking, but there's some depreciation to be had on the kitchen, bathroom, some fittings, as well as a cheeky outhouse for a SOHO/salon set up.

    http://www.domain.com.au/101-comb-street-soldiers-hill-vic-3350-2012342191?sp=3 - around the $230-$240K asking - not much depreciation to be had, but doesn't look like there's too much wrong either (obviously sight unseen), Soldiers Hill with a median rent of $260, I wouldn't be unhappy with this.

    http://www.realestate.com.au/property-house-vic-ballarat-120485993 - I think at $255-$264K asking with 800m2 this one's gone already. Link up on realestate.com.au but down on domain.com.au - some deprecn as well on kitchen and bathroom, huge backyard @ 806m2 allotment.