Melbourne townhouse

I am helping my son into his first property. I am thinking a townhouse as PPOR, 1-2-1 new, in Greater Melbourne. It seems there are townhouses in the range $400-600k in the suburbs Springvale, Clayton, Oakleigh and Greensborough.

I wonder what people's opinions are about these suburbs. Are they reasonably safe and prospects for CG?

 

You also have Reservoir and maybe Preston in that price range.

Its a very speculative time for further property growth. My opinion is that rents aren't going up much any time soon so properties that are not constrained in supply (ie. units and townhouses) will not see much growth.

The big unknown at the moment is what interest rates are going to do. Its a question of when they will go up, not if. Should they hold steady all year there is a decent chance at some growth, however if they start to rise sooner, I would say its limited. Make sure this is factored in to the cost of buying, and beyond 2017 most analysts are in agreement that Melbourne will be flat.

This is just my opinion, would love to hear others' thoughts as well

 

By 1-2-1 do you mean 1 bedroom?

 

I used to live in Clayton, it has a large (Asian) student population. Super convenient with lot of shops, restaurants. It has one of the largest Asian grocery stores in Melbourne. A lot of townhouses are being built there along the train line. You won't regret it if you buy there as later you can sell to an Asian family or rent it out room-by-room to students.

Oakleigh: beautiful suburb with amazing houses, close to Chadstone shopping centre.

Springvale: cheaper, a large Indian population there (at least two years ago), it has a very big and cheap market. I know someone who lives in South Morang (Northern end of Melbourne) who goes to the Springvale market as it is better than Preston market, lol.

Yes agree with the above, don't bother if you don't buy near the station.

 

Sorry for the confusion there! I mean the budget is enough to target either 1 or 2 bedrooms. The latter is preferred but being the first buy 1 bedroom will have to do some time.

 

I am doing the initial research for my son. Based on my limited knowledge the suburbs I suggested seem to have the townhouses that may be within the budget at the moment. Close to stations would be handy to go to work. He works in Richmond.

 

Hi Francesco
I would be wary of Reservoir the developers have jumped and gone gangbusters, many price points but I think also may be oversupply.

MTR

 

My gut feel is not to opt for suburbs in the North or West of Melbourne. It seems that anywhere near Oakleigh along the rail line would be optimal.

 

Go for clayton .
Preston Reservoir will be on the cheaper end of the 400-600K (as there is a lot of infra stuff happening) - preston market rebuild, reservoir station rebuild, upgrades to northland etc .
But personally I would buy in suburbs where there the streets are zone neighbourhood residential zone

 

Clayton is awesome area, it's not that far from the city (20-30 mins by train and around 40 mins drive to city). Heaps of eatery area, and wide variety of shops (alongside Clayton road between Carinish and Center rd).

It's quite safe and I think it will grow more in price due to the redevelopment of the train station and removal of the level crossing.

There are lots of new townhouses being built around my area however I have found often they are already bought most of them before they are even finished being built.

 

Ah sorry, I have never been to Springvale so I'm not aware of the Vietnamese population there. That said, I live in Footscray now, honestly Richmond is no comparison when it comes to Vietnamese food.

 

Just had a quick look and it seems like the rental yield is very low for most of the mentioned suburbs. By low I mean around 3% or even sub 3%. Shame as apart from that they look very attractive.

 

Haha fair enough.

Or maybe go to the outer west suburbs and get 4% yield?

 

I am betting that future CG along the Oakleigh-Springvale corridor will more than make up for the lower yield on a percentage basis.

 

My investor clients have picked up some great buys in Clayton recently - but best to stay away from the large overhead powerlines and landfill/ex landfill sites.