Melbourne Outer Suburbs - Waiting For The Ripple...

[JIT]

Reservoir has done 50% over the last year, primarily for the standard 3-4 bedroom home in the better side. Huge demand!!

Yes, I've seen this too.

It's still much cheaper than it's neighbouring suburb of Preston, which is a Principal Activity Centre in Melbourne 2030. I think select parts of Reservoir will continue to do very well over the next 12 months. Not just houses, but also medium-density housing eg. villa units and townhouses. Don't think there's much demand for apartments here as yet. Preston seems to have a bit more higher density apartment developments at present.

Furthermore rents are much, much cheaper in Reservoir than Preston, but in recent months I've seen quite significant rent increases and demand for rental properties here. A 'spillover' from Preston as supply dries up here and rents command a premium.

GSJ

 

[chrispy]

GSJ

I agree if you do a search RE there are still some cheaper places in Reservoir but I would be checking the area. The same with Mill Park. However, Bundoora has moved on to a certain extent and although becoming older most areas are now OK, particularly if you can get close to the tram, giving easy access both ways to the two Unis (Latrobe and RMIT)

Chris

 

[ffc1883_1996]

We invest in Melbourne's outer east (Maroondah and Knox) and there seems to be a mini boom at the moment - with first home buyers and developers falling over themselves to buy any stock that hits the market.

Suburbs like Wantirna and Rowville were settled by young families 25-30 years ago - now their kids are growing up and want houses.

There's virtually no land left to build on so cheap houses on good blocks have seen a minimum 15% increase in the last few months. With Eastlink arriving next year I think it's unlikely that this little bubble will burst.

 

[feihong]

We invest in Melbourne's outer east (Maroondah and Knox) and there seems to be a mini boom at the moment - with first home buyers and developers falling over themselves to buy any stock that hits the market.

Suburbs like Wantirna and Rowville were settled by young families 25-30 years ago - now their kids are growing up and want houses.

There's virtually no land left to build on so cheap houses on good blocks have seen a minimum 15% increase in the last few months. With Eastlink arriving next year I think it's unlikely that this little bubble will burst.

city of manningham, whitehorse, knox and monash has already gone up in big way since the beginning of this yr, and I expect the ripple effect from inner city suburbs to flow through again, bringing price to new high (esp. these places are the so called 1st choice entry points for new immigrants, where educated and/or cashed up ppl want to live)

 

[Arkay]

Hope that's true. I live in Rowville and just had a valuer through on Monday. Results aren't in yet but I hope their figures tell the same story.

Cheers,

Arkay.

 

[ffc1883_1996]

Hope that's true. I live in Rowville and just had a valuer through on Monday. Results aren't in yet but I hope their figures tell the same story.

Cheers,

Arkay.

I recently spoke to an agent in Ferntree Gully who told me that houses that were selling for low-mid 200s at the start of the year are now selling for almost 300k. I was scheptical at first but we was able to show recent examples.

I had our Heathmont PPOR independently valued last month and the valuer spoke of a similar trend in the greater Ringwood area.

 

[Arkay]

Just as an FYI for those interested we just got our valuation back on our PPOR in Rowville.

The increase in valuation (same valuation firm, same valuer), since Feb 07 was 16%.

Pretty happy with that!

Cheers,

Arkay.

 

[feihong]

Just as an FYI for those interested we just got our valuation back on our PPOR in Rowville.

The increase in valuation (same valuation firm, same valuer), since Feb 07 was 16%.

Pretty happy with that!

Cheers,

Arkay.

congrats, and thank for the info, I'm happy too Can't wait to get my place revalued in April next yr, 12 mths from the purchase date

 

[DavidMc]

Just as an FYI for those interested we just got our valuation back on our PPOR in Rowville.

The increase in valuation (same valuation firm, same valuer), since Feb 07 was 16%.

Pretty happy with that!

Cheers,

Arkay.

Far out! Any improvements?

 

[feihong]

It's all about good school!

Hi DaveMC:

This increase without improvement isn't unexpected I'd think, given the % increase in the surrounding area. Glen Waverley has gone up 28% between March and June (3rd best performing suburb for that quarter after Balwyn North and McKinnon)

 

[Arkay]

Far out! Any improvements?

Possibly only in my ability to sell the place to the valuer

Oh.. and the grass was much greener

Cheers,

Arkay.

 

[JIT]

Possibly only in my ability to sell the place to the valuer

Silly valuers, gotta love 'em !

GSJ

 

[Arkay]

Sure do. That valuation made my day Not cause I think it's necessarily over the top. Just great to see things happen the way we believed they should/would.

Cheers,

Arkay.

 

[feihong]

Just read the newspaper this morning.. checked out Mulgrave sales last week, all houses with reasonable land size and number of bedrooms are sold above 400k. Same time last yr they were low to mid 300k's..

 

[Kennethkohsg]

BUMP!

Has anyone got examples they could share of any significant price falls in properties in Melbourne's outer suburbs in the current market?

I believe the statistics show that generally speaking outer suburbs are either still stagnating, or in some cases falling...

Clearly there are still exceptions to this, and some outer suburbs may still be showing good CG.

I'm more curious though to hear which outer suburbs are struggling in the current market and would like to hear some examples if possible...eg. of the type of price falls (if any) people are seeing in % terms...?5%, 10%, 20%, 40%???

Thanks,

GSJ

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Dear GSJ,

1. According to Jan-Mar 2007 Quarterly Update data provided by the Victorian Valuer-General, Mr Jack Dunham, the suburbs with fall in the median land prices include

a. Epping ( - 16.4% - A$125,350 from A$150,000).
b. Melton (-7.3% -A$102,000 from A$110,000)
c. Sunbury (-5.8% - $122,000 from A$129,000).

2. Regional towns suffering significant land price falls during the same period include
a. Horsham (-18.5% -A$52,970 from A$64,9654)
b. Warrnambool (-15.8% - $100,000 from A$118,750)
c. Yarrawonga (-8.3% - A$90,000 from A$98,200)
d. Mildura (-7% - A$79,540 from A$85,500)

3. For your update and further comments/discussion, please.

4. Thank you.

regards,
Kenneth KOH

 

[Georges]

what do people think about Broadmeadows? ANy good? has the price over there boomed?

 

[tiger]

&&&&&&&&&&&&&&&&&&&&&&&&&&&
Dear GSJ,

1. According to Jan-Mar 2007 Quarterly Update data provided by the Victorian Valuer-General, Mr Jack Dunham, the suburbs with fall in the median land prices include

b. Melton (-7.3% -A$102,000 from A$110,000)

Interesting.. I know its a short term drop but I wonder if it will continue.

 

[oc1]

what do people think about Broadmeadows? ANy good? has the price over there boomed?

Still the same. Fawkner has gone up a fair bit. Might be next.

 

[JIT]

&&&&&&&&&&&&&&&&&&&&&&&&&&&
Dear GSJ,

1. According to Jan-Mar 2007 Quarterly Update data provided by the Victorian Valuer-General, Mr Jack Dunham, the suburbs with fall in the median land prices include......

Thanks Kenneth,

The 12 month change in the median house price of Melton is up 3.8% (from June '06 to June '07, see http://realestateview.com.au/median/m.html)

Yet, as your quoted figures show, in the Jan-Mar '07 quarter alone the median land prices in Melton actually fell by 7.3%!

Granted that the time periods aren't exactly the same, what can we deduce from this?

Perhaps that there is still a large supply of land available in Melton so prices are falling due to insufficient demand, and, that it is the cost of building that is increasing, thus explaining the median price rise (ie. the price increase is not due to an intrinsic and favourable supply/demand balance, but rather the rising costs of building)...

Any thoughts from the Melton investors...?

 

[Kennethkohsg]

Interesting.. I know its a short term drop but I wonder if it will continue.

********************
Dear Tiger,

1. We all know that supply of residential land in Australia, will become increasingly more expensive over time, as a result of increasing govt charges and other production/development costs faced by the land developers, all other things being equal.

2. This is as a result of increasing housing demand from population increase from overseas emigrants, all things being equal.

3. If the land prices can drop in the short term, it either means that the land is "over-priced" vis-a-vis its effective market demand or/and there is some "over-supply" of vacant land in the prevailing market presently vis-a-vis its true market demand, all other things being equal.

4. That the land price can increase fast and suddenly fall back in the short term, suggests to me that there is some market speculation play by investors, rather than actual land supply being consumed by geniune first time buyers and real owners-occupiers in these suburbs.

5. Whether the land prices will grow further will depend on the actual market supply and demand forces as well as its real underlying market fundamentals and the prevailing market sentiments.

6. For your kind update and further comments/discussion, please.

7. Thank you.

regards,
Kenneth KOH