Which suburbs savvy unit buyers should target in Geelong

Homebuyers need to look to the heart of Geelong to find the best areas to purchase a unit or townhouse that’s most likely to pay off in the long run.

New data reveals the suburbs with the biggest disparity in price between houses and units as more people seek affordable hacks to enter the market.

But not all suburbs are equal, with property experts revealing areas with the biggest land values, widest disparity to house prices and best scarcity are the top hot spots to buy a unit.

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Downsizers are among the biggest demographic for units and townhouses, given the lower cost, smaller maintenance requirements and locations typically close to popular amenities.

But more young couples are finding a more achievable first step onto the property market.

Inner city suburbs where the land value is highest and areas where there’s less chance of oversupply due to the cost development is the best buying strategy, Geelong buyers advocate Tony Slack said.

The four-bedroom townhouse at 25a Fyans St, South Geelong, is listed for sale with price hopes from $890,000 to $930,000.

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Geelong buyers advocate Tony Slack.

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The three-bedroom townhouse at 11/259 Bellerine St, South Geelong, is listed for sale with $799,000 to $849,000 price hopes.

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That means Geelong, Newtown, East, South and Geelong West and even central Highton and Belmont which are all within that inner ring around the city.

While there’s going to be a big increase in CBD apartment construction, lower density developments are less likely to flood the market and erode future capital growth prospects, Mr Slack said.

“What’s going to appreciate over time is that parcel of land, albeit it might be a postage stamp size block of land, but it’s got an intrinsic value because it’s just going to always be expensive because where it is,” he said.

“What I talk about units, and especially inner city units, it’s how hard would it be to replicate that particular property?”

Buying in a street surrounded by beautiful houses means it’s less likely you’ll see lots of new unit development in the future, he said.

“None of the houses are going to be knocked over because there’s too much value in the dwellings

“The long term growth is going to be built in because it’s hard to replicate.”

Mr Slack said that was the case even in areas such as Highton, where medium density dwellings are being encouraged near Highton Village, due to the costly hurdles facing those developments.

79 Little Myers St, Geelong, is listed with price hopes from $719,000 to $769,000.

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The three-bedroom townhouse at 22 Cranmere Ave, Belmont is listed with price hopes from $739,000 to $759,000.

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The two-bedroom unit at 3/92 Aphrasia St, Newtown, is listed with price hopes from $489,000 to $509,000.

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McGrath Geelong director Jim Cross said several groups are targeting units in suburbs such as Belmont, which is Geelong’s most popular suburb for unit sales.

“From $450,000 to $750,000, you’re looking at a target market that is partly downsizers but also young couples looking at getting into the market,” Mr Cross said.

“Once you get up over $750,000 to more than $1m, 95 per cent of the buyers are downsizers moving from a big family home.”

Investors have largely dropped out of the market, he explained, falling around 25 per cent of buyers to about 5 per cent of buyers as holding costs such as interest rates and land tax increased.

“People are definitely tending to build bigger product now and to a higher standard,” he said.

“There’s a really good quality product in today’s market. Where possible, they’re doing bigger dwellings and higher-end fit-outs.”

McGrath Projects Geelong director Jim Cross.

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The two-bedroom townhouse at 2/27-29 Marlo St, Hamlyn Heights, is listed with price hopes from $549,000 to $599,000.

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The three-bedroom unit at 3/35 Logan St, Hamlyn Heights, is listed with price hopes from $679,000 to $731,000.

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But houses are still going to provide a better investment for homebuyers in the long run, he said.

“If you have a house in Belmont or a townhouse on a small, smart block, the house is going appreciate more than the townhouse because of the land value. It’s the land value where you capitalise more on growth over time.”

Harcourts, North Geelong agent Joe Grgic said houses are presently more in vogue with most buyers seeking a property with a bigger land component, though units and townhouses can offer incredible value, especially in areas where there is a lot of parkland and other amenities available.

“There can be a difference in product, and it comes back to price and presentation, and as always location,” he said.

2/10 The Avenue, Belmont, is listed with price hopes from $849,000 to $899,000.

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The two-bedroom unit at 3/92 Aphrasia St, Newtown, is listed with price hopes from $489,000 to $509,000.

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The two-bedroom townhouse at 1/149 Kilgour St, Geelong, is listed for sale with price hopes from $695,000 to $730,000.

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“It’s about the type of buyers – if you have a busy lifestyle and you’re not into gardening, you’re going to prefer a unit or a townhouse over over a house if you’re downsizing.”

SuburbData analyst Jeremy Sheppard said a common theme among the markets where units were selling for hundreds of thousands of dollars less than similarly-sized houses in the area with a long history of house subdivisions nearby.

“Unit sizes tend to be fairly similar across areas, while houses can vary,” he said.

“Often the best value units are in established areas where most of the houses are on smaller blocks.

But Mr Sheppard said oversupply can be a real killer of the long-term value.

“It’s best to try to avoid units in high-rise buildings and rather focus on boutique blocks where there are only a few apartments there.”