Top 5 suburbs for the Geelong investment property market

Last year, we reported that Geelong's investment property market growth remained resilient in the face of a slowdown in Australia's real estate boom. Fortunately for investors, growth continues to go from strength to strength in Geelong, making the city one of the country's top performers for rising house prices.

CoreLogic data from June 2018 showed the median price of Geelong property climbed 10.2 per cent over the last year, beating all Australian capital cities except Hobart (including Melbourne). Rental yields rose 2.8 per cent annually, according to realestate.com.au, with Geelong suburbs benefiting from high demand for affordable properties outside Melbourne.

But which suburbs are enjoying the highest growth? The answer to this question depends on a real estate investor's short- and long-term investment objectives. However, we've examined the latest research to bring you a list of Geelong suburbs, in no particular order, where house prices and rental yields appear to be on the rise.

1. North Geelong

Investors may be surprised to hear that North Geelong is a rental property hot spot, but the suburb saw capital growth jump a staggering 23.6 per cent in 2017. CoreLogic figures, published by News Limited, show the median price of a house was $418,000 at the end of last year.

The new Geelong Golf Club housing estate has contributed to the gains, offering investors more high-end properties. Nevertheless, even older homes in the area are becoming popular, as people begin to realise the suburb's potential.

"North Geelong used to be more of a working class suburb, but that is definitely changing because of the affordability aspect," Nathan Ashton of Gartland Property told News Limited.

"People are seeing really good value in buying and investing and in developing and renovating."

2. Barwon Heads

The coastal township has proven to be Geelong's most successful suburb for growth over the long term. House prices have climbed 812.6 per cent over the last 25 years, according to a new report from home loan firm Aussie.

Well known for its tourism, Barwon Heads has experienced a large influx of affluent Melbourne families over the decades, with Aussie finding that median prices had surged to $940,000 in 2018.

Capital growth has slowed in recent years, and the town failed to reach the top 25 of CoreLogic's highest-growth suburbs in Geelong over the last year. Whether this is a short-term slump or a sustained trend is yet to be seen, but coastal properties often hold their value and Barwon Heads remains one of the most expensive locations to purchase a Geelong home.

3. Manifold Heights

Manifold Heights is one of the best all-round performers in the list, having kept a steady rate of capital growth over the last 25 years.

The Aussie report found house prices had climbed from $99,750 in 1993 to $720,000 by 2018 – an average of 8.1 per cent a year over the last two-and-a-half decades.

What makes this residential suburb particularly interesting is that it doesn't appear to have suffered much growth volatility during this time. CoreLogic figures show Manifold Heights was the highest-growth suburb over the last 10 years, as well as experiencing 17.3 per cent capital growth in 2017 alone.

4. Geelong

Whether you know it as Geelong CBD, Central Geelong or simply 'town', Geelong is the city centre's official suburb name – and the area remains popular among rental property investors.

Geelong is Victoria's largest city, Melbourne notwithstanding, and it acts as the cultural and business hub for the state's regional areas. Tourists are also drawn to the vibrant Geelong Waterfront, which offers restaurants, cafes, public art, landscaped gardens and much more.

But what about Geelong house prices? Aussie's report showed values have risen 8.5 per cent on average over the last 25 years, while CoreLogic data revealed capital growth of 20 per cent in the 12 months to December 2017. The median price of a property in Geelong stood at $735,000 earlier this year, Aussie figures confirmed.

5. Geelong West

Geelong West is a key commercial and residential suburb that has seen considerable growth over the last 10 years. Realestatate.com.au shows rental yields are currently 2.9 per cent and landlords can expect to charge tenants approximately $370 per week, on average, if they own properties in the suburb. Year-on-year growth has also remained strong at 9.4 per cent.

Furthermore, Geelong West's strong property market isn't just a flash in the pan. Aussie's statistics rank the area as the second-highest performing suburb over the last 25 years, behind only Barwon Heads. The median price of a house is also $65,000 lower than in Geelong, potentially making the suburb a more cost-effective option for investors.

Finding the right Geelong rental property tax experts

There are many elements you need to succeed in Geelong's property market, and understanding the relevant tax implications is crucial to maximising the profitability of your investments.

Our accountants can provide a comprehensive suite of rental property services tailored to your specific investment needs. Please book an appointment with WMC Accounting today to find out how we can help.