Melton Vic.

[JIT]

This was what I did:

Ballarat
Horsham
Warragul
Moe
Morwell
Trafalger
Traralgon
Melton

Warragul
Traralgon
Werribee

From these lists, if I had a very small budget I would probably go with Melton or Werribee, but this is just based on my own personal investing bias, which is proximity to the CBD and capital growth prospects.

Which is less risky? Not sure...you'll have to do your own research on that...

Wasn't there a thread sometime ago on 'Melton vs. Werribee'?

Just curious...what does Melton have that Werribee doesn't??

GSJ

 

[tiger]

Dont know but I really liked Werribee when I visited there on my way back to Avalon airport. Didn't even intend to go there as all I'd read about it was that its a smelly suburb halfway between melbourne and geelong. But we had some time to spare so dropped by.

Well, I noticed no smell and down near the waterfront was beautiful. The town centre itself was also nice.
Shame its a tad over my budget for a first purchase but Im not ruling it out for future purchases.

 

[Bandita]

Dont know but I really liked Werribee when I visited there on my way back to Avalon airport. Didn't even intend to go there as all I'd read about it was that its a smelly suburb halfway between melbourne and geelong. But we had some time to spare so dropped by.

Well, I noticed no smell and down near the waterfront was beautiful. The town centre itself was also nice.
Shame its a tad over my budget for a first purchase but Im not ruling it out for future purchases.

Told ya it didn't smell

Is your budget still under $200k? There's quite a few properties in Werribee available for under 200k.

http://www.realestate.com.au/cgi-bi...inbed=2&maxbed=&parking=&minlandsize=&m=&p=10

Cheers,
Jen

 

[tiger]

Yes it is but i think its moved down to 150-160k due to the other halfs employment situation and our small deposit (i dont want to keep waiting)... if we can go to 180k then Werribee could be a goer.

 

[Cherry Pro]

From someone who visited Werribee /Point Cook / Hoppers for the express purpose of looking for an IP and thought there was nothing wrong with it ..its proximity to Avalon is good as well.....but bought in Melton ... don't think the yields in Werribee /Hoppers are near to those in Melton.

That was my understanding from about 5 months ago ... might
have changed as I haven't checked the Werribee/HC rental situation
since.

Good luck Tiger !

 

[Peter Parker]

101.1 FM radio today announced that the highest crime rate increase within the Melbourne Metro area in the last 12 months was in Melton. An increase of 99.7%.

Was that crime rate per thousand of population or raw numbers of offences?

Since Melton has about the fastest population growth rates in the state, even if its crime rate held constant the number of crimes would still rise quickly.

Some inner suburbs with very little population growth also recorded hefty increases in the number of crimes.

 

[ozi]

101.1 FM radio today announced that the highest crime rate increase within the Melbourne Metro area in the last 12 months was in Melton. An increase of 99.7%.

Keep in mind that when they refer to "Melton", they often mean the Melton Shire. I know for a fact that the crime rate in Caroline Springs is very high as it is a new housing estate. There are lots of break ins. Caroline Springs is part of Melton Shire. This would probably be the case in the newer estates around Melton as well.

Cheers,
Ozi

 

[meggala]

well I have been living in melton south for 7 months now prices creep up here slowly. The rental demand is getting much higher and you tend to find long term renters rather than short term ones. as had been said b4 this is a great area for the workers who work in the industrial west and north also people commute to geelong from here. I have not seen alot of crime the worst area for that I believe is melton west, in the town ship of melton.the thing you really need to look for when buying a house here is that maintenance has been done unless you are prepared for that yourself the reason being the people who live here tend to be on tight budgets and dont tend to spend alot. A few of the houses I looked at needed 20 to 30k worth of work. the other thing is central Heating alot of the houses only have wall heater ( to keep the cost down) I felt these really help in the resale. as for the land banking and new houses they tend to be well over the budget of the cheaper houses 230 + so I feel your looking at a different market of buyers. I put my hard earned down here cause the value of the houses was much better and you have the country feel also you have reasonable train services to the city and a great network of buses meandering around the neighbour hoods. also it still counts as a city train ticket zone 2 big help there.
meggala

 

[Cherry Pro]

For someone in the know of both Melbourne and Sydney, what suburb in Sydney's west could Melton be compared to ? Blacktown, Penrith, Richmond ?
Just curious.

Ta.

 

[tiger]

In terms of distance from the city or demographic?

Demographics wise, its nowhere near as bogan-ish as Penrith. Only saw a couple of riced up falcodores (commodores/falcons) rather than every second car.
More like Blacktown but smaller and quieter.

 

[Cherry Pro]

Thanks Tiger ...you've answered my question.

 

[swebay]

I've just been advised to buy in Melton by a friend, with all this stuff going ahead, the racecourse, the bypass and all the infrastructure that goes with it - how could you go wrong ?

Buying a 3BR brick for $170k sounds good to me.

I read the whole 15 pages of this thread but generally see more positives than negatives about the area. I can only see prices going up from now on ...

 

[Peter 14.7]

Was that crime rate per thousand of population or raw numbers of offences?

Since Melton has about the fastest population growth rates in the state, even if its crime rate held constant the number of crimes would still rise quickly.

Some inner suburbs with very little population growth also recorded hefty increases in the number of crimes.

Exactly…

Whilst this may seem as Pro Melton I put very little faith in these statistic surveys for any where on any thing. Spin Doctors can prove almost anything with questions and stat put the right way. It is simply media bite buying.

Makes me think of an episode of the Simpsons. In it, Homer starts a local vigilante group in response to a cat burglar. He responds with his usual buffoon style in running a police state of fools. Inspired by his power, one of the local thugs Jimbo Jones joins his group in awe. Having no weapons left, the give him a sack to fill with door knobs.

As it starts to go pear shaped, Homer is interviewed on “Smart Line” (a Dateline rip-off) by Kent Brockman” (Clichéd News Anchor). The dialogue is (as I remember it):

Kent “Mr Simpson, what do you say to claims your group causes more crime than it solves?”
Homer “Hows that? Crime is down”
Kent” Well yes juvenile muggings are down 50%, but sack beatings are up 190%”
Homer” Statistics are notoriously unreliable, 55% of all people know that”
Kent “Touché”

I rest my case, Peter 14.7

 

[Peter 14.7]

That sounds familiar...this is the line I've been using in recent threads :

"Property investment for me is all about selection. I would say get out there and buy the best IP in the best suburb that you can afford to buy and service at this point in time, without over-committing yourself financially."

Still waiting for a comment though from either of the Peters here re. my land-banking/supply and demand post with article link - would be interested to hear your thoughts on this one as this is the main problem I see with investing in fringe/far outer metropolitan areas like Melton (so note, I'm not lumping ALL 'outer suburbs' into this category)......and that you guys so far seem to be over-looking???

GSJ

Giday All

Sorry have not been able to add much of late. Still busy but let’s have a go.

On land banking that influences supply and demand. Agreed
More land means more supply, lowers demand and lowers prices.Agreed
IF demand stays the same but lets ignore that future unknown and consider this question...

WHY land bank if you can make money now by developing? Say average value of block is $80k. Why not develop now and get you $80k??? Every day costs more $$$ in holding cost.

The only reason would be Developers expect to make more money than the holding costs in the future. Therefore you must assume they will be able to get say $100k in 2009 and to hold will cost them $5k so they are $15k up. Ok.

So it that makes sense then all the land banking is being done because developers see MORE growth in suburbs such as Melton as demand increases due to Gov direction, immigration pressures, lower rates, bypass, etc... (Whatever, it does not really matter). They see Growth in base land price. So land isn’t getting any cheaper.

Regards, Peter 14.7

 

[Peter 14.7]

So that leaves the cost of building.

As an ex builder I have rarely see construction costs go down. In 1995 I was building new BV Homes for $550m2 now project builders are averaging $950m2. Why?

Where do I start….In 1995 we got rid of excess dirt at the local dump or gave it away. In 2007 you have to have it certified for contamination, special pits and pay for the longer travel and paperwork. We used real timber beams, now timber is a luxury finish and most frames are steel or LOSP pines. Cost more and harder to work. Timber has run out. Did we put in Tanks and Solar Systems? average cost $2500 for either. What are they? I would say in 1995? In fact you were not allowed to put in tanks.

Want to get rid of a few trees. Go Ahead! Said the Council Inspector in 1995 and by the way, can I have some of the mango wood for wood turning? In 2007 I have just spent $1300 getting a tree survey on my 1300m2 new house block as part of the Council approval. I am yet to get rid of a tree, if I am allowed.

And last but not least, Council Levies! They have exploded in 10 years. Are we seeing a trend here…

Add to the mix we have the lowest unemployment in my lifetime and less tradespersons per capita of population ever and those we have are less skilled than 10 years back. So the cost of building is not going to get any cheaper.

Me again, Peter 14.7

 

[Peter 14.7]

Notwithstanding the above logic or lack there of, the real proof is the market. So I was reading last week the Western Melbourne Paper and it had lots of pages advertising "house and land packages" and a big full page colour ad was for Melton.

It advertised 4 Bedroom Home, DLUG, Driveway, Fences and only Front Yard with Heating but no air was $258 to $261k. Price had a * (don’t they all) implying fine print on the stamp duty savings, loan fees, etc... But let’s ignore that and call it $260k.

So… as you can buy a near new ( 3 years old) 4 Bedroom Home, DLUG, Driveway, Fences and both Front and Read Yard with Heating and some Air Con for $230k plus $10k in costs then new stock from the land bank is $20k above what the market is asking at the moment.

Therefore…..there is still a margin of capital gain to be found.

Land banking may well close this gap if there is a huge stock increase but at this stage, developers cannot build cheaper than you can buy and or don’t want to build cheaper.

When existing prices reach parity with builder deals then Melton is subject to landbank but it is not there yet

Thank you for reading, Peter 14.7

 

[swebay]

Can I make the point that in maybe 15-20 years just about ANY suburb within 50km of a big city will be easily looking at a million bucks +

so for my $170k investment I will probably make in Melton, that looks ok to me

Ipswich in Brisbane is in the same position as Melton basically and it's been going crazy for the last year or so. Bought for $190k a year ago and now its worth about $230k. What's that about 20% in a year ?

Why wouldn't Melton eventually do the same ? Yes I know we are looking medium-long term for Melton but I'm not in the 'chase the boom' get-rich-quick crowd who want instant profit/gratification. I am looking long term in the first place, sure if we get a boom in the next 5-10 years that's all good but I'm looking at what a decent house on a large block in Melton will be worth in 25-30 years...

 

[tiger]

I still think Melton is a great buy but I'm worried about rentals.

There are SO many rental properties available. A quick search brought up 70 on re.com.au - including units and houses.
ALOT of houses for rent in the budget range of $200 and under.

I think vacancies would be a problem compared to buying somewhere regional.

Those who have an IP in Melton - are you having trouble finding tenants?

 

[feihong]

I still think Melton is a great buy but I'm worried about rentals.

There are SO many rental properties available. A quick search brought up 70 on re.com.au - including units and houses.
ALOT of houses for rent in the budget range of $200 and under.

I think vacancies would be a problem compared to buying somewhere regional.

Those who have an IP in Melton - are you having trouble finding tenants?

Tiger,

I think you can give regional centres another thought. Short term wise these places may even have more capital growth potential than Melton due to upcoming projects and business activities, and this has a lot to do with China boom. Melton, on the other hand, is competing with a lot of other places (say Melton Shire) to get the population to move there.

 

[myoung]

I still think Melton is a great buy but I'm worried about rentals.

There are SO many rental properties available. A quick search brought up 70 on re.com.au - including units and houses.
ALOT of houses for rent in the budget range of $200 and under.

I think vacancies would be a problem compared to buying somewhere regional.

Those who have an IP in Melton - are you having trouble finding tenants?

Tiger I have owned in Melton South since last year, no problem renting it out or with payment of rent.

i have just bought in Melton again, although last year was a basic 3BR 1Bath. Picked it up for $142.5K and spent $6K on it, you will struggle to get one for that now.

From what I've seen since last year, the bottom end of the Melton market is pushing up. There are also a fair amount of spec homes on the market from builders. The value IMHO is 5 year old mid market places. The gloss has come off a little but I think you can pick them up below replacement cost. I just bought a 4 Bed 2Bath 3 Loo 2Car two storey place for low $240's. My research tells me you couldnt build and buy the land again now for under $280K min. Time will tell how easy it is to rent, but the PM's i spoke to reckon it will be easier than the low end as there are fewer options in this part of the rental market(fewer tennants too though).