Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Sunday, 19 March 2017

Geelong tees off

Thar she blows...

As someone allegedly knows something about property, I have to confess I didn't participate in Melbourne's property market through its recent stellar run, having been focused on Sydney, and more lately Brisbane. 

At least I won't miss out on Geelong, though.

Geelong had always looked to be a likely contender for the ripple effect from Melbourne, being located less than 50 miles from the capital, and being a generally good city in its own right.

And then the Labor government more or less nailed it on by announcing a series of measures to stimulate the market.

I broke a golden rule of thumb when discussing possible price impacts here when I estimated that median house prices in the city could feasibly rise by 20 to 30 per cent by 2020 (never use numbers; they always go for the numbers...).

Somehow, that became a median price of $600,000 (refer here for my actual view: "it's not hard to envision prices in Geelong moving 20 to 30 per cent higher by June 2020, particularly in the sub-$600,000 bracket").

Anyhoo, the point was that prices could rise as a result of the stimulatory measures, not least because the new legislation doesn't take full effect for months, affording opportunists a free kick at buying before 1 July. 

And it looks like prices are teeing off already.

Last weekend the auction clearance rate in Geelong moved above 90 per cent, the highest regional or non-capital city clearance rate in the country.

And there are now regular stories of street records being smoked.

This weekend a house that last sold for $310,000 in 2009 sold for an astonishing $836,000 at auction. 

It looks like a rocket has been put under house prices in Geelong West.   

All the hallmarks of a nascent boom.