Will Properties at Frankston Double in 10 years time ?

[mingling]

Dear All,

I have been to a few renowned and establised property investment company recently. They all reckon that properties at Frankston areas will never double in 10 years time. Beside, the local have the same feeling. I am kind of disappointed naturally as I bought my IPs there this years.

If Frankston does double in 10 years time then those properties at CBD or within 5 KM of Mel or Mel blue chip area will reach 2 or 3 million.

Say for example, a standard size land+house of 400K at Frankston South Area compare with same capital investment of 2 bedroom unit/apt @ 400K at much much closer to Mel city. The latter will double in 10 years compare to 400K at Frankston investment.

How do you feel about this ? Appreciate Mel investor or local feedback and sharing.

Cheers !

 

[bailz66]

Frankston is in close proximity to the beach, you have a generation of baby boomers heading for retirement. They will sell up their inner cities and move to the country or move to the beach.

Frankston should do alright over that time i wouldn't stress about it.

 

[buzzlightyear]

I'll preface my comments by saying that I have bought in Frankston South with a view to subdivide and develop in the next little while, so my opinions may be biased

There has been a pretty significant upswing in prices in the are over the past two years and more particularly in the last twelve months. There aren't as many 'good buys' as there once were. You need to be a bit more selective today if you are looking to buy. I am still looking for another, but am finding prices being paid, are making development far more marginal, which means you may need to hold onto the property for longer before you redevelop.

When I first started looking, development sites were $100-110k, today they are upwards of $130 and in some cases over $180k+. This increase in land prices still haven't fed themselves into the newer developments cost base, so as long the economy continues on its current path, I am pretty comfortable in saying that prices will continue to push north for some time.

This increase in prices is now starting to spill over in the Frankston Heights area (east of Frankston-Flinders Road) and even there development sites are becoming a bit pricey.

Notwithstanding the already increased prices, I still believe the area is going to be a very good one for both capital gains given its proximity to the beach, the redevelopment of the Frankston foreshore, and the upgrading of property through redevelopment and the pro-development council.

As for your comparison re a inner city Melb unit/apt v Frankston H& L the answer is....it depends. I would still argue that if you can buying inner city melbourne, (especially houses), then that would be preferable. At some point in the future redevelopment opportunities will become far more limited, so to the cost and prices will become prohibitive.

 

[Savanna100]

How is the old Housing Commission area of Frankston, known as "The Pines" going ???.....I can't imagine that it would every do that well.

 

[Toni]

Where can you still buy and 3 bedroom home in a beach side suburb, close to major shopping centres, universities, Tafe, top schools, transport, ring road, be in a projected 2030 growth corridor, marina (which is supposed to incorporate a ferry to travel from Port Melbourne to Frankston, 5 star Motel (being developed), beautification of the foreshore and lots of other developments etc. for $230????? How can it not double????

Sometimes you have to go against the masses and supposed professional opinion and allow logic to creep in.

As for the Pines, I believe as prices become more unafordable in Frankston, Developers will get in and start bull dozing and building. It has happened in alot of other areas that were also undersirable.

This is a Beach Side Suburb!

 

[Harris]

How is the old Housing Commission area of Frankston, known as "The Pines" going ???.....I can't imagine that it would ever do that well.

I agree .!

I bought there in March last year (2 prop side by side on 1600 sqm) with 2 sitting tenants and paid $289k for both.

Nothing on close to 800sqm can be bought now for under $240k in pines.. so just a very ordinary 66% increase in 18 months…!

I am very close to getting plans approved there for 6 townhouses and its showing a measly return of 30% on the whole project in the current market… which sounds awful too..

Harris

 

[BayView]

How is the old Housing Commission area of Frankston, known as "The Pines" going ???.....I can't imagine that it would every do that well.

"The POINES" is where my sister-in-law bought her house in 2003 for $93k.
It is now worth double that, and the standard of people in that little area is still the same.

Not only that; but her block is a quarter-acre, so there is even more potential to "add value". Her back yard is probably worth close to $100k.

No matter what the history of these sorts of areas is, places like Doveton near Dande-thong as another example, the reality is that eventually they will be the only cheap places within an hour from Melb, near transport, employment, shopping, schools etc.

This spells cap growth to me.

 

[BayView]

I'm laughing like a fat spider; we bought in Central Frangers in 2004.

Mingling, just sit back and count the money.

 

[Toni]

forget about the possibility of a 10 year doubling in property prices here in Frankston. I give it 5....

I bought here 7 years ago and started with nothing. I now have 4 houses and land in Qld. All courtesy of Frankston.

You cannot go past the beach. Everyone loves it and it is still sooo cheap for what it has to offer. I forgot to say before that the Kanonook Creek area is being transformed with coffee shops and board walk to look in at the beach, almost like a mini Lygon Street and there are so many other developments, just look at the frankston council web site for more information.

Frankston can only go up! I love it here and would not live anywhere else. I have lived in the suburbs (not beach) before and after living on the beach could never go back. We are in between Portsea and Melbourne and I love the flexibility and joy this brings to our family.

Frankston is a Wonderful place and I couldn't live anywhere else.

 

[cgw]

I am fm Adel, I assume Frankston is an outer beachside suburb of Melbourne.
The people who told you that Frankston will not double in 10 years time, probably want you to buy in their suburbs that they have for sale, or some invested interest in.
Over the last 50 years, all properties have doubled every 7 - 12 years in capital cities, ask your friends, family that live inner and outer Melbourne how much they bought their house for in the 1960s, and I bet all have always doubled every 7 - 12 years.
It sounds like Adelaide's Christies Beach, about 20 km down south, as soon as they start knocking down the timber frames on the large blocks, and the housing commission, it will more than double in 7 - 10 years.
It is a beachside suburb.......

 

[kelvinh]

Im no expert.. and dont really know the area ... but based on past performance.. I'd say yes...

growth for Change in
houses 96-06 houses 96-06
FRANKSTON 9.9 %pa 158%
FRANKSTON_north 10.1%pa 162%
FRANKSTON_south N/A

 

[mingling]

thanks

Dear All,

Thanks for the confident in Frankston and moral support. Our 2 IPs at Frankston were bought from the internet and till today we have not even seem the properties. We do not even know where is Frankston ?

So when these 2 Aussie guys from Mel comment negatively about Frankston, frankly speaking, i was very disappointed . For once, I thought I have make the wrong decision about this investment.

well, after reviewing our investment portfolio, one of the strategies is to dispose all my 4 IPs together with our cash, reinvest in their products. This is guarantee that I will achieve my goal ie retire with 5 debt free properties 10 yrs from today.

yes, thanks for all the +ve feedback, i will definitely keep my IPs at Frankston.

thanks and cheers friends !!

 

[Ausprop]

I have been to a few renowned and establised property investment company recently. They all reckon that properties at Frankston areas will never double in 10 years time. ....

seems far too coincidental that the properties that they are selling will do so well vs. the properties they aren't selling. who are the companies?

 

[feihong]

hmm.. with the completion of Eastlink, there will be a lot of ppl from North east corridor coming down to Frankston who previously thought Frankston is too far away. Imagine ppl from Templestowe, Doncaster, etc who deeply believe in "feng shui" coming down to Frankston.. "mountain at the back, water at the front". Do not underestimate the power of feng shui!

 

[gussman]

They will triple, every single one of them. A bloke down the road told me. It wasnt a Metropole seminar was it, they are pretty good at making themselves money.

 

[toony]

I bought 2 townhouses/units in South Frankston in 1998 for $90k each. They are now worth about $250k each. No renovations, nothing.

So thats almost triple in 10 yrs.

 

[Property Mogul]

This thread has picqued my interest in Frankston and while I still have a lot of DD to do, can someone tell a little about the different parts of Frankston?

Thanks heaps.

 

[Harris]

This thread has picqued my interest in Frankston and while I still have a lot of DD to do, can someone tell a little about the different parts of Frankston?

Thanks heaps.

http://www.somersoft.com/forums/showthread.php?t=31663

 

[Property Mogul]

Thanks Harris, for a very interesting thread link. So tell me...with all the growth, have I missed the boat or do you see more gains in the short/medium/long term?

 

[Harris]

Thanks Harris, for a very interesting thread link. So tell me...with all the growth, have I missed the boat or do you see more gains in the short/medium/long term?

The actual rise in values in Frankston Nth started happening around Dec last year whereas Frankston prop values really started rising around Feb/March this year.

Based on my personal experience with investing in Cairns, Rockhampton and inner melbourne, and comparing this with last growth spurt in Frankston (from 2002-2004), the length of each spurt lasted a minimum of 24 months - most around 36 months.

Frankston's recent growth spurt timeline in that context is quite young.

The key factors to carry this forward would be the following:

1- Affordability factor - so long as the values of the adjoining suburbs (to the north) keep rising off the back of rising values in middle - outer bayside belt (starting from Mordialloc, Aspendale, Edithvale and all the way to Seaford), those wishing to live in a bayside suburb with great infrastructure will find the values for Frankston very appealing. Ehich ofcourse would keep pressure on demand and with that the values keep rising.

2- New development activity- Was speaking to a couple of councillors in Frankston council last week and the feedback was that Frankston council has now historically high number of applications for new developments. Most are around central frankston and along the beachside. Those new developments projects are in addition to a multi fold increase in development applications for sub-division.

New development is also a major contributing factor for gentrification of any area.

3- Infrastructure - New freeway to be completed mid next year to generate new demand level and in absence of any new increased demand, should atleast sustain the current growth cycle.

Plenty of discussions already in the main thread about new projects including $70mil redevelopment of Penninsula centre into a 5 star hotel, new board walk, major bulky goods terminal and marina. They are secondary however significantly contributing factors to maintain those growth levels.

4- Publicity - A lot of media continously highlighting the fact that the area represents great value not only for the proximity to the best beaches in melbourne but with new connectivity options and major spending related to it being designated a transit city.

5- Interest rates/ Election - Has potential to reduce the momentum of rising values however last 2 rate rises did not result in any change in the growth spurt.

So in my biased opinion.... I see this phase of rising prop values continuing for the foreseeable future and I am still looking to buy more in the area.

Harris