G'day,
We're a 31 year old couple with a newborn currently living in Melbourne. We have an investment property in Perth that is close to neutrally geared and are now looking to purchase a principal place of residence here.
Our rationale is that interest rates are at historic lows, the home owners grant for existing dwellings is soon to be abolished and I can get a heavily discounted home loan through the financial instituition that I work for. As we'll eventually move back to Perth we are keen to diversify into Victoria whilst we are here and can observe the market.
The plan is to live in the PPOR to qualify for the grant (probably for a few years) and then when we move back to Perth to convert it into a investment property. We are targeting capital growth over income. Hopefully the growth will occur whilst the property is PPOR so we can minimise CGT.
We've identified Corio and Norlane as a place of interest for a number of reasons. These reasons include:
- City of Geelong is growing and I don't see very good growth prospects in Melbourne versus regional Victoria
- Can commute to Melbourne. Only one of us will have to as my partner will be a stay at home Mum.
- Afforability (we're targeting $200,000 and under) and low risk - If I lose my job we could still service the loan whilst job searching
- Government is attempting to gentrify the area with the New Norlane project etc.
With affordability becoming less and less in Melbourne I believe that cheaper alternatives such as Corio and Norlane will see good growth. We would try to get an older house on a larger block such as a minimum of 600sq metres to effectively "land bank" for a few years. Later on we can sub divide or sell up.
How does everyone see these two areas performing? We are under no illusions, there is a lot of stigma attached and we've received many negative comments from friends regarding crime, unemployment and safety. I also understand that many people believe it will take a few generations before this area improves. There's also concerns about Australia's competitive edge in manufacturing declining and we've seen this in Ford and Shell terminating jobs. No need to go easy on me, I can take it.
I just feel the whole affordability and supply issues will ensure property growth here. For those that know the Perth market, we were going to do the same thing in areas like Girawheen and Balga a couple of years ago. My understanding was that the sprawl up and down the coast and the West Australian dream of living by the beach was not sustainable. Areas slightly inland with an "ugly duck" status had to catch up. Balga and Girawheen have been hot the last six months.
Let me know what you think...
Thanks in advance for the input!
We're a 31 year old couple with a newborn currently living in Melbourne. We have an investment property in Perth that is close to neutrally geared and are now looking to purchase a principal place of residence here.
Our rationale is that interest rates are at historic lows, the home owners grant for existing dwellings is soon to be abolished and I can get a heavily discounted home loan through the financial instituition that I work for. As we'll eventually move back to Perth we are keen to diversify into Victoria whilst we are here and can observe the market.
The plan is to live in the PPOR to qualify for the grant (probably for a few years) and then when we move back to Perth to convert it into a investment property. We are targeting capital growth over income. Hopefully the growth will occur whilst the property is PPOR so we can minimise CGT.
We've identified Corio and Norlane as a place of interest for a number of reasons. These reasons include:
- City of Geelong is growing and I don't see very good growth prospects in Melbourne versus regional Victoria
- Can commute to Melbourne. Only one of us will have to as my partner will be a stay at home Mum.
- Afforability (we're targeting $200,000 and under) and low risk - If I lose my job we could still service the loan whilst job searching
- Government is attempting to gentrify the area with the New Norlane project etc.
With affordability becoming less and less in Melbourne I believe that cheaper alternatives such as Corio and Norlane will see good growth. We would try to get an older house on a larger block such as a minimum of 600sq metres to effectively "land bank" for a few years. Later on we can sub divide or sell up.
How does everyone see these two areas performing? We are under no illusions, there is a lot of stigma attached and we've received many negative comments from friends regarding crime, unemployment and safety. I also understand that many people believe it will take a few generations before this area improves. There's also concerns about Australia's competitive edge in manufacturing declining and we've seen this in Ford and Shell terminating jobs. No need to go easy on me, I can take it.
I just feel the whole affordability and supply issues will ensure property growth here. For those that know the Perth market, we were going to do the same thing in areas like Girawheen and Balga a couple of years ago. My understanding was that the sprawl up and down the coast and the West Australian dream of living by the beach was not sustainable. Areas slightly inland with an "ugly duck" status had to catch up. Balga and Girawheen have been hot the last six months.
Let me know what you think...
Thanks in advance for the input!
