A snap shot of what is happening on the ground in Melbourne

The commentary is still the commentary - I am not going to change what I am saying is happening on the ground, just because you all disagree with me or just because you are offering me an article (that I have already read). If you don;t value commentary about what someone on the ground is seeing, feel free to keep scrolling.

 

Yeah there might be and there might not be.
If you think its going to pull back more than 10% yeah, there will be better deals.

 

I don't think that is the case. I think there is a target number for immigration (10million extra by ..... bugger I can't recall the date....)

 

If you go by data

• International yields are rising,
• Funding costs are increasing,
• Our DTI is already in highly risky teritory as per developed country standards
• Our household debts are like never before
• China is have a credit crunch of sort along with trade war effect, If china sneezes OZ will catch cold, watch out.

We are already at extreme end of a expansionary credit boom, new credit boom doesn't follow old credit boom immediately it needs to deflated first, household debts needs to be deleveraged.

What do you think will lead to creation of an easy credit environment like it was few yrs back?

 

No one said we are about to enter a credit boom - don't mistake what I am saying. I said all it takes is some loosening and that has already begun.

 

Why do so many investors keep referring to 'the market' 'the market' 'the market' and or imply there is only 1 market. There is no 'the market' imho! There are hundreds of markets. And then you have different stock types which can and do behave differently. Then you have different price points which can and do behave differently.

Using Sydney as an example. There are some markets in big trouble atm, especially those who bought OTP units at the peak. Then there are other markets in a different stock type which are showing some great value and opportunity atm. Maybe even more value to be had to wait longer.

For goodness sakes there is no 'the market'!!!. When people frame this stuff wrongly in their head, how do they then expect to make good buying decisions. Its beyond me.

Ok rant over.

Continue with 'the market'.

 

AMEN.....

there are 4 things happening in the Melbourne market at the moment, yet everyone has found a way to take issue with one of those things as if it is the WHOLE market.

 

What a beautiful list of beautiful little gentrifiers.
I don't mind if they can't read properly/ don't get it - I want investors OUT of Frankston.
I know what you're saying about stats vs on the ground but even the stats for
Frankston (the one I follow very closely) are looking good. As for 1st hand experience, I've got a decent tenant who never wants to leave, a recent rent hike and low vacancy. Investors out, fhb-gentrifiers IN.
As for the commentariate, that's what they do best, all day, every day.

 

No offense but if you think the general trend in housing finance availability is loosening, then you clearly do not have much of an insight into what is happening in banking in Australia . Things will continue to tighten for a good while yet unfortunately .

 

I didn't say that.
I made a passing statement to illustrate a point that things can and do change quickly.

 

*sigh..... its a real shame. There are people out there (who come here as visitors and read these posts) trying to find out what is happening on the ground, and they have to cut through all this BS and work out what is really happening.

How good is Frankston looking with the young street upgrade, train station upgrade and the main street renos!!!! (aside from the thug last week - did you catch wind of that!!?? Its really coming along so well. Id love to see the main street with heaps more restaurants etc - I think it will happen in time (long time) )

I am going to work out how to turn off the notifications for this post and go take a hot bath and panadol. Its ALWAYS a pleasure chatting with you @WattleIdo

 

Hi Lisa

Great opening post and yes I concur 95% with your analysis. Most of, let's say 80% of the facts are from what is happening on the ground right at this point in time, I tell people what I see and they don't believe me.

Previously I was looking for a very cheapy stiyle apartments in a 60/s/70's block of units with a courtyard for around $300,000 in areas such as Carnegie & also Mentone.

I have now changed my focus and are looking for a couple of different properties in a few different suburbs due to me noticing the decline in prices, one of them is a suburb that you have published in this thread where I have found 3 bed, 1 bath, 2 car garage townhouse style units been advertised for $390,000 to $425,000 and I have been making offers last week and this week with one of them not marketed on the internet as yet that I hope to secure within 24 hours.

I am also looking at the very cheapest houses in a very high end or what I class as high end subrub but many people disagree because it is further past Frankston and I have noticed prices drop over 5% for these 1980's un-renovated homes.

The small 5% that I disagree with you is that I think some parts of Melbourne are going to take a much bigger hit as soon as the end of this year to 2019 (or maybe this is me hoping/dreaming so I can get a better bargain?.

For the record I have also been involved in property for over 20 years and watch the market as an active investor.

Regards,

alicudi

 

@alicudi..... now I’m wondering which suburbs and how much you might think it will go down. We should discuss further and see how things unfold.

Good luck for your offer! Hope you get a great deal over the line. Woohoo!

 

Over the past couple of months or so, I came across some wealthy folks who are targeting Frankston/Frankston South to invest despite negative sentiments about changes in the market(s)...

 

You are spot on. Also, there are other things happening; some small - like upgrade of the playground at the foreshore, but also larger projects including CHISHOLM INSTITUTE'S FRANKSTON CAMPUS REDEVELOPMENT. Also, once electrification of Frankston - Baxter line with addition of new train stations in Langwarrin and Karingal kicks off, folks need to make sure they are on the train already so to speak and not behind it and the list goes on...

 

Sentiment is the market in my opinion.

 

I think it’s because 90% of things impacting the real estate market at the moment are macro impacts.

APRA changes. Interest rate concerns. Limited credit. Wage growth stalling. Reduced sentiment.

You can argue that different houses form different markets in different suburbs, but those are micro stock questions.

However the largest items impacting buyers at this time are macro, people earning 50k, 100k, 200k and 300k per year are all impacted by apra, interest rates, credit supply, wage growth, sentiment.

So the demand side is impacted from basically the near top to bottom of town. The general result of this is that it works upwards through the supply side. People avoid c grade property, then b grade gets impacted, then in some cases a grade suffers. There is some outlier results like 3 bed houses 500-750k will go storm for people locked out of the market, but in a full downturn that will subside too.

So in short - most people here a commenting on macro impacts to the whole demand side.

 

Yeah, nah, it's just easier to hit the keyboard than to do a little research before offering your very valuable opinion, in my opinion..
Even better would be if some of these self-appointed experts could get themselves onto the ground and then give us the benefit of their informed opinions. In my opinion.
Actually, one or two of the posters are on the ground. It's ok to disagree, if you do, when you know why because you've seen it when you've hit the pavements yourself.

 

A lot I disagree with there, though (naughty me) really can't be bothered to articulate further my views on this. Que Sera, Sera

 

Interesting times, I am now getting phone calls from real estate agents in Melb, asking if I want to buy development sites? What does that tell you.

Markets within markets, I understand this..... but when market sentiment changes and you have finance tightening it may not impact today on your neck of the woods, but it would be foolish to ignore what is happening in the background.

The next question... is show me the great deals where you can make money today, I am not talking about buying property 2-3 years ago and then presenting current values. I am talking about buying today where it makes sense, a strong market, values still rising? strong rental returns?

I certainly cant do this. Have looked at DAs in Melb today and they do not make sense.
Building costs/land costs too high.

As far as developers go.... good luck putting together a DA, anything over 5 units very difficult to sell... why ? because developers/building finding it very different to source finance. Finance is huge, when development sites no longer make sense and developers are holding stock, what do you think happens...… oversupply



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