Confirmation of the heat in Melbourne - New median 420,000

[aussierogue]

big numbers

There are some huge numbers in that report and not just bayside or inner. Looks to me the boom is everywhere around Melbourne. Interesting to see so of the property shows are making a comeback to prime time TV.

 

[Howdy Doody]

Mont Albert up 147.8% in the past year. That's amusing

 

[jazzlobber]

Mont Albert up 147.8% in the past year. That's amusing

Howdy Howdy,

I did notice Mont Albert has the asterisk * meaning less than 30 houses sold, so the sample size is not enough for a good result. There must have been only a few high end properties sold for the median to shoot from 575K to 1.4M

 

[meggala]

It would be interesting to find out how many WA SS investors have put money into Melbourne/Victoria.

well I'm in melton and and a couple of weeks ago the local paper had the head lines about the people from perth and sydney buying up property in this area they are apparantly just checking realestate.com.au and calling agents and putting offerers in and completing the sale with out even comming over. some are buying up to 4 or 5 properties in a short period this has cleared up alot of dead stock and other people are putting houses in the market this is an area with a slow selling cycle you are mainly dealing with naive vendors and purchasers. working class people etc. I stated b4 I bought my house I felt the area was still under valued and I have been proven right the prices are creeping up now but it is still pretty cheap. you can buy a house for well under 200k still. rental demand is still very high here as well.
cheers
meggala

 

[Trogdor]

Via a BA I've been the underbidder at 2 auctions in the last two weeks in inner SE suburbs. Went in with a limit about 25% more than similiar properties would have sold for 12 months ago, and missed out - by 26K on the first auction, and 4K on yesterdays auction.

Basically 1960/70s 2 bed units - unremarkable / run of mill places in inner SE are now going for mid 400s.

Hopefully third time is a charm.

 

[jingo]

Via a BA I've been the underbidder at 2 auctions in the last two weeks in inner SE suburbs. Went in with a limit about 25% more than similiar properties would have sold for 12 months ago, and missed out - by 26K on the first auction, and 4K on yesterdays auction.

Basically 1960/70s 2 bed units - unremarkable / run of mill places in inner SE are now going for mid 400s.

Hopefully third time is a charm.

Hi Trogdor,

That is amazing. How many bidders were there at these auctions?

Regards Jason.

 

[turk]

Via a BA I've been the underbidder at 2 auctions in the last two weeks in inner SE suburbs. Went in with a limit about 25% more than similiar properties would have sold for 12 months ago, and missed out - by 26K on the first auction, and 4K on yesterdays auction.

Basically 1960/70s 2 bed units - unremarkable / run of mill places in inner SE are now going for mid 400s.

Hopefully third time is a charm.

Hopefully they keep appreciating, bought 2 bedder in Brighton East 4 months ago just about finished a complete renow. on this and will lease.

Should sign a contract on a 3 bedder in Hampton this week (450 k) this is a private sale and is in excll. condition,

 

[MichaelSyd]

...people from perth and sydney buying up property in this area they are apparantly just checking realestate.com.au and calling agents and putting offerers in and completing the sale with out even comming over. some are buying up to 4 or 5 properties in a short period

Hiya Meggala,

I'm one of those Sydney buyers in Melton, I've encouraged a friend to buy 2 more IPs around the corner from mine there and another has grabbed one as well...we all feel there is good value in Melton as you said.

I picked up a 3yo 3bd house on a 500m2 block for $204K ... much better value than my similar houses of the same age in the back suburbs of the Gold Coast (now valued at $360K) and Newcastle ($330K)...

... now just waiting for the ripple in prices to come out from the centre of Melbourne...

cheers
Michael

 

[jingo]

... now just waiting for the ripple in prices to come out from the centre of Melbourne...

cheers
Michael

Interesting you should say that. Suburbs a little further from the city are now starting to be mentioned in the weekend property market write ups. This is only a recent development. So perhaps the ripple is starting to move now.
Regards Jason.

 

[Trogdor]

Hi Trogdor,

That is amazing. How many bidders were there at these auctions?

Regards Jason.

I dont know for sure as Im in London and it was via a BA, but from the feedback I recieved for the first auction there were two other BAs (one on behalf of an investor, and another on behalf of a owner occupier) and a couple of owner occupiers bidding on their own.

The second was fewer I think but still another BA and a couple of individuals.

Interestingly, I think both ended up going to owner occupiers and not investors (who were present, and included myself via a BA).

It seems that investors are thinking twice at paying 450K for $300 - $320 pw rent, but owner occupiers have no such concerns.

 

[turk]

Hi Trogdor

I was curious as to which suburbs these auctions were in and which other suburbs you are interested in.

Peter

 

[Twitch]

Story in todays Age on Kew house prices; it's a front page story no less so it must be true

 

[Trogdor]

Hi Trogdor

I was curious as to which suburbs these auctions were in and which other suburbs you are interested in.

Peter

Peter - Prahan and Caulfield Nth. Basically all inner SE suburbs.

You buying now too?

 

[Peter 14.7]

I am with Michael Syd re Melton. I am the friend who bought two (wife actually) and I am managing the other as buyers agent.

Since we started looking with Michael we have seen rents go up 10% $20 week and prices up 10% ( which I only worked out when typing here) IMO.

Consider Melton is you have $250k and want near new with large depreciation and secure tenant base. It aint Toorak or Kew but that doesnot matter. It is return v risk. Supply and demand.

Peter 14.7

 

[beech]

Hi Peter,

Im in Bacchus Marsh and i understand the ripple effect working its way out of Melbourne but yields arent anything like the last cycle out this way.

I just think the ripple will take quite some time to get out here this time round as affordability and interest rate rises will slow that ripple right down.

What are your thoughts?


p.s, I think Melton is a No Brainer for investment and i expect to have quite a few of them there,just struggling to see it happening soon.

 

[GoAnna!]

Not everyone seems to agree number wise

http://data1.reiv.com.au/trendchart/

Shows that thee is a general upward trend, strongest within 10 kms from the city (22.2% annual) and little growth at 20kms plus (6.1%) with March quarter downturn recorded each year. I assume this would be based on completed sales and if so this would reflect the sales in late 2006 and early 2007 which are typically those left over after the peak spring period. The current strength those on the grouns are currnelty witnessing is yet to even be reported. RE stats are always old news as by the time the sales go through the valuer generals office it is many months old.

The market is very segmented and to talk about Melbourne's median or growth rate is meaningless.

 

[jazzlobber]

The market is very segmented and to talk about Melbourne's median or growth rate is meaningless.

Heavily Disagree;

If you have the median performance of every suburb in melbourne then its straightforward to produce the Melbourne Median, we can judge the cities performance relative to Perth or Brisbane with this. True inner might be going nuts, middle might be just typical growth and outer melbourne might be flat, but the melbourne median encompasses all these in one hit. A melbourne median of 20% growth in 1 year tells me alot compared to a median growth of 2%, whilst the distribution of that is another story

The median is an excellent statistic for judging market position and relative buoyancy.

Whilst you need to be careful not to just blindly believe a 3month or quarter median results. The YOY (year on year) median figures start to rule out any short term peaks and troughs,

Indeed any particular suburbs with small turnover of sales is highlighted as such and should only be taken with a pinch of salt.

Its the easiest and most direct mechanism by which we can judge CG is the median price.

Long term statistics are also valid, victorian valuer general publication, over the last 10-15 years.

Its true its not an indication or reflection of every property sold in that suburb, but is a good yardstick for judging what the average is

I do agree that the figures are always out of date but thats the nature of the beast, suffice to say my prediction for the next quarter is more of the same with middle and outer melbourne picking up somewhat.

 

[GoAnna!]

Heavily Disagree;

If you have the median performance of every suburb in melbourne then its straightforward to produce the Melbourne Median, we can judge the cities performance relative to Perth or Brisbane with this. True inner might be going nuts, middle might be just typical growth and outer melbourne might be flat, but the melbourne median encompasses all these in one hit. A melbourne median of 20% growth in 1 year tells me alot compared to a median growth of 2%, whilst the distribution of that is another story

The median is an excellent statistic for judging market position and relative buoyancy.

This is true but as investors we buy individual properties, unless we are part of a group that is buying many properties accross the city. So Sydney might have a higher median growth rate than Melbourne say but the growth on an individual property in Melbourne might be higher than an individual property in Sydney. And in the end for me its how how individual properties in my portfolio are performing. So my research is specific, not just in suburb, but areas and properties types within that suburb. This way I can catch a growth wave in the short term rather than wait for the market to do its average thing. Most significent growth happens over a relatively short period of time.

 

[Peter 14.7]

Not everyone seems to agree number wise

http://data1.reiv.com.au/trendchart/

Shows that thee is a general upward trend, strongest within 10 kms from the city (22.2% annual) and little growth at 20kms plus (6.1%) with March quarter downturn recorded each year. I assume this would be based on completed sales and if so this would reflect the sales in late 2006 and early 2007 which are typically those left over after the peak spring period. The current strength those on the grouns are currnelty witnessing is yet to even be reported. RE stats are always old news as by the time the sales go through the valuer generals office it is many months old.

The market is very segmented and to talk about Melbourne's median or growth rate is meaningless.

I agree as well but thanks for the chart anyhow.

So using the chart Melton rise from around $182k to $200k in the last quarter but overall has been flat since records began in Sept 04. As many house in the nearer range where built in 03 and 04 this means and important stat is missing.

Also it does not show Kurunjang or Melton West but simply Melton and Melton South. So assuming Melton is the centre, west and Kurunjang then we have a mixed bag noting my comment earlier as the age mix.

But as stated investment here is a No Brainer. My calculations show each IP is costing me only $20 a week and maybe as little as $10k subject to final depreciation. With rents rising strongly at the moment and not reason to stop, in at least 2 years they are going to be neutral cost or positive geared, if not earlier.

So as Robert Kiyosaki's Rich Dad says "how many can you afford if they cost you $0.?” Answer: As many as you can find! subject to equity.

The tipping point to go Melton for me is the new freeway to bypass Deer Park. It will mean freeway all the way to the CBD. The benefit of this will be like the growth Frankston is experiencing at the moment due to the almost completion of the Freeway there. Prices has skyrocket.

Melton will do the same end 2009. I am getting in early as personally, the time, income and bank response is right for me.

Regards Peter