Geelong first-home buyers gain a market edge as renters face $30 a week hikes

An aerial view over Geelong from Rippleside. Pic: Supplied

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The door to an easier entry into home ownership could be opening for first-time buyers as investors shun the property market in the wake of changes to negative gearing and capital gains tax discounts.

But the federal budget changes could leave more renters facing rising stress as investors look to diversify their portfolios beyond bricks and mortar.

FoundIt head of research Kent Lardner said the loss of negative gearing and the CGT discount is likely to mean fewer people would buy investment properties in Geelong in the future.

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FoundIt data revealed 93 Geelong homes were removed from the rental market in May, although 136 were added to supply after recent investor purchases hit the market.

For house renters the steepest annual rises in advertised rents were in Leopold (plus $50 a week), Belmont (+$45/wk), Newcomb, Whittington and St Albans Park (+$40/wk); for unit renters, Corio and Norlane (+$40/wk), Geelong West-Hamlyn Heights (+$30/wk), Lara (+$30/wk).

“A lot of investors had been active in the inner suburbs of Geelong. Smaller houses had been really good opportunities for investors,” Mr Lardner said.

The previously rented four-bedroom house at 11 Devereux Way, Charlemont, is listed for sale with price hopes from $640,000 to $685,000.

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“Up until now, the yield was good. But the yield was not enough to make the properties cash flow positive.

“Once we lose negative gearing and the CGT discount, a lot of those investors who would have been buying in Geelong probably won’t be investing,” Mr Lardner said.

Mr Lardner said Geelong rents are an average of $30 up from a year ago.

“They average about $530 currently for a house. This won’t be attractive enough to give a new investor a cash flow positive investment,” he added.

The pressure from the ex-rental sell off is sharpest in a few suburb areas.

The previously rented four-bedroom house at 36 Dearborn Parade, Corio, is listed for sale with price hopes from $629,000 to $679,000.

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Mr Lardner said rental supply in much of the country was already shrinking before the budget changes were announced and the trend would accelerate in the coming months, increasing pressure on rental prices and vacancy rates.

“There will always be some landlords who need to sell because of divorce, death, retirement, or other reasons. That hasn’t changed. The difference is that fewer new rentals are being cycled back into the market,” Mr Lardner said.

“Now, especially in established areas, if a rental is sold, it’s not being replaced,” he said.

Geelong’s rental home exodus

Source: FoundIt. Homes withdrawn from the rental pool in May 2026. Average rise in advertised rents over 12 months.

Henning Property director John O’Brien said while real estate agency rent rolls were providing a substantial number of property appraisals for agents, interstate buyer agencies had also stopped calling, reflecting a fall in demand in the region for investors, he said.

“Obviously a lot of that stems from some of the changes we’ve seen from May 12. The sentiment has been really negative,” Mr O’Brien said.

But the drop-off in investor activity opens the door to first-home buyers.

The previously rented four-bedroom house at 208 Heyers Rd, Grovedale, is listed for sale with price hopes from $890,000 to $940,000.

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“At a lower price bracket, we are definitely seeing great opportunity for first-home buyers that are now not competing with investors. We saw fierce competition over the past six to nine months, where you had investors and buyer’s agents, and I think it’s just such a good time now for first time buyers to get in.”

But Geelong buyers advocate Tony Slack said first-home buyers were holding fire too, amid rising concerns over higher interest rates, job security and impacts from the war in the Middle East.

“Doing nothing seems to be the strategy of choice at the moment for both investors and first-home buyers,” Mr Slack said.

The previously rented two-bedroom house at 1/57 McClelland Ave, Lara, is listed for sale with price hopes from $469,000 to $509,000.

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Mr Lardner said first-home buyers hoping the sell-off opens a window will find limited relief: median house prices across those areas sit around $622,000 to $745,000, and units around $426,000 –$537,000. The households being squeezed out of leases here are, in most cases, still short of affording to buy, he said.

Tenants Victoria CEO Jennifer Beveridge said the changes highlight the crisis the government faces to build more homes.

“The reality is that skyrocketing rents and tight supply have already locked families out of too many parts of Victoria. If a landlord sells a family home because they can’t maintain it, that property doesn’t vanish. It often becomes a more affordable entry point for a first-home buyer, or an opportunity for a new owner to bring it up to standard. A safe, well-maintained home is always a better outcome for the community,” she said.

Additional reporting: Aidan Devine, Alesha Capone