Melbourne...the steady market in Australia?

Would it be better to buy a 2x1 in a suburb closer to city or 3x1 further out?

 

Such a difficult question that maybe someone else can answer @The Y-man, @Coota9, @MTR . I'm not even sure if I would be looking at the outer suburbs now because I like to get in before they start moving.

 

Some of them haven't started moving yet from my understanding?

 

Really ? please do tell which ones.

 

Actually, you're right. Just been mowing the lawn, pulling out weeds and thinking about this. There are some places that have been moving for a while and some that haven't started to move yet. I suppose if the fundamentals are looking good, that's the main thing. Who knows how long the increase will last but there is so much going on in Frankston that it seems to be on a forward trajectory for a while. That is my biased opinion. Was just looking at the plans for Chisholm TAFE today plus there's the station upgrades going on plus plenty of fhb in the area.
I know Geelong is looking good. Then there's the north but I don't know much about that. There are some satellite cities a bit further out to the north east as well.

 

If outer burbs I'd say Narre Warren, Berwick for a land/small farm at today's prices (undervalued). Hold for land values.
If you've a bit more cash go for exclusive neighbouring 'Guys Hill', small country feel, gorgeous up market area, limited housing stock, overlooking stunning vistas. I know someone who bought 5 acres 10 years ago for about $500k. Now you can get in for just under a million. Bet most people had never heard of the Guy from the Hill....lol ;-)

 

Thanks a lot mate. That does sound really good.

I guess as inner and mid Melbourne become less and less affordable, these outer areas will only get more popular. Another thing I read recently is they predict Melbourne will outgrow Sidney in population. One would expect the gap in housing prices between the two capitals will close as well?

My partner and I might buy in outer Melbourne in the next couple of months, we are still not 100% confident that the timing is right.

Also, another quick question. We can afford to go closer to CBD, maybe within 15km, but my understanding is that's not the best idea as a lot of growth already happened there. Am I correct with this?

 

Do your home works, I think the market in the outer suburbs is really hot at the moment if you are looking for land. It depends also on where you look. Better to buy something already established and renovate to create equity but it is a seller market anyway = auction = something I ate. I see a correction coming to Melbourne but not in the near future. Just make sure you check the population growing as per forecasts. A slow down will be caused by less migrants or higher rates (people not able to service). Closer to CBD = better. Also make sure close to schools & station. This means $0.8-$1Mil range, so why don`t buy 3 x 300k maybe interstate?

 

Realist35, the growth has occurred across almost all over Melb. Melbourne (MEL) is doing a SYD and just playing catch ups with the rest of the world. Both the incoming migrants and interstate people as yourselves realise MEL is overall relatively cheap for the amount of house/land you can buy and proximity to the MEL CBD and all conveniences like shopping centres and wonderful lifestyle that attracts so many to MarVellouS Melbourne. Just compare to SYD prices and you will instantly recognize MEL is good affordable value. As someone who has been fortunate enough to travel the world and live in quite a few countries, i can see where MEL is heading.. There's only one way UP!! Where else can you have this kind of space, this amount of land, needless to say 'own a house' versus 'live in an apartment'/ studio/shoe box.

Where you buy depends on your needs. If you need to frequent Melb CBD regularly for work/leisure , then I'd be buying up to 20km from Melb CBD. If you can work from home etc, you'll definitely be wanting a bit more space at home as you blend work/hone lifestyle into one.

There are still quality suburbs within 20km of MEL CBD that are good value. IMHO, if you wait a year or so you'll likely be priced out of the market, unless you have deep pockets, and have no choice but to live further afield. Sadly this is the harsh reality that we are all waking up to, myself included. Basic laws of supply and demand.

 

Really nice post. Thanks

Love your optimism!

It's only going to be IP, so from that perspective we don't care too much about proximity to cbd etc. We just want something that still might be undervalued.

I think for our budget of 500k we can't get any closer than 25-30km anyway. We can stretch our budget to 600k though...

 

Are you after a house, townhouse or apartment or unit? Everyone has diff preferences for what type of property they would like to invest in

 

We are after a house beacbabe.

Other products might be a bit risky from what I've read.

 

Realist35, you can easily buy for sub $600k and in many cases sub $500k within 25-35km from MEL CBD. Atually all in this list are within 14km .As i said this comes as a complete surprise to many that don't know MEL. I travel everywhere for work, week by week it's different so i get a feel for new areas and re-visit familiar areas. You can see signs of gentrification appear and you can see some suburbs within 2-3years completely transform.
Some of the suburbs i know reasonably well, others i would have little idea. As Luca said in this thread, definitely do your homework re: population forecasts for the suburb, employment in region, growth drivers etc etc.. and choose the housing product and suburb that works for your situation.

This list will get your search underway but its by no means exhaustive. There are many more suburbs to choose from that are under 25km from cbd, too many to list. I've listed suburbs under 14km from MEL CBD. (All Measured from MEL GPO). You just need to find your rough diamond.


Here's my top of the pops!


Both still 'undervalued' due to proximity to MEL CBD but over your quoted maximum:
*Altona approx $755k
*Altona north $720k


Under $600k:
NORTH
* Hadfield - large blocks of 600m2 land. $550k Distance= 12km
*Heidelberg west (only if you are lucky to find something very run down). %%%%This would be my #1 pick due to established infrastructure & neighbouring upscale suburbs such as Ivanhoe etc. Superb value in my opinion. Was or Has lots of social housing but its going thru big regeneration


Under $550k and all within 14km or under of MEL CBD
WEST
*Kealba - $450k - 700m2 large blocks
*St Albans - going thru a mini boom due to lxra track works. Median about $650k, however $530- $550k is still possible if you search well.
*Albanvale $415k - medium 550m2 blocks
*Keilor east $555k
*Sunshine North - closest to cbd out of this sub-list. Large'ish blocks.

*Kingsbury - just scrapes in under $600k average block size 500-550m2.

A lot of people who stick to their 'hood ( that's neighbourhood to you fine folk ), don't venture out and realise how blessed we are in MEL. Some of us do take things for granted and sometimes it takes a non Melbournite to make us realise just how lucky we are with the diversity of housing types and the ability to buy a PPOR or IP. In many other countries buying is simply not an option that is afforded to the general populace. You just have to look at New York, London etc...
Some Melbournites will have never heard of some of these suburbs i have listed.

 

Excellent, helpful post. For my next purchase in Melbourne, I would definitely be looking in these areas too, even if I could only afford a unit. Thanks heaps BeachBabe.
Timing is the only issue really. Will Melbourne keep moving or is it near peak? Who knows. Sydney kept moving and is STILL going.....

 

Hi Maso....actually I am not a developer...I just do simple house and land packages.

At this point in the cycle....huge developments has some risk anywhere.

One of the reasons on houses vs unit/villas/Town Houses.

 

For Melb there is generally low yields but sub $500k also consider SE around Narre Warren close to station & Fountain Gate SC. Suburbs closer in - Mulgrave, Rowville etc prices have already gone so likely ripple effect & Monash Freeway widening upgrades currently underway. Also much further out prices for Officer, Pakenham (although new H&L) are not dissimilar. However choose any tenants carefully & do your own DD. SE growth corridor is generally further out than suburbs in the West however.

 

Typo Correction: this below is within "17km" of MEL CBD

Under $550k and all within "17km" or under of MEL CBD
WEST
*Kealba - $450k - 700m2 large blocks
*St Albans - going thru a mini boom due to lxra track works. Median about $650k, however $530- $550k is still possible if you search well.
*Albanvale $415k - medium 550m2 blocks
*Keilor east $555k
*Sunshine North - closest to cbd out of this sub-list. Large'ish blocks.

 

Holding for land values, how much would you be paying in interest?
No returns on the land, more land above land threshold.
You need to figure out holding costs, land tax and returns on investment (opportunity cost).

Regards

 

Yes, if you dont find property within 15km then definitely try further out in Narre Warren (has the FGate SC), Berwick and surrounds as @craigc says as they haven't moved much yet.

SC=Shopping Centre

 

I would like to through in Glenroy. I like it a lot.