Melbourne: Has any suburb boom then busted?

[willister]

Hi,

Just curious, has any suburb boomed, peaked then busted with the house price then staying lower than at its peak? The way it is, I seem to be reading all suburbs are currently averaging their highest peak price?? I'm wondering what correction (in $) some of the million dollar suburbs will be...

I'm restricting this to only within 40kms of Melbourne CBD....

The closest thing I ever heard of was Yarraville, but I might and possibly likely be completely wrong...it was one of the first suburbs to boom in the West, but I never quite liked how it was a truck thoroughfare....I noted that Maribrynong/Maidstone and Kingsville then took on the flow on effect and I think Yarraville became less popular? Not sure if the house prices went the same way?

 

[jpcashflow]

Hi

Hi,

In terms of capital growth there are some suburbs doing really well in Melbourne. We are seeing suburbs like Sunshine, Deer Park, Airport West and East Keilor doing well at the moment as an example.

I have seen Williamstown peak but prices have remained the same for the last year or two and also suburbs like Yarraville, Wallan or some parts of Thomastown have really been flat as of late.

 

[Kinnon Bell]

Yes, Melton.

For my old PPOR I built for $250k then a year later got a Val done at the peak and it came in at $380k for a cookie cutter average 3/2/2 in Brookfield.

At the lowest point the value would have been high $200's or low $300's. Prices are only just starting to recover. If I were to get a Val done now I think it would be ~$330-$340k going off comparables.

Melton council is silly though where they don't quite understand the supply vs demand concept and the market was saturated with new land estates which really hurt prices are are keeping them low.

 

[The Y-man]

Hi,

Just curious, has any suburb boomed, peaked then busted with the house price then staying lower than at its peak? The way it is, I seem to be reading all suburbs are currently averaging their highest peak price?? I'm wondering what correction (in $) some of the million dollar suburbs will be...

I'm restricting this to only within 40kms of Melbourne CBD....

Our place in Donvale was bought for $600k, would have got to over the million mark, dropped to $700k a few years back, and only now getting towards the 7 figures again.

The Y-man

 

[willister]

Our place in Donvale was bought for $600k, would have got to over the million mark, dropped to $700k a few years back, and only now getting towards the 7 figures again.

The Y-man

Surprising - aren't the mainland Chinese buying up Doncaster? Where ever they touch (for now) keeps increasing and prices defies laws of gravity...

I recall chatting once in the neighbourhood after a night of running and he claimed that a guy purchased his place for $890K in 2008 in Glen Waverley and in 2010 it dropped to $700K. The place would easily be worth more than 1.4mil now by demand.

 

[tone1]

The closest thing I ever heard of was Yarraville, but I might and possibly likely be completely wrong...it was one of the first suburbs to boom in the West, but I never quite liked how it was a truck thoroughfare....I noted that Maribrynong/Maidstone and Kingsville then took on the flow on effect and I think Yarraville became less popular? Not sure if the house prices went the same way?

I think Yarraville has been flat in the past year based off some recent statistics I saw, but there's been sharp rises in the years prior. I think you are right in that people are looking further afield as neighboring suburbs are starting to compete in the desirability stakes and aren't as expensive. This might have caused the recent flatness.

 

[schweedy]

Yeh, this happened in Mulgrave about a decade ago.

After our tenants had trashed the house, I did a major reno and we put it on the market. Sold it within 2 weeks of listing it, so was great.

Now for a breakdown. In the Feb when I started the renovations, I had agents come out and for positioning and land size etc 240k, no worries. Did the renovation and spent about 50k fixing it all up, 3 months later listed it for 440k and got our asking price as I said within weeks. We did a 1 month (6 weeks due to a delay) settlement, within weeks, the market crashed and the values fell. I would have been lucky to have gotten the 240k I had been quoted in original condition. We were so lucky, I would have been heartbroken if we had lost money on that, as it took several years for the market to get back up to those prices.

We flipped some of the profits into another property in melton, we have renovated, but still it has pretty much plateau'd at cost price. But neutral geared, it suits us for now, looking at developing the block later down the track.

 

[jpcashflow]

Hi

Melton is a good example too....

This is why I strongly believe that if you have a property in a area that has peaked some times you are better of just selling the property and reaping the rewards.

 

[The Y-man]

Surprising - aren't the mainland Chinese buying up Doncaster? Where ever they touch (for now) keeps increasing and prices defies laws of gravity...
.

Yes - that's what drove the prices up in a crazy way.

Then Gov made some FIRB changes (if I understand correctly) and bang! No more buyers overnight.

The Y-man

 

[angelz]

Melbourne: Has any suburbs boom then busted

Hi everyone,

So having mentioned Melton, do any of you think that a recovery will happen between 4-6 years? Would love to hear your thoughts...

 

[Kinnon Bell]

Hi everyone,

So having mentioned Melton, do any of you think that a recovery will happen between 4-6 years? Would love to hear your thoughts...

Recover to what extent?

To the highs of the late 2000's? Possibly.

Too much vacant land between Caroline Springs/Taylors Lakes and Melton to be developed yet which, once they do, won't help with capital growth nor is the stigma either.

 

[angelz]

Hi Kinnon,

I'm thinking more mid 2000's. I think the stagnation started from about 2008 & Melton is still being gripped by it.

There are still houses that are selling for the low price point of 210k - 230k for three bedroom homes in Melton and Melton South.

I am wondering when or if such properties at this current price point would eventually go to 300-350K... Considering the land releases in the next few years and the impact it may have on rents.

 

[strongy1986]

Hi Kinnon,

I'm thinking more mid 2000's. I think the stagnation started from about 2008 & Melton is still being gripped by it.

There are still houses that are selling for the low price point of 210k - 230k for three bedroom homes in Melton and Melton South.

I am wondering when or if such properties at this current price point would eventually go to 300-350K... Considering the land releases in the next few years and the impact it may have on rents.

Melton is not Penrith

There is still houses 15 - 20k from melbourne for 300 - 350

Nothing against Melton but it's not worth the investment

Supply and demand

 

[Kinnon Bell]

Hi Kinnon,

I'm thinking more mid 2000's. I think the stagnation started from about 2008 & Melton is still being gripped by it.

There are still houses that are selling for the low price point of 210k - 230k for three bedroom homes in Melton and Melton South.

I am wondering when or if such properties at this current price point would eventually go to 300-350K... Considering the land releases in the next few years and the impact it may have on rents.

Prices were still quite strong late 2000's with the peak about 2010 and then from 2011 onwards they started to drop (just double checked RP Data to make sure my memory was serving me right).

Anecdotally, from the monitoring I've been doing for the past 12 months I've noticed prices start to recover just a little bit but nothing too outstanding.

I know the houses in your example will eventually get to the $300k mark but the question is not if but when! If it's just purely CPI then it would take about 10 years to crack the low $300k's. But, like you also mentioned, the supply vs demand issue will hamper CG and also there's not as many incentives for FHB'ers to buy out that way anymore like there were in the 2000's.

Sydney is peaking and historically the other capital cities and regional capitals have followed but this cycle around it seems that there's more focus on Brisbane and Adelaide and not as much on Melbourne so perhaps there won't be as outstanding CG this time around as there was at the peak of the last cycle, but then again there are always markets within markets.....

 

[tone1]

Too much vacant land between Caroline Springs/Taylors Lakes and Melton to be developed yet which, once they do, won't help with capital growth nor is the stigma either.

I think this is the main issue. Plumpton is being rapidly developed now and the amount of land available is ridiculous. There's a good.. maybe 10-15k of land between Hillside and Melton, and is as deep as between Melton Highway and Taylors Road. It's absolutely massive.

 

[albanga]

I think it will take a long time if ever for Melton to lose its Stigma. Suburbs with bad stigma usually recover due to some other factor and unless i am missing something, Melton just does not or will not have it.

Yarraville/Footscray - Horrid names when i was growing up but ultimately they are a stones throw from the city.

Sunshine - Still not fully recovered but again super close to the city with great transport and a really good asian community supported by good local restaurants.

Frankston - Starting to SLOWLY recover but it is bound to happen when you have a nice beach at your doorstep and are 15 minutes from amazing spots around the penninsula.

So the question I ask, is what will diversify Melton? What will make it trendy or desirable in the near future? What will bring people to live there because at the moment people live there for 1 reason, affordability.

 

[The Y-man]

So the question I ask, is what will diversify Melton?

Well, it is closer to Adelaide and Perth than many other suburbs in Melb......

The Y-man

 

[albanga]

Well, it is closer to Adelaide and Perth than many other suburbs in Melb......

The Y-man

haha well I forgot about that, i stand corrected

 

[strongy1986]

I think it will take a long time if ever for Melton to lose its Stigma. Suburbs with bad stigma usually recover due to some other factor and unless i am missing something, Melton just does not or will not have it.

Yarraville/Footscray - Horrid names when i was growing up but ultimately they are a stones throw from the city.

Sunshine - Still not fully recovered but again super close to the city with great transport and a really good asian community supported by good local restaurants.

Frankston - Starting to SLOWLY recover but it is bound to happen when you have a nice beach at your doorstep and are 15 minutes from amazing spots around the penninsula.

So the question I ask, is what will diversify Melton? What will make it trendy or desirable in the near future? What will bring people to live there because at the moment people live there for 1 reason, affordability.

Melton is a good spot for harness racing enthusiasts

 

[albanga]

Melton is a good spot for harness racing enthusiasts

The funny thing is my mum is a harness racing enthusiast often making her way to tabcorp park but even she bags it. You know your struggling if your own demographic doesn't like you.