Melbourne Property Market

[ARCHYBOY]

It would though be easier for the home to sell itself if the agents actually new a bit about the house. Is there drainage behind this retaining wall, how/where does this paved area drain to, what sort of air conditioning does the house have, what does this electrical panel on the wall here do, does the garden have automatic spinkler/dripper systems, how do you get under the house, etc. The agents rarely know the answer to these or similar questions. They can however tell you the previous owners absolutely loved the house but have decided to move back to England.

100% agree Jb, product knowledge is a major factor in trying to sell something. When showing a buyer through a home, I tell them all about the product upon entering the home, take them for a guided tour and tell them if they have any questions to fire away. If I know the answer, I will answer but if I dont, I find out and get back to them.

As a complete novice thinking about getting an investment property what suburbs are my best chance at long term gain in the lower end market 360 k and under. I reckon Melton has bit to offer with nice cheap houses in ok streets

I would suggest start at the bottom and work your way up, juts like anybody should when buying their first home to live in. I think the key question for anybody looking at getting into the investment market is "Why are you buying an investment property", if you can answer that you are half way there.

Shoot me through a PM if you want mate or throw a couple of questions up here, happy to share some knowledge and my thoughts.

 

[martyshire]

As a complete novice thinking about getting an investment property what suburbs are my best chance at long term gain in the lower end market 360 k and under. I reckon Melton has bit to offer with nice cheap houses in ok streets

Suburbs that are not in Australian cities; that would be my bet

 

[ThePercies]

Almost ready to purchase 1st home. My one big issue is that I have no idea what to buy or where :-(

 

[Rosy]

A question if I may please Archy. Seems all 3 of our kids will be purchasing their first homes in the near future. Just wondering about going guarantor for them and mortgaging the property. Our property is on 3 titles. One our house and 20 acres. One 20 acres. The rest is the farm, homestead and shearing shed etc. Ideally we'd like to put up the separate 20 acres. Can one property be mortgaged for the separate loans or would we need to have one mortgage on each of the 3 titles? Is it an advantage to the kids for us to go guarantor? Any advise on how it works would be greatly appreciated.

 

[ARCHYBOY]

A question if I may please Archy. Seems all 3 of our kids will be purchasing their first homes in the near future. Just wondering about going guarantor for them and mortgaging the property. Our property is on 3 titles. One our house and 20 acres. One 20 acres. The rest is the farm, homestead and shearing shed etc. Ideally we'd like to put up the separate 20 acres. Can one property be mortgaged for the separate loans or would we need to have one mortgage on each of the 3 titles? Is it an advantage to the kids for us to go guarantor? Any advise on how it works would be greatly appreciated.

Rosy, sorry for the delay in responding, been a hectic couple of days and Ive only just had a chance to log on.

A question like that is really one for the brokers and possibly even a solicitor if you know of a good one. There are a couple of ways you can attack it and what it all hinges on is how much equity you have in the properties. Hypothetically if the one 20 acre lot is worth $500,000 and its clear title there should be no issues whatsoever, if you owe $350,000 on it there might be some issues as the banks and to even a greater extent, the mortgage insurers are playing real hard ball at the moment. If you keep all the loans with the one bank (kids included), there shoulnt be any issues at all, once another bank comes into play thats when it can get a little messy. The other option is to set up a line of credit loan (only do this if you are very disciplined) against that one property and give the kids say $50,000 each once they have purchased or into the loan. If you put that money into an account for them not to be touched, the banks may still want to see it sit there for 3 months to show some form of savings ability or non spending ability. If you go guarantor, you will have to use security from somewhere so its much of a muchness, only real difference is you wont have to pull any money from anywhere.

I could go on for another 3 pages trying to explain the ins and outs Rosy but the best thing to do is either speak with your bank or broker and they will be able to sort it for you but yes you can go guarantor, use the one property for all three loans as long as you have enough equity.

 

[Rosy]

Thanks heaps for pointing me in the right direction Archy. Greatly appreciated. We own the property and it has no money owing, or existing mortgage, on it. Will make an appointment with our bank manager and go from there. Thanks again for your time.

 

[ARCHYBOY]

Thanks heaps for pointing me in the right direction Archy. Greatly appreciated. We own the property and it has no money owing, or existing mortgage, on it. Will make an appointment with our bank manager and go from there. Thanks again for your time.

If the property is clear title, it will be a walk in the park and a very straight forward transaction as long as the kids get a loan through the same bank. All the bank will really need from yourself is to hold the title as the first registered mortgagee on your property, they will need to do a valuation (in most cases) on it and as long as the kids don't get carried away $$ wise with their purchase all should be sweet, try and do it so mortgage insurance is not needed as that could be $10,000 out the window on all 3 Purchasers if your not careful.

Good luck...

 

[martyshire]

...I think (based on quarterly and monthly reports to date) it was about a 3 or 4% drop for the year...

make that 2.9%...

http://theage.domain.com.au/real-estate-news/house-prices-sink-for-a-second-year-20130102-2c559.html

 

[tigersnake]

A question if I may please Archy. Seems all 3 of our kids will be purchasing their first homes in the near future. Just wondering about going guarantor for them and mortgaging the property. Our property is on 3 titles. One our house and 20 acres. One 20 acres. The rest is the farm, homestead and shearing shed etc. Ideally we'd like to put up the separate 20 acres. Can one property be mortgaged for the separate loans or would we need to have one mortgage on each of the 3 titles? Is it an advantage to the kids for us to go guarantor? Any advise on how it works would be greatly appreciated.

If I may weigh in here rosy, I have a very simple piece of advice, get a good lawyer. It won't cost too much for legal advice on a matter like this, $400 to $1000, but believe me, it will be money well spent. If something goes wrong, there is a possibility, a remote one but it does happen, that you could lose the farm. You want to be sure its all set up right and all the i's are dotted and t's are crossed.

I've been involved in complex real estate ventures involving multiple family members and contracts where things had to happen before other things happen, a good lawyer, good legal advice and a $2K investment, has delivered 20 fold, 100 fold.

Ask around and get a good one, meet them and tell them what you want to do, worth their weight in gold.

 

[evo]

Just went and checked it out. Wierd experience. She didn't say a word, just opened the front door. I asked her if she could tell me anything about the property. She replied 'I dunno, its an old house, like what?'.

Along with the crap single photo on the net, I suspect its the old 'keep-the-deceased-estate-bargain-out-of-the-limelight-so-your-son/ mate/ neice-can-snap-it-up' trick.

these experiences are always my favourite. They usually tell me I have found a bargain.

Having said that I only ever need to know two things about a property. How big is the land and is there an easement? ( both of which I already know by doing a search)

 

[Scoop]

The property slump is only valid for those that paid huge dolalrs for McMansions in the outer suburbs.

It's a complete beat up. Property is still the best investmen you can make. Even now between Mentone to Seaford you can get still get great value if you do your research. In the Eastern suburbs there is some great value around the 450-600 mark around Vermont to Glen Waverly.

 

[Tigers of Old]

I'm no expert but I think there is still a lot of room for the market to correct itself and especially with a forecast weak 2013 economically.
No doubt property prices are hugely inflated in Australia.
I read recently that house prices have dropped 9% in the States since 1979. Just think about that for a second. Dropped 9%? ???
What has our market done over the same period? Sky's the limit.
I honestly think house prices are unsustainable given current salaries coupled with the high cost of living.
I have no invested interest in them dropping as I bought into it near the peak a couple of years back but I can't help but feel that the bubble is still yet to really burst.

 

[tigersnake]

these experiences are always my favourite. They usually tell me I have found a bargain.

Having said that I only ever need to know two things about a property. How big is the land and is there an easement? ( both of which I already know by doing a search)

Me too, land and posi. I think Archyboys suggestion that the vendor is a prick may be correct here, the property has changed agents and is now being marketed normally and is $50K dearer, pushing it from a bargain to thereabouts.

 

[tigersnake]

I think Scoop and Olden are both right. The headline in the Age the other day was 'Property Prices Plummet', I clicked on the story and it was 2%. I my book that is not a 'plummet'. The headline was changed a few hours later. Like scoop I reckon the across-the-board figure is dragged down by McMansion suburbs, and you can still make some money through knowledge of certain areas. The silly money is all over though, as it should be, it wasn't sustainable.

Also agree with Olden, the market generally is in for a sustained period of generally crabbing sideways or drifting down. Our tax laws combined with long term historic market data means that it is still worth buying your own home and holding it for 10-15 years, you won't make spectacular money, but still well worth it.

At the moment my cousin is making $20-30K a year, on top of his wage as a painter, by buying a shabby house, then living in it and tidying it up. Doing it once a year or so. He's using knowledge of a local market, his skills and tradie network, and our exploiting our primary residence as tax free status. Smart and solid way to make some money.

 

[tigertim]

I'm no expert but I think there is still a lot of room for the market to correct itself and especially with a forecast weak 2013 economically.
No doubt property prices are hugely inflated in Australia.
I read recently that house prices have dropped 9% in the States since 1979. Just think about that for a second. Dropped 9%? ???
What has our market done over the same period? Sky's the limit.
I honestly think house prices are unsustainable given current salaries coupled with the high cost of living.
I have no invested interest in them dropping as I bought into it near the peak a couple of years back but I can't help but feel that the bubble is still yet to really burst.

that would be in adjusted terms, surely?

 

[poppa x]

n the Eastern suburbs there is some great value around the 450-600 mark around Vermont to Glen Waverly.

Not so.
I live in Glen Waverley and due to the excellent reputation of Glen Waverley High School, property prices are inflated. Many Asians are buying into the area so they can send their kids to a "good" school without paying private school fees. The cost of a 3 bedroom weatherboard run down house on a typical subarban block - if you can find one - would be $800,000 plus. The house gets bought, pulled down and either a new house built or apartments. I live in a stand alone two story 3 bedroom town house about 12 years old on a small lot with no back or front yard. Price? Currently about $750,000.

 

[tigersnake]

Not so.
I live in Glen Waverley and due to the excellent reputation of Glen Waverley High School, property prices are inflated. Many Asians are buying into the area so they can send their kids to a "good" school without paying private school fees. The cost of a 3 bedroom weatherboard run down house on a typical subarban block - if you can find one - would be $800,000 plus. The house gets bought, pulled down and either a new house built or apartments. I live in a stand alone two story 3 bedroom town house about 12 years old on a small lot with no back or front yard. Price? Currently about $750,000.

A good strategy would be to sell, smash a few windows at the school, maybe spray some grafitti around, then buy back in.

 

[TIGEREXTRA]

For me personally I hope the market can stay stable for 2013 as I just purchased off the plan an apartment in the Docklands which is due to complete late this year.

I'm nervous because I read too much on the internet and you all know what the internet is like, mostly all doom and gloom stories...


Thought I would share these positive stories for a refreshing change:

http://www.hotspotting.com.au/article/2429-rba-happy-with-house-price-levels


http://www.smh.com.au/business/growth-expected-to-continue-but-at-a-sedate-pace-20130104-2c8yu.html


http://petewargent.blogspot.com.au/2013/01/the-3-ways-rba-will-attempt-to-avert.html

 

[evo]

I've always found this graph a fairly reliable medium term predictor. If the stock on the market continues to fall in Jan and Feb I suspect we will be in for a fairly positive year.

http://www.sqmresearch.com.au/graph_stock_on_market.php?region=vic%3A%3AMelbourne&type=c&t=1

 

[martyshire]

...you all know what the internet is like, mostly all doom and gloom stories...

That's interesting. Up until recently, I would have said exactly the opposite. I've been reading property articles on the Age on-line a lot over the last 3 years and I would have said that with the exception of Chris Vedelago, all the other regular Fairfax writers try to look for ways to put a positive spin on things. Take Simon Johanson and Andrew Wilson reporting Auction clearance rates, for example. If the clearance rate is lower than the previous week but higher than the equivalent week the previous year, they will emphasise the latter. If the opposite is the case, they will report that clearance rates have increased since the previous week. They also often ignore the fact that many results are yet to be reported, yet compare the present week's non-revised figures with the previous week's revised ones. When results are good they will say so. When things are bad they will say they are 'mixed'.

Maybe it's about perspective. I notice this because I want prices to stall whereas you notice when the opposite happens because you want prices to rise. I guess like noticing bad umpiring decisions against your own team

I've always found this graph a fairly reliable medium term predictor. If the stock on the market continues to fall in Jan and Feb I suspect we will be in for a fairly positive year.

http://www.sqmresearch.com.au/graph_stock_on_market.php?region=vic%3A%3AMelbourne&type=c&t=1

Wouldn't this just be seasonal though? From your graph it looks like listings drop every Summer...

Property is still the best investment you can make.

This phrase often interests me, SCOOP, mainly because it is such a popular belief in Australia. Do you think there could ever be a point when you would change your mind re this? For instance, if prices doubled in 2013, would you still think property it is a good investment in 2014? What if they halved in 2013..? What if they stalled for 10 years..?