Buying in Hampton Park

[roos]

Hello everybody

I have been reading a lot of information on this forum, but finally made my debut by posting a thread.

Have been planning to buy an IP for a few years, but not got there, but want to take the plunge and as all first timers, I have a lot of concerns and bit low in confidence.

I have been doing a lot of research and have been inspecting a lot of properties in Hampton park. I am basically looking for capital gains, but at the same time would like to be cautious about other things. Some queries/observations I have are:
1. What do u think about this suburb?
2. There are 2 types of properties available in this area: (Old and new)
New houses
=========
- price-range is approximately 220,000 to 240,000.
- Block size range:350 to 400 sqm
- Rent is approximately 200 to 210 per week.
Old houses
========
- price-range is approximately 180,000 plus to 220,000.
- Block size range:550sqm to 700sqm
- Rent is approximately 185-190 per week.
3. I want to put some offers, but all I have is my own research, would like all you experienced guys' views.

So, please shoot with all your views that could help me in anyway.

Thanks
Roos

 

[The Y-man]

Welcome roos.

Growth for HPk is 7.5% pa compunding over past 10 yrs, median prelim fig for 2005 was $213750.

As a rule of thumb, go the bigger block - land is not scarce out that way, so you need to grab as much as you can (you can always rebuild a house, but you can't grow land on itself...)

Demographics - (lower?) middle class area. Not sure about renters. Yield generally good compared to inner suburbs. CG might be volatile.

Freeway nearby helps, as well as large tracts of industrial estates just down the road.

At least the trees are growing back - used to flat nothingness.

Possible noise issues due to my friend's 20B triple rotor 700kw+ RX7 hooning down the road.......


Cheers,

The Y-man

 

[roos]

Welcome roos.

Growth for HPk is 7.5% pa compunding over past 10 yrs, median prelim fig for 2005 was $213750.

As a rule of thumb, go the bigger block - land is not scarce out that way, so you need to grab as much as you can (you can always rebuild a house, but you can't grow land on itself...)

Demographics - (lower?) middle class area. Not sure about renters. Yield generally good compared to inner suburbs. CG might be volatile.

Freeway nearby helps, as well as large tracts of industrial estates just down the road.

At least the trees are growing back - used to flat nothingness.

Possible noise issues due to my friend's 20B triple rotor 700kw+ RX7 hooning down the road.......


Cheers,

The Y-man

Y-man

Thanks for your reply.

What would be the minimum size block one should consider before buying a house for future development purposes?

I was told that every council have a policy in place that will grant a permit to for sub-division if there is a stipulated minimum size of land available.

Cheers
Roos

 

[The Y-man]

Oooh... you'd need to approach the council for that one

Cheers,

The Y-man

 

[Michael Yardney]

If you are buying for capital growth, you are likley to do much better elsewhere.

Hampton Park is basically an area for first home buyers or buyers in the lower price range.

That sector of the market is not likely to take off for some time due to lack of affordibility.

For the same amount of money you could buy a 1 bedroom apartment in Carnegie, Murumbeena or a host of other suburbs with a stronger history of capital growth and you would geta similar rental return.

I understand the argument that land goes up in value, but that is due to scarcity and there's plenty of land and not that many buyers out Hampton Park way

 

[natedog]

Hi Michael and forumites,
Loved your book firstly,

"I understand the argument that land goes up in value, but that is due to scarcity and there's plenty of land and not that many buyers out Hampton Park wayI understand the argument that land goes up in value, but that is due to scarcity and there's plenty of land and not that many buyers out Hampton Park way"

In relation to the above, i agree that the whole SE corridor running along and around the Monash has alot of land around it, that it isnt scarce, but that hasnt stopped the price of average new residential blocks (500-600 sqm) increasing over the last 4 years though.

Just a quick search on realestate.com showed a few average blocks in Hampton park between 140-160k.

This is around the average for the Narre Warren/ Berwick area also.

The wife and i were considering buying a 600sqm block in Berwick back in 2002 for 92K, today that will cost you about 155K.

Even out in packenham, 50kms out of the city, in a brand new release called "cardinia Lakes" a 680sqm block will cost you 135k.

If it is the scarcity factor that mainly drives land prices up, then is it a combination of the Melbourne 2030 plan combined with increasing costs of providing infrastructure in the outerlying areas that is continuing to push the prices up?

Or is it all just simply supply and demand, if alot of people want to buy and build in an area then naturally prices for vacant land will increase.

 

[roos]

If you are buying for capital growth, you are likley to do much better elsewhere.

Hampton Park is basically an area for first home buyers or buyers in the lower price range.

That sector of the market is not likely to take off for some time due to lack of affordibility.

When do u think will it take off, and if it does, would there be any benefits from a long term point of view

For the same amount of money you could buy a 1 bedroom apartment in Carnegie, Murumbeena or a host of other suburbs with a stronger history of capital growth and you would geta similar rental return.

I understand the argument that land goes up in value, but that is due to scarcity and there's plenty of land and not that many buyers out Hampton Park way

R u in able to provide me with the names of other suburbs that you think have a stronger history of capital growth.

Thanks a lot for your tips
Roos

 

[Peter Parker]

R u in able to provide me with the names of other suburbs that you think have a stronger history of capital growth.

Easy. Just go to the State Library, get on the microfiche and look up the real estate ads in the papers. You can go back 40-50 years if you want.

Sure they're asking prices not sale prices but for this exercise the distinction isn't important.

Then compare them to current prices (and most important) relativities, noting changes in housing stock, etc.

Peter

 

[The Y-man]

.....or read Spiderman's fantastic post in
http://www.somersoft.com/forums/showthread.php?&p=212170#post212170

Cheers,

The Y-man

 

[Peter Parker]

To quote Henry Ford, 'history is bunk'.

And in this case it might be, given that a lot of 'historical analysis' in property circles (at least in the lift-outs, magazines and GRQ fluff) only uses stats going back 20-30 years and calls these long-term.

Given property demand is underpinned about society's location and housing preferences and long-run trends may last at least 30 years then using such short time-frames may have little value.

As the fund managers say 'past results are no guide to future performance'. So historical research is an interesting exercise, but I'm not sure how much it can tell about the future.

Peter

 

[chadsimons]

Hampton Park

Roos,

Is there much opportunity to sub divide a big block and build another property at the back etc. H/Park will definately have to appreciate over the coming years considering all the suburbs/infrastructere around it.

Others areas to consider is Noble Park and Doveton.Also Drouin.