“Features such as street appeal, access and the detached/semi-detached nature of a property begin to create larger price variances and impact marketing periods."
New housing investors on Ballarat fringe warned to be cautious: HTW
Ballarat has been identified as a potential hotspot, but investors should tread cautiously when considering housing in new estates further out of town, according to property valuers Herron Todd White.
In its April property market report, HTW notes that “Ballarat property values soften as the distance from Lake Wendouree, [schools], shops or CBD increases”.
“The modern outer suburbs of Lucas, Alfredton, Sebastopol and Delacombe continue to be developed to new housing and estates, which are largely filled by young families and investors.
“It is these outer suburbs that are generally hardest hit by government announcements, interest rate movements and economic uncertainty, due largely to the high loan to value ratios and relatively generic product in the $200,000 to $350,000 price range,” warns HTW.
Currently developers are offering house-and-land packages in Lucas and Sebastopol starting from about $240,000 for a two-bedroom house on a 375-square-metre block rising up to $435, 000 to a two-storey, four-bedroom house on a 522-square-metre block.
There more than 500 off-the-plan house-and-land packages on offer in these two suburbs alone.
Among them is this three-bedroom house-and-land package on a 375-square-metre block (pictured below) priced at $267,000 and listed by Vince Cavarra of Burbank Homes Melbourne.
There are no established houses for sale in Lucas, according to Realestate.com.au.
On Spencer Street in Sebastopol this “updated” three-bedroom house (pictured below) is targeted at first-home buyers or investors with a price tag of $195,000 and is listed by Mark Nunn of Hocking Stuart Ballarat.
In contrast, the inner suburbs offer a more stable investment environment for property investors.
Two of them – Soldiers Hill and Ballarat East – have median house prices under $300,000 while a third, Ballarat Central, has a median house price just over $300,000.
Only Lake Wendouree has a median house prices approaching that of some Melbourne suburbs:
Source: Smart Investor magazine
According to Herron Todd White, proximity to the Ballarat CBD continues to remain important, with the residential property market “largely driven by infrastructure, planning, amenity and return on investment”.
The report notes that proximity to Lake Wendouree for walking, running and water sports remains important, with the suburb remaining predominantly owner-occupied with some of Ballarat’s most expensive housing.
“Areas such as Lake Wendouree, Soldiers Hill and Newington are thinly traded and tend to maintain steady value patterns as outer suburbs grow and become more or less expensive,” says HTW.
Currently the most expensive home in Lake Wendouree listed for sale is this rather grand-looking five-bedroom home on Wendouree Parade (pictured below) listed by Laurie Gillett from Professionals Ballarat, which has an asking price of around $1.4 million.
According to HTW, market volatility in new housing areas is a good indicator for the greater region.
“In a softening market, as buyers become more hesitant, property type begins to significantly impact purchasing decisions.
“Features such as street appeal, access and the detached/semi-detached nature of a property begin to create larger price variances and impact marketing periods. Traditionally, detached homes with good access are preferred,” says HTW.
Photograph of Ballarat courtesy of Tourism Victoria