Revealed: Geelong’s incredible home value surge

Geelong home values have increased more than 16 per cent in the past financial year, new data shows.

CoreLogic’s monthly Home Value Index shows Geelong’s median dwelling value rose 2.6 per cent in June to a new high of $706,000.

In the past three months, both the median house and unit values have lifted 6.5 per cent, reaching $741,000 and $530,800 respectively.

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The rise in the value of property in the region has occurred against a backdrop of increasing internal migration to Geelong, particularly out of Melbourne.

Greater Geelong has the third-highest share of capital to regional migration, with 10 per cent annual growth in the number of people relocating to the region.

CoreLogic head of research for Australia Eliza Owen said affordability constraints were starting to slow momentum in the growth of home values.

Ms Owen said Geelong had the fourth-best rate of growth in regional Victoria, behind Warrnambool and South West Victoria, Latrobe-Gippsland and the Hume region north of Melbourne.

““The uplift across the Geelong region was 16.1 per cent,” she said.

“Geelong’s growth rate is still very high. It is worth noting there is a little steam coming out of the market.

“In the June quarter we saw an uplift of 6.5 per cent. That’s down from 7.8 per cent, which was a peak quarterly growth rate in the three months to April.

“Ultimately we are going to hit affordability constraints when we have strong house price increases. And that is taking a bit of momentum out.”

Ms Owen said the volume of advertised housing stock remained low against a backdrop of a high rate of sales in the past year, exacerbating competition for properties.

Buxton agent Jarrod Leonard said buyer demand remained high in Geelong, although vendors expectations was starting to outpace the market in some cases.

“Geelong is still super-affordable when compared to Melbourne and that’s where our market will continue to power on,” he said.

“Once the Melbourne market begins to cool off, you do lose some buyers back to Melbourne. But what happens is the local buyers pick up the slack.

“The heat still feels like it’s pretty solid. Inquiry is super strong, maybe it’s not the many-multiple bidders we were having at auctions but it feels like it’s still a competitive environment.”

Mr Leonard said government loan guarantee schemes for first-home buyers had been extended to $700,000 in Geelong.

Under the scheme, limited to 10,000 applicants annually, the government will guarantee the first 20 per cent of an eligible buyer’s home loan, leaving buyers to save just 5 per cent of a property’s value as a deposit.

“It makes a different where it’s now is up to $700,000,” he said.

“All of a sudden that opens a whole new level of people where people can purchase.”