VIC Melton South or Norlane

Discussion in 'Where to Buy' started by Seby643, 29th Jan, 2017.

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  1. Seby643

    Seby643 Well-Known Member

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    Hi guys

    Ive been lurking around here on the forums for awhile and finally decided to register to ask for some suggestive advice. My first investment property is currently being built in Tarneit, once that is built and tenanted some time this year I will be looking to purchase a 2nd. I'm predominantly looking for a 3 bedroom house in victoria i can purchase for under 300k in an area with a rental yield above 5% that will also see capital growth. So far i have my eyes on either Melton south or Norlane, Norlane has a 3 bedroom median price of $240k and melton souths is $270k. Both suburbs have a rental yield above 5% as well as a vacancy rate under 2%. My options at this stage would be to either buy an established property in either norlane or melton south or buy a block of land in melton south in one of the new estates and build instead. So my main question here is where will my money better be invested? Am open to other suburb suggestions as well :)
     
  2. Dave3214

    Dave3214 Well-Known Member

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    Did someone say Norlane? :)

    I speak merely as a homebuyer in Norlane West, been here for almost 7 years and certainly as a place for me to live it's got everything i need. Close to my jobs, close to shops, just 10 minutes to Geelong and perhaps unlike Melton, it's also basically on the coast, eg minutes to Eastern Beach and Geelong's waterfront and then maybe a 25-30 minute drive to Torquay etc.

    Now my place which i bought new on a half-size block cost $260K in 2010, and has only now been valued at $300K, so the growth (at least from a building sense) has been relatively minimal. But there's bargains to be had buying an older 50's or 60's weatherboard place on the 600m2 blocks which are plentiful for the $240K-ish price point. A fair few older places have been renewed with the 'New Norlane' project that has been ongoing for the last few years, particularly around Bunnings and also on the Eastern side of Princes Hwy. There's also a couple of other factors that make me think that something might have to break price-wise when these are taken into account.

    O.K...one is, suburbs closer in to Geelong have exploded in price. Geelong West, East Geelong, Drumcondra and Rippleside, Manifold Heights and even Hamlyn Heights have all had significant growth in the last few years. Now, i'm a Geelong local and have lived here all my life. As such, i just cannot really fathom the massive differences in price for properties that are only a few kilometres apart. Norlane's just a 10 minute drive to the CBD, Pako, the waterfront, yet you can get in for even as little as a third or less of those higher prices.

    Check this out, an original house on a half size block...

    1/2 Blair Court, Norlane, Vic 3214 - Property Details

    $167K....That is remarkable value. Great rental return for this, and you're just a few minutes from Geelong. To put this house into context, it's roughly 1500m from the waterfront of the Esplanade North Shore, where places overlooking the bay are commanding remarkable prices.
    Geelong's Northern suburbs also are the closest to Melbourne, yet paradoxically are the cheapest in the Geelong region. I sometimes feel like adding a road sign to all those Armstrong Creek people on the Ring Road coming in...with a little sign saying 'Corio and Norlane....You'd be home already!' Yes, and i am the first to admit it, there's a few ferals in some parts of Norlane, but what i am hoping for is that with the rest of Geelong showing big capital growth already, and Norlane being just moments from these places....surely SOMETHING has to gerry about it being value. Geelong's not like Melbourne, it doesn't take an hour to get into the city from an outer suburb. A Norlane-ite will merely take a few extra minutes to get to the same places that inner suburban buyers will happily shell out big money to buy.

    And although i am not particularly familiar with Melton or Melton South, or even Kurunjang, does Melton have any part of that suburb where houses are at a premium price? That's why i hold out hope for my Norlane, there's that overflow factor that almost has to happen at some point. For Melbourne commuters (and there's the North Shore station to boot), it's no further away for travel time than many of Melbourne's outer suburbs. And for Geelong, you've got Cotton On, Geelong's largest private employer just minutes away, Barwon Health, Bunnings in Norlane now, plus it's close to the industrial areas and jobs of North Geelong and North Shore. There's jobs in Geelong, and i would contend that if you have any sort of employable skills, you'll already be ahead of the queue of some of the locals.

    The rental yields i reckon would be nearer to 6-7% guaranteed, and i reckon Norlane's kind of not really caught the wave that has swept Geelong's inner suburbs. For where it is, for the closeness to amenities and proximity to Victoria's largest two cities, it really should start to reflect this in prices in the future. I sure hope so!
     
  3. MikeyBallarat

    MikeyBallarat Well-Known Member

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    Agree with everything Dave said. For your budget, you could probably find a triple fronted brick home in Norlane West (west of Thompson Rd) - take a look for yourself, growth prospects are excellent for the area.

    Edit: Snap this one up. 1 Cortina Close Norlane Vic 3214 - House for Sale #122924926 - realestate.com.au

    Further edit: that home I linked to is going for the same price as unrenovated houso homes in Corio. It's worth a look!
     
    Last edited: 29th Jan, 2017
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  4. sash

    sash Well-Known Member

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    Either of suburbs will perform over the longer term.
     
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  5. Seby643

    Seby643 Well-Known Member

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    Thanks for the info dave.
    I have seen there are a few off the plan 2 bedroom units for sale On camelia crescent, plume street, and morona street on realestate.com. There going for around 245k. Does anyone think they are worth purchasing even though they are above market value by roughly 35k??
    I suppose an already established older property would cost the same price after a few minor renovations
     
  6. Dave3214

    Dave3214 Well-Known Member

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    I think it's just the economic reality that it does cost around $150K to build the house. The blocks of land are usually rated around the $80K mark (mine in Dunloe Ave is valued at $90K for a 298m2 block) so the completed and landscaped finished product of the 2-1-1's are about the mark of $240-ish, with a bit of profit for the builder on top i guess. The old weatherboard places that exist currently are almost valued at next to nothing, the land component is virtually all the price of that median $210K or so.

    There are new 3-2-2's and even the odd 4-bedder that have sold for over $300K, even as much as about $360K in Aunga Ave for a 4-bedder there. The same houses though elsewhere in Geelong will be more like around the $300K mark or more as the land value in Norlane is the cheapest in the city.

    I guess the new places (here's an example of a relatively new 2-1-1 in Bellbird Ave) are rentable for higher figures, this one is $250 a week.

    18 Bellbird Avenue Norlane Vic 3214 - Unit for Rent #420124982 - realestate.com.au

    This one's a 3-2-2 not too far from North Shore station, and is being offered for rent at $330 per week.

    57A Forster Street Norlane Vic 3214 - Townhouse for Rent #418555430 - realestate.com.au

    FWIW, my place is rated as $90K land, $160K building on my rates notice.
     
  7. Dave3214

    Dave3214 Well-Known Member

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    Here's an ad for units in Station St Norlane, and the funny thing is that they say they are a stones throw from North Geelong station, they are actually right opposite the North Shore station. Maybe that's what the ad should have said.

    4 & 6/5 Station Street Norlane Vic 3214 - Unit for Sale #121471614 - realestate.com.au

    This one sold for $225K....and would rent for surely a 6-7% yield where it is. Same complex so maybe the others could be got for the same sort of budget.

    2/5 Station Street Norlane

    Those are an example of the 'New Norlane' places. But as G-Town has said, you can get an older brick house in Norlane West, (where i live) for around the $250+K mark. Most blocks are around the 600m2 mark.

    This one's just up the road from me..

    http://www.realestate.com.au/photogallery_new.ds?id=124012854&theme=rea.buy

    But being new it's dearer and probably over your budget. But there's still a few places in the area between the highway and Thompson Rd for the $220-$240K mark, on a full block that should furnish some capital growth with the land value, and earn a solid rental income.
     
  8. Seby643

    Seby643 Well-Known Member

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    I like the idea of the 2 bedroom unit on station street or an older 3 bedroom brick house on a 600m2 block. I do plan on implementing a buy and hold strategy and eventually trying to create a passive income in future. Both of these options seem like the bread and butter properties needed in the start of a 10 or 15+ property portfolio.

    I think im leaning towards a plan of the 600m2 block and later subdividing and building 2 or 3 units or townhouses if norlane does have a big price rise in the short term of 5-7 years. There is a repetitive incline and decline in price from the graph since 2008 but no major incline that stands out.

    Do you think we will see a major price boom within 7 years from new infrastructure or from people being outpriced out of geelong?
     

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  9. Dave3214

    Dave3214 Well-Known Member

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  10. Coota9

    Coota9 Well-Known Member

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    Interesting to see development around this area.

    Sub divided block(Similar size)150M from listed property
    Pic1.PNG


    Pic2.PNG
     
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  11. Luca

    Luca Well-Known Member

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    I would suggest give a crack to macro data. See the population forecast for Melton & Geelong and you`ll get your answer.
     
  12. Seby643

    Seby643 Well-Known Member

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    IMG_0484.PNG IMG_0485.PNG Norlane and city of greater geelong mentioned in this months issue of money magazine. Norlane and Corio on 2017 top 50 property hot spots
     
  13. Dave3214

    Dave3214 Well-Known Member

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    Fascinating reading those tables there Selby, what stands out to me is simply that given Norlane and Corio are inside an hour to Melbourne and are so close to everything Geelong has, the prices are far less than the smaller NSW cities of Cessnock and Dubbo, which are much further away from Sydney as well. Apart from the reputation, there's no logical reason why Norlane and Corio should be as cheap as they are when you compare how much more say Highton is, just 10 minutes along the ring road, and 250% of the price. Take it from me as a lifelong Geelong resident, if you want to go somewhere in Geelong, you just drive there, nothing's much more than 20 minutes away wherever you go. Hell, even the huge Waurn Ponds shopping centre is just 15 minutes along the ring road from Norlane or Corio.

    I made a comment to a mate, with all the hoo-hah about people whingeing about housing prices being so high in the capitals, is housing truly unaffordable if those who whinge about unaffordability are unwilling to consider the places that are? Those prices are so illuminating, Norlane and Corio are priced like a rural city, yet is as close to Melbourne as many of the capital's eastern suburbs, and at about half the price of Pakenham and Officer and the like.

    Reality has to hit at some stage you'd think.
     
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  14. Kelstan2009

    Kelstan2009 Member

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    Sorry, i'm a newbie here - can you direct me to a site where I could research this data? Thank you :)
     
  15. Luca

    Luca Well-Known Member

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    Hey mate, I don`t have a specific site. I usually start from the council website and then move to google and type "suburb + population + forecast"
     
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  16. Seby643

    Seby643 Well-Known Member

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  17. Kelstan2009

    Kelstan2009 Member

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    But won't the tax benefits of a new build be far greater and beneficial for you as opposed to buying an established home?
     
  18. Dave3214

    Dave3214 Well-Known Member

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    Auction action here in Tennyson St, indeed a house just four doors down from the house i lived in as a baby. Right near the shops in Forster St and less than a kilometre from the Nth Shore station.

    That sold for $255K....so maybe that might assist the bank in re-evaluating the Bingara Ave place for private sale.

    Kade Camilleri - Ray White Agent | Facebook

    FWIW, i'd consider this area in the less desirable part from a perspective of a PPR, but prices are moving upward over the last several months. Also, auctions, they were a very rare feature for Norlane once upon a time. I went to one at 4 Arunga Ave a few years ago (think it was just after i moved in to my place), that sold at auction for $165K....now it's sub-divided and for sale as two properties....here is an ad for one of them.

    This one is renovated, but priced at $225-$245K, the original place was in pretty mediocre condition.

    1/4 Arunga Avenue, Norlane Real Estate For Sale

    This house down the street from me, sold for $310K

    48 Dunloe Avenue, Norlane, Vic 3214 - Property Details

    In December 2015, 64 Dunloe, right opposite my place sold at auction for $225K, an unrenovated weatherboard 4-bedder that could use some work. Arguably now it's worth a bit more i'd say.

    Just reckon getting a place on a full block for under the $230-$240K mark might be a recipe for a bit of growth, as Norlane is still the cheapest suburb in Geelong. And unlike those sweating it out far from the coast in Western Sydney suburbs or further inland, we're right near the coast. Could be a sneaky factor to consider to be frank, the cool sea breezes and moderate temperatures suit me fine.
     
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  19. Otie

    Otie Well-Known Member

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    Personally I'd try to get into Cranbourne or Pakenham if you can squeeze in within budget- land then build.
    Otherwise my second pref would be Melton way I don't have enough faith in regionals yet as I'm too early in the game to risk it. Plus I think tenant quality and yield would be better in Cranbourne or Pakenham. Not that they are great suburbs either but not a concentrated area of low socio economic residents.
     
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  20. Seby643

    Seby643 Well-Known Member

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    Yes it would but a new build is generally on a smaller block of land in norlane from what is advertised. If i do buy established on a 600m2 block, i can demolish the existing place in future, subdivide and try build 2 or 3 units or townhouses
     
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