What are people's thoughts on which outer Melbourne suburbs are relatively undervalued and have the greatest potential for significant capital growth, as the Melbourne market enters the next boom phase?
Most of my research and investment to date has been in inner Melbourne, so I'd be interested to hear what others think about the outer suburbs...
Thanks,
GSJ[/QUOTE]
Hi GSJ,
Some of the areas I believe to be undervalued in the Western Suburbs of Melbourne are as follows. While I don't know if they will see significant capital growth, they have features that make them worthy of consideration from an investment point of view. They are:
ALTONA
Altona is an attractive beachside suburb with wide tree lined streets and beautiful parks. The suburb lies approximately 15 km's in Melbourne's West. A train line connects Altona to the city. The freeway is accessible from Altona, but involves a 5 minute drive down Miller's Road. This year property prices have moved up by approximately 12%. The range of housing stock consists of:
a) Many brick veneer homes there were built during the 1960's and 1970's. There are also many timber style homes that were built earlier. Many of the older houses are on large blocks, which are currently being sold to developers. Houses range in price from mid $300's upwards.
b) Many modern luxurious town houses have been built in the streets closest to the beach. Older houses have been torn down to make way for these new town houses.
c) Luxurious homes are being built along the Esplanade (the street which faces the bay). Older homes (1950's style) are often sold off and new mansions are built in their place. The price of a luxuious home on the Esplanade sells for between 1.5 and 2M.
ALTONA MEADOWS
Altona Meadows is located 17km's from the CBD. It is a 2 minute drive from Altona Meadows to Altona and the beach. The suburb is close to a train line, and has excellent access to the Princess Freeway. Many people who live in Altona Meadows are employed by industries which are based in the surrounding areas of Altona and Laverton. Many people also commute daily by car and train to work in the city.
Property in Altona Meadows has moved up by 7% this year. There are a range of properties available:
a) 2 bedroom units - starting at approximately $220,000
b) A small % of Town Houses which sell for around the $275-$280 mark.
c) 3 bedroom houses starting at approximtely $245,000
d) 4 bedroom houses which range in price from $280,000 upwards.
The housing stock is mainly brick veneer. The older part of the suburb was established during the late 1960's-early 1970's. Extensive building occured in the suburb during the last boom, and most of the suburb is built out. (There is not much land available in Altona Meadows now, and blocks of land on 450sqm are selling for approximately $185,000). There is not much stock available for sale in the suburb at the moment. A quick glance at real estate.com revealed only 55 properties avaible for sale. A couple of years ago there were approximately 200 for sale at any one time.
LAVERTON
Laverton is situated on the other side of the Princess Freeway opposite Altona Meadows. Property in Laverton has averaged approximately 10% growth p/a over a 10 year cycle. Recently, I have noticed that prices have moved again. In 2003 it was possible to pick up property for around $195,000 to $200,000. Now I notice that many properties are selling above $220,000. The suburb was primarily established to house the RAAF personel, and many 1950 style homes exist. The suburb is now popular with many of the workers from nearby factories and industry. Recently an announcement was made by the council that the RAAF base would be turned into a commercial and residential development. There are not many houses available for sale at the moment. A quick glance the other day revealed only 12 available for sale in the suburb.
I believe that all three suburbs above have the potential to increase in value due to their relatively close proximity to the CBD. The journey to the city by car is made easy by the dual four-lane freeway, and the train line runs directly into the city. Furthermore, all suburbs are close to the Altona beach. Add to this, all three suburbs are closer to the city than Point Cook, and are largely built out. (There is not much land available in these areas).
Point Cook is close to Altona Meadows and Laverton, and there is currently an extensive shopping centre and commercial centre being developed there at the moment.
From an investment perspective, tenants in the area include:
1) Workers who are employed by the industries which surround the area
2) Single parent families
3) Families who are up-grading their homes and building in the surrounding areas of Point Cook and Sanctuary Lakes.
Regards Jason.
PS: My PPOR is in Altona Meadows, and I have 1 IP there as well.[/QUOTE]
A while ago I stated that I thought that Altona Meadows and Laverton were undervalued. Well since then, prices have risen substantially......
Last week I posted this about an auction I attended in the area of a property on Merton Street (a main road) which sold for $318,000. See post No. 24:
http://www.somersoft.com/forums/showthread.php?t=32486&page=2
This weekend I attended another auction at 31 Graham Court. A nicely presented but small 3 bedroom house with a garage situated one street away from the Central Square shopping complex. It was not as heavily contested as the property in Merton Street, but managed to sell for $350,000.
http://www.realestate.com.au/cgi-bi...eader=&c=73142053&s=vic&snf=ras&tm=1197185235
Last year, it would have been possible to pick up this property for between $275,000 and $285,000.
The ripple has definetely arrived in the Middle Ring Western Suburbs now! I should have taken my own advise and bought more in the area earlier this year!
Oh well, other opportunities will arise.
Regards Jason.
) 6ks from beach, eastlink about to open making the area closer to city and eastern corridor...... 
