surf coast victoria

An interesting thing is happening at our end of the Surfcoast, we are getting more enquiry for permanent homes than we ever have. We have been pondering this phenomenon and as usual – we have a theory.?


When people are relocating from their current community for lifestyle reasons, there is often a psychological barrier as to how far they will go from that original community. They have the perception that their friends and family will want to see them all the time and miss them when they are gone. They feel most comfortable if they have reasonably easy access to get back to their place of origin whenever they want to (and fill the desperate void that their family and friends will no doubt have for them!)?


The traditional areas of the Bellarine and Mornington Peninsulas that enjoyed good travel times to most of Melbourne have been settled by retirees and lifestyle buyers for that very reason.?

Our theory is that as the access has improved dramatically to towns like Anglesea, Aireys Inlet and Lorne, so has the acceptance that these towns are now within the psychological limit as to which people will consider for their permanent or semi permanent place of residence. This will be interesting to monitor as the last section of the Geelong Ring Road opens in November, taking out the last sets of traffic lights and providing direct access to the coast.?


This theory is supported by the amount of building happening in Lorne right now. The investment in dollar terms is quite incredible. We recently counted 35 houses and 11 major renovations under construction in the town. Most of these are not small projects either. GD Constructions, who are one of Lorne’s leading builders, have told us that their average budget in the past three years for the houses they have been building has been between $1m-$1.3m, and that is on top of the purchase of the land. Clearly property owners are not going to spend this amount of money and not use them. They may not be all permanent homes but the vision of the split lifestyle between the Surfcoast and Melbourne is an achievable reality with the ease of unimpeded access.?

So who is buying and who is spending at present in these times when much of the herd is sitting on their hands? The answer is simple. It is those from the medical and legal fraternity and we have seen this before. When the GFC hit in 2008, interest rates went south, the real estate market flattened and those with total job security from these professions took advantage of those conditions to buy well. It is easy to see in hindsight but we can tell you that it is starting to happen again. The amount of doctors and lawyers that we are dealing with right now far outweigh any other demographic. Why? Job security, interest rates trending south (you can get 3 year fixed interest rates for 6.3% now even without the RBA moving) and a flatter market allowing them to buy well. Add to this the ring road now and it is not really that difficult to see why.?

Certainly the recent stock market volatility has distracted and cautioned some buyers. For most of us it is just annoying. We have been forced by government legislation to invest in shares yet the industry that supports and trades in that asset class have simply lost their way. They are rarely focusing on fundamentals but are just reactive to the latest headline or report that is produced. As the amount of available information has increased, so appears has the fear of stock holders and their representatives.?

Any asset market where some participants can profit from falling values has some serious structural issues. Real estate, as an asset class, may be experiencing some negative sentiment from some quarters at present, but at a minimum it is stable and you can touch it. It isn’t subject to daily manipulation and it is actually physically useful. Australian property has been incredibly resilient since the GFC and this is simply because the fundamentals remain very strong.?

As real estate is governed by three factors, supply, demand and sentiment our local fundamentals are some of the strongest in the country. We have created a graphic which demonstrates the reason why property prices on the coast remain steady in a flatter market and surge in a buoyant one. Look at the total available properties of Anglesea, Aireys Inlet and Lorne versus the population of the main buying demographic of Melbourne – and all the previous capital growth mentioned in the graphic was pre ring road.?