VIC Geelong 2019

Discussion in 'Where to Buy' started by Brendon, 5th Jan, 2019.

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  1. Brendon

    Brendon Well-Known Member

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    What are everybody's predictions for Geelong 2019 and beyond?

    I bought in Whittington early-mid 2017 and have made a nice gain but am considering selling in the next 6-12 months to realise some profits and put the money into other projects.

    I think the area still has a fair bit of potential mid-long term it just comes down to whether or not I can make the money work better elsewhere if prices aren't going any further in the short term
     
  2. Ian87

    Ian87 Well-Known Member

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    I am in the exact same boat, bought in Hamlyn Heights and really hoping for another 6-12 months growth. If it continues on like it did last year I reckon I will sell up and take my cash. But also think I might regret that decision in 10 years, but I can do a lot of stuff I want to with the profit right now rather than delay it any longer.
     
  3. MikeyBallarat

    MikeyBallarat Well-Known Member

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    I don’t think that Geelong’s going to repeat it’s spectacular 2016-18 gains this year, but I don’t expect it to go backwards either.

    I would probably look at re financing rather than selling, myself. Now that the interest only cap has been lifted, it probably makes more sense to me to extract equity (which you would have plenty of thanks to capital gains and that ace reno you did) and either pad out your PPOR offset or invest elsewhere. This way, the grubby ATO won’t get their dirty mitts on your money via a CGT event, you don’t have to worry about selling costs, and you don’t miss out on future Geelong gains.

    You bought yours for $315k, and Domain says it’s worth around $405k right now (I think it could get higher personally, but for the sake of the exercise I’ll use this number). Say you bought at 80% LVR and refinanced at 80% LVR now, that’s going from $252k to $324k, netting you $72k extra to play with. When borrowing $324k at 4.7% interest only for 5yrs over a 30yr loan term (a conservative rate I plucked out of thin air) - that leaves you with $293 per week to pay, easily covered by the $315 you’re receiving in rent. That’s not even taking into account if you leave some of that cash in the Whittington IP offset.

    Sure, you still gotta pay rates and Barwon Water charges (say $1600 per year for rates and $180 per quarter for water) but that’s a hell of a lot less than agent fees (say 2% of $405k = $8100) and CGT.

    Not advice, just opinion. I’m an opinionated guy :D
     
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  4. Brendon

    Brendon Well-Known Member

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    You know my numbers very well! Any chance you want to be my accountant? Haha

    You are correct in a lot of ways however the thing you haven't taken into account is serviceability.
    I'm lucky enough to have enough equity in properties through some quick renos and market growth but I am basically at borrowing capacity. I have enough for my current projects/subdivisions but will then be a little stuck.

    @Ian87 exactly the same boat! I think long term I may regret it but at the same time you don't go broke taking a profit....
    It's a good problem to have and I suppose it just comes down to what you're going to put your profits into...
     
  5. MikeyBallarat

    MikeyBallarat Well-Known Member

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    I’d love to be your accountant mate...please ignore my total lack of qualifications in the field though...:eek:

    You’re right, I didn’t know what your serviceability was like. However I still wouldn’t sell unless I absolutely had to, because of the exit fees and added costs involved regarding buying something else. It’s by no means a dud IP, it’s done well for you growth wise, and shouldn’t be too troublesome to hold. I’m not anticipating any market crash in Geelong either.
     
  6. David Shih

    David Shih Mortgage Broker Business Member

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    I would tend to agree with @G TOWN here @Brendon - all the sales cost, CGT etc is just gonna eat away most of the profit you've made. Given where we are at the moment Geelong is still affordable in comparison with Melbourne prices, not to mention Avalon airport has now officially turned international and employment prospect is looking bright.

    I think Geelong will still be great for a long term hold - steady growth as long as the yield stacks up. Especially for those of us that have entered this market just before it shot up which is why I'm still intending to keep it.

    Having said that though - I would say crunch your numbers and be realistic. If you believe that you can make a much more stellar return by putting your realised profit into a project that'll net you much better return then go for it :)

    Cheers,
    David
     
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  7. Lions4Eva

    Lions4Eva Well-Known Member

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    Holding.

    Great yields, a bright economic future in the region and with good growth still yet to come - I don't see why I shouldn't be holding onto this for the long term. FWIW for those who don't know, I bought in Corio.
     
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  8. Lions4Eva

    Lions4Eva Well-Known Member

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    Anyone intending to sell? I am definitely holding on. Great yields here and still expecting very good growth (Corio).

    Edit: Thread moved
     
    Last edited: 6th Feb, 2019
  9. Dave3214

    Dave3214 Well-Known Member

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  10. schmucky

    schmucky Member

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  11. Ian87

    Ian87 Well-Known Member

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    Think you have missed the boat.
     
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  12. Westie

    Westie Well-Known Member

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    Well and truly.
     
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  13. MikeyBallarat

    MikeyBallarat Well-Known Member

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    Good land size and top location - however the price is high and capital growth has already been factored in.

    The house itself is also utterly tiny - I don’t mind 2 bedders at all, but the second bedroom is barely big enough to fit more than a single bed!

    Perhaps you could get a 3 bedder in postcode 3215 for that asking price. I would prefer that route.
     
  14. qak

    qak Well-Known Member

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    Check out the aerials in the house behind!
     
  15. schmucky

    schmucky Member

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    Thanks for all the comments. I'm just slowly researching and narrowing down pockets I'm keen on. I also feel the price is quite high and will revisit this in the future. The search continues.
     
  16. Paula Ospina

    Paula Ospina Member

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    Hi Brendon

    I Agree with Mikey and David - Over the long term Melbourne still has strong Fundamentals.

    Corelogic released an article that Melbourne has had the highest change in dwelling values over the last 20 years compared to all the other states - and even though this isn't to say that it predicts the future growth of Melb, its interesting to see what the long term trend has been.
    Australian Cities See Substantial Gains Over Past Two Decades'

    Also, as Melb is predicted to overtake Syd as the largest city, and is one of the fastest growing cities in the developed world, and 2nd most liveable city, has the highest international migration, low unemployment, strongest employment over the last year, tightening rental market and low vacancy + other reasons... I personally think it would still be good long term despite any corrections in the short term.

    The fact that Geelong is alot more affordable comparably makes it very attractive for first home buyers + Migrants. Additionally, if the high speed rail does go ahead linking Melb to Geelong it would be another plus :)

    Just some things to consider :)
     

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  17. paulF

    paulF Well-Known Member

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  18. tom72

    tom72 Member

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  19. Nav Saini

    Nav Saini New Member

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    Hi Gurus,

    FIRST POST as I am a newbie....What are your opinions for Geelong specially Corio/Norlane area ? Looking to buy my first I/P. I am after old/solid house on decent size land with the potential of building second dwelling in future. I am searching atm but the good properties are bit out of my range. If Labor wins (which most probably they are gonna win) will it slow down the investment in area due to their N/G Policy ?
     
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  20. tom72

    tom72 Member

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