After a tumultuous year in 2007, 2008 should be the year to build your property portfolio. We have seen massive gains in many suburbs across Melbourne last year and, although some of these suburbs will keep performing spectacularly, it is the neighbouring suburbs to the best performers of last year that will probably be the real movers this year.
Interest rates will probably rise again early this year and this will put pressure on the market under $450k but for the rest of the market this rise has been factored in and will probably result in no significant slow down. Stock levels should rise slightly from last year and this may mean there is a lot more negotiation than last year but above the $700k mark I think that purchasers will again outweigh Vendors, leading us to another year of strong auction results.
Areas such as Reservoir, St Albans, Sunshine, Fawkner, Thomastown, Croydon, Edithvale, Altona are just a few of the suburbs that may have good value properties this year, that should make good investments, for both the “value-add” investor or the long term “set and forget” purchaser.
Choice of good property, either purely for investment or to live in, is vital in increasing your wealth. It is not that difficult to manage the basics. Proximity to transport, schools, parks, cafes, major arterial roads are just some of the parameters we look for. Once the location is justified, then we look at the block. How big is it? What shape is it? Is it on a severe slope or covered with rocks. Most of these are obvious to anyone who looks.
The house itself is actually the last thing we look at, as it is the item we can change the most to suit us. Obviously it must suit our basic needs, but it may not be all we want, so look at its possibilities. Can this conservative 3 bedroom family home be turned into a two level 4 bedroom dream home? Could this 2 bedroom cottage be demolished, or updated to a brand new $400k house?
I hope everyone had a great break and has had a chance to recharge the batteries, as I think we are in for another very hectic year.