Melbourne property market and capital growth

[happytimes75]

Hi I'm band new on the forum and to property investing and would really appreciate some insights from those of you more experienced in this field. I hope my questions aren't too naieve

I'm just running a few spread sheet scenarios. I understand anything is possible but my question is more based on what people here believe is likely to happen. I'm wondering if anyone believes capital growth in the hot spots in Melbourne such as Werribee and frankston are likely to fall below 5% average over the next 5 years. During troubled times with the interest rate rises and price of oil etc I'm wondering if it's worth taking such a risk right now. My figures show a healthy profit if capital growth is more than say 6% but below 5% and it is not worth the hassle.

My strategy is to buy in a suburb with potential high capital growth (6-10%)and gross rental yield of around 4-5%

Also wondering if there are any reputable property reseach companies who are good at forecasting such growth suburbs.

Your insights would be much appreciated.

Dave

 

[stumunro]

i think you need to have the ability to have a 10 year minimum plan for your investment, and I think you will be happy with your results.

For example it's been 5 years since around the peak of the last boom, in Sydney the growth has been terrible (in most places) it's only until recently has it showed signs of improvements, and really it will be in the next few years that we will see good growth, so if you had bought back then, really a 5 year plan isn't suffice.

 

[Bazza]

As long as you buy well initially and hold onto the property for at least one property cycle then it doesnt matter if the CG goes up and down.

It is best to buy and hold and use the CG as leverage to buy more IP's or you can take out a Line of Credit on the property once you have equity and enhance your lifestyle.

Cheers,

Bazza