Purchasing in VIC - Frankston Area

HTW backs Frankston as the major contender for cap growth in 2008

Herron Todd White - February edition

http://www.htw.com.au/Downloads/Files/187_February_2008_Month_In_Review.pdf

"Mid 2008 will see the completion of Eastlink tollway, a 39 km road system linking the outer eastern and south eastern suburbs with Melbourne's existing freeway and tollway network. An estimated 40% of Melburnians live in East link Corridor. Benefits will include reduced travel time to CBD and Airport as well as easing congestion on overloaded arterial roads such as Springvale Road and Stud Road.

The residential property market benefits could be substantial throughout the suburbs of this region. Firstly, we could see considerable increase in demand and capital values for areas such as Frankston , one of Melbourne's most affordable suburbs located by the bay at the end of the new tollway. With improved access coupled with an affordable median house price and desirable bayside locality, areas such as Frankston could see some major movement in 2008..."


Melbourne is now back as "Rising market" in the HTW Capital City property market indicators chart for all Aus cities. This the report concludes is based on strong infrastructure growth, very tight rental supply and above average population growth.

I am convinced (barring a tsunami or 4 interest rate rises in the next 4 months ;) ) that Frankston is set to gain much better capital growth in 2008 than 2007 (achieved 20% in 07). Most of that growth should occur around the opening of the eastlink with massive publicity and media interest.

The accessibility after the tollway, compounded with the affordable rental stock in Frankston should also increase the rental returns for the investors who have bought in the last 18 months and at this time.

Excluding my development stock, my gross rental yield across my Frankston portfolio is over 6.5%, which I expect to reach over 7.5% (of the original purchase price) in the next 6 months.

Harris
 
I am convinced (barring a tsunami or 4 interest rate rises in the next 4 months ;) ) that Frankston is set to gain much better capital growth in 2008 than 2007 (achieved 20% in 07). Most of that growth should occur around the opening of the eastlink with massive publicity and media interest.

Hi Harris,

What % of growth are you tipping for the Frankston area over the coming year? (Difficult question, I know!)
 
Hi Harris,

What % of growth are you tipping for the Frankston area over the coming year? (Difficult question, I know!)


Simple answer.. I dont know.

All I can say is that based on sales activity level, buyer interest and demand, tightening vacancy rates and the meteoric rise of inner (rippling in middle ring), the scope for capital values appreciation is higher now in Frankston than it was back in early 07.

Whilst the values in Frankston have gone up 20% in 12 months, the interesting fact is that Frankston is now more affordable (in the bayside belt) than it was in early 2007. Affordability is relative and the suburbs north of Frankston (comparing the bayside) have appreciated at higher or similar rates, however came off a higher median compared to Frankston. That median has gone up further corresponding to their higher values at the start of the growth.. thereby offering a better value proposition to Frankston investors now compared to start of 2007.

The growth I am expecting this year WILL have a compounding effect due to the ripple effect and affordability blues. The Eastlink opening coinciding at this time of melbourne property market will add a new dimension and fresh trigger to the Frankston property values.

Stab in the dark figure - I would say 30% for 2008.
 
units in Frankston

Hi all,

I've checked re.com.au sites, and found that a lot of units are still advertised for sale in central/south Frankston area. Are most of them still for sale, or the agents have forgotten to take them off the market? I'm under the impression that nobody wants to buy units in Frankston at the moment. Maybe it's because the house with land is still very cheap?
 
I have a few units in Sth Frankston. There are only a few units in Sth Frankston on the market.

I would not buy a unit near the TAFE college or Beach St. The Beach St area has been known for its druggies. Hopefully this is changing as its close to the Station etc. But it will take time for some of these small units to change tenants etc.

If you are looking to buy a unit in Frankston, pay a bit extra and look around Sth Frankston, Kar St, near the Frankston (soon to be St Kilda) football oval.
 
I think you'll find that the only units on the market for a long time are the not-so-good ones in the bad positions.

I just did a quick search on r/e.com.au under sold properties and saw 13 units sold in Jan.

This could mean that there are less on the market too. If you were an investor or an owner occupier who followed the trends in Frangers right now; you would NOT be selling.
 
I think you'll find that the only units on the market for a long time are the not-so-good ones in the bad positions.


Frankston is going through the classic/ text book case of any growth spurt that happens during a boom in an area. Houses with significant land content are always in high demand at the start of the boom due to investors capitalising on the boom by acquiring properties with high land content and owners who want to buy houses due to relatively affordable price points. Once the market goes up significantly, a new wave of investors (late investors), people who want to live in the area but cant afford houses (and other affordability reasons) start latching on to the units.

I have experienced this many times in the locations where I have bought property, both interstate and in melbourne.

This happened in inner melbourne too with the latest boom, where units lagged way behind the houses in CG and took a belated start to appreciate in value. Once the market for the houses cools down or stagnates/ units keep on appreciating in the following months and catch on to the approximate growth for that area (although units appreciate at a slightly lower rate than houses in long term).

Units are in low demand currently in Frankston, however that would change very soon.

I would agree with toony regarding choosing the location of units very carefully and researching the area to make sure that on the desirability index, the choice of unit location makes good sense for letting/ value appreciation purpose in short term.

Harris
 
Pretty sure Frankston has gone up around 19% since October/November last year! Quick gains. Funkytown is looking great...hence why i just bought a property, beach side of Kars St, last week. Bit of work needs to be done...but good spot.
 
Pretty sure Frankston has gone up around 19% since October/November last year! Quick gains. Funkytown is looking great...hence why i just bought a property, beach side of Kars St, last week. Bit of work needs to be done...but good spot.

Why do you say that Wriggles..?

I am pretty sure it has not - but you might have some info on the movement in values (that I am yet to see) and might want to enlighten the rest of us here..?

Harris
 
Sorry Harris...no info on values etc here......just going off what a couple of agents (andrew milne) have told me thats all. Spose i should have said that in my 1st post.
 
Sorry Harris...no info on values etc here......just going off what a couple of agents (andrew milne) have told me thats all. Spose i should have said that in my 1st post.

I am surprised that Andrew Milne has made such a sweeping (and wrong) statement. He is always the one with the most conservative hat on when talking about the appreciating values and would always resist to gloss over any growth figures.

Will chat to Andrew to discuss how he came to that conclusion.

I would say perhaps a 3-4 %, 5% tops being the max growth since Nov/ Dec. Although it will be a totally different story in the months to come.

Harris
 
I thought myself it was around the 15% just going on my house valuations...and when i mentioned it to Andrew...thats when he said the 19%. Mine was valued around the 410 last september and now is around the 480/490.

Im only new to all this anyway...so just still learning.
 
I Just secured one as well on south frankston, from andrew milne. not sure whether too late to catch the wave... will let it flow.
 
I thought myself it was around the 15% just going on my house valuations...and when i mentioned it to Andrew...thats when he said the 19%. Mine was valued around the 410 last september and now is around the 480/490.

Im only new to all this anyway...so just still learning.

My property in Frankston South (Sycamore Road) was valued at around $320 June last year and is now valued at around $350. I've been keeping a close eye on the market and I definately have not seen 15% since September.

Might depend on who's calculating these estimates. Somestimes greater values are put on properties in order to list them.



Toni
 
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Actually sold my house this week....it was only signed up for about 2 days and sold for full asking price (near Rosedale Gve). So very happy.

But yes..some agents do up the value in order to get the listing.

I know sycamore really well...my parents live on Lawson Av.
 
Just come from 2 Auctions...1 in pratt ave frankston south....2nd in violet st frankston south. Pratt sold for 356k & violet sold for 730k.

The thing that amazed me, was that it was a young asian couple (mid-late 20's) who bought both of them. Not a bad amount to go shopping with.
 
wriggles, they are probably new millionare from asia, just stashing their cash here.

and 16 mincha st, sold for $340k, any one been to the other mincha st today (9 feb) ? i am just curious whether or not it is sold ?

cheers.
 
wriggles, they are probably new millionare from asia, just stashing their cash here.

and 16 mincha st, sold for $340k, any one been to the other mincha st today (9 feb) ? i am just curious whether or not it is sold ?

cheers.

22 Mincha sold for $345k yesterday and 531 Nepean Hwy (740 sqm) sold for $895k. 626 Nepean Hwy (630 sqm) sold for $720k.

A good bargain price for 30 Lindrum Rd in Karingal that sold for $232k (however sits on one of the smallest blocks in Karingal and requires very serious reno).

Very surprised at Frankston North having past the price point / median values at which Karingal prop were selling same time last year. 3 properties sold last week for between $265k and $270k in Pines !

Another 2 went for $250k +. Just a matter of time before it cracks $300k mark.

Harris
 
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