VIC Villa, Townhouse or House in Melb with $650k-$700k budget?

Hi all,

I'm a newbie here and hoping to get some thoughts and guidance on where to buy in Melbourne with a budget of $650k-$700k. I'm trying to decide between a 2 bed villa in a innerish suburb (e.g. Preston / West Footscray / Kingsville), a 2 bed townhouse in the middle ring (e.g. Reservoir / Braybrook / Heidelberg West /Pascoe Vale) or a house in an outer suburb (e.g. Thomastown / Lalor / Mill Park / Sunshine West / Deer Park).

My situation:
I'm looking to buy my first home in Melbourne for $650k to $700k and utilise the first home owner stamp duty concessions.

Although it'll be a home I want to look at it more as an investment. I'm single in early thirties and life can take me anywhere so it won't be a forever home. And I can always rentvest if need be after a year.

I live in the north west around Taylors Lakes, and am thinking to buy somewhere in the north or west. Leaning slightly more towards the north than west. I'm not keen to go to the outer eastern suburbs because that'll be far from everyone I know so I've ruled that out.

What do you think will be better for capital growth? A 2 bed villa? A 2 bed townhouse slightly further out? Or a house in the outer suburbs?
Any suggestions on suburbs and dwelling type? Where to go or where to stay away from?

Thanks! Really appreciate any ideas and input.

 

Try Williams Landing for that budget. There's a lot of employment coming there (and already there) with the new "master-planned" town center. Truganina already provides endless employment for logistics/light industry etc and WL's proximity to it is enticing from what I hear. You're going to have to be ready to go to be able to get into WL for that budget - the older Wyndham Waters estate is where your budget will allow. Give the house a fresh lick of paint and new carpet - you'd be ready to rock.

 

I am a similar age and circumstance and was considering exactly this, buying something around that price in Melbourne to try and get the stamp duty concessions. But in the end it made no sense.

1. you don't get the full savings unless it's under $600k. At $700k you pay quite a lot of stamp duty.
2. If you are treating it kind of a temporary place to live but also maybe an investment, IMO it's a bad way to approach it. You are better off just buying the best investment property in any location and not be limited by location in order to save on stamp duty. A slightly better investment asset will return more than you save on stamp duty.

 

Hi JSam, writing here because I am in a similar situation and looking for something like this.

Issue that I see for buying somewhere else, apart from not saving stamp duty (lets forget about this one sec) is that you won't be able to get into the market with less than 10% deposit (not saying that is your or OP intention, but it is mine). If buying somewhere else and if it is your first purchase and IP you'll need a 10% deposit; however, if you buy as PPOR you could get in with as little as 5% (yes, you pay a massive LMI premium and a bit of a higher interest rate, but at the same time this could get you into "maybe" a better asset)

Really keen to read all the experienced investors and professionals opinions on this.

 

I have a similar type of thread and would like your comments in there if you can spare 5 minutes.

Thanks.

Strategic Buying in Melbourne Northern Suburbs $650k - $850k [VIC]

 

I'd really like to get people's thoughts on the performance on villas, townhouses and houses at the $650k-$700k price.

@The Y-man -
At my price range I need to compromise on either location or dwelling type since I certainly can't afford the dwelling type and location where I'd really like. But more or less I'd be happy with all the locations and dwelling types I listed. For example in a house I'd like the space but with the villa I'll like the location. I know I can't have both. So I may as well choose based on the better investment option.

@JSam -
What would be the better investment?

@Westie -
Thanks! I'll look into Williams Landing to familiarise myself with it.

Thanks for the feedback

 

@LuisCente It seems like we're thinking in a similar way, we want the next purchase to be a stepping stone to get us closer to being able to purchase what we really like a bit further down the track. And to make use of concessions if possible along the way. I've also commented on your post.

 

Whats is your prices research showing you in regards to what you can afford in the inerish, middle and further out suburbs and where @tny.

seems like we are looking in the same/similar sort of areas with similar budgets and concerns.

would be good to bounce ideas and experience so far.

 

@JSam

 

Hi Luis, ah interesting I didn't actually consider that. I am still learning myself.

 

@tny keep in mind I am new to this as well, but I ended up deciding to search for a house in brisbane on it's own block of land after searching in the $750k range in Melbourne and not finding much.

My main thinking though is when I was searching for a place that I could live in for a year or so then switch it to an IP it was limiting my search to areas I would want to live, rather than being detached and objective about finding the best possible investment asset.

Just my thoughts, I could be wrong I'm sure either will probably perform decent with the current interest rates.

 

@LuisCente
Looking at the price points going towards the north I was thinking my options are a villa in Preston, a townhouse in Reservoir, Heidelberg West, maybe Pascoe Vale, and a house around Epping, Lalor, Mill Park. Towards West, a villa in West Footscray, townhouse in Braybrook, or house maybe around sunshine west. The places won't be anything special though.

What are your thoughts? Villa, vs Townhouse vs House? What about locations?

@JSam
That's makes sense. For me I'd rather buy in Melb for now even if its not as good as interstate. But that's just a personal choice based on what I'm comfortable with, it seems like QLD and SA are good investment locations though from what I've heard.