New Affordable Location To Buy Property For Under $650K In Melbourne!

Summary

The Melbourne property market is set to experience a significant rise in house prices, reminiscent of the post-World War II boom, due to similar economic conditions like falling interest rates and population growth. PK Gupta, in his video, details the dynamics of the market, emphasizing that the phenomenon isn't uniform across all of Australia. He highlights areas like Broad Meadows in Melbourne as potential investment hotspots due to low prices and significant upcoming infrastructure projects. However, he warns of risks from unqualified buyer agents, urging potential investors to be educated and cautious, leveraging data to make informed decisions.

Highlights

• Historical boom cycles might repeat in Melbourne due to current economic conditions. 📈
• The Reserve Bank of Australia signals a potential housing super cycle. 🔄
• Interest rate cuts are anticipated, possibly igniting the housing market. 💥
• Broad Meadows identified as an investment spot with ongoing infrastructure projects. 🚧
• Growing concerns over untrained buyer agents in the property market. 🕵️‍♂️

Key Takeaways

• Melbourne's property market is poised for potential growth, echoing historical boom conditions. 🏡
• Interest rates are expected to fall, which could fuel a housing boom cycle. 📉
• Areas like Broad Meadows are highlighted as affordable investment opportunities. 🏘️
• Potential dangers exist from untrained buyer agents in the Melbourne market. ⚠️
• Investors are encouraged to educate themselves and carefully assess opportunities. 📚

Overview

Is Melbourne the new treasure for property investors? With house prices expected to skyrocket, PK Gupta takes us on a journey comparing the city's current economic climate to the post-WWII boom. The stars align with falling interest rates and rapid population growth, suggesting a prosperous path ahead for Melbourne's property scene.

Highlighting the various factors fueling this potential boom, Gupta points to areas like Broad Meadows in Melbourne. Despite its reputation, the suburb is ripe with growth opportunities, boasting affordable prices and proximity to the city. Infrastructure projects further heighten its investment appeal, calling out to savvy investors.

Yet, as the property landscape gets hotter, so does the influx of untrained buyer agents in the market—posing a risk to potential investors. PK Gupta strongly emphasizes the need for education, urging viewers to become critical explorers of their own investment ventures. With detailed insights and a dash of caution, this episode serves as a guide for anyone looking to navigate Melbourne's exciting property possibilities.

Chapters

• 00:00 - 01:00: Introduction and Melbourne's Historical Context The chapter discusses Melbourne's housing market, noting that house prices are expected to rise significantly over the next 2 to 4 years, similar to post-World War II conditions. Factors contributing to this increase include housing shortages, population growth, labor shortages, low unemployment, and falling interest rates. The situation mirrors that of 80 years ago after the war.
• 01:00 - 02:30: Interest Rates and RBA's Outlook The chapter titled 'Interest Rates and RBA's Outlook' discusses the rapid increase in property prices following the World War, where prices surged threefold—an unprecedented growth in Australia's history. Although there's no direct insinuation that such a significant rise will occur again in places like Australia or Melbourne, the same influential factors are observed today. The chapter suggests that it is virtually impossible for house prices to decrease, including in Melbourne, unless an unexpected 'black swan' event occurs. The prevailing conditions hint at a continual rise in property prices.
• 02:30 - 03:30: Housing Growth in Australian Cities This chapter discusses the potential housing boom in Australian cities. It presents concerns regarding housing growth, especially if major political parties implement their housing policies. The discussion also highlights warnings from the Reserve Bank of Australia (RBA) about an impending housing super cycle. Additionally, it notes that interest rate futures suggest a decrease in the official cash rate to 2.9%.
• 03:30 - 04:30: Market Analysis: Melbourne's Potential The chapter titled 'Market Analysis: Melbourne's Potential' discusses the current expectations and forecasts regarding interest rate cuts projected to be 5.25% by the end of the year. Although market futures may have inaccuracies and change, these figures reflect present market expectations. The chapter further delves into insights from the Reserve Bank of Australia's (RBA) board minutes, providing qualitative reasoning behind their decisions. The RBA anticipates a housing boom, drawing on historical experiences both within Australia and internationally to support their projections.
• 04:30 - 09:30: Spotlight: Broad Meadows Area The chapter titled 'Spotlight: Broad Meadows Area' discusses the impact of lower interest rates on borrowing activity. It suggests that when interest rates are low, people tend to engage in riskier borrowing behaviors, their borrowing capacity increases, and there might be a rapid rise in house prices. Additionally, there may be a relaxation in lending standards during such times. The chapter also highlights Peter Dutton's proposition, if elected, to reduce the 3% interest rate buffer that banks use to assess borrowers. This buffer means that if the bank offers a 6% interest rate on a mortgage, they actually assess the borrower's capability at a 9% rate.
• 09:30 - 14:00: Warning on Untrained Buyers Agents The chapter titled 'Warning on Untrained Buyers Agents' discusses the impact of changes in mortgage conditions on borrowing by investors and the housing market. It highlights the necessity of maintaining a buffer in borrowing, reflecting on how historically low interest rates during COVID influenced this need. However, as interest rates normalize, the necessity for such a large buffer is questioned. The chapter concludes with the importance of closely monitoring investor activity in amplifying credit and the housing market cycle.

New Affordable Location To Buy Property For Under $650K In Melbourne! Transcription

• 00:00 - 00:30 melbourne house prices are tipped to rise the most out of any capital city over the next 2 to 3 to four years these boom conditions last occurred about 80 years ago after the end of the World War Australia had an acute housing shortage it had record population growth it had skilled labor shortage it had low unemployment and interest rates were falling these five things if that all sounds familiar it's because that's the perfect storm that's occurring right now in 2025 house prices including Melbourne
• 00:30 - 01:00 went up three times that's 3x 300% in the 6 years after the World War of course I'm not saying that is going to happen right now to Australia or to Melbourne but that was the quickest lift in property prices this country has ever seen and I posit that because we're seeing the same forces unfold it's almost impossible bar a black swan event for house prices to go down right now including Melbourne or even just rise at
• 01:00 - 01:30 a slow pace especially if the major political parties implement their housing policies that I shared with you in a recent episode all of that combined is starting to look like I don't want to say it but a property boom even the RBA the Reserve Bank of Australia is now warning on a housing super cycle about to begin the latest pricing as you can see from interest rate futures has the official cash rate falling to 2.9% by
• 01:30 - 02:00 this year's end suggesting another 5.25% rate cuts this calendar year you can see how they're just dropping off now these futures have been wrong they get changed but as of now this is what the market expects but more interesting than that is the RBA's board minutes where they actually give qualitative reasoning and color around some of their decisions they're expecting a housing boom historical experience both in Australia and abroad say the RBA
• 02:00 - 02:30 suggests that periods of lower interest rates can coincide with riskier borrowing activity in other words borrowing capacity increases a rapid increase in house prices and at times a relaxation of lending standards we know that Peter Dutton if elected he wants to reduce the 3% interest rate buffer that banks assess you on versus what they actually charge you if you're getting a 6% interest rate on your mortgage they've actually assessed you at 9% just
• 02:30 - 03:00 to make sure they have some wiggle room and some buffer he wants to bring that rapidly down which I'm not against because that was only in there in the first place that buffer because we had record low interest rates during co we don't anymore so we don't need such a big buffer historically borrowing by investors has been particularly sensitive to changes and conditions in the mortgage market the potential for this activity to amplify credit and the housing market cycle would be monitored closely reading between the lines they're saying if we reduce interest
• 03:00 - 03:30 rates the amount that we need to housing market is going to boom now I wanted this episode to be predominantly about Melbourne so let's look at the fastest ever 5-year growth period in different capital cities let's start with Sydney so in October 1988 that 5-year period house prices grew 80.7% in Melbourne it was actually bigger melbourne's typically known for not huge booms and bus but more longer
• 03:30 - 04:00 boom periods at a shallower rate like instead of 20% peranom like Perth just had more like 8 to 10% peranom for a longer period of time but its peak boom in a 5-year period January 1989 where it went up 98.8% that's a doubling in house price in just 5 years you can see the other cities are very similar Perth being the largest in September 2006 and I know a lot of you are probably thinking "Hey PK
• 04:00 - 04:30 you're just making the market out to be more than it actually is because we've just had a huge boom during co how can people afford another housing boom all of the affordability metrics are way out of sync it just can't happen." No I'm not disagreeing with you but the fact is and I'm the only one saying this on YouTube and different podcasts house values in Australia over the last 5 years in the supposed co boom have risen only 39% if you extrapolate this out to
• 04:30 - 05:00 10 years that would suggest that house prices had not even doubled from year 2020 to 2030 that is not boom conditions because typically in Australia housing market doubles every 7 to 10 years over the last 80 years that's been the historic reality so in the last 5 years even though it might seem like because of the media because of so much more content out there that we've experienced this massive housing boom and we have
• 05:00 - 05:30 increased house prices for sure it has not been boom conditions when averaged over the last 5 years at the national level on average of course Perth different story other places Adelaide different story Brisbane different story but on a national basis especially Melbourne which hasn't even grown more than 15% there has been no boom so there's plenty of latent capacity in these areas that have pulled the national average down now I want you to watch this episode right till the end
• 05:30 - 06:00 because at the end I'm going to share with you something that may pull the rug from underneath your investing plans especially when it comes to Melbourne because there's something going on that most people that even watch my channels will get affected by and will lose money that's really important i'm going to share what that is but without further ado let's do a little bit of a deep dive on Melbourne let's understand the most affordable areas that are primed for some of the best growth hear me loud and clear when I say that the affordable end
• 06:00 - 06:30 of the Melbourne market is already growing at double digits peranom some of my clients and of course non-clients as well who get benefit from my platforms have already bought in some places in Melbourne over the last 12 months and already made 10% plus capital growth you can see on this chart where the opportunity exists where there's a lighter shade of yellow for example on the northern side here around this number one on the western side down the
• 06:30 - 07:00 southwestern side these are the affordable yellowy areas cheaper areas under a million under $750,000 as you get these oranges and these darker runes those are the areas that are now above a million above $2 million so let's just ignore that because that is not really investment worthy given atrocious yields and also in this episode I'm not going to go through number two and number four because they still have abundant land
• 07:00 - 07:30 supply i know a lot of buyers agents and other people big up Melton and they say how parts of Melton South let's say West Melton etc are actually got pretty good data but you just need to draw a line from Melton right through to Melbourne CBD and there's massive pockets in the middle where vacancy rates are more than 4% more than 5% so don't judge an area just based on its own geographic boundaries you have to zoom out and say
• 07:30 - 08:00 all right if people want to commute to the city which we know they do for employment purposes i mean Melton in itself cannot support 100 200 300,000 population with self-sufficient employment opportunities and economic diversity they have to travel to Melbourne CBD then why wouldn't they live closer when land is finally approved and built upon in these closer in areas with higher vacancy rates so that's one of many reasons which I might do in another episode of why I'm staying
• 08:00 - 08:30 clear of these areas for now but number one and surrounds are really interesting to me for example a suburb notorious as it may sound called Broad Meadows now according to PRD Broad Meadows is about 6 or 7:00 on the property cycle that means it's just recovering if you ask me it's already had a double-digit runup so it's more like at 7 to 8:00 but this is an area that will continue to do well despite its stigma around crime and lower socioeconomic dynamics we saw
• 08:30 - 09:00 places like Armaddale in Perth we saw places like Petri and Kalinga in Brisbane we saw places like Western Sydney in Sydney there's examples all over Australia where areas that you and I may not want to actually live have gone up by double triple quadruple in a space of 10 to 15 years that's because crime doesn't have any direct correlation to capital growth but Broad
• 09:00 - 09:30 Meadows is less than 15 km from the Melbourne CBD it's predominantly made up of three-bedroom houses with two bedrooms and four bedrooms being more rare a fourbedroom median price starts at 630 which I would argue now at an auctions is more like 700 but you can still get a three better for around $600,000 to $650,000 its rental yield is 4.3% so you got to need to have some decent cash
• 09:30 - 10:00 flow surplus on a monthly or yearly basis to be able to buy in a place like this vacancy rate is very low at8% and one great thing which I'll expand upon in a second is that there's a lot of projects going around Broad Meadows in fact there are $190 million worth of projects going on but in terms of freestanding houses there's not much supply coming online less than 31 town houses and less than 20 freestanding houses the unemployment rate is huge
• 10:00 - 10:30 it's 15% which is more than three times the national average and this is one area that a lot of Melbourne is struggling with because of the way the state handled the whole CO affair a lot of commerce has been slowed down there's a budget deficit a lot of infrastructure has been postponed or cancelled although there's still a healthy pipeline of that there's been a mass exodus of population now that is finally reversing so we want to watch that unemployment rate we don't need it to come down to 4% for it to be
• 10:30 - 11:00 investment worthy you have to be very careful in a locality like this to be buying in only the best neighborhoods within that suburb where within that specific neighborhood inside Broad Meadows the unemployment rate may be less than 7 or 6% with a higher owner occupier ratio of course there's lots of projects still in the pipeline for Melbourne and the Melbourne airport rail link the railway works southern cross station to Talamarine sponsored by
• 11:00 - 11:30 predominantly the state government that's a $10 billion project and that's going to positively impact commute times and accessibility to the airport which Broad Meadows is not too far away from so it will get some positive side effects from that places like Broad Meadows and other affordable areas of Melbourne are positively humming with price pressure right now i'm not saying go out and buy there with a blindfold on nor am I saying that's the best strategy for anyone and everyone most of my
• 11:30 - 12:00 clients aren't even considering it there are many other locations in Melbourne that that are perhaps better and lower risk especially when it comes to townhouse locations under $700,000 but I want to warn you of something and this is from the industry body Real Estate Buyers Association of Australia i'm not a buyers agent you know how I feel about 95% of buyers agents which are just trash that this is their own industry body warning of growing dangers to consumers from untrained buyers agents entering the
• 12:00 - 12:30 property market and I can tell you right now the majority of these people are in Melbourne there's a huge immigrant community of course in the northwest of Sydney and also in the western suburbs of Melbourne i don't want to tarnish all of them but the majority of them have become buyers agents in just the last one two or three years there's such an influx of investors especially from the community and because of advertisement they are employing buyers agents and
• 12:30 - 13:00 getting done because those buyers agents are inexperienced don't hear it from me this is the industry body saying it themselves they've raised concerns about the influx of poorly qualified representatives who may lack essential knowledge about property transactions sales agents have also expressed alarm over the issue citing instances where inexperienced buyers agents have failed clients the Reeba president attributed the problem to minimal entry requirements and insufficient specialist education in the industry this is what
• 13:00 - 13:30 I've been saying for like 7 8 9 years finally the industry body of buyers agents themselves is calling it out if you're looking to hire a buyers agent because you don't even have 3 to 5 hours a week over one or two months to learn and implement yourself through structured systematic data education with a mentor i.e me cheeky plug there then at least be educated enough to ask them the right questions why did you
• 13:30 - 14:00 propose this property and be able to verify the suburb property valuation negotiation due diligence reports be able to verify all this yourself independently don't trust them at all use them as expensive labor hire if you have no time or energy but don't outsource the accountability the responsibility or the due diligence get educated because no one cares about your money as much as you do if you do want to level up I'll leave links below to my
• 14:00 - 14:30 free podcast Oz Property Mastery with PK and also my Facebook group more than 60,000 people Australian Property Mastery with PK where you can start learning and verifying what I say what others say what 25 million property experts in Australia say for yourself using cold hard data hit the subscribe button give it a like thanks for being here guys