I am looking at investing in Melbourne in particular the Bayside districts South from Aspendale through to Frankston. Can anyone give me some guidance on these areas?? (I am not from VIC, hence the Q’s))
1. Why does the median house price drop rapidly after Parkdale?
2. What affect does the Eastern Treatment Plant (Bangholme) have on the areas to the West ie Patterson Lakes?
3. What do people think of Patterson Lakes, it seems to be the only “canal” system in Melbourne so shouldn’t the prices be higher??
4. Are there any other good areas (Capital Growth) in Melbourne that I should look at?? (ie Coburg, Brunswick, Sunshine???)Thanks
I am from Melb and live on the Mornington Peninsula (not at the moment) so I guess I can have a crack at the answer for you.
1. South of Parkdale is historically the holiday areas, a hundred years ago.
All the architecture and infrastructure was basic and the access to the City was limited due to only one main road – Nepean Highway. The prices therefore always lagged well behind the more desireable suburbs and houses closer to the CBD.
Another factor is schools and shopping.
The mentality still exists, and this is why the median house price is still behind the city. Parkdale is 30 mins from the city in good traffic.
But in the last 20 years everything has changed from Parkdale to Frankston, and even down to Dromana another 25 mins drive (where I live). From my house to the CBD is 50 mins.
The freeways are excellent and there are more being built, there are very good schools, the infrastructure is great, parks, newer housing estates etc, and the beaches are great. The whole area is now really part of the Melbourne Suburb Web.2. Right near that plant there are very few houses and never will be as far as I know. All around it there is development galore at the moment, and the boom has already happened I’m afraid.
3. Patterson Lakes was a big deal back in the 90’s. In my opinion it is very overpriced – a lot of people with too much money and no brains buy there. You are paying a premium for being near a canal that accesses the Bay. There are some very nice houses, but from an investment standpoint, I can’t see a plus – rent returns are average at best and the entry level is pretty high. The area is a bit “McMansion” – big houses on tiny blocks. It does have good access to the city. It has also had it’s boom, and it may be a good time to buy for cap growth in the long term, but the cashflow may be a problem.
4. Melbourne as a whole has just hit the bottom of the ‘correction’ according to many, so if you are a cap growth investor, then now is a good time to buy, but the rent returns all across Melb are generally around 4-5% historically. Sunshine has been a low socio-economic area for a long time, and used to be cheap, but it may have boomed over the last 5 years I suspect because of the proximity to the CBD and the low prices.
Coburg and Brunswick are very big Greek/italian/Turkish/Indian/Asian areas, and are closer to the city and never were all that cheap.
Generally, anything within 10 k’s of the CBD will be a good place to start looking for cap growth, but bad cashflow.
Many of the emerging growth corridors will be good for growth also, particularly northwest of Melb, but same deal with cashflow.Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
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