Frankston VIC - Please Help

[hammond26]

Hello

We are in Perth WA and are looking at investing in Frankston Vic, does any know what's happening in Frankston, Is it a good place to invest, is it going to contuine in growth or do you think it is going to crash and burn, has it already had its boom, what are rentals like, do they get good money? and is there too many rentals for the area or not enough.... If anyone has an info i would love to hear from you,,,

Many Thanks

 

[Peter Parker]

Hello

We are in Perth WA and are looking at investing in Frankston Vic, does any know what's happening in Frankston, Is it a good place to invest, is it going to contuine in growth or do you think it is going to crash and burn, has it already had its boom, what are rentals like, do they get good money? and is there too many rentals for the area or not enough.... If anyone has an info i would love to hear from you,,,

Think of it as being a bit like Rockingham, with Frankston Nth being more like Kwinana and the Mornington Peninsula like how Mandurah used to be.

The socio-economics and demographics are similar, with both places attracting large numbers of UK migrants in the 1960s.

The main difference is that Frankston has no heavy industry to its north but already has the railway to the city. Rockingham has more beach in surrounding areas like Safety Bay & Shoalwater due to the peninsula.

But in Frankston one can buy a house within 20 minutes walk of the train, beach and CBD, whereas in Rockingham you only get one of those choices.

Peter

 

[hammond26]

Hey

Thanks for your reply.... Do you think Frankston is a good investment area??? or do you think it has already had its boom, We have heard rumors that they are putting in a marina and that this will push prices up... is this correct???

 

[alexlee]

Hammond, why not just run a quick search on www.realestate.com.au and www.domain.com.au, and get an idea for what the yields are like, how many listings there are, etc? Or to put it another way, should you be influenced by our opinions as to whether it's a good area or not without doing any research on your own?

I mean, what do you mean by a 'good investment area'? Are you after units, houses, old, new, 5 year or 20 year time horizon? What's your budget? What type of property (new with minimum hassles, older with subdivision potential) are you after? Unless you either tell us those things or you do your own research, you can't say whether an area is a 'good investment' or not.
Alex

 

[DavidMc]

I mean, what do you mean by a 'good investment area'?

Alex has raised some good questions. Traditionally, areas like Frankston have their 'catch up spurts' but I'm not sure how 'year in year out' consistent the growth is. I think I still have the Herald Sun article showing that Frankston topped the state for growth one year in the last 3, something crazy like a 44% increase in the median price. This to me signals that 'a spurt' has recently occured.

I was born in Frankston (or Franga as I colloquially know it) and have queried many friends and relatives of the area about past purchase prices when I first start my investing career. My first IP is right near Frankston and the family I purchased it from saw no growth for the 9 years they held the property, then for me it boomed for the next 3 years. The last 2 years have been pretty flat though for me (it came in at another $5k higher over the last year and a half).

Still, the area has a low entry point and does have good fundamentals. My view is if you can get in just before one of these spurts then you'll be doing very well.

 

[Ms Jade]

Hi Hammond26,

We have a couple of houses in Frankston South. The prices went mental in the 18 mths up to the end of the last boom (Sept 2002) & then went nowhere - much like the rest of outer Melbourne. I would say "YES" to your question about whether it's a good place to invest. The marina has been approved but the process is slllooooowww & they haven't even got a developer yet. My feeling is that it will happen eventually but I'm not holding my breath just in case. Here's what I feel more confident about:

- The Eastlink freeway will be open by the end of 2008, which will cut transit time to Melbourne CBD from 1 hour to about 30 mins (from what I can see on the website). There is already a train line of course, so Frankston is well serviced from an infrastructure viewpoint

- A lot of money has been spent developing the foreshore & the beach is fantastic. To be able to live so close to the water 30 mins from Melbourne for under $300k is a bargain in my book

- The state gov't & local council has earmarked more funds to develop the Central Activities District including the Jamie Durie - led development of the old Peninsula Centre (ugliest building in Melbourne) into a swish retail & apartment complex.

- Gandel's have completed the central entertainment complex of cinemas, bowling alley, pub & resturants for a reputed $300m not long after the opening of the new wing of the Bayside Shopping Centre which is now nearly double the size.

Regardless of "the market" in some respects, I think the fundamentals in Frankston are sound in the medium -long term (5 years +). Rental demand is strong but the demand is for houses rather than units. Your best option would be a 4 bedder in Frankston Central / Frankston South / Frankston East / Frankston Heights/ Marylands / Karingal (That's in my personal order). It's a large area!

Good luck.

 

[see_change]

It's interesting looking at what happens to lower end areas .

Most of them have nothing particular geographical to rediem them . eg Logan , Mt Druitt . Some are near the water , most arn't .

Redcliffe was considered Deadwood and some of the Sydney's northern beaches have been considered less than desirable in the past . These have done well when the locality has tipped the balance over the perception of the area and people with higher expectations have started buying in these areas becuase they're the cheapest close to the water and with that movement the areas have changed their nature.

I spent a fair bit of time in the 70's sailing on Port Phillip from the various sailing clubs including Frankston , as well as seeing sandringham play Frankston in the then VFA . Lived in Sandringham .

Geographically I can't see why Frankston can't move up market (to middle market in the longer term. Might take a while but it's got a chance compared with Mt Druitt and logan.

See Change

 

[Monopoly]

Hello

We are in Perth WA and are looking at investing in Frankston Vic, does any know what's happening in Frankston, Is it a good place to invest (YES) is it going to contuine in growth (YES) or do you think it is going to crash and burn (YES, EVENTUALLY LIKE ANYWHERE ELSE; NOTHING LASTS FOREVER YOU KNOW), has it already had its boom (YES & NO, SOME POCKETS HAVE, SOME YET TO GET THERE), what are rentals like (AVERAGE), do they get good money? (SEE PREVIOUS REPLY) and is there too many rentals for the area or not enough (HOW MANY IS TOO MANY?? DIFFERENT POCKETS HAVE HIGHER RATIO OF OWNER OCCs vs RENTALS BUT NO MORE OR LESS THAN OTHER COMPARABLE BURBS).... If anyone has an info i would love to hear from you,,,

BTW.....I hear it's awesome!!!

 

[Rick Traberg]

I agree with Monopoly

My 2 hot spots for melbourne for average or under average melbourne prices are Frankston without a dought will go crazy over the next 5 to 10 years also Footscray .

 

[kissfan]

BTW.....I hear it's awesome!!!

Frankston without a dought will go crazy over the next 5 to 10 years

Hi Monopoly (great to see you back) & Rick.

I hope your positive views of Frankston include Carrum Downs

Regards
Marty

 

[Monopoly]

Hi Monopoly (great to see you back) & Rick.

I hope your positive views of Frankston include Carrum Downs

Regards
Marty

Thanks Marty!

Carrum Downs?? ABSOLUTELY!! I was being very "tongue-in-cheek" with the "I hear...." comment. As many here will know I am a huge fan of "The Pen" from its foreshores to its inland boundaries; I love em' all!!

And why wouldnit I?? IMO it's gonna pay off big time. Okay so it may not happen as quickly as some might like, in fact with the prolonged property lull it is not unrealistic to estimate this could be YEARS away, but (like the clairol ad, I believe eventually) "it WILL happen"!! And when it does, those areas that have boomed will have their day again (albeit not as much as those yet to take off); the BOOM will engulf everything surrounding this 190km coastline.

For those who don't believe me?? Hey, that's cool...you needn't take my word for it; I only invest there!!

Cheers,
Jo

 

[Michael Yardney]

Hi Monopoly (great to see you back) & Rick.

I hope your positive views of Frankston include Carrum Downs

Regards
Marty

Interesting predictions.

My caution would be the same was said about these 2 suburbs and for the same very logical reasons in the early 2000's and they underperformed.

And again in the mid 1990's and they underperformed and in the mid 80's and they underperformed.

the best predictor of future perfomance is past performance and the longer history of capital growth the better the predictor.

 

[Peter 14.7]

Frankston may become like Redfern in Sydney.

Some parts very desirable and some parts no growth and dead zones.

However having visited family there a few times recently it is not all cafe strip and smart shopping. Lots of low to no income types. No architecture of merit.

Footscray is actually more Redfern. Old homes of value, close to the city, cafe lifes style, older residents dying out or moving away.

Fankston is ok for development sites but not huge CG in the short term IMHO.

My two cents, Peter 14.7

 

[Peter Parker]

the best predictor of future perfomance is past performance and the longer history of capital growth the better the predictor.

Michael, if that is true how can this explain the stellar performance of inner-northern suburbs like Brunswick which was most certainly not highly regarded between say the '50s and the '70s?

At that time the inner suburbs were passe and all the development was happening in the Clayton - Oakleigh - Waverley area. The outer areas were beating inner suburbs for capital growth and the whole culture of the time supported the outer suburbs (especially for 'normal people just like us'). At one time a house in Clayton (or even Springvale) was dearer than one in Brunswick and preferred by most.

For the last 15 years the shoe has been on the other foot, with the inner suburbs doing well. The reason why their growth looks so good long-term is precisely because they were semi-industrial dumps 30 - 40 years ago and no one wanted to live there.

Conversely newish suburbs like Dandenong North were suprisingly expensive in the '70s, so it's no mystery why its capital growth has been very poor in the 30 years since. Today's over-capitalised McMansion belts may show similarly poor growth in the future once the population ages and the low-fee private schools are less of a drawcard, while closer in places like Doveton have stagnated long enough to become development opportunities.

So with the inner suburbs bad places to live and the outer areas overcapitalised, it's no suprise that this leads to figures that show that inner has been better over the long term. This is useful for historical accounts, but its value as a predictive mechanism is limited in my view.

Instead I am inclined to favour explanations based on actual events and not blind linear assumptions like 'it consistently did well years ago so it must do well tomorrow'. Even though I've seen figures that make a compelling case for inner suburbs, there must be a deeper reason behind it.

In the case of the inner north and inner east, paradoxically it was the deindustrialisation of these areas that caused their residential value to rise even though the loss of jobs caused much local unemployment and hardship.

This was firstly industrial change, where factories moved to large scale plants at Dandenong or Clayton from the '50s. From about the mid-70s the remaining small-scale factories in inner suburbs shut down due to the rise of Asian manufacturing and tariff cuts.

However this made these areas more liveable and thus fostered these areas high capital growth performance for residential purposes. But for a long time these inner areas were in transition and were neither highly liveable nor desirable (though they were sometimes exploited by developers wanting cheap land for 12-pack flats). Investors who weren't developers would have had to hang on for a long time to see the fruits of their investment while those in outer areas may have had faster gains.

Peter

 

[Monopoly]

the best predictor of future perfomance is past performance and the longer history of capital growth the better the predictor.

Hmmm....I guess this logic would not explain remarkable growth in areas such as Brunswick (already mentioned) and Ashburton, to name but two!!

I don't dispute that the past is a good "indicator" but it is by no means a diecast which one should use to set their future in stone!!

True, many areas surrounding Frankston (ie. Carrum Downs) and even pockets within itself, have long been cause for debate, and even all the bagging of their potential have I once doubted their ability to out perform their historically more affluent bayside neighbours. In fact, if I was to listen to a tenth of the hog-wash that was bantered around about property these days, especially by so-called "experts" I would not be in the position I am today. I don't make it a habit, actually I avoid it at all costs, the practice of listening to other people's speculation; I believe in doing my own homework, which includes looking at ALL angles ie. past, present and future trends!!

I had (up until joining this (and once PI.com) NEVER read a property investment book; although I have spoken to a few of their authors) attended any seminars, investment "get togethers" or was even aware that there were kindred spirits who shared my passion!! IMO there are NO EXPERTS; we are all capable of making our own informed choices, as long as we put in the hard yards!!

In property, as in life, there will ALWAYS be anomolies, and if you're smart you'll know where and how to tap into them!!

As I said before (and repeatedly) about Frankston and its neighbours, it will do well, but it will NOT be overnight. I don't PREDICT, I'm not that talented. But what I do do, is not hold onto the past as a means of fortelling the future!! I made that mistake once and bought a very expensive inner Melbourne property which was sold at a loss because of an over abundance of units that were later developed in the area!!! Pfftt.....past predictors....so much for that theory!! No matter how rosey the past, if someone throws a spanner in your present, your future can quickly turn to #@$%&!!

 

[Fat Lizard]

I currently live in Carrum Downs, next door to Frankston, and have also lived in Frankston, and, Mornington, which is a little further down the Peninsula (and much nicer in my opinion).

Some areas of Frankston, such as Frankston South and Karingal, are desirable, and can command large prices.

Other parts of Frankston, eg 'The Pines' (low cost ex-Housing Commission) in Frankston North cater to a lower socio-economic group.

For some time Frankston has been looked on unfavourably, due to it's youth/drug problems, yet moves are underway to try and lift the general mainstream of Frankston above this.

The are some areas in Frankston, and surrounds, such as Carrum Downs, I would consider, other areas not.

Lesson: The extremes with Frankston are exactly that, extremes, so undertake your research, including visiting if that's possible, and exercise due diligence.

Fat Lizard

 

[natedog]

markets within markets...

Hi Guys,
As alot of forumites have stated before, there are always markets within markets.

The wife and i have our PPOR in carrum downs and are about to settle on a newly built IP built on land we purchased last year, also in carrum downs, ( i can almost here the "why would you build a new house to rent out in THAT area??" are you crazy???)

The answer to that is......it has 4 bedrooms, have a quick squiz on realestate.com and there will probably be 1 or 2 4 bedders for rent only, thier is a lack of good quality 4 bedroom houses in carrum downs/skye for rent. local RE have waiting lists for these properties. And although ours is brand new built full retail it will still have a yield that is close to 5.5%, big depreciation benefits, ( love the new 200% diminshing value ruling!!!) and the house itself works into our LONG TERM plans.

This is in an affordable suburb surrounded by new housing, alot of them less than 4 years old (north of hall road), 8 and a half minute trip to the beach, beautiful carrum beach.

Carrum downs still has some of the cheapest residential land available within 35 kilometres of melbourne, and 6km (straight line) of the beach.

either side of it in every direction land only gets more expensive.

I like it and i like living here too

Cheers all

 

[Peter Parker]

Carrum downs still has some of the cheapest residential land available within 35 kilometres of melbourne, and 6km (straight line) of the beach.

This may represent genuine value (there'd be many worse places to buy) or could be an indication of the lack of services in the area.

Take public transport, for example (as it's likely to be more important for renters than owner occupiers).

There are no direct buses to the nearest station at Seaford. To get to the city you need to backtrack via Frankston and spend an hour on a train. If you do well, the trip will take 90 minutes, if you do poorly and just miss a bus it's nearer to 2 hours. As opposed to under an hour for the whole trip at somewhere like Carrum or Chelsea (which are dearer but also bayside).

Carrum Down's local bus route (832) runs every 45 minutes during weekdays (even peak hour), 60 minutes on Saturdays and not at all on Sundays. If you worked in the city, you'd have to finish by about 6:45pm to be sure of getting the last bus home. You will spend many 20-30 minute waits at Frankston interchange and the route also passes through Frankston North/Kannanook area, reputedly Frankston's roughest area.

What about parking at a station instead? Carrum would be ideal since it's the last station in Zone 2. But the car park there fills up increasingly early, with many people taking advantage of the cheaper fares. Bad luck if your job starts after 8:30 or 9am. Also park and ride is only really useful if everyone's schedules in the household coincide.

It's true that there are few places cheaper than Carrum Downs. But there's also few places with worse public transport than Carrum Downs. Owner occupiers have shown that they are willing to put up with lack of services if it means getting a big house at a low price. But tenants can be more choosy, especially if the rental market softens.

Peter

 

[toony]

Carrum DOWNS

I dont particularly like Carrum Downs. As mentioned previously no decent transport and its out the back behind Seaford and Frankston North. I had some mates who lived there as it was cheaper (first homes) and they have all left there now.

I am very much bullish Frankston. I have invested in Sth Frankston near the football oval. Great spot walking distance to city centre, beach and hospital and there is even a cultural centre. The kids concert was there and its a great venue. I dont live in Frankston but if I did not work in the city i would. Frankston has everything (even a good university) and in my view is very much underrated.

With the marina and Eastlink as future projects, there is huge upside.

 

[natedog]

Hey again,

not to sure of how to use the quote option so i apologisefor the "" marks only...

Peter...you said...

"To get to the city you need to backtrack via Frankston and spend an hour on a train. If you do well, the trip will take 90 minutes, if you do poorly and just miss a bus it's nearer to 2 hours. As opposed to under an hour for the whole trip at somewhere like Carrum or Chelsea (which are dearer but also bayside)."

Valid points..if you work in the city...doesnt mean that everyone who rents or owns a house down here needs to travel to the CBD every day for work, or needs public transport, remember that frankston and dandenong although not glamorous are buzzing little semi cities that provide employment and the industrial areas around here also provide jobs. they are a 5-10 minute car trip away. Alot of tradie vans and utes parked in driveways around here aswell, self employed, working all over the place....not so focused around CBD for employment.

"But tenants can be more choosy, especially if the rental market softens"

At the moment its in reverse... i as a landlord can be more choosy...Now remeber i was talking about a particular type of property, market within a market.... new 4 bed rentals very scarce, waiting list for quality large homes = demand for this type of property, why would the market for this type of property soften?

Nathan