First home buyer - Melbourne - what would you do?

 
chenderson said:
Thanks guys for your input, and as I've expected there are so many different suggestions from different people...I understand this is a very vague question, so I would like to narrow it down a bit...

What would YOU do, given the same financial situation described earlier, but with these goals in mind:

1) Want to buy PPOR which could be later transformed into an IP
2) Looking at a term of 10 years
3) Looking to buy in SE suburbs of Melbourne - around 20-30 kms from CBD
4) And most importantly, something that will gives me the most financial benefit after 10 years.

thanks again...
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my answer stays exactly the same except i would buy at 90% and have more in offset and have more already saved for future PPOR and be able to claim more against first property once an IP.

I would buy an older townhouse in small block as close to city as possible with that price range
 
I still dont see the problem with renting somewhere you want to live, and purchasing somewhere that makes investment sense (the two do not always align) until you are ready to purchase your eventual PPOR?
 
turk said:
Hi Melbournian

In terms of median it have been one of the biggest drops, but with a small number of properties being sold the number is easily skewed, plus as per my post I am referring to the lowest decile of housing.

I also picked up houses in this area 1994/95 in the $125,000/$145,000 range and once again was told how silly I was, they were over priced and could not go up, now valued in the $850,000/$1,000,000 range.

Picked up property in Brighton in Oct. 2008, reoe'd and now after dropping in value still worth around 45% more than buy+ reno. cost.

Another stupid move according to gloomers.
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i think anybody would bought anything 2008-2009 would see gains.
Well 1994/95 - melbourne has experience big jumps then - i was still in high school so wouldn't have had any opportunity to purchase into those areas.
 
if your intention is to turn it into a IP later, i would make sure..

a. that the house is close to public transport.
b. negotiate a discount so that you have some $ left after the purchase.

good luck
 
pieman said:
Yeah 30 minutes to walk
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Not sure where Aaron's getting his 30 minutes from. Maybe from his place in Carlton?
I would of said Albert park was about 10 - 15 mins

As other posters have already said what is wrong with renting.

Why bye a place to live in that then will become an IP. These are two different criterias

Just buy an ip in the best place and rent where you want to live ( assuming no dependants).

Some people just don't get it. Sad thing is many of the people who don't get it would probably be considered intelligent.
 
was in albert park just before - 15 minutes to the city and in chinatown.

Well - i think some ppl want to buy a place coz it is convenient to their lifestyles.

this could mean next to beach - in mentone or frankston or could mean a highriese buillding in the eureka/freshwater where they have concierge that checks their mails daily as they travel overseas regularly or it could be some family who has 3 german shepard dogs which loves to run in a 300sqm backyard in ringwood or nunawading. So it all depends on what they prefer.

there is no right or wrong answer in 1st home buyers as many buy coz they wnat to live where they want to live. Not everyone wants to rent as they have different needs and it is nothing to do with some people don't get it or not.
 
Melbournian said:
was in albert park just before - 15 minutes to the city and in chinatown.

Well - i think some ppl want to buy a place coz it is convenient to their lifestyles.

this could mean next to beach - in mentone or frankston or could mean a highriese buillding in the eureka/freshwater where they have concierge that checks their mails daily as they travel overseas regularly or it could be some family who has 3 german shepard dogs which loves to run in a 300sqm backyard in ringwood or nunawading. So it all depends on what they prefer.

there is no right or wrong answer in 1st home buyers as many buy coz they wnat to live where they want to live. Not everyone wants to rent as they have different needs and it is nothing to do with some people don't get it or not.
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Have I miss the boat? Should have bought a property in 2008. House prices are so expensive these days, and even though it's true that they're gone down, they're still very expensive...A couple I know who bought a land/house package in 2007 in Lyndhurst in 2007, they bought it for less than 400k and is now worth 600k+. One friend bought another house/land package in the new estate of Sommerfield in Keysborough in 2009 for $490k, his house is now worth around $600. Anyway, this is from my personal experience...
 
There is absolutely no hurry, you certainly haven't missed any boat. Things are flat, but don't expect some "fair value" crap for a family house in middle park for 400k as that's all they're "worth"

Lots of people are sticking vast amounts of cash away each month. Eventually when the tide turns and people's confidence return, they will go looking to spend. Shares and property will be the obvious choice. You just need to do your due diligence and get some research together for a future purchase, then when values start to increase you'll be in an educated position to make a good choice.

There's no hurry.
 
Melbournian said:
was in albert park just before - 15 minutes to the city and in chinatown.

Well - i think some ppl want to buy a place coz it is convenient to their lifestyles.

this could mean next to beach - in mentone or frankston or could mean a highriese buillding in the eureka/freshwater where they have concierge that checks their mails daily as they travel overseas regularly or it could be some family who has 3 german shepard dogs which loves to run in a 300sqm backyard in ringwood or nunawading. So it all depends on what they prefer.

there is no right or wrong answer in 1st home buyers as many buy coz they wnat to live where they want to live. Not everyone wants to rent as they have different needs and it is nothing to do with some people don't get it or not.
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All I was saying is that for his situation it makes no sense to buy when he can just rent and make better use of his money elsewhere (this is what people don't get!). I realise that for some people (eg those with families) renting is not an option.
The only benefit I see for him in buying is so he can tell his mates he owns the place he lives in.
 
strongy1986 said:
The only benefit I see for him in buying is so he can tell his mates he owns the place he lives in.
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That's certainly not the case for me. I've never rented in my life, as I like the security of knowing I can be in my home for as long as I want, and no risk of being asked to leave in 12 months time. I like the idea that I can decorate it whenever I want to, however I want to. People with kids and/or pets may also find it much more difficult to find a rental property that they like.

I'm sure it cost a bit more to own my place initially instead of renting, but after a few years my P&I mortgage payments are now less than the rent I would pay for the same place, and continues to be less and less as rents increase. I now have a large tax free capital gain, if I sell it, and I've used the equity in it to purchase investments.

As someone said, there's no right or wrong answer, and there are many factors to consider.
 
Biggles said:
That's certainly not the case for me. I've never rented in my life, as I like the security of knowing I can be in my home for as long as I want, and no risk of being asked to leave in 12 months time. I like the idea that I can decorate it whenever I want to, however I want to. People with kids and/or pets may also find it much more difficult to find a rental property that they like.

I'm sure it cost a bit more to own my place initially instead of renting, but after a few years my P&I mortgage payments are now less than the rent I would pay for the same place, and continues to be less and less as rents increase. I now have a large tax free capital gain, if I sell it, and I've used the equity in it to purchase investments.

As someone said, there's no right or wrong answer, and there are many factors to consider.
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Couldn't agree more but we are talking about the poster who started this threads situation? He even said himself that he doesn't see much capital growth for these apartments in the next five years.
That makes the only benefit of buying being that he can stay in the place as long as he wants.
If I was in his situation I would take the risk of renting. Rewards are much greater than the inconvenience of having to find somewhere else to rent
 
apartments are the highest level of developed real estate you can buy... so you can't add value and the melbourne market will be on the slide for the next few years... there is no logical reason to buy this. I don't think even debt deflation could justify it.

so there you have it - if you have a burning emotional desire to buy then go for it, but it will come at a price
 
Ausprop said:
apartments are the highest level of developed real estate you can buy... so you can't add value and the melbourne market will be on the slide for the next few years... there is no logical reason to buy this. I don't think even debt deflation could justify it.

so there you have it - if you have a burning emotional desire to buy then go for it, but it will come at a price
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he doesn't need to buy an apartment, he can buy a house or a bit closer to the city a townhouse with some land.

the apartment market will likely be down for a while but i doubt houses/townhouses in decent spots will be going backwards, i think melb bottomed out in nov last year (excluding apartments near cdb and houses in growth corridor suburbs)
 
strongy1986 said:
Not sure where Aaron's getting his 30 minutes from. Maybe from his place in Carlton?
I would of said Albert park was about 10 - 15 mins
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Depends on which end of the CBD you are at. Certainly from the Carlton end it will take a long time, although I do not live in Carlton itself.
 
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