Investing in Melbourne, Broadmeadows? Does the data say buy?- With Junge Ma

Summary

In this episode, the hosts dive into Victoria's property market, focusing on the suburbs of Broad Meadows and Dallas. With Victoria experiencing a 2.7% annual population growth, including positive internal migration, the area shows promising potential for investors. The hosts discuss housing trends, recent growth in the region, and the impact of new construction. Despite a higher unemployment rate, the areas are seeing positive shifts in market pressure and rental yields. However, fast growth may not be immediate, and long-term investment could be more fruitful. Ultimately, it’s a cautious 'go' for those prepared for steady growth.

Takeaways

• 😀 Victoria's population growth is currently at 2.7% per year, the second highest among all Australian states.
• 😀 Melbourne's population growth is 3.5%, indicating strong ongoing demand in the area, driven by internal migration.
• 😀 Net internal migration to Victoria is now positive, marking a shift from previous trends where the state was losing people to other regions.
• 😀 There are similarities between Victoria’s current market and Perth's rapid growth in 2021, especially in terms of economic recovery and affordability.
• 😀 Melbourne is seeing a lot of new housing construction, both in houses and units, particularly in the western and northern suburbs.
• 😀 The LGA of Hume, which includes Broad Meadows and Dallas, has experienced population growth of 4.15% year-on-year, which is higher than Melbourne's growth rate.
• 😀 Broad Meadows and Dallas have shown a solid 10-year house value growth of 80.6%, which is higher than Melbourne’s 60% growth over the same period.
• 😀 Despite the higher population growth and housing demand in these areas, the unemployment rate in Hume is 7.2%, which is higher than the Melbourne average of 4%.
• 😀 Broad Meadows and Dallas have experienced strong rental growth, with Broad Meadows showing a rental increase of 12.5% over the last year, while sales prices have increased by 6.4%.
• 😀 The median house prices in Broad Meadows ($585,000) and Dallas ($540,000) are still relatively affordable, especially considering their proximity to Melbourne CBD.
• 😀 Investing in Broad Meadows or Dallas could be a 'go' if you are prepared for moderate growth over the next few years, though it's not likely to see fast short-term gains.
• 😀 A key consideration for Broad Meadows is the high percentage of rental properties (49%), which could lead to an oversupply of rental stock in the future, potentially affecting cash flow and rental growth.

Q & A

What is the current population growth rate in Victoria?

Victoria's population growth is currently at 2.7% per year, which is the second highest among all Australian states.

What is net internal migration, and how has it changed in Victoria?

Net internal migration refers to the difference between people moving into and out of a state. For the first time in several years, Victoria's net internal migration has turned positive, meaning more people are moving into Victoria than leaving.

What factors are contributing to the positive net internal migration in Victoria?

The positive net internal migration in Victoria is attributed to the relative affordability of Melbourne compared to other states, as well as significant construction activity that requires a lot of labor.

How does Victoria’s current situation compare to Perth’s in 2021?

There are similarities, particularly in terms of economic recovery, population growth, and affordability. However, Victoria is seeing a higher level of construction, with both houses and units being built, whereas Perth in 2021 had less housing supply.

What is the population growth rate in the Hume LGA (Local Government Area)?

The population growth rate in the Hume LGA is 4.15% year on year, which is higher than Melbourne’s overall growth rate of 3.5%.

What has been the house value growth in the Hume LGA over the past 10 years?

House values in the Hume LGA have grown by 80.6% over the last 10 years, which is higher than Melbourne’s average growth of 60% during the same period.

What are some concerns about the Hume LGA, particularly regarding unemployment?

The unemployment rate in the Hume LGA is 7.2%, which is higher than Melbourne's average of around 4%. However, it is not necessarily a determinant of property price growth, though it may influence investment decisions.

What is the current median house price in Broad Meadows and Dallas?

The median house price in Broad Meadows is $585,000, and in Dallas, it is $540,000.

What are the rental yields and vacancy rates in Broad Meadows and Dallas?

Broad Meadows has a rental yield of 4.2%, and Dallas has a slightly higher yield of 4.5%. Vacancy rates in both areas are low, with Broad Meadows having a vacancy rate of 0.8%.

What is the outlook for property investment in Broad Meadows and Dallas?

The property market in both Broad Meadows and Dallas is recovering, with rising prices and relatively low stock levels. However, if you're looking for fast growth, it may not be the best option in the short term, but it could be a good long-term investment.