Ferny Creek VIC Property Investment

## 2. Market Overview The median house price in Ferny Creek is approximately $1,059,279, although this figure is pending peer validation. With a 5-year CAGR of 6.2%/yr and a forecasted 3-year growth of 2.4%, the market is showing signs of stability and potential for long-term growth. The owner-occupier rate is high at 92%, indicating a strong community presence. However, the lack of data on days on market and 1-year price growth makes it challenging to determine the current market momentum. For buyers, this stability could provide a sense of security, while sellers may need to be patient due to the potentially slower market pace.

## 3. Rental Market The rental market in Ferny Creek is characterized by a low vacancy rate of 2.2%, indicating high demand for rentals. The median weekly rent is $460/wk, and the gross rental yield is 2.3%, which is relatively low compared to other suburbs. The rental demand is rated as high, suggesting that investors can expect to find tenants relatively quickly. However, the low yield may impact the attractiveness of the suburb for investors seeking higher returns. For investors, the high demand and low vacancy rate are positives, but the low yield needs to be carefully considered.

## 4. Short-Term Rental Opportunity Unfortunately, there is no data available on the short-term rental (STR) nightly rate and occupancy rate in Ferny Creek. Therefore, it's challenging to assess the potential of STR in this suburb. Without this data, it's difficult to compare the viability of long-term rentals (LTR) versus STR. Investors should consider the traditional rental market data and weigh the pros and cons of LTR versus STR based on other factors such as property type, location, and target market.

## 5. Infrastructure & Growth Drivers Ferny Creek benefits from standard suburban transport access, making it relatively convenient for residents to commute. The Angliss Hospital Expansion, currently under delivery, could potentially drive demand for housing in the area, especially for those employed in the healthcare sector or seeking access to medical facilities. The moderate supply pipeline, consistent with long-term averages, suggests that the suburb is experiencing steady development without significant oversupply risks. These factors contribute to a stable environment for investment.

## 6. Bull Case If market conditions hold or improve, with the 5-year CAGR of 6.2%/yr continuing or increasing, Ferny Creek could see significant upside. The forecasted 3-year growth of 2.4% could potentially exceed expectations if infrastructure projects like the Angliss Hospital Expansion have a more substantial impact on demand than anticipated. In such a scenario, investors could see their properties appreciate in value, making it an attractive long-term investment. For example, if the median house price were to grow at an average annual rate of 7%, the approximate $1,059,279 median house price could increase to around $1,300,000 in five years, providing a substantial return on investment.

## 7. Risks One of the significant risks in Ferny Creek is the high bushfire risk, as indicated by the state planning portal overlay. This could lead to elevated insurance costs and necessitate specific mitigation measures, including the need for a property-specific bushfire certificate before exchange. The bushfire overlay obligations could also impact development and renovation plans, potentially affecting property values. Investors should carefully consider these risks and factor in the additional costs and complexities associated with bushfire mitigation. The unemployment rate of 4.0% is relatively low, suggesting a stable employment base, but investors should still monitor economic trends. The moderate supply pipeline, while not indicative of oversupply, still poses a risk if demand does not keep pace with new developments.

## 8. The Play For investors looking to enter the Ferny Creek market, the recommended entry range would be around the approximate median house price of $1,059,279, pending peer validation. Investors should target a minimum gross rental yield of 2.5% to ensure a reasonable return, considering the low yield environment. Watch signals include changes in the vacancy rate, rental demand, and the progression of infrastructure projects like the Angliss Hospital Expansion. The recommended strategy is to hold for the long term, riding out market fluctuations and benefiting from the potential for steady growth. However, due to the high bushfire risk, it's crucial for investors to conduct thorough due diligence, including ordering a property-specific bushfire certificate, to understand and mitigate these risks fully.

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