Ballarat's tug of war between local positive sentiment and macro-climate: HTW
Ballarat, Victoria’s largest inland city, figures in various positions from rising market to starting to decline in the HTW property clocks for February and March, and like the rest of the Australian economy, the residential market there will not be without its challenges in 2016.
Valuation firm Herron Todd White’s property clock is a simple broad brush means to suggest where property markets are as at February 2016 and what direction prices are moving in.
Macro economic factors such as the success of Australia’s transition from a resource driven to a service-driven economy, the mood of the various regulatory bodies and the ability of the elected elite to remain united behind one leader will play a major hand in its fortune, says the report.
Locally, the direction and pace with which the market door will swing will depend on the continued state governmental inclination to decentralise Victoria, in addition to the continued popularity and population growth of the area and the local economy’s success.
The good news for the area is that none of these drivers appear at present poised to pull the plug on the place.
The bad news is, nor do they elicit an inclination to provide us with a path to the promised land, says HTW.
“And so the great unwashed are left to wake up, frock up and front up. The fundamentals of the residential market are sound if not strong, yet only the most bullish would foretell a 2016 Ballarat boom. So how will it play out?
“The year will play out as tug of war between positive local sentiment and what will be on balance, at best, a macro economic climate,” says HTW.
As usual, the property with the greatest chance to grow will be that with limited supply close to the CBD such as Ballarat Central, Lake Wendouree, Soldiers Hill, Black Hill and Golden Point. Areas with significant challenges will be those with oversupply issues such as the new estates in Delacombe and Lucas.
The strong history of Ballarat provides a sought after niche with period housing, particularly Victorian dwellings circa 1900. Areas likely to prosper from this niche market are Golden Point, Black Hill and Ballarat East. Period homes in these areas provide a stable investment outlook with driving factors that include affordability and proximity to the CBD, transport and sporting facilities as well as limited supply compared to the new estates on the city fringes with modern housing facing no limit in supply. These suburbs provide an inexpensive option for good quality period homes, close to the city centre and ripe for gentrification. Well-renovated period homes fetch a premium within the Ballarat residential market.
There is strong evidence of gentrification in Soldiers Hill with property quality and prices continually improving. With good quality renovations and the location of these suburbs, rising property values are likely in the future.
On the outer edges of Ballarat, Buninyong presents an opportunity with good local facilities and close proximity to Ballarat. Buninyong provides heritage properties with a rural township atmosphere and is becoming a sought after location because of these factors.
At present, Ballarat has seen little development of reclaimed spaces, such as factory conversions, due to a limited demand for apartment living in regional areas. It is unlikely the apartment market in conversions of this type would have high demand in the foreseeable future, however, smaller scale buildings such as churches provide more of a lower density lifestyle choice for Ballarat.
The median price for houses in Ballarat at the end of 2015 was $308,750, according to CoreLogic RP Data. There was not data for units in the city.
As an example of properties sold around the median, a four-bedroom house at 8 Leroy Street (above) was sold for $335,000 in Ballarat, as per RealestateVIEW.com.au.
