VIC Geelong

Hi @User1634,

Personally I have no issue with AC, however I'm not a big fan of off the plan - don't like things that are shiny and brand new, because I know they all come with a tax called "developer's profit".

Sash as a pioneer in AC has made good profit not by buying off the plan, but source the land and the builder himself to do the build. By cutting out the middleman and getting into AC early he was able to make a tidy profit to-date (from memory close to 200K). Understand this is quite an advanced strategy and probably is not suitable for someone who just started out. But I guess it's worthwhile for you to consider why he has deployed such strategy rather than simply buying a OTP product.

Note recent AC prices have already gone up a fair bit....how much more will it go up? I don't think anyone has a crystal ball.

Also 500K in Geelong is not a small number. Most of the investors are chasing Corio/Norlane which is around $275-$350K mark on a 600SQM block. Why? Because you can get bigger land component at a cheaper price and we know land is the one that appreciates over time and building will only depreciate. So if I was you with that budget I would probably look closer to Geelong CBD with a bigger land component and hold for as long as you can.

 

Hi David and everyone
I am new to the forum as well as the property investment journey. I have found a lot of valuable information and advices here and hope to learn much more.

At the moment, I am looking into Geelong, especially Corio/Norlane areas. I have noticed that the price has gone up a lot but still quite affordable compared to the rest of the market. Do you think it is still not too late to jump on the boat there? My plan is to buy a house with decent land size (min 600sqm2) and close to amenties (station, shopping) and rent out for 3-5 years. After that will subdivide and build. Budget is 300k-350k. What areas do you think I should avoid in Corio/Norlane? Thanks a lot.

 

David....there is still plenty of room for AC....to move.

You just need to stick to the quality estates. This might surprise you...but a lot of professional people prefer AC to inner Geelong...particularly if they are commuting to Melbourne.

500k is nothing now for Geelong...very soon the median will be 650k similar to Newcastle in Sydney. The temperature setting for prices rises accordingly.

I also feel that trying to but in the hot inner Geelong market ...is paramount to buying in Sydney in 2015-2016.

As for places like Newcomb, Whittington....sure these places have risen...but they are still under 400k. Remember most of the better places there were selling in low 3......so rise whist great has been about 50k...not bad.

Similarly in AC.....the land has risen in the last 2 years from median of 165k to just over low 2s for a 400sqm block. So it is tracking at the same rate. Bear also in mind the rents in AC if bought well will easily return 6% plus that won't happen in areas like Newcomb, Whittington, Corio, Norlane....these are lower socio areas. You will get about 300-320 on average for 350k purchase in Newcomb/Whittingrton....and the endless maintenance headaches as these are older properties. Best to give a full reno to avoid the issues.

I personally targeting higher priced (500k plus) coastal areas...on a more CG play.

 

@David Shih @sash thank you for your thoughts. To me the priority would be not to make a huge profit but rely on the fact the house will increase in value once it's built (end of 2018, by then we should see a bit of growth as well) and use the equity of the house to buy another property somewhere else.

Again, I am aiming to buy only cash flow positives properties for now as I don't think I am able to go for anything else too advance for me for now.

I am just hoping AC is a good area to invest it and that it will see the growth I am hoping to see. As I mentioned before, the government is spending a lot atm and all the big corporations are investing in the area as well. I am confident it will keep growing I dont have a crystall ball unfortunately...

 

To add to Sash's comments: Yes, professionals who are commuting do like AC. While looking at it on a map it is at the opposite end of Geelong to Melbourne it does have easy access to the freeway and additionally easy access to the beaches. Professionals do not want to live in Corio or Norlane.

Also, the shops have only just opened about two weeks ago. Before it was a long drive to anything of convenience, yet prices were still rising. This new infrastructure should keep prices and rents in particular on the move IMO.

 

People also have to remember the large shopping centre at Waurn Ponds is only a 5-10 minute drive away.....this along with the new shops and the Town Centre within 5 years should keep prices rising....

 

Here is why Armstrong Creek will go from strength to strength...

Villawood’s Armstrong vision wins top urban development gong - realestate.com.au

 

Wow that's great!

 

Yep, I concur with David. I think unless you're buying it as a PPOR, you've already missed the boat for AC. I remember a guy on PC who bought a 3/1/1 H+L for around $320k and that would be an excellent price to buy a new place for the purpose of IP with regards to both yield and CG.

I disagree that professionals would even humour the thought of travelling all the way from AC to Melbourne - That is at least 1.5 hours door to door (car or train). I would not even consider doing this in Sydney. I would imagine that even if they do commute from Geelong as the furthest away, they would prefer to be with 5-10 mins walk of the train station. A professional would not live in Corio/Norlane but equally they would not be willing to live in AC unless they work in Geelong.

For $500k, I would also buy an established house closer to Geelong CBD and a station with a fair bit of land. Werribee as well. If you're still interested in Corio/Norlane I would suggest you find a place advertised in RGZ with a 2 or early 3's with an agency none the wiser (giveaway is that they don't say that the property is in RGZ when it is!) and see if you can get it cheaply.

 

Hi @hieund85,

That budget will suit for Corio/Norlane with the land size that you're looking for so yes, can fit the strategy that you're looking to achieve in 3-5 years time (or longer!) .

In terms of subdivision potential definitely check with council before you purchase to ensure can be subdivided later on. Make that part of your due diligence check then you shouldn't go too wrong.

Here's a copy of the marked up Corio Map - hope it'll help you and the investors who are still looking to get into the area to know what kind of area to avoid etc (by all means not comprehensive so use as a guide only):

Corio Map (with Mark Up) by David Shih posted 3rd Dec, 2017 at 11:09 PM

 

That is super helpful. Thanks a lot @David Shih

 

Petanol...this is being done....the lady who is my neighbor in AC travels to Melbourne twice a week and works from home the rest of the time.

Couple other neighbors up the road also commute but to Melton and Altona.....

As for missing the boat in Armstrong Creek...if you but land under 190k (300sq lost) and build under 200k ...that product should be worth North of $460k by the time it is built.

4x2x2 in 450sqm of land are now well over 500k if they are designed properly.

 

I like those posts from @sash Even if from Sydney so much knowledge of the local market. Always a hint here and there.

 

People did the raspberry when I went down to Geelong in late 2015....they asked why I went there and what I saw in it.......

2 years later...it is the best performing regional city in Australia...in terms of property growth on the back of Melbourne's growth....this city has more potential than Newcastle NSW...

 

Even if I didn`t see any full cycle yet it is impressive to see the ripple effect from the CBD to the regional areas. I assume the next one will be Brisbane ;-) I think Melbourne still has another 2/3 years to go. 100k migrant per year + construction boom will fuel the house market

 

Yes...I have said that Melbourne as 12-18 months maybe 24 months at a stretch...it is better priced than Sydney in the outer suburbs and the demand is coming from people wanting to buy home to live in. Sydney investors are disappearing from the Melbourne market.

And yes the next value proposition is definitely Brisbane....the trolls on here who bagged a out of us who said Sydney would go down and did not see Melbourne rising have gone deathly quiet...

 

Did you go 4 or 3 bedroom in AC? I see a lot of 4x2x2 out for rent, good rent though

 

I did 3x1x1 and 3x2x2 with a stuudy nook double story...I went against the desire to build a 4x2x2 like everyone else and guess what it paid off big time!

 

https://www.domain.com.au/news/canv...uildings-reborn-as-arty-hubs-20171204-gzwzcp/

Another reason ....

 

Why 650K Sash? There must be a formula somewhere in the back of your brilliant mind