VIC Mickleham's booming property prices

As per Connor's comment you can definitely find something in Melton but I would strongly advise against buying land out there. Too many estates are popping up and there's a lot of empty land out there. I doubt you will see any decent growth in these estates for quite some time.

If your budget is $400k then why not consider buying an existing property? You can still find something decent close to the shops and train station.

 

I am looking in Wyndham Vale. Will try to look up land in Melton as well.

 

Not too sure about that, but I have my eye on Botanical. It's a new one and starting price is very very good.

 

I would prefer something that I can buy now as I can get finance arranged right away but if I buy a land which will register a year then I might have to sit on it for few months before building if wife goes to leave for little while.
My concern is that Melbourne market have gone up so much whether there is any steam left for existing houses to go further up. Ofcourse I am planning for long term and I can stretch upto 500K if it is possible to get a decent yield.

 

Spot on.
I was building 4 land and house packages pa in the Perth booming market in 2001, waiting 6 months for titles, great if you buy in the early stages of the development less risk, the thing to be mindful of is the fact that booms don't last forever regardless, I wish they did.

Land and house packages are vulnerable when markets turn because its the same cookie cutter product and when people stop buying there will immediately be an over supply of land and the same product. My suggestion is have an exit plan if you get caught in the middle of a build, it can get ugly if you have over committed and be prepared to hold for the next cycle, which could be years away.

Immigration is only one factor to consider. Not saying the market is going to crash, however I do think the Melb market will eventually correct, its been booming since 2013.

MTR

 

If market starts to lose steam, new houses will be the first to get hit.

 

which is why I'm building a 5/3/3 at an excellent price point. Definitely not a cookie cutter house.

 

@MTR I will have to agree with you and @ATANG that it could relatively be a risky step because I am looking for L&H package maybe towards the peak of market as compare to few top guns who already have made good fortune by getting in early but it seems there are not many options other than holding on and waiting for next good setup.

 

There are still some stocks with higher land content in that price range in train lined suburbs like Weeribee, Sunbury, Doveton, etc. If the OTP has something over 500, 600sqm, then thats not bad, but a lot of them are less than 300sqm. It's the land value that pushes up prices.

 

What some seem to be forgetting is that even with low end H&L, it's very possible in the current market to manufacture 40-50k equity into the deal....meaning, compared to the deal you put together, the existing equivalent products on offer are asking 40-50k more! And that's without taking into considerate any growth in values.
Compare that to many other suburbs in Aus that investors are flocking to that take years to see that type of growth.

Even in 2017, I put together a package in Jan that had approx 50k equity at the time... that's sitting at about 80k equity now with land growth.
June a deal for my brother with approx 40-50k equity not counting any growth. July another deal with approx 150k equity...but that is a higher end product..

I'm not saying you just go out to Henley or wherever and buy any old H&L... you got to do the work... and you have to make sure you'll have decent equity in the deal. Personally I'd never do a deal without an equity uplift from the very beginning.

Markets can and do turn, and when they do, it affects entire regions. The majority of the H&L markets in Australia I would not touch. But when buying in certain existing suburbs, and at certain price points, it lessens your exposure in a downturn.

Put it this way.. investor 'A' buys a property at the very peak of the market for 450k and its worth 450k. Investor 'B' at the same peak of the market puts together a H&L deal for 400k, but it's market value is 450k.
Which investor now has negative equity and is most at risk?

 

When you say that you put together a package which has 50K equity..do you actually generate equity in building? because the cost of land in a release would be same for all same size lots and generally the price range of all developers is same as well. You can make money by getting in early releases though because the value increases as the developer offers new releases at higher price.

This is a new package so someone is giving away their profits whereas it is different scenario when you purchase existing already built properties.

 

Yes there's plenty of $$ you can gain in the building. Sourcing of land is an art form also. You can compare the different estates and land values until you know your prices. I've seen such huge fluctuations in prices between estates literally across the road from each other. You have to find these discrepancies and find out why. If it passes your DD then you can take advantage.

You also need to persist with the developers and land sales agents. Often you can snap up previously held blocks for builders, or deals from previous stages that have fallen over for their original sale prices. There's always opportunity, but it wont just fall in your lap.

 

Which is the main reason why I never built with a lot of builders (ie. Henley, Metricon, Simmonds, Carlisle, PD etc) because I get the same product for much cheaper.

I made structural changes to the original floor plan which will provide a lot of equity in future. ie. raised ceilings, extra ensuite/WIR to a room, grand alfresco, 5th bedroom, extra 2 metres on the garage etc. Also ensured I got a really, really good deal. for $288k, can't go wrong.

 

You made some good savings. Good stuff.

Now, I'd like to see you invest some of those savings on a selfie stick. I keep focusing on that phone in your hand and it's driving me nuts lol.

 

guys , I have got question. can I buy land in new estate with 5% deposit ? releasing land and titled might take nearly 2 years. After two year, can I sell land to someone? I have already got 3 properties. They wont give me any loan as my income is not high.

 

You can't sell what's not yet yours. You can nominate someone though but these I can confirm developers are putting clauses in limiting this from happening.

 

when I buy land, I will try to put nomination clause. After two years, I will try to market within my community and ask them to transfer money in my account according to current market value with bit of discount and nominate them

 

Yeah that's what I said too. They are trying to stamp out this practice.

 

sounds good.... thanks

That's a good tip.... Thanks

thanks for heads up!! will look into it.

 

Hello,

Planing to buy a land in Merrifield Parkway just opposite to Future Sporting Reserve 448m for $370k
Any suggestion please