VIC Where are investors buying in Melbourne?

I have been asked this question so many times over recent weeks. Here's a list of where my clients (including interstate investors) are currently buying in Melbourne.

Land and new homes:
Clyde North
Woodlea
Officer
Melton
Aurora
Wollert

Townhouses and units:
The Heidelbergs
The Croydons
Noble Park
The Hamptons
Ormond
St Kilda
Elwood

Off-the-plan apartments and townhouses:
The Brunswicks
Coburg
Reservoir
Carnegie
Thornbury

Houses:
Frankston North
Richmond
Murrumbeena
The Footscrays

Geelong area houses and units:
Newcomb
Belmont

Ballarat area houses:
Ballarat East

 

investing in new home and land? isn't that a considered a no-no as you are buying in developers premium

 

Really? do tell....have you done any?

Where abouts you buying?

 

I assume by "Land and new homes" OP means OTP
I commented based on various blogs/articles which suggest OTP might not be best choice for investment
e.g. Problems With Buying Property Off The Plan

just snopping around various areas in MEL and I see many new houses like in officer, werribee
personally I think these might not be that bad choice for investment, if you are buying old home in such suburb it will be hard to rent it out as you will be competing with new modern built homes
which usually also have more built area
only plus with older is more land

 

OK...so have you bought anything?

Have you got any investment properties?

One mans trash is another's gold....

 

Long term hold play and you only buy at a "Developer Premium" if you are actually buying the bread and butter H&L packages..

 

So are you recommending people buy already-built new homes in these estate areas?
If so, technically the developer premium is already factored into the price given the land price etc..

 

Werribee, hoppers crossing, Dallas, Coolaroo, Meadow Heights, Sunbury was where I headed with my max budget of 450k and plenty of people each open, lost 4 properties before I finally could nab one in Werribee.

 

This is completely off topic - but often the older houses in areas popular with new home builders can actually be great investments in my opinion!

Often they are really well located, near essential town services, railway stations etc. and you often don't need to go through a maze of streets to get to freeways or main roads.

The land content cannot be underestimated! Most 70s style homes have large backyards and a side access driveway making development a possibility. The zoning will likely be more favourable near the main activity areas of a suburb - which is where these older homes tend to be.

And sure, the new homes might be fashionably flashy these days, but it won't stay like that forever! Eventually they will date anyway. Not to mention - you can always put new carpet in an older home, give it a lick of paint and it will be eventually more desirable than the cookie-cutter rendered boxes on postage stamps. If you can find a weatherboard then that's even better!

In the case of Werribee, there are older homes in an area known as 'south of Synnot' - this is considered desirable! It is in the zone of a very well regarded secondary college, and is only a short stroll away from the train and all the services in Werribee town centre. Unless your heart is set on shiny and new (which not everyone's is)- IMO why bother with the Tarneit style new estates when you can live here?

I personally view new estates popping up around an established area as a sign of renewed interest in the established area - particularly if the new areas are reliant on the established area's services and businesses (see Sunbury, Digger's Rest).

Note: I may be biased but I bloody hate off-the-plan from a lifestyle perspective - but some people like @sash have done very well out of it.

 

450k in Melbourne? For me that would be Sunbury time! Travel there if you've never been - it's only a half hour from the city, it's gorgeous and it's got everything.

 

My best friend grew up there, I love the leafy suburb and nice restaurants are popping up with good food. I looked there too but actually found Werribee to be much closer to city (fast train option too) with a lot more infrastructure although no way as pretty, so bought an older house approx 600sqm there for about 420k. That was after I missed out a house over 650sqm for 385K in Sunbury

 

Generally I wouldn't ever buy new builds. The value proposition never stacks up. People often consider these to chase small incentives like stamp duty concessions / new fhog coming in / depreciation benefits but in the long run these aren't going to change your networth in any meaningful way.

Always established land in good locations close to infrastructure. Stick with the basics.

 

The other factor is buyer demographics......lot of new immigrants want shiny new houses with good facilities...that is what is driving prices up in new estates in Melbourne.

Surprisingly same thing in Geelong...but down sizers and lifestylers rather than immigrants.

 

Why weatherboard?

 

That is an interesting comment........ have you done any H+L?

 

Two outer Northern suburbs of Melbourne - one called Brisbane and the other Gold Coast .

 

Never, they never manage to keep my interest beyond preliminary details (I just see the price and location out in the sticks, tiny new blocks of 400 or less = nope).

You seem to support it but beyond your sarcasm you haven't backed up your perspective at all, which is fine that's up to you, but this is a property discussion forum so i'm not sure what you're doing.

 

I have backed up my facts....... I have done now close to 6 ..and have made about 1m in equity in about 2 years. The rent returns are most well over 6%. What surprised me is in some market the newer homes command more in rent than better located older houses.

You are basing your facts on your own biases in the past it might have been relevant but now you have these new group of migrants who think differently. This is what is driving prices up.

Lets hear what you have done?

 

There are many threads on the H&L subject where many members have posted their builds with full run downs of their figures. Some excellent returns have been made.

Personally the returns I've made on my H&L's closely rival the development projects I've done in established areas. In the vicinity of 25-30%

If you have nothing but a preliminary interest, it's inaccurate to claim that the value propersition 'never' stacks up, or that they won't have much of an impact on your net worth..

 

This is precisely what's happening in Melton and why I bought an established house that is well located.