Frankston prices increased???

bobbiemenzies said:
Sounds like sour grapes that you don't have a spare $1m to invest. :D

Druggies? Do you work for the police and keep in touch with local stats do you? I've seen drug paraphanalia on the street in Vaucluse & Double Bay. Prices there went up a lot since I saw the syringes back in 1990.

Pray tell us where we should park our money old boy. And if you don't have any positive investment ideas, why bother posting at all?
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If I had a spare $1m, I would not invest in that area. If you have read my previous posts, you would recall that I am positive about Frankston. But there are areas, I would not invest. So old boy, just out of interest, how far from Frankston do you live? I am pretty well travelled around Melbourne, but I dont know where Vaucluse & Double Bay are?
 
pickle pickle said:
Thy are in Sydney.
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Durrrrrrr. That aint Melbourne. I am curious where the old boy Bobbbbbie lives. I dont believe its in Melbourne nor the bayside area of Melbourne. I reckon he is a blow in who has no idea of Melbourne or Frankston for that matter. He has probably read a Ryder report or something and now thinks he is a Frankston bayside expert.
 
Agree some of that area is the worst in Frankston. Stanley st would be about as bad as it gets but I have seen drug deals in Frankston station at 10 in the morning. Walk round the shops at Frankganistan, its as rough as guts.
I have also seen plenty of girls on Grey st stkilda at any old weekday arvo and i own property round there too and can still get a tennant and the growth has been ok.
Horses for courses mate, if the yields there and the chance for growth is there and some add value potential, I will buy in Geelong, Dandenong, Frankganistan wherever
 
pieman said:
Agree some of that area is the worst in Frankston. Stanley st would be about as bad as it gets but I have seen drug deals in Frankston station at 10 in the morning. Walk round the shops at Frankganistan, its as rough as guts.
I have also seen plenty of girls on Grey st stkilda at any old weekday arvo and i own property round there too and can still get a tennant and the growth has been ok.
Horses for courses mate, if the yields there and the chance for growth is there and some add value potential, I will buy in Geelong, Dandenong, Frankganistan wherever
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I agree with everthing you said. Not sure i like the term 'Frankganistan'. Location wise that area is good - walking distance to Station, TAFE etc. But would you really pay nearly $1m for a large block with 5 units in that area NOW. There are alot of units in that area with NO street appeal. Most are damn well ugly. It will still take a very long time before that area gentrifies.
 
I like that precinct

Personally, I consider the amenity and nearness of infrastructure to make that pocket north of Beach Street and west of the freeway to offer the best chance of gentrifying and cap growth.

However, as posted earlier, not at those yields. There is plenty of town house development happening in that precinct so precedent is assured.

My feeling (and I'm only commenting on that precinct beacuse that is where I own and am most familiar with) is that with rent rises becoming more sluggish to the $$$ capacity of the demographics, and yields looking less attractive, as FHB activity wanes, I am not so sure that investors (savvy ones at least) are going to drive that area up too much higher in the near term.

I still believe it has great potential as infill land acquisition with rental boxes on them for future develpment, however holding costs will become prohibitive due to he afforementioned softer yields.

I feel that early in to 2010 with a couple more rate rises, the heat of that market (and it has had a stellar run this year) as has the northern areas of Frankston will taper. Better pickings (and more leisurely at that) should ensue.

I could be wrong of course. :p ;)
 
I was bidding, yeah, but wouldnt pay anywhere near that money for that block. As mentioned I had done alot of work on that, in fact i was crunching numbers at 3 in the morning in my sleep:eek: such was my enthuiasm.
Without giving to much away i liked it - for the right price;)
 
Player said:
Personally, I consider the amenity and nearness of infrastructure to make that pocket north of Beach Street and west of the freeway to offer the best chance of gentrifying and cap growth.

However, as posted earlier, not at those yields. There is plenty of town house development happening in that precinct so precedent is assured.

My feeling (and I'm only commenting on that precinct beacuse that is where I own and am most familiar with) is that with rent rises becoming more sluggish to the $$$ capacity of the demographics, and yields looking less attractive, as FHB activity wanes, I am not so sure that investors (savvy ones at least) are going to drive that area up too much higher in the near term.

I still believe it has great potential as infill land acquisition with rental boxes on them for future develpment, however holding costs will become prohibitive due to he afforementioned softer yields.

I feel that early in to 2010 with a couple more rate rises, the heat of that market (and it has had a stellar run this year) as has the northern areas of Frankston will taper. Better pickings (and more leisurely at that) should ensue.

I could be wrong of course. :p ;)
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Player, you are reading my mind, I couldn't have put it any better.

the only concern I have is that yes, the rate rises, unemployment etc, etc. on paper do indicate a possible crash/fall/stablizer (whatever you want to call it), but due to the supposed recovery of the economy portrayed by the media (yes the media often do get it very wrong) I feel that by waiting, you might miss the train ....

once again, my economical/sensible side of my gut says, yes, taper off, but my instinct gut says it will continue to rise as per the average melbourne market rate.... as after the first rate rise, I thought that things wouldn't change, 2nd rate rise, ithought things would slow down and I was a little shocked to see that another rate rise has arleady been predicted for christmas, and things don't seem to be slowing down at all, so me thinks that maybe unless it gets to 8-9%, things won't change at all......

player, whats your definition of taper, and what do you think is going to happen?
 
Slowly does it

I am no economist PM, however my intuition and gut feel (based on what I see, hear and know of that area.............and I don't profess to know it all.......where is Harris ;) ) is that with the purported aggressiveness that the RBA is hinting it will raise rates, I cannot see prices moving too much further north (for now)

Will they soften or track sideways or plummet? I don't know. I doubt they will plummet; They may come off 5-10 % and even if they tracked sideways, there will be more timely pickings IMO from OO distress and with softer yields more balanced and restrained investor activity in the short term.

I reckon, as prospective buyers, we will have more time to transact and not be fearful of "missing out" as some properties are taken off the market very shortly after listing by over-exuberant FHB to time their grant in the recent past and investors who feel they may miss out.

For the record, I actually put my foot on the next door property to mine back in March this year and eventually rescinded the contract due to SIGNIFICANT building faults. Whilst the intention was to amalgamate the sites, it was handy to have but not imperative. Mine is the corner so whilst it was a nice adjunct piece of dirt, I was not desperate to furnish the required (and fairly immediate) repairs/remedies that equated to approx two years rent :eek: as this was a super fund purchase and I was not to develop them for at least 10 years.

Having let it go, in April another in Stanley Street (which is gentrifying) caught my eye.........that one I missed. I forget the number however it was 650 sq m (sold for a pittance of 260 K only 7 months ago) and was more than rentable with a near new colorbond roof...........it is now ground zero. At 130,000 per site for two townies, whoever bought that has done well.

My opinion (and it is only my opinion) is that the air from that balloon will soon escape and there will be more leisurely pickings.

Pieman, I am also waiting for rates to rise.....I'd be happy for 0.5 % before Christmas, however even if not, by May-June next year we will have a cash rate in the mid four's I reckon...........eyes wide open and be ready to pounce only when the deal ticks the investor's boxes and suits their pockets. I am also looking for another multi, however in different areas.

Happy hunting folks :)

Harris where are you? :confused: .....your thoughts please.
 
I am in the consolidation phase and cant offer any gut feel opinion. My take is based on the following:

1) Close to unanimous commentary suggests that the property values will keep rising in the short to mid term owing to all the factors that have been discussed here numerous times. Population growth, low interest rates, lack of supply, growth in economy, peaking unemployment, global economic recovery and the associated positive vibes on all things investing, etc.

2) Frankston market along with some outer suburbs has proved many times to have its own cycle, independent of what Melbourne's median might be doing. When the entire Melbourne property prices were appreciating in 2001 -2003, Frankston had minor growth but once inner and middle rings settled, Frankston took off and gained 20% per annum for close to 2 years in a row. Similarly it took off again in 2006 and 2007 before the inner melbourne had its meteoric rise in 2008. Frankston values are again up around 15% this year - Frankston North over 15% whereas Frankston South has relatively lagged in that growth.

3) On the negative side of the spectrum, I believe majority of the very recent growth in Frankston area was driven by FHB and with the winding down of FHB grants, it might slow down any further growth. On the other hand, investors' interest partly driven by reports from "so called" experts like Terry Rider and Margaret Lomas including its beachside location, still low median values, gentrification and new infrastructure including marina can prove to provide significant resilience to any downward pressures on property values there. Investors (local and interstate) were the main demographic responsible for the increase in values in Frankston & Frankston North in the last growth spurt of 2006 & 2007, so that demographic alone has the ability to significantly alter the median values of the suburb without needing much contribution from FHBs.

4) I never buy the "bad areas and drugs impeding growth" argument. My purchases in Frankston North (with boots on electric wires in the street where I bought when I purchased in early 2006) is up 70%. Similarly looking at the examples of all "once drug & crime ridden" suburbs like Footscray, St Kilda, Broady (still has high crime and drugs), Clayton, Highett have had massive capital growth and these suburbs are still considered solid investment (perhaps excluding Broadmeadows).

5) There are arguments regarding potential bubble and its overall impact on the future growth in property values. If there is a bubble, then we are all stuffed (to a degree) ! The key here is to ride out any short term fluctuations or dry period with no growth by actively looking at increasing the yield.

Personally speaking, I am looking at consolidating my purchases by improving the yield and by developing some of them into townhouses. One thing I know for sure is the boost that the portfolio gets with one or more years of double digit growth and any short term pain of monthly shortfall is well and truly forgotten when that happens. Frankston gets spurts (hallmark of most outer suburbs with zero growth for a number of years and then massive growth inside a year or more).

Being out of the market and hoping for values to fall is not a sound strategy in my opinion - It is impossible to predict when property values will rise and when the next growth spurt is due. All of us who have been doing this for a while have experienced that. Increase in 0.5% of interest rates either can be a dampener for Frankston or it might have zero effect and the values there might go up another 20% in 2010. Majority of experts get it wrong, most of the time.

My counsel would be for investors to look for properties with 5% + yield and then be prepared to spend a couple of grand for cosmetic face lift with a view to improve that to 6% or close.

If they can do that, it will be a much better and sound strategy than hoping for rates to go up and then wanting to pick an 'ideal' property at depressed values. If the values keep going up in the short term as predicted then most likely they will price themselves out of the market by waiting. The cost of the monthly shortfall on a property yielding 6% or close over say 2 years will be much less than the missed opportunity with a growth spurt of even 10% in a year.

Harris







Player said:
I am no economist PM, however my intuition and gut feel (based on what I see, hear and know of that area.............and I don't profess to know it all.......where is Harris ;) ) is that with the purported aggressiveness that the RBA is hinting it will raise rates, I cannot see prices moving too much further north (for now)

Will they soften or track sideways or plummet? I don't know. I doubt they will plummet; They may come off 5-10 % and even if they tracked sideways, there will be more timely pickings IMO from OO distress and with softer yields more balanced and restrained investor activity in the short term.

I reckon, as prospective buyers, we will have more time to transact and not be fearful of "missing out" as some properties are taken off the market very shortly after listing by over-exuberant FHB to time their grant in the recent past and investors who feel they may miss out.

For the record, I actually put my foot on the next door property to mine back in March this year and eventually rescinded the contract due to SIGNIFICANT building faults. Whilst the intention was to amalgamate the sites, it was handy to have but not imperative. Mine is the corner so whilst it was a nice adjunct piece of dirt, I was not desperate to furnish the required (and fairly immediate) repairs/remedies that equated to approx two years rent :eek: as this was a super fund purchase and I was not to develop them for at least 10 years.

Having let it go, in April another in Stanley Street (which is gentrifying) caught my eye.........that one I missed. I forget the number however it was 650 sq m (sold for a pittance of 260 K only 7 months ago) and was more than rentable with a near new colorbond roof...........it is now ground zero. At 130,000 per site for two townies, whoever bought that has done well.

My opinion (and it is only my opinion) is that the air from that balloon will soon escape and there will be more leisurely pickings.

Pieman, I am also waiting for rates to rise.....I'd be happy for 0.5 % before Christmas, however even if not, by May-June next year we will have a cash rate in the mid four's I reckon...........eyes wide open and be ready to pounce only when the deal ticks the investor's boxes and suits their pockets. I am also looking for another multi, however in different areas.

Happy hunting folks :)

Harris where are you? :confused: .....your thoughts please.
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Have the price gone up that much ??

Hi,

I bought a RP AVM report online last week and the estimated value for our IP is 50% incremental.

Pls share with me is the estimated value for the property is over price or it is genuine increase at Frankston ??

cheers,
Ming
 
sorry, more info;

IP bought in mid 2007 at 380K at frankston. last week bought RP report online, the estimated value is 570K.

was it over estimate ? or price has gone up that much..

cheers
 
Go ask the provider of the Report. I doubt it would have gone up 50% in that time. Have a look at realestate.com.au to assess the current value.

Is the property a development site?
 
mingling said:
sorry, more info;

IP bought in mid 2007 at 380K at frankston. last week bought RP report online, the estimated value is 570K.
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I don't like to say that anything is "impossible" but I find it hard to believe. Are you willing to share the street name? Some properties have certainly increased since mid 2007 but I'd be hard-pressed to think of any that have risen anything near 50%.
 
OK, Denbigh Street is definitely one that would be showing good growth as it's one of the better streets. It would definitely be more than what you paid, but I think $570 still sounds high....Unless you have a gigantic piece of land (4 unit site). I would be holding onto it if it were me.
 
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