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Tale of Two Cities

Discussion in 'General Property Chat' started by MTR, 30th Jan, 2016.

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  1. MTR

    MTR Well-Known Member Premium Member

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  2. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    Good read @MTR - thanks.
    I also read another article earlier in the week and Louis Christopher from SQM research has predicted overall house values to increase by 10-13% across Melbourne in 2016.
    What are peoples thoughts?
     
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  3. Coota9

    Coota9 Well-Known Member Premium Member

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    The candle has definitely been blown out on the Sydney markets as discussed in other threads.

    As I have said I believe the inner east boom markets will now ripple out to markets a little further from CBD.

    Also value area's in the North and West either side of the M80 ring road will see good growth in 2016
     
  4. melbournian

    melbournian Well-Known Member

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    i think as long as migration keeps coming in and population keeps growing with jobs - u will see growth in western suburbs like pt cook, williams landing has seen 10% growth from 1 year ago as really many families have been priced out in the east but i do not think it would hit a 500Kish median barrier it will just stay around that range median range of mid to high 400s as if it goes higher buyers might as well go to other suburbs. Reasons why even though there is so much land it still sells as that is what average income earners can afford. Been watching suburbs like maidstone where dual occpuancy sites were selling high 700Ks now has come down to high 600Ks from couple months ago. So there is some easing from the highs of last year.

    Not all suburbs are equal and the macroeconomic stats don't reflect it. Suburbs were demand for quality schools will still keep going up especially those in the zones like balwyn high school (balywn & balywn north), glen waverley, mckinnon, bentleigh east, doncaster east, camberwell, canterbury etc, it will be 10% or above. Where the demand to be in these suburbs are high, units prices (like villas, townhouses) will rise. Already seen many examples of this in auctions, what a 2 bedroom villa unit was 600K 1 year ago when renovated comestically can be sold for nearly 900k -1 million within a year (close to 50%). i suspect development block sites are easing a bit due to recent financing - been going to see a lot of sites in doncaster, and some under offer sales has been back on the market. Went to couple of inspections today and can say there were a good 20-30 different parties all looking and asking for the s32.

    As someone who had been a regular purchaser and seller of many apartments in the past, can say the overall market will be flat for CG, there are many new products in the market (OTP) and they have low ceilings etc and the finishings are pretty bad. The only gains can be achieved in older larger apartments which are now very rare to find.

    One thing pushing a lot of rental mkts is the twining programs melbourne universities has with asian educational institutes like monash, deakin, swinburne, rmit which the student spends 1-2 years in asia and the remaining 1-2 years spend in melbourne. That alone drives a lot of demand for rentals esp near universities. Long are the days where you see students cramping up in hostels. they now rent townhouses, apartments or houses and is evident in clayton, carlton brunswick etc.
     
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  5. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    Thank you for the great explanation @melbournian. I enjoyed reading your post.
     
  6. big max

    big max Well-Known Member

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    Usual cycle. Sydney goes first then it moves to Melbourne and then once Melb settles Brisbane and Gold Coast ramp up.
     
  7. luckystar

    luckystar Well-Known Member

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    Historically Melbourne has followed Sydney anyway, simply because it is cheaper and people can see that, the media also know this and they just build story's around it and then MTR posts them lololol
     
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  8. sash

    sash Well-Known Member

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    Absolutely agree with this MTR...good post.

    People forget that without affordability a market will be dormant for years. I can see Melbourne still growing for years to come. Bar a few inner suburb...it will moderate and price will still steadilty press up.

    In comparison I think that Sydney is in for a hard landing.
     
  9. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    How hard are we talking @sash? % wise, Sydney as a whole?
     
  10. sash

    sash Well-Known Member

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    Many debates on this....but it will generally be the suburbs which have grown say 250% in a period of say 5-6 years.

    In 2010 you could have still bought houses for low 6s...now they are at 1.1-1.5m. So the drop will be more pronouned.

    Areas in the upper North Shore did not go up that much in % terms...so more likely to hold.

    The other thing..is that there are all those McMansions being built in areas like Wentworthville, Pendle Hill, Westmead, Toongabbie, Merrylands for over $1.1m...these are definitely going to be hit hard. In Melbourne you have seen this also...but only in select suburbs. Still plenty of suburbs with good value...
     
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  11. Azazel

    Azazel Well-Known Member

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    Usually a Canberra in there after Sydney.
     
  12. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Sorry @Azazel....
    Screenshot_2016-01-31-17-39-11.png
     
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  13. Azazel

    Azazel Well-Known Member

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    Ha!
    It is a bit odd that they don't include it with the capital cities.
     
  14. Big Will

    Big Will Well-Known Member

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    It is all just hot air in Canberra anyway
     
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  15. big max

    big max Well-Known Member

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    Gold Coast is missing too. The capital city of Queensland ... :)
     
  16. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    I reckon this year might be the one where Sydney units do better than Sydney houses... in Sydney affordability is a major issue, especially houses...
     
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  17. albanga

    albanga Well-Known Member

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    Without sounding like im biased and trying to drive my own property prices I do honestly believe where I live in Melbourne's North West (Niddrie) is some of the most undervalued real estate in Melbourne. Suburbs like Essendon, Niddrie, Pascoe Vale, Airport West, Strathmore, Aberfeldie for what they offer IMO are way undervalued.
    Distance to the CBD is 10km with multiple entry points all way quicker than entering from the east. With traffic it takes me max 25-30 minutes, without traffic i can get to my office in Collins St in 12 minutes.
    Multiple transport options with Train, Tram and Buses all running into the CBD. My Essendon train takes about 18 minutes to get into Flagstaff station.
    Zoned to amazing private schools for both boys and girls (Essendon Grammar, St.Bernards, Lather Hall, Ava Maria, St Columbus) also access to great public schools.
    Beautiful parks and trails with the highlight being the maribyrnong river.
    Multiple restaurant options with Keilor Rd, Mount Alexander Rd, Sydney Rd in Brunswick.
    Shopping a plenty with Highpoint, Essendon DFO, Westfield in APW.
    10-15 minutes from Melbourne airport.
    10 minutes and zoned to some of the best hospitals in Melbourne (Royal Childrens, Royal Womens)

    Look up these suburbs in REA and get the median value. They are still not cheap suburbs but grab that same distance and go East and compare the prices and look at why I think it is so undervalued.

    Take just my suburb of Niddrie, median price for a 3 bedroom house is 805k.
    Now compare that to something similar being say Ivanhoe (Ivanhoe is a bit further out) and the median is 1.23mil.
    I am in no way trying to say that Niddrie is a superior suburb to Ivanhoe, the East is beautiful and Ivanhoe an amazing suburb, but I am saying when comparing key property indicators the 520k difference does not add up.
     
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  18. MTR

    MTR Well-Known Member Premium Member

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    I think its not necessarily a good idea to look at past history as an indicator for future performance.

    Not quite correct, Melb was rising around the same time as Syd, just that Syd went harder in terms of growth generally speaking.

    MTR:)
     
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  19. MTR

    MTR Well-Known Member Premium Member

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    Still chugging along nicely........


    This potential development site in Croydon (east south) sold at auction over w/end for $760,000.
    6 DENNIS STREET Croydon Vic 3136 - House for Sale #121647022 - realestate.com.au

    Just to give you an idea how things are moving in this area, I purchased similar size development site, in similar location in June 2015 for $520,000.

    Am told there is a shortage of townhouses in this area, and end prices for these are still rising.

    MTR:)
     
  20. melbournian

    melbournian Well-Known Member

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    Is the council pretty restrictive in those? in terms of the planning scheme.
    There seem to be some pretty restritice site coverages rules in the inner city suburbs now with the introduction of that planning schemes from last year.