VIC Carrum Downs or Werribee

On Clayton I'm still shocked as to how quickly it shot up (mid 2015) I think there was a block for $800K and it was barely 400m2 off Eva Street? These days it looks normal or even cheap. Clayton wont be a Mt or Glen Waverley due to a lack of a "good school" and lush green areas. Drive on Clayton/Stephensons Road past the Waverly Road intersection and it seriously becomes very Green.

Immigration isn't cut yet, but if there is a recession it might. Interest rates are going up, just got mine bumped to 4.04% from 3.87% from ubank. I'm just astounded at auctions people auction into the 1mil+ mark like that it's as if it's $100 or something....imagine the loans?

 

interesting news on 457 visas (i know lots of Indians are on these visas - some are my tenants too ).again Werribee is different to say a clayton etc (they're different demographics) - so it would not even put in dent in suburb like clayton etc. New laws and changes affect everything similar to rezones and is likely to have some level of impact on these western surbubs H&L

Malcolm Turnbull to abolish 457 immigration work visas

 

All new purchases are assessed at 7.2% these days, or something like that.

Take Werribee for example.
Household income is 1124 per week.
Let's say they buy with 20% deposit on a
320k @ current 4% P&I home owner is 352 per week repayment.
352 of 1124 =31% of there pay per week leaving more disposable income than most highly leveraged investors,
Say rates go to 7.2% then repayments will be 501 a week, that's 44% of their weekly income, it's tuff, but most usually start off high and that drops after a few years.
Also add in additional costs per week to maintain the home and it will push it over 50% which is tuff but doable.

So 1% interest rates won't really do much at those prices are my thoughts, 2%+ will.

Even at 2% they can afford 450k-500k. It's tuff and would be tight, but just doable. Also that's just the median household incomes, those servicing now must be earning more to service.

 

Saw this 20mins ago and instantly thought H&L impact…

 

Interesting to see other people's perspectives! Thanks all the same!

 

Incorrect...457 visas... are supposed to be temporary backfills for labor in areas of skills shortages. So when they do buy...they buy when they get permanent residency and show up as one of the recent migrants.

There are still 200k immigrants coming to Australia. Now more people are also moving from WA and Sydney to Melbourne.

 

This article is telling also....

Sydney's loss is Melbourne's gain: House prices push young families interstate

 

Very true.

 

Are we then in effect, pushing the bubble? Sydney may flatten out and deflate and then Melbourne takes up Sydney's slack?

 

I don't see why Melbourne can't rise to Sydney's current median house price level. Fundamentally, its got everything and arguably more than Sydney It's desirable (most liveable city in the world for a fair few years in a row), reaping benefits of interstate and international migration, cheaper houses and commercial properties, better planned out roads, one of the most diverse economies if not the most in Australia. Not sure how how much effect land availability would have though.

 

We are just trying to pick the right property at the right time at the right price. Not everyone is investing, some people just want to buy a house. They will be looking at what is affordable, and not necessarily close to cbd. Not everyone has a million to buy a house. That is why Carrum Downs went up. Hopefully Werribee wil continue its steady rise in next 3 to 5 years...and may even outpace CD.

 

werribee has too many new houses (HL packages?) if you search for available properties
how does that play in if you are looking to invest in an established home in the area?
still a good area for investment ?