Hi All. Looking for some opinions on the current Melbourne market.
Steve, please feel free to add your take on things. I am currently residing on the Gold Coast, having left Melbourne a couple of months ago for warmer climes and a different lifestyle. I missed your recent tranche of updates (in Melbourne), having attended the Gold Coast one in early March.
I listened to Steve McKnight's update last Nov (2010) in Melbourne and whilst the market was starting to soften, clearances did do quite well. I was surprised to hear that Steve expected the market to be sluggish until Autumn and then begin another up-cycle. My feeling on the ground at that time was that we would track sideways for some time with perhaps some softening of the over million dollar markets. I am significant;y invested in Melbourne currently and am selling one down at present. The higher end has come off in Bayside Melbourne and the buyers are well and truly in control.
Not sure whether to persist or take it off the market for a few months and go again around Aug/Sept. Obviously everything is for sale at a price and whilst my expectations have been amended, I don't wish to give it away either. Problem is opportunity cost of those funds locked up in a property and not in the bank (for now) earning 6.5 % or so and the opportunities that will present in Brisbane for example that can be invested in.Steve's thoughts from the recent Melbourne update would be appreciated as well as anyone else who attended that event or has their own insights on where they see the Melbourne market going in a general sense.
Personally, I see yields in Melbourne as very low at present compared to Sydney and Brisbane. Sydney ostensibly still has legs IMO and Brissy missed the run that Melbourne had over the past two or so years and that Sydney is currently enjoying. Superimpose the unfortunate floods they had and I reckon, Brisbane will be like a wound up spring that will have rapid capital growth whenever it takes off…….prognosticating 2012 or thereabouts. Yields are pretty good in Brisbane and so cap growth will see those come down a bit to reach a circa 5 % equilibrium point. THere should be decent equity gain IMO
Anyway, people's thoughts on current Melbourne and medium term prospects would be most welcome.
Thanks.
Anybody, any thoughts?
Michael,
Can you please email me information on the property you're intending to sell?
I'm not promising anything but I may consider it.
Thanks.
Angel
Hey there Angel,
happy to do that however I must clarify, this isn't an investment. It's our
former PPOR. You could of course rent it out or consider it as your own PPOR,
however as a yield play it will be woeful. It would be a land bank in the best street in the precinct
with a fair bit of house there to provide some income to assist holding.If you are still keen knowing this let me know and, I will email you the link.
I don't wish to use this forum to advertise it, however would still be
keen to hear opinions on Melbourne as indicated in my opening post.** Bump**
Anyone with on the street views about Melbourne and some of my points raised below?
Steve McKnight?
Would be appreciative of some opinion and views.
Thanks,
M,Michael 888 wrote:Hi All. Looking for some opinions on the current Melbourne market.Steve, please feel free to add your take on things. I am currently residing on the Gold Coast, having left Melbourne a couple of months ago for warmer climes and a different lifestyle. I missed your recent tranche of updates (in Melbourne), having attended the Gold Coast one in early March.
I listened to Steve McKnight's update last Nov (2010) in Melbourne and whilst the market was starting to soften, clearances did do quite well. I was surprised to hear that Steve expected the market to be sluggish until Autumn and then begin another up-cycle. My feeling on the ground at that time was that we would track sideways for some time with perhaps some softening of the over million dollar markets. I am significant;y invested in Melbourne currently and am selling one down at present. The higher end has come off in Bayside Melbourne and the buyers are well and truly in control.
Not sure whether to persist or take it off the market for a few months and go again around Aug/Sept. Obviously everything is for sale at a price and whilst my expectations have been amended, I don't wish to give it away either. Problem is opportunity cost of those funds locked up in a property and not in the bank (for now) earning 6.5 % or so and the opportunities that will present in Brisbane for example that can be invested in.Steve's thoughts from the recent Melbourne update would be appreciated as well as anyone else who attended that event or has their own insights on where they see the Melbourne market going in a general sense.
Personally, I see yields in Melbourne as very low at present compared to Sydney and Brisbane. Sydney ostensibly still has legs IMO and Brissy missed the run that Melbourne had over the past two or so years and that Sydney is currently enjoying. Superimpose the unfortunate floods they had and I reckon, Brisbane will be like a wound up spring that will have rapid capital growth whenever it takes off…….prognosticating 2012 or thereabouts. Yields are pretty good in Brisbane and so cap growth will see those come down a bit to reach a circa 5 % equilibrium point. THere should be decent equity gain IMO
Anyway, people's thoughts on current Melbourne and medium term prospects would be most welcome.
Thanks.
Hi Michael (and all)
Having recently sold our last unit in Melbourne in just 3 weeks and for the price we wanted, I think Melbourne is a mixed bag.
I can only speak for suburbs that I am watching currently – Box Hill south, Burwood, Camberwell, Surrey Hills, Wantirna, Wantirna South, Bayswater, Boronia, Mooroolbark, Lilydale, Woori Yallock, Croydon South, Colac – Those areas and some surrounds.
And it is a mixed bag. Some of the prestige areas are down. There have been sales for around the $1mil for Camberwell which a couple of months ago would have been unheard of. You could buy land for $1,250,000 at that time.
It also depends what you are selling, properties that finished and staged and ready to move into are selling quickly. We staged our unit and redid the courtyard to make sure it was perfect.
I'm finding anything that needs work is hanging around. Vendors want top dollar, people don't want to do the work so it sits there.
We have been trying to sell our regional Vic house (need to put the money elsewhere), but it has sat there for about 6 mths. It needs too much work so buyers are put off. I'll be renovating that soon so we can sell it.
Prices seem to be rising in the $500k and under bracket but the house has to be right……New stuff seems to sell quite quickly also.
So there's my take, complete and utter mixed bag. Buyers are fussy, much fussier now than 6 or 12 mths ago and they want the best they can get for their dollar.
Here's my crystal ball going forward for the rest of the year (Just for Vic) not gospel truth! Regional does ok with steady but low growth. Inner ring suburbs with really well done houses will do ok as will 2 bedroom reno'd units. Houses that are not finished and not development sites will stagnate. Outer ring suburbs will do ok depending on location, will be more driven by what is in the area as the Gen Y start crawling out of their bedrooms when mum and dad start saying "you earn enough, just marry her and move out".
I would not be getting in for growth in Melbourne and would only be looking at manufacturing profit, but that is my strategy.
I'd love a few other opinions on this topic and if anyone is watching any other areas
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeHi ya D,
Thanks for your input. Along the lines of your Camberwell example, I am also finding the over 1 Mill price point
to be struggling to the same tune. Specifically it's Bayside (10 km to CBD). Renovated (bling, bling) properties are
flying and for silly prices, and the rest are struggling to get even fair value contracts other than fire sale offers. Patience required. The buyers are in control in this segment much to our frustration.We are trending sideways now after some softening since last year. Personally I smell 1991 in the air. Those old enough will
remember those times. I am not intimating that we will see interest rates old enough to vote, however the sentiment and mood of property may follow that tune of the early and mid 90"s. I'll hedge myself with the markets within markets caveat, however I reckon things will just bubble along……and watch this space if any more smoke and mirrors type fiscal collapses come out of the the US, other sovereign mishaps or worse still any road bumps in China.Keen to hear other's experiences in the above median markets.
Hi Michael,
Thank you for being honest and up-front. You ARE good at reading people, I am, truly, not into land banking. Only going for positively geared properties now.
Good luck and I hope you find the right buyer.
Angel
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