Melbourne Boom...Take 2!

[K4K4M]

Forever if you really wanted. A property close to my parents home, when they moved there in 1975, was burnt down. The block has remained vacant ever since (well there is a garage there)

I think the owner (who lives down the road), stores his stuff inside and has a veggie patch out the back. The block would have to be worth around $900k

When I was looking for my PPOR in 2002, I looked at house & land package in Craigeburn (3064) but the condition was to build the house on the land within 12 months (not sure the condition was required from the council or builder)

Buzz, the land you mentioned located in inner suburb ?

 

[THEHEATH]

any thoughts on this property?

http://www.realestate.com.au/cgi-bi...er=&cc=&c=5707854&s=vic&snf=rbs&tm=1250273520

Not sure about the property, but it is definitely in the nicer part of Newport imo.

 

[buzzlightyear]

When I was looking for my PPOR in 2002, I looked at house & land package in Craigeburn (3064) but the condition was to build the house on the land within 12 months (not sure the condition was required from the council or builder)

Buzz, the land you mentioned located in inner suburb ?

I think H&L rules would be different. The land is in Nth Balwyn

 

[Property Meister]

the suburb im looking at in Melbourne, the recent sales have been crazy,

really up and down,

eg a difference of $50k in a few weeks for 2 basically similar properties 4 doors away (in the sub $400k price bracket).

I feel that no matter how much due diligence I can do, its just near impossible to predict the prices,

as a result, if I talk to an agent, and say, well, I think this one is only worth $XXX because the one 3 doors down also only sold for $XXX,
any switched on agent can reply, well the one 4 doors down sold for $XXX + $50k

so how can people get at least a decent indication of what is the realistic price, is it better just to do a valuation and take that as a fair market value....

I am quite confused, as to what to do, with all of these fluctuation of prices.

any comments would be apprecaited

 

[normailson]

I am quite confused, as to what to do, with all of these fluctuation of prices.

any comments would be apprecaited

I have said in the past that one can generally value new land, spec homes and fittings down to about 2.5% becuase you just add up the 3 bits.

However, when you get to established, desirable areas another factor comes into play - especially when it comes to your PPOR. That other factor is the same factor that drives ALL markets and by definition is not rational. That factor is emotion.

Emotion covers intangibles such as prestige and reputation, and, tangibles such as security, cafe culture, neighbours and good schools for the kids.

Shares go up and shares go down but in the same day has their intrinsic value actually changed? The same price changes can be seen at an auction in a heated market where two or more parties want to win at all costs.

As an investor, the theory is we should park the emotion and look at the sums. If it doesn't meet the critieria, move on. Easier said than done because even an investor doesn't want to spend the next month of weekends looking at more properties; especially if the trend is upwards.

Now that the media is reporting "problem bypassed", "full steam ahead" I'm sure we will see more upwards moves. (not saying I believe the media)

 

[Property Meister]

However, when you get to established, desirable areas another factor comes into play - especially when it comes to your PPOR. That other factor is the same factor that drives ALL markets and by definition is not rational. That factor is emotion.

Emotion covers intangibles such as prestige and reputation, and, tangibles such as security, cafe culture, neighbours and good schools for the kids.

Shares go up and shares go down but in the same day has their intrinsic value actually changed? The same price changes can be seen at an auction in a heated market where two or more parties want to win at all costs.

As an investor, the theory is we should park the emotion and look at the sums. If it doesn't meet the critieria, move on.

yes, I completely agree with you, I imagine that if I told the buyers of some of the same properties but had paid $40k extra they would either be shocked and a little annoyed to end up paying too much or they would have just accepted the fact that they needed to pay the extra in order to secure it!!

I would suspect that their main reasons for paying the extra was due to fear and need rather then a logical assesment of a justification for the extra $40k.

Unfortuantely, this is an IP for me, and not a PPOR and hence im trying to leave emotion out of it, its not a suburb that is ideal for my current lifestyle so I have no intentions in living in it,

as a result I would like to buy into it, but am struggling bigtime to work out a fair value, eg 4 houses within a few streets of each other, all houses very similar and within a matter of months have sold for $308k and $388k, and $330k and $375 (just as an example)!

 

[McBrain]

$1MM for a house in Box Hill, who would have thought!

I lived in a 2 bed flat with my folks in Box Hill when I arrived in Aus.

Any other astounding auction results others have seen today?

No surprise. There's plenty of $1MM plus properties around Box Hill!

 

[JIT]

What's happening in Melbourne folks?

Personally, I think there's bugger all quality stock available at the moment.

I was lucky to purchase one in Surrey Hills a couple of weeks ago, but looking at the current listings there's not much out there (broadly speaking).

Maybe more supply and better stock will be available in the next month or two?

That's what the agents seem to think, if you believe what they say in the papers.

 

[buzzlightyear]

2br Prahran property sold for $963k (yesterday). This has astounded me. These prices are now well in excess of 2007 prices for the area.

Knowing this area (well I thought I did), ~ $800k to $820k would have been fair value.

As an aside, have a look at the price guide!

 

[JIT]

Wow, that's a lot of $ for what seems like around ?120-150m2.

In Northcote these smaller sized 2br Victorian terraces are going around 570-600k now.

 

[buzzlightyear]

Maybe more supply and better stock will be available in the next month or two?

That's what the agents seem to think, if you believe what they say in the papers.

There's always more stock from spring onwards in Melbourne. Maybe that (and a rate rise or two) will mitigate some amazing prices being experienced at this time

 

[buzzlightyear]

Wow, that's a lot of $ for what seems like around ?120-150m2.

In Northcote these smaller sized 2br Victorian terraces are going around 570-600k now.

Yep, land is 5 x 30m.

If that Northcote pricing is true, then I would buy because that gap is not sustainable. Prahran/Windsor is nice, but not $300k+ better for house prices than Northcote.

 

[JIT]

Yep, land is 5 x 30m.

If that Northcote pricing is true, then I would buy because that gap is not sustainable. Prahran/Windsor is nice, but not $300k+ better for house prices than Northcote.

Fortunately I bought one of these Northcote babies at 360k four years ago, had passed in at auction with no interest for weeks after until I made an offer... so I personally wouldn't pay a cent more for it now!

 

[Gigantor]

i bought my 2br villa unit in Thornbury in november when everything was down and doomy and gloomy, 40% clearances that week i think.

i still keep an eye on the area & northcote , since about may its started going silly again.. small & worse located flats in need of reno's are going for 50k over what I paid.

renovated 2 & 3 br period houses are back to over 800k territory in a lot of cases.

 

[aussierogue]

That Prahan price is unblieveable. But what an amazing case of underquoting though. I reckon it was worth 700k ish. Very nice inside, nice light, very presentable. But 960k CRAZY

I also have a SF vic in Northcote bought 5 years ago for 330k. I personally havent seen evidence that market is quite back to 2007 levels.

2007 i though for a monet there my joint might be worth 575 and then last year maybe 475 - 2 weeks ago my guess was 525.....you never know maybe we are back at 2007!.

Im strapped in!

 

[The_Bludger]

I nearly fainted at an auction I attended in Reservoir on the weekend, I was that shocked. I purchased last year in the street next to this one which are pretty much identical for $425k. House I bought was much nicer, same land content and this one got sold for $555K, $130k more than what I paid exactly one year ago. In fairness, mine is a two bedder, not three, but does 1 bedroom command an extra $130k?.

And if you think this is a brick home think again, it's fake brick cladding and it was pretty old inside. Only decent part of the house were the polished floor boards.

http://www.realestate.com.au/cgi-bi...r=&cc=&c=20010553&s=vic&snf=rbs&tm=1248935849


House next to it got sold $655K+ the same day. At least this one had been renovated. But, in Reservoir! Can you believe it?

http://www.realestateview.com.au/Real-Estate/Property-Details-buy-residential-1416368_S.html

If this ain't a BOOM, I don't know what is!!!!!!

PS. I drove home after the auction seriously considering selling... Still unsure of what I will do, but will probably hold on. It's out of control.

 

[aussierogue]

Yo Bludger

Thanks for the link - you are right that is serious money in Reservoir for a decidedly average house.

615 sqm - are these places all subdivision candidates? I know this has been drivng alot of the market in reservoir...

Cheers
Aussie

 

[MTR]

It was only about 4 months ago I was chasing a house on corner lot sub-dividable, the lucky buyer purchased for $380,000 prior to auction.

 

[danielkanoon]

Hey guys this trend of ridiculous auction prices is increasing every week especially in Melbourne. Apparently, over the weekend there were 620 auctions on Saturday and a clearance rate of 86 per cent, the second biggest weekend for sales this year. So these crazy prices at auctions is now not uncommon.




Daniel Kanoon

 

[The_Bludger]

615 sqm - are these places all subdivision candidates? I know this has been drivng alot of the market in reservoir...

Yes, but still...

By the time you knock over existing and build 2 new dwellings, you'd have to sell them for $600k each to make it worthwhile. And I doubt you'd get that sort of money. But then again, nothing surprises me in this market. I'm just glad I bought in that specific area last year!!!