Melbourne Boom...Take 2!

JIT

JIT

Hi there,

I've recently been having a look at sales in various eastern Melbourne suburbs and it seems that late last year/early this year would have been a great time to buy...because prices are now well and truly on the move!!!

I'm trying to get a loan in place at the moment to get another IP before things get too silly...

Anyone else seeing the same thing in the suburbs they're looking at?

Not sure what the median price stats are showing?

I think after the "mini-boom'' of 2007 prices fell back a bit, but those falls, broadly speaking, have already been recovered now and prices are going even higher than the peaks reached in 2007.

That's my experience looking at current comparable sales to some of my eastern suburb IP's.

Any thoughts?
 
Totally agree.

I was looking (made a few offers) late March. But area (Ringwood) became very hot. Thought I'd wait until July when the FHB boost ceases. But of course it was extended.

I've now been sitting on the sidelines, watching prices continue to rise, still waiting for the FHB boost to stop so that I can see what will happen.

But I am now pretty sure that once the boost goes, investors will come in - if they haven't already. So prices won't magically come down. New price floor forming?

So trying to figure out where best to buy right now. For some short term good growth.
 
ILoveProperty said:
Totally agree.

I was looking (made a few offers) late March. But area (Ringwood) became very hot. Thought I'd wait until July when the FHB boost ceases. But of course it was extended.

I've now been sitting on the sidelines, watching prices continue to rise, still waiting for the FHB boost to stop so that I can see what will happen.

But I am now pretty sure that once the boost goes, investors will come in - if they haven't already. So prices won't magically come down. New price floor forming?

So trying to figure out where best to buy right now. For some short term good growth.
Click to expand...

I was lucky to buy one late Dec last year that settled in March this year.

I don't think the FHB ending is going to have much effect, maybe in some outer FHB suburbs or new estates, but not in the inner/middle suburbs.

Not sure about Ringwood, but Mitcham seems OK, depending on your price point.

I think I'm already priced out of houses in the areas I'm looking at so will be looking at units instead.
 
Melb Boom Take 2 Reply

Hi JIT,
I work in the mortgage broking area and a lot of info filters in via the lenders as they employee teams of anylists to try to work out what the future holds. If we all new what the future held we wouldn't be on this forum but in the Bahamas somewhere. In some eastern suburbs in Melbourne lenders mortgage insurance is no longer available due to the high demand by FHB's.

Anyway my views about the market are:
The Federal government underwriting of the building/home industry has had a multiplier effect on pricing IE $9K in a grant can effectively lift prices $100K in terms of purchasing power. There has been an absolute deluge of applications for the FHOG.

I went to the auction of a property recently were the price prior to minor decorating meant a yield of around 2.4% and that's in a large regional centre.
Throw in a few dollars prior to renting and the yield goes to 2.8%. Is that a good investment? Make up your own mind. Yet down the road a slightly tired, but solid house would have yielded 8.8% after a small input of $$$. The distortions caused by the Feds handing out cash should not be overlooked.

My point is anything that is priced up to around $600K is under pressure from the grants so my view is shop carefully cause in the early 90's prices didn't drop but pretty much stayed the same which in real terms is a price drop.

I respect Jan Somers and have her books but some property promoters really are just trying to sell the next seminar. And to Jan's credit she has entirely different approach.

Just My 2 Bobs Worth

Cheers
 
Yeah I'm looking to buy too.

Ideally would have purchased 6 months ago but I wasn't working at the time. Not many good lending options when your income is zero.
 
Hi JIT

In 2007 I think it was the inner city that experienced the greatest growth.
I noticed my inner city property did fall back by around 8-10% but gains have all been made up and now experiencing some good growth due to lack of stock.

It may be the middle ring that is experiencing most growth at the moment, I purchased 4 properties over that last 3 months and prices are continuing to go up with gains of over 25%, once again due to lack of stock.
As I am not from Melb would be interested on any information regarding this.

Great times for Melbourne investors, happy hunting just make sure you jump in before your competition does.

Cheers, MTR
 
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BobbyGee said:
My point is anything that is priced up to around $600K is under pressure from the grants so my view is shop carefully cause in the early 90's prices didn't drop but pretty much stayed the same which in real terms is a price drop.
Click to expand...

Thanks, will keep that in mind, I'm looking to buy up to this price and it's very competitive in the suburbs I'm looking at for this price range.
 
MTR said:
Hi JIT

correct me if I am wrong, but in 2007 I think it was the inner city that experienced the greatest growth.
Click to expand...

Yes, that's what I understood too.

MTR said:
It may be the middle ring that is experiencing most growth at the moment. As I am not from Melb would be interested on any information regarding this.
Click to expand...

I'm looking in the middle eastern suburbs 8-15 km out, and can see it moving quickly.

I think 3-6 months ago I could have bought a house here, but now will probably have to settle for a unit.
 
Hi JIT
I have regrets that I did not start purchasing 6 months ago, I think I could have purchased in mid 200s, now it is heading $400,000+.

Oh well, just keep going you beautiful thing.

Cheers, MTR
 
Hi

Bought a property in Brighton last November, attended an auction for a similar property
on Saturday (but with less land, smaller building envelope, worse condition).

Property went for 32% more with strong multiple bidding, $563500 as opposed to $426000.

When I bought the other 2 parties interested were FHB, last Saturday 1 bidder was in their 30's the other 5 were all 40 plus, seemed to be investors.

Cheers

Pete
 
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Hi Turk
It does not surprise me that investors are back in the market, with all my purchases investors/builders/developers have been my competition.

The RE agent tells me Spring is usually strong in regards to auctions.

Cheers, MTR
 
JIT said:
...it seems that late last year/early this year would have been a great time to buy...because prices are now well and truly on the move!!!
Click to expand...

Yeah, yeah, rub it in! :eek: So I sold 2 properties at the worst possible time.... oh well, at least 2 lots of people picked up a ripper bargain (was it any of you?) :)

Cheers,

The Y-man
 
The Y-man said:
House in Coburg and a 2BR apartment in Prahran.
Yes, still (sort of) came out in front :)

Cheers,

The Y-man
Click to expand...

Without being too much of a sticky beak, did you sell because you thought the market would fall? You don't have to give a reason, was just curious as to what other investors were thinking at the time.
 
I had a agent call me on the weekend about a 2 bed 1 study property (only 2 on the block) i own in Sth Frankston. How he got my details i dont know.

He asked if i was interested in selling and whether i was interested in a valuation. To get the valuation, i told him i may be interested in selling. But I only wanted a drive by valuation.

I thought maybe it would be worth between $275k to $300k.. He reckons its worth between $325K-$350k. It may be agents speak but it sort of blew me away.

Anyway thank you to the outsiders for driving up Frankston prices.
 
Corio booming too!

I rang my RE in Lara today about getting possibley selling our IP in Corio.
She said that it is booming down there, and she has buyers waiting for properties.

She is going to have a look at the property and give me a price... then we can decide if you sell or not.
 
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