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First Home Buyer - Advice needed (Frankston sth, Chelsea, Mentone)

Discussion in 'Where to Buy' started by gullywantsachip, 29th Mar, 2016.

  1. gullywantsachip

    gullywantsachip New Member

    Joined:
    29th Mar, 2016
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    Location:
    Melbourne
    Hi guys,

    New here but have been lurking for a while. My partner and I are looking to enter the property market after years of renting. I'm in a secure profession (Fire Brigade) and she is in a corporate role. We currently live fairly close to Melbourne CBD but understand that if we want to purchase we'll have to look a bit further out. We have no kids currently and have grown up close to the city but once kids are on the way living away from the CBD won't be a problem.

    We would like to purchase something for under $500K and are not interested in the North or West of Melb.

    I was hoping for some advice in regards to the best direction to head in terms of investment.

    Option 1: Buying in a location like Mentone/Mordialloc but at our price range we would be looking at a 2 bdr Unit with a small courtyard.
    Option 2: If we bought in Chelsea we could purchase a larger unit with a larger yard for around the 400K mark.
    Option 3: We are weighing up buying in an area like Frankston South where IMO prices haven't gone ballistic for a home like other areas have. The problem is the distance from the train line and CBD. This would allow us to purchase a home and we could always rent this out after a year if we choose to live closer to the CBD for a few years.

    My question I guess is.. Which of the three options would allow for the most growth? Is it always better to purchase a house over a unit even if the area is not as ideal?

    Thanks in advance for any advice!
     
  2. Jake Milne

    Jake Milne #1 Buyers Agent, Vic. Business Member

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    1st Jul, 2015
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    Location:
    Melbourne
    1. It's your home, and as such try and focus on buying something that will suit your lifestyle for the longest amount of time. It's hard holding onto a house for a long time and many home buyers end up selling in less than 7 years. The key to making money from your home is to hold onto it for as long as possible.

    2. As for growth, generally speaking suburbs that are closer to the city have more capital appreciation. Units usually lag behind houses in growth but there are inner suburbs that can rival houses in outer suburbs. For example Elwood apartments and Bayside units can perform and are maybe even likely to perform better than houses in Frankston or surrounds.

    Long term average CG returns per year in Frankston are about 5%. That is about the same as a villa unit that's half the distance away from the CBD (South & East). If I were solely buying for CG I'd try and buy as close to the CBD as possible. Reason being, location is 80% of the work while the property does about 20%.

    Buying something that has the scope to be renovated over time is also a good option for creating some wealth. The catch is that houses give you more options for improvement as long as they have enough land, usually 600sqm or more. So... if you're not afraid of sub-dividing and building in the future then maybe buying further out where you can afford such a project eventually isn't a bad idea.

    Otherwise, just buy the best suited property for the next ten years as close to the CBD as possible.
     
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  3. ashish1137

    ashish1137 Well-Known Member

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    Location:
    Sydney
    Whats wrong with Geelong area. Armstrong Creek and vicinity.
    Provides a good price point and entry level products.
    Basic price and infrastructure in place plus upcoming infrastructure will ensure constant growth.

    Regards
     
  4. gullywantsachip

    gullywantsachip New Member

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    Location:
    Melbourne
    Thanks for the advice Jake, much appreciated.

    The Geelong area is appealing but we can't move to that side of the bay for work reasons.
     
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  5. ashish1137

    ashish1137 Well-Known Member

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    Location:
    Sydney
    There is a V-Line which would take you to City in less than an hour (depending upon where you decide to reside).

    Or an hour drive. Where are you looking to reach for work?

    Regards
     
  6. ashimashi

    ashimashi Well-Known Member

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    Location:
    Melbourne
    If your budget is around the 500k mark, well worth looking into Maroondah area, Croydon/Mooroolbark/Chirnside Park etc or even Bayswater considering what will be happening around the Knox area in the near future.
     
  7. ej89

    ej89 Well-Known Member

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    Location:
    Sydney.
    Have you considered Noble Park North? Easily fit your budget for a decent home. You would prob have to move quick though as i've watched these areas move and the price gap to nearby suburbs is getting quite large
     
  8. gullywantsachip

    gullywantsachip New Member

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    Location:
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    Cheers for all the advice. I grew up in the inner eastern suburbs so the Maroondah area is on the radar. Noble Park isn't a place we've considered but we'll have a look. One of the reasons we are keen on bayside is that even though it may be a bit further from the CBD, there is the beach side living pay off, something that Maroondah/Noble Park areas don't have.

    A place I looked at over the weekend was this one in Chelsea, needs some work done on it but could add some value and I believe Chelsea will be on the improve over the next few years 15 Scotch Parade Chelsea Vic 3196 - House for Sale #122194746 - realestate.com.au

    Another place I really liked that sold the other week is this one in Parkdale Sold Price for 1/20 Cedric Street Parkdale Vic 3195 .. Better location and not much to be done to it.
     
  9. LMD

    LMD Well-Known Member

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    the bayside(mordiallic, edithvale, chelsea) areas still have some room to grow but the areas have moved quite a bit in the last 12-18 months. Units in chelsea are some of the best performing in melbourne and you can still find some value but be aware of the undesirable pockets. But the best value could end up being in those pockets.

    Maybe have a look at one suburb back from the beach? Chelsea Heights, Aspendale Gardens?

    Living so close to the beach was the biggest drawcard for me too.. We were looking at Houses with a good land component but in the end couldn't compete with the young families with deeper pockets.
     
  10. Spiderman

    Spiderman Well-Known Member

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    Location:
    Vic
    Not long ago everything was under $1m, even houses beach side of the highway. Now even places inland of the highway now top $1m at Chelsea.

    Just recently a beachfront Chelsea townhouse sold for $2.1m. http://www.heraldsun.com.au/leader/...n/news-story/c3cd24d68d00221f640aad586d964b90

    And on the inland side of the highway this very modest 2br house on a large block recently topped $1m. 50 Catherine Avenue, Chelsea - Report, Sold Price
     
  11. Mick

    Mick Active Member

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    Location:
    Frankston
    If you're thinking of buying in Frankston the time to do it is now. Frankston had the 5th highest rise in property values in Victoria for the September quarter being 14.5%. Langwarrin which is also in the City of Frankston was no. 1 with 20%. The real value is in the land. I would have an old house in Frankston on a decent block of land any day over a unit or apartment. I have been door knocked and letterboxed by developers several times in the last few months, one offer was very tempting but I am holding on because I still think Frankston has a lot more potential for growth due to the increasing demand for bayside land.
     
  12. Luca

    Luca Well-Known Member

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    Hey @Mick, are you talking about Frankston North or South?
     
  13. Mick

    Mick Active Member

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    Neither of them. Frankston South is getting too expensive. Frankston North is cheap and has good size blocks and is slowly improving but I don't like it because too many low-life still live there and it's hard to get good tenants who want to live there. The area I mean is bounded by Beach Street/Cranbourne Road, Wells Road, Skye Road, McClelland Drive. So I guess it's more Frankston Central/Frankston East. Also the immediate area south side of Beach Street/Cranbourne Road up to McClelland Drive.
     
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  14. Luca

    Luca Well-Known Member

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    Thanks @Mick , good description.