By Patrick Brady AAPI 

Victoria’s coastal and regional areas are fast becoming the ‘place to be’. Supported by significant developments in the growth of our regional cities and infrastructure links, a noteworthy number of purchasers are relocating from Melbourne to these lifestyle destinations.

During the first quarter of 2010 regional areas such as Geelong, the Bellarine and Mornington peninsulas, and South Gippsland have witnessed significant demand across the market, with numerous examples of strong competition pushing prices above expected levels and properties selling within only days of being listed. This activity has led to an increasing number of vendors choosing to auction their property rather than sell via private sale to take advantage of the current frenzy.

As many buyers are forced out of the Melbourne market, Greater Geelong is fast becoming a genuine alternative for commuters and people looking for a lifestyle change; the appeal being its affordability, level of infrastructure and employment opportunities. With commuting times comparable to the outer eastern suburbs of Melbourne, Greater Geelong will continue to benefit from the strong demand generated by non-local buyers in the foreseeable future. While external activity is currently driving this market, activity from local ‘upgraders’ is also supporting positive growth.

With vacancy rates less than 5 percent and clearance rates at an estimated 60-75 percent, buyers will continue to remain active in the market leading to strong price growth in the second quarter of 2010. However, this price growth will temper as the impact of recent interest rate rises is realised. Similarly, the Bellarine Peninsula, located 90 minutes from Melbourne and only 20 minutes from Geelong continues to perform well, particularly in areas with good infrastructure such as Clifton Springs, Drysdale, Ocean Grove and Barwon Heads.

Likewise, record sales and strong growth for Mornington Peninsula and Frankston are positive signs of sustained activity across the region which will continue until the end of the second quarter of 2010, after which time prices are likely to stabilise.
 
Supported further by construction works such as Peninsula Link, which will link EastLink to The Peninsula Freeway at the rear of Mount Martha and is due for completion in 2013, property values will continue to rise, particularly in those pockets with good access to the new road. Of the areas to benefit, beachside suburb Seaford will see positive growth in values as a direct result of the project, in addition to influence from increasing gentrification and development of the area, which will occur over the next five years. Peninsula suburb Rye is also showing positive signs of capital growth as a surge of buyers rush to purchase vacant land and lower end properties for record price as investors return to the market. Rye and neighbouring suburb Rosebud are becoming highly sought after locations due to the offer of a good mix of holiday homes and permanent residences.

Turning to the South East, Melbourne’s largest growth corridor is moving forward in leaps and bounds. Melbourne suburbs Berwick and Narre Warren, through to regional suburbs Officer and Pakenham and Nar Nar Goon and Warragul, have all seen a tremendous surge in activity across the market, akin to the high’s of Melbourne’s boom in 2007. Strong population growth has created a strong rental market with considerably low  vacancy rates, which will underpin the investment market in this area in the coming years.

Continued development of these areas, the majority of which are relatively young, is a strong driver of values for the region. In particular, the proposed shopping hub in Officer, the relocation of the Pakenham Racecourse and the redevelopment of Warragul Central Shopping Centre will have a significant impact on local values.

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