VIC Frankston 2019

In this can an inner city buyer from the west moved to Frankston South for the lifestyle appeal. Other buyers saw the appeal too with the seller having five offers from local and outside buyers. It was snapped up just two weeks after being listed.

It was located in the sought-after Olivers Hill area with nearly 40 groups going through at two inspections.

 

Frankston has been hit hard. I was very active in the market around 10/12 years ago and accumulated various IPs with dev potential. Got back in last year and picked development blocks again at the peak of the market however regretting acquisitions of 2018 now. The largest dev block I acquired (with 11 townhouse permit now) in mar 2018 would fetch 30%-35% below what I paid in this market so decided to delay the build until the market stabilises.

The townhouses projected to sell for $550k in central frank on my feasibility will not fetch $450k as new buyer interest is drying up with borrowing issues and more stock becoming available.

Individual homes are down c 15% - 20% (not correctly highlighted in median data as its 12 mths rolling) however with multiple dev projects in pipeline, I am still buying more stock to bring my average price per dev site down. I am talking to all key RE agents in the area and looking at all recent online (realestate.com.au) and offline data and yields when reaching that conclusion.

Frank Nth is also down over 15%-20% as stock is not moving and multiple dev projects that were about to commence have stopped / delayed the build. I have been offered prop on the prestigious Cliff Rd (with water views from multiple rooms) for almost 25% below their advertised price 12-18 months ago and with long settlement, so there are people desperate to offload.

Yields were averaging 3% early last year but plenty of good opportunities nudging 5% now which in itself explains the state of affairs and the stock availability.

I consider Frank still a great market for shrewd purchasers where they can negotiate long settlement, buy dev good opportunities with over 4% yield for buy and hold types. Don't believe that developers on short lead time, renovators or short term holders have much opportunity there.

I had been bullish on this area for a long time and remain so based on its long term infrastructure plans, beach access, affordability etc but it has been hit severely (like most inner mel areas) and this will reflect in data in coming months.

Harris

 

Investment property magazine says Frankston north has had 6.5% growth in the last 12 months.

 

The median is a 12 month rolling data and most of the damage has occurred in the past 6 months, so this will reflect in the data mid to late this year.

 

There’s a development site near me for two townhouses. They started construction then stopped at slab down about 6 months ago. Are these people just going to bleed money until the market picks up?

 

Same source has Frankston nth -0.61% growth in last 3 months. Hardly a huge drop.

 

Had a house for sale past two months

No serious bites in the range

Back to renting it again

The market has spoken

 

mate, I am not here to talk up or talk down the area - I have a 6 x 3 bedder town houses permit to start build on 2 adjacent prop in Frank Nth that I bought in 2004 so it serves me well to tell everyone that it's flying off the charts (especially as I keep buying more) but the fact is that this time last year, 3 bedders over 600 sqm in Frank Nth were selling in excess of $500k and closer to $550k and now you would be lucky to get any to go over $420k. The dev sites were fetching $175k per unit site and now down to $110k which is a severe drop.

Frank proper has a lot more prop stock (being one of the largest suburb in Melb) so there are pockets which are down over 20% and others are c 15%.

My largest IP portfolio is in Frank area and I remain bullish on its prospects and since I am purchasing more stock now with a view to land bank, I remain of the opinion that it will rebound in coming years (hopefully with the rest of the market) but affordability blues & lack of lending are affecting it adversely and it's in the dumps currently.

Frankston North, VIC 3200 Sold Property Prices & Auction Results - realestate.com.au

4 out of 25 Prop (page 1) sold from apr 19 until late oct 18 have 5 in front of them.
16 out of 25 prop (page 4) sold between feb 18 & sep 17 have 5 (and 6) in front of them.

The prop values in Frank Nth currently are where they were in late 2015/ early 2016.

Harris

 

Hey, just using stats to show it’s not going too bad.

I wouldn’t touch Frankston north for what’s its worth. Too much commission housing, scum and drugs in that area for me to even consider that area in my strategy

 

I still look back some days and think... if only I’d bought that 3 bed 1 bath house on 600sqm for $130k in Franga north in the early 2000’s though .... but you could pick any area in Melbourne and pretty much say the same thing in hindsight

 

Yes. You could throw a dart at most of Melbourne in 2000 and the price would have gone up 500%.

 

Long time reader, first time poster - Thought i'd do it in the "local" thread.

What are the pro's and cons of getting into something like these - blocks of units

1-4/26 Lewis Street, Frankston, Vic 3199

1-3/1 Catherine Parade, Frankston, Vic 3199

I feel like lewis st could be a bit dubious in that pocket and with 1br the type of tenants.

Seems like the rental market is heating up in the last year though

 

The Lewis St units would only rent for around $260-270 per week being in original condition. It's a good area with proximity to TAFE, PARC and walking distance to the station. For a half renovated 2/1/1 town house close to Lewis I get $290 per week.

 

Put an offer for both for $1.75m (together) last week but didn't get accepted - same agent but different vendors. I wouldn't pay any more in this market as 3 out of 4 units are currently vacant @ Lewis. They should have no vacancy given its very central pocket of frankston and units get tenanted immediately.

Catherine pde's adjacent prop is a clinic so agent expecting re-zoning however shouldn't be part of any 'expectation-value', given councils are notorious in delaying rezoning precincts.

For a 5% yield with significant land content, both are good buys but in my calcs not worth more than $1.1m & $650k respectively (tops), given the significant supply and current prop value tanking. I would also discount agent's rental appraisal for Lewis as being a tad too-optimistic.

 

Nice one. Yes thought they mightve been the same vendor given the way it was written up and the timing.
Might give Catherine a further look as we might miss out on the cheap one in williams st.
If the last unit was updated you would think a total of $39,000pa achievable ?

 

Been following the auction results in Frankston over the past two months. Seems like the market has turned the corner somewhat and prices are back to almost 2018 peak. I still believe the fundamentals of Frankston are good for long term growth so this is pleasing to see.

 

We have just had the chisholm tafe extension finished and i was apart of that. great for the suburb and still alot going on here. The council starting to deny big buildings for some unknown reason. The cbd needs it. it needs growth there. A few shops of late closing down

 

There's a good opportunity to enter the market at these prices. A mate of mine couldn't get into the area end 2017, but has purchased here now. Frankston\Frankston South has all the key ingredients. ie, beach, infrastructure, good schools, freeway, shops, Government spending, etc. It will take off again, so for those that can get a loan, it's a great area to be investing in and the returns are good compared to the rest of Melbourne.

 

Totally agree with all of the above. The one thing Frankston really needs to do to take the next step though is to improve the main shopping strip along the promenade. Currently it still looks a bit run down in my opinion. Get some hip eateries / coffee shops and it will really take off.

 

Just was reading in the recent newsletter that the shannon st mall and clyde st maĺls are getting a total revamp for a traditional style arcade so i went down to there on friday night as the works had already begun to have a look and it taking shape nicely which is Good news. But there are more works for other arcade shopping strips in the area too.