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Why Melbourne makes more sense than Perth
Why Melbourne makes more sense than Perth

Most property investors are herd animals, diving into markets when they read that prices have risen 15% or 20% in the past year – or 50% in the past three years. Buying in such a market means you are likely buying at – or after – the peak of the market.

The smart money would have been there 2-3 years ago – and is now focused on places that are early in the growth cycle.

That’s why Melbourne makes more sense than Perth for property investors seeking to buy strategically for capital growth.

The Melbourne market, in simple terms, is situated where Perth was three years ago, before prices started to rise and rise.

To find out more about why Melbourne and Regional Victoria should be strongly considered by property investors, join leading national buyers’ agent Kate Hill of Adviseable in this webinar recording hosted by Hotspotting founder Terry Ryder.

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If you’d like entirely independent and unbiased advice that’s right for your unique situation and goals, then get in touch with us today.

Note; Transcript has been generated by AI.

00:07
Terry Ryder
Hello, everyone, I’m Terry Ryder, founder of Hotspotting, and welcome today’s webinar, in which I’m speaking
to leading buyers agent Kate Hills on the intriguing and perhaps controversial topic. While Melbourne makes
more sense than Perth right now for investors, now that topic is contentious because it runs counter to the media
portrayal of the markets in those two major cities and also to the behaviour of many property investors, many of
whom are piling into the Perth market frenzy because of media reports of an ongoing boom and perhaps
showing less interest in Melbourne and Victoria because of perception that there’s no growth on offer there. But
today we’ll be arguing that Melbourne does indeed make sense if you understand about market dynamics and
cycles and the issues of when you should get into specific markets and when you should stay away from.
00:56
Terry Ryder
So, to explore this topic, my special guest today is Kate Hill of the National Buyers Agency Adviseable, who
has considerable experience and knowledge of both markets and indeed of markets right across Australia. So,
Kate Hill of Adviseable, welcome.
01:11
Kate Hill
Oh, thrilled to be with you and everyone out there, Terry.
01:16
Terry Ryder
Yeah, so it’s a great topic. I mean, I’ve been really pleasantly surprised at the engagement from our audience this
topic. We actually got more numbers for the webinar today than we have at any time in the past twelve months
for a webinar. So maybe it’s the attraction of you as one of our regular presenters.
01:36
Kate Hill
I don’t think I can take credit for that. I think it’s more the fact that everyone must be so frustrated with actually
trying to buy a property in Perth right now and they’re looking for alternatives. That’s what I’m putting my
money on anyway.
01:51
Terry Ryder
Well, that’s right. But I mean, it does speak to the wisdom of how you go about property investment and when
you get into markets, because I can recall that three years ago when we started including Perth locations in some
of our national hotspots reports, people, why would you recommend this? I’ve had no growth for ten years. No
one wants to buy there. But now, of course, everyone wants to buy there after it’s had three years of growth.
02:18
Kate Hill
Yeah, yeah, well, I think now. Yeah, exactly. So now we’re going to be making the case for Victoria being
exactly that location Perth was, let’s say, two or three years ago. Yep. Without peeking too soon. Let’s go through
the slides.
02:35
Terry Ryder
All right then. Well, yeah, I’ll hand the rounds over to you and you’ve got some graphics to share with us.
02:44
Kate Hill
And I do.
02:47
Terry Ryder
We’ll have a bit of a discussion about some of these key points as we go through. And of course, we will have
time in the latter part of the hour for people to give us their questions, which you can transmit to us by writing
into the Q and a panel, which you should see in front of you.
03:02
Kate Hill
Yes. So can I just check, Terry, you can see this.
03:07
Terry Ryder
Yes, I can see.
03:11
Kate Hill
Great. We do encourage the question asking. It tends to form mostly, what do you think of this area? What do
you think of that area? So it would be nice if we had, obviously, some of those I know will come, but if we had
others around the Victoria markets or if people have more concerns and questions specifically around Victoria,
that would be great. So I’ll just get straight on with this. I have to put this disclaimer in. We all do. I’m sure
you’re all familiar with this, that all the things that I’m talking about areas, any strategies, cash flows that I’m
showing, these are, it’s all very general. Right. It’s very generic stuff. And you always have to make sure that
what we talk about is suitable for your specific circumstances. Who are we? As Terry said, we are national
buyers agents.
04:10
Kate Hill
We are independent, qualified property investment advisors. That’s a QPIA buyer’s agents. All of our advisors
are qpias. I think that’s quite unusual, but we pride ourselves on that. We care about finding the right investments
for you. We operate in multiple states. We’re national. We do not pigeonhole you. We look at your situation,
think about where might be right for you to invest with your budget, your cash flow needs, et cetera. And we’ve
been doing this for a very long time. We love what we do, as I’m sure you all know, and we are members of the
property investment professionals of Australia and the Real Estate Buyers Agents association. So obviously,
while we can’t guarantee many things, there are some things that we can guarantee.
04:59
Kate Hill
And as terry already alluded to in our introduction, the press will continue really to print a lot of stuff, much of it
nonsense, and economists will continue to make forecasts, predictions, wrong, incorrect, et cetera. You have to
always remember why they do this. They just want your attention. They’re not giving you investment advice.
They need to continuously be relevant. So it’s rare that they’re going to talk about things that are going to
happen. They love to talk about things that are happening, and that is going to be what we are going to talk more
about today. So governments will come and go. Theyre going to continue to make crazy policies, reactive
policies. Being in government is a business. Remember that they very rarely tend to try and solve actual
problems.
05:57
Kate Hill
Interest rates are going to continue to go up and down and world shattering events will continue to happen. But
properties bought in strategic locations with all those really great long term growth drivers that we talk about
with high demand and low supply, they will grow in value. I like to summarize that the key to success in
property investment lies in ignoring that noise that we are talking about out there. I can’t stress how important
that is. You need to have a plan. You need professional help. You need to find the right location, the right
property in that location. And you need to find the location and the property to suit you and your circumstances.
So those things are really important.
06:47
Kate Hill
So just going back to that location thing, as Terry said, and as we’ve both said in the introduction, really the
smart money buys in locations before prices start to take off. And not buying in overheated markets like Perth. I
mean its been fascinating watching whats been happening over there in the last couple of years. But if you want
to make real money in property investment, you need to target locations that have the credentials for that long
term growth but are currently at that lower point in the cycle, not at the peak of a cycle or approaching a peak.
So I don’t, obviously, I don’t want to offend anyone out there, but we have to acknowledge that so many property
investors out there, especially novices, they’re herd animals.
07:44
Kate Hill
A lot of us like to have that social validation that we, you know, a lot of that we get in the press that tells you
that really just confirms kind of what you want to hear. I know it’s really hard to trailblaze and buy in areas that
not a lot of other people are talking about. It makes people nervous. I understand that. But if you don’t do that, it
means that you are buying in areas that are, like I said, featuring really heavily in the press and the media. And
that, as we all know, has been Perth. If you buy there now, you are buying in a market where prices have already
risen 15% to 20% in the past year alone and probably even up to 50% in the past three years.
08:33
Kate Hill
So like I say, buying in a market like that means you are buying at or after a peak. Youve missed most of that
growth thats happened there now. And I have to stress, im not saying that Perth markets wont continue to
experience growth in value, but you are not buying in optimal conditions. And in a market that is past or
approaching its peak, you should have been buying there three years ago. And right now, one of those locations
that meets the criteria that we like is Victoria. Before we do go and look at Victoria, I do want to, just very slight
aside, let’s take a moment to take in this piece of information. South Australia, Terry, never talked about in the
press, ever, as an investment location.
09:30
Terry Ryder
No. And certainly it would surprise a lot of people to learn that South Australia is actually the nation’s top
ranked economy. We always follow this report by COmSEC, the state, which they publish quarterly, and they
rank the eight state and Terrytories in terms of their economic outlook based on a series of metrics, because we
think there’s a strong correlation between the strength of an economy and the performance of the capital city
property market and also the regional market. So the fact that South Australia is the best performing economy
can help to explain why Adelaide has been such a good performer as a property market for the last few years
and continues to do well.
10:11
Kate Hill
Yeah, and it’s ranked top for the first time in this report’s history. That’s the other thing. And not only in
economy, it ranks first in a number of those metrics, economic growth, relative unemployment, construction
work, dwelling starts. So there’s a number of factors that make it top in Comsec’s report, and that is really
important.
10:40
Terry Ryder
Victoria also ranks very highly as well.
10:43
Kate Hill
It does. So I’m going on to that. So you can see the big number one is South Australia, but equal to are New
South Wales and Victoria. Now back, before we go into more about Victoria, I do really want to urge everyone
to go and get these reports if you are interested, obviously, apart from this fabulous webinar. But if you want to
know more about why some of these markets in Melbourne and Victoria as a whole are so compelling, you have
to get these reports. I know I’m biased and I’m talking to Terry, but genuinely, I can’t tell you how important and
awesome the information in these reports is. They are second to none out there. Do yourselves a favor, just do
this bit of research. Read about what you’re missing.
11:35
Kate Hill
They go into a lot more detail than we have time to go through today. But really, just, again, Terry, I think what
you guys do is incredible, really, just in terms of independent, valuable information out there. So, Victoria, it
does have one of Australia’s strongest state economies and very consistently so, even though we’ve just talked
about South Australia being the top right now in the most recent report just in October, in that quarter’s state of
the state reports it had the strongest of the state economies. It ranked top in that report. There are also. Sorry, go
on.
12:21
Terry Ryder
You mean Victoria in this case?
12:22
Kate Hill
I do. I do. Victoria. Victoria. There are forecasts that say that gross state product in 23 and 24 in Victoria will be
around 2.5%. Again, these are forecasts, of course, but that will outpace all other states and Terrytories.
Victorian economic growth is set to lead all the states over the next five years, say, to 27, 28, at an average
annual rate of 2.3%. Those are, again, very compelling figures. And like Terry said earlier on, that economic
growth is a really important metric to look at.
13:06
Terry Ryder
Just emphasize that on the flip side of that, the bottom ranked economies at the moment, according to the
Comset reporter, Northern Terrytory in Tasmania. And it’s not a coincidence that the two capital city markets
that haven’t shown any growth recently and currently aren’t showing growth are Hobart and Darwin. They have
in the past when their economies were stronger, but right now they’re not performing. There is that very strong
correlation. So the information that you’re giving us now about the underlying economy for Melbourne and
Victoria is really important stuff.
13:40
Kate Hill
Yes, agreed. Thank you. But it is. It’s one of the top things that we look at, you know, in all of our. When we
look at those fundamental growth drivers, it’s economic growth. It’s obviously. It’s right up there. So moving on,
another metric, population growth in Victoria is among the highest in the country, obviously enhanced by
overseas migrants, students, etcetera. It was probably two years ago the Victoria’s population actually declined
quite considerably by more than 50,000 people, especially during COVID-19 and now it is the second fastest
growing state. The city of Melbourne is the fastest growing LGA in the country in terms of population growth at
10.6%. Melton, which has now been the redrawing of boundaries and stuff, is kind of considered part of metro
Melbourne. It’s on those far western outskirts of Melbourne, is the next fastest at 6.6.
14:48
Kate Hill
And then of course, you’ve got some other more inner city areas. Yarra, Port Phillip is in there as well. So again,
interesting, you know that we’ve got some top spots. Perth is in there as well. Of course. A couple of WA
precincts I actually took out in this chart, there’s. When you look at the. This is from the Abs, there’s a couple of
tiny sort of smaller jurisdictions with like a couple of hundred people in there. One of them, I think, was
peppermint Grove, randomly in Perth. But so in terms of percentages, it was up there. But I’ve kept in,
obviously, those more major population centres as representative, really, of what’s going on in the grand scheme
of things.
15:32
Kate Hill
Look, I will say that I think that certainly inner Melbourne, we’re probably coming off quite a lower base here
because it was so badly affected immediately and post COVID. So we are, I think, coming back, really, it’s more
of a return to normal. But nevertheless, I think those stats are compelling. And the latest ABS population data
shows that greater Melbourne grew 3% last year, which is well above the national average. And on the national
list of lgas with the largest population growth, four of the top ten were Melbourne locations. And I think, Terry,
were talking earlier on. You’ve got some more. You saw some recent stats on that too.
16:17
Terry Ryder
Yeah. So this is again another analysis of this latest population data that’s come out from the Australian Bureau
of Statistics. And this analysis breaks it down into suburbs. And what it found is, of the top twelve suburbs for
population growth last year, nine of the twelve were in the greater Melbourne area and of the top 3016 of them
were in the greater Melbourne area. So more than half the suburbs in the top 30 in Australia for population
growth last year are in. In the greater Melbourne area. So a big resurgence there for Melbourne. We’ve talked
about how strong their economy is, underpinning that and enhancing that is this big surge in population. And of
course, overseas migrants are part of that, but they’re not the only part of that.
17:04
Kate Hill
They’re not. Not, absolutely. So we’re just beginning to paint the picture of what is happening there because this
is. It’s happening now. When you look at. I mean, this is again, the top chart there is the Melbourne metro area in
terms of median sale price growth, and the bottom one are regional combined growth. Obviously, I’m not a
believer that all regional markets perform the same. The whole of Melbourne doesn’t perform the same. But just
to give us an idea of what is happening, as you can see over the last couple of years, not very much. And that is
why those earlier slides, when we talk about economic growth, we talk about population growth that’s
happening and that is coming.
17:55
Kate Hill
This is why, partly why it’s exciting, because you are coming in at a much better time, that cycle that were
talking about earlier on than you are in Perth. And I’ve got some more charts that will showcase that a bit later
on. So Melbourne hasn’t had the price growth of some of our other cities in the past year, but we are seeing a big
uplift in buyer activity recently, which is often, as Terry very eloquently puts in his reports, a precursor to
elevated pricing. So many locations have recorded really strong uplift in sales volumes in recent months. We do
still, like everywhere in the country, we’re still seeing a sort of slightly depressed listings numbers. We’re not
back to where were yet in terms of people listing their properties for sale.
18:52
Kate Hill
And the other thing that is interesting in this uplift in buyer demand is that a lot of it is coming from owner
occupiers, which again, is interesting when you’re thinking about who those purchases are, it’s important to
know that it isn’t mainly investor activity, which can sometimes skew figures a little bit. So, to me, so far, all of
this supports forecasts that Victoria is poised for a period of notable growth in residential property prices.
Moving on, next metric of demand and supply. So a month or so ago, the ABS reported that Australia’s dwelling
approvals as a whole, we declined to only 162,000, which is tracking around 78,000 below the albanese
government’s target to build that 1.2 million homes over five years. Which means they actually need to be
building 240,000 homes a year to get to that. Obviously.
19:59
Kate Hill
The press called it a collapse in approvals. It was led by Victoria, where only 51,000 homes were approved for
construction in 2023. And that was the lowest annual approval figure for Victoria in a decade. And this level of
approvals is also way below the actual, specifically victorian government’s target to build 800,000 homes over a
decade. So, which obviously requires 80,000 homes annually. So you can see that the supply, and this is our
dwelling, Victoria, this chart on the left here, the dwelling approvals in Victoria, you can see the decline. Supply
is very low. You can see in almost every jurisdiction in Victoria how low building approvals were. When you
look at charts for building approvals, especially, and Terry’s, again, those reports that hotspotting do show you
the level of building approvals.
20:57
Kate Hill
You can see how low those approvals were compared with others in recent years. But the demand is high and
only increasing because again, like we’ve just said, we’re talking about population growth, which exceeds
national average. It’s growing at an unprecedented rate, with the state growing by 182,000 people in 2023 alone.
So Victoria is facing a worsening housing shortage, with population growth destined to way outrun dwelling
construction. I do like to put these two charts kind of next to each other. The decline in dwelling approvals and
the population growth on top of that. Now added to that, another ABS chart is the one for new loan
commitments for investor housing in Victoria compared with the other states. I’m hoping everyone see my little
blue arrow there. It’s meant to point to the little decline there. The black line there is Victoria.
22:09
Kate Hill
The other states are mostly all, at least even or going up. Victoria is going down. So the supply of rental
properties, that is properties bought by investors, has declined. It is still declining. So what that means is that
vacancy rates are very low. That’s our bottom chart. There are no rental properties. It puts further upward
pressure on rents and yields, which is our top chart. Now I don’t see this changing anytime soon. I think, in fact
it’s just going to get worse as demand increases and the supply of rental properties decreases. So again, not only
have you got a much more favorable buying conditions here because you’ve got less competition from other
buyers and other investors, you’ve got all this capital growth to come and a demand for very few properties,
rising rents because of a critical rental shortage among this hugely growing population.
23:21
Kate Hill
To me all these indicators point towards it being such a great time to buy in Victoria. Terry, I think, yeah, I mean
there.
23:34
Terry Ryder
Is a growing volume, isn’t there, of indicators that point and the time and the cycle. But one of the ones that
really impresses me, you mentioned it, that we place a lot of faith in the trends with sales volumes as a
precursor. What will happen? Prices and prop track published recently. A comparison of the first three months of
this year. The first three months of last year it did show that nationally there’s been a big uplift in sales activity.
So it does bode well for property markets generally. In 2024, national increase of 24% in sales activity compared
to the first three months of last year, but Melbourne was up 38%. Now this has not yet translated into price
growth to any great degree and that is normal.
24:23
Terry Ryder
There is always a time lag between an uplift in sales activity translates into an uplift in prices. That’s one of the
reasons coupled with some of the other things you presented like population data and economic performance
and the lack of supply, where we think that Melbourne and Victoria are going to have a period of growth starting
this year and now is the optimum time to be getting into that market because they’re at a low ebb in the cycle.
24:53
Kate Hill
Agreed? Yeah, of course. Absolutely. So I’ve got a couple of location profiles for you. I am keeping these two
locations that I’ve kind of chosen for our webinar here at affordable levels, so they’re well below a million. Most
people’s borrowing capacity has come way down, obviously, with our rise interest rates. So I really wanted these
particular locations to be achievable for people to be kind of relevant rather than feature somewhere that’s 1.5 or
million, et cetera. So while I do think there are some really great opportunities in Melbourne itself, I’m staying
mostly to the fringes, and I’ve picked a regional city as well. So first one that I want to look at is Geelong.
25:45
Kate Hill
When you get Terry’s report, I think one of the things, actually, that struck me, first of all, which I know sounds,
I don’t know, it’s very high level, but I know Terry’s reports really well. And I think what struck me, one of the
first things that struck me and strikes me about the Geelong part of that report is its length. It’s rare that we see, I
think, Terry, in your overall report, there’s about 20 pages just on Geelong. You might not know that, but it is
because so much to talk about.
26:22
Terry Ryder
There’s so much to talk about.
26:24
Kate Hill
There is so much to talk about.
26:26
Terry Ryder
Projects of an infrastructure nature, for example, which is something that we’re really interested in because that
really elevates an economy and the property market.
26:36
Kate Hill
That’s right. So we look at, again, a very rapidly growing economy. We’ve got billions in recent infrastructure
expenditure and projected billions more in other major investments. We’ve got population and gross regional
product growth. They are all above the national average. And we’ve got roughly forecasts of saying there’s going
to be about 500,000 residents expected in Geelong by 2047. Those are the forecasts I find often it depends on
the area, but in forecasts like this or in forecasts about areas like this, I find that those forecasts are actually
sometimes quite conservative. And you can see the way things are tracking that it’s going to exceed what people
forecast. You’ve got major urban expansion plans that are going to cater to, at least at the moment, another
110,000 residents create 35,000 jobs, et cetera.
27:38
Kate Hill
The other thing that we love about this area is a good, solid variety of employment industries, and as I’m sure
everybody out there knows, the reason that is important is that if you’ve got a good diversity of industries, it’s a
very stable area. If one of those industries has a bit of a wobble, then there are plenty of others that people can
work in. And rather than if you’ve got maybe one major, one or two major ones industries, especially if they’re
volatile industries, it can lead to wobbles all the way, filters all the way down into, ultimately, property pricing,
which is, of course, what we’re interested in here.
28:24
Kate Hill
So you’ve got council data that shows, again, these billions being spent on major developments across at least
I’ve read 147 projects that were either on the planning table under construction or that have been recently
completed. Again, I urge you to have a look at Terry’s report for all the details. It’s like it just goes on and on.
The exciting things happening in Geelong and for those with, again, those slightly lower borrowing capacities.
We have at least twelve suburbs in the Geelong area with a median price under 700,000. So I think that’s good.
It’s affordable for a lot of people. It has all those growth drivers. I’ve kind of slightly randomly picked a couple
of suburbs here to just showcase in terms of our vacancy rate.
29:20
Kate Hill
So 1% in Cario, that’s up on the north, often gets a bit of a bad rap, Cario, but it’s a lovely little place. Slightly
older properties, very popular, great growth. And then you can see the bell park, which is more sort of down. It’s
heading further south from Corio in towards town with a median of around 633. And I’m sorry, but what is not
to love about that growth chart? It’s so consistent. Yeah, go on, Terry. Sorry.
29:59
Terry Ryder
It’s actually quite rare to see a growth chart with such a consistent rise to it. There’s normally ups and downs.
The general pattern for most good locations is up, but there are hiccups along the way. There’s very few evident
in that. It’s just a story of consistent growth. We’ve already got a lot of questions coming into our q and a panel.
By the way, there’s a lot of engagement today. Okay? So get ready.
30:27
Kate Hill
I hope they’re not all from Geelong. Everybody lives in Geelong going, woohoo.
30:31
Terry Ryder
Now, one of the questions is, given that level of growth, can it continue into the future? Is there capacity for
further growth in these places?
30:41
Kate Hill
Absolutely. Because one thing I want to show you, which was actually, I’ll be honest, news to me, greater
Geelong is Australia’s third most popular destination for australian movers. Just take that in. Right? So it’s in
third spot. It is second. It’s in third spot because the Sunshine Coast. Shoka and the Gold coast even more.
Shoka. Are the top two. Are the top two. Geelong is in third position. I’m sorry. Tell me if you knew that out
there. If you’re living in Geelong, you probably do because you’re getting all this onslaught of people moving to
Geelong. But I guarantee you that there’ll be a lot of people out there who did not know that. Right. It’s a lovely
place. It is. I mean, obviously, I’ve been. I know the place quite well. It’s, you’ve got, you know, a really
desirable lifestyle change.
31:41
Kate Hill
It’s like I say, it’s the third most popular destination in Australia for people moving from capital cities to regional
areas. You’ve got employment opportunities that is attracting people from across Australia. You’ve got that sea
change trend, et cetera. So I think that’s another thing that just speaks for itself, that information. Now, I’ve done
here a little bit of a. I’ve just picked a kind of a bit of a random property. It literally is just sold in the last couple
of months in the Geelong area. It is very nice little property. It’s not too old. It’s, I’d say around a 2002 build.
And I’ve done a sample little generic cash flow calc for us so we can see how that looks. So this suburb median
is about 620. The median yield is around 3.5%, which is not fabulous, but that is a median, remember?
32:43
Kate Hill
So this particular property, I’ll just talk you through it kind of quickly. Sold for 619, which you can sort of see
that purchase price, it would rent probably for around 520 a week. So that actually gives you an actual yield of
around 4.4%. I tend to factor in a short vacancy every year. Just do that. It’s a bit of a worst case scenario, but
with very low vacancy rates. As I said, it’s likely to be less than that. But let’s err on the side of caution. It’s
around the 2002 2003 build, so you will get some depreciation on that. I’ve assumed a 37% marginal tax rate,
6.3% interest rate on your loan. I have factored in. You’ll see the two blue arrows in those holding cost charts
down here.
33:38
Kate Hill
I hope people can see that where I have included the land tax that we all now have to pay. I know it’s outrageous,
but just deal with it. And we have those minimum standards and upkeep that we have to do perform on our
rental properties in Victoria, which we do in other states as well. This is not a new thing. All states are bringing
these things in. So I have upped our repairs and maintenance line there a little bit. And I’ve shown you that cash
flow outcome before and after tax, but also before and after those two things. And there is literally like a $20
difference in terms of when you look at reasons why investors are fleeing Victoria because of land tax.
34:27
Kate Hill
I understand it’s a principle and it’s not great, but please don’t let this put you off, buying in such a compelling
investment area. Yeah, Terry, I don’t know what else to say. Don’t let it put you off. It’s not a huge difference in
before run after.
34:49
Terry Ryder
No, I think. I think it is Adviseable to actually sit down and do some of the numbers. What does it actually
mean? Yes, I mean, it’s true that the state government of Victoria is just, I think, lost a little bit. They don’t seem
to understand that they do have a rental shortage crisis, and what they should be doing is actually encouraging
people to become landlords, not the other way around. Some of the headlines are a little bit scary, particularly
around land tax, but when you do the numbers, the impact isn’t that great. And as someone who owns property
in Victoria, I don’t plan to sell mine because I’ve had such good growth in both rentals and values in places like
Bendigo, for example, which is another regional city that we could strongly recommend.
35:43
Kate Hill
Absolutely. So just wanted to show you that as a bit of a case study. Real life example. Now, next one. I’ve
talked about it before. I do. I love me a bit of ballarat. It has, again, really compelling growth drivers. The
Australian Bureau of Statistics names this is the fastest growing inland city in 2020, which admittedly was four
years ago. Now, Ballarat was named one of Australia’s most livable regional cities, the best regional city in
Australia for economic growth. And there’s that phrase again, economic growth. It’s really important. It has
proximity to Melbourne. It has a wonderfully diverse economy. Gross regional product in Ballarat is up 10% on
the last year. That is a lot, everyone. That’s. That’s a lot. I see these figures all the time. And that is a. It’s a big
figure.
36:48
Kate Hill
It has a lower than average unemployment rate of just 2.6%. It has a growing population. It’s got things going
on, like a substantial hospital expansion. It’s got airport Runway upgrades happening. You’ve got the Ballarat
west employment zone. So there’s other things. Again, get Terry’s report to read in a lot more detail about what
is happening there. That $5 billion regional rail link upgrade makes the commute times to and from Melbourne
much better. It’s about an hour and 15 minutes, but think about and look at who actually does come. People do
commute, but when you look at, again, the Bureau of Statistics and Census data, actually only about 1500
people work in Melbourne. They list Ballarat as their residential place and their workplace as Melbourne. It’s
only about 1500, just over 1500 people.
37:47
Kate Hill
And that doesn’t necessarily mean that they’re all commuting to and from Melbourne every day. They could, you
know, the place of work could be Melbourne, but they are working. Obviously, the new trend of working from
home means they might only be doing that two or three times a week if that 81% of residents live and work in
Ballarat. And that’s good. It’s a good sort of healthy amount. Population growth between 2021, 2036. So in
twelve years time is projected to add another, at least 40,000 people. I’d say that will exceed. It’s one of those
figures where. Or one of those estimations and forecasts where you see that estimation is kind of. We’re sort of
almost there already. Not quite, but, you know, I think that will be exceeded. And the city of Ballarat economic
strategy says that there is.
38:41
Kate Hill
They have an economic strategy that says there’s capacity to generate 20,000 jobs over the next 20 years, which
obviously they need to with that population growth. Again, just slightly. Randomly selected a suburb on the
south side with a 0.6% vacancy rate. They are consistently low, I think over the last, looking at that, since 2005,
it has barely gone over 3% in terms of vacancy rate. And that’s kind of the magic percentage number that we
look at. We like it to stay under 3% in terms of vacancies, again. So that’s nearly 20 years of it staying at exactly
where we like. And once again, look at the growth chart. It’s very sure we had a little dip last year. I tend not to
look at 2024 figures because we are three months really, in terms of actual settlements, only three months in.
39:36
Kate Hill
So again, what’s not to love about those very steady growth charts? Nothing wrong with it. Ballarat, I think, very
much worth considering. I have again picked a little sample property. The suburb median is 539,000. The
median yield. Sorry, this is just slightly. I think it’s a 4.1. Terry, I can’t quite read my own slide here because of
the little zoom thing that’s blocking it. I’ll purchase, sorry, 4.4.3. There we go. Okay, so our purchase price of
this property, 545,000. You probably going to get around. I’m being very conservative here. $450 a week rent.
It’s a 4.3% yield of this actual property. It’s a slightly newer build. So I’m factored in a little bit more
depreciation. All the other holding costs and details are the same. And again, showing that difference before and
after your land tax that we do now have to pay.
40:45
Kate Hill
And I’ve increased the maintenance slightly. Again, it’s not even $20 a week difference, so it shouldn’t deter you
from investing in a great area. That’s it. I think to me these figures speak for themselves. Obviously the moment
interest rates go down, your cash flow is going to improve. Massive shortage of rental properties. People may
have noticed. I have picked two three bedroom properties to showcase. This could be a whole other webinar. But
Australia’s family size is shrinking or household size is shrinking. Again, there is national studies about this. Not
everybody wants that big four bedroom house. Three bedders are in massive demand and I think that the yield
growth on three bedroom properties is going to way outpace yield growth on four bedroom properties moving
forward over the next few years just because of that shrinking household size. How are we doing?
41:52
Kate Hill
Hurry up, Kate. So here’s a little summary of growth charts from typical suburbs in each state. Again, I’m not
really looking at the 2024 figures. We’re barely into the year. It shows our boom and flatline mini declines cycle
of WA. And again, to me, why would you buy there at this time? Now of course, these past charts are no
indicators of future performance. I’m not saying that some Perth markets won’t continue to grow in value, but I
really do think that you have to ask yourself what the likelihood is of this continued level of performance. Yes,
building approval levels are also really low in the Perth area. Population growth is relatively high. It’s popular,
it’s a great place to live if you want to be over that side of the affair. But think about where the smart money
goes.
42:52
Kate Hill
Is it really the optimal time to buy an investment property in Perth? Is it worth the risk? That’s really the
question I would put out there and think about what some of the reasons are that investors are and have been
buying there. Its price point, its yield. I cant dispute the fact the cash flow is awesome and the fact that its all
over the press. It gives people confidence. But the more the prices rise in Perth, the more its going to become
and be in line with some of these other markets, Perth will become less and less attractive and affordable. Yields
are growing everywhere. With our critical shortage of rental properties and I think that’s almost probably going
to reach, dare I say, catastrophic levels in Victoria because of the lack of investor interest.
43:45
Kate Hill
The government’s doing everything it can to put people off buying rental properties there. The construction
shortfall. But people do still want to rent. They need and want to rent properties. And when you look at the
Victoria growth charts as opposed to, let me just go back, the Perth ones, look at the difference. Boom. Flatline
decline. Boom. Versus that Geelong. As we’ve said, it’s the third most popular place for people to move to.
Where are all these people going to live? That’s kind of the question I would put out there. The same is true in
Perth. Don’t get me wrong. Like I said, building approvals down there are also over. There are very low.
Population growth is high. But is this sustainable? That’s the question I would put out there. There we go. How
am I doing? Thousand questions.
44:43
Kate Hill
Terry, I’ve got a bit of a call to action. Just to things off before we go. Questions.
44:50
Terry Ryder
Why don’t you speak to that and just leave it on the screen?
44:52
Kate Hill
I’ll leave it up there. I’ll leave it up there. Yes.
44:55
Terry Ryder
While we deal with questions. There was one that came in from Jason a couple of days ago and he’s also
included in the Q and a panel today. And I did a little bit of. I did a few numbers in response to what Jason was
saying. He’s suggesting that ballot and Shillong have an oversupply property for sale at the moment with new
housing estates. Do you expect we’ll see things improving again anytime soon for existing investors in these
markets? How long do we have to wait with the amount of land release? Do we expect that to have an impact on
values in Ballarat? So I did some numbers on that. I actually don’t see in all the numbers that I’ve got any
evidence of any kind of oversupply.
45:51
Terry Ryder
I would say there is a good supply of properties for sale in places like Belloc and Geelong. That’s one of the
reasons why it’s a good time to buy there as opposed to some other markets in Australia. We have reference
Perth as an example of that. It’s very hard to find property available for sale. Anything that does come up sells
very quickly and it’s very difficult to buy sensibly in those markets. Whereas in Geelong and Ballarat they’re at
the another point in the cycle. It’s not as frenzied and that’s one of the reasons why I think it’s a good time to
consider there.
46:21
Terry Ryder
Looking at the track record and the prospects for future growth, days on market in both Ballarat and Geelong for
the individual suburbs mean that they, what you might call normal markets, so you’re not having to buy
recklessly to secure a property in these markets. The vacancy rate figures don’t suggest oversupply. Ballarat. All
the postcodes in Ballarat have vacancy rates no higher than 1.2% and many of them are below 1%. The building
approval figures in both cities peaked in financial year 2021 and have been falling quite significantly since then.
So the amount of new supply coming in to these cities is actually much lower than has been the case in prison.
So.
47:09
Kate Hill
Yeah, and Jason will have hope, if he’s watching, will have seen, you know, everything that I’ve talked about and
the reason that this is exactly why, you know, I certainly wouldn’t recommend that we buy right in the middle of
one of those new housing estates necessarily. But some of those stats that I’ve gone through show that this is
exactly why now is a good time to buy. Why would you wait until there is that frenzied activity? Now is the
time to get in there where you’re not overpaying for your investment property.
47:45
Terry Ryder
Keeping in mind that all that background information we’ve given today about economy, about population,
about an uplift in sales activity, all of that’s an underpinning of future price growth. And the point of the cycle
means it’s an attractive place to buy. Rather than wait till you read in the media, there’s a boom happening in
Melbourne and most people want to pile in and follow the herd that they will miss.
48:11
Kate Hill
Exactly. Wish I’d have listened to Kate back in April 2024.
48:15
Terry Ryder
Yeah, so just referring to some of the specific questions, some of these are quite specific. Anthony is asking,
would you sell a St. Kilda unit and use the sale process to buy a house in a Melbourne suburban?
48:31
Kate Hill
Hard to say. Don’t know the circumstances of the person asking the question. I will say St. Kilda units are, look,
they perform okay, but it’s just you’ve got a very transient population there, variously very popular with tourists
and as I say, that more transient population, it’s less a place for your family, bringing up kids, going to school.
Lovely area. I know St. Kilda very well. Would I do it? Depends how much you paid for it, when you bought it,
where it is. I mean, there’s so many. Sorry, so many factors to consider there? Possibly, yes.
49:25
Terry Ryder
I mean, if I owned a unit in St Kilda, I wouldn’t sell it to buy a property out of Melbourne. One of the reasons
for that is that what we are seeing as a national phenomenon, but it’s certainly very evident in Melbourne, is
there is stronger and stronger buyer demand for apartments and. Good.
49:43
Kate Hill
Yeah.
50:13
Terry Ryder
Kate, I think we’ve lost Terry for a bit there, so I want to jump in and help out. And hello to everybody else as
well. You’ve caught me in my gym, where at the moment. But we’ll kick on with some more questions. Kate, so
I’ve got one here from Thomas that says you’re a national buyer’s agent from an optimal portfolio perspective.
Would you bet your money on Tea tree galley, South Australia, with stronger yields or Melbourne units in
around the same day? A lot of older units are really not that appealing from a living perspective and wonder
whether or not it could be lifted up along with other unit prices in the area.
50:45
Kate Hill
That’s a tough one, actually. That’s a great question. I think there’s compelling reasons for both. I love that
teacher gully area, the Adelaide great performing market. It’s a, I’d say probably a much more low. Historically
would have been a much more stable market, but with the, like I said, that shrinking household size and Tim,
you’d know all about this too. Obviously, you’ve worked in this market. A lot of, you know, that apartment
market, I think, is becoming more and more appealing for so many different reasons that, you know, and I’m
sorry to sound vague and generalizing here, but you pick a great unit, not in one of, you know, not one of five.
51:36
Terry Ryder
Density.
51:37
Kate Hill
Exactly. So watch your density. Pick a great location with good access to amenities, I think, you know, and the
right cash flow in terms of your strata fees and whatnot. I think a really strategic unit purchase could also work
really well as long as you’re just not right in one of those enormous talents.
51:58
Terry Ryder
I think each individual investment’s got to be looked at on its own merits. Avoid the high density, look at your
body corporates and.
52:05
Kate Hill
Exactly. But great question. Really hard to pick and it depends on your risk profile in terms.
52:11
Terry Ryder
Yeah, exactly.
52:12
Kate Hill
I’m taking a bit of a punt there, but all the signs point towards that unit market really performing quite well over
the next few years.
52:19
Terry Ryder
Yes, I hope that helps. Thomas. Next question we’ve got is from Ganeth. I hope I’ve said that correctly. Is Vix
still good for investors looking at land taxes? Obviously we’ve touched on that a little bit today. They’ve
increased considerably. What do you get to say? We’ve sort of touched on a little bit of that already, Kate.
52:35
Kate Hill
Well, it’s the point of the whole webinar. Yes, Gloria is good.
52:40
Terry Ryder
Yeah, obviously good. But also it’s a pay to play mentality, isn’t it? Like we like anywhere. We just talked about
South Australia. South Australia’s stamp duty and title transfer is very high as well. It’s something that in every
market, it’s got their own intricacies.
52:58
Kate Hill
Exactly. But really you need to look at long term capital growth prospects. That’s where the real money is, not
the 2000 extra you’re going to have to pay in fees. Right now. Look, you need to play a long term game here.
Yeah.
53:11
Terry Ryder
Robert’s got a good question. What are the reasons why dwelling approvals and investor loan approvals are so
low in Melbourne compared to other states?
53:19
Kate Hill
Look, I don’t think they are particularly. I mean, they are low in Melbourne. They’re low everywhere. There’s a
number of reasons. I think it comes through, really. We’re still in that. Coming out of the supply chain issues
post COVID. They just haven’t been the materials. We’ve had labor shortages, costs. It’s this big. What’s the
word I’m looking for? Big concept of factors that have come together.
53:46
Terry Ryder
Yeah. Then you add population growth to that.
53:49
Kate Hill
Yeah. But they’ve been more expensive to build, harder to build. And then you probably will also factor in
legislative issues in trying to push approvals through. You know, we’ve got this grand. The government’s, like I
say, they put forward these grand plans of, oh, we’re going to build all these millions of properties because they
have to be seen to be reacting. But the reality of it is actually quite different. So. But, yeah. Number of factors
that go towards building shortages.
54:19
Terry Ryder
Okay, a couple more. I got one here from Franco. Arla Franco. I know Franco. There are some studios and one
bedroom apartments in Melbourne. CBD listed for less than 300,000 with high rental yields. Is it risky
purchase? Considering that new residential developments are in construction at the moment and that they could
lead to an oversupply?
54:39
Kate Hill
Yes, I think they are risky. Banks don’t like them.
54:42
Terry Ryder
Hard to finance.
54:43
Kate Hill
Very hard to finance moving forward. I think that is risky. Despite the fact of what I’m saying about household
sizes shrinking, I would be very cautious with that sort of purchase. You need to. People do still like a second
bedroom, so. And in terms of if the banks think it’s risky, that’s there for a reason. Yeah.
55:10
Terry Ryder
Look, I think this is a really good example of why, you know, some properties work for some people and others
not for other people. And, you know, if you’re at the end of your working career and you’re just after cash and
you’re buying a unit like that just for cash flow. Makes sense, you know, but don’t expect huge growth
opportunities from it. And. Yeah, overheads lending. Very tough.
55:29
Kate Hill
Yes, well, Terry’s.
55:32
Terry Ryder
Terry’s back. Terry’s back. Apologies for my absence. Telstra chose this moment to lose our Internet connection
for five minutes. I imagine you’d be managing quite well without me. We just assume you wanted to avoid the
tough questions, Terry. Well, I just wanted to leave them all to chat because some of them did look a bit curly.
But I gather that you’ve actually got through all of that. Well, we’ve got fewer through, but look, there are a lot
there. And just, I suppose a reminder for the audience, we will be sharing these questions with Kate and we
won’t get through them all. But if you do have questions, feel free to drop them in there. And I’m sure that Kate
will reach out because she’ll have the contact details from everybody who’s attended today. So feel free to join
any more questions you’ve got.
56:21
Terry Ryder
But Terry, we’ve probably got to a bit of time for a couple more. I might jump off and leave you to it. Okay, let’s
see. Chandrash, could you please name five spots worth considering? I guess he’s asking hotspots in Melbourne
and regional Victoria.
56:46
Kate Hill
How much money have we got to spend?
56:48
Terry Ryder
Yes, that’s right. We get a lot of questions at these events and elsewhere. Where’s the best place to buy? And the
answer depends on the individual. Often say to people, you can have twelve people in front of you. They all ask
that question, there’ll be twelve different answers. Circumstances, no.
57:07
Kate Hill
And I don’t mean it to be evasive, but. And again, it’s just going to be so different for everyone. But that it is, it’s
really true, right. Depends what you’ve already. If you’ve already got property in Victoria, how much have you
got to spend, what’s your cash flow needs, et cetera. Age of property.
57:25
Terry Ryder
Yeah, it does depend on a lot of those things. Chandra says, just written in his price range is 600 to 700,000.
Certainly the two locations you’ve.
57:35
Kate Hill
Exactly. Yeah. And I would also say for your top, really top five picks, read Terry’s report. They’re there. It’s
right there. No, that’s it. All the information that you need, the research is second to none. The locations are in
those reports. And why with medians, price point, all of that. I’ve just picked two of them.
58:03
Terry Ryder
All right. Another question that some people are concerned about. Low rental percentages should the interest of
chasing capital growth.
58:14
Kate Hill
Yes, yes, that is a factor. I agree. And Victoria is. The purpose of the webinar is to merely is to showcase
Victoria as worthy of consideration. The rental yields are lower in Victoria than they are in Queensland. And I’m
not saying buy in Victoria over Queensland or over South Australia. The webinar is why would Melbourne and
Victoria better than Perth and Wall? So street. There are other better cash flow outcome options than some of the
Victoria markets that we have showcased today. Absolutely. If that is a concern, then have a look elsewhere.
58:54
Terry Ryder
Yeah, okay. And I really don’t know what questions were answered while I was in that hole caused by the
collapse of the Internet. Yeah, we have come up to the end of the hour, so time to wrap this up. Look, this has
been a great webinar. It’s been a really interesting topic, certainly a contentious one. I think you’ve presented
great information today, Kate. A compelling case for why not only is Melbourne a Victoria a good place to
consider, but why now is the time to be considering it. Yes, and I certainly do agree. And I am also like you,
concerned about the way people are piling into the Perth market at the peak of that market, maybe because of
the frenzied nature buying perhaps anything they can get their hands on at any price without doing proper due
diligence.
59:47
Kate Hill
And I think I’m seeing it happen.
59:49
Terry Ryder
The time to display some caution and do real. And if you can’t buy safely with due diligence, don’t buy. I would
suggest.
59:59
Kate Hill
I know, I promise you’re leaving it all to luck and that is not a way to invest.
01:00:08
Terry Ryder
Thanks, Kate, for a great question.
01:00:10
Kate Hill
My pleasure.
01:00:11
Terry Ryder
And for something about you. And this topic has attracted our best audience, both registrations and people who
tuned in live today. Then we’ve had for more than a year, maybe longer. I’d urge everyone to follow up, make
contact with Kate Hill at Adviseable. There is that special offer for those who do follow up. It costs nothing to
make the phone call or send the email to make further inquiries and see whether Adviseable can help you with
your property investment needs. Okay, thank you. Thanks to everyone who participated, those who didn’t get
your questions answered today. Please follow up with either myself or Kate, and we will do our best to give you
answers. And, Kate, let’s do it again soon.
01:00:59
Kate Hill
Can’t wait.
01:01:01
Terry Ryder
Okay. And just before we go, a little poll we do at the end of each of these 100% of people who tuned in today
found the webinar informative. No one said it wasn’t what they were expecting, and the vast majority said it was
very informative. So that’s great feedback. Thank you, everyone. And thank you again. Kate Hill. You did a
great job. Looking forward to doing the next one.
01:01:26
Kate Hill
Thank you, everyone. Okay, bye, everyone.

Note; Transcript has been generated by AI.
00:07
Terry Ryder
Hello, everyone, I’m Terry Ryder, founder of Hotspotting, and welcome today’s webinar, in which I’m speaking
to leading buyers agent Kate Hills on the intriguing and perhaps controversial topic. While Melbourne makes
more sense than Perth right now for investors, now that topic is contentious because it runs counter to the media
portrayal of the markets in those two major cities and also to the behaviour of many property investors, many of
whom are piling into the Perth market frenzy because of media reports of an ongoing boom and perhaps
showing less interest in Melbourne and Victoria because of perception that there’s no growth on offer there. But
today we’ll be arguing that Melbourne does indeed make sense if you understand about market dynamics and
cycles and the issues of when you should get into specific markets and when you should stay away from.
00:56
Terry Ryder
So, to explore this topic, my special guest today is Kate Hill of the National Buyers Agency Adviseable, who
has considerable experience and knowledge of both markets and indeed of markets right across Australia. So,
Kate Hill of Adviseable, welcome.
01:11
Kate Hill
Oh, thrilled to be with you and everyone out there, Terry.
01:16
Terry Ryder
Yeah, so it’s a great topic. I mean, I’ve been really pleasantly surprised at the engagement from our audience this
topic. We actually got more numbers for the webinar today than we have at any time in the past twelve months
for a webinar. So maybe it’s the attraction of you as one of our regular presenters.
01:36
Kate Hill
I don’t think I can take credit for that. I think it’s more the fact that everyone must be so frustrated with actually
trying to buy a property in Perth right now and they’re looking for alternatives. That’s what I’m putting my
money on anyway.
01:51
Terry Ryder
Well, that’s right. But I mean, it does speak to the wisdom of how you go about property investment and when
you get into markets, because I can recall that three years ago when we started including Perth locations in some
of our national hotspots reports, people, why would you recommend this? I’ve had no growth for ten years. No
one wants to buy there. But now, of course, everyone wants to buy there after it’s had three years of growth.
02:18
Kate Hill
Yeah, yeah, well, I think now. Yeah, exactly. So now we’re going to be making the case for Victoria being
exactly that location Perth was, let’s say, two or three years ago. Yep. Without peeking too soon. Let’s go through
the slides.
02:35
Terry Ryder
All right then. Well, yeah, I’ll hand the rounds over to you and you’ve got some graphics to share with us.
02:44
Kate Hill
And I do.
02:47
Terry Ryder
We’ll have a bit of a discussion about some of these key points as we go through. And of course, we will have
time in the latter part of the hour for people to give us their questions, which you can transmit to us by writing
into the Q and a panel, which you should see in front of you.
03:02
Kate Hill
Yes. So can I just check, Terry, you can see this.
03:07
Terry Ryder
Yes, I can see.
03:11
Kate Hill
Great. We do encourage the question asking. It tends to form mostly, what do you think of this area? What do
you think of that area? So it would be nice if we had, obviously, some of those I know will come, but if we had
others around the Victoria markets or if people have more concerns and questions specifically around Victoria,
that would be great. So I’ll just get straight on with this. I have to put this disclaimer in. We all do. I’m sure
you’re all familiar with this, that all the things that I’m talking about areas, any strategies, cash flows that I’m
showing, these are, it’s all very general. Right. It’s very generic stuff. And you always have to make sure that
what we talk about is suitable for your specific circumstances. Who are we? As Terry said, we are national
buyers agents.
04:10
Kate Hill
We are independent, qualified property investment advisors. That’s a QPIA buyer’s agents. All of our advisors
are qpias. I think that’s quite unusual, but we pride ourselves on that. We care about finding the right investments
for you. We operate in multiple states. We’re national. We do not pigeonhole you. We look at your situation,
think about where might be right for you to invest with your budget, your cash flow needs, et cetera. And we’ve
been doing this for a very long time. We love what we do, as I’m sure you all know, and we are members of the
property investment professionals of Australia and the Real Estate Buyers Agents association. So obviously,
while we can’t guarantee many things, there are some things that we can guarantee.
04:59
Kate Hill
And as terry already alluded to in our introduction, the press will continue really to print a lot of stuff, much of it
nonsense, and economists will continue to make forecasts, predictions, wrong, incorrect, et cetera. You have to
always remember why they do this. They just want your attention. They’re not giving you investment advice.
They need to continuously be relevant. So it’s rare that they’re going to talk about things that are going to
happen. They love to talk about things that are happening, and that is going to be what we are going to talk more
about today. So governments will come and go. Theyre going to continue to make crazy policies, reactive
policies. Being in government is a business. Remember that they very rarely tend to try and solve actual
problems.
05:57
Kate Hill
Interest rates are going to continue to go up and down and world shattering events will continue to happen. But
properties bought in strategic locations with all those really great long term growth drivers that we talk about
with high demand and low supply, they will grow in value. I like to summarize that the key to success in
property investment lies in ignoring that noise that we are talking about out there. I can’t stress how important
that is. You need to have a plan. You need professional help. You need to find the right location, the right
property in that location. And you need to find the location and the property to suit you and your circumstances.
So those things are really important.
06:47
Kate Hill
So just going back to that location thing, as Terry said, and as we’ve both said in the introduction, really the
smart money buys in locations before prices start to take off. And not buying in overheated markets like Perth. I
mean its been fascinating watching whats been happening over there in the last couple of years. But if you want
to make real money in property investment, you need to target locations that have the credentials for that long
term growth but are currently at that lower point in the cycle, not at the peak of a cycle or approaching a peak.
So I don’t, obviously, I don’t want to offend anyone out there, but we have to acknowledge that so many property
investors out there, especially novices, they’re herd animals.
07:44
Kate Hill
A lot of us like to have that social validation that we, you know, a lot of that we get in the press that tells you
that really just confirms kind of what you want to hear. I know it’s really hard to trailblaze and buy in areas that
not a lot of other people are talking about. It makes people nervous. I understand that. But if you don’t do that, it
means that you are buying in areas that are, like I said, featuring really heavily in the press and the media. And
that, as we all know, has been Perth. If you buy there now, you are buying in a market where prices have already
risen 15% to 20% in the past year alone and probably even up to 50% in the past three years.
08:33
Kate Hill
So like I say, buying in a market like that means you are buying at or after a peak. Youve missed most of that
growth thats happened there now. And I have to stress, im not saying that Perth markets wont continue to
experience growth in value, but you are not buying in optimal conditions. And in a market that is past or
approaching its peak, you should have been buying there three years ago. And right now, one of those locations
that meets the criteria that we like is Victoria. Before we do go and look at Victoria, I do want to, just very slight
aside, let’s take a moment to take in this piece of information. South Australia, Terry, never talked about in the
press, ever, as an investment location.
09:30
Terry Ryder
No. And certainly it would surprise a lot of people to learn that South Australia is actually the nation’s top
ranked economy. We always follow this report by COmSEC, the state, which they publish quarterly, and they
rank the eight state and Terrytories in terms of their economic outlook based on a series of metrics, because we
think there’s a strong correlation between the strength of an economy and the performance of the capital city
property market and also the regional market. So the fact that South Australia is the best performing economy
can help to explain why Adelaide has been such a good performer as a property market for the last few years
and continues to do well.
10:11
Kate Hill
Yeah, and it’s ranked top for the first time in this report’s history. That’s the other thing. And not only in
economy, it ranks first in a number of those metrics, economic growth, relative unemployment, construction
work, dwelling starts. So there’s a number of factors that make it top in Comsec’s report, and that is really
important.
10:40
Terry Ryder
Victoria also ranks very highly as well.
10:43
Kate Hill
It does. So I’m going on to that. So you can see the big number one is South Australia, but equal to are New
South Wales and Victoria. Now back, before we go into more about Victoria, I do really want to urge everyone
to go and get these reports if you are interested, obviously, apart from this fabulous webinar. But if you want to
know more about why some of these markets in Melbourne and Victoria as a whole are so compelling, you have
to get these reports. I know I’m biased and I’m talking to Terry, but genuinely, I can’t tell you how important and
awesome the information in these reports is. They are second to none out there. Do yourselves a favor, just do
this bit of research. Read about what you’re missing.
11:35
Kate Hill
They go into a lot more detail than we have time to go through today. But really, just, again, Terry, I think what
you guys do is incredible, really, just in terms of independent, valuable information out there. So, Victoria, it
does have one of Australia’s strongest state economies and very consistently so, even though we’ve just talked
about South Australia being the top right now in the most recent report just in October, in that quarter’s state of
the state reports it had the strongest of the state economies. It ranked top in that report. There are also. Sorry, go
on.
12:21
Terry Ryder
You mean Victoria in this case?
12:22
Kate Hill
I do. I do. Victoria. Victoria. There are forecasts that say that gross state product in 23 and 24 in Victoria will be
around 2.5%. Again, these are forecasts, of course, but that will outpace all other states and Terrytories.
Victorian economic growth is set to lead all the states over the next five years, say, to 27, 28, at an average
annual rate of 2.3%. Those are, again, very compelling figures. And like Terry said earlier on, that economic
growth is a really important metric to look at.
13:06
Terry Ryder
Just emphasize that on the flip side of that, the bottom ranked economies at the moment, according to the
Comset reporter, Northern Terrytory in Tasmania. And it’s not a coincidence that the two capital city markets
that haven’t shown any growth recently and currently aren’t showing growth are Hobart and Darwin. They have
in the past when their economies were stronger, but right now they’re not performing. There is that very strong
correlation. So the information that you’re giving us now about the underlying economy for Melbourne and
Victoria is really important stuff.
13:40
Kate Hill
Yes, agreed. Thank you. But it is. It’s one of the top things that we look at, you know, in all of our. When we
look at those fundamental growth drivers, it’s economic growth. It’s obviously. It’s right up there. So moving on,
another metric, population growth in Victoria is among the highest in the country, obviously enhanced by
overseas migrants, students, etcetera. It was probably two years ago the Victoria’s population actually declined
quite considerably by more than 50,000 people, especially during COVID-19 and now it is the second fastest
growing state. The city of Melbourne is the fastest growing LGA in the country in terms of population growth at
10.6%. Melton, which has now been the redrawing of boundaries and stuff, is kind of considered part of metro
Melbourne. It’s on those far western outskirts of Melbourne, is the next fastest at 6.6.
14:48
Kate Hill
And then of course, you’ve got some other more inner city areas. Yarra, Port Phillip is in there as well. So again,
interesting, you know that we’ve got some top spots. Perth is in there as well. Of course. A couple of WA
precincts I actually took out in this chart, there’s. When you look at the. This is from the Abs, there’s a couple of
tiny sort of smaller jurisdictions with like a couple of hundred people in there. One of them, I think, was
peppermint Grove, randomly in Perth. But so in terms of percentages, it was up there. But I’ve kept in,
obviously, those more major population centres as representative, really, of what’s going on in the grand scheme
of things.
15:32
Kate Hill
Look, I will say that I think that certainly inner Melbourne, we’re probably coming off quite a lower base here
because it was so badly affected immediately and post COVID. So we are, I think, coming back, really, it’s more
of a return to normal. But nevertheless, I think those stats are compelling. And the latest ABS population data
shows that greater Melbourne grew 3% last year, which is well above the national average. And on the national
list of lgas with the largest population growth, four of the top ten were Melbourne locations. And I think, Terry,
were talking earlier on. You’ve got some more. You saw some recent stats on that too.
16:17
Terry Ryder
Yeah. So this is again another analysis of this latest population data that’s come out from the Australian Bureau
of Statistics. And this analysis breaks it down into suburbs. And what it found is, of the top twelve suburbs for
population growth last year, nine of the twelve were in the greater Melbourne area and of the top 3016 of them
were in the greater Melbourne area. So more than half the suburbs in the top 30 in Australia for population
growth last year are in. In the greater Melbourne area. So a big resurgence there for Melbourne. We’ve talked
about how strong their economy is, underpinning that and enhancing that is this big surge in population. And of
course, overseas migrants are part of that, but they’re not the only part of that.
17:04
Kate Hill
They’re not. Not, absolutely. So we’re just beginning to paint the picture of what is happening there because this
is. It’s happening now. When you look at. I mean, this is again, the top chart there is the Melbourne metro area in
terms of median sale price growth, and the bottom one are regional combined growth. Obviously, I’m not a
believer that all regional markets perform the same. The whole of Melbourne doesn’t perform the same. But just
to give us an idea of what is happening, as you can see over the last couple of years, not very much. And that is
why those earlier slides, when we talk about economic growth, we talk about population growth that’s
happening and that is coming.
17:55
Kate Hill
This is why, partly why it’s exciting, because you are coming in at a much better time, that cycle that were
talking about earlier on than you are in Perth. And I’ve got some more charts that will showcase that a bit later
on. So Melbourne hasn’t had the price growth of some of our other cities in the past year, but we are seeing a big
uplift in buyer activity recently, which is often, as Terry very eloquently puts in his reports, a precursor to
elevated pricing. So many locations have recorded really strong uplift in sales volumes in recent months. We do
still, like everywhere in the country, we’re still seeing a sort of slightly depressed listings numbers. We’re not
back to where were yet in terms of people listing their properties for sale.
18:52
Kate Hill
And the other thing that is interesting in this uplift in buyer demand is that a lot of it is coming from owner
occupiers, which again, is interesting when you’re thinking about who those purchases are, it’s important to
know that it isn’t mainly investor activity, which can sometimes skew figures a little bit. So, to me, so far, all of
this supports forecasts that Victoria is poised for a period of notable growth in residential property prices.
Moving on, next metric of demand and supply. So a month or so ago, the ABS reported that Australia’s dwelling
approvals as a whole, we declined to only 162,000, which is tracking around 78,000 below the albanese
government’s target to build that 1.2 million homes over five years. Which means they actually need to be
building 240,000 homes a year to get to that. Obviously.
19:59
Kate Hill
The press called it a collapse in approvals. It was led by Victoria, where only 51,000 homes were approved for
construction in 2023. And that was the lowest annual approval figure for Victoria in a decade. And this level of
approvals is also way below the actual, specifically victorian government’s target to build 800,000 homes over a
decade. So, which obviously requires 80,000 homes annually. So you can see that the supply, and this is our
dwelling, Victoria, this chart on the left here, the dwelling approvals in Victoria, you can see the decline. Supply
is very low. You can see in almost every jurisdiction in Victoria how low building approvals were. When you
look at charts for building approvals, especially, and Terry’s, again, those reports that hotspotting do show you
the level of building approvals.
20:57
Kate Hill
You can see how low those approvals were compared with others in recent years. But the demand is high and
only increasing because again, like we’ve just said, we’re talking about population growth, which exceeds
national average. It’s growing at an unprecedented rate, with the state growing by 182,000 people in 2023 alone.
So Victoria is facing a worsening housing shortage, with population growth destined to way outrun dwelling
construction. I do like to put these two charts kind of next to each other. The decline in dwelling approvals and
the population growth on top of that. Now added to that, another ABS chart is the one for new loan
commitments for investor housing in Victoria compared with the other states. I’m hoping everyone see my little
blue arrow there. It’s meant to point to the little decline there. The black line there is Victoria.
22:09
Kate Hill
The other states are mostly all, at least even or going up. Victoria is going down. So the supply of rental
properties, that is properties bought by investors, has declined. It is still declining. So what that means is that
vacancy rates are very low. That’s our bottom chart. There are no rental properties. It puts further upward
pressure on rents and yields, which is our top chart. Now I don’t see this changing anytime soon. I think, in fact
it’s just going to get worse as demand increases and the supply of rental properties decreases. So again, not only
have you got a much more favorable buying conditions here because you’ve got less competition from other
buyers and other investors, you’ve got all this capital growth to come and a demand for very few properties,
rising rents because of a critical rental shortage among this hugely growing population.
23:21
Kate Hill
To me all these indicators point towards it being such a great time to buy in Victoria. Terry, I think, yeah, I mean
there.
23:34
Terry Ryder
Is a growing volume, isn’t there, of indicators that point and the time and the cycle. But one of the ones that
really impresses me, you mentioned it, that we place a lot of faith in the trends with sales volumes as a
precursor. What will happen? Prices and prop track published recently. A comparison of the first three months of
this year. The first three months of last year it did show that nationally there’s been a big uplift in sales activity.
So it does bode well for property markets generally. In 2024, national increase of 24% in sales activity compared
to the first three months of last year, but Melbourne was up 38%. Now this has not yet translated into price
growth to any great degree and that is normal.
24:23
Terry Ryder
There is always a time lag between an uplift in sales activity translates into an uplift in prices. That’s one of the
reasons coupled with some of the other things you presented like population data and economic performance
and the lack of supply, where we think that Melbourne and Victoria are going to have a period of growth starting
this year and now is the optimum time to be getting into that market because they’re at a low ebb in the cycle.
24:53
Kate Hill
Agreed? Yeah, of course. Absolutely. So I’ve got a couple of location profiles for you. I am keeping these two
locations that I’ve kind of chosen for our webinar here at affordable levels, so they’re well below a million. Most
people’s borrowing capacity has come way down, obviously, with our rise interest rates. So I really wanted these
particular locations to be achievable for people to be kind of relevant rather than feature somewhere that’s 1.5 or
million, et cetera. So while I do think there are some really great opportunities in Melbourne itself, I’m staying
mostly to the fringes, and I’ve picked a regional city as well. So first one that I want to look at is Geelong.
25:45
Kate Hill
When you get Terry’s report, I think one of the things, actually, that struck me, first of all, which I know sounds,
I don’t know, it’s very high level, but I know Terry’s reports really well. And I think what struck me, one of the
first things that struck me and strikes me about the Geelong part of that report is its length. It’s rare that we see, I
think, Terry, in your overall report, there’s about 20 pages just on Geelong. You might not know that, but it is
because so much to talk about.
26:22
Terry Ryder
There’s so much to talk about.
26:24
Kate Hill
There is so much to talk about.
26:26
Terry Ryder
Projects of an infrastructure nature, for example, which is something that we’re really interested in because that
really elevates an economy and the property market.
26:36
Kate Hill
That’s right. So we look at, again, a very rapidly growing economy. We’ve got billions in recent infrastructure
expenditure and projected billions more in other major investments. We’ve got population and gross regional
product growth. They are all above the national average. And we’ve got roughly forecasts of saying there’s going
to be about 500,000 residents expected in Geelong by 2047. Those are the forecasts I find often it depends on
the area, but in forecasts like this or in forecasts about areas like this, I find that those forecasts are actually
sometimes quite conservative. And you can see the way things are tracking that it’s going to exceed what people
forecast. You’ve got major urban expansion plans that are going to cater to, at least at the moment, another
110,000 residents create 35,000 jobs, et cetera.
27:38
Kate Hill
The other thing that we love about this area is a good, solid variety of employment industries, and as I’m sure
everybody out there knows, the reason that is important is that if you’ve got a good diversity of industries, it’s a
very stable area. If one of those industries has a bit of a wobble, then there are plenty of others that people can
work in. And rather than if you’ve got maybe one major, one or two major ones industries, especially if they’re
volatile industries, it can lead to wobbles all the way, filters all the way down into, ultimately, property pricing,
which is, of course, what we’re interested in here.
28:24
Kate Hill
So you’ve got council data that shows, again, these billions being spent on major developments across at least
I’ve read 147 projects that were either on the planning table under construction or that have been recently
completed. Again, I urge you to have a look at Terry’s report for all the details. It’s like it just goes on and on.
The exciting things happening in Geelong and for those with, again, those slightly lower borrowing capacities.
We have at least twelve suburbs in the Geelong area with a median price under 700,000. So I think that’s good.
It’s affordable for a lot of people. It has all those growth drivers. I’ve kind of slightly randomly picked a couple
of suburbs here to just showcase in terms of our vacancy rate.
29:20
Kate Hill
So 1% in Cario, that’s up on the north, often gets a bit of a bad rap, Cario, but it’s a lovely little place. Slightly
older properties, very popular, great growth. And then you can see the bell park, which is more sort of down. It’s
heading further south from Corio in towards town with a median of around 633. And I’m sorry, but what is not
to love about that growth chart? It’s so consistent. Yeah, go on, Terry. Sorry.
29:59
Terry Ryder
It’s actually quite rare to see a growth chart with such a consistent rise to it. There’s normally ups and downs.
The general pattern for most good locations is up, but there are hiccups along the way. There’s very few evident
in that. It’s just a story of consistent growth. We’ve already got a lot of questions coming into our q and a panel.
By the way, there’s a lot of engagement today. Okay? So get ready.
30:27
Kate Hill
I hope they’re not all from Geelong. Everybody lives in Geelong going, woohoo.
30:31
Terry Ryder
Now, one of the questions is, given that level of growth, can it continue into the future? Is there capacity for
further growth in these places?
30:41
Kate Hill
Absolutely. Because one thing I want to show you, which was actually, I’ll be honest, news to me, greater
Geelong is Australia’s third most popular destination for australian movers. Just take that in. Right? So it’s in
third spot. It is second. It’s in third spot because the Sunshine Coast. Shoka and the Gold coast even more.
Shoka. Are the top two. Are the top two. Geelong is in third position. I’m sorry. Tell me if you knew that out
there. If you’re living in Geelong, you probably do because you’re getting all this onslaught of people moving to
Geelong. But I guarantee you that there’ll be a lot of people out there who did not know that. Right. It’s a lovely
place. It is. I mean, obviously, I’ve been. I know the place quite well. It’s, you’ve got, you know, a really
desirable lifestyle change.
31:41
Kate Hill
It’s like I say, it’s the third most popular destination in Australia for people moving from capital cities to regional
areas. You’ve got employment opportunities that is attracting people from across Australia. You’ve got that sea
change trend, et cetera. So I think that’s another thing that just speaks for itself, that information. Now, I’ve done
here a little bit of a. I’ve just picked a kind of a bit of a random property. It literally is just sold in the last couple
of months in the Geelong area. It is very nice little property. It’s not too old. It’s, I’d say around a 2002 build.
And I’ve done a sample little generic cash flow calc for us so we can see how that looks. So this suburb median
is about 620. The median yield is around 3.5%, which is not fabulous, but that is a median, remember?
32:43
Kate Hill
So this particular property, I’ll just talk you through it kind of quickly. Sold for 619, which you can sort of see
that purchase price, it would rent probably for around 520 a week. So that actually gives you an actual yield of
around 4.4%. I tend to factor in a short vacancy every year. Just do that. It’s a bit of a worst case scenario, but
with very low vacancy rates. As I said, it’s likely to be less than that. But let’s err on the side of caution. It’s
around the 2002 2003 build, so you will get some depreciation on that. I’ve assumed a 37% marginal tax rate,
6.3% interest rate on your loan. I have factored in. You’ll see the two blue arrows in those holding cost charts
down here.
33:38
Kate Hill
I hope people can see that where I have included the land tax that we all now have to pay. I know it’s outrageous,
but just deal with it. And we have those minimum standards and upkeep that we have to do perform on our
rental properties in Victoria, which we do in other states as well. This is not a new thing. All states are bringing
these things in. So I have upped our repairs and maintenance line there a little bit. And I’ve shown you that cash
flow outcome before and after tax, but also before and after those two things. And there is literally like a $20
difference in terms of when you look at reasons why investors are fleeing Victoria because of land tax.
34:27
Kate Hill
I understand it’s a principle and it’s not great, but please don’t let this put you off, buying in such a compelling
investment area. Yeah, Terry, I don’t know what else to say. Don’t let it put you off. It’s not a huge difference in
before run after.
34:49
Terry Ryder
No, I think. I think it is Adviseable to actually sit down and do some of the numbers. What does it actually
mean? Yes, I mean, it’s true that the state government of Victoria is just, I think, lost a little bit. They don’t seem
to understand that they do have a rental shortage crisis, and what they should be doing is actually encouraging
people to become landlords, not the other way around. Some of the headlines are a little bit scary, particularly
around land tax, but when you do the numbers, the impact isn’t that great. And as someone who owns property
in Victoria, I don’t plan to sell mine because I’ve had such good growth in both rentals and values in places like
Bendigo, for example, which is another regional city that we could strongly recommend.
35:43
Kate Hill
Absolutely. So just wanted to show you that as a bit of a case study. Real life example. Now, next one. I’ve
talked about it before. I do. I love me a bit of ballarat. It has, again, really compelling growth drivers. The
Australian Bureau of Statistics names this is the fastest growing inland city in 2020, which admittedly was four
years ago. Now, Ballarat was named one of Australia’s most livable regional cities, the best regional city in
Australia for economic growth. And there’s that phrase again, economic growth. It’s really important. It has
proximity to Melbourne. It has a wonderfully diverse economy. Gross regional product in Ballarat is up 10% on
the last year. That is a lot, everyone. That’s. That’s a lot. I see these figures all the time. And that is a. It’s a big
figure.
36:48
Kate Hill
It has a lower than average unemployment rate of just 2.6%. It has a growing population. It’s got things going
on, like a substantial hospital expansion. It’s got airport Runway upgrades happening. You’ve got the Ballarat
west employment zone. So there’s other things. Again, get Terry’s report to read in a lot more detail about what
is happening there. That $5 billion regional rail link upgrade makes the commute times to and from Melbourne
much better. It’s about an hour and 15 minutes, but think about and look at who actually does come. People do
commute, but when you look at, again, the Bureau of Statistics and Census data, actually only about 1500
people work in Melbourne. They list Ballarat as their residential place and their workplace as Melbourne. It’s
only about 1500, just over 1500 people.
37:47
Kate Hill
And that doesn’t necessarily mean that they’re all commuting to and from Melbourne every day. They could, you
know, the place of work could be Melbourne, but they are working. Obviously, the new trend of working from
home means they might only be doing that two or three times a week if that 81% of residents live and work in
Ballarat. And that’s good. It’s a good sort of healthy amount. Population growth between 2021, 2036. So in
twelve years time is projected to add another, at least 40,000 people. I’d say that will exceed. It’s one of those
figures where. Or one of those estimations and forecasts where you see that estimation is kind of. We’re sort of
almost there already. Not quite, but, you know, I think that will be exceeded. And the city of Ballarat economic
strategy says that there is.
38:41
Kate Hill
They have an economic strategy that says there’s capacity to generate 20,000 jobs over the next 20 years, which
obviously they need to with that population growth. Again, just slightly. Randomly selected a suburb on the
south side with a 0.6% vacancy rate. They are consistently low, I think over the last, looking at that, since 2005,
it has barely gone over 3% in terms of vacancy rate. And that’s kind of the magic percentage number that we
look at. We like it to stay under 3% in terms of vacancies, again. So that’s nearly 20 years of it staying at exactly
where we like. And once again, look at the growth chart. It’s very sure we had a little dip last year. I tend not to
look at 2024 figures because we are three months really, in terms of actual settlements, only three months in.
39:36
Kate Hill
So again, what’s not to love about those very steady growth charts? Nothing wrong with it. Ballarat, I think, very
much worth considering. I have again picked a little sample property. The suburb median is 539,000. The
median yield. Sorry, this is just slightly. I think it’s a 4.1. Terry, I can’t quite read my own slide here because of
the little zoom thing that’s blocking it. I’ll purchase, sorry, 4.4.3. There we go. Okay, so our purchase price of
this property, 545,000. You probably going to get around. I’m being very conservative here. $450 a week rent.
It’s a 4.3% yield of this actual property. It’s a slightly newer build. So I’m factored in a little bit more
depreciation. All the other holding costs and details are the same. And again, showing that difference before and
after your land tax that we do now have to pay.
40:45
Kate Hill
And I’ve increased the maintenance slightly. Again, it’s not even $20 a week difference, so it shouldn’t deter you
from investing in a great area. That’s it. I think to me these figures speak for themselves. Obviously the moment
interest rates go down, your cash flow is going to improve. Massive shortage of rental properties. People may
have noticed. I have picked two three bedroom properties to showcase. This could be a whole other webinar. But
Australia’s family size is shrinking or household size is shrinking. Again, there is national studies about this. Not
everybody wants that big four bedroom house. Three bedders are in massive demand and I think that the yield
growth on three bedroom properties is going to way outpace yield growth on four bedroom properties moving
forward over the next few years just because of that shrinking household size. How are we doing?
41:52
Kate Hill
Hurry up, Kate. So here’s a little summary of growth charts from typical suburbs in each state. Again, I’m not
really looking at the 2024 figures. We’re barely into the year. It shows our boom and flatline mini declines cycle
of WA. And again, to me, why would you buy there at this time? Now of course, these past charts are no
indicators of future performance. I’m not saying that some Perth markets won’t continue to grow in value, but I
really do think that you have to ask yourself what the likelihood is of this continued level of performance. Yes,
building approval levels are also really low in the Perth area. Population growth is relatively high. It’s popular,
it’s a great place to live if you want to be over that side of the affair. But think about where the smart money
goes.
42:52
Kate Hill
Is it really the optimal time to buy an investment property in Perth? Is it worth the risk? That’s really the
question I would put out there and think about what some of the reasons are that investors are and have been
buying there. Its price point, its yield. I cant dispute the fact the cash flow is awesome and the fact that its all
over the press. It gives people confidence. But the more the prices rise in Perth, the more its going to become
and be in line with some of these other markets, Perth will become less and less attractive and affordable. Yields
are growing everywhere. With our critical shortage of rental properties and I think that’s almost probably going
to reach, dare I say, catastrophic levels in Victoria because of the lack of investor interest.
43:45
Kate Hill
The government’s doing everything it can to put people off buying rental properties there. The construction
shortfall. But people do still want to rent. They need and want to rent properties. And when you look at the
Victoria growth charts as opposed to, let me just go back, the Perth ones, look at the difference. Boom. Flatline
decline. Boom. Versus that Geelong. As we’ve said, it’s the third most popular place for people to move to.
Where are all these people going to live? That’s kind of the question I would put out there. The same is true in
Perth. Don’t get me wrong. Like I said, building approvals down there are also over. There are very low.
Population growth is high. But is this sustainable? That’s the question I would put out there. There we go. How
am I doing? Thousand questions.
44:43
Kate Hill
Terry, I’ve got a bit of a call to action. Just to things off before we go. Questions.
44:50
Terry Ryder
Why don’t you speak to that and just leave it on the screen?
44:52
Kate Hill
I’ll leave it up there. I’ll leave it up there. Yes.
44:55
Terry Ryder
While we deal with questions. There was one that came in from Jason a couple of days ago and he’s also
included in the Q and a panel today. And I did a little bit of. I did a few numbers in response to what Jason was
saying. He’s suggesting that ballot and Shillong have an oversupply property for sale at the moment with new
housing estates. Do you expect we’ll see things improving again anytime soon for existing investors in these
markets? How long do we have to wait with the amount of land release? Do we expect that to have an impact on
values in Ballarat? So I did some numbers on that. I actually don’t see in all the numbers that I’ve got any
evidence of any kind of oversupply.
45:51
Terry Ryder
I would say there is a good supply of properties for sale in places like Belloc and Geelong. That’s one of the
reasons why it’s a good time to buy there as opposed to some other markets in Australia. We have reference
Perth as an example of that. It’s very hard to find property available for sale. Anything that does come up sells
very quickly and it’s very difficult to buy sensibly in those markets. Whereas in Geelong and Ballarat they’re at
the another point in the cycle. It’s not as frenzied and that’s one of the reasons why I think it’s a good time to
consider there.
46:21
Terry Ryder
Looking at the track record and the prospects for future growth, days on market in both Ballarat and Geelong for
the individual suburbs mean that they, what you might call normal markets, so you’re not having to buy
recklessly to secure a property in these markets. The vacancy rate figures don’t suggest oversupply. Ballarat. All
the postcodes in Ballarat have vacancy rates no higher than 1.2% and many of them are below 1%. The building
approval figures in both cities peaked in financial year 2021 and have been falling quite significantly since then.
So the amount of new supply coming in to these cities is actually much lower than has been the case in prison.
So.
47:09
Kate Hill
Yeah, and Jason will have hope, if he’s watching, will have seen, you know, everything that I’ve talked about and
the reason that this is exactly why, you know, I certainly wouldn’t recommend that we buy right in the middle of
one of those new housing estates necessarily. But some of those stats that I’ve gone through show that this is
exactly why now is a good time to buy. Why would you wait until there is that frenzied activity? Now is the
time to get in there where you’re not overpaying for your investment property.
47:45
Terry Ryder
Keeping in mind that all that background information we’ve given today about economy, about population,
about an uplift in sales activity, all of that’s an underpinning of future price growth. And the point of the cycle
means it’s an attractive place to buy. Rather than wait till you read in the media, there’s a boom happening in
Melbourne and most people want to pile in and follow the herd that they will miss.
48:11
Kate Hill
Exactly. Wish I’d have listened to Kate back in April 2024.
48:15
Terry Ryder
Yeah, so just referring to some of the specific questions, some of these are quite specific. Anthony is asking,
would you sell a St. Kilda unit and use the sale process to buy a house in a Melbourne suburban?
48:31
Kate Hill
Hard to say. Don’t know the circumstances of the person asking the question. I will say St. Kilda units are, look,
they perform okay, but it’s just you’ve got a very transient population there, variously very popular with tourists
and as I say, that more transient population, it’s less a place for your family, bringing up kids, going to school.
Lovely area. I know St. Kilda very well. Would I do it? Depends how much you paid for it, when you bought it,
where it is. I mean, there’s so many. Sorry, so many factors to consider there? Possibly, yes.
49:25
Terry Ryder
I mean, if I owned a unit in St Kilda, I wouldn’t sell it to buy a property out of Melbourne. One of the reasons
for that is that what we are seeing as a national phenomenon, but it’s certainly very evident in Melbourne, is
there is stronger and stronger buyer demand for apartments and. Good.
49:43
Kate Hill
Yeah.
50:13
Terry Ryder
Kate, I think we’ve lost Terry for a bit there, so I want to jump in and help out. And hello to everybody else as
well. You’ve caught me in my gym, where at the moment. But we’ll kick on with some more questions. Kate, so
I’ve got one here from Thomas that says you’re a national buyer’s agent from an optimal portfolio perspective.
Would you bet your money on Tea tree galley, South Australia, with stronger yields or Melbourne units in
around the same day? A lot of older units are really not that appealing from a living perspective and wonder
whether or not it could be lifted up along with other unit prices in the area.
50:45
Kate Hill
That’s a tough one, actually. That’s a great question. I think there’s compelling reasons for both. I love that
teacher gully area, the Adelaide great performing market. It’s a, I’d say probably a much more low. Historically
would have been a much more stable market, but with the, like I said, that shrinking household size and Tim,
you’d know all about this too. Obviously, you’ve worked in this market. A lot of, you know, that apartment
market, I think, is becoming more and more appealing for so many different reasons that, you know, and I’m
sorry to sound vague and generalizing here, but you pick a great unit, not in one of, you know, not one of five.
51:36
Terry Ryder
Density.
51:37
Kate Hill
Exactly. So watch your density. Pick a great location with good access to amenities, I think, you know, and the
right cash flow in terms of your strata fees and whatnot. I think a really strategic unit purchase could also work
really well as long as you’re just not right in one of those enormous talents.
51:58
Terry Ryder
I think each individual investment’s got to be looked at on its own merits. Avoid the high density, look at your
body corporates and.
52:05
Kate Hill
Exactly. But great question. Really hard to pick and it depends on your risk profile in terms.
52:11
Terry Ryder
Yeah, exactly.
52:12
Kate Hill
I’m taking a bit of a punt there, but all the signs point towards that unit market really performing quite well over
the next few years.
52:19
Terry Ryder
Yes, I hope that helps. Thomas. Next question we’ve got is from Ganeth. I hope I’ve said that correctly. Is Vix
still good for investors looking at land taxes? Obviously we’ve touched on that a little bit today. They’ve
increased considerably. What do you get to say? We’ve sort of touched on a little bit of that already, Kate.
52:35
Kate Hill
Well, it’s the point of the whole webinar. Yes, Gloria is good.
52:40
Terry Ryder
Yeah, obviously good. But also it’s a pay to play mentality, isn’t it? Like we like anywhere. We just talked about
South Australia. South Australia’s stamp duty and title transfer is very high as well. It’s something that in every
market, it’s got their own intricacies.
52:58
Kate Hill
Exactly. But really you need to look at long term capital growth prospects. That’s where the real money is, not
the 2000 extra you’re going to have to pay in fees. Right now. Look, you need to play a long term game here.
Yeah.
53:11
Terry Ryder
Robert’s got a good question. What are the reasons why dwelling approvals and investor loan approvals are so
low in Melbourne compared to other states?
53:19
Kate Hill
Look, I don’t think they are particularly. I mean, they are low in Melbourne. They’re low everywhere. There’s a
number of reasons. I think it comes through, really. We’re still in that. Coming out of the supply chain issues
post COVID. They just haven’t been the materials. We’ve had labor shortages, costs. It’s this big. What’s the
word I’m looking for? Big concept of factors that have come together.
53:46
Terry Ryder
Yeah. Then you add population growth to that.
53:49
Kate Hill
Yeah. But they’ve been more expensive to build, harder to build. And then you probably will also factor in
legislative issues in trying to push approvals through. You know, we’ve got this grand. The government’s, like I
say, they put forward these grand plans of, oh, we’re going to build all these millions of properties because they
have to be seen to be reacting. But the reality of it is actually quite different. So. But, yeah. Number of factors
that go towards building shortages.
54:19
Terry Ryder
Okay, a couple more. I got one here from Franco. Arla Franco. I know Franco. There are some studios and one
bedroom apartments in Melbourne. CBD listed for less than 300,000 with high rental yields. Is it risky
purchase? Considering that new residential developments are in construction at the moment and that they could
lead to an oversupply?
54:39
Kate Hill
Yes, I think they are risky. Banks don’t like them.
54:42
Terry Ryder
Hard to finance.
54:43
Kate Hill
Very hard to finance moving forward. I think that is risky. Despite the fact of what I’m saying about household
sizes shrinking, I would be very cautious with that sort of purchase. You need to. People do still like a second
bedroom, so. And in terms of if the banks think it’s risky, that’s there for a reason. Yeah.
55:10
Terry Ryder
Look, I think this is a really good example of why, you know, some properties work for some people and others
not for other people. And, you know, if you’re at the end of your working career and you’re just after cash and
you’re buying a unit like that just for cash flow. Makes sense, you know, but don’t expect huge growth
opportunities from it. And. Yeah, overheads lending. Very tough.
55:29
Kate Hill
Yes, well, Terry’s.
55:32
Terry Ryder
Terry’s back. Terry’s back. Apologies for my absence. Telstra chose this moment to lose our Internet connection
for five minutes. I imagine you’d be managing quite well without me. We just assume you wanted to avoid the
tough questions, Terry. Well, I just wanted to leave them all to chat because some of them did look a bit curly.
But I gather that you’ve actually got through all of that. Well, we’ve got fewer through, but look, there are a lot
there. And just, I suppose a reminder for the audience, we will be sharing these questions with Kate and we
won’t get through them all. But if you do have questions, feel free to drop them in there. And I’m sure that Kate
will reach out because she’ll have the contact details from everybody who’s attended today. So feel free to join
any more questions you’ve got.
56:21
Terry Ryder
But Terry, we’ve probably got to a bit of time for a couple more. I might jump off and leave you to it. Okay, let’s
see. Chandrash, could you please name five spots worth considering? I guess he’s asking hotspots in Melbourne
and regional Victoria.
56:46
Kate Hill
How much money have we got to spend?
56:48
Terry Ryder
Yes, that’s right. We get a lot of questions at these events and elsewhere. Where’s the best place to buy? And the
answer depends on the individual. Often say to people, you can have twelve people in front of you. They all ask
that question, there’ll be twelve different answers. Circumstances, no.
57:07
Kate Hill
And I don’t mean it to be evasive, but. And again, it’s just going to be so different for everyone. But that it is, it’s
really true, right. Depends what you’ve already. If you’ve already got property in Victoria, how much have you
got to spend, what’s your cash flow needs, et cetera. Age of property.
57:25
Terry Ryder
Yeah, it does depend on a lot of those things. Chandra says, just written in his price range is 600 to 700,000.
Certainly the two locations you’ve.
57:35
Kate Hill
Exactly. Yeah. And I would also say for your top, really top five picks, read Terry’s report. They’re there. It’s
right there. No, that’s it. All the information that you need, the research is second to none. The locations are in
those reports. And why with medians, price point, all of that. I’ve just picked two of them.
58:03
Terry Ryder
All right. Another question that some people are concerned about. Low rental percentages should the interest of
chasing capital growth.
58:14
Kate Hill
Yes, yes, that is a factor. I agree. And Victoria is. The purpose of the webinar is to merely is to showcase
Victoria as worthy of consideration. The rental yields are lower in Victoria than they are in Queensland. And I’m
not saying buy in Victoria over Queensland or over South Australia. The webinar is why would Melbourne and
Victoria better than Perth and Wall? So street. There are other better cash flow outcome options than some of the
Victoria markets that we have showcased today. Absolutely. If that is a concern, then have a look elsewhere.
58:54
Terry Ryder
Yeah, okay. And I really don’t know what questions were answered while I was in that hole caused by the
collapse of the Internet. Yeah, we have come up to the end of the hour, so time to wrap this up. Look, this has
been a great webinar. It’s been a really interesting topic, certainly a contentious one. I think you’ve presented
great information today, Kate. A compelling case for why not only is Melbourne a Victoria a good place to
consider, but why now is the time to be considering it. Yes, and I certainly do agree. And I am also like you,
concerned about the way people are piling into the Perth market at the peak of that market, maybe because of
the frenzied nature buying perhaps anything they can get their hands on at any price without doing proper due
diligence.
59:47
Kate Hill
And I think I’m seeing it happen.
59:49
Terry Ryder
The time to display some caution and do real. And if you can’t buy safely with due diligence, don’t buy. I would
suggest.
59:59
Kate Hill
I know, I promise you’re leaving it all to luck and that is not a way to invest.
01:00:08
Terry Ryder
Thanks, Kate, for a great question.
01:00:10
Kate Hill
My pleasure.
01:00:11
Terry Ryder
And for something about you. And this topic has attracted our best audience, both registrations and people who
tuned in live today. Then we’ve had for more than a year, maybe longer. I’d urge everyone to follow up, make
contact with Kate Hill at Adviseable. There is that special offer for those who do follow up. It costs nothing to
make the phone call or send the email to make further inquiries and see whether Adviseable can help you with
your property investment needs. Okay, thank you. Thanks to everyone who participated, those who didn’t get
your questions answered today. Please follow up with either myself or Kate, and we will do our best to give you
answers. And, Kate, let’s do it again soon.
01:00:59
Kate Hill
Can’t wait.
01:01:01
Terry Ryder
Okay. And just before we go, a little poll we do at the end of each of these 100% of people who tuned in today
found the webinar informative. No one said it wasn’t what they were expecting, and the vast majority said it was
very informative. So that’s great feedback. Thank you, everyone. And thank you again. Kate Hill. You did a
great job. Looking forward to doing the next one.
01:01:26
Kate Hill
Thank you, everyone. Okay, bye, everyone.

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