VIC PPOR - FHB - Reservoir or Heidelberg West/Heights

Discussion in 'Where to Buy' started by Madium, 20th May, 2020.

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  1. Madium

    Madium Member

    Joined:
    12th May, 2020
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    Location:
    Melbourne, VIC
    Good morning all,

    I've been deep diving in these forums for at least the last month and it has been a WEALTH of information.


    TL;DR / Exec Summary: Paralysis by Analysis. I want to buy something that isn't going to tank in the next 2+ years as we will upgrade. Don't want to mistime the market and wait out for unreasonable discounts but also don't want to buy high. Can afford up to $750k but would prefer to be as close to $600k as possible. Melbourne and surrounds to the North and East.


    Our Purchase Fundamentals

    So we're looking at a PPOR, as First Home Buyers we're looking to keep to as close to $600k as possible for Stamp Duty concessions/exemption. We're happy to throw on extra but it's mostly about opportunity cost on the stamp duty concessions and being first homeowners.

    Areas we would be interested in are North to North East and East of Melbourne. Wife works in Doncaster and I'm going to study for the next two years so doesn't really matter for me. I just like good food and coffee.

    We are excluding OTP and New Build Apartments. Houses and Town Houses are included in the search.


    Your Thoughts - Rough Diamond in the Rough?

    Pricing information for 2 bed House by suburb (sourced on Domain)

    • Preston - $727k
    • Thornbury - $875k
    • Heidelberg West - $573k
    • Heidelberg Heights - $629k
    • Rosanna - $720k
    • Reservoir - $595k
    • Bulleen - $849k
    • Ivanhoe - $800k

    So nestled in either what has already gentrified or what was already expensive suburbs are the Heidelbergs and Reservoir. Crime rates are certainly up there, with the Heidelberg's ruling the top spots of Banyule crime statistics and I hear Reservoir on the news every second night. What was once a very violent place is becoming a little more like above-average violence, and other than theft if you stay out of people's business you should be somewhat ok.

    Surely this should subside with gentrification? I have noticed that there are many amazing metrics and ratios that you all use that I can't seem to get a hand on as a first home buyer (other than property research on Domain, REA and my property reports with Lendi).

    • Is there a methodology/data to determine or guesstimate rate of gentrification?
      (Household income | City of Banyule | Community profile shows income data for 2016 but cannot see a rate of change setting or data anywhere, for example).
    • Am I overthinking this? Should I just focus on buying in this area because it's good value for money or should I avoid it because... well... because.

    Alternative suburbs I imagine would be Thomastown and Watsonia that would have a somewhat lower median compared to Greater Melbourne but in a somewhat safer / gentrified suburb.

    Really appreciate the opportunity to read your responses and see what else I can learn about this fascinating world of Real Estate. You guys have such interesting takes and perceptions on value and this community is really great to learn from.
     
    Anthony Leong likes this.
  2. Anthony Leong

    Anthony Leong Member

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    i am in a very similar situation as you are.
     
  3. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
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    Location:
    Melbourne

    Gonna add to your analysis paralysis:

    https://www.realestate.com.au/property-townhouse-vic-wantirna-134968914

    3 bedder
    901 smartbus to ringwood
    Reasonable drive to Donc (even quicker if wife can get work to pay for eastlink/tunnel)

    For future rentability - also got the hospital across intersection

    The Y-man
     
  4. housechopper2

    housechopper2 Well-Known Member

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    Location:
    Melbourne
    Reservoir is a very large suburb. You really need to drive through it to work out the best pockets. A well located house there will do well in the long term IMHO. Try to find a lower maintenance property close to transport. You will need to pay above the median house price to find a property with good prospects of capital gain.

     
  5. Ben JH

    Ben JH Well-Known Member

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    Location:
    Melbourne
    I had a discussion with someone about guessing gentrification. We think looking YoY change of demographic data by suburb could give some indication such as average income, age group and ethnicity etc.

    Such data is not readily available in public unfortunately. May have to wait until the 2021 census in August. Otherwise, ABS will release the 2019-2020 FY Population Change data in late Mar.
     
  6. Triton

    Triton Well-Known Member

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  7. craigc

    craigc Well-Known Member

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    Wow @The Y-man , brings back memories. I looked at one townhouse in that same complex 20+ years ago as a first IP when had no idea what I was doing (some say that hasn’t changed) :p
    I recall being neat and tidy with slightly unusual street access tucked tight in behind the shops/restaurants.
    Had an unusual floor plan with the bedrooms down and everything else upstairs. Thought it was a pain then and probably still is now.

    Interesting to see the values now (thankfully not a $1M) as this one’s under offer already.
     
    Last edited: 8th Jan, 2021
    The Y-man likes this.
  8. paulF

    paulF Well-Known Member

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    As mentioned above, Reservoir is a very large suburb and has some rough parts and some very nice parts to it.
    As for Heidelberg West/Heights, they are rough and will surely gentrify but how long would that take is the million dollar question.
    Maybe add Fawkner/Glenroy to your list of suburbs too.

    Best of luck with it all.
     
    Bunbury likes this.
  9. Bunbury

    Bunbury Well-Known Member

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    Location:
    Melbourne
    You haven't been to Thomastown have you? I'd only call it gentrified if you were comparing with Broadmeadows.

    You will get a feel for the area if you go there and spend some time driving and walking around and visiting the shops and cafes. Reservoir is a very large suburb and the crime rates vary quite a bit in the different locales within the suburb. However, the overall crime rate is relatively low on a per capita basis. There are dodgy parts but there is a world of difference between Oakhill and East Reservoir. Likewise Heidelberg West and Heidelberg Heights are worlds apart despite being adjoining suburbs. Getting a house for $600k+ is a very big ask in any of those suburb except for Thomastown.

    That data from Domain should be taken with a grain of salt because there are generally not large volumes of 2br houses compared to 3br as well as a consequence of the variation in the quality of stock in those suburbs (bar Thomastown and Heidelberg West).

    Check out the burglary rates in the suburbs. I know from experience in organisations in Thornbury and Preston that burglaries and theft are virtually non existent in the better parts of those suburbs and that almost all the property offences occur in the lower demographic areas.

    RACV Burglary Statistics in Victoria: How Does Your Suburb Fare?
     
    Last edited: 8th Jan, 2021