VIC Property Investment in Melbourne

Hey Rasheda, what sort of yield is achievable nowadays on St Albans?

 

Wonderful. Well done. All the best. Wendy

 

Hi
Is it possible to share info on landsize, cost and the BA cost
Thanks

 

Thomastown and Lalor are also moving now, off the back of Reservoir. You will need $650-$700K to buy a house on a decent sized block (550-600sqm) and it is continuing to move. Those houses were $100K+ less 12 months ago.

Developers can't make the numbers work in Reservoir now, so they are moving north.

 

Anything is possible Anthony, but you are talking about two different kinds of suburbs. Reservoir, Thomastown and Lalor have scarcity, in that you can't just open up another land estate and sell it off. What is there is what is there.

In Epping, they are still creating new land estates, so there is no scarcity of supply. Old Epping (further South) will do better than further out where those homes are closer to infrastucture. It depends on your outcomes and investment strategy, but there are likely better options for you than Epping.

 

Reservoir, Thomastown and Lalor have already experienced massive growth
Pay a premium to get into these areas today

 

Sunshine West is getting a lot of traction with families that have been priced out of Yarraville, Newport and Footscray. It's just a little further out and you can get a house on land. However, the prices have jumped so not sure who long that will be the case there either.

We managed the sale for a client of their home in Sunshine West in August last year and even then, that home sold for $100K more than what we had expected. The market has accelerated even more since then. People are heading west to buy because the south and east (even parts of north) are just unaffordable for them now.

 

Purchase price of my property $650k, 4 beds + 2 bath & land $650sqm and estimated rent $380.

 

Hi Rasheda, can you please let me know as well about BA. I am very to new to this and will appreciate your help.
Cheers

 

In the last month Thomastown had moved very significantly.

It's seems like people who are priced out in Rezza and Preston are looking at cheaper options like Thomastown.

Thomastown / Lalor are worth looking at because:
(1) It's still affordable for those have been priced out from other suburbs
(2) It's less than 20KM away from CBD
(3) It will benefit from the investments made by the government in Epping

Still think there is still some growth in those suburbs.

 

The problem with Melbourne is such cr*ppy yields. It is a great city to buy property but you must have deep pockets to pay holding costs per annum.

I tend to go for small house/townhouse closer to city in this regard as I am quite restricted in holding costs. But YMMV.

 

I have also noticed that smaller blocks have higher yields due to the lower price and not much lower rental return.

This looks like a very significant upside.

Is there much/any downside to smaller blocks closer in for cheaper?
Is growth relative to purchase price going to be any less?
Or any other issues?

 

I tend to agree, when I initially started the whole this IP journey (still going btw), I wanted to look at less desired suburbs but decent sized blocks (600-650m2). The thing is thought when I started looking at stuff in Rezza, Mulgrave, Springy, all these middle to outer rung suburbs tended to not fit my purpose - provide a decent income/rental return for my investment - the land was way too big but offset but being further from the station or CBD. Sure I could plonk a granny flat or townhouse at the back but it's way too much work and capital.

IMHO if you can buy cheaper, you don't have a larger mortgage and with the rate increases - I think this will cool the market. Having a smaller mortgage may mean also a better chance to buy another smaller block when the tsunami hits?

You would make better profits on larger blocks (600m2+), maybe even 500m2+ is considered large but that's only in good markets. I think the markets will cool off with rate increases, so I think I will be waiting out for now. This really does look like the Real McCoy this time around! (Bubble bursting).

My personal opinion is that even T-Town has sailed, Lalor also to some extent. Is it me or is T-Town really ugly?

 

Sorry I think this will be a stupid question, but by strata do you mean a town-house (as opposed to free-standing)?

I know nothing about townhouses, I only know of strata from apartments, so I assume it means when more than one property is joined together and requires single management and that is what strata is, so from what you mentioned, I am guessing strata is used for townhouses also (?) and that is what you were referring to? Correct if I am way off, which I probably am because I am just guessing all of this.

 

I have been thinking about this quite a lot but it is not discussed much. Nice to hear someone's thoughts on it (or maybe I am biased and it is just nice to hear someone agree with my thoughts)

So in good markets with a better outlook, or with higher yields, would you choose 500-600sqm blocks further out instead in that situation?

 

Yep I would but I would venture out more than 20kms in any direction from the CBD! Having said that in good markets you will have a lot of competition amongst developers as well so good luck trying lol!!

I'm looking at the medium rung suburbs North East but not buying as I really see a tsunami around the corner! I think and as all know here on the North, North West and West still have any fat left in them. NE looks a bit more exxy but I think Bundoora, Macleod, Watsonia and Montmorency have some what better prospects longer term - it's greener/lusher, access to arguably better unis (La Trobe, RMIT and possibly even Swinburne) vs just Vic Uni in the West.