which one in western suburbs:melbourne

[djones]

Hi :

Iam going for IP for the first time and am looking for the same in
A) Altona,
B)Altona north/meadows,
C)Ardeer,
D)Braybrook areas.

I would like to take advice of my fellow experienced investors as to which of the above areas would be best suited for capital growth as well reasonable yield.

I know its bit tricky to predict future prices but on the face of it altona meadows looks pretty good and has some new stock as well.

cheers
djones.

 

[Elwood or Bust]

Its not tricky to predic future prices at all. Get a history of price growth in the area for the past 30 years, take the average price growth, and its a fairly safe bet that the average growth for the next 30 years will be the same. Of course if u are a short term investor then this is much harder, but it still gives you a guide. For example, analyst current market conditions (low interest rates, poor eco outlook etc), find a point in the past with similar characteristics, and check out the price growth in the areas at that point in time.

However, it is IMPORTANT to not base your decision on the last 1,2,3 years of growth. A lot of long-term investors are making this mistake. You hear about the GOOD stories, but those with BAD stories stay silent. And so you get caught up in the tide.

Personally, I would not touch any of those areas you mentioned as a long term investor looking for cap growth. In my opinion, those areas are more buy, fix, sell areas.

Of course this depends on the affordability factor. If you cannot afford higher growth areas, well thats it. But I would consider sacrificing a fair bit of income, taking a bigger loan and getting a property in a higher growth area. Iys hard in the early years, but you'll be glad later.

 

[manny]

Hi DJones,

(like your nick name, reminds me of one of our best cricketers ever, Dean Jones)...

Now in terms of the areas you listed, well I would look out for proerties in Altona, contrary to what Elwood stated (sorry Elwood, I would have to personally disagree with you on this), Altona is experiencing good growth, cafeteria's are openning & the shopping strip has no empty stores (should say something)... also, it is close to the city & is the only affordable beach suburb at the moment (next suburb after Williamstown)... Note: with Altona you may not get the best rental yield, but the growth it has experienced & the expected future growth would make it well worth your while... (note: other developments include works on the shore line, recently completed boat ramp, life saving club, big dollas invested for large villa's, etc...) & above all it has a Zone 1 train (in the city via train in less than 20min)...

Altona Meadows does have some prospects, with land quickly running out & being the next suburb after Altona, I suspect the people that cannot afford Altona would hit Altona Meadows & also it having easy access to the city via the West Gate freeway you should expect some growth there, (although probably not as good as Altona) but you can still find properties returning a 5-6% rental yield...

Altona Nth is SO CLOSE to the city & has lots of local infrastructure & good schools (shopping centres, etc...) & has Zone 1 busses hitting the city over the West Gate... so I would expect continued growth in that area, although Rental Yields would not be as high as Altona Meadows, but I would expect higher growth than Altona Meadows... Note: Altona Nth adjoins Spotswood & Newport, if those areas continue to grow (which have done well in the last 10 yrs), Altona Nth would continue to follow along...

I know the Altona areas well as I live there & invest there (in all 3, Altona, Altona Meadows & Altona Nth)... My personal preference in ranking would be: 1. Altona, 2. Altona Nth, 3. Altona Meadows... if I can help u with more info re: these areas feel free to ask questions on the forum OR send me a private message...

I'd stear clear from Braybrook & Ardeer (Ardeer in particular)...

Just my 2cents worth...

Cheers,

MannyB.

 

[BKH]

Ah my favourite area only because I know the region very well and have watched the area for some 25 odd years

I agree with what Manny says in relation to the area in general.

To see how the individual areas have performed I recommend ontaining the Valuers Guide (I have made mentione in other posts) It takes into account all sales rather than auctions.
This way you can track the medium prices over the last 10 years.

It would appear that you are seeking a balanced property and not only capital growth. These suburbs would fit that criteria.

My pick is Altona which has had a growth in value of some 50% in the last couple of years. It is the sleeping bayside suburb which has only now been found. Of Altona the area closest to the beach is the pick but those value hav skyrocketed over the last couple of years. As Williamstown goes up in value, (and still increasing, Ignore the reports in the daily papers) increasing prices flows onto the surrounding areas go up too.

Altona Meadows is running out of room as Point Cook is the neighbouring area and is building up as well with Santuary Lakes prices overflowing into Altona Meadows (all that separates the area is a fence and subject to disputes even now )

The Western Suburbs are losing the stigma of a decade ago and prices are cheap compared to other parts of Melbourne the same distance from the CBD.

 

[sbe]

I'd tend to agree for the most part.

Altona is next to Williamstown, but much cheaper - for now.

Ardeer - there's some pockets there I like, but in terms of cap growth, dont see anything spectacular happening for a while.

Braybrook has been moving a bit lately. Had other people recommend it to me as a fix up and keep sort of area. Should come into its own in a few years (supposedly...)

Altona would still be my pick - news beach, near city... Be careful, when I was looking, there's some areas better than others in there. Locals can tell you more than I can. I liked the area's near the big park there.

Good luck.

Simon.

 

[djones]

thanks guys

Thanks alot to all of u who have replied.

I also wanted to know from where i could get my hands on the Valuers Guide mentioned by 'BKH'.
Also you mentioned there are some areas which are bit better then others in altona. could please give some areas whichi should steer clear of.

Cheers.
djones.

And yes Dean Jones was a great one day cricketer....

 

[Elwood or Bust]

Sorry guys but i stand by my post. Prices have escalated but 1/ not as much in blue chip areas, and 2/ prices ahve been artificially increased by the construction of 'new' dwellings or quick sale renovations. And as i said in my first post, beware the SHORT growth spurt. You need a area that growth will be sustained longterm. Can you guarantee with high probability that this would be the case in those areas. Your a fool if you did.

I'd written a much larger post that this but i got an error msg and was shut down, but in brief, to me, picking a area to buy a residence in is akin to picking a SHARE in a particular market sector.

You shoud go for the best share in the best sector.

The sector in this case is the TYPe of area, eg bayside, inner city, outer suburbs etc. The stock is the particular suburbs in these areas. In my opinion, and the historical growth rates (and current prices) back this up, those suburbs are not the best in their sectors.

However as i stated in my first reply, the issue is affordability. If you cant afford the prime areas, then you will have to goto the next level, and i suppose Altona might fit those, though i think there are better.

The historical facts do not support those 5 suburbs as being long term high growth areas. They may be, but why gamble when there are areas that are no-brainers.

 

[BKH]

D Jones
As I said in my previous post it would appear that you are playing it cautious as this is your first investment property. How would all first time investors approach their first big investment, WITH CAUTION and with lower risk abet at a reduced potential of capital gain but with a rental assisting the payment of the mortgage. You are feeling the waters and will build up your knowledge and confidence over time to make your 2nd and third property.


Elwood- How well do you know the Western Suburbs area? Are you considering the current investment personality of DJones.

What happens when interest rates go up to 8% or the prices, across Melbourne, stop rising for the next 5 years. Prices cannot continue the increase of the last couple of years. So many investors who were chasing capital growth and geared heavily may have their fingers burnt. But then the true investors may be able to get some great bargains.

Manny and I have grown up in the area. We have seen the barriers come down on the stigma of "Western suburbs".

I have watched Williamstown prices go from $40-50k in the early 1980’s to in excess of $600k in 2003.


I have watched the same happen to Yarraville, Newport, Footscray and seen the gentification of those suburbs. And where to many of the new owners come from? The Other Side.

Altona is a BAYSIDE suburb- beach, low through traffic and soon to be discovered. The last undiscovered bayside suburb.

Whilst it will not reach Williamstown’s heights but it will have enormous growth over the next 10 years once fully developed. 12-15 k’s from the city it is on par in distance to Hampton and Sandringham. Altona’s infrastructure is in place. It has lots of parks and areas for families with children. bus and train lines. A very good village shopping centre. It’s demographics WILL change as has Williamstown in the last 10 years.

DJones look ahead and try and see Altona in 10 years hence. You wont go wrong.

If I was looking for my first ( or even my second) investment I would closely look at Altona near to the beach and before crossing the railway line.

My pennies worth (yes I remember them) Time and hindsight are marvellous things

 

[BKH]

Sorry DJones I forgot. the book

A Guide to Property values. Data and Analysis from the records of the Valuer General Victoria.

Available at the Victorian govt bookshop in Collins Street between Queen and Elizabeth St

And Altona's prices from the book/s with averages _ it probably wont send properly
1990-119k, 1992-110, 1994 -114, 1995-120, 1996 -122 1997-131, 1998-155, 1999-172,2000-192, 2001-243, 2003 277, my guess for 2003- 315- whats that? 300% in 10 years

In the years 1990-2001 Spotswood had the greatest growth.

DJones if you want all the west suburbs back to 1990 send me a private email.

 

[gailh]

Hi everyone,

As someone who grew up in Altona, I couldn't resist adding my bit. Altona is definitely a strange one. Bayside and close to Williamstown, but still very daggy and working class. There is not one single trendy cafe in the whole suburb (believe me, I've looked). But, it does have the beach, and anything close to the beach has shown good growth over the last 10 years. Houses on the Esplanade go for around the million dollar mark these days. A few professionals starting to move in now (god knows where they buy their lattes). Will never be like Williamstown in my view as no period housing and too much industry.

All in all, I would say good prospects of solid growth over the medium term, especially near the beach. But as I have already said before, why even think about buying in Melbourne right now - we've just seen the longest boom since the war. If prices go up more than a percentage or two in the next couple of years, it will be unprecedented. After the last boom (which was smaller than this one) prices in Melbourne didn't go up for five years. Sure, it might happen. But shouldn't investors deal in likelihoods? Remember that the property market is cyclical. If prices stay the same and you're negatively geared, that's called losing money. Be very careful.

Good luck everyone

Gail (and I am not a gunna - just circumspect and a keen observor of history)

 

[BKH]

Gail- Yes I agree that Melbourne has gone thru a boom that will not be seen for quite some time.

I percieve Altona as a mini Williamstown without the history or period houses etc. What we have seen over the last 2-3 years is Melbourne REdiscovering the beach and cheap land beside the water is getting scarce. That is why I thing Altona will continue to increase in price because it is still long way, in price, behind other similar distanced bayside suburbs on the other side.

ONce upon a time Williamstown was frowned upon. Just going thru some of my auction records I see houses in the late 1970's were going for $15-25,000.

It took a generation to be discovered and that is what it takes to change the character or perception of a suburb.
Altona is growing old and it will reach soon that line where the older generation disappears and young families discover the area and change the character so I am looking 10 years hence.

This has happened to Williamstown. Only 10 years ago mothers with babies and toddlers in the shopping strip were a rarity. Now the schools and kinders cannot cope.

 

[Elwood or Bust]

BKH, I did qualify my post by stating that it was subject to personal circumstances, such as affordability, although, I don't necessarily think that that should be a precursor to purchasing in a blue chip area.

As I stated, I could be wrong, and Altona could boom, but I see no reason why such a 'gamble' should be taken when you have suburbs that have a strong historical record. Im talking 40-50 years not 5-10.

And I do know western suburbs quite well? Why? well im not the only property investor in my circle of friends. Many have bought in altona, footscray , even god forbid, Brooklyn, thinking that the prices were cheap. Most of them have either sold out or are still waiting. As I said, the price growth in th western suburbs in most areas have been due to renovatins or new developments with higher prices. This has helped a small bit with older style places, but they will all stagnate.

Exceptions are, and my recommendations if ur going west:

- Yarraville
- Spotswood
- Seddon
- Williamstown

I would not go out further, not would I go to any in betweens

If you do insist on altona, etc, I would recommend that you use the 'worst house in the best street' philosophy, which is really the same as buying in the best suburb out of the choice of suburbs, same principle.

But again I see no reason for considering those suburbs at all above others. It is VERY hard to break a long term trend in house prices in an area.

But as BKH said, and I said in my posts, its subject to personal circumstances.

 

[JSD]

"Exceptions are, and my recommendations if ur going west:

- Yarraville
- Spotswood
- Seddon
- Williamstown

I would not go out further, not would I go to any in betweens"

Hi, what are your thoughts regarding Newport? I personally would put Newport in the same category with Spotswood and Williamstown.

 

[BKH]

Newport- I have been watching Newport for some years and we are currently going thru a transformation in Newport. Like other areas that get discovered it started 5-10 years ago in the Newport area next to Williamstown near the Strand Road and has slowly expanded to to Newport Central, whichis currently in the early stages of its transformation.

The migrant families of the 1950-60's are moving out and being replaced by young families or professional couples. Railway land is being developed for housing.

In another 5-10 West Newport will start to development. (it has only just seen redevelopment of sites)

Is the obove indicates there are 3 distinct areas to Newport.

Prices for the last 12 years are 1990-2002
Newport 112 110 107 110 117 115 126 140 173 200 235 285 314 300% in 12 years.

 

[beech]

hi ELWOOD i would be interested to hear the areas that you consider NO BRAINERS based on your research of historical growth in the past.

Darren

 

[Elwood or Bust]

Originally posted by beech
hi ELWOOD i would be interested to hear the areas that you consider NO BRAINERS based on your research of historical growth in the past.

Darren

Hi Beech, here's a post I did on another topic with my top 10 suburbs, the top 5 with reasons:

Well in Melboure my top 10 suburbs would be (not in orderand only 5 with brief reasons):

- Elwood (beach, transport, ormond rd, population growth, tough new development restrictions, avg 15%+ growth over 30yrs, i could go on and on about this suburb but one important thing, stay on the BEACH side of ormond rd, the other side was built on swamp and has terrible cracking problems)
- North Carlton, specially in the new suburb Princess Hill (city walking distance, princess park, great growth history, some nice streets, just stay away from the cemetry)
- Toorak (capital growth, chapel st, upper class attracting the rich, private schools)
- Kensington (super close to city, macaulay st, beautiful victorian style houses, picturesque, booming, recent developments removing eyesores)
- Mentone (gorgeous suburb, private schools, bayside)

other 5:
- Essendon
- Hampton
- Carlton (not north)
- Sandringham
- Brighton

As you can see, heavy lean towards coast, in fact id say most bayside suburbs wil continue to grow strongly, australians are a beach culture after all.

Personally all my properties are in Elwood and north carlton. How, well strong growth means more equity, means more properties, so your on the right track, look for growth, yield is a secondary factor.


__________________
Elwood or Bust

 

[Lily House]

Have done a little research on Altona lately.

Median property prices 2002: top 25% $338,111, Middle 50% $312,000, Bottom 25% $232,500.
Rental return 3.9%.

Hi Elwood - would be interested on your thoughts about Mordialloc (being next to one of your top 10 Mentone). Thanks

Lily

 

[manny]

Hi Gail,

in terms of cafe's in Altona, if you go for a walk on the w/end in Pier St you will see the number of ppl having coffees in some of the local bakeries & even the new "Cafe" that has just openned up on Pier St... looks like more & more of these Cafe's & Eateries are openning to cater for the newer residents, which show early signs of a new trend (pretty much the transformation/trend Williamstown & even Yarraville went through a few years back)...

Cheers,

MannyB.

 

[Elwood or Bust]

Hi Lily,

Re Mordialoc, this suburn extends quite deep inland I believe and you will note a large discrepancy between the prices on the beachside of Mordi and the more inland areas. I would stick to the beachside, and yes i think mordi is ok, but only because it is coastal and that is the current boom trend.

Having said that, again, I stress that mordi des not have the long term growth history of coastal suburbs closer to the city. Yes short term the growth may be bigger in mordi as it plays catch up, great if ur a property trader, but long term, it wont stack up against the inner suburbs on the beach...Albert Park, Middle Park, Elwood, Brighton, all the way out to say Sandringham, though i like Mentone due to the scenery. Mordialloc is a bit more blue collar as we get closer to industrial parks etc.

Its a tough game property if you try and pick a suburb that has only started to appreciate but will continue to do so, as they are doing in previous posts in this thread. But it can be easier if you stick to suburbs that have a long history of growth, even if they are not coastal.

 

[suejones]

Hi Djones and others,
I just wanted to pick up on what Djones said in the original post, which was

which of the above areas would be best suited for capital growth as well reasonable yield. .

We all have our personal theories and reasons why we buy but they are not necessarily applicable to someone else. So Djones, (and everyone else,) you need to be really clear about why you are buying and what criteria you need your investment to have and recognise that this will be different for everyone.

I will add at this point that I live in the Western suburbs (Footscray) and invest here too (Yarraville, Newport & Footscray).

Djones, it is reasonably easy to pick growth areas, the Valuer-Generals guide is invaluable for this, but to assess yield, you really need to do your research, especially at the moment. Try some stuff on for size.

i.e. Can you afford a two bedroom apartment in Williamstown? (good growth) If the answer is yes, have a look at the current rentals for smilar properties & the vacancy rate in the area. The current issue of API magazine has some useful figures on this stuff. How would you cope if it was vacant? What could you do so tenants would prefer to rent your property?
Then you can make an assessment about which area suits your criteria.

You can get information from others, but ultimately you need to assess this and do the research yourself, because only you really know your situation and what you need.

No areas are intrinsically good or bad. It depends what you are looking for in an investment.