VIC Where are investors buying in Melbourne?

Yep...I agree with that....but as that prices up....the land around it also explodes...

 

Title of the thread should be 'where is owner occ demand growing'.. Therin lays the good investment suburbs

 

The it would be Point Cook, Tarneit, Wollert, Mickleham, Rocklea, Cranboune (west,east,north), Clyde and Wyndham Vale...lots of migrants bying their first homes there now...

 

Sash, I'm going to try this path too. How are you choosing which suburbs to do this in?

 

Well done for achieving that. No I haven't done as well as you, but for the purpose of academic debate lets talk more about the numbers. I had a chance to look through some of your old threads and other threads detailing the numbers and I see that you're making money but with the following caveats:

1) after your initial equity gain, you're left holding a subprime asset (200sqm out in the sticks, no infrastructure, increasing competition from more new builds and land releases etc) so your capital gain prospects in future are weakened

2) your new yield is lowered to around 5% after you recognise your equity gain, and you know this yield is hinged upon the shinyness of your new build which won't last

3) I think much of your gains in the past 2 years is due to general market gains, and this point was raised several times in replies to your older threads

4) given points 1 and 2, if your target is 5% yield, you're better off buying a house in northlakes or newcastle which you're also hyping right now, except that's a much better value proposition long term because after your 5% yield, you're not holding a junky subprime asset, and you have options attached for free due to the larger block size.

 

not sure in particular about @sash locations but the initial gains are normally realized from the organizing and selection of the build. Depending on the selection, you will then realize 40-60K per house upon completion. for me - would't say pt cook is out in the sticks being 30kms. Again yes market conditions moved just about everywhere in melbourne, but irrespective that is everywhere. H&L has it's pros and cons, pros being, you can basically buy the land and plan your build while waiting for the land to settle. Also you have a brand new house - being able to depreciated and not run into the hassle of repairs unlike old houses. It depends which state and what demographics the estate is in. Certain demographics prefer new houses and also infrastructure will eventually come in. I remember when i bought a few blocks in pt cook, there wasn't the woolworths, the school yet all have come in now, with the parks, lakes and landscape all fitting in nicely. and had 10 signed offers on the table when i was going to sell which sold in a week. there were other estates nearby as well but eitherway - there is demand for these are now growing (as the infrastructure and communities has grown)

I think for any investor, it is good to get at least one H&L on the belt, you learn a fair bit abt building, proj management etc which i see some on this forum lack of yet many claim to be experts advising on investments etc. I have also bought many existing houses - and yes each has it's merits but each strategy is different.

 

Went to point cook yesterday look at new townhouse development opposite Point Cook town centre and price started from 499-540k and the average land size around 100m2 (yes its one hundred only ) And yet they managed to sell 30% of stage 1 within 2 weeks.. nowadays you can buy existing house with land more than 400m2 Around 550k or slightly less .. I have feeling this price wont stay low this long.

 

Scientist....the properties are not subprime assets any more.

The infrastructure is either in the plan or already being put in.

As for a 200sqm block of land not being desirable.... I'll let @larrylarry answer that. He just built a 3x1x1 in Armstrong Creek. Larry please share the rent achieved, build cost, and approximate worth? In particular how the smaller house is more in demand than larger houses....

As for Newcastle and Northlakes...price point for a new H+L is now well over 450k....no thanks....

Do share where you IPs are...

 

@melbournian I guess some of the posters have no ideas on perspective and affordability.

Parts of PC are only 22klms from the city........with the infrastructure being built it won't be in the sticks...vision is needed...what is the sticks today...in 5 years...things change a lot!

 

Existing house is 550k....but alot were undercapitalised on land. But yes some value but stamps/legals are 30k! So you are paying about 580k.

If you bought a block of land now for say 370k (about 350-400sqm)...and put a 25 sq house you would be at 590k minimum at completion.

 

197sqm block in Armstrong Creek.
$101,800 for land. Paid stamp duty for land which is very little.
Just over $160,000 for 3/1/1 including landscaping.
Rented $345 per week within a week of handover. A single tenant who works in the medical industry.
Limited number of 3/1/1 in the estate. Rest are 4/2/2.

Similar block of lands are now $20-30k more.
Current value around $350,000 to be conservative.

 

Noice.....and end value ? I believe that would be 350k?

By the way stamps is about 2k

 

$350k to be conservative.

 

That is a over 35% gain Larry.......in 1 year.....

 

Well interesting topic. How will the new deprecation changes effect the investor thinking. I assume most members here are long term investors. Is that going to make H+L more attractive than an established property?

 

I absolutely admire what @sash has done with new builds but this post has highlighted exactly why new builds are not for me at this point in time.

Yep Sunbury is amazing, you get a very high standard of living for not a lot of money.

 

Yes only with careful selection....I think outside of the box.....not everyone is successful with H+L land as they end up paying a massive premium.

I try to buy as close to whole sale. For example the packages I have bought have 30-40% profit built into them as I tend source builders very competitively....and also got land in recent case in stage 4 for 144k....that same land is now 215k plus. The build cost for 18sq is 175k turnkey with most of upgrades...as opposed to 215k buying the pre-packaged options.....

 

Hi Larry, Well done. Could you give the dimensions of the land please