Hi everyone,
I am a my first time property investor and I am looking at Carrum Downs and Skye suburbs in the Frankston area, Victoria. These properties are generally cheaper than Frankston, however there has been lots of development and I have heard that the new Eastlink project will increase prices within the next 2 years. Any thoughts on Carrum Downs and Skye?Thanks heaps!!
I guess it depend on what you are looking for.
These suburbs are mainly populated by first home owners and as you said they are in the cheaper price range.
This means they are much more sensitive to the affordability issues we hear so much about. With the likelihood of another interest rate rise and with petrol prices unlikely to come down – these areas are having a tough time and are unlikley to give you much capital growth.
I know many beginning invetsors look for cash flow, but to make real money out of real estate you need capital growth and there are much better places to invest in Melbourne.
For the same price you could get an apartment in an inner or middle suburb – I'd rather pput my money there – In fact I have
Stretch yourself and try and get closer to Frankston centre where a lot of development money is going in. I prefer Seaford as close to the bay as possible. That should be your goal rather than go inland. Also, in time, there may be a difference in price b/w properties west of Eastlink vs east.
Given you're an investor, try for an older house that you can improve over time if it gets you into a superior location. I an speaking ignorantly, however looking objectively, it's unlikely those 2 suburbs have anything unique to offer in the long-term, that's not to say it may appreciate slightly due to the Eastlink.
tend to agree with scarecrow
We looked at central Frankston but an opportunity came up near the golf courses on Skye Rd. That was Nov 2005 and weve had about 20% appreciation since then (admittedly we fell on a good deal going in). I think what you are talking about will work but it would be better to stretch as suggested (or look harder for a good deal) closer to the water and/or central Frankston. Nor sure how much longer the freeway factor will play on prices (till it opens I guess) but its been a nice ride so far.
as a relative newbie I can also say that the main thing is to get started. I was concerned by what we did at the time but the ramp up of values and of rents has made a dramatic difference in just 18 months.
good luck
inigo wrote:Hi everyone,
I am a my first time property investor and I am looking at Carrum Downs and Skye suburbs in the Frankston area, Victoria. These properties are generally cheaper than Frankston, however there has been lots of development and I have heard that the new Eastlink project will increase prices within the next 2 years. Any thoughts on Carrum Downs and Skye?Thanks heaps!!
Hi Inigo,
I recommend you read the latest (August) addition of Australian Property Investor magazine. It contains an article that busts the myth that, generally, property in the inner suburbs of our capital cities outperforms property in the outer suburbs on capital growth. The API article explains that the figures over past years do not back this up; generally it is the OUTER suburbs that had the superior captial growth.
One reason offered for this phenomenon is that the outer suburbs generally are coming off a lower base, and then may experience some infrastructure and/or transport improvements. IMO Frankston fits this profile and will provide excellent capital gains in the next few years – in fact I’ve just bought in Frankston South.Best Regards
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