Blue chip vs bayside Melbourne

Discussion in 'Investment Strategy' started by TMNT, 9th Sep, 2018.

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  1. TMNT

    TMNT Well-Known Member

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    So I've just been helping someone out (well trying to) with a purchase

    Was having a look around and looked at mentone because it's proximity to the beach, it's blue chip bayside, however it's also the bum of bayside

    The cheapest 600sqm block crappy house is 900k

    Have a look at the east Eg Doncaster area, the cheapest 600sqm block with a liveable house is 950k.

    For. Lifestyle wise, Mentone is no where near as nice and should no where near be the same as the east
    Is this the case of the gaps between the east and the south east has become far too small, and that either one is overpriced or under priced?
     
  2. Joynz

    Joynz Well-Known Member

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    The bayside area has the beach but also lots of great little street-side shopping areas and cafes. Mentone isn’t the only beach-side suburb though.

    To me, Doncaster has no appeal at all - just standard suburbia...

    What are your friends looking for - if proximity to the beach doesn’t matter, then go east.
     
  3. TMNT

    TMNT Well-Known Member

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    lets say purely for investment purposes,

    half of me says that the east is better in terms of reputation and image,

    bayside brighton/hampton obviously a different kettle of fish
    and all your cheltenham, mordialloc, mentone parkdale, beaumaris
    to me east is still nicer overall,

    however from an investment perspecive which would people take???
     
  4. TMNT

    TMNT Well-Known Member

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    I should have put in a post

    For purely invesmtnet long term.

    Which would you buy 600sqm block
    Same house.

    900k mentone vs
    950k Doncaster
     
  5. Sticky

    Sticky Well-Known Member

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    For long term investment I would choose Bayside.

    Look at any other major city globally, prices increase near the water.
     
  6. Silverson

    Silverson Well-Known Member

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    Tricky one as Doncaster is 17km approx 5km closer to CBD than Mentone, Could possibly fetch more from a capital improvement point of view, however as mentioned pretty bland, not exceptionally well services by public transport etc.
    For me I probably still would go Doncaster, but I think you will do well with either.
     
  7. kaibo

    kaibo Well-Known Member

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    950K isn;t going to get you a regular block with a liveable house in the better parts of Doncaster (around shopping town/park and ride). Keep in mind Doncaster Park N Ride to the North east edge of Doncaster east is actually a 10km drive.
     
  8. johnmteliza

    johnmteliza Well-Known Member

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    Property prices boom near the bay so much that the Mornington Peninsula was even the 2nd highest area for property price growth in 2017/18 in all of Australia. There are plenty of blue chip bayside suburbs on the Mornington Peninsula including the most notable: Portsea, Sorrento, Mt Eliza, Mt Martha, Flinders and St Andrews Beach. For being a fair distance away from Melbourne CBD this is pretty impressive. However, I think because of the upcoming Mordialloc Bypass (Extension of Mornington Peninsula Link) people are noticing that the area will soon become a lot closer to Melbourne. Therefore, they see it as an investment opportunity. The popularity of beach side suburbs show the reality of buyers desiring a better coastal lifestyle.

    I agree, Doncaster is very much suburbia despite it having some nice grand houses. But then again you can get the same if not better houses in the Mornington Peninsula and also with the beach on your doorstep. Bayside is vastly more congested and dense than the Mornington Peninsula. So Mornington Peninsula really provides the best of both worlds. The south is definitely where the potential growth is. While the east and north-east is really suffering too much due to the declining inner city market.

    The Mornington Peninsula also hasn't fallen to a great degree like the rest of places in Melbourne. For something more recent, have a read of this article to get a better insight of how the agents feel about the Mornington Peninsula's performance. The statistics speak for themselves.

     
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  9. The Y-man

    The Y-man Moderator Staff Member

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    Donc ends cnr Victoria and King - so only 4.9km drive according to google maps.
    I think you are talking about DE (3109)?

    Once you are in DE, you have the 906 Freeway bus (ditch car on any residential street near bus stop) in addition to 907, 901, 902

    But even in DE, a house on a decent block rarely comes in under $1m

    The Y-man
     
  10. The Y-man

    The Y-man Moderator Staff Member

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    ...which may mean not as many bargains?

    The Y-man
     
  11. johnmteliza

    johnmteliza Well-Known Member

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    The OP is looking for good investment opportunities so the Mornington Peninsula market is attractive given its continual and expected growth. The Mornington Peninsula is also already affordable compared to Melbourne for what you get and therefore is a bargain. This is in contrast to buying into Melbourne's city market and seeing no growth and in fact a continued decline. Hence, buying on the Mornington Peninsula is a more viable option.
     
  12. Connor

    Connor Well-Known Member

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    I love the Mornington Penninsula! But I certainly wouldn't be buying there now.
    If Melbourne suburban prices have peaked and are now pulling back. And, as you claim, peninsula prices have increased but not had a pull back or adjustment. This tells an investor that there's a greater likelyhood of stagnation or correction than continued growth.
    I don't know of any successful investors that buy into an area AFTER its had major growth, while surrounding areas that are better connected and closer to the city are softening in price.
     
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  13. alicudi

    alicudi Well-Known Member

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    Hi

    This has already started in Mt Eliza especially in the low end price range.

    Regards,

    alicudi
     
  14. Jimmyay

    Jimmyay Well-Known Member

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    Yes the Mornington Peninsula had it's boom a little later due to the ripple effect - the echo of which has continued til very recently - if I remember correctly the best performing areas in Melb recently were Warburton in the Yarra Valley and Bittern / Hastings on the MP. That boom's now a busted flush so whilst the MP may be cheaper than the inner suburbs at the moment, it is not necessarily "better value".
    Back to the original posting. I live southern bayside and have been surprised how much mentone has come up in the last few years - always had a rep to me of being the land of the small 2 bed villa units..and its over 20km out. however proximity to water, good schools and fast train to the city has meant it has outperformed some other areas in last 5 years. Commuting by car up the nepean and back is a first class pain however. personally wouldn't want to live in Doncaster, it feels rather drab and characterless but investment wise it is closer to city.... who knows!
     
  15. The Y-man

    The Y-man Moderator Staff Member

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    Drab suburbia (and high rise now!) maybe but big Asian factor.

    The Y-man
     
  16. johnmteliza

    johnmteliza Well-Known Member

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    As you stated on another forum the "the property values that I enquire about are on the bottom end of the scale, ie: units/apartments up to $350,000 and houses up to $750,000". There are very few house under $750,000 in Mt Eliza and therefore your comment is not representative of the majority of the expensive Mt Eliza market.
     
  17. johnmteliza

    johnmteliza Well-Known Member

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    It is still a good time to invest as the Mornington Peninsula market is further showing that it is in a delayed cycle compared to Melbourne. This provides a opportunity for Melburnians to cash out of Melbourne while it begins to decline and continue growing their wealth in the Mornington Peninsula market. This is similar to the way buyers are looking at holiday and regional markets for growth because they feel they have missed out on the Melbourne market and are looking for less inflated markets for future growth. For Melbourne buyers, this offers a perfect time to buy on the peninsula as they have more money from the Melbourne property boom and can afford more on the peninsula due to the delayed property growth between the two areas. Melburnians may also be looking at retirement from the boom which is convenient timing for the Mornington Peninsula to prosper.

    The market is still vastly more affordable and is showing it is separate to the Melbourne market. The growth is evidence that the Mornington Peninsula has not had its complete major growth already as you suggest and isn't being impacted by poor performance in Melbourne. In fact, the poor growth in Melbourne has been helping other regions in Victoria gain growth such as the Mornington Peninsula. Buyers are not looking for areas that are better connected or closer to the city anymore. The growth in the area is reflective of a changing importance among buyers for quality lifestyle.
     
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  18. Barny

    Barny Well-Known Member

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    Hi John, what kind of growth do you see or believe might occur? 50k, 100k? 200k?
     
  19. johnmteliza

    johnmteliza Well-Known Member

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    The Mornington Peninsula's growth cannot be explained by purely the ripple effect. The outer suburbs have definitely benefited from the ripple effect and recently become the top performers in the capital cities as you stated. However, Warburton and the Yarra Valley are by no means top performers. Warbuton's median has only increased by $52,000 in last 12 months and the 4 bedroom median is actually declining (core logic). Similarly, in Yara Glen the median house price have only increased by $30,000 in the past year (core logic). While the 4 bedroom median is the exact same as it was 12 months ago (core logic). Bittern and Hastings (both on the Mornington Peninsula) are actually not the top performers of the Mornington Peninsula area. For example, Bittern's 4 bedroom median house price has risen $183,000 in the past 12 months (majority of the uplift has been recent within the past 3 months). This is strong growth however the blue chip suburbs such as Portsea has risen $730,000 in the past 12 months alone. This really shows that the Mornington Peninsula combines affordable offerings while also displaying incredibly strong growth. Therefore, the market is both a good market to buy in with high expected growth.
     
  20. WattleIdo

    WattleIdo midas touch

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    To put it simply, gentrification.
     
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