House prices: Coast up, city down

MICHELLE HERBISON
SURF Coast house prices swelled 25 per cent but Geelong’s remained “relatively stable” in 2011, according to Real Estate Institute of Victoria.
The institute’s data showed Surf Coast Shire’s median house price was $677,500 in December, up from $540,500 a year before.
REIV Geelong chairperson Gina Tobolov said improved transport connections to Melbourne had increased interest in the Surf Coast.
“The lifestyle on offer has proved very popular. Compared to Geelong, the Surf Coast is a more constrained supply so prices can be higher.”
The REIV figures showed Geelong’s median house price was down 1.6 per cent from $386,500 at the end of 2010 to $380,500 in December.
Ms Tobolov said Geelong had outperformed Melbourne.
“This just underscored the area’s popularity. Buyers can get better value here than they can in many parts of Melbourne.”
Ms Tobolov said last year’s reduced confidence in the economy made buyers hold back.
“This last year has seen sales take longer, which means that as real estate agents we have to work harder for our clients. Unlike a few years ago, there’s not an undersupply of homes putting pressure on prices.”
Richard Jenkins, of property valuer Opteon, said Geelong’s affordability insulated it from volatility.
“The broader market in Geelong is unlikely to fall substantially. This coming year will be a year of consolidation as confidence builds and I think it will build.”
Mr Jenkins said Geelong was now a buyers’ market.
“Sellers will have to accept it will take a bit of time for people to invest at the moment. But if they’re reasonable about price expectations then people are prepared to pay what its worth.”
Mr Jenkins thought the market needed a half a per cent in interest rate cuts and increased consumer confidence.
“People will realise the fundamental economics in Australia are still fairly strong. There’s a lot of sentiment adversely affected by the European markets but soon Australians will feel our own country and region is still doing quite well.”