Browse Forums General Discussion 1 Aug 27, 2012 6:55 pm I would just like to ask people who are thinking or are actually building out here is it really worth it? I have bought another property out in the country so i will be renting mine out shortly. I jumped on realestate.com and noticed that there are so many brand new houses for rent for $300/w. That is only $1200/month. You cannot build a house for anywhere near that and with the amount of land up for grabs out here it is only going to get worse. I'm all for owning your own home but when rental is this cheap i think you would be mad to spend major $$ on a house that will probably not appreciate in the next 5 years. There are plenty of McMansions in the next half of the estate on 450m^2 blocks that would have easily cost $450k-$500k to build but would struggle to get $400k at auction. I have 2 friends that built in Tarneit 4 years ago. Houses cost around $400k to build.....tried to refinance and bank has valued them at $360k. With an average interest rate at 7% that's $2660/month * 12 months * 4 years = $127,000 already out of pocket + the lower house value. If they rented they would be over $60k better off in the hand and $100k better off including equity. I understand this is a broad generalisation and i'm no way blaming anyone or calling anyone stupid. I just hope people think a little more and don't get caught up in the emotion of owning their own home. Just to clear things up I built out near Point Cook around 5 and a half years ago for a reasonable price and on a 900m^2 block. Around this time developers started releasing land in very small numbers to increase the price. At the same time we kept getting told by the media that there is a housing shortage in Melbourne. Re: Is it worth Building in Melbourne's outer west? I think 2Aug 27, 2012 8:34 pm Un nerving numbers and I would agree building in the outer suburbs of most large cities is always going to be an investment risk. Most owners of homes side by side in a paddock are not looking to move on quickly...it’s usually the 1st family home. The last few years have seen real estate become the most recent 'bubble' stock to trade. Most of us will never be lucky enough to buy the next big thing...before everyone else knows about it...and should stop trying. But hey that’s greed isn’t it. One point that always irks me is 'the media keeps telling us'. The media is just a conduit from whoever has the biggest press release. The media rarely does any investigation, study or thorough Analysis, it just spits out whatever the noisiest of us are saying. There is no conspiracy, no corporate media, it’s just a bunch of wet kids filling space between adds beating the daily deadline. We deserve better but keep silently watching and reading the slow death of journalism in this country...... soap box over lol Re: Is it worth Building in Melbourne's outer west? I think 3Aug 27, 2012 9:24 pm I purchased house and land package in Werribee in 1995 for $134,000. Even now at the lowest point in the market it still would sell for $310,000, that's and average of $11,000 increase in value per year. If I only wanted to live here for a few years .. sure building a house would be a waste of money. ---With housing don't think in the short term..--- Ps I bought a vacant block next to my house in 2000 for $33,000 . Now its worth $170,000. I'm building on it with the house we want now.. Re: Is it worth Building in Melbourne's outer west? I think 4Aug 27, 2012 9:37 pm bought a house 7 years ago in melbourne. around cheltenham area. paid 380,000 4 bedda with a pool early 60's, needed work. spent around 75k on it, sold it in jan this year for 660,000 it gave us enough equity to now move further outer south east and build our dream home only 80K more (740,000) but double the size, we have a family now etc.... we have no plans to move again for a long time. get stuck into your principle amount and nothing is dead money about owning your own home, regardless of the current market or trend. Re: Is it worth Building in Melbourne's outer west? I think 5Aug 27, 2012 9:43 pm Like the op stats Probably not a good time to buy vacant land and building on it. This not only applys to the west I am pretty sure all directions have this issue. You pay at least 50K more to buy the land you want with the house you want on top. Houses are always going to cost money. The only way to save money is to have it paid off asap. Re: Is it worth Building in Melbourne's outer west? I think 6Aug 27, 2012 10:14 pm Of course people make money off property. If i sold mine tomorrow i would too. I'm trying to comment on the current glut of cheap houses out this way. I'm also trying to point out that you can rent a BRAND NEW house for nearly half the price of building (in this area). What makes it worse is that people are borrowing well above what they can afford to do this. There are so many of these cheap houses to rent yet there is a heap of land along Sayers, Palmers and Leaks road that is about to be released. This will only bring the value down even further. Re: Is it worth Building in Melbourne's outer west? I think 7Aug 28, 2012 8:51 am JimmyL Of course people make money off property. If i sold mine tomorrow i would too. I'm trying to comment on the current glut of cheap houses out this way. I'm also trying to point out that you can rent a BRAND NEW house for nearly half the price of building (in this area). What makes it worse is that people are borrowing well above what they can afford to do this. There are so many of these cheap houses to rent yet there is a heap of land along Sayers, Palmers and Leaks road that is about to be released. This will only bring the value down even further. Jimmy, not sure what your real point is, you have come to a home building and renovation forum with clearly a adverse point of view on doing that. Thats all fine and good, but I think you need to take a step back and understand why people actually do build/buy. Now, I am the first to through Tarneit under a bus, I think its poorly developed, lacks thought leadership, and to be honest, places like the reserve are now 10 years old. Take Caroline Springs, and you get a very different outcome. We rented in Tarneit for over 18 months, as we considered the area. I have been vocal on Tarneit for sometime. It does lack sole. It is also a property investment belt with plenty of IP's in the area. Now the other piece in this puzzle is that your maths assumes 100% loans, I am fairly confident that doesnt happen anymore. So while your not calling anyone stupid directly, you basically are. Which is fine, its your opinion. There are 2 fundamental differences with ownership v renting. Renting, save now, pay later Owning, pay now, save later Both are effective, just depends on the timeline. I dont expect Tarniet to have real property growth for over a decade. The train line, shop development, and the proposed outer ring road will change that. But its 20 years away from completion. Re: Is it worth Building in Melbourne's outer west? I think 8Aug 28, 2012 9:17 am Your right Caroline springs has worked and hopefully one day this area can do the same. I posted in the general area for discussion and that's it. The topic came up after speaking to one of the mates i pointed out that is now in a bit of crap with the bank as they need to sell. I'm sure there are hundreds of people that come on this forum looking for advice and maybe a different opinion than to the norm. Also i'm not calling anyone an idiot. I pointed out that i have done the same but in hindsight maybe i would have done things a little different. Re: Is it worth Building in Melbourne's outer west? I think 9Aug 28, 2012 9:18 am Buying into a 512m2 block in Brimbank Gardens 3 years ago for $153k, plus first home owners grant to build.... for anyone thinking of buying now, $300k for the land and little incentive, unfortunately the good times are over! Those who did get in at the right time then realised that moving back into their parents was a smarter option will cause an overall unfavorable buying situation in the west when the rent is cheap. But then again, when is it ever a good time? I personally think there are now cheaper options closer to the city like Sunshine and West Footscray of which there are bargains to be had. Re: Is it worth Building in Melbourne's outer west? I think 10Aug 28, 2012 9:26 am JimmyL Your right Caroline springs has worked and hopefully one day this area can do the same. I posted in the general area for discussion and that's it. The topic came up after speaking to one of the mates i pointed out that is now in a bit of crap with the bank as they need to sell. I'm sure there are hundreds of people that come on this forum looking for advice and maybe a different opinion than to the norm. Also i'm not calling anyone an idiot. I pointed out that i have done the same but in hindsight maybe i would have done things a little different. I think if people are planning to build today 2 key questions have to be answered. 1. Whats the long term plan? if you plan to live in this place for 20 years, it will work 2. What history has the developer had. That 2nd one is what adds value. Places like Derrimut and Caroline Springs have stagnated in Median Price, not tanked. Tarneit and Point Cook, have a median 100k and 50k under Derrimut/Caro. That says a lot imo, both the same distance from the city, both very different in development. Re: Is it worth Building in Melbourne's outer west? I think 11Aug 28, 2012 9:56 am Ive sold a home, built an investment sold that now renting while building. The only way id ever have an investment again is if i won the lotto and could fund it outright! But.. We still made money off it even though we sold it in a bad market so to answer your original qustion it is still worth It. A new home as an investment offers more when its tax time! You have things like the garden, paving curtains to claim..I am renting while building now and I love the building process, I think it's worth it if you are willing to put in the time effort and money to get it right in the first place, then come sell time it should pay off! I That's my opinion anyway! Re: Is it worth Building in Melbourne's outer west? I think 12Aug 28, 2012 11:45 am I think you have to keep property values in perspective, its a long term investment. Anyone who has followed property prices will know that apart from corrections (now) it always goes up. I can remember when you could buy house in Brunswick for under $10,000 an in Surrey Hills for $12,880 on a large block. Try that now. Recently I did pre purchase in Surrey Hills not far from $ 12,800 home in 1968 it was $1,275,000 Building prices will ensure that existing stock will go up. We are on the edge of 3 billion people who want our standard of living and many want to come here. The population growth will create demand and the prices will rise. Do your homework and buy if you are in position, there are heaps of underpriced properties out there. That's my two bob Foremost Building Expert in Australia,assisting with building problems/disputes, building stage inspections,pre-contract review advice for peace of mind 200 blogs http://www.buildingexpert.net.au/blog Re: Is it worth Building in Melbourne's outer west? I think 13Aug 28, 2012 2:45 pm I didnt buy a house for easy money, I bought a house for lifestyle and to raise a family. I can make my payments comfortably, I like the area - why should I care if I have no intention of selling. I agree that a home isnt a worthwhile investment at the moment, however there is more to owning an home than just the balance sheet. Re: Is it worth Building in Melbourne's outer west? I think 14Aug 28, 2012 3:30 pm Lunchtime I didnt buy a house for easy money, I bought a house for lifestyle and to raise a family. I can make my payments comfortably, I like the area - why should I care if I have no intention of selling. I agree that a home isnt a worthwhile investment at the moment, however there is more to owning an home than just the balance sheet. agreed. Otherwise you will simple be a sad rich person. We dont have much power in our world. Atleast you can be the King and Queen of your house:-) Hi All It has been a few weeks since my last update. The build has been progressing well. No major issues to report. The scaffolding was dropped today, gyprock will be… 96 357053 In fairness nobody gave a crap about the ACCC and the gag clauses continued in the pro forma templates of a few other builders after the ACCC took on Wisdom, and more… 19 73525 Hi I am wanting some opinions about the build of a steel shed I am going to get one about 4.5 x 2.5 m steel shed and the height will be about 2.3-2.4m high The one I am… 0 14465 |