St Albans, Melbourne

Hi all,

I'd like to hear your opinion about buying an IP in St Albans.
I am well aware the it has a reputation for being a problematic area, crime etc, so I am not asking for St Albans horror stories.
I'd like to know if people feel St Albans has potential for capital growth over the next 3 to 10 years.
Obviously its one of the cheaper areas to buy in Melbourne, most 3 bedrooms seem to be selling between 300-400.
Its affordable and the rental return seems reasonable.
I also wonder with the upcoming developments due to happen within Sunshine over the next few years, will this help capital growth in St Albans.
So far I've been advised that if I buy in St Albans, stick to the east side of St Albans and try and stay close to the shops/train station.
Any insight, opinion and advice is most welcome.

Thank you.
 
Capital growth has been almost nil in the area since the GFC. My parents have an IP there (east side, near HS and local shops) - 275k before GFC, lucky to get 330k now.

It's cheap, but don't expect any capital gains. Even the large plots suitable for building units have only had marginal returns once built on.
 
Thanks Joey,

I have a feeling I might be on my own about St Albans potential, which may be a sign that I'm actually wrong :(
Thanks for your input, it's helpful.
 
It's a good rental place, with low cost IPs so you can relatively quickly get them CFP, for but capital growth it is much easier elsewhere.
 
My family friend who is a RE agent with Barry Plant in St Albans tells me market is quite hot at the moment especially anything with development opp.
 
Was covered in a few other threads
http://somersoft.com/forums/showthread.php?t=89369&highlight=albans

Also look at Kealba. St Albans is the Western equivalent of Springvale and Noble Park, both areas I have invested in Successfully over the years.

With the 'social' problems in the area, this is where a good property agent comes in. Noble Park has the same issues hopwever I have a number of properties there with a good rental manager.

For St Albans, there was a thread on developments, look at the size of land and see if you can develop. Its within the vicinity of Melbourne, so long term growth potential given the vicinity to city and population growth of melbourne, and suburbs generally change over a 20 year period, i.e ST Albans used to be a predominantly Euro area, who moved out to Taylors Lakes / Keilor area and now very asian/ african.

Re close to station - always a good principle....

Hope that helps
 
My family friend who is a RE agent

Wasn't trying to offload a parcel on you was he? :p

and suburbs generally change over a 20 year period, i.e ST Albans used to be a predominantly Euro area, who moved out to Taylors Lakes / Keilor area and now very asian/ african.

Even the Asians are looking to get out. Kealba is a middle of nowhere land type place that tried to take advantage of the property boom but got cooked in the squat.

Disclaimer: Immediate family have investments in both Kealba and St. Albans.
 
Lol.. No he wasn't but I'm surprised how quickly development blocks are getting snapped up and at ridiculous prices.

I'm looking on the other side of the equation - how quickly subdivided developments sell. I haven't seen much of that. Any one know about 336 Station Rd St Albans? They paid handsomely for it about 10 years back (about then, because I was trying for it at the time too) as a development site and it sat as a demo site until early last month.

I know a previous hotspot Bundoora is cooling very rapidly after the highs of last December. developed sites are having trouble selling.
 
St Albans has been discussed a few times recently on SS... My opinion is that it's not desirable enough to attract any significant price increments in the short-mid term.

As far as I know, there's not much happening in St Albans apart from the sporadic gentrification of old stock and the usual House & Land packages that are found in that Western Melbourne area.

There's more activity in say West Footscray where prices are going up because of the billions being pumped into neighbouring Footscray and one could "speculate" that this suburb may be desirable to the larger market in say 10-20 years more so than St Albans.
 
Thanks everyone for the feedback. We have been looking at seaford lately as well for IP. Appears like the ones with a decent land size go quickly.

Recently made an offer in avondale heights (for ppor) but was surprised to find out most houses actually go for 20 percent more than the asking price. We realised that we are better off renting as places we want for ppor are out of our price range at this stage.

With a 450k budget (for ip)
Or 550k budget for (ppor) what suburbs in Melbourne would people recommend for CG?

Or are we better off looking at ballarat, bendigo or other regional places?
 
With $450k you may be able to pick up a nice little two bedroom apartment in the cheaper inner Northern suburbs such as Brunswick.

If you can find something that's not too compromised in the city it's probably a better option than buying regionally; but with that said there are always exceptions and properties should be judged on their own merits.
 
With $450k you may be able to pick up a nice little two bedroom apartment in the cheaper inner Northern suburbs such as Brunswick.

If you can find something that's not too compromised in the city it's probably a better option than buying regionally; but with that said there are always exceptions and properties should be judged on their own merits.

Hi Jake, slightly off topic, if you have $400k as budget for land suitable for 3 site development, which area would you choose?
 
$400k just for land purchase? How much for total build? Are you just looking for paper gains or going through with the full build? Are you going to hold on to any of them or sell?
 
$400k just for land purchase? How much for total build? Are you just looking for paper gains or going through with the full build? Are you going to hold on to any of them or sell?

$400k just for the land. Construction cost, depending on the size, I would say up to $500k-$600k. So total approx $1m. Will be looking to sell all. Thanks
 
It'll be tough anywhere in Melbourne to make $400k work for a 3 unit site, just ask Oscar on this forum. You'll most likely have to be in the outer ring to afford a decent parcel.

With that in mind - Werribee (~$90k-$130k per 250sqm lot) and Craigieburn (~$150k per 250sqm lot) spring to mind for the right land prices but the problem there is that you'd be competing against big developers and they mainly build houses not units.

Sunshine West (~$150k per ~300sqm) has been a popular topic on Somersoft, as well as Frankston ($150k-$200k per ~250sqm lot).

2 units on 600-800sqm may be a less challenging possibility with that outlay. Outer areas such as Dandenong could get you this land for less than $400k.

Have you considered, buying subdividing and building a unit on the back of a house?
If so, there are inner Western suburbs like Altona North, or Northern suburbs like Reservoir and Glenroy with precedence that may be worth looking into.

Alternatively you could look at regional areas such as Ballarat & Bendigo.

These are just rough suggestions of course; be sure wherever you're developing that you build the appropriate size and style of property and ideally build where others have already successfully completed recent projects. Also, aim for a 25%-30% on paper margin and a ~15-20% actual margin to make the build worth while.

Edit: Just saw this on RE.com - http://www.realestate.com.au/property-residential+land-vic-broadmeadows-200884987

^ Might be a hard one to make profit upon completion though (considering new units go for ~$250k ea.).
 
Hi Jake I see you mention Altona north for development a fair bit but never Altona. Im curious if there's a reason for this? I'm guessing it's due to Altona being slightly more expensive than north?
 
Thanks Jake for the thoughtful reply. Gives me something to think about, possibly may have to increase my budget
 
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