VIC Outer East Melbourne

For those interested - house prices have increased signicantly over the last 12 months (Dec 2015) and I don't see signs of this market slowing down.

High demand for larger land component/deve sites, the larger the block the higher the returns

There is also a demand for renovated weatherboard character homes.

The completion of Ringwood Station and Eastlands redevelopment are contributing factors.

It's a SELLERS market

Bayswater North 16.7%
Bayswater 20%
Chirnside Park 16.2%
Croydon 18.2%
Croydon Hills 14.8 %
Croydon North 12.1%
Croydon South 14.0
Kilsyth 13.8%
Lily dale 10.0
Mooroolbark 19.3%
Montrose 13.3%
Ringwood 17.6%
Ringwood East 23.0%
Ringwood North 19.5%
Warranwood 14.3%

 

So I assume it is not a good time to buy for "buy and hold" investors in those areas? I always wanted to buy one in those areas but the yield is not good.

 

Not necessarily, I know developers who are still buying,

It's about finding value, I have seen some good buys recently and market is still moving

 

Crazy increases. Ringwood and other areas just continue to grow well I see.
Any chance you have the stats for west side handy?

 

no I don't perhaps someone here can provide these.

 

Agree with this. Unless one has enough cash flow to hold, it's hard. I live not far from Ringwood and the market is just crazy. It's definitely sellers' market and I even suspect there could be a bubble. But as an investor, a bubble is the last thing I want to see.

@MTR could you share some sold ones around those areas, which we can see as good buys? My next step is to look around the areas to do some cash flow analysis.

 

Contact re agents in area and ask them to email recent sales over last 3 months.

Its going to be very difficult to achieve cash flow positive in these areas because they have already moved too much. I suspect the further out the better the yield?

I think this is more of a capital growth play or something with a twist. If you can source a property that has development potential, where you can keep the front property, cut up the block and sell off the front property and built a new property at rear this may work??, once again it will be a numbers game do your homework??

They sold a corner lot ifor $565,000 around 6 months ago in Croydon where the buyer renovated the house cut the block and build a brand new home, both having street frontages. A very sweet deal because a brand new townhouse 3x2, decent size will sell for around $600K-620K and there is a high demand for these properties from the downsizers. If you look at something like this to build, always make sure the master bedroom/ensuite is downstairs.

The alternative is to look at much lower entry level in perhaps West but am not sure whether you will achieve the same results but assume cash flow is better, I have not looked at this.

MTR

 

Work in Ringwood and the area has had a massive injection of money spend with over 700 million on the upgrade of Eastlands shopping centre along with the upgrade of the Ringwood train station and bus hub.

 

Prices have doubled and we are seeing the impact of the ripple effect.
I have also been told that there are many Chinese buyers.
I particularly liked these pockets, lovely leafy areas, good infrastructure, schools etc etc..... many ticks on many boxes

 

Do you happen to have the address of this place? just trying to get ideas etc on corner blocks.

 

No, sorry 6 months ago all I remember it was closer to North Croydon and did not go to auction, private sale.
If someone has RPD data I guess it would be matter of checking all sales.

 

So what is the consensus on this area (specially Croydon, Mooroolbark, Boronia, Bayswater)? Has the market peaked or the prices still going uphill?

 

i wento the ringwood area like ringwood north last week at auction and cryodon inspections - seems ok prices not like one AFR article suggested of 60 bidders. Strange these areas like croydon and ringwood some are auctions some are not - if this was in preston like 80% are auctions. If it is really that hot - it would just go to auctions.

 

A buy and hold strategy in these areas tends to have excellent results, but don't mistake that for meaning cash flow; the rental yields are indeed low. These suburbs do have a lot of continuing growth drivers for both capital and yield. If you can tollerate the gearing losses for the short to medium term, you can do very well in the outter east in a buy and hold strategy.

 

Got a recent valuation on one of mine in Heathmont.. 3 bedroom 1 bathroom house on a sloped backyard 680m2... $786k from the bank.

Same valuation April 1, 2015 $639,000.

Only about 20 houses in the street, one of the worst in the street....

 

Just be mindful that new residential zoning laws in the Maroondah area (Ringwood (all), Croydon (all), Heathmont Bayswater North) came into place recently.

General and Neighbourhood zones instead of just Residential 1.

If the property is in a Neighbourhood zone you are restricted to only two dwellings on a lot, regardless of the land size. Many purchased not knowing this and their feasibility of building 3 units was suddenly restricted to only 2.

 

Rents being basically stagnate for established regular places shows no correlation to selling prices. This is where the market is out of wack on sales prices vs rent movement.

So Chirnside Park and Lilydale is that the next window of opportunity? 10 years ago local Melbournians considered it to be way to far out, why would you buy in Ringwood when you can get something in Box Hill, that was the mindset, but increased demand causes the ripple right up to Healesville before we know it.

Even paddocks on the Fringes of places like Ballarat are getting snapped up by Tree Changers when the big city gets too much to deal with. Growing trend too as part of the population explosion.

 

Anyone have any thoughts on wantirna and ferntree gully?

 

Wantirna is expensive....so is Ferntree Gully......well at least for me..I want product under 400k.

 

Even boronia is expensive.