Growth area Melton, Brookfield Victoria

B

BlueToba

Hi,

Melton Shire in Victoria is in a growth corridor. 4th in terms of population growth.

I came across this article: http://www.parliament.vic.gov.au/im...s/subs/31_-_Melton_Shire_Council_Redacted.pdf

It seems that the area is struggling with unemployment. 3-3.7 jobs for one worker. The shire is concerned, and wrote a letter to parliament. What do you think of the area? It is in the growth corridor. Is anything going to be changing for the better?

I am looking at about 5 years from now, for a long term settlement in Brookfield. Will the situation improve? and why not?

Thanks
 
Its in a growth corridoor, indeed. That means its population is going to increase. Population increase sometimes leads to property value increase. Id argue that doesnt follow in this case because of lots of factors, but mostly because its a greenfields site. Why would somone in 2 years time buy your second hand house over the odds when they can spend less and build their own new property for a similar amount?

Im not dishing the area per se. It may have great rental yeilds, and there might be some established stuff with ptential for capital growth. But as a suburb, I dont think there is going to be much CG for the short to medium term.

Are you looking at a development site with this 5 year settlement date? Id be wary if this is your first try at purchasing a development site.
 
Though the population is rapidly growing, there's too much land and it's too far from the city to expect sensational CG+ in the short to medium term.

The only properties I would recommend are old brick veneers in the established areas - either in Melton itself within walking distance to the town centre or in Melton South within walking distance to the train station and shops. I wouldn't pay more than 230k unless I planned to subdivide or develop.

If you buy well or are prepared to do a small cosmetic renovation, you can manage CF neutral to positive. Keep in mind that prices have dropped over the past two years and may drop further.

Brookfield in 5 years... it's a gamble and I don't have a crystal ball so I obviously don't know how it will pan out, but I'd personally be wary.

Yes, there is an unemployment problem. There's no heavy industry in the Melton area and most of the jobs are in the service industry. Woodgrove (the mall) is expanding and that will create more retail and hospitality jobs but it's just a drop in the ocean.

Most work outside the Melton area and some don't work at all. I can only see unemployment worsening as more jobs are lost in surrounding areas.
 
@Tobe; thanks for this analysis. Regardless of my first or not, the numbers must stack up. And I am looking at 5+ years away.

What about the Toolern precinct that they are trying to develop?

Will there be enough amunition in Melton 5+ years away?

Any economists who live in Victoria??? :)

Thanks
 
ah yes, because economists get 14 of the last 2 predictions bang on.....

Whats so special about this offer your considering with a 5 year settlement?
 
If I was considering something with a 5 year settlement, Id run the numbers on its value today. For Melton I wouldnt bank on much capital gains within 5 years, so I wouldnt commit to paying much more than todays value plus maybe the nominal rental for the 5 years as a figure to start negotiating with.

So for instance, if house blocks in melton sell for $150k today, and you are considering buying enough for 10 blocks, Id say 1.5 mil minus the development costs/taxes etc is a figure to start with.
If you have to project/extrapolate that house blocks will sell for $200 in 5 years time for the numbers to work, Id be walking away.
 
The development is veneziane.com.au. It's a luxury estate. Price is already high, but cost is only in deposit bonds/bank guarantee.

If price does go up in 5 years, it's ok if we could sell. Question is will people buy luxury development in that area? where there is no shortage of land for now?
 
Anything luxury in Melton is just overcapitalisation. Most people with a budget above the Melton median would choose to live elsewhere. It's one of those "the best that I could afford" suburbs (just a comment - not an attack on anyone living in the area) and the market for that kind of development would be very limited IMO. As previous posters have also said, land is plentifiul in the area so there is nothing stopping anyone from buying a block and building a house exactly like they want. I would personally avoid the suburb.
 
Most people in Melton commute to Melbourne or Ballarat. Capital growth over the last 5 years has been neglitible compared to other opportunities.

It is a growth corridor, but that can also mean that there's lots more land being rezoned and opened up for development (which is definitely the case). Population growth will certainly follow this, but it's very easy to find examples of Melbourne satelite suburbs where developers have been building for over a decade, with an unlimited supply of land, resulting in negligible growth in actual value.

The outer west of Melbourne is probably not a great area to be aiming for captial growth simply because the supply of land is virtually unlimited.
 
To make any money you need the property to increase at least 20% in 5 years to cover all your costs and agents fees. They were making outrages claims that the properties may grow by 50% by the time you settle.

Be careful!!!
 
Have you researched what comparable properties sell for in Melton. I know Rowan claims that his properties are premium and is about 25% priced above other sites. But i feel his pricing is more than 50% more than similar buildings.
 
My focus is to analyse Brookfield for its growth potential. It's completely a financial and risk calculation. Thank you to everyone who responded. I think the summary is that many of you don't think there is a growth potential in the next 5 years because land is not scarce and this is a budget area.

So, if I use Caroline Springs as an example; can it not be repeated in Brookfield? By a good team of townplanning/architects? When you are not looking the site to begin to mature at least 5 years from now?
 
Problem with Brookfields is that it it is tied up with Melton. Caroline Springs had Deer Park, St Albans, Sunshine which are built up areas. People were selling up in areas like Sunshine, Footscray etc.. to move into new homes in Caroline Springs. Whos going to sell up to move to Brookfields? People from Melton?????

So if Brookfields is going to get the Capital Growth then you must be confident that Melton will as well. Dont expect Brookfields to get massive growth from its already high prices if you don't like the growth prospects of Melton. The growth and downturn will be linked between the 2 suburbs.

The thing i didnt like about the Rowan Burns offer is that you are NOT buying at a discount. They jack up the prices and then say they give you this and that, and what you end up with is still an overpriced product.
 
They also are pitching the FOSCARI luxury waterfront properties at Truganina.
From what i can find it looks like Truganina has the green light to go ahead with developement. its on the plan of the governments UGZ precint structure plan to be completed.
What do others think of this as an investment.? Is this sort of thing too risky for a 1st time beginning investor?
I think 250 lots 33 i think that are waterfront called Aqua.
land value supposedly $250K at todays value, discount of $70k so you pay $180K.

So from the above posts i am gathering that this sort of land value is overpriced to make it look like you are getting a good deal and discount.

Any advice or warnings or encouragement

regards
 
Just took a phone call from a "property mentor" from Rowan Burn's company. Very painful phone call as the guy basically had bought one option for one block of land, and was pitching himself to be a property mentor. His main selling point was the potential for capital growth, potential to be an employment hub in the future, an expected population explosion of 40k out of Melbourne through "overseas migration". He had poor understanding of migration policies, or economic factors that could potentially decrease the capital growth he was talking about. He also claims to have 2 other neutrally geared properties. If it is such a good deal, why doesn't he finance his other properties to buy more of these options instead of trying to sell it to me?
 
Rentwithpets said:
Just took a phone call from a "property mentor" from Rowan Burn's company. Very painful phone call as the guy basically had bought one option for one block of land, and was pitching himself to be a property mentor. His main selling point was the potential for capital growth, potential to be an employment hub in the future, an expected population explosion of 40k out of Melbourne through "overseas migration". He had poor understanding of migration policies, or economic factors that could potentially decrease the capital growth he was talking about. He also claims to have 2 other neutrally geared properties. If it is such a good deal, why doesn't he finance his other properties to buy more of these options instead of trying to sell it to me?
Click to expand...

Must say that i totally agree. Had very similar phone call/discussion and was told that all properties that investors had bought in the development were cash flow positive. When i pressed him if he had purchased into the development he sheepishly answered with, Yes i purchased one. My first thought was if they are all handsomely cashflow positive then why haven't you, the other mentors working there and even Rowan himself not purchased more or even purchased the whole development, especially if it is not taking money out of your pocket but putting a substantial amount in to your pocket.
Was also told back in early november that if i did not take up the option that there are "OTHERS" who are lined up ready to beat down the door for this deal. Well here we are a month later and he is still emailing me and calling to try to get me on board. We have all the door bashers gone?

Apparently they have until Dec 13 deadline to sell the remaining lots of their quota or the developer takes them back and some of the discounts they supposedly got are at risk.

Was also sent from them that council has recently approved the development FOSCARI at Truganina for go ahead and earth works has started. They also have lots for sale at the development Veneziane in Brookfield.

I was told by the mentor that of the 260 lot development FOSCARI that they acquired 130 lots to sell to investors which i gather will all be rented out - that sort of high percentage could'nt be good for capital growth could it?
 
My first ip is in Brookfield Botanica springs which was built in early 2010, I did a lot of work their my self but it ending up owing me all up $280,000 for a 600m2 block, triple car drive way, side access and a 3 bedroom + study, 2 bathroom, 2 garage home which was leased immediately at $340pw, same tenants today which are great! been looking at recent sold prices recently and I believe this ip today would be worth somewhere around the 340-360 mark.

Went their today as I haven't been in the area in over a year and cannot believe the growth I Have seen, the new Woodgrove shopping centre is as big as water gardens, traffic has increased heaps, Brookfield it self the estate is almost all sold out now... all it really needs is a new train station.

Personally, for me Brookfield has been a good low risk investment, I was able to get into the property market, gain equity, experience and have been able to move on and invest in other areas...
 
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