VIC Why is Lara so expensive?

Hi All,


So I am looking to invest in Victoria, mainly west.


Anyway, prices in lara are so expensive compared to suburbs that are closer to the city, such as: Hoppers’s crossing, Werribee, tarneit, and so on.


Lara is literally in middle of no where, no major amenities, hardly any good schools, and new estates with tiny 200-300 sqm blocks are popping up like crazy. I can’t even call it a lifestyle living as the blocks are tiny, streets are congested & so on.


You would think that being THAT far from city the prices would be at least 100k lower than what they are now.


Thoughts?


I also know a few people who have invested in lara, but I absolutely don’t see the logic in that. They say the rent is high there now (yes right now.. demand/supply ratio is high. Only few houses available for rent right now). HOWEVER, as soon as a few estates are somewhat established, the investors houses will be listed on market & the demand for rent will drop. You will then be left with a house on tiny block, that costs more than other suburbs closer to the city.


I just don’t see the logic! Surely I’m missing something? , so lets discuss & share your views/opinions.

 

Ok so..

1. Lots of OO appeal. How do you know everyone building there is an investor?

2. Sits nicely in the middle of the Surf Coast and Melbourne. Best of both worlds.

3. It was undervalued (IMO) to begin with. Values rose rapidly and accordingly.

4. Families love the area. You Yangs for picnics, plenty of parks, swim school, wide open spaces (for the most part). Village feel. Agreed about lack of quality schooling.

5. It's not in the middle of nowhere. It's almost a Geelong suburb. 10 or so mins out from its CBD is where it is.

6. Has its own train station. Gets you to Spencer Street in 50 mins by car (with no traffic, anyone's guess how long it takes with traffic), 55 mins by train.

7. Not all estates are full of 200sqm blocks. Not popping up like crazy either. Mt Duneed is developing like crazy, not Lara (as much!).

 

Isn't there an airport nearby?

It is not a house - it's a home!

 

Lara station is zone 2, so just $9 to Melbourne

 

Lara was probably good to invest several years ago. Now prices are crazy and personally I don’t think it’s a good idea to go there.
Also, there is no reason to buy a house staying on 400 sq m block of land in the countryside. Lara is still a countryside and big blocks in the countryside are in demand. Small blocks might be found much closer to Melbourne.
Lara’s infrastructure is terrible, in my view. A small shopping center with a couple of shops and this is it. For the rest, people need to drive to Corio or Geelong
I think the immediate and current demand in there is driven by first home OO who want to utilise 20K govt grant for regional Vic.
If it was me, I would not buy in Lara for OO because of no shops, not really good roads and Lara’s position relative to Melbourne. I appreciate that some people may work in Geelong but not people of my profession. Speaking about investing, I think that with new suburbs coming in, the demand very soon /in 2-3 years/ would be non-existent but the supply would be huge. It’s like if you go to an opposite direction - Clyde in SE - heaps of new houses were for rent and no renters because it’s too far. Yes, transport to Mel is cheap but this is no metro, so the capacity is not that great. Multiply this by car park limitations at Lara station...

 

1. Village feel. Good parks and local spots
2. No good local schools, but there would be 10-20 school busses a day to take kids into the private/catholic schools in town (Geelong)
3. Zone 2 Myki
4. Easy commute if one parent works in Melbourne, the other in Geelong (or one/both in either)
5. Still close enough to Torquay that you could go after work with the kids

 

I am amazed to read the comments.

All those who don't recommend probably dont know anything sbout lara. There are shopping precincts that is enough to cater to demand.

It is a demographic play. People who will not stay in western suburbs or even move to corio or norlane.

This way if you see other regionals like beveridge, bannockburn, the views will be similar.

I bought my first property there back in 2015. A 375 sq mt block and a 21 sq house for 360k. Now valued at 550k and rented for 500 per week.
My last property was also in Lara settled mid last year and 25 square home on 400 sq mt block bought for 475k (premium inclusions)currently valued at 600k and will rent out for 530 per week.

The estates have been popping up since 2015 but have not been able to meet the demand. The supply is more now but here are the numbers:
5 houses per 200 houses in market. This is way less than Wyndham council suburb where you will get 12 to 14 houses per 200.
8 houses per 100 coming to market in next 1.5 to 2 years while wyndham cou cil, it is 12to 16 per 100.
Lara still offers 5% yield if you are lucky. Now you might be too late to the party though.

Commute is a breeze unlike some of the city suburbs. You can commute to Ballarat, Bendigo, Geelong, Colac, CBD, etcetera without having the need to be stuck in traffic. Yes, this is a locals consideration, station, coles, retail markets, cafes, shops,upcoming shopping precinct in coridale, upcoming school in coridale and a close and tight community which has objected to every town house development since last 3 years and have been successful in getting the approvals denied.

Really, here is where on the ground knowledge is more important. Beauty lies in numbers and views of people who stay there.

There are ample similar markets in Victoria and a Sydneysider was able to understand and trust instincts of other savvy forum.investors.

Rest of the points are covered by @Westie and @tedjamvor .


Regards

 

This shopping precinct has very limited capacity & parking. For lockdown times it's okay, when there is no lockdown I am not sure I would be happy to drive there on Sat or Sun. Btw, I visited Gisborne several months ago and noticed how locals drive around car parks on Sat trying to find a place. Yeah, they love Gisborne and hence drive around for 10-15 min but this is not for me, thanks. Unfortunately, with new planned shopping precincts around Lara new people come too, hence not sure there would be adequate space for comfortable parking and going to the shops.

Re: Now you might be too late to the party though
These are the key words and this is what I also said. Everything what you described with your houses relates to properties bought 5-6 years ago when Lara was undervalued. Since then, prices gone up and now the rental yield would not be that great if I buy a 4-bedder for 600K...Moreover, with new suburbs coming landlords would have a lot of competition and it would be Clyde North No2: lots of landlords and not so many renters. While you can drop your rent because you bought your properties for 350K, landlords who would buy for 600K would struggle to do so.

 

@OzziMelbourne, you have some valid points. But boots on the ground is how you actually know about an area. The rental market is hot, with rental properties flying out the door. Lara was excellent buying even 2 years ago, not just 5-6 years ago. The shopping area is not "very limited" capacity, it's just about sufficient for the area. It's not like all of Werribee drives to Lara for their grocery. Also, Gisborne isn't anywhere near Lara (maybe that was a typo or something?).

 

Well.
I had my boots on the ground in Lara and Gisborne. I provided an example with Gisborne to simply say that sometimes locals see their area only and may not see how things go elsewhere. When I was in Lara, I visited town during both business days and weekends. I have done this deliberately to see what’s going on. I couldn’t park my car to go shopping on a weekend and same happened in Gisborne and this is why I gave this example. So, locals love the area but if they can’t park their car or if there is inadequate spacing and they need to wait or drive around, this is their choice but not mine.
This is the only thing I wanted to say if we discuss OO.
Speaking about IPs, my thinking about Lara is that when Coridale, Austin etc are built, there would be fierce competition among new investors who would pay 550-600K for their houses. Same thing happened in Mel SE Clyde North when I saw with my own eyes not really happy investors who built houses in this new suburb but could not find tenants.
As of rental market, it’s now hot almost everywhere except cbds. None of my properties is empty and they are located across Mel and Vic country towns: 3 in Mel and 3 in towns across Vic.
I appreciate your opinion but mine is just different from yours...

 

Exactly my fear. But then that’s the case with most new developments in and around Melbourne, right? Manor Lakes, Wyndham Vale, Melton South? Plenty of built stock in all theee areas when ready. Also interested to know what you feel regarding the CG prospects of Lara?

 

I think CG prospects are good. Not far from both Mel & Geelong but not Melbourne. On the other hand, if we talk about new developments and compare Coridale and Austin, the first one looks better. I looked at what both offer in terms of land and noticed that Coridale pieces of land are more decent and consistent, whereas Austin’s pieces vary a lot. This means on one street there would be very decent houses and nearby very small houses, which in my view wouldn’t look favourably for the entire estate. However, the whole Coridale / Austin area would have a new school plus new shopping precinct, so in several years when it’s all built everything would look good and I’d expect decent CG.

 

My son has said he would like me to do a joint venture on a property in Lara. What do you think of prospects there now?

 

I have some in the area. I have a new (premium) build finishing in 1-2 months (hopefully) which I'll flog right away. Agents here till me demand's steady but like anywhere else prices are down about 5%-7%. I'll agree with them. Some people may say 10% down but I reckon it depends on the product. Overall, it'll keep on a steady burn. The area benefited from ripples from Geelong and Werribee. Rent's are holding up and increasing.

What's the project - dev or simple build and rent out?

 

Yes just a build to rent.

 

Does not make sense now 400sqm over 325k. Build 320k. You will barely break even

 

The sage has spoken, the protégé has no more to add

 

Isn't almost every estate development out there done by Bisenela ?
Slow release of areas to keep demand high probably part of the strategy....

 

Bisinella are big in the area, but not every estate is theirs. They've done Lara Lakes and the industrial dev near Corio, don't think any other estate was theirs. Yes, slow release is part of the game. The council's slow to approve too. It all goes hand in hand.