VIC New Melbourne Suburbs North, SE, West -Observations

Discussion in 'Where to Buy' started by sash, 15th Jan, 2017.

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  1. sash

    sash Well-Known Member

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    Hi All

    Just thought I would do a quick post of my observations on the new suburbs in Melbourne mostly in the North, Southeast, and West:

    1. There is no land oversupply at the moment....the queue for quality block is not abating. The affordability point drops rapidly once the block exceeds 250k
    2. The prices in the West are starting to rival the Outer Southeast and North
    3. Reasonably price blocks between 260-350sqm where you can put a double garage are flying out the door if they are under 250k.
    4. Most people are building either a 3x2x2 or 4x2x2 ..people are ok with small yards and one living area...they are trying to get into the market
    5. North - areas like Mickleham and Donnybrook are red hot
    6. West - Point Cook, Werribee, Tarneit are red hot. Herald Sun real estate section slates Werribee, Hoppers to take off
    7. Southeast - Cranbourne, Officer, Clyde are all head hot. Again Herald Sun slates Cranbourne to do extremely well
    8. Whilst driving around on Sat. most of the land agents were busy signing contract as some did a release this weekend. In some estates they sold 90% of releases on the first day!

    I feel that Melbourne will continue to perform while it is affordable. What is surprising is the affordability...you can still buy a small home on under 300 sqm home for the same price as an older house in Qld ..which is about 330-370k. Some of these areas are under 30 klms from the city.

    I was there over the last 2 days...and wow...what some people are saying about the Melbourne market and it slowing are completely untrue. Even the builders are pushing back on work via raising their prices.
     
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  2. C-mac

    C-mac Well-Known Member

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    Great insights Sash, thanks very much for sharing.
     
  3. sash

    sash Well-Known Member

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    No worries....I was "boots" on ground in Melbourne...and was absolutely astounded....that city is growing like anything.

    People's comments about the supply of land is way off mark...all the estates were dancing around answering the questions on when land will title....the estates I approached are slowing down development as they significantly delayed on land releases which is causing the supply.

    I did sign-up on a block for 149k (289sqm)..in the West....but that won't title till Q1 2018...my guess is it is more like Q3! The same land in other estates are selling for 170-180k.
     
  4. BeachBabe

    BeachBabe Well-Known Member

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    H
    Hey Sash

    Good observations. Note us Melbournites generally view a house on a 300m2 block as a unit/ subdivided block. You will see these regularly listed on realestate.com.au as a unit, villa unit or sometimes as a towhouse. Most families still prefer the 600m2 full sized block, but for that now you need to go further afield hence why the likes of Wollert, Donnybrook etc are kicking goals....not to mention the majority of Melbournites think that it's so remote it's in Timbuktu!! (You need the Vline to get there- Seymour route, lots of commuting, but trade-off is its desirable due to affordability)

    Note there is no oversupply as developers are careful via a strategic method to release stage by stage, hence a form of slightly manipulating D & S but at the same time ensuring all blocks are snapped up so there is no or little slack.


    Also note Clyde has the highest burglary rate in Melb, and Cranbourne is tipped to have the largest defaults

    Affluent Melbourne homeowners considered at high risk of mortgage default: new research - realestate.com.au

    I often use the interactive RACV crime map if it's a buy and hold. This might help others if they are looking for a PPOR. If a H+L flip then it's a different story and you need to crunch the numbers. Cranbourne affordability is reducing.

    https://www.google.com.au/amp/s/amp...1b9edcbdb1644393d6?client=ms-android-optus-au


    As for me I'm heading to SA, TAS & QLD to invest....better cap growth & returns for my strategy
     
  5. sash

    sash Well-Known Member

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    Yep....families prefer 300sqm blocks...but these are now over 210k...in a lot of estates. Add a 17sqm home plus landscaping and often they are over 200k. So a total of 420k including stamps.

    Recently...I noticed that the blocks I have been targeting 12.5m by 21-25 deep have been the first to be snapped up!

    It is crazy out there.

    I visited my Officer block......there is not house and land packages now under 400k...even for a 3x2x1....crazy stuff. It will keep going till the affordability wall is hit.

    I had to stand around for 20 min when I went to visit my Officer block and get permission from the estate manager to go to the block as it is technically still a construction zone.

    Whilst I was there there was a young Indian family and a Asian couple (Malaysian/Singaporean) couple with their daughter who snapped out 2 blocks for around 18-195k mark...one was 10.5 by 25 and the other was 12.5 x 21m. So things are definitely moving....



     
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  6. Cactus

    Cactus Well-Known Member

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    Arcadia had a release of like 6 blocks on the weekend I think. Will all have been sold now. They are drip feeding public at the moment, and trying to look after builders with package lots. But as you say titles dates are getting well out. Some times sales person says end of the year but it doesn't sound very believable. I can see several titles pushing out to late 2018 with the amount of work developers have on. Civil contractors are stretched big time.
     
  7. sash

    sash Well-Known Member

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    The block I secured...they said would title by Q1 2018....knowing the track record of developers is more like Q3 2018
     
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  8. Air_Bender

    Air_Bender Well-Known Member

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    The same thing is happening here in the North, specifically with the Aurora estate sold by Lendlease. They're still selling like hotcakes.
     
  9. JK200SX

    JK200SX Well-Known Member

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    Hello Sash,

    Would be interested to know which area this may be in?
     
  10. fols

    fols Well-Known Member

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    I bought in tarneit in June 16. Based on comps It's already moved 10%.

    Settling in Cranbourne this Friday. Agree it's hot. Rental market also hot- had tenants signed 3 weeks ago at top of the rental appraisal band.

    Agree lots of action on the fringes of Melb that doesn't look like stopping.
     
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  11. Cactus

    Cactus Well-Known Member

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    Was that an 8.5 x 34? Building 3/2/1 total package anticipated $300-315k?

    What's rental like for that in the area? $350pw?
     
  12. andyboiii

    andyboiii Well-Known Member

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    Bought my lot in Waratah Micklehham for $250k (576sqm), one is selling in The Woods estate next door, same exact dimensions for $281k. For that size in the S.E mainly officer, crancourne etc. you'd pay well over $300k for it, so the North is still representing great value. Not sure what the Cloverton estate will do to supply up there as they're going to be the largest development in Victoria (or Austalia?) with 12,000 lots.

    Yesterday, I picked up a 369sqm lot in Ashbury estate for $169k in Armstrong Creek. Amazing value, as Armstrong creek is expected to grow by 50% by 2030. Going to put a 4x2x2 on it and rent it out for $400 a week. Should be a nice positive cashflow build. The estate is so far all sold out, so even that is experiencing a lot of demand. 10 minutes from Torquay beach and 10 minutes from Geelong CBD with amazing existing amenities and new ones coming along. Took me 1 hour to drive back to Melbourne CBD and didn't even stop once on the way back home!
     
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  13. dissimulo

    dissimulo Member

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    Have been trying to get a block in Truganina for the last 12 months. 12 months ago 350m2 block can be had for around 220k, now you're looking at around 240k+.
    New land releases all get snapped up very quickly, one got released at 10am, I called to enquire at 12 noon and it was sold out.

    I had to move further out and purchase a 350m2 block in Werribee for 205k, I've been told that prices have already increased since and it's only been 2 months.
     
  14. BeachBabe

    BeachBabe Well-Known Member

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    Yes, It all comes down to fundamentals of affordability. Note as mentioned earlier, Demand and Supply is manipulated hence the 'sellout' each and every time. Werribee IMO is way better than Truga and has more growth potential...
     
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  15. dissimulo

    dissimulo Member

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    I hope you're right about Werribee's better growth prospects, it does have better amenities, public transport and access to the freeway. Only thing going for truganina is proximity to the CBD.
     
  16. melbournian

    melbournian Well-Known Member

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    crazy i bought those sizes in pt cook couple years ago for less than that. Agree werribee would experience a bit of growth. Esp those werribee south areas - views to the ocean similar to williamstown or st kilda or port melbourne without the exp price tag
     
  17. sash

    sash Well-Known Member

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    Just came back from Melbourne...my 274sqm lot in Trillium has a house on it...just did a PCI built for 301k...rental estimated 360-370pw.

    My one in Armstrong Creek rented for 395pw...built for 335k.
     
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  18. sash

    sash Well-Known Member

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    Nah...13.79 by 21 deep ....with a 175k 17 sqm home it should be about 320k...rent aobut 360-370pw.
     
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  19. Realist35

    Realist35 Well-Known Member

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    Hey what do you guys think of townhouses in one of those areas?

    A big advantage is they have higher rental yield, but with the apartment oversupply in Melbourne, will the CG be crippled?
     
  20. jjcxu

    jjcxu Member

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    I personally wouldn't touch the townhouses in those new estates, I've looked into a few of them and they cost as much as a 422 house for the same price, for example in Hartleigh in Clyde they are 350k for 2 bedders and 400 for 3 bedders. I would only go for townhouses in area where houses are limited supply, in the new estates case there are endless supply.
     
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