Sub dividable blocks under $400k

Hey Everyone, first time posting on here but have been reading and learning from this forum for a while now.

Was wondering if it's still possible to buy subdividable blocks around Melbourne (obviously outer suburbs) for under $400k, preferably under $350k. I know this is a tough ask but I'm sure there is still some pockets around.

Thanks

 

I think you could in suburbs like Cranbourne, Pakenham etc. Would be the older houses however the issue I would be worried about is if they would ever be worth splitting when buyers would be able to go out and build a house and land package in a new estate for the same price and have the luxury of living in a modern estate.

 

100% agree @Otie
I'm very wary of buying in a location where there's plenty of land close by that can still be developed.

 

Im pretty much looking for the same as you are, and with the same budget. I can go up to 460k, however everywhere I like is just slightly out of budget- always the way. Im keen on Western suburbs within 20kms of the city, as they are in budget and their neighbours have boomed, hoping for a follow on effect. I live South East Melb, and ideally would buy this way but it would just be too far out to make sense to me. @Brendon

 

Definitely seems like we're in a similar boat, I live in the eastern suburbs (Ringwood area) but everything out this way is currently out of reach for what I'm looking for.

Have been looking in Frankston North area but everything is selling very quickly down there atm

 

Even Frankston is quite far distance wise. I don't mind it but I just feel safer closer to the city. Sunshine west is within your budget but if your from Ringwood it will take some getting used to in terms of the area- its completely different over that way- no leafy streets, quite untidy homes and streets

 

Having a bit of a look out that way, I don't know the area all that well though.
Do you have any thoughts on St. Albans? Obviously a little bit further out but seem to get a bit more bang for your buck in terms of development potential.

I'm pretty keen to secure properties with development potential due to the fact that I'm a drainage plumber, so in the future when I do decide to develop I'm able to do a lot of the earthworks myself for next to no cost, which will obviously help my bottom line quite significantly!

 

I would definitely be looking at St Albans, its not somewhere I would want to live, but your not going to be living there. It does have a Uni there which can only be a good thing. I think St Albans will end up like Sunshine, it looks like developers are already starting to buy there.

 

Apparently Deer Park is one to miss, I think the train service is poor/not there, and there is lots of land not much further out

 

Laverton?

 

not anymore

 

True, Laverton has moved a lot in the past 6 months but if the budget can stretch another $20k should be able to find something suitable.

 

also important to buy walking distance to rail these deve sites dont come along too often

 

Buying at 400-450K per block and then putting 3 (2BR) units (approx 450K)...numbers do not stack up as selling price is around 300-325K for an equivalent unit...especially given the uncertainty in politics, credit availability and cyclic placement of Melbourne.
Werribee, hoppers crossing...maybe... because the CG there will be more due to population and infrastructure imperatives.
IMHO better to wait till end of this year by when Basel IV will be finalized. If impatient, at least till the election is over.

 

That is true. you better off buying something where you can build in the rear while retaining the front so the savings are in the build cost. Otherwise if the units are not sold for high prices It is hard to recoup or make a margin.

 

Couldn't agree more.

This is possible only in the suburb where gentrification has not taken off, otherwise the asking price has the sub divisibility premium built into it (same as corner blocks). E.g. sunshine, footscray, laverton ...the prices include the sub-divisibility premium hence hardly any profit in development.

 

Sunshine just looking at it yesterday has come down from highs maybe due to having not many similar high price suburbs for the ripple effect.

I think if the budget is higher there are surbubs that do allow this. it really depends suburb and the demographics and income levels and the zoning. If you go to suburbs where the "neighbourhood zones" are in place which allow sub division u can get a place relatively OK priced as the developers won't be chasing those. Developers mainly chase ones where you can have maximum units on the block. Also, You can go to suburbs like doncaster, doncaster east, you can buy it for 1+ mil and build a brand new super mansion at the back and sell it for 1+ million too. You could go to reservoir and buy for say below 600K and build in the rear and sell for 500K lesser margins but less capital outlays. Heidelberg Heights, you buy for 650-700K you can build in rear and sell for 620-770K. All comes down to risk, time, capital, return etc.

 

For my personal situation I am rather keen on a subdivision, where I can keep the front house.

This will enable me to rent the front house and hold it for quite a while until I am ready to develop the backyard, obviously it will be quite heavily negatively geared initially but that will work fine with my other property which is currently positive.

St. Albans area definitely looks like an area that I should spend some more time looking into!

 

Apart from the existing infrastructure and distance from the CBD - this is the main reason you cant go wrong in sunshine and bordering suburbs ( see link below ) . there will only be a small amount of clusters and they will end up being mini cities in their own right. Just have to wait thats all!
http://www.theurbandeveloper.com/melbournes-sunshine-to-become-economic-powerhouse/

 

I have been looking at and around sunshine, there are 2 things which make me a little hesitant, one is the price is more than I was looking to spend, may still be doable but would really be stretching myself, spending anything under 450k seems not worth it, the other issue is the low yield. More than happy for my property to be negative but it seems it would be very heavily negatively geared.

I have also been looking around the Jacana/Broadmeadows area, the price point just seems to be better for me plus yield is better (similar rent but 70-80k cheaper for comparable properties)

Does anybody have any opinions on what would be a better bet?