VIC The Market has certainly changed direction - Melbourne

Discussion in 'Where to Buy' started by NWHT, 19th Mar, 2018.

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Which way do you think the market is headed in Melbourne?

Poll closed 23rd Jan, 2020.
  1. Strong Upwards

    0.9%
  2. Upwards

    9.3%
  3. Flatning

    23.0%
  4. Flat

    22.1%
  5. Downward

    30.8%
  6. Strong Downward

    14.0%
  1. melbournian

    melbournian Well-Known Member

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    got someone i know who just sold 2 weeks ago - 2 mil in his bank account made. end of the day money made. simple logic.

    I wouldn't buy high end property in Melbourne or H&L in Melbourne - but lots of emerging markets ( I go to auctions every weekend and inspections - some do like super great boom like some flat like a pancake. the one in Ivanhoe east - 17 bidders on a property that went 500K above reserve. Lalor - 100K above reserve , Toorak 1 mil above reserve, unless it is all an act or they're just not as smart investors as some :D

    if you're buying based on number of negative threads or positive threads raised by a few individuals -same can be said about positive threads. you're only a sucker if you don't research hard enough.
     
  2. DrunkSailor

    DrunkSailor Well-Known Member

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    Clearance rates this weekend were 65-67% (Domain says 65%) with many unreported.

    This article in June 2017: Rise in unreported auction rates masks property market reality: SQM Research

    Overall, the evidence suggests that home prices are still rising in Sydney and Melbourne. However, clearance rates are off their peaks and unreported rates have been rising, particularly in Sydney. Listings are also higher, suggesting more vendors may be thinking the property market is at its peak or close to it.

    “In my opinion, clearance rates need to be lower than current levels before a peak and new downturn can be called.

    We need to see clearance rates fall to around mid 60 percent for Sydney and high 60 percent for Melbourne. We are not close to those levels yet even after making an adjustment for unreported rates,” says Christopher.

    Ok, so now that we are and have been at those levels for some time, do we start calling it a downturn?
     
  3. kaibo

    kaibo Well-Known Member

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    amount over reserve figure doesn't really matter as many reserves are lower then their values (e.g. when someone is moving in to a nursing home etc.).

    Current market around Boorondara is PPOR that are turn key (people too lazy/cant be bothered to renovate or tradies are getting expensive)

    Melbournian is right you need to be on the ground on auctions to get a vibe as results don't necessarily show you the state of the market.

    As about yield in 2013 I bought a house at 2.7% yield in Boorondara and everyone said I paid too much. Now it has gone up about 50% and yield is under about 1.7%. I was reading articles on domain at the the time how overpriced houses were in 2013 and that future house growth would be aligned with wage growth and inflation
     
    melbournian likes this.
  4. melbournian

    melbournian Well-Known Member

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    I also recall back when the boom was flying high in 2014/15 and I sold out of Doncaster (i’m One of that smart investors I assumed I was LOL). To build H&L in pt cook. All My relatives had a go at me while their properties in Balwyn, Doncaster ror glen Waverley went 50-100% growth. Pt cook remained flat for years till 2017 and boomed and has remained very hot till today while now my relatives properties have stayed flat and dropped
     
  5. 738

    738 Well-Known Member

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    Market as a whole very patchy in the areas I work - Inner north Melbourne (Carlton, Fitzroy, Collingwood, Brunswick, Northcote etc)

    Good properties that represent value are going well across the board. B grade and C grade properties if marginally over priced not selling.

    Lots of owners expectations are too high and buyers don’t have the fear of missing out mentality which was pushing prices up 12-24 months ago.

    Sub 800k market performing well with good apartments in strong demand.
     
    zed_kid likes this.
  6. 738

    738 Well-Known Member

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    I should add that it is still a good market. Owners just need to be realistic in their pricing.
     
    MTR likes this.
  7. hieund85

    hieund85 Well-Known Member

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    Hi @melbournian , what do you think about Broadmeadows, Westmeadows, and Meadow Heights areas?
     
  8. melbournian

    melbournian Well-Known Member

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    broadmeadows is an ACZ. it is a very middle eastern centric area - though many of my trades have IPs in those areas many bought for 300K which is now around 500-600K. I think it is not for the faint hearted though there are some on the forum who have bought and are looking to develop there. it is probably already moved quite a bit but its main pro is the distance to CBD and its large blocks.
     
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  9. hieund85

    hieund85 Well-Known Member

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    Yeah. The distance is only 16-17km to the CBD. I am not sure how quick the area can gentrifie. Atm it is still quite affordable.
     
  10. MTR

    MTR Well-Known Member

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    just to give you an idea I purchased 5 development sites in Broady in 2008 GFC period, this suburb was booming at this time, various prices from around $320K-350K, good locations, all development potential/sites. I put DA together for 2 sites and flicked the others. Made a nice tidy profit, interesting prices dropped off and now bounced back like most suburbs in this Melb boom cycle.


    MTR:)
     
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  11. zed_kid

    zed_kid Well-Known Member

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  12. MTR

    MTR Well-Known Member

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    SOULFLY3 likes this.
  13. Chill2205

    Chill2205 Well-Known Member

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    I think these suburbs have seen the ripple effect from places like Pascoe Vale and Glenroy. As you said its the affordability thats attracting buyers
     
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  14. hieund85

    hieund85 Well-Known Member

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    Yes. I want to know how long will it last since Pascoe Vale and Glenroy seem to cool down (not so sure, just my 2c opinion). I personally like Westmeadows more than Broad and have followed the area for a while. It is still doing really well atm both older houses with big land and newish townhouses ($600k+ for 3x2x2).
     
  15. Starlite

    Starlite Well-Known Member

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    I go to auction every week and conclude its hard to make a general statement for the whole market.. even within a suburb, every street is different.. i think zoning plays a huge role.. when you have a growth zone property (rgz) that allows more than double the amount of townhouses put in compared to grz, you know you will have a bullet proof portfolio :) just my 2 cents.. to each their own.. I sleep very well at night strapping some rgz in my portfolio..
     
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  16. Chill2205

    Chill2205 Well-Known Member

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    I like Westmeadows also, surrounded by dearer suburbs like Gladstone Park and Attwood. As for how long it will last... your guess will be as good as mine. If I had to guess I'd probably say it will go until the end of this year, which is around the same time they are expecting interest rates to start moving.
     
  17. hieund85

    hieund85 Well-Known Member

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    Same as I think. Westmeadows has lovely walking and bike trails, leafly streets, creek. Very different feeling to Broadmeadows.
     
  18. WattleIdo

    WattleIdo midas touch

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    Not the small ones.

    @NWHT Good thread and I see that most have voted 'flattening' as did I. Only thing is, I would say that 'flattening' is slightly more pessimistic than 'flat' but not everyone will agree.
     
  19. Sackie

    Sackie Well-Known Member

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    Imo the question is very problematic ( many people often refer to a state as 1 market) because Melbourne is made up of thousands of markets. They won't all behave the same way and corrections will affect individual markets to varying extents. No state is ever just 1 market and I've seen it time and time again, what 1 or many markets may do does not necessarily affect the behavior of another batch of markets in the same state.

    Just look at Brisbane over the last 3-4 years. Some markets/types of stock have barely moved/seen over supply while others have gone up 50%+. So the people 3 years ago who were saying the Brisbane market is 'flat/uneventful/not going anywhere' etc etc would have consequently sentenced ALL markets to the same fate. Which simply isn't the case.

    Just how I see it.
     
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  20. mues

    mues Well-Known Member

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    I really feel people don’t use the term market correctly. Outside of super wealthy trophy houses there is only one market per city.

    Drops in the value of 1.5mil house price runs down all the price brackets. This is because the majority of buyers are looking for similar things if their budget could pull it off. People buying 600k builds in new western Melbourne suburbs would buy in hawthorn if they could afford it. That’s what fundamentally makes it a single market. People buying an apartment in Fitzroy would buy a townhouse or Victorian in Fitzroy if they had the resources.

    I think we get confused with the buyers who determine the market and what happens to crappy stock when the market pulls back.

    Sure there is entry level stock and more expensive stock - but if a 1.5mil house becomes 1.3mil, a 1.3mil might become a 1.1, and a 1.1 to 950k and so on.

    So basically - when there is less demand on the market bad stock is impacted more - but it’s all connected.
     
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