In wake of Hazelwood closure, Latrobe Valley's affordable properties begin to appeal

How long since you’ve seen a challenge like this attached to a real estate advertisement? “TRY TO FIND A CHEAPER PROPERTY.” It was for a two bedroom Morwell unit that sold for $82,000.

Or, how about: “PRICE REDUCTION MAKES THIS A BARGAIN. NOW REDUCED TO $227,000”. Ray White in Traralgon likes capitalisation and an exclamation mark in spruiking the quite unbelievably small-change pricing of so many properties in the Latrobe Valley.

They love to trumpet the idea of the BARGAIN! And using bait phrases like “OWNER PREPARED TO NEGOTIATE”, even when the opening price gamut is $129,000 for a humble two bedroom brick house. With a population about 13,600 and the lowest house prices in the urbanised parts of the Valley, Morwell’s median is a shade higher than this offering, at $192,000.

Chris Davis of KW Property Sales and Rental in Morwell has done a similar textural shout-out with what he says qualifies as a top of the range, “top of the tree” five bedroom home at 85 Paul Street, Morwell. Close to the golf course and on 10 acres, the ad says “PRICE REDUCED”.

The price is $598,000 … for all of lifestyle implied in the above.

The realtors of one of Victoria’s cheapest regions for housing have been announcing the extreme affordability of the valley in such a manner for many years. “Oh sure,” Davis says. “We’re not Melbourne. We don’t have hundreds of people turning up to auctions. We have five or six.”

Largely overlooked, except as being a beleaguered region that has sustained so many employment and lost industry crises in the past few years — farm gate milk prices, Heyfield Timber Mill and more latterly the Hazelwood Power station closure — there was some talk, especially with Hazelwood ceasing operations at the end of March, that it would lead to a rash of panic selling and untenanted properties.

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But although a 150 day average for selling housing on the region’s market is the norm, Jim Demetrios of Stockdale and Leggo LaTrobe Valley says the Hazelwood effect was only slight “because not everyone works for Hazelwood”.

Indeed, something else entirely seems to be starting up down in the Valley and Demetrios expects it will gather fuel after July 1 when Victoria’s first-home buyers become exempt from stamp duty for homes valued up to $600,000.

With virtually all of the housing on conventionally-sized blocks in the Latrobe council district located between the Strzelecki Ranges and Mt Baw Baw being worth way less than that, “we’re expecting it will stimulate the market”.

“It won’t be an overnight boom,” he cautions, “but as Melbourne gets more and more expensive, regional areas with lifestyle become more and more attractive”.

First-home buyers who can contemplate the hour or so long commute, say to Dandenong, might be among the incoming, he thinks. “A lot of Melbourne people make an hour commute to work in the city, don’t they?”

Before the penny-wise first-timers show up in flocks, there is already another discernable trickle of interested parties: retirees and investors. All the realtors spoken with report discernable commencement of such a trend.

Isabelle McMahon of Ray White Traralgon said she showed a potential client from Melbourne a five-bedroom Traralgon home for a price “in excess of $350,000 and she couldn’t believe what she could get for the price”.

Though a few miles further down the highway from Morwell, Traralgon’s median is higher at $285,000. “Many prefer Traralgon over Morwell and Moe,” McMahon tells.

Davis reports a Morwell buyer, who had sold his rundown southern suburban Melbourne home for $800,000, “bought a house here that was ten times better, and he was able to put $500,000 into super”.

The purchaser plans to commute to Melbourne for the next five years until he retires permanently to the Valley.

For investors, Davis says, the district is entry level opportune, yet the rental returns can be a very surprising 6 to 7 per cent.

Demetrios says that once one investor puts money down on a rental property, word spreads in social groups. “Because they don’t need a big deposit and the loans virtually take care of themselves, investors start to buy multiple properties over a few years, and then their mates follow.

“I had one investor buy a house for $150,000. Then he bought another. Then came his family and friends and now between them they’ve bought 5-6 properties around here.”

BARGAIN!