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Thought i would throw in my experience.
I’ve bought two houses in the area, and every one was giving the dont touch it comments then too. (on another prop forum).
One in Melton South 2006 and one in Melton 2007.
Melton South was an easy call, 7% yield at $140K 3/1/2 600m2. Older place, cost very little to hold. Sold for $237K 3.5 yrs later as needed money spending and thought the market had hit a peak at the time and was not going to return it in added valuation.Melton 4/3/2 two storey Paid $242K 580m2 bought as it was an opportunity that presented below market value due to vendor needing a contract to obtain bridging finance – was prob worth $280K ish at the time and I had the replacement cost of 6 years old house alone at purchase price. Now worth about $490K but rent is still only $350pw – could push it but dont need to. This house had about $6Kpa depreciation from the start which helped – cant play that card now due to changes in May last year. Still hold it as will get killed by CGT if i sell, so it is chugging along fine.
On rent in Melton you tend to hit a glass ceiling where people who will pay high rent just go and buy a house locally or move closer to the city, so you are limited at the higher end of the rental market.I’ve been happy with both purchases and the holding cost has been low to non existent and gains have been ok without being spectacular.
Concerns at the moment.
Yield is generally too low to enter at current prices for newer houses and depreciation capability is diminished due to tax changes. I haven’t really viewed the lower end of Melton South recently to make a call on yields there at present.
Cant buy newly built houses anymore below replacement cost and enjoy depn benefits to bring to cash neutral from the start like my 2007 one.
New houses built on postage stamps now ~ 300m2.
My view:
Better yields to be had in SE QLD / Perth / Adelaide with similiar entry prices and better block sizes for potential dual occ later. Melton is an area you capitalise on when mortgage rates jump and people need out in a hurry or the banks do.Hope this helps.
