VIC Best Melb Strategy (600-900k)

The buyer was from Sydney he could not get those kind of prices in Sydney for distance to CBD and in a apartment zone. He also missed out on an earlier buy. This kind of prices just smashed premium stuff like in Doncaster size wise. It is clearly a sign other properties will start a pick up growth wise similar to reservoir when it started getting million dollar sales.i believe this whole suburb just went through some rezoning upwards and is now in boom

Yeah and u got some ppl saying west of Melbourne is a dumb deal ? Just want to laugh. Might as well stick to shares

Personally I wouldn't pick Bellfield or Heidelberg west or heights purely as they're very green the banyule council and there is a lot of overlays.

 

Unless rates rise a couple of basis points in a short amount of time I don't really see it having that much of an impact on property prices.

I work in the health industry and I've met a lot of people who have been waiting for some sort of a crash or market correction. The majority of them are first home buyers who have substantial savings. I know a couple who have well over $300k in savings and waiting on the sidelines to pull the trigger.

When rates finally start heading up and investor numbers recede I believe these guys will be your new competition. They have well paying, safe jobs and I see them picking up where investors drop off.

It'll be very interesting to see how it all unfolds.

 

Hey everyone, thanks for all the fantastic discussion, I am learning so much from the wealth of information that is shared on PC.

I am also searching for my first IP in Melb. According to the broker I can borrow up to 600k and my primary focus is capital growth with a long term time frame.

I am particularly interested in the North, suburbs such as Thomastown and Lalor, which have already been touched on in this thread. I was looking on reservoir but have been priced out towards the Keon Park top end in the time that I've been searching.

Could anyone please provide any insights into whether these would good areas to focus my efforts? If so, I would be most grateful if those with local knowledge could share their insights into which pockets of thomastown and Lalor are more or less desirable and why. I am planning to devote some time to drive and walk around to get a feel for these areas, as I had only previously been hunting in rezza previously. I am open to either the north or West for my budget and hoping to get in somewhere within about 15km of the CBD. Any insights on Western alternatives would also be great.

Finally, I am interested to hear your thoughts and predictions about how you anticipate the proposed North East link will impact on specific suburbs in the North and North East such as Thomastown, Lalor, Kingsbury, Bundoora and Greensborough.

Apologies for the long post, I look forward go hearing your thoughts!

Cheers,

J.

 

Which parts of Reza were u looking ? As I think u can get something for just 600kish
Why not St. Albans 15kms to cbd

 

Firstly i think great choice of areas, and good work preparing for the long haul. Just in case you havent considered it, I noticed you said 600k was your borrowing limit - if that is limited by your ability to repay, consider that estimates pin interest rates going up to as much as 6% by 2020, which could be a 40- 50% rise on what you will be paying now. Don't expect rents to do the same, and make sure you're ready in case this happens.

Back on topic, if you're looking long term then current socail demographics are somewhat less important as a long term strategy really relies on the demographics changing. Focus more on surrounding infrastructure and a good property (be it land, or the right structure depending on what your strategy is). What i like to imagine for these areas is "if i were married and just had kids, where would i be looking to rent/buy and what would my key consdierations be?" Becase really, that is a key demographic for gentrifying these areas.

Contrary to that however, current rougher zones from my research:

• Reservoir - north of broadway and east of cheddar is rought
• Lalor - north of kingsway drive, west of highstreet. look at it on google maps view, you can actually see the housing commission area where nearly every roof is identical.
• Thomastown - varies throughout, but friends in social work say to steer clear of the area west of highstreet towards hume highway.

Saying that, a good deal in these pockets could be well worth it.

 

Thanks for your insights melbournian & JL1.

Budget wise I have room to comfortably service a 600k purchase up to interest rates of 7-8% with a 5% rainy day cash buffer, so hopefully this will give me sufficient breathing space and peace of mind go ride out any storms in the short to medium term.

In terms of Rezza, I was admittedly focussing my efforts more on the bottom half, West of high Street and south of Broadhurst / Rutheven station and finding anything on a decent block of land was selling for above my budget. The side east of high St / train tracks does seem to have a rough feel to it in places which probably put me off a bit. The places up toward the keon Park end seem to be a bit more affordable, however often seem to be selling close to or above my budget if they have any development potential.

In your opinion, do you think the (currently) less desirable northern parts of rezza would be a better option than say properties situated in more ideal pockets within the northern neighbouring suburbs of Thomastown and Lalor, for example?

I will definitely look into St Albans, I haven't done much research on the western suburbs to date, but I think I need to be a bit more open minded about all suburbs I to avoid missing out on investment opportunities due to ill-conceived and outdated notions of geographical stigma.

Sounds like north and west are the places to focus on at the moment?

Where do you envisage places like Bundoora, Kingsbury and Greensborough are headed in the foreseeable future? I wonder if the proposed N/E Link will have any impact on property prices in the north eastern suburbs of melb.

Thanks again for your insights.

J.

 

It's really anyone's call for which of those suburbs is best, they are all priced relative to eachother with not a huge arbitrage between them. One may be closer to the city but the other may be closer to rail - no real answer for which is better.

Personally i think Greensborough and surrounds are quite limited for growth. There is minimal infill so property values are based on what people will actually pay to live in existing houses. At $7/800k+ for a house, I don't see huge scope given affordability is low, wage growth/jobs are not going to be doing anything spectacular, and rates are going up in the next few years. I think their next big moment will be once Mernda is fully built out and no new housing in the corridor adds a new element of constraint, much like the eastern corridor has experienced. this will be years out though.

 

@melbournian ...would be interested to know your thoughts on Wantirna. I see them having good schools, Chinese population improving and prices seem to doing bit of zig zag since last 6 months. config I am looking are 4,2,2 under 800k for ppor....

 

there were houses going for the 550-600Kish smaller blocks around the edwarnes lake area.
Also broadhurst is not that as expensive as other areas unless the block is pushing 900sqm. To be honest, there are actually a lot of undesirable areas in Reza (outside of the high St, gilbert rd, regent area, and oakhill estate) but even those areas are increasing. I mean a ex-housing comm house flying off the shelf close to 800K- less desirable (but it was only 500kish 6 months ago) and some with permits selling for nearly 900K. I went to some auction in the preston (ex-housing comm) only 400kish sqm wise but so many bidders (indian, Asian, aussies, greeks) and it went for like 656K or something) when last year it would have been around the 500K mark for that size.

Again you have to look at zoning, what infrastructure, accessibility to bus routes, trams, distance to preston mkt, universities etc as you know reza is huge (so it really depends how and what factors will help with this)

Bundoora and Kingsbury is already above that 600K mark, as it is very close to the universities (RMIT, Latrobe) and there is big Asian population due to the being close proximity to the universities.

I spoke to some agents and contacts about St Albans. The agent says just last year the train went underground also she has been dealing with lots of overseas Viets (ho Chi minh) city and they too are buying in cash. I looked at the zoning too and they just chuck like a big square of growth zone so majority of streets to the city area is growth zone. Lots of Sydney investors too coming in. The council even had to put in an acquisition to take a property off the market and acquire it due to having a parking overlay rather than bidding in auction. Rental though is very low in St Albans.

Brimbank council attacked for pre-auction compulsory acquisition of St Albans house

 

I used to have a townhouse in wantirna south many years ago. There is super big Malaysian population there. There is a facebook auction reporters website which you can view live auctions (which features a lot from this area)
A lot of places now edging a million dollars.

 

@willister went to that gouldburn auction

To be honest first time I saw a mainland Chinese guy come in and bid and outbidding everyone in reservoir. Usually it is just Italians and Greeks

 

Haha mate, your quick! The stylish 50s fella in a purple velvet suit jacket and jeans with aviator sunnies? I did not even both bidding as heck, my price range was well smashed well before I could even stick my hand up! $880k, my thoughts is that it's not a bad price for Reservoir, bit more exxy than my budget, but for what it offers and compare it to say a Springvale, it's way better.

Just curious by the way, where were you?

 

was facing this way. there were other bidders inc the chinese mother buying for the family. Then it was down to the young indian couple and that mainlander letting his instructions through the chinese speaking agent. The indian couple i think got a bid freaked out as this guy was upping his bids quickly and left at 880K. the indian couple then went to 175 Broadway Reservoir and paid 950K - there is a certain feeling when you lose an auction (which was not bad seeing the last 2 sales was 1.1 and 1.34 mil). Even heidelberg west when i was looking last year in the 500kish has now moved to 700kish (is it a boom or is it just buyers moving further out or covering suburbs within reasonable distance to CBD which are cheap? tarneit property like nearly 150 ppl showing up. end of the day ppl who live and want to stay in melb (esp ppl who have just started working last ocuple years) can only afford so much hence moving further out. i predict even pt cook or st albans majority sales would be 700Kish and werribee would move up.

 

Haha my gf was standing behind the indian couple. Umm from memory are you the big aussie fella in the tshirt and shorts?? I honestly dont think the chinese guy knew what he was doing he belted out big bids to smash the indian bloke but failed. There was one auction concurrently on shand st 950k sold for. Interesting that the indian couple went elsewhere on the same day to buy!!

To be honest I predicted $800-$820k when I was at the auction for Goulburn St. I think the Mainland guys will demolish and build 2 units and will reap instant rewards, 1 mil suburb in 2018 this Reza. It was more than I could afford and frankly I think I've missed the boat for Reza. The returns are incredibly low as well and thus, does not fit my plans. Next stop would probably be Noble Park or St Albans, but good old St. Albans is a bit far from where I now live, still a bit of nostalgia about the place!

 

Haha Nah I wasn't the Aussie bloke in shorts but u are right it is moving up rapidly the thing ppl dun understand abt Melb is it Reza din really moved that much from last overall boom. Some suburbs in Melbourne did some didn't and really it is only moving now like for eg Pt cook etc St. Albans. The Heidelberg west and heights are as expensive and really like nearly 200k move from last year.

The broadway area is pretty buZy if u asked me for a ppor. I also went to double block auction in Preston two middle eastern blokes belting it out at 2.8 mil and got passed in at 3.05 mil.

 

I almost feel as if $700K is really not enough these days to buy a decent sized block (600m2+) within a 20km radius. People quote say a St. Albans but really anything that's left there is rubbish for the price tag of $500K. I use to live there as a kid and honestly the best block is probably bounded by Walmer Avenue, Lester Avenue, Station Avenue and Main Road East. Anything closer, you are a bit too close to commercial zones or too far out from the town centre.

 

St. Albans has been hyped up massively recently - but how about neighbouring Kealba and Keilor Downs?

 

well - when properties sell 1.1 mil, 1.81 mil and a council uses some overlay to buy over a property - wouldn't think it is hyping.

 

St Albans has a big ace up it's sleeve - a decent town, but most of all, a station. The high school these days is not half bad, if only they could get Victoria University up to a decent standard, it wouldn't be far off as a liveable suburb. When I used to live in St. Albans (1989 to 2005), people used to say how great Keilor and Taylors Lakes was - the "Toorak of the East" but honestly, it is only of the most inaccessible suburbs I've come across.

 

Just wondering what you mean by inaccessible? Taylors Lakes has Watergardens station and is served by the Calder Freeway (Melton Hwy exit). Keilor is more difficult to traverse PT wise (it is hilly unlike TL which is flat, and there is no train) but it's served by the Calder Freeway too (Green Gully exit).

I agree on St. Albans by the way. It's probably got the best PT out of anywhere past Footscray, with three train stations.