[VIC] Prices to drop or continue the rise?

Hey all,

THINKING about purchasing my first place, but have heard so many opinion's I have just confused myself.

Some people think that the prices will drop (great for me as a first home buyer)
Australia headed for recession next year, Professor Steve Keen says - ABC News (Australian Broadcasting Corporation)

Others say it will stay the same or continue to grow but at a much slower pace.

I am in no rush to move out of home, but want to invest my hard earned savings.

What are every bodies thoughts, because I have no clue and I am not afraid to say it.

 

I guess no one knows exactly what is going to happen. Prediction is just another opinion which can go either way. More importantly is if you are financially prepared if things are not as per your expectation.

Australia is heading down to an economic slowdown just like most other countries, hence affecting property price, however Sydney, Melbourne and Brisbane have become global cities which attract a lot interest from global investors and migrants. Having them as part of the equation makes it hard to predict where Australian property price is at now.

Having said that, I think some parts of Melbourne are still good value.

 

Just heard on news that there are few big hotels in the pipeline in Sydney to cater tourists. It depends on who you listened to.

 

This might be irrelevant, but I am finding the property market extremely hard to grab a bargain.

Its not like buying a motor vehicle where you can really haggle down on price.

I am still living with my folks (age 26), and we are on 2 acres, I have grown accustomed to having quite a large backyard, most importantly a shed for all my toys.

Finding a place that will allow me to have a barn style shed is a real struggle around a 400k budget in melbourne's north. I went looking out at Wallan today, and I believe it has some potential, but I still feel it lacks "value" and future growth compared to other suburbs. Sadly I feel other suburbs are out of my price range that allow barn style sheds.

I know a few people who are buying house and land packages in wollert and surrounding suburbs and renting them out. Personally I don't believe there has been alot of thought about why they purchased them other then "property is a great investment and always goes up".

I am trying to do as much research and educate myself as much as I can about property (even though I find it a boring subject), because quite frankly it is going to the biggest purchase I have ever done and probably ever will!

Sorry if the post is a bit long winded, but its nice to post up my thoughts and hoping some people will help guide me on the right track

 

I know a few people who are buying house and land packages in wollert and surrounding suburbs and renting them out. Personally I don't believe there has been alot of thought about why they purchased them other then "property is a great investment and always goes up".


Why do you think buying in Wollert, Mernda, South Morang or Doreen is not a good idea? The reason I am asking is I am in the market to buy my first property and looking at those suburbs because I have a similar budget to yours. Have lived in the north for 12 years now and think it is much better than the west.

 

Strong immigration & migation, government infrastructure projects, business investment rising - see recent new Amazon distribution centre over 6 acres! in Dandenong & talk (tbc) of a big defence vehicle contract to be manufactured on old Holden engine plant in Pt Melbourne, new Crown casino tower.
Most livable city, sporting capital, lots of events also brings tourists.
Geographically means Melb can continue to spread to reduce pricing boom pressure but economic fundamentals seem to indicate a continued steady rise in prices.

 

Jump in and do it, if you don't you will look back and regret it. 8 years ago we bought a similar distance to the CBD but in the south east, we thought it was pretty crap, but was where we could afford. Fast forward to today, value has doubled, and the area has grown heaps, and has everything we need.

 

Your confusion is very normal. It is hard to predict most markets at any time, but it is particularly hard to predict Melbourne right now.

Normally the end of the boom phase of the property cycle as it moves into the correction is indicated by more well sought after locations pulling back while only the lower socio-economic areas continue to rise, which it looks very much like is the situation in Melbourne, and this is a strong indication that this is literally the worst possible time to buy, yet the time when most people buy due to the hype in how people made a lot of money in recent years in property.

The other side of the coin is that Melbourne still has high migration rates which are not decreasing yet (unlike Sydney which the rate of immigration is going down meaning immigration is still going on but it is slowing) and this is one of, if not the most, important fundamental drivers, so that could push it up further in the coming years keeping the boom lasting much longer than expected. The FHB might also be helping right now to drive the low-mid priced areas.

So it is particularly hard to predict based on these 2 things.

It is not irrelevant. In a boom it is virtually impossible to get a bargain. I think you might have to be willing to pay market value during a boom. It is during the slump that you can get some bargains, and that is the ideal time to buy. But of course you will have to wait a lot of years for that in Melbourne and at that time property investment will be considered a crap investment since values have gone nowhere for years and years by that point and people want to exit the property market as a result of all of the negativity in the media about property investing.


To sum up - I also have nfi.

 

No one has the answer you are looking for.
Only you can decide, and time will make any mistakes bearable.

I had dinner tonight with some old friends in Geelong, as always property is discussed, they have been waiting 13 years for it to crash and grab an absolute bargain
Even if it went backwards by 40% today you would still be up on the 2004 price

You have to be in the game to stand any chance

 

They will do both. There is not one synchronized market

 

Exactly. Why not buy something that makes sense to you today, rather than worrying about whether prices will go up, down or sideways? Speculation may or may not work for you, but it's hardly a great start to building a solid portfolio for your future. Maybe look at strategies beyond speculation that give you some control, not always easy but lots of reading, networking and some money will get you there.

 

IMHO - i personally think that some places were grow, some will def fall (esp the ones which jump signficantly not the 10% ppl boast on other places but ones that went like 50-70%), some will flatline and some will still boom. At the moment - today auction - my friend who went to the auction of an Ip with serious burnt damage with an order from council went for 725K when places like this was only 500K last year. also simlar places asking offering 950k and the owner wants 1 mil+ that is nearly 100% CG in 1 year. there will be new suburbs which will def grow which i will keep to myself atm.

Melbourne although public spending has been a lot in the infrastructure railroad crossing train station highways. i am in asia at the moment and the front page of the business papers show this . These are billion dollar companies. And no they're ain't mainland commmies as some like to project. and no they ain't keysian stimulus coz these guys are in the business of making money and this only one SE Asian country (not even including the singaporeans, mainland chinese, indonesian etc) And does not even include the hotels that are coming up (mandarin oriental) off collins st etc. i would avoid reading too much into the RBA wannabe economists on the forum esp the ones comparing one state to another by comparing stats without knowing and detailing what is going to happen. melbourne 2030 plan and the ACZs initial draft was in 2002 not in the last few years. but really some have shown some consistency in calling winners so far like @sash







Some of the projects for melbourne widenning of the tulla freeway, even new stations being proposed into studies. A lot of infrastructure is happening. Also Sports capital (AFL, AusOpen tennis F1) of all the 3 cities - melbourne is up there.

From rental perspective - i can tell u weekly rent is up $75 for 1 ip and the responses have increased by 4 times more from last year. this is crazy as i have never seen demand go up this much due to population increases

I got emails saying they're selling a stage in werribee by ballots not private sale, so you put ur name in and if selected you can buy these weren't like that

End of the day if steven keen was that good, he would be a millionaire and put some short options in CFD on the ASX

 

Wallan and hawthorn east is a big contrast man like super huge . But def as mentioned the falls will be upper end suburbs

There are limited 1+ million buyers compared to below that.

Like that 1.3 mil for 1200sqm in glen Waverley is a steal. Ppl were paying 1.2 for units closer to gw central not too long ago

 

Oh dear, that is going to be tough if you find it boring.
You need to make some money, I am sure you will come around

 

Hawthorn/E Hawthorn one of my favourite suburbs in Melb,.....drop baby drop

 

Did you steal that?

 

If you put glen iris in, which borders hawthorn east, every suburb around it other than east hawthorn has gone up, quite a bit too so it might be an outlier?

I watched this sell for 2.9 today, a good 300k plus over reserve
49 Peate Avenue, Glen Iris, Vic 3146 - Property Details

 

Camberwell, Canterbury, Balwyn, Deepdene (which all sit in between the hawthorns and surrey hills) all up

No rhyme or reason.

Not sure about the units, certainly townhouses aren't getting cheaper. 2 bed villas in glen iris or anywhere around there aren't either. There's been a couple on decent sized blocks for villas go for over a million in glen iris recently.

Might be cheaper apartments in glen iris dragging it down, I'm not sure about ashburton though