Join Australia's most dynamic and respected property investment community

Melbourne...the steady market in Australia?

Discussion in 'General Property Chat' started by sash, 18th Nov, 2015.

  1. sash

    sash Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    3,214
    Location:
    Sydney
    I feel that apart from inner Melbourne, the apartment market and part of middle targeted by the Chinese Melbourne and Geelong still have growth.

    I am headed down there to finalize one purchase..and scope out a few more. I am primarily looking at outer Melbourne (20-50 klms out)...and also Geelong.

    I really am fan of this market..it is the classic steady Eddy....

    What do people think..what be interested to hear other people's experiences?
     
  2. melbournian

    melbournian Well-Known Member

    Joined:
    2nd Sep, 2015
    Posts:
    1,326
    Location:
    melbourne
    @sash if you visit Pt cook, williams landing, tarneit, wydham vale and werribee (there are a lot of new migrants indians and chinese professionals moving into those area - not the upper end of chinese like you see in glen waverley or doncaster) but ones who have enough to purchase a home anything within AUD250-450K comfortably. At one stage this market was stalling, but it has gone up, in a long run it will grow and there is a new ferry service which they are initiating now hoping to copy sydney. I think you will find sydney is a little different to melbourne being anything 35km is considered quite far out as oppose to what it might be normal in sydney. Geelong in my opinion is not a good idea being a lot of people were losing jobs due to closure of factories and slashing of jobs (like Ford Aus, Alcoa, Barwon Health, CSIRO etc) as many of them live around those areas.
     
    eng likes this.
  3. sash

    sash Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    3,214
    Location:
    Sydney
    From an outside looking in....Melbourne is just jumping on the decentralization bandwagon. I agree that the West is the one to watch...lot happening there. Apparently the trains were congested but relieved somewhat by the regional line duplication. As for traffic...similar to the outer Southeast.

    I am fan of Geelong and feel it is a under rated market for the following reasons:

    1. New train line makes it very accessible to Melbourne. Services have improved dramatically.
    2. New Epworth Hospital will bring a lot more jobs over 1200 plus allied services
    3. The job loses at Ford, Alcoa, Target, CSIRO..were over played in the media
    4. TAC has relocated there
    5. Deakin Uni is increasing its footprint
    6. There is talk of some of the defence work coming to Geelong
    7. Would not be surprised if Workers Comp Victoria also moves to Geelong
    8. The population is expected to grow from 280k to 500k by 2050 the yearly growth rate is higher than Sydney, Melbourne, and Brisbane.
    9. My calculations show that there are about 40k odd blocks available over the next 30 years in Greater Geelong. To cater for an additional 220k people assuming 2.6 people per household that about 80k lots. Where are the others going to come from?? At the moment...they would be lucky to have 1000 loss released for new builds per annum. Most of these would be Armstrong Creek and Curlewis/Drysdale areas.
    10. As baby boomers wind down...this city will be very attractive as they can get from Geelong CBD to Melbourne in about 1.5 hours.
    11. The Feds and State government is pouring a lot of money in.
    12. Surprisingly the rents on the low end properties are 10-15% higher.
    13. Housing is surprisingly affordable.
    14. Also they is some talk of using Avalon for international flights particularly budget carriers
    15. Also....watch out to see where the next Costco goes in.....potentially also near Geelong...
     
    Last edited: 18th Nov, 2015
    eng, Whitecat, MTR and 1 other person like this.
  4. Tekoz

    Tekoz Well-Known Member

    Joined:
    24th Jun, 2015
    Posts:
    1,244
    Location:
    Sydney
    @sash & @melbournian what about the Frankston VIC 3199 area that seems to be a great location by the water more like:

    Birkdale QLD
    Wollongong NSW​
     
  5. sash

    sash Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    3,214
    Location:
    Sydney
    Yes good location near water...but comparatively expensive now...
     
    Tekoz likes this.
  6. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,594
    Location:
    Adelaide, SA
    Happens everywhere my friend.
     
    Beelzebub, OC1 and Skuttles like this.
  7. Bayview

    Bayview Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    2,716
    Location:
    Mornington Peninsula
    The yields are crap now.

    The problem is finding anywhere which is able to be Pos Geared without plowing substantial amounts of cash into the purchase - which most folks don't have.

    I am DONE with IP's which suck dollars out of my pocket each week, in the hope of some CG in a few years' time.

    Dev blocks are my only interest now....buy, rent for a bit until the permits and construction loan comes through, build and sell....maybe keep one of the units as a renter.

    Show me the cashflow baby.
     
    eng, Taku Ekanayake, Barny and 2 others like this.
  8. sash

    sash Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    3,214
    Location:
    Sydney
    Agreed in some areas..particularly in inner/middle Melb..what I am doing is building small lot homes for 300-320k ..3x2x2 and rent them for 350-360pw. Most are 17 sqm homes with all the mod cons and very nicely designed.

    The real plus will be in 3 years when the core shopping comes on line. Initially my upfront gain is small 60-80k upon completion.
     
  9. JohnPropChat

    JohnPropChat Well-Known Member

    Joined:
    10th Sep, 2015
    Posts:
    567
    Location:
    Perth
    Indeed. Buy and Hope only makes sense in a rising market. If you have the dough and the risk appetite then manufacturing equity is the only way to sustain growth, me thinks.
     
  10. melbournian

    melbournian Well-Known Member

    Joined:
    2nd Sep, 2015
    Posts:
    1,326
    Location:
    melbourne
    i'm not a big fan of frankston having had my high school in mt eliza which is a suburb next to frankston further out in the late 90s, which i feel hasn't change that dramatically since my high school days. Yeah they're moved South east water head quarters over there but basically everyone from there stays around that area. Also the quality of tenants etc is something to be wary about.
     
    Tekoz likes this.
  11. melbournian

    melbournian Well-Known Member

    Joined:
    2nd Sep, 2015
    Posts:
    1,326
    Location:
    melbourne
    Didn't you say you bought in officer and plan to do a build there. but yes you are right. the rentals are around 300-360. This would mean you are positive given the rentals. only negative is there are heaps of them available so i wondering about how long it takes to get a tenant. I know pt cook there is no vacancy however i do know the further out the harder it gets to get a tenant.
     
  12. teetotal

    teetotal Well-Known Member

    Joined:
    7th Nov, 2015
    Posts:
    398
    Location:
    Sydney
    You are right. There is also a demand shift happening from Sydney to Melbourne. Lots of Friends and friends of friends have moved/are moving to Melbourne because they cant afford anything decent in Sydney. Land prices are on the rise in west of Melbourne even though there is so much land available.
     
  13. sash

    sash Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    3,214
    Location:
    Sydney
    Yes I bought in Officer.....vacancy will be similar to Point Cook.

    Also depends on the estate....
     
  14. MTR

    MTR Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    7,458
    Location:
    Perth, Melbourne, USA
    Nice post Sash.:)

    As you already know I am a big fan of Melbourne, have been playing in this market for 3 years now and will continue developing in Melb.

    I believe it may be the best overall market to play in over coming years for me. Highest immigration and economy overall seems to be diversified and stable.

    I do like Geelong.
    Though my focus is really the middle ring bread and butter areas, close to rail and CBD for development project ts.

    MTR:)
     
  15. Soul

    Soul Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    90
    Location:
    Melbourne

    I have seen more Chinese purchasing properties in Pt Cook area since last year. Some of them have come from other side of the town, mostly families and young couples. Yes, they do not drive Maseratis or so, but you can see them driving new cars/ 4WD/s including Audis. The 450K range homes are small starter homes. You need to spend 520K+ for a decent established family home in Point Cook.

    I do not see Ferry service starting in next 7-10 years. It is shallow water there, Millions required for Dredging. By the way the Ferry is supposed to take off from Wyndham Harbour (1M+ for home) to Docklands.and teh fare is not going to be cheap. The proposal was made in 80's, worked started before GFC. Very limited development. I won't count on that.
     
  16. melbournian

    melbournian Well-Known Member

    Joined:
    2nd Sep, 2015
    Posts:
    1,326
    Location:
    melbourne
    @Soul very true on the ferry although it might help congestion. i think 450K are easy to purchase homes. i did 4 of them for around 365-375K each just 1.5 years ago for around 350-400sqm lots and 17-18sqs there are still plenty selling btw 395-499K for around that price range whether as new devs or existing stock. Werribbe still got things going around for 275K-295K (500 sqm lots).

    It is not a good idea to go too high as an investor but stay within the median maybe for family home yes. My friend bought H&L package for 560K 4 years ago and sold it 575k just recently as he just separated from his wife.
     
    Last edited: 18th Nov, 2015
  17. melbournian

    melbournian Well-Known Member

    Joined:
    2nd Sep, 2015
    Posts:
    1,326
    Location:
    melbourne
    Keep to see your build and rental figures after a year when it goes live @sash. i 'm not buying anymore H&L atm, looking more for a sub-div site.
     
  18. Soul

    Soul Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    90
    Location:
    Melbourne
    Generally speaking, valuations are 20% up in the last three years. I know a couple of friends who bought there 3-5 years ago, did nothing till 2012. Some estates have low prices than others for good reasons, you will find out when you compare/visit.

    Investors are still large part (25-30%) as it is a newish area, but families are moving in, income 150K+, two new schools have opened up in the last 3 years.
     
  19. melbournian

    melbournian Well-Known Member

    Joined:
    2nd Sep, 2015
    Posts:
    1,326
    Location:
    melbourne
    friend's and my ips are in featherbrook estate which is much dearer than other estates (like saratoga and paragon). i'm managing the 2 tenants in pt cook for last 1.5 years so have a good feel for the area. For investor perspective, it is mainly to get the return. Personally no offence to anyone, it is not my cup of tea pt cook, williams landing area to live but i don't deny there is a big market to it. That's really good news with the schools @Soul . I have been monitoring the land prices closely and they have gone up a bit since 6-7 months ago.
     
    AusMover and Tekoz like this.
  20. WattleIdo

    WattleIdo renovating Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    1,821
    Location:
    Central West NSW
    Yes, just steadily doing what it's supposed to do. First home buyers getting into affordable housing; baby-boomers down-sizing. Working itself up to a boom maybe around 2017...