Frankston on the up

[Lamingtons]

You guys might like this article from HS.

http://www.heraldsun.com.au/travel/...as-famous-suburb/story-fnjjv1f4-1226773609786

PS the Kittens club is gone?!?!

 

[Jake Milne]

Warning... I'm about to offend some posters.

Paraphrased:
I don't give two hoots if you think Frankston is great because it has sand castles or not great because people have mullets.

----

All of this subjective investment talk, as in choosing assets based on one's own perception of an area is insanity.

When investing you have to look at measurable units; of which, stigma is not one of them.

The problem with focusing on the "stigma", which is purely derived from social conditioning and emotional perception, of an area is that it often lingers long after the initial growth spurt of any gentrifying catchment. In layperson terms, the general populace will only think an area is desirable once it is widely accepted as desirable.

Time and time again lower socioeconomic areas or areas that have less infrastructure are developed and improved until they reach a tipping point. The risk with speculation is that capital improvements may not reach the pinnacle.

That tipping point, when reached, will usually see the area dramatically improve in value; which is also, generally speaking, before the wider market understands the new found desirability.

Speculative investment, the act of risky financial transactions in an attempt to profit from short or medium term fluctuations, has to be conducted pragmatically or it is simply gambling.

Thus, I say to all of you talking about "Franga's reputation" this: Remove your preconceptions about this area. Research facts. If you want to say there are socio-economic issues; then post crime rates, social service expenditure, unemployment and income/housing stress figures.

If you want to suggest that Frankston is "on the up", more so than other investment areas. Explain why!

It's not rocket science, but there is a science to it.

 

[TMNT]

I'm actually a big fan of Frankston

However, what makes me laugh is people who come on here and say how great it is but can never say why or give lame a$$ reasons for it, why people get so worked up over this suburb only and not seaford is beyond me

Also in a rising market, buying in a suburb that's rising or risen is like fishing with dynamite

I'd say its more of a challenge to actually find a suburb that goes backwards or stays flat

 

[TMNT]

Warning... I'm about to offend some posters.

Paraphrased:
I don't give two hoots if you think Frankston is great because it has sand castles or not great because people have mullets.

----

All of this subjective investment talk, as in choosing assets based on one's own perception of an area is insanity.

When investing you have to look at measurable units; of which, stigma is not one of them.

The problem with focusing on the "stigma", which is purely derived from social conditioning and emotional perception, of an area is that it often lingers long after the initial growth spurt of any gentrifying catchment. In layperson terms, the general populace will only think an area is desirable once it is widely accepted as desirable.

Time and time again lower socioeconomic areas or areas that have less infrastructure are developed and improved until they reach a tipping point. The risk with speculation is that capital improvements may not reach the pinnacle.

That tipping point, when reached, will usually see the area dramatically improve in value; which is also, generally speaking, before the wider market understands the new found desirability.

Speculative investment, the act of risky financial transactions in an attempt to profit from short or medium term fluctuations, has to be conducted pragmatically or it is simply gambling.

Thus, I say to all of you talking about "Franga's reputation" this: Remove your preconceptions about this area. Research facts. If you want to say there are socio-economic issues; then post crime rates, social service expenditure, unemployment and income/housing stress figures.

If you want to suggest that Frankston is "on the up", more so than other investment areas. Explain why!

It's not rocket science, but there is a science to it.

I'd have to agree with 95% with what you said and disagre. With 5%

Just about all owner occupiers and many mum and dad investors and dumb investors follow the herd or buy on emotion or perception
So many people across different states are now buying because everyone else is and are conplain't how expensive it is
Yet they could have bought for 15% less 18 months ago

 

[grand dad]

Haven for Developers

If you want to suggest that Frankston is "on the up", more so than other investment areas. Explain why! It's not rocket science, but there is a science to it.

Yes, there is a science to it....but only if only people care to open their eyes and do the numbers and research.

According to the Valuer General's office, barely 2% of Melbourne's established homes are on subdivisible blocks. A significant number of these are in Frankston and Seaford, both highly underpriced beachside suburbs. In fact, as many as half of existing local homes in these two suburbs are subdivisible. In a rare few cases, you can retain the front house and build in the back without demolishing the existing house. All for under $300,000 if one does one's homework.

I won't go into the merits of living in Frankston. What I am saying is that it is poised to be a developers paradise. The suburb will change as old houses are razed and replaced with smart new units.

When investing you have to look at measurable units; of which, stigma is not one of them.

Well said. Plenty of stigmatized places eg. St Kilda etc have done very well.

That tipping point, .

Warning: reading too much Malcolm Galdwell can turn peoples minds into spaghetti.

Open your eyes a bit Jake. A mind is like a parachute. A closed mind won't help you understand markets.

BTW I'm interested in what are you buying yourself? Rather than just selling it, you DO own property don't you?

 

[HD_ACE]

Oneworld used to have alot to say about the area.
If i remember correctly sold all his perth stock and invested it in frankston.

He Hasnt been around of late.

Cheers

 

[Aaron_C]

Well said. Plenty of stigmatized places eg. St Kilda etc have done very well.

On the flip side, people have been saying that Footscray is due to for gentrification. They also said that 20 years ago - it is still a **** hole. The science is not to get in too early as all money has opportunity cost. When I search for property I don't even consider Frankston in my criteria - and I am not alone in this respect. Less potential buyers -> less demand -> less growth.

 

[grand dad]

On the flip side, people have been saying that Footscray is due to for gentrification. They also said that 20 years ago - it is still a **** hole. The science is not to get in too early as all money has opportunity cost. When I search for property I don't even consider Frankston in my criteria - and I am not alone in this respect. Less potential buyers -> less demand -> less growth.

Well, you own property in Richmond don't you Aaron? That suburb was once reviled as a basket-case, a place drug sellers and refugees called home. Its changed quite a bit hasn't it? I daresay you have done rather well by taking a contrarian view. If you had done so 15 years earlier, when Richmond was seriously underpriced, you would have made an even bigger killing.

When I search for property I don't even consider Frankston in my criteria .

Perhaps you should! Imagine if you had bought up Richmond when that suburb was considered to be a bin for undesirables. Sometimes getting in early CAN make a huge difference.

The beauty of Frankston and Seaford is that around half of existing houses are subdivisible. Like bait for sharks, this WILL attract developers. With new developments, gentrification WILL follow. That these two suburbs are beachside will help.

My understanding is that a good percentage of new housing is being bought by retirees. The Bogans are slowly moving inland, where housing is cheaper.

 

[Jake Milne]

What I am saying is that it is poised to be a developers paradise. The suburb will change as old houses are razed and replaced with smart new units.

Yes, I agree, as mentioned previously, development is a viable option in this area. Buy and hold is not.


Well said. Plenty of stigmatized places eg. St Kilda etc have done very well.

Thank you



Warning: reading too much Malcolm Galdwell can turn peoples minds into spaghetti.

Never read a thing from Mr. Galdwell, I've heard he has interesting opinions however.

Open your eyes a bit Jake. A mind is like a parachute. A closed mind won't help you understand markets.

BTW I'm interested in what are you buying yourself? Rather than just selling it, you DO own property don't you?

I was just about to watch a Disney movie since I had the urge to feel like I was 5 years old again... but then I decided I would just read your last two comments. ...grand dad


.

Thanks for the feedback, I'm not sure what you mean by "just selling it?

I do own property, I'll pm you a short list; it's not for public viewing

 

[grand dad]

Thanks Jake. Good to see that you consider Frankston to be a buying opportunity for developers. If it's good enough for a developer, then surely a canny investor can buy in cheaply and, after a few years sell to a developer?

You PM'd me a list of property. Do you actually own these or are these what you have bought for your clients in your capacity as Buyers Agent? Very interested to see what you actually own yourself, if you would be kind enough to share.

 

[Jake Milne]

If it's good enough for a developer, then surely a canny investor can buy in cheaply and, after a few years sell to a developer?

Sure, even better if that canny investor got plans and permits...

You PM'd me a list of property. Do you actually own these or are these what you have bought for your clients in your capacity as Buyers Agent? Very interested to see what you actually own yourself, if you would be kind enough to share.

It was both, another pm to clarify.

 

[pieman]

Some negatives about franganastan (from someone who was an under bidder for a block of 6 a few years ago near the station)

St Kilda is full of 1880's Victorian mansions that have been turned into flats - I don't see many street scapes like that in franganastan or it's neighbouring suburbs
St Kilda was/is always close to pt infrastructure like trams/trains
Richmond has pretty single front Victorian houses and it's 10 minute walk to the city with loads of infrastructure

Franga has some good points and I'm a fan but I've been wrong for a decade with its gradual rise to fame. The train, beach and retail are hard to beat but it's got a long way to go. I'd much rather buy small in stkilda or Richmond as I know they'll always be gold. Btw my grandfather owned 5 x Vic terraces at 200quid each when there was 2br in each and a family of 8. A small tap for water at the rear of the block completed the 3rd world conditions

 

[TMNT]

http://www.news.com.au/finance/real...-kitchen-or-roof/story-fndban6l-1226784271824

here is the property in question

http://www.realestateview.com.au/Re...roperty-Details-sold-residential-6257211.html

even though i am a short drive to frankston, im not familiar with frankston south prices,

is $511k for a block a good price??

I am still trying to work out whether the unintended intention of the article is

"wow, look how good this guy has done"

or

"wow, look how little idea this guy has"

or

"wow, look at how dumb and how much $$$ he is going to lose!"

 

[grand dad]

He has bought a 4 unit development site in one of the best parts of Frankston for a price well under the REIV Melbourne median price of $595,000

After being ignored and maligned for so long, Frankston is at last playing catchup with the rest of the market.

The big money is in development sized blocks. The bottom two recently-sold links would have easily doubled in the last 5 years, when they would have been sold for close to $300,000 or less. Hardly a return worth laughing at.

http://house.ksou.cn/p.php?q=Frankston&sta=vic&id=285041

http://house.ksou.cn/p.php?q=Frankston&sta=vic&id=293772

 

[TMNT]

is this one any good?

http://www.realestate.com.au/property-house-vic-frankston-115301095

good size but weird shape and right next to freeway

 

[grand dad]

http://www.news.com.au/finance/real...hotspots-in-2014/story-fndbalka-1226783863132

In the above link of today, Frankston was mentioned as a battler-suburb with plenty of upside potential. Back in 2008, Frankston was priced as cheaply as Sunshine. These days Sunshine has shot up (despite all the negative talk of crime and it being an ethnic ghetto). In contrast Frankston has lagged behind, despite having excellent infrastructure including a branch of Monash University. The malevolent, nasty talk about ethnic enclaves like Springvale, Sunshine etc does not apply to Frankston, its is predominantly a "white" suburb.

Barely 2% of Melbourne's houses are subdivisible, according tothe Valuer General. The figure for subdivisible properties in Frankston and Seaford is closer to 50%. Definitely a developers paradise. Its catch-up time for Frankston. For those who are not ashamed to buy into working class suburbs, the upside is great, especially for development sized blocks.

 

[grand dad]

is this one any good?

http://www.realestate.com.au/property-house-vic-frankston-115301095 good size but weird shape and right next to freeway

In theory, possibly a 3 unit development site STCA, with an immaculate house. No freeway noise. And its selling for a price well under Melbourne's REIV median of $595,000. Even if you are not a developer, buying and holding this will only result in decent long term capital gain. Pretty hard to go wrong at this price despite the wonky shape of the block.

Be aware that offers are invited "above this price". This is a marketing strategy and it may well be that they do not accept lowball offers. Keep hunting - there are stil plenty of bargains to be had if one looks hard enough. They don't last for long in the current hot market.

 

[TMNT]

In theory, possibly a 3 unit development site STCA, with an immaculate house. No freeway noise. And its selling for a price well under Melbourne's REIV median of $595,000. Even if you are not a developer, buying and holding this will only result in decent long term capital gain. Pretty hard to go wrong at this price despite the wonky shape of the block.

Be aware that offers are invited "above this price". This is a marketing strategy and it may well be that they do not accept lowball offers. Keep hunting - there are stil plenty of bargains to be had if one looks hard enough. They don't last for long in the current hot market.

I think you put too much emphasis on median price of melbourne,

anyway, a 620sqm block with a house nearby sells for anywhere between 290 and $340k, so you essentially get a 300 sqm block extra for $40k
on the assumption you get it for $380k

 

[grand dad]

I think you put too much emphasis on median price of melbourne,

anyway, a 620sqm block with a house nearby sells for anywhere between 290 and $340k, so you essentially get a 300 sqm block extra for $40k
on the assumption you get it for $380k

I see your logic. Cheap is cheap and you spotted a beauty. I just got off the phone with the agent. He says he won't write down an offer of $380,000. "Mate the market is picking up fast, you have to offer something with a four in front of it if you want to be considered".

Barely a year ago, Frankston agents were a lot more humble and willing to sign-up all offers. There has been a sea change in attitude.

The higher the rest of Melb moves, the more the "bounce back" in cheaper suburbs like Frankston.

 

[TMNT]

I see your logic. Cheap is cheap and you spotted a beauty. I just got off the phone with the agent. He says he won't write down an offer of $380,000. "Mate the market is picking up fast, you have to offer something with a four in front of it if you want to be considered".

Barely a year ago, Frankston agents were a lot more humble and willing to sign-up all offers. There has been a sea change in attitude.

The higher the rest of Melb moves, the more the "bounce back" in cheaper suburbs like Frankston.

oh really? I dont know that agent but yeah agents in teh past have generally been ok. I would have said why put down a figure that you arent even going to present!, but the agents dont care as someone will most likely offer what they want so no skin off their back


over the years, most of them to me have been surprsignly ok, but there are a few arrogant bogans