VIC Where to invest $400k Melbourne investment prefer 580sqm

Hi all
My husband and I am a first time investors looking to get into the market and buy a house abit further out for under $400k.
Looking at Frankston north or Werribee way.
Is there any other areas I should be looking at? Ups and down of either?
I was looking at Corio but I think the commute is too long and there’s not enough industry out there for employment.
Keen to hear your thoughts!

 

Good Day Sally,

Any particular reason you are looking at Melbourne market only?

And do you have any other properties in your portfolio? Keen to understand what the goal/strategy is to be able to answer it properly I guess..

Cheers,

 

Hi Jazz
We don’t own our own home so this is our first time sipping our toes into the property market - were in our mid 30s and are looking for a buy and hold to increase with capital gains.
Cheers

 

Do you currently have a broker/accountant?

It will good to sit down with them and go thru overall financial position Cashflow, expenses etc etc to make right decisions ...

 

Yes we’ve run the numbers afew months back and are able to purchase a property up to $400k using a 10% deposit strategy.

 

Great that you know that, but what's the cashflow position like currently? Any other asset/liabilities e.t.c..

Best to sit down with the broker who helped you crunch those numbers and work out proper strategy first..

I would love to answer your question but to be able to provide appropriate advise need to understand full financial picture tbh..

 

To address the question of jobs in close proximity to Corio (as you mentioned Corio), more and more jobs have been coming into the Geelong region (in recent times, jobs associated with customs and baggage facilities associated with international flights now departing and landing at Avalon Airport as an example). Another example is the Australian Bureau of Statistics, who moved into Geelong recently (into what was formerly the Ford Discovery Centre).

The former Ford manufacturing site will also become home to manufacturing and maintenance site for wind turbines as noted in the following article :
https://www.smh.com.au/business/the...-as-renewable-energy-hub-20190214-p50xoz.html

There isn't a great deal on offer left in the Melbourne Metropolitan region for $400k and below if seeking a free-standing house. Depending on the cashflow you need it to produce, it might be necessary to also include the major regionals in your areas for consideration.

 

Are you aware there is a large number of housing commission properties in Frankston North? There is a reason it is so cheap. If this is a PPOR, I would strongly recommend you away from that area. Especially if you plan on having children. A lot of crime, drug dealing and the local schools are woeful.

In terms of capital gains, unless the neighbourhood gentrifies (which I can't foresee happening for at least another few generations), there are much better opportunities elsewhere.

 

The south-eastern suburbs are a good option. If you look past Frankston to Mornington there are some equally affordable options with enough industry for employment. Mornington is the perfect alternative to Frankston for your budget. There is likely a greater opportunity for growth too.

8 Illowa Street, Mornington, Vic 3931
3 Waruka Court, Mornington, Vic 3931
4/47 Spray Street, Mornington, Vic 3931
1/12 Brent Street, Mornington, Vic 3931
7/1-3 Wendy Street, Mount Eliza, Vic 3930
5/56 Wilsons Road, Mornington, Vic 3931

 

The top two are in the 'housing commission' or lowest income area of Mornington. If you were going for that sort of market why wouldn't you pick the more handily located Frankston north?

Others look like units so wouldn't have the land area the OP wants.

Mornington and south are great lifestyle areas but score poorly for access to higher education (even Frankston North or Karingal is better located). The labour market on the peninsula is also thin, being narrowly based on retail, trades and a bit of health. Compare the diversity of jobs you get if you were to draw a 10 km radius around Mornington versus a similar radius around (say) Noble Park where you've got the Monash precinct and industry in Dandenong.

If you look at what most people spend most of their time on, convenience to everyday things like jobs and education are probably key to their location decision. Even if it means a location where they have to travel 15 min longer to occasional outings like the beach (which the Mornington Peninsula is really good for - for those with the time or reduced working hours).

 

I don’t think you’ll get a house with over 500m2 anywhere in Melb for 400k.
You will get a nice 3 bed unit in Cranbourne/Pakenham etc which will have everything a house has except a large years. I would look at trying to get one with own street frontge or one in the backyard of a subdivided block (front or back house) as likely to have lower or no strata fee.

 

Because the OP said a bit further out and is looking at Frankston I don’t think they mind distance to the city specifically. The southernmost suburbs near the bay tend to be holding their value as of late so its a pretty safe option. Coastal markets continued to be popular last year (the past year or so there has been a shift towards people wanting lifestyle properties over location to the city). This is partly due to the rise of teleworking and flexible working conditions.

Mornington has significantly less public housing when compared to Frankston/Frankston North and the two surrounding suburbs of Mornington (Mt Martha and Mt Eliza) have none. The suburb also has a higher average income when compared to the Frankston area.

The local Mornington Peninsula economy has been performing great in the past few years with record tourism growth and a development/construction boom with a 77.5% increase in construction jobs between 2011 and 2016 and a 347.3% increase in building approvals in 2017-18. The unemployment rate was 4.6% in June of 2018 and is 1.6% lower than it was in 2015. Also lower than the 6.8% in Greater Melbourne and 6.6% Victoria wide in 2016. Besides, almost half of the people that live in Mornington don’t work locally so it obviously doesn’t matter to existing residents. The new Frankston hospital is also set to boost employment in health related and construction jobs in the surrounding area in the next few years.

Generally the broader Mornington Peninsula jobs market is very diverse with the majority of workers being Professionals and Technicians and Trades Workers. Nevertheless, retail, trades and health are popular industries as in any other jobs market.

I don’t think the OP wants to buy in the Monash precinct and hasn’t mentioned if they need access to higher education anyway.

 

Frankston is actually doing incredibly well in terms of fundamentals for stellar growth. Lots of opportunity and has had a strong past 2 years for growth and development.

You should see the entirety of this forum VIC - Frankston 2019

But Mornington is similar if not stronger in its past growth and potential. It is an overall safer investment.

 

There are freestanding houses in Werribee, Wyndham Vale, Melton on 500+sqm land for less than $400k such as

1. 4 Songlark Crescent, Werribee
Sold 4 Songlark Crescent, Werribee VIC 3030 on 29 Jan 2019 - 2014802187 | Domain

2. 10 Harcourt Square, Wyndham Vale
Sold 10 Harcourt Square, Wyndham Vale VIC 3024 on 13 Dec 2018 - 2014746749 | Domain

3. 7 Ziema Court, Werribee
Sold 7 Ziema Court, Werribee VIC 3030 on 04 Jan 2019 - 2014796401 | Domain

4. 1 Myrtle Street, Melton South
Sold 1 Myrtle Street, Melton South VIC 3338 on 15 Jan 2019 - 2014793550 | Domain

P/S: I am not saying those ones are good investment but at least Werribee is not worse than Cranbourne/Pakenham.

 

I don’t follow Werribee so I wasn’t aware, I remember at peak there was nothing really left in Werribee at those prices. Those are cheap

 

Werribee has soften a bit since mid 2018. Certain types of stocks have gone down 10%. Now you start seeing high 3s and low 4s properties which were almost non existent between mid 2017- mid 2018

 

32 Oak Avenue, Doveton, Vic 3177

 

Most already mentioned but Melton, Werribee, Hastings, Doveton, Doreen, Meadow Heights, Broad Meadows, Dallas, St Albans or Taylors Hill would be my recommendations!

 

Definitely Melton would be a promising option for long term.