How are the regionals doing?

To give you perspective on how some regionals have out performed Sydney and Melbourne:

1. Geelong (Bellarine) - land bought in 2017 for 155k 480sqm block.... 5 brm house built for 240k turnkey...so total was 395k. I thought value was 850k...house just sold in my street for 1.04m. House similar size but a 4x2x2 and a bit nicer land 525sqm but small backyard compared to mine. That would put mine north of 900k conservatively. That is 225% gain in 4 years. Under rented at $420pw...as they are good tenants and have been raising slowly. Next time will be $450pw. True potential $480pw.

2. South Gippsland near water - land bought for 160k early in Dec 2020. Land will title next month. Plan to put a 4x2x2. Build turnkey 220k. So 380k total. Similar houses on completion valued at $700k and rent about $480pw.

 

Not really - both have vacancy rates close to zero.

Vacancy Rate Stawell

Vacancy Rate Kerang

 

cause theres no listings, thats how you get a 0 vacancy rate! 1 listing and 4 listings.....

id be investing in stawell than kerang tbh if i had the choice

 

LOL - that further supports the argument don't ya think?!

 

Thanks, will keep this in mind!

 

nope - heres how i look at it and id assume it be different to you,

The town: example say kerang - population 3380
whats in the town? - major infrastructure? services? hospitals? schools? what will drive people to live there?
how many listings have they had? i worked out at kerang just before corona hit last year and was working on a cannabis crop farm for govt. now much out there....now from memory the govt where giving away free blocks of land to people so they could get people to move out there but the kicker was you had to moveout there for 2 years else it was a no deal. and this is all researchable info you can find yourself.

lets also look at say example other driving numbers....you said vacancy rates etc, cool had a squizz at that. very low. what about weekly rents?



look at the numbers.....it says 3 br house are down 25% over a 12mth period down 18% and over a 10 year period it says the median has only gone up $70.

compare that to stawell over a 10 yr period was 150 and now at 300pw.

from a number POV id be going for stawell. the numbers always tell a story behind it and whats driving it...

thats how i see things....a bit out of the box but seems pretty straightforward...

 

DYOR. Dont dismiss Kerang on past data, if you do that for any investment you may miss the best seat on the boat or end up in a canoe. Good houses are hard to find any-where at a good price. Buy where ever you can get a suitable house put your offers in weighted to the way you lean and the return you expect. Investing in housing is about the finance. Kerang does have manufacturing It has Dunstan Engineers, Strommens Faucett make their tapware there , another place makes shower screens etc. It is one of the best places for sunshine , has expanding solar energy and and one of the largest energy storage capacity (Batteries), meaning cheap energy, it also has cheap land making it an appealing location for industry. I would expect Kerang to do very well and perhaps be at inflection point. I would invest there myself if I had a 15 year time frame. Lake Boga may be a better option but it will be difficult to buy there now , as it is closer to SwanHill , SeaLake has zero houses now, like Ouyen, market can turn quickly. it was worse than Kerang . Swan Hill market is too hot and poor availability) The Goschen project which is a rich Rare Earths mine and processing plant for materials to make products that produce and use renewable energy, using the energy from the solar farms being built at Kerang, I would go to the LakeBoga, Ultima, Mystic Park and perhaps Kerang Pubs early in the day and have a yarn to the publicans or customers and see what I could find out about the mines, and/or contact VHM perhaps talk with the recruitment officer about requirements for accommodation and perhaps sus out becoming a supplier for them . To get reliable information and the timeline from the horse mouth you want you may need to buy some shares. And of course talk RE Agents but you know what they would probably say. Even if the mine turns out a flop an investment in the area could still be ok.

 

Should of seen the rental returns two years ago....
Stawell - 150k house, 300-350 per week
Kerang has a heap of awesome builds and some of these period homes were selling for circa 100k 3 years ago - madness in hindsight
Rents were always far lower in Kerang though, yet similar vacancy - in small regionals local agents can impact pricing mechanisms, particularly rent

 

Thanks for information and advice, much appreciated.

 

absolutely, these towns are high rental returns compared to their property value

 

Hi

Just looked at the stage 12 Mitchell Grove Estate- The Nelson Release, Moe, any insights or have you heard anything about it, land is titling in June 2022, how about buying a block of land, building a 4 bedroom house and selling?? never done this before. Trying to weigh pros and cons.

Thanks

 

Hi Nisha,
I was actually just driving around the Mitchell Grove Estate just last week! It's certainly one of the nicest estates in Moe. It is close to the town centre and presents very nicely when driving in and around the street. From what I understand, the other previous stages (land) have sold relatively quickly and sold out completely. I cannot comment on buying, building and selling, unfortunately, however I do know that Moe is growing well with Tree-changers moving out of Melb. To compliment this on the commercial and industrial side, the Industrial estate at Della Torre road has started construction and the land just sold at 19-27 Bubb Street will be redeveloped into new modern tilt panel warehouses.

Here are some photos I took whilst driving around the Mitchell Grove Estate:

 

Hi

Thank you kindly for sharing this info, impressed with pics.

 

Impressive. Are you able to show build quality of a 5 bedroom turn key at $240k? Are you building yourself?

 

No that was via a mid sized builder. Price locked in 2018 when land was off the plan. Build started in 2019 and completed 2020.

 

This recent article popped up and I thought about this thread.
Regional Victorian house prices fall for first time since 2019.

What are people seeing in their Vic regions? Is it actually dropping? Can you see it picking up in the next 6-12 months?

 

What I see is a dearth of quality, prices arent falling but quality is.

 

It seems they (most of) are dropping based on the median house prices shown on onthehouse.com.au.

But very interesting that Shepparton house prices are not falling when Ballarat, Bendigo and Mildura for instance are all falling. What could be the reason?

https://www.onthehouse.com.au/suburb/vic/ballarat-central-3350

https://www.onthehouse.com.au/suburb/vic/mildura-3500

https://www.onthehouse.com.au/suburb/vic/shepparton-3630

 

For the new land estate market (vacant land, and H&L) in the regions, the areas i have looked at and have sites in (im a vic regional land developer), haven't seen to much movement in price, but sales volume has reduced since the interest rate rises. The rises in interest rates seem to have spooked potential buyers in the first home buyer market, who seem to be more affected by the rate rises. The richer second and third home buyers with more money/equity are less affected and seem to be still buying for more premium lots/H&L. By luck, none of our housing estates are in the sales process at the moment, but the above are based on observations and discussions with other regional land developers selling at the moment.

Stawell was discussed earlier and we had a large site in that area so thought I'd add some comments. Stawell has a couple of larger employers, including an abattoir which sold semi recently and is expanding. Their employees have found it very hard to find rentals and a fair few have had to rent in abutting towns. I believe the abattoir bought an old hotel and turned it into accommodation for their staff as well. Due to the lack of supply there are some developments occurring in the southern part of stawell, a big builder has a 100+ lotter and should be starting to sell H&L soon. There is another slightly smaller affordable housing development next to the 100 lotter which is a partnership between council and a developer to help ease the rental crises. Council are also considering opening up more land for development, if they do it will be huge number of lots and probably way too much land supply, as in the long term stawell is considered a dying town, or at least it was before covid. A demographics report on stawell prepared for council showed the long term population decreasing and aging, with the demand in housing required shifting to housing better suited for older residents. But with covid changing peoples perspectives of regionals like stawell, and increased work opportunities and housing in stawell, hopefully younger people will be drawn there and the demographics will change.

 

Why do you think that is?