Is it time to invest in Melbourne?

Discussion in 'Where to Buy' started by Shroom, 7th May, 2020.

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  1. Shroom

    Shroom Member

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    Looking at the potential to buy IP. Given the current covid situation is it now or in the next a few month good time to buy in Melbourne area? We are located in Adelaide so not too familia with Melbourne market.

    Looking for passive income but if it’s in an area with CG potential that’s bonus. Ok to appartments if it’s <$300k and in good accessible area with 5% pa rental return. Otherwise am looking at unit/townhouse/house with reasonable transportation to CBD and access to schools. Budget ~$500k max. What would be a good area to look at and what’s the expected rental?

    when looking at realestate.com I noticed ongoing strata/council/ESL/sewage are not normally listed. Can anyone share their knowledge on how much these fees are for apartments in the city area?

    Thanks!
     
  2. kaibo

    kaibo Well-Known Member

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    waste of time in regards to apartment, I don't see anything in Melbourne worth while investing in at 500K so thats why I am closing my SMSF
     
    Last edited: 7th May, 2020
  3. The Y-man

    The Y-man Moderator Staff Member

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  4. The Grinch

    The Grinch Well-Known Member

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    For that price range I'd suggest brissy. But I'd wait a few more months to see what happens price wise around AUS
     
  5. Jess Peletier

    Jess Peletier Mortgages, Finance & Property Strategy Aust Wide Business Member

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    Any particular reason for Melbourne? What's making you look there over other areas?
     
  6. MTR

    MTR Material Girl Premium Member

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    I would stay clear from Melb market for a while. At least Wait till dust settles.

    We could be looking at 2 out of 3 restaurants coming back. Not the best scenario

    I believe Economically Melb going to be hit the hardest
     
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  7. Shroom

    Shroom Member

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    Agreed. This is more pre-research. Certainly am not looking at getting into the market now. But curious as to why would you recommend Brissy over Mel?
     
  8. Shroom

    Shroom Member

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    Precisely the reason why I’m doing research now. Long term I think Mel will recover and that’s why I wonder if post covid is a good time to get in.
     
  9. Shroom

    Shroom Member

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    Well we have got a few properties already in SA, now looking at diversify the risks hence outside SA. Figured housing demand in Mel/Syd will be high in the longer term and so more stable rental income and higher chance for CG. Personally don’t like SYD so Mel it is. But if you could suggest any other places worth looking I’m keen to hear your suggestions too.
     
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  10. Shroom

    Shroom Member

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  11. The Grinch

    The Grinch Well-Known Member

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    This is all just speculation, nobody has a cristal ball but I expect melbourne and sydney will have have some periods of going flat before big growth comes. I may be wrong but that is my hunch.

    Speculation aside I believe for your price range you are going to get more bang for your buck with better fundementals, proximity to the city, stable economy, access to transport , new infastructure, land size and subdivision potential all within your budget.

    I also think that brisbane has more potential for larger growth over the next few decades. I don't think we can see prices double in sydney and melbourne without inflation or a massive rise in wages. I do however think this may be possible with brissy.

    No expert, just my personal view.
     
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  12. Adrian Trimboli

    Adrian Trimboli Member

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    Hi

    Hi,
    I think we are definitely going to see a slight drop in prices however not too dramatic. At the moment, there are obviously less stock on the market however there is also much less competition trying to purchase property. I have seen a slight reduction (2% or so) and my guess is that it may drop another 2-5%. In saying that I have just purchased a property for my client which I got for $45,000 under what it was listed as.
    In regards to the fees paid, you will need to look at the particular council as they all differ. Feel free to contact me if you have any queries or would like for me to find you a property down in Melbourne.
    [email protected]
    0423882679.
    Thanks.
     
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  13. Peter2013

    Peter2013 Well-Known Member

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    If you are looking at population growth, Melbourne is definitely the place to invest. Currently modelling shows Sydney will have a lot of emigration, primarily to Melbourne as wages are about the same, but house prices and cost of living is cheaper. In fact, some people are predicting Melbourne will outgrow Sydney as it becomes too expensive to live there.

    (Adelaide will also be bad for emigration if you hold a lot of IPs there. Adelaide property is quite expensive when you look at it as a ratio of house prices to wages/income. A lot of Eastern state investors flock there because it is 'cheap' and then can't understand why the tenants can't afford the rent! Simply because they don't get paid like Sydney and Melbourne)

    [​IMG]


    However, it is too soon.

    ANZ predicts both Melbourne and Sydney to drop 13 per cent over the next year.

    NAB is predicting 15 percent for Melbourne and Sydney but over 12 to 18 months.

    NSW and VIC are about to abolish stamp duty, so if you hold off, you will save there as well.

    I would hold off until this time next year and re-examine.
     
    Last edited: 9th May, 2020
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  14. Frank--y

    Frank--y Member

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    I was interested in whether investment timing is right (or best to wait a few months). I found an interesting website that tracks property listing prices. Make of it what you will about investment timing, but some interesting things I found in my searches:
    I don't know if it's a "bottom" for investment timing, but seems like things may have dropped by 5%-ish over the last couple of months.
     
  15. Shroom

    Shroom Member

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    yes I believe I have seen the same reports. Not planning on making a move now, but wanting to see what areas are good and get in when the price does get the the “bottom”. Also agree with your view on Adelaide IPs. It’s hard to find the IPs that generate 5% annual rental return in Adelaide, while the prices are lower than the Eastern states the rent has to be reasonable for people to afford, this is also why I’m not looking at getting another IP in Adelaide area even though I’m most familia with the market here.