Ballan VIC Property Investment

## 1. Investment Verdict We recommend a Buy for Ballan, VIC, with the single most important number justifying this decision being the 3yr growth forecast of 13.4%. This indicates a strong potential for long-term capital growth, making it an attractive investment opportunity.

## 2. Market Overview The median house price in Ballan is approximately $622,000, while the median unit price is $540,000. The market is currently experiencing a cooling cycle, with a 1yr price growth of -1.3%. However, the 5yr CAGR of 4.5%/yr suggests a stable long-term growth trend. The high owner-occupier rate of 80% indicates a strong demand for properties in the area. For buyers, this means that they may be able to negotiate better prices due to the current market cycle. For sellers, it may be a good time to hold off on selling, as the market is expected to grow in the next 3 years.

## 3. Rental Market The vacancy rate in Ballan is 2.4%, indicating a relatively low vacancy rate. The median weekly rent is $500/wk, with a gross rental yield of 4.2%. The rental demand is high, with an unemployment rate of 3.8%. This makes Ballan an attractive option for investors, as the low vacancy rate and high rental demand suggest a stable rental income stream.

## 4. Short-Term Rental Opportunity The median nightly rate for short-term rentals in Ballan is $507/night, with an occupancy rate of 48%. This translates to an estimated annual revenue of around $132,000 (assuming 365 days of occupancy at 48% rate). However, considering the gross rental yield of 4.2% for long-term rentals, it seems that long-term rentals may be a better option in Ballan, as they provide a more stable and predictable income stream.

## 5. Infrastructure & Growth Drivers Ballan station is 1.8km away, providing relatively easy access to public transport. However, there are no major projects on file, which may limit the growth potential of the area. The supply pipeline is moderate, with strong population growth likely attracting new development approvals. The key risk to long-term capital growth is the distance from the CBD, which may limit demand and growth potential.

## 6. Bull Case If conditions hold or improve, the upside scenario for Ballan is significant. With a 3yr growth forecast of 13.4%, the median house price could increase to around $743,000 (assuming a constant growth rate). This represents a potential capital gain of around 19.5% per annum. Additionally, the high rental demand and low vacancy rate suggest that rental yields could remain stable or even increase, providing a strong income stream for investors.

## 7. Risks The key risk to long-term capital growth in Ballan is the distance from the CBD, which may limit demand and growth potential. The supply pipeline is moderate, which may lead to an increase in supply and potentially put downward pressure on prices. The vacancy trend is improving, but the current vacancy rate of 2.4% is still relatively low, which may indicate a risk of oversupply in the future. The flood risk and bushfire risk are both low, according to the state planning portal overlay.

## 8. The Play For investors looking to enter the Ballan market, we recommend targeting properties with a minimum yield of 4.0%. The entry range for houses is approximately $600,000-$650,000, while for units it is around $520,000-$560,000. Investors should watch for signs of improving market conditions, such as increasing demand and reducing vacancy rates. The recommended strategy is to hold for the long-term, as the 3yr growth forecast suggests strong potential for capital growth.

This analysis is for informational purposes only and does not constitute financial, legal, or investment advice. Seek professional advice before making investment decisions.