VIC Shepperton in 2018

I am looking at a regional town for my next IP, looking at Geelong, Ballart and Bendigo are over my budget for +3 bedder at the time. My plan would be to buy and hold whilst give a good yeild.
Any Shepperton locals here that can provide me with some insight to the market and local drivers in the area.

 

Hi Well Known

I remember someone asked this question years ago. My question to you is why Shepparton?

For The last decade, house prices have been very stagnant in Shepparton. In fact I remember it's house price achieved negative growth in 2017. It's population does increase but at a rate significantly lower than the other larger towns of Bendigo and Ballarat. And it's population, at around 65,000 is also smaller than the 2 "B" towns. Comparing Bendigo, Ballarat and Geelong, Shepparton also is the furthest away from Melbourne.

Why buy in a place where there are so many limiting factors?

I do not agree that Ballarat or Bendigo has gone up in house prices such that you can't get a good return. Bendigo from my knowledge, is still very affordable and it's not impossible to find houses that give you a 6% gross return. Plus, it's vacancy rate has been declining so your chances of having it rented out is high.

I frankly can't see any upside of Shepparton in the short term. Buy in Bendigo and Ballarat if you want regional and I don't think you can go too wrong.

 

Houses in the comish area are not that cheap anymore. Could pick one up for 100 to 120 k..nothing under 150k now.

 

Thanks Xiao, I still think I ll struggle to get into Ballarat with my budget, Bendigo is still possible. Checking the growth data it is true that growth has been stagnant for the last few years, I think I was trying to speculate the market a bit. Most houses for sale have been advertised for well more than 12 months, I guess the only good thing is yields are pretty high.

My target is to buy a property in another 3-4 months so I will continue having a look at Bendigo, any good areas in Bendigo that you would recommend?

 

I am glad you mentioned Bendigo. And youre right to say you might be a little late for Ballarat and most probably so for Geelong.

Bendigo has been the "neglected child" for years. But this looks likely to change as it possess all the ingredients for growth in the next 6 to 12 months :

1. Bendigo compared to Ballarat and Geelong is the cheapest regional town to buy into now.

2. Bendigo is the largest regional town in the whole of central Vic. It is very self contained, having almost everything you wish to have in a big city. Its importance and potential will always be there.

3. It is after Geelong and Ballarat, the 3rd largest town closest to Melbourne. If these 2 cities have grown in prices due to The ripple effect of Melbourne's high prices, shouldn't it be Bendigo's turn next?

4. Vacancy rates here have been tightening, a vast improvement from 3 years ago where there's so much surplus rental stocks. There has even been reports of inadequate housing in some areas. This is the perfect ingredient for price increase.

5. Real Estate agents here are reporting increased interests from investors esp those from Melbourne, unseen previously. With more people buying up the properties here, price increase looks unavoidable ...

The lucky thing is that Bendigo is still very affordable now. Its in its initial stage of upward swing. So this is probably the best time to go in.

Regarding areas to buy - if you use high st in Bendigo city as a border, areas South of it are the better areas. This includes surburbs like Quarry Hill, Strathdale, Florahill, Kennington etc. Areas north of the hospital such as Long Gully, California Gully and Eaglehawk are always chided as the "rough ones".

Now, if you're going for returns, buying in these rougher areas might actually give you a better return as strangely, rental properties in these areas are in shorter supply. Plus the rental price difference between the "good " and "bad" areas is actually minimal yet it's significantly cheaper to buy in these "rougher" surburbs.

Its definitely possible to buy a house on a 400 to 600sqm block in the range of low $200,000. If you have a tight budget, buying something like this is a much better bet than buying anything in Shepparton I feel.

 

Thanks Xiao, I ve lived in Melbourne for 15 years and never been to Bendigo, from what you say time might be right for a visit and to check out the market there.

 

Shepparton is going great! (Well a little too great for me!) LOL. I've got 1 IP there, high yielding. Rents are increasing and rental demand is strong. Rents are in the 270-320 mark for a 3bed 1bath. Prices are still quite low in comparison.
I missed out. I put offers in on a property, slightly below asking price and then got asked if I wanted to increase my offer. I gave a above asking price offer and it was trumped by a higher offer 'significantly higher than asking price'. When I asked how much higher, I was told it was a few thousand higher not hundreds :0 WOW! Apparently, lots of houses are going for above asking price in this area.
Properties are yielding around the 6-8%.
I'd be looking in the South Central area, as there is new infrastructure going up. Look at the Greater City of Shepparton website. New Arts Museum is being established here. Great for those looking to have a 'lifestyle' location. Otherwise, look for properties that are close to the walking tracks that the council have put in, because they are a great draw card. But then maybe I shouldn't sing its praises... leave a few for me! LOL. yeah.. Bendigo, Ballarat, Gelong might be good options but I have no first hand experience of them.

 

how about Seymour?
45min-an hour out from nothern suburbs of victoria.. an hour to shepp, an hour to bendigo

 

What are the growth drivers in Seymour? to me there is not much happening around Seymour currently.
Even if Melbourne's urban sprawl continues along the Hume it is still a few decades away from hitting Seymour.

 

Not much different from shepparton, really. Granted it's a large town, what are the growth drivers in shepp that drive you to invest there? Seymour is that little bit closer to melb with regular train services. Major employment with the army, flight school at mangalore, health, aged care. Lots of agricultural, wineyards, equine related fields. Speaking to real estate agents locally, there seems to be a fair bit of interests from buyers from Melbourne. Rental properties are in high demand. But you need to do the due diligence yourself. Just throwing an option out there.. maybe a drive up the hume and goulburn highway is in order!

 

What areas of shepp would you be interested in?

A lot of rough areas around there and the ice epidemic is getting worse there

 

still have not decided on an area, was thinking more closer to the hospital and train station, which areas would you recommend avoiding?

 

Is Shepparton still a bad area to invest in 2021? Few areas of interest with good rent and growth potential are ;
1. Shepparton North : High demand market, House median price - 465k, Median rent - 400/wk
2. Kialla - Avg demand market, House med price - 487k, Medium rent - 410/wk
3. Moroopna - Avg demand, med price - 257k, med rent - 300/wk,
4. Tatura - Avg demand, med price - 322k, med rent - 290/wk

I know new land in an estate is frowned up by many here. But for the peace of mind (new investor), I have been given choices of Kialla Lakes, ParkView Estate (Moroopna), Windsor Park Estate (Shepparton). Still havent decided.

 

who gave you those choices?

for peace of mind i would be buying an old house for low 200s

 

I went to Kialla Lakes which is the premium side of Shepparton.
There arent any old house in Kialla for under 300k. All the houses being advertised in Kialla in RE website for a 4 bed house are $360k upwards. The median for 4 bedder is 488k as mentioned in RP Data. The avg weekly rent for any 4 bed house in Kialla is 410/wk upwards. If its a new house, the tenants are happy to pay 450 plus. The area is positively geared for most properties.
I recently put an option on a block of land in Kialla Lakes for 150k for 800sqm land. My cousin is a small custom builder, can get a 25sq house with good inclusions for 250k, so all up about 400-410k project cost and will still be within median price and positively geared. The extra rent can be put towards offset or can pay off the loan quicker than 25 years. The other areas/suburbs in Shepparton may not be as good, but Kialla def has better prospects...

 

your getting too caught up in location ,
if shepparton sees good growth i guarantee the whole town will see very similar growth percentages
price premiums on individual suburbs have been built in for years

theres way more examples of cheap suburbs closing the gap than expensive ones expanding it, in australia that is