VIC ballarat prospects?

Maybe time to hype Ballarat. I've driven through Ballarat, Geelong when on ocean road drive, that's all. Entry points seem palatable to me

 

http://www.domain.com.au/18-molbray-street-wendouree-vic-3355-2012339622?sp=10 - 613sqm, but I've tried to avoid looking around Wendouree, Sebast etc

 

I'd avoid Sebastapol but I wouldn't rule out Wendouree for decent yields and capital growth. But you would need to be comfortable with investing in the low SES areas.

 

If it were me I would avoid Dunn Street, I'd prefer the Soldiers Hill property. There is room to make improvements to the property and possibly get some equity gains and attract higher rents better tenants with a quick reno. It's also a corner block so there might be future potential to put town houses on the site (I wouldn't think it would be worth it now, something to look into with your DD though) and It's a decent suburb. Close to central Ballarat and next to Lake Wendouree which, unlike Wendouree, is one of the best suburbs in Ballarat.

I'd also look at the 800sq plus property in Golden Point. If there is enough room in the driveway (I think you need 3m+) you might be able to build a unit out the back

 

That part of Wendouree is OK.

 

Hype away

 

If you're not planning on any renos or development yourself, the Dunn St property is in an area that is beginning to gentrify and it's very close to the CBD.

Comb St is very close to the train line there and that's the line that gets the massive freight trains go through. I also think it's really stretching things to call it Soldier's Hill. Whilst there is some gentrification happening in the surrounding blocks, it is still a fairly low socioeconomic area at the moment.

The Joseph St property is large enough for future subdivision & development if that's what you're after, however it is fairly close to an industrial area & this end of Joseph St still has some way to go before it gentrifies much. It's also a lot further from the CBD.

 

Can I ask why you don't like the Dunn St property? Thanks in Advance...

 

Not so much that I don't like it. It just doesn't have the opportunity to value add as it has already been renovated by the looks of it. If the deal stacks up then sure, go for it.

I didn't look close enough at the Comb Street property. It does seem a bit close to the train line.

 

Thanks @Toon and @Beelzebub are you guys local and invest in the area? What really attracts me is the low entry point but i haven't done much research. What are the main industries?

 

My (could be completely flawed) thinking around Ballarat is that growth will most likely be driven by Melbourne prices going up and flowing onto Ballarat. Based on this "logic" the property we purchased is a large federation place 10 minutes walk to the CBD- hopefully a nice couple or family will be driven out of Melbourne by the prices wanting to live in a nice house and commute to Melbourne and come and offer us an exorbitant price

 

But then they have to live in Ballarat !

 

I quite like golden point, I think its a little bit of the ugly sister, but with prices not caught up quite yet

the soldiers hill area I like but prices there have always been a bit too high for my liking in comparison, if you can get a decent priced one, then go for it

wendouree, unless you get a screaming bargain avoid the HC triangle, doesnt seem like much growth however until recently 3 bdr run down places were struggling to sell at $155k, but now slightly renoed ones seem to be advertising (not selling) for up to $200k

right of this triangle is far better but you pay more for it,

wendouree for me is not a good place to invest (i have one there) you pay for a premium, it doesnt have a high demand, yields are poorer than surrounds, id stick to central

sebas is also low demand, decent yield and a rough area, however, lots of developments going on or at least applications in, if you are going to buy, its more for long term land banking, id definitely look for 880-900sqm + without paying the premium

ps. you are like one of my friends and seem to focus greatly on depreciation, as half your description is about depreciation......no offence

 

Not a local, just purchased there

 

Hi, none taken. The depreciation potential is just a side benefit, not the main driver for me at all. I'd just prefer to hold an IP that doesn't have original features in the kitchen/bathroom etc. I'm in that position with one of my IPs and when there's a vacancy I will have to outlay on a value add, but not until then; hence the reason why I'm focusing on refreshed fittings until I can see an interior in the flesh.

 

I live here & have invested here, but currently looking interstate for next purchase.

Main industries - not in any particular order:

Health - 2 hospitals including new big $$$ BRICC facility (Ballarat Regional Integrated Cancer Centre)
Education - 2 universities
Government & Technology - SRO (State Revenue Office), ESTA (Emergency Services Telecommunications Authority [000]), IBM - hoping to get Vicroads relocated here in future
Manufacturing - Mars, McCain, GEKKO, Alstom (trains)
Tourism - Sovereign Hill, Wildlife Park,
Agriculture
Sports & recreation - new Olympic sized swimming pool
Airport (small) - pilot training & ST Aerospace Academy training international pilots
Retail
Construction/building

Not very comprehensive, but you get the idea.

More info here - http://www.ballarat.vic.gov.au/ed/industries-reports-and-strategies.aspx

Currently below national average unemployment & above national average population growth.

 

It doesn't specify the exact date and month of the interview, only 2015, but these BAs (Empower Wealth) have basically stopped buying in Ballarat....short transcript and full link below..

"The story of Regional Victoria, let’s sort of do around the ground and the real major centres that we’re looking at, Ballarat, Bendigo, Geelong, those axis send us back to the city locations.

It’s no secret that we bought a lot of properties in the Ballarat market in the last sort of 18 months to two years in excess of 50 properties we bought in those particular markets. That was a nice yield play with that sort of growth story coming in behind it. But we’ve enjoyed double digit growth in those areas and now it’s not time. We’ve had the run and that’s what happens in those regional pockets. They run and then they stagnate. So it’s really a timing story, isn’t it?

Bryce: Yeah, it’s a nice story for our clients too to actually say that because it was a bit of a leap of faith when we were suggesting that they go into that Ballarat market and they were buying at the high 100s, early 200s. But for the similar types of properties now, they’re at that mid to high 200s. So it’s nice for them to actually see that they actually did put a bit of faith into that – I guess that location. It served them well. They’re getting good yields but you don’t really want to be – if you’re taking the – if you’re taking advice from the taxi driver about that, you’re a bit too late.

Ben: Yeah, yeah."

http://property-investment.empowerwealth.com.au/2015-part2-property-market-melbourne-regional-vic/

 

It's still a yield play. Essentially you're buying in Ballarat because you have been priced out of quality properties in Melbourne and those properties in Melbourne have poor yields. Ballarat isn't going to compete with houses in the Eastern Suburbs for capital growth.

Ballarat, Bendigo, Geelong on the other hand still offer strong yields with decent price growth potential. I guess the point is that you will not be seeing growth like that which occurred in Melbourne. It would be more steady, long term growth; I would think.

Also, the fundamentals are still strong. Good infrastructure, proximity to Melbourne, diverse industries, lower unemployment and decent population growth.

It all comes down to whether you can find better opportunities elsewhere for your budget and that fit your needs, goals, risk profile and circumstances. If you have a high income and a couple hundred thousand in cash to play with you could definitely find better opportunities elsewhere. However, if you have a $300k budget and you need a decent yield to help hold the property, suit your strategy or suit your risk profile then the regionals still offer opportunities IMO.

 

My first 3 properties were in Ballarat, always been cash flow neutral/positive on current valuations/rent return. I was lucky to have a little capital growth early on that meant I could leverage from one to the next and then into the Melbourne market.

 

Not trying to hype Ballarat or anything, but this can only be a positive - http://www.thecourier.com.au/story/3444660/town-centre-gets-go-ahead/?cs=61