30 Rocklea Drive, Torquay, sold for $1.4m. It had previously sold for $593,00 in 2011.

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Home sellers are pocketing huge gains in Geelong despite market headwinds created by rising interest rates and cost of living pressures on buyers.

New PropTrack data has calculated the median profit figures from home sales reported in suburbs between March and July, a period when the Reserve Bank began raising interest rates in an effort to curb rising inflation.

The move has put a brake on the property market, with region’s median dwelling value dropping 1.9 per cent in the past quarter, with some suburbs seeing larger price falls.

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PropTrack economist Paul Ryan said the five-month snapshot shows that people who were selling in the downturn were still unlocking huge equity, particularly after the rapid growth during the two years of the Covid pandemic.

The median profit figures are the middle price of gains recorded for home sales in each suburb. It does not reflect the increase in value in every home in a suburb.

The lowest median gain of $215,000 was reported in Norlane, where the typical house price hit $485,000 in July, up to a staggering $770,000 median gain in Torquay, where the typical house now sells for more than $1.3m. Ocean Grove also had a median gain above $700,000.

18 Trader St, Ocean Grove, sold for $1.075m recently. The home previous sold for $755,000 in 2019.

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2540256 Thacker St, Ocean Grove, recently sold for $1.4m. It had previously sold for $665,000 in 2016.

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Mr Ryan said sellers had held their properties for longer than those who sold in the period during or immediately before the pandemic.

Most suburbs in the region showed a median hold period of around five years, with the longest at 7.8 years at North Geelong and the shortest, 4.4 years, at Charlemont.

“What we’re seeing at the moment is while interest rates are increasing and while that is putting pressure on prices and making affordability a bit tougher for upgraders, the big profit gains that people made over the past couple of years unlocked huge equity for people to use to upgrade and we’re seeing that in listings activity across the country.”

Gains seen in growth areas such as Armstrong Creek, Charlemont, Curlewis and Mt Duneed could be inflated by the difference between the land price originally reported on house and land packages and recent home sales, although the research excluded land sales, Mr Ryan said.

30 Crofton St, Geelong West, sold recently for $1.33m. It had previously sold for $776,000 in 2016.

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30 Crofton St, Geelong West, sold recently for $1.33m. It had previously sold for $776,000 in 2016.

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“The profits aren’t wildly higher than East Geelong and Highton, it’s still consistent with the profits of the area.”

McCartney Torquay agent Tim Carson said it was a very high figure for the Surf Coast town.

“A good rule of thumb is that things have gone up in the past two and a half years $400,000 to $500,000. And lifestyle properties have gone up around $700,000,” he said.

“There would be some people may have seen that growth over a 10-year period, or five or six years.”

RT Edgar, Ocean Grove agent Brock Grainger said people who chose to stay put during the pandemic were reaping the rewards of an enormous wave of price growth fanned by people relocating to the Bellarine Peninsula town.

Geelong agent David Cortous said the city’s properties had been historically undervalued.

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1/38 Denman St, East Geelong, sold for $829,000 recently. It had previously sold for $465,000 in 2010.

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“When you look at the growth over the two years of Covid, Ocean Grove was up near the 40 per cent mark in median house price and in my experience right now it’s come back 10 per cent to 15 per cent,” he said.

“They’re still making 25 per cent just on median growth profit.

“We are seeing a little bit less of relocating for lifestyle reasons and probably going back to the traditional market where people upsize or downsize within the same market.”

McGrath, Geelong agent David Cortous said while some people were lucky to have locked in strong gains through the Covid boom, the figures show time in market would lead to capital growth.

He said the city was also playing catch-up because property in the region was undervalued, considering Geelong was 75km from a capital city and sitting on a bay.

“Geelong being so close to Melbourne we were probably undervalued to start with,” he said.

“Take the pandemic boom out of it, the Geelong market had a bit of catching up to do.

“I think you’ve seen that now with those numbers – 75km from a capital city, sitting on bay, we were undervalued, it’s as simple as that.”

GEELONG’S MOST PROFITABLE SUBURBS

Source: PropTrack. Median profit from all sales between March and July, 2022.