Melbourne Outer Growth Areas $12/hr

@sash @Connor

 

Yep...it ain't Casey ....but also Melton and Werribee.....Werribee...might even start to compete with Casey in the next 12 months.

 

And will only continue with the introduction of nil stamp duty for FHB's in July.

Have to agree, 20-30k jumps in land prices since Jan and they are still selling out.... Some estates are even selling via ballot.

 

Yes that is correct....just confirmed with one very you have to get a VIP invite pay $1k...and then have an appointment to sign-up on the land. 10% deposit required no negotiation.

 

Exactly what happened to me last week. A developer i enquired with told me they are making available all their new releases to their VIP's first...ie clients who have purchased from them previously.. Then, they would take what's left to the market.

I called them up on the day of the public release.
All sold to there VIP's. and where not talking a FHB estate. This is a premium area with 10x28's from about 300k

This developer sold their 350sqm lots at 375k

 

So these outer markets are still rising fast? I would have thought demand would have slowed until July when first owners get free stamp duty. So if it's still rising fast, what the hell is going to happen in July?

 

Pandemonium as the amateurs bum rush....

 

sounds like an epic bubble in the making.

 

I will hold 5 IPs in growth areas by the end of 2018. With 2 completed 2 under construction and 1 that won't settle until mid next year.

Just flipped all my Cranbourne North off the plan stock and will flip my Rockbank off the plan stuff with the exception of the one to build to keep (the 1 that won't settle until
Mid next year).

I'm starting to worry when it comes to settle many of these titles that many of the hordes of speculators will be unable to settle if they can't onsell. That said I'm comfortable holding my IPs as long term I think Melb will continue to grow. I'm also going to buy another development site for a duplex.

 

Hi Cactus, I've been following you and a few others who have been buying outer west and have been very successful. My question is why aren't you riding the growth wave, but cashing out now? By my calculations, there should still be about 12-24 months of growth in it?

I have purchased a H+L in an estate in Plumpton for $292k for a 409m2 + a complete turnkey 4-2-2 for $240k (I know, I know, I got ripped ... I was a completely greenhorn with zero experience with regards to investing in landed properties, my other IPs are inner-CBD apartments).

Looking at everyone's success in the outer Melbourne regions, I was thinking of scouting for a cheap block of land to buy (under $265k hopefully) and hope it settles late so I can get a free 12-18 month capital gain ride. Will be building this myself this time, with a budget of $185k. Thoughts?

 

No crystal ball here but if there is another 12-18 months of growth then a correction, then the outer areas with a large contingent of speculators may correct more. Anything being bought now won't title until then potentially making it harder to flick for a profit.

I have done very well from this "game" hence time to take stock review my strategy focus on adding value to development sites in established suburbs and revisit this game in following the next oversupply to indersupply period.

Don't get me wrong. I'm planning on holding 5, if I thought it was all bad news I would sell everything.

 

THat's 532K - I hope your 240K for the 4-2-2 is a double storey? I don't think there will be much huge movement once a suburb has taken that leap. it really depends on the nature of the purchase and deal. not sure abt the cranbournes and other areas but the ones I look in pt cook, werribee are mainly FHBs as oppose to investors

 

Makes sense to me, thank you.

Hi mate - there was a $20k cashback sweetener I forgot to disclos. But no, it wasn't a two storey. I know I overpaid now after reading this forum, but I had zero experience in home plus land. Now I know much better

My view is that it'll stagnate at around $550k before finally making a push to $600k territory in 3-4 more years, which is generally the max that FHBs will consider. Longer term though, this place should have bigger CG compared to my apartments which are simply cash cows for now.

 

that's good coz if you asked earlier I could throw you a turk builder doing $129K build for a barebones turnkey (not the greatest but gets by for a build). With the FHB concessions, the focus of growth would be anything below the 650K mark come 1st july.

Whereabouts are your apartments? I used to play the apartment game probably like 6 years ago (refurbishment, corporate leases) to be honest - it's cashflow positive in melb as the prices are not like in Sydney.

 

I feel like Dagglebert Duck with my Melbourne/Geelong new purchases:

1. Armstrong Creek - built 2016
2. Mickleham - built 2017
3. Officer about to build completion early 2018
4. Armstrong Creek building completion July 2017
5. Wyndham Vale - land settles 2018
6. Bellarine Peninsula Beachside - land settles 2018

I love these purchase good returns and gains.....

 

Unfortunately, only stumbled upon these threads 9 months too late! My saving grace is, that the 512K paid for that hous + land is in a Stage 1 release. As the way these things work, for new releases prices are going up and blocks will get smaller. At least that's what the developer leaked to me and what I've read in these forums.

I will certainly turn to you for that turnkey builder if I go about another purchase

One apartment smack in the CBD (a much quieter street, further away from all the residential apartments that are sprouting along Spencer and Elizabeth streets). That was a real bargain, snapped that up for about 498K, now getting 31k pa gross rent and I'm about to convert it into an AirBNB which should net double that in gross rent.

The other one is in the Abbotsford/Richmond area. Bigger, better build but pricier, yield not as good on this one, only 5.1% yield. Not too confident in doing AirBNB on this one here, I think vacancy rate could be higher than I would like, so may just continue leasing. This one is a funny one, it's giving better CG than the CBD one, but lower yielding. Almost like a townhouse.

You ARE the scrooge duck Mind sharing the total costs and build sizes for those? I might also look at Geelong.

Just curious - doesn't anything in the north attract you? Cragieburn, Wollert ... I've seen some land releases popping up there. Though there isn't really any good connectivity in terms of roads. The Hume fwy is the only major arterial.

 

Most of the build costs for singles are 175-177k for 17-18sq

 

Sash, In your opinion is Armstrong Creek new land still worth buying now which will title in latter part of 2018? If yes, would you prefer established estates like Vilawood or Warralily or smaller places like Ashbury or Watermark?

 

Yes and no...is the answer...a lot of the blocks on offer at the moment have some falls thus much higher build cost.

The best estate would be Villawood...but prices there have bolted.

Land has gone up considerably there also...the opportunity is in blocks where people can't settle at old prices. Still possibly to snap up quality 300-400sqm blocks for under 180k on fall overs.

 

@sash - do you have particular builders that you have used and recommend around Geelong?