An Interview with Belu

Thanks Belu and Y-Man for the interview.

A great read and very inspirational.

I agree with your observation regarding the large difference in house prices between Melbourne and Bendigo. If people can travel into Melbourne CBD via train in just over an hour, then it makes sense that they would move to an area with less traffic congestion, fresh air and more affordable house prices.

Congratulations on running the Barry Plant agency in Bendigo and the development sites you have picked up as well.

Look forward to hearing more updates as time goes on.

Regards Jason.
 
A question for Belu.

I understand that Bendigo was picked due to its comparative value. Ie comparative proximity to the CBD and much lower house prices.

However there also exist outer suburbs of Melbourne (eg Melton, Sunbury and Werribee) with median house prices roughly similar to Bendigo. These are half the distance to Melbourne CBD. Eg during off-peak times one can drive from the CBD to Hoppers Crossing in under 30 min and there is a more frequent train service.

Hence there must be other reasons that makes Bendigo more attractive than outer Melbourne, even to the extent of paying about the same for a property twice as far out.

I'd be curious hearing what some of them are.
 
A question for Belu.

I understand that Bendigo was picked due to its comparative value. Ie comparative proximity to the CBD and much lower house prices.

However there also exist outer suburbs of Melbourne (eg Melton, Sunbury and Werribee) with median house prices roughly similar to Bendigo. These are half the distance to Melbourne CBD. Eg during off-peak times one can drive from the CBD to Hoppers Crossing in under 30 min and there is a more frequent train service.

Hence there must be other reasons that makes Bendigo more attractive than outer Melbourne, even to the extent of paying about the same for a property twice as far out.

I'd be curious hearing what some of them are.

Yes, I think that these other reasons are far more important than differential in median price and proximity to the city centre. A case in point is Gosford, NSW, hugh price differential to the north shore, sydney but only 45 minutes away. Yet, there is no cap gain in Gosford.
 
Hence there must be other reasons that makes Bendigo more attractive than outer Melbourne, even to the extent of paying about the same for a property twice as far out.

I'd be curious hearing what some of them are.

I think you can buy a much better quality home (ie period/character home) in Bendigo for a similar price to an ordinary brick veneer home in Hopper's Crossing and with access to better facilities - ie good quality Hospitals, easier CBD access and good train service to Melbourne. Not to mention fresh country air and a less hectic way of life. The infrastructure and road network in the Western suburbs of Melbourne is shocking and doesn't look set to improve in the immediate future.

Be interested to hear what Belu says too.
 
Hi guys,

Thanks for the feedback on the interview and Bendigo.

There is a lot more to Bendigo when looking at it than just the location, but didnt want to go into all of it in the interview. For those that came along to the Bendigo investor night I covered a lot more of the pluses. Compared to those outlining areas Bendigo has a lot more going for it from an investment point of view.

Firstly the level of business and investment in Bendigo is much higher than the outlining suburbs of Melbourne. Bendigo Bank is a huge employer along with Bendigo Health. Also the indications and investments from all levels of Government is massive. The new hospital and investment from the federal and state governments, the relocation of the State Trustees from Melbourne along with the local government investments in the new Library, upgrade of the Art centre along with others.

Secondly the outlying suburbs of Melbourne have no scarcity, whereas about 75-80% of the Bendigo border is covered by forest. Meaning the only ways for the city to expand is out through Eaglehawk, Strathfieldsaye, Epsom and Maiden Gully. The local council are very big on in-fill development which, along with the inner land scarcity, is causing properties in the inner Bendigo region to increase quite dramatically. As an example Kangaroo Flat, Golden Square and Bendigo itself were the only 3 victorian suburbs in the RP Data top 20 CG suburbs for 2011, between 12% - 13% growth for the year.

This growth is on top of shrinking block sizes as well, and a median house price of still under $300k, when compared to Sunbury as an example of $345k.

In short, there are a lot of reasons for the on-going, long term sustainability of Bendigo, whereas the satelliets of Melton, Hoppers and Sunbury tend to exist purely because of proximity to Melbourne.

These are just my views though, and is why I am investing in Bendigo :)
 
I think you can buy a much better quality home (ie period/character home) in Bendigo for a similar price to an ordinary brick veneer home in Hopper's Crossing and with access to better facilities - ie good quality Hospitals, easier CBD access and good train service to Melbourne. Not to mention fresh country air and a less hectic way of life. The infrastructure and road network in the Western suburbs of Melbourne is shocking and doesn't look set to improve in the immediate future.

In terms of facilities, I fail to see the great advantages of Bendigo over Hoppers. I reckon they're pretty much line-ball.

Hospitals: Hoppers has The Mercy whose maternity facilities are extremely high regarded

Schools: Hoppers has the new Suzanne Corey select entry state school that opened only a year or two back.

Shopping: Hoppers has the massive Werribee Plaza and a large trades area. It doesn't have the old buildings or historical main street (though if that floats your boat there is Watton St in Werribee).

Public transport: Hoppers trains run every 20 minutes 7 days/week. Bendigo's are generally hourly, so you're really bound by the timetable. During peak times Hoppers has express trains every 10-12 minutes, whereas Bendigo's waits are several times more. Hoppers clearly superior - there's no contest.

Traffic congestion: Here Bendigo definitely superior. Though if Bendigo keeps growing then congestion there will increase. Though for Hoppers not really an issue if you get a place that you can walk to the station.

Health: The obesity surveys (roughly a proxy for income and maybe how well parents bring up their kids) show that outer suburbs like Hoppers rate poorer than richer areas. But on this criterion regional cities also fare poorly.

Access to coast and country: Hoppers is only 15 min from Altona beach. The fast developing Werribee Marina area is even closer. Torquay is the other way. However Bendigo is nearer to other attractions (Grampians, Murray River, museums, Macedon Ranges) and you don't have to drive through half of Melbourne to get there.

On the objective factors there's not a lot between them. There's no doubt that Bendigo is quite good on all but it's not objectively greatly superior to Hoppers.

The difference must be due to some sociological or non-tangible lifestyle factor.

Eg whether they appeal to a certain quite affluent but backward looking demographic attracted by tiny pretty cottages (even if the toilet's out the back), streetscapes, main streets, books, wine, old buildings, coffee, inner suburbs etc.

Such a demographic may eschew McMansions, bogans, fast-food, drive-in shopping centres, modern (but fully-featured) homes and different cultures that signify Hoppers (or any cheap outer suburb).

Accordingly, if they can't afford Brunswick, Northcote or Yarraville but they want a larger home (to raise their one child) the heritage parts of Bendigo might appeal.

Just as lower-middle class Australian born homebuyers skip over the ethnic enclaves of Noble Park/Dandenong/Doveton in favour of Narre Warren and Cranbourne (or Berwick if they've got more money), there may be a tendency for some middle class to skip further out to the inner parts of the regionals over the likes of Hoppers, Craigieburn or Sydenham.

Monique Wakelin is a reliable barometer of the prejudices of this market, and I suspect that's why she recommends the inner part of Bendigo, Ballarat, etc because the housing styles are (at least superficially) similar to her favoured inner Melbourne.

The 2011 census data, showing trends in average income and commuting (to come out later this year) should show this for certain - we may see the average income of inner Bendigo increase faster than outer Bendigo. That is unless portions of outer Bendigo include hobby farms that some ex-Melbourne migrants also favour (until they realise the maintenance involved is harder work than just patting goats).

If inner Bendigo has a rich suburb's style yet bogan belt yields, then I can understand its attraction, even though some of its services are inferor to Melbourne outer suburbs and it's bitterly cold at this time of year!
 
Haha it's bitterly cold where I am sitting in Strathmore too.

I didn't mean to weigh Bendigo against those suburbs, they were just ones that were named above. How do yields and scarcity go in hoppers? Bendigo yields are currently sitting at around 5.4% average. I.e a $300k buy would typically rent for $320-340 a week.
 
Haha it's bitterly cold where I am sitting in Strathmore too.

I didn't mean to weigh Bendigo against those suburbs, they were just ones that were named above. How do yields and scarcity go in hoppers? Bendigo yields are currently sitting at around 5.4% average. I.e a $300k buy would typically rent for $320-340 a week.

Bendigo yields are slightly better - Hoppers are pretty close to 5%. Also a lot of vacancy in the area, especially the new estates.
 
Vacancy is running at between 0.7% and 1.7% at the moment in Bendigo.

Also just did the numbers and yields are actually circa 5.7% @ $330/week on a $300k buy as an example.
 
Belu,

Another great inspirational story, which I really enjoy especially when I learn something too. Keep it up!
Similar "shadowing" concept happened to some Sydney suburbs, not necessarily regional.
It is always interesting to read other people's life experiences and how they started into property investing.
Thank you for sharing.....:)
 
I really enjoy the interviews. Thanks for your time Belu - and thanks to Y-man for organising.

Fair bit of confidence in the local area then Belu. Also good to see a real estate agent who is happy to help the local investors.
 
Great read - thanks guys! I agree on several points notably the "don't be afraid to take a risk when you're young" among many others...

And yes I'm a strong believer in Bendigo. Low unemployment, low vacancy rate, great future prospects!
 
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