Capital Gains in Melton?

[el caballo]

I totally agree with Sash, this is a property investment forum and it is about making money and the reason I'm here is to learn more as I have IPs but have no idea of what I'm doing and if there's better investments I want to know about them.

George,

Your Melton investments, prima facie, appear to be superb. I dare say they have been close to or actually cash positive for their lifetime, and you clearly have experienced good capital gains. Hence, enough of the misplaced self-deprecation - you should be very proud of your work thus far. May it continue!

 

[Psyk]

Good post Sash and George.

I'm more familiar with the South Eastern side of Melb past Dandenong for all the same reasons you've mentioned about Melton.

All this talk about crims, drugs, the working class and what not, I can only go by my experience. Cranbourne cops a bagging on these forums as well, but for all the reasons people buy out in Melton, people are buying in Cranbourne also. Some people need to upsize and bring up a family with a back-yard and buying a house with decent size land, open space and parks just appeals. Most people that live out there would work in the City of Dandenong, Braeside, Moorabbin, Mulgrave etc. and it's easy commute to those places.

 

[Intrinsic_Value]

Hi guys im new here, I am currently thinking of buying a house and land package in melton, but its a 3 bedroom unit, would it be any capital gain in the years to come. Would like to here your opinion.

George

Mate in this environment, no need to pick a suburb, throw a coin, pick a suburb, there is capital gains to be made everywhere and anywhere (at least in melbourne).
Whether this lasts in the years to come is another question, but then from the nature of your question, you are after capital gain, not a long term income stream,
so its tally ho boys, lets all speculate on where the greatest capital gains can be made.

sorry if this post sounds a bit sarcastic.

 

[kero]

if there is a lot of land space around a town or estate, it is not necessary the untouched land is available for building.... the untouched land could be a reserve, aboriginal land, swamp etc... and like Melton, i believe their structure plans sets boundaries to development.

so yes, Melton has a lot of land around it but look at the structure plan, you'll see the limits to its land for development.

 

[sash]

A very good point!

Whilst it may look like a lot of land.....developers have learned to control development to optimise pricing.

3 years ago you could have bought land in Tarneit or Truganania for less than 115k for 500sqm. Now they start at about 160k for a decent block.

if there is a lot of land space around a town or estate, it is not necessary the untouched land is available for building.... the untouched land could be a reserve, aboriginal land, swamp etc... and like Melton, i believe their structure plans sets boundaries to development.

so yes, Melton has a lot of land around it but look at the structure plan, you'll see the limits to its land for development.

 

[Bigtone]

Hi George,

Very detailed posts but a paragraph or two would help when reading.

I know several people who have build in melton last 2-3 years and basically no to little growth when revalued, had they bought anywhere else in Melb would have had min 20%.

Don't think crime rates, type of people make any difference as George said rates probably lower than St Kilda etc.

George you mentioned Fitzroy and Brunswick as bad areas that no-one wanted not that long ago which is true but they are established suburbs close to cbd which can turn very quickly when they become popular, there are stacks of examples of this-Preston, St.Kilda, Northcote, Coburg etc. I cant think any any newish suburb more than 20km out that has suddenly become a hotspot and a place for buy and rent.

If the only reason people buy or rent in an area is affordability then there is a natural cap on the growth, does anyone really want to move from a inner cbd location to Melton?

I wish anyone who has purchased there the best of luck but it is not for me.
I would never buy in an area dominated by FHOB and house and land packages.


Cheers

 

[el caballo]

Bigtone,

Interesting note, and much appreciated. Interesting because, as George and Sash have previously mentioned, they have experienced good growth. I have recently purchased an investment property in Melton, and feel confident of steady, low-risk growth with little to no impact on cash flow.

 

[kero]

i have been living in Perth for the past three years and observed that the first residences ages ago settled around the western suburbs- claremont, nedlands, dalkeith and what have you.

It would be interesting to know during those early years, when someone decides to move to Mount Pleasant, Ardross or Applecross, what would the residences who lived in the western suburbs say to them.

How about in the Northern Territory? 5 years ago, I remember good intented friends telling me to pull out of the Palmerston land and house package deal cos 'who wants to live there?', 'there's plenty of FHB', 'its not safe' and so on. I am glad I still went ahead cos the capital growth there allowed me to get three more IPs within those 5 years and not to mentioned the crazy rents the Palmerston property is fetching.

 

[yeealibabamafan]

i used to work in melton back in 2006-07. that was only three years ago. it's a hearsay, so i may have been given incorrect info but my client who was a police officer in the area told me in the year prior to 2007, there were 7 murders commited in melton. i was thinking of buying a ppor in melton until i got that info. so just to share with all you guys who think so highly of melton.

 

[Bigtone]

melton will grow over time, all suburbs were new once but the opportunity cost of buying somewhere where the growth is lower is massive as you take longer to get into market next time and so on and on, if it gets growth that does not mean u r right if that growth is way below other areas u could buy in now, anyway good luck, time as always will be the judge

 

[el caballo]

Yes, Bigtone, the proof of the pudding is always in the eating. Time shall be the judge. FYI - I've just returned from a leisurely morning spent with family and friends in Black Rock ... you had mentioned you had purchased there recently. Lovely spot indeed!

 

[Bigtone]

even more loverly if the CG keeps going!

 

[Kael]

So crime might be a little higher then in the average community in Melbourne. Tell me: Does that mean it will always stay that way? With new developments going in, does that not mean more families will move to the area? Does that not mean that the percentage of crime will decrease, and it will become diluted?

Melton has some fantastic infrastructure, shopping centres, reserves, parkland, the highway straight into Melbourne, a train station, a University campus, plenty of schools. It has everything that you would want in an investment. Yes, there are some bad things; however, the good seems to outweigh the bad.

I have watched the prices in Melton go up over the past year and I know that from the statistics, that capital growth has been relatively efficient over the past few years before that. Rents also appear to be going up. As Melbourne is pretty much a "smaller Sydney" with better infrastructure, does that not mean that later on down the track, that Melton may become a desirable place to live, that has good growth and good rents?

 

[paul2299]

So crime might be a little higher then in the average community in Melbourne. Tell me: Does that mean it will always stay that way? With new developments going in, does that not mean more families will move to the area? Does that not mean that the percentage of crime will decrease, and it will become diluted?

Isn't the crime related to the new development?

As Melbourne is pretty much a "smaller Sydney" with better infrastructure, does that not mean that later on down the track, that Melton may become a desirable place to live, that has good growth and good rents?

How long will that be before it is desirable place to live? Surely it won't happen until all the surrounding land is developed plus land out further (to make Melton land somewhat scarce). Could this be 20 years down the track?

 

[Kael]

How long will that be before it is desirable place to live? Surely it won't happen until all the surrounding land is developed plus land out further (to make Melton land somewhat scarce). Could this be 20 years down the track?

Just because it has land around it, that does not mean it will not be a desirable place to live. I know of multiple areas in Sydney (same distance from CBD, if not a bit further) where there is PLENTY of land surrounding it, but people still desire to live there, and the land is in the high $300's and $400's of thousands.

 

[Bigtone]

Kael it is not the forum posters you need to convince as they will never invest there but the valuers as like it or not they have a huge impact on the market as they can make or break a deal.

The last three valuations I have seen for house and land packages In Melton came in between $10-$30k under purchase price. I saw one this week, house and land package 3 bed 2 bath $268k came in at $250k, if you can't get 3 beds and 2 baths to value up at $268k there is a problem there.

Valuers control growth of suburbs wHere buyers borrow a big portion of the purchase price. Older homes in Melton would have been dragged up by recent activity but so many new ones built by FHOB's, were is the scarcity?

 

[GeorgeOrwell]

Hi Bigtone

I do apologize about the lack of paragraphs... it does make it tedious to read.

I must say I’m perplexed with your friends valuations. Maybe it was because they built and got in over their head or maybe they paid too much for their properties to start with? I truly don’t know. I’d be interested to hear from property owner in Melton who haven’t made at least 20% from properties purchased 3 years ago...

I myself don’t know anyone with properties here in Melton that haven’t made at least 80k plus over the last 3 years (and I know a lot of property owners here). Now I’m aware 80k isn’t massive, but when you only lay out 150k for a bottom end 3br house 3 years ago, I’d be very surprised if you couldn’t get 230k plus now. This isn’t a one off case either, just 2 years ago I bought a property for 180k, had it valued at the beginning of this year at 290k – 300k. A very simular property 2 doors down just sold in Feb for 298k after being on the market less than a week.

I actually did move here from the CBD Bigtone, as stated in an earlier post, so now you know at least one

I’d also be interested to know more about those murders in Melton, which was horrible and sad. I wasn’t living here then, but my knowledge of them (hearsay as well) is in a period of about 2 years they did have 6 or 7 murders. I agree that is a lot, but I’m not aware of any since 2007 and I’ve always felt safe (heard of one in Sunbury about a year ago though). If you averaged it out over the last 10 – 20 years you might even find it low compared to some inner city suburbs (but I’m sure those 2 dark years would still affect it greatly)?? I don’t know, but from what I hear apart from those sad couple of years the murder rate is pretty low. Does anyone have figures and comparisons of other suburbs? I’d be interested to know as I truly have no idea.

Thank you for the feedback everyone, I guess its different strokes for different folks. I’m happy in Melton and I’ll continue to invest here (just purchased another IP actually) until I see for myself all these horrid things that apparently no one I know who lives here has experiences, I’ll keep on investing.

Good luck to all

 

[virgo]

Melton

Hiya Bigtone and GeorgeOrwell

I'm one of those who bought exactly 3 years ago in Melton in 2007. Paid 235K in Melton West (near the pool) for an established home . It is now rented at 270 per week; never paid a single cent in any renovations ever...

Westpac revalued it at 300K in Dec 2009; i thot they were dreaming but hey, as Bigtone says, in this game, it is the valuers we have to convince.....

cheers

 

[K_Raheja]

melton

Thanks for all the posts.

Just curious ..George which parts of Melton would you recommend ?

I am researching into buying my first IP very soon & my plan is to buy and hold.
Am driving out this weekend to see a home & land package display with BURBANK homes.Its actually in Brookfield.

One big + i see in Melton is the investment i can afford and manage without sweat.

Thanks in advance.

 

[schweedy]

I live in Melton and bought an ip here 18months ago. Whilst I dont think MY property is worth any more at the moment, once these tenants are out and I get some renos done, it will have increased slightly.

I do have the advantage of it being close to high street/bus stops, walking distance to all level of school and the local pool/shops etc, on and its on a large block with NO evesments (sp?), which we are looking into subdividing in the future.

I know this house wont increase in value like my one in Frankston north, or the one we had in Mulgrave, but by being subdividable, I see it has potential.