Western Suburbs

[chris168]

Western Suburbs; Melbourne

HI all,

I'm curious to know more about Sydenham, Delahney, Taylors Lakes etc??? Those suburbs have gone sky high. Any comments???

I'm considering those areas ...any advices?? Is it wise to invest in the new areas where the prices have jumped considerably in the last 5 years?

Chris

 

[darren b]

Wait a while and see what happens. If you buy know, you are buying at the peak, although I have no crystal ball. Prices are way to high for cuurent rental returns. Something has to give. If you want value for money, look at unfashionable werribee. Its only 20 minutes to melbourne cbd. I bought a 12 year old 3 bedroom brick yesterday for 139k in first class condition. I'll wrap it myself, but it would still make a good rental and still is new enough to claim building depreciation.
A warning though. An agent told me 1 in 10 rentals in Werribee are taken over by dope growers

 

[sbe]

Of the three, Taylors Lakes would be the pick.

Sydneham still has new land available, which would reduce any price rise due to demand (people can still buy new land -> no scarcity value).

Delahney - not the best area, haven't studied it a great deal.

Taylors Lakes - No new pockets of land immediately available, all pretty established now, close to freeway and shopping etc. More upmarket then Delahney for sure. Not sure on rental returns etc, but would still be the pick of the three you've listed.

With price rises - who knows. Look at surrounding suburbs for cues as to whether it can go higher easily.

All the best,

Simon.

 

[BKH]

For Taylor Lakes if you know the last couple of years this is how it has performed sine1990
1990- 171 k
1991- 168
1992- 165
1993- 163.5
1994- 165
1995-168
1996-163
1997-175
1998-176
1999-200
2000-229
2001 prelim 247k

As you can see since 1998 Taylors Lakes have been increasing around 10% per year.

 

[sbe]

Looking at the costings, there's two things about the drop / lull in values.

Sydneham opened up (lots of cheap land real close) - early 90's
Property (esp West) around early 90's dropped a bit in value.

It's now well established (compared to the others), and I think now pretty much sold out. Sydneham's got the big shopping centre (5 min's to Taylor's), but still has lots of land...

 

[suejones]

Personally, as a Western suburbs resident, I'd be really cautious about investing in the outer Western suburbs, as I would outer East such as Pakenham, Narrewarren, etc. My feeling is that if the market flattens out or even dives, these suburbs will be hardest hit.

When researching an area, I like to look at the data for as far back as I can get. For example, Taylors Lakes price didn't move at all for 6 years between 1991 and 1996 before taking off. However, everywhere in Melbourne has grown in the last four years so the fact that it did is not much recommendation to me. I am looking for suburbs which do okay even in the tough times, not just in the booms. I would much rather buy into a suburb whose price increased even marginally during a lull in the market.
If you wait a little, you may find prices in outer suburbs return close to 96 levels, which would be a much better time to buy.

Also I don't think that those suburbs have much to recommend them to tenants. There is too much property that is too similar and they tend to be less well serviced by amenities. There is no reason why a tenant would chose your property over many other similar properties. In fact they will tend to go for the newest one, especially now when the market is overstocked.

I am more optomistic about Werribee, but I would really want to check out the state of the rental market there: what the returns are, what tenants want, vacancy rates etc.

I know this sounds really pessimistic. I guess what I am really saying is do your research! Make sure you know the area well, the rental returns and how it fits into your strategy. Don't just buy because it is cheap and sounds like a good idea. If you do, it might come back to bite you on the bum!
All the best,
Sue

 

[sbe]

Be careful of Werribee too. Heaps of rental stock out there......

Sue has a point though, in that your due dilligence has to determine the rental demand for any area.

Werribee's got lots of stock (just check the local, there's heaps advertised!!!). Sydneham is more typically a owner/occupier area (pioneer spirit etc). Dont know about the others - I don't play there.

As Sue points out - certain suburbs will nearly always grow albeit with not real good yield rates. Outer suburbs grow less predictably, but usually better yield. You need to determine what you need. Can you afford to cover the shortfall for a growth property.

It's easier to find a yield property that can grow, than vice-versa.

Also, if it's all you can afford, at least you're in the race.

I also live out West, grew up in the North, and lived out East for a while...

ps. Narre Warren & Pekenham - may be out in the outer, but with the new freeway extension, about to become that much more servicable.....

Cheerio

Simon

 

[chris168]

Thanks again guys....

Outer suburb is a bit of a worry but my gut keeps on telling me to look more into Taylors Lakes. Population there is growing and I picked up the local paper and the rental list is not as over flooded as other area. Can be wrong but of course I won't rush into it.

BKE, would you able to give me Glen Waverley last 10 yrs house prices?? Just like to compare the trends between them.

For some bizarre reasons I think Taylors Lake will be another Glen Waverley. Naive way of thinking??? I'm looking at the common trend to make some decisions. Any comments welcome.

Thanks for all your replies.

 

[suejones]

Chris,
Here are the median prices for Glen Waverley from 1987 - 2000. (read L -> R) Sorry I don't have the last two years but they shouldn't be too hard too find.

93,000 115,000 145,000 141,000 137,000 129,500 140,000 142,000 131,500 140,250 147,250 160,000 194,250 207,500

I think if you have done thorough research (and you seem to be in that process) then you should trust your gut. My gut often seems to tell me what my brain hasn't quite articulated yet, and when I think through my gut feelings, they stand up to the intellectual stuff (usually! And if they don't, my husband tells me!!)

My gut feeling was to buy single fronted Victorians in Footscray several years ago. I'm glad we did.

Best of luck!
Sue

 

[rodm]

sydenham etc

sydenham, now has a new rail service 35 mins to the city, 25 mins by car to the CBD near paek hour times (I have clocked it ) A raidly expended shopping centre that will rival High Point. rents a 220k home will get you good tenants paying $220 plus a week.