PROPERTY BOOM: House prices jump almost 40 per cent

Charles Stewart Real Estate's Melissa Smith and Steve Lugg.

Charles Stewart Real Estate’s Melissa Smith and Steve Lugg.

THE Colac district has the “best performing” property market in regional Victoria with median house prices jumping 38 per cent over the past five years.

The Real Estate Institute of Victoria showed Colac Otway Shire’s median house price increased from $260,000 to $358,500 in the five years to September last year.

Colac to Coast sales consultant Stuart Nelson said investors made up a majority of his sales and he believed the price rise came from fairer prices.

“The market seems very strong at present and it is mainly due to the fact Colac’s prices appear to be very fair when compared to Geelong and Warrnambool; where prices for blocks of land are around $100,000 to $150,000 dearer,” Mr Nelson said.

“Sixty per cent of sales are coming from investors who are taking their money out of banking sector, where they were receiving two per cent, and reinvesting into Colac’s property market,” he said.

Mr Nelson said investors were receiving returns of 5.5 to six per cent with the potential of three per cent in capital growth which could mean an eight-and-a-half to nine-per-cent return when adding rent.

Charles Stewart Real Estate’s residential sales manager Melissa Smith said over the past six months a majority of the agent’s buyers had come from outside of the Colac region.

Ms Smith said there were more buyers than houses available and that was contributing to the price increase.

“There’s been so much talk around the highway and infrastructure in the Colac area that this was always going to happen,” she said.

“Real estate works on supply and demand and if there are a lot of buyers and less listings, prices are going to move upwards.”

LJ Hooker Real Estate’s Wayne Mackrell, who predicted a property boom from the duplicated highway four years ago, said a duplicated highway attracted people to a city.

“Every time something happens with the highway, like the overpass being shut down to be widened soon, we’ll get more calls from Melbourne buyers,” Mr Mackrell said.

“We probably make a sale to a Melbourne person about every three weeks, and we certainly show a Melbourne buyer through a property here at least every week,” he said.

“There are a lot of baby boomers who want to move here; they go the Blues and Blueberry Festival or something like that, stay here for a few days, see our community, see the duplication and want to move here.”

HF Richardson Sales Specialist Troy Kincaid said it was a “sellers market” in Colac and he expected interest in Colac real estate would continue to grow.

Mr Kincaid said he believed as work continued on the Princes Highway duplication Colac would continue to grow which would also boost the economy.

“We provide such an array of things in the area, from food, to shops like Bunnings and Aldi,” Mr Kincaid said.

“It’s affordable to buy, our median price is attractive to people outside the area and they can afford to buy in our area,” he said.

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