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

i buy and sell all the time. at one stage i sold 8 apartments within a 1 year period. i will buy if it suits my product type, strategy and risk.

 

i personally don't think it is tanking - i think there are some big corrections. some stuff like ppl have discussed in northcote, and i have witness in doncaster,balwyn and even heidelberg heights/west. who have peaked so fast. imagine a place that was 400K gone to 900K within 2+ years period and it has dropped to 700Kish - that is like a nearly 200K drop.

If you look at sydney even in Mt Druitt - the price median is close to 700K compared to 500Kish around 2015 or high 300kish in 2012. Same like pt cook in 2013 - you could get a place around 350Kish and 2017 it was around 500Kish and it is now 600Kish in 2018.

maybe work on a strategy - if you just flip and flop with all the data and analysis - you will never get a direction.

 

Melbourne is a big place, and cannot be labelled as performing the same in all its pockets at the same time. Melbourne has many markets within it... and within each market, different pricing brackets behave in their own way also. It is always the case that it is necessary to understand the sandpit you're intending to play in.

 

What are your anticipations? @Leo2413 has seen some good deals in inner Sydney but he’s waiting for the fantastic deals next year. I see he anticipates inner Sydney to keep tanking until next year.

 

My expectations are for the apartment segment to start hurting from all the over supply that’s built up and all the doom and gloom about an apartment glut to come to fruition now the downturn is in motion.

I do not see much money to be made on growth in my segment so I’m focusing on money to be made on declines (can I get a big apartment in a blue chip suburb for 20% below peak). That’s my strategy right now.

 

which suburbs are you targeting - i took the train a few times last few weeks during peak morning rush hour. (man it is very tough, in terms of congestion, is like mirroring some parts of china now). i wouldn't be targeting apartments in inner city like in sunshine or the likes of preston or like doncaster, clayton. Those will just stay flat or drop. Apartments is about having facilities being accessible to you. one being close to the CBD for office workers, parks, cafes, eateries. No point buying an apartment in mitcham if you get what i mean.

However Apartment market in general has been very flat - it had gone backwards in terms of 20%+ in early 2000s. (2005 around there) but i feel quality apartments (ones which are big - 3 beds or 2 bed 2 bath) inner city fringe - here is big demand for them. look at that carlton one art deco selling for record price. if you refurb a centrally located apartments - there are still gains to be made - but it is hard work.

 

How are you seeing gains, just because the odd one or two Art Deco units sold above reserve recently? Apartments seem very hit and miss in my segment. Apartments in sunshine selling for 285-300k unrenovated last December, but right now there are similar ones on adjacent streets asking 265k. One just sold, completely unrenovated for 210k.

In kingsville an apartment sold at peak last year for 405k now there’s 4 sitting on the market on the same streets for 3+ months now, starting from 375k.


Youinvestmentproperty.com has St Kilda apartments down -8% yoy.

So I’m not sure where your bullishness comes from, you make it appear as if Melbourne is an unbreakable market. I’m seeing weakness all over the inner city unit market. It’s just a matter of how long it will last.

3 months ago I put a verbal offer on a 1 bedroom unit in Brunswick for 280k but the agent said minimum owner will accept is 290 because last year similar ones in the building sold for 300k. This week he calls me and says he thinks he can get my offer through.

My specific target is 2 bedders in bubbly + oversupplied suburbs like Footscray and St Kilda.

 

i am only talking about apartments because you talked about it so much.

there are markets for this. Sunshine is an absolutely no go for apartments seriously. and the ones you are looking like kingsville at i am telling you will make minimal gains or negative growth. ppl buy houses or at least townhouses in those areas not apartments. you're not in anywhere special that should have apartments - you buy in CBD Fringe you can at least walk to work or take the free tram or if you had apartments in front of GWSC or Balwyn high - than yeah. why not?

I am NOT BULLISH on apartments - i never was and don't play in that sub market anymore.. All i can advise is my experience on buying and selling apartments which i have done going back 7-8 years ago. i might add and stress i was in a flat and NON-MOVING markets such as southbank (so what i have seen was the WORST and OVERSUPPLIED of the apartment markets) and i still manage 7 figures gains after doing all that. Gains are what you can make out of it - if you are just targeting "organic growth" by seeing charts and indexes without manufacturing growth, seeing what sells in the market - then just forget the apartment strategy altogether.

if it was so easy to make money - the garbage collectors would be making millions.

Have i not pointed out drops in doncaster, balwyn ?? and also heidelberg heights ??

 

I see what you’re saying but it’s too broad a statement for me to find useful. Show me a specific listing on realestate.com which you think will turn a profit in the short term. Because All I’m seeing is weakness in the inner suburb apartments in my budget.

 

My question comes down to where the markets are heading in the short term. There are some good deals I can take now but they are not exactly what I’m after. Or I can wait for the fantastic deals next year if people think this trend will continue.

 

The key to what I have said is manufactured growth - but I think a crucial factor as well is budget which u have mentioned.

 

Why doesn’t mtr do that? Instead of monitoring the market for attractive investments to manifest in the downturn just buy something now and manufacture attractiveness. Why is Leo waiting for fantastic deals next year, why not just buy something now and manufacture a fantastic deal.

It doesn’t add up. It’s why I asked if you’re buying now or if you’re one of the seasoned investors waiting to swoop in on good deals.

 

@DrunkSailor
It seems you are analysing a lot. But not doing anything.
@melbournian
Seems like you buy sell and make money


So would it not hurt to list to the advise of Melbournian rather than keep analyising and question the logic or go buy a place and compare results.

 

Its not a 1 size fits all


For the same reason sales agents don't close when market is slow.

 

Everyone has their own timings and agenda. No one is going to openly tell u what they are going to do. Which is why I have said before diff deals diff target markets and price brackets

Like if u ask them for a town planner contact - no one is going to give it to u

Ppl give some guidance and u take it upon urself

Personally I think u need a mentor from a sash or someone who can give more guidance

 

Where do you think I’ve got it wrong? Property in my segment won’t decline which is what my strategy requires?

 

Is doing anything always better than doing nothing?

 

Exactly that. Most seasoned investors and developers have a strategy. Markets need to display certain characteristics before they buy/develop etc....
@DrunkSailor
I personally know of 2 high end developers in Melb that are not committing to any more projects in the short term. Why? The higher end markets that they play have plateaued or pulled back. End values have stagnated... In short, it's too much of a gamble to commit to a 18-24 months project for them.

On the other hand, I know of other investors that have niche skill sets and have bought recently.

Personally, I've sold 2 and having another hitting the market this month. However, my last purchase was in May this year.

My point is that Melboiurne is a fragmented market. It can't be painted with the same brush.
And when companies like Corelogic say Melb is failing/crashing etc... well, which part of Melbourne are they referring to?

IMO, if you see an opportunity that ticks the boxes and matches your risk profile, then I say buy.

 

I misspoke by saying I’m crippled with analysis. I’m not trying to seek out what little growth there is left in the Melbourne market. I think that would be foolish for someone of my skill level to do.

 

In most cases yes.

Because as much as you can.learn from the forum and statistics.

Nothing replaces skin in the game and doing it in real life.

Lessons learned are more vivid.