Push for local investors

MANY Latrobe Valley investors do not understand the benefits of buying up local real estate, leaving the profits largely to external investors who take the money “out of the area”.

That was the summation of long-time Moe-based real estate agent Robert Sim last week, commenting on October quarter figures published by real estate magazine PropertyObserver which indicated Moe was “Victoria’s top-performing housing market” in regional Victoria.

The magazine quoted figures by Residex which calculated the median weekly rent in Moe at $270, suggesting investors could expect rental returns of around 5.7 per cent.

It said a September market round-up by valuers from Herron Todd White picked Moe, along with Morwell and Newborough, as offering sub $300,000 opportunities with 1980s and 1990s brick veneer homes.

It said 1970s units could be bought for “well under $300,000 with gross rental returns of seven to nine per cent possible”.

Mr Sim queried the accuracy of other quoted figures which said Moe house prices increased by 4.66 per cent over three months to October, rising to a median value of $243,500.

“You can’t necessarily judge median values (based on) a quarter,” he said, adding an accurate reflection of the market relied on a broader timeframe.

Widely-used real estate website domain.com.au instead puts the most recent median house price for Moe at $160,000.

Rental return scenarios referred to were “probably fairly accurate” though, Mr Sim said, adding “not so much the nine per cent, but certainty between seven to eight per cent.”

Returns were stronger now than a few years ago, Mr Sim said, but he added: “I don’t think a lot of investors have worked that out yet… they are a little cautious but when they return to the market they will see exceptional value here.”

“The rental market is very strong; rents have increased and tenants seeking good properties are very much active in the market place,” he added.

Asked how the local economy benefited from outside investors buying up inexpensive properties in Moe, Mr Sim said “I would have thought not a great deal… and the disadvantage is that they might take their money out of here”.

“Unless they are purchasing properties and looking to improve them… then tradesmen, builders, carpet stores and suppliers and handymen (might benefit),” he added.

“I would really like to see more local investors but the problem is they tend to be a little bit cautious and don’t necessarily see how good things are here.

“There are a number of astute (local) buyers who recognise the value here but I would love to see more… if they did some checking in other areas and then referred back to their own market they might be surprised by what they see,” he said, adding “they don’t necessarily have to risk a lot of money to get the sort of returns they might be after.”