All the indicators point to the early stages of a boom for property investment Melbourne. Canny investors can take advantage of lower prices now and ride the wave to the top.
Hot spot performers are keeping Real Estate Agents on their toes and excitement is starting to come back into the market with double digit growth in key suburbs.
Melbourne didn’t suffer as badly as Sydney post GFC and even saw increases in 2010 and 2011. 2012 and 2013 were tougher years for Melbournian investors and they are likely to be outdone by their Sydney cousins again this year but there will still be good buying.
Prestige suburbs on the fast track
Prestige suburbs such as Camberwell, Toorak and Hawthorn had seen improvement in their prices by 10 to 15 per cent and may lag better value suburbs for investors.
Some areas in the inner bayside such as Garden City in Port Melbourne still remain undervalued. Homes were fetching a price of about $800,000.
Hot Suburbs include Affordable Choices
Melbourne hot suburbs are likely to include affordable Thomastown and Epping (house median price of $388,000, while units were priced at $296,000) where prices are proving to be popular with first home buyers. Rents sitting at $330 (4.9%) per week on average look attractive as well.
The $500k to $750k market is likely to have strongest growth so consider suburbs like Newport (median price $668k) and Yarraville (median price $640k) considered undervalued by experts.
Houses Present Great Value
Melbourne’s rental vacancy in general is stable with demand for new houses high. New constructions has started to trend up and this will have a positive impact on growth. With house sales rising we could consider that Melbourne Property is now in a rising market.
Units prices and rental rates are not faring as well as houses with an oversupply currently in the market and demand soft. This will not be helped by a strong increase in unit construction.
So generally, if you can afford it, houses present better investing, at least for the short term.
The Top 5 suburbs for median price growth over the past 12 months have been:
At the beginning of 2014 I released my “Peter Spann – Where to Buy Guide for Property Investment Melbourne.”
Let’s see how those area have performed…
3 Month growth
as at Sept 2014
12 Month growth
as at Sept 2014
Capital Gain on a$500k investment
St Kilda West
Source: Australian Property Monitors
The figures point to the early stages of a property boom.
Melbourne’s not quite performing like Sydney has over the last couple of years but it is looking more and more like it is on its way. Now could be an ideal time to invest.
The average median price of a house in these suburbs was around $640,000, which, although reasonably expensive still quite affordable for most investors, almost half the price of my Sydney recommendations.
With some great affordable suburbs in this list it gives the Melbourne Property Investor lots of options.
The most remarkable figure in this though is the average capital growth on $500,000 invested, in this case $73,513.
So in other words if you had invested $500,000 into property across these suburbs (impossible I know but I think you’ll get the point) you would have gained more than $73,000 in capital growth.
More than the average wage
That’s more than the average wage in Australia – by doing nothing! (apart from investing).
Considering interest rates are hovering around 4.5% and the average yield 3.79% this investment would have only cost you $4,800 in interest for the year!
Even if you had bought in 3 months ago you would still have achieved an average 3.59% growth – the capital gain on $500,000 invested would have been $17,950.
So when it comes to Property Investment Melbourne – Peter Spann say’s get in!
Profit From the New Property Boom
Find out about Peter Spann’s exciting new On-Line Property Investing Course Property Pay Day:
Only buy in the Top 20 Suburbs By Growth over the past 10 years in the State
Ensure Growth is in an UP Swing
Rental Returns – 4% + minimum
Vacancy Rates in the area below 5%
3 – 20 kms from CBD or Satellite Cities with high growth prospects (look for permanent infrastructure investment)
Buy AT or BELOW the median price for the city and the suburb
Irreplaceable Features that add value
Can add value to the property
Meets prospective tenants needs / trends (lifestyle, affordability, transport, education, coffee culture, high street shopping, etc)
Fits your price range
There is always a cycle. Boom always follows gloom and gloom always follows boom, and smart investors are ahead of the curve. Know where we are in the cycle and modify your strategy accordingly.
Yield is king – always look for higher than average rents. The only exception to this rule is where growth can be turned into yield in the long term.
Follow the (big) money, not the herd. Buffett was saying in 2010 it was time to get back in the market. Those who listened have profited. The herd still aren’t there. At worst please be the leader of the herd because if you aren’t the view is always the same!
Creative Director of Aspiro– ” We build market dominating cash flow machines attracting high value clients from automated lead generation, feeding into systemised high performance sales and delivery processes, creating profit and capital value for owners”.
Teacher and Coach: His courses have been presented to over 270,000 people worldwide and include:
He is listed in ‘Who’s Who’ Queensland Edition, and his charity, Fox Smile helps underprivileged children with health and education.
He is well known for his inspirational seminars and films on life success, business, wealth creation and personal development. His goal is to help people reach their full potential.
His personal interests include travel, boating, aviation, fine art, writing, and film.
Important note and Disclaimer:
This publication is not investment advice. It is intended for wide distribution and then only to inform and illustrate.
This article has been prepared without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs.
Past performance is not a reliable indicator of future performance.
While every care has been taken in the preparation of this article, the publisher and Peter Spann make no representations or warranties, express or implied as to the accuracy or completeness of any statement in it including, without limitation, any forecasts.
The publishers and author expressedly disclaim all responsibility for any errors in or omissions from the information contained in this publication including all liability for any loss of damage suffered or incurred by any person as a result of or arising from that people placing any reliance, whether whole or in part upon the whole or any part of the contents of this publication.