VIC PPOR SE Melb 900k - 1.1Mill

Hey guys, my partner and I are planning on buying a property in E Melbourne (Mitcham, Blackburn North/South, etc). Blackburn, especially seems to be in high demand with cafes, schools, hospital (Box Hill), M3, Box Hill Centro and Doncaster Westfield around the corner. I also feel this area has a good prospect for capital growth in the coming 10 years. Stand alone houses in the area seem to have held their value, more or less, despite the current market.

What are your thoughts? Any other suburbs we should consider? Or should we sit tight until latter part of 2019?

 

Welcome!

Expand your search to Donvale/Donny East etc. Someone, I believe it was @The Y-man, posted links to a few acreages in Donvale that went for like 15% below their peaks. Further falls are in the works I believe, I'd hold off till 2019/2020 unless you have to buy quickly.

 

There are plenty of areas you can probably squeeze into with that budget now. Depends on what you prioritise - schools, shops, transport - bus vs train vs freeway, distance to city, trees, land vs shiny new stuff.

But as @Westie said, if there's no urgency it may be worth holding back for a while.

At this rate though, looks like there might be a lot of demand building up for end of 2019. It may be worth considering getting in a bit early to beat the rush

 

School zoning is key in this area and your price range as at a higher price range closer to and over 2 million generally can afford to send 2-3 kids to private (up to 30K each per year). Box Hill High, Mount Waverley High, Balwyn High (probably not at your price) have the reputations around that area and you will pay a premium to be close to train station.compared to being around the eastern freeway

 

The area is in decline and I agree that you would be better off holding off until 2020 or so. The lack of foreign investment in comparison to previous years seems to have really hit the area hard. The north-east is acting very different to the south-east where strong growth has been recorded in the Mornington Peninsula, Geelong and also to an extent in the western suburbs. These would be better alternate investment options in the shorter term for capital growth.

 

Thanks guys - very helpful information.
@johnmteliza - where did you get those graphs from? Pretty compelling downward trajectory in those suburbs!

 

It seems to be a common trend around the area. The graphs are from realestate.com.au's market data investment tool. In comparison, you can also see the growth in the Mornington Peninsula and Geelong through expanding the map.
Box Hill Investment Property Market Data

 

TBH I assmue OP and partner want to live in that area. People that choose to liveE Melbourne (whatever that means) generally don't want to live in Mornington Peninsula, Geelong or Western suburbs.

The graphs are useless as we are talking about PPOR not IP. Box Hill market is quite different from other markets as well for an example

16 Kintore Crescent, Box Hill VIC 3128 - Buxton
$2.28 M in residential growth zone in a small street full of trees and no apartment development on the whole street. 3.2K per square metre not typically associated with Box Hill

https://www.realestate.com.au/property/28-standard-ave-box-hill-vic-3128
1.8M in a general residential zone @ 2.6K per square

 

The OP stated 'I also feel this area has a good prospect for capital growth. Any other suburbs we should consider? Or should we sit tight until latter part of 2019?'

I was simply providing insight into the likelihood of capital growth as mentioned by the OP. The OP stated 'Thanks guys - very helpful information' so I wouldn't call the graphs useless.

The OP also asked if there are other suburbs worth considering. In terms of capital growth, the Mornington Peninsula and Geelong are clearly viable areas to invest in comparison to the Box Hill/Blackburn area. A lot of people from Melbourne are moving to the Mornington Peninsula and Geelong. This demand has been a key driver of these markets for years now.

 

Look I have never met a person who says in regards to PPOR " planning on buying a property in E Melbourne" and then end up buying a PPOR in Geelong..

Using your link median price Box HIll in 2013 was 768K and 2017 was 1.76M which is 130% increase in 4 years which puts the current less than 20% drop in perspective.

Look other people might say other suburbs doubled in 4 years but not at a starting base of 768K in 2013. You bank dollars not percentages

 

I agree Geelong is a bit far fetched but it is one of the few thriving markets in Victoria. In reality, there aren't many options for a safe investment in the east of Melbourne right now.

 

I am on the same boat. Want to move into these areas early next year. My drive is mostly schools and closer to work. I have been watching the market for the last few months and can see the only trend...down down. Although I need to mention that good properties are getting sold very quickly. Will attend a few more auctions in next 3/4 weeks and then decide. I am also considering renting for next 12-18 months and watch the market closely.

 

North east link will help a lot in this area with getting to the airport and should save at least 15 minutes driving time

 

Why do people still fork out 900k to 1mil for properties in the inner/middle rungs of Melbourne? I would have thought this would have been one of the hardest hit/steepest drops in price especially when you consider these were the areas most propped up by mainland Chinese money? Box Hill, Doncaster, Balwyn/Balwyn North, Glen Waverley and Mount Waverley.

 

I was under the impression it has. From what I can tell middle east suburbs have come off 10% already. I don't think the West or North have come off that much yet.

Sure, investors aren't buying, but people still need a place to live and $1Mill might look cheap compared with 12 months ago... I know of a couple of families that have used the opportunity to upsize/upgrade.

 

FWIW latest data from domain:

Melbourne region median house prices – September quarter
SEP-18 MEDIAN PRICE QOQ CHANGE YOY CHANGE
Inner city $1,105,000 -7.9% -15.0%
Inner east $1,350,000 -6.1% -12.9%
Inner south $1,235,000 -5.0% -8.5%
North east $705,000 -2.1% 1.4%
North west $615,000 -1.6% 5.5%
Outer east $755,000 -4.4% -5.6%
South east $640,000 -1.5% 3.2%
West $599,750 0.8% 6.2%

Is the inner east really worth that much of a pull to like dump in $1mil?

 

Looking at the graphs I've included above, a large amount of suburbs in the area have at least dropped in value by $100,000 in the past 12 months. More notably, Box Hill's 3 bedroom house price has fallen from $1.75m 12 months ago to $1.29m this month. Thats a significant $460,000 decline within only 12 months. The impact of a lack of Chinese money to prop up these markets is significant. Buyers do still need a place to live and I think they would likely look elsewhere to suburbs in other areas with a near $1m median house price. For example, suburbs in the west, south-east and north-west as they are the only areas still in growth.