Firstly Melbourne is a big city so depending on where it is may determine what strategy you use.

Then you can see what is currently selling in your area. You will know price point and size.

Without knowing the location it makes it hard to offer the advise

I think that in Brisbane it has been flat for a long time due to a lack of confidence. With a new government taking action and changing some of the planning laws I think we will see a boom in Brisbane over the next few years.

Even if I am right about the market being undervalued by 10% if it jumps by only that amount in the next 2 years still well worth buying in inner city Brisbane.

I would agree I think that the markets will improve across Australia however I can see big improvements in Brisbane. I have felt that the market is 10% under where it should be. The market is lower in Brisbane has had more to do with confidence than anything else. So as confidence improves we see demand increasing. Thats why I like inner city Brisbane

What crap

First the article is 12 months old. In that time no massive falls. What a lot of these so called experts forget is that the Australian property market is mainly driven by owner occupiers not investors. In other words you have people living in a 1 million dollar suburb who buy and sell in the same suburb or the one next to it so they are not buying a property from 0 to one million they may be selling a house for $900,000 and buying one for 1 million.

The second point is that although in some states we saw values fall by 40% in most cases because of sub prime lending the markets were artificially stimulated that led to massive gains, in many cases far more than the properties were really worth and the price falls were also an over reaction.

In States like Texas where in most cases state laws required property purchases to have a 20% deposit the results were quite different and we saw very few falls in the property market occur there. So I cannot see anything that would cause such falls in Australia.

The Freckle

I do not agree with you. I believe most of the evidence shows that most markets across Australia have now bottomed. The great thing about being an investor is that you are not tied into any local market. As an example I believe that the Brisbane market is currently undervalued and there are still great opportunities for capital growth. However you need to do your own research. With Brisbane I especially think its worth buying property within 5 km of the CBD

It was removed by Keating in 1984. 

Keating thought it was a benefit for the rich. The end result was that the property investment market collapsed rents went through the roof and the government were forced to bring back negative gearing. However to save face the worlds greatest treasure introduced capital gains tax.

It is interesting to note that any investment properties purchased before 1984 for investment remain Capital gains tax except

I think that it is highly unlikely that any government even one as Dumb as Gillard  would be silly enough to remove negative gearing again.

Personally what you should be considering is high growth properties. However negative gearing is a benefit however the deal needs to stand on its own.

The way to look at capital growth is like this. If you invest $400,000 and are intending to keep for 20 years then look at one at 5% and the other a 10% capital growth. The difference over 20 years works out at around $80,000 per year for the full 20 years. Clearly you are far better to lok at something with a closer to 10% capital growth than something with 5 or less

I suggest you have a chat with Richard Taylor who is 007 on this forum. He has had a lot of experience with English property and is in England right now.

If not he will be back at the end of the month 

I agree with Jacm

The simple answer is you need to understand the market you are looking at like the back of your hand

How close is the site to public transport and shopping. My experience shows that properties close to shops and public transport are easier to sell and of course rent.

The other point to consider is if you are looking at small site you will have a lot of competition. A two or three unit site you are competing with other investors and builders. I personally like sites over 1 million they tend to have more profit because you do not have the same competition as cheaper site.

I think out of all the states we are likely to see strong capital growth over the next 12 months or so. I have felt for a long time that Brisbane is under valued especially in the inner city areas. Especially with a Pro development government