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Capital growth in Cairnlea, Victoria?

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jedi77 | 18 Aug 2015, 11:28 AM Agree 0
Hi all, I am after some advise regarding the Cairnlea Suburb in Victoria. We are currently investigating options of moving to another suburb near the Strathmore / Strathmore Heights area and surrounding suburbs such as Keilor East, Niddrie, Oak Park etc (Melbourne North west). The reason for the move is for school zoning as we really like some of the schools in that area. Currently we have an investment property in Hoppers Crossing and the family home in Cairnlea. We are definitely selling the hoppers crossing home, as that has been a mistake since day 1. Hind site is always a wonderful thing, but it was the wrong area to buy in and it didn't help that we also had to spend thousands of dollars fixing the place up after it was trashed by the tenants. Anyway, the house is now quite nice, with some great tenants but capital growth has been poor in the area. As such, once we sell, we won't be making much money from it, if any at all. But the Cairnlea home is the one we are unsure about. Its the family home which we had built new back in 2006 and has been valued at $580K. We paid $360K for the land and house back in 2006. So it has grown in value. In our plan, we were hoping to sell the Hoppers Crossing home and rent out the Cairnlea home and purchase another home in the areas that we would like to. Unfortunately, after speaking to a financial adviser, with the sale of only the Hoppers Crossing home, our loan amount from the bank is ok, but not great, for the areas we are looking in. If we sell both homes, then it becomes a little easier, assuming we can comfortably afford the monthly repayments of the larger loan. So after all that, I was hoping to get some ideas or advise on what people here think about Cairnlea as an investment suburb. Prices are slowly increasing and its 18kms out of the city. Is it worth keeping the Cairnlea property or should we just sell it?

Many thanks for the advise.
  • Jules | 18 Aug 2015, 02:56 PM Agree 0
    I live in Cairnlea and it is a good suburb with great CBC access points. It works for us as my parents are in aged care nearby and shops are walking distance. I think you need to ask yourself how much you want to spend on your new home... and what are you prepared to owe the banks? If you want to live in Strathmore or Pascoe Vale be prepared to spend more to buy in to these more established suburbs. No one can really answer your question for you. The key is don't over stretch yourself and one goal at a time. If a home closer in is the right move for you...then focus on that... established areas will grow more over time as land is limited. Think long term and good luck.
    • Jedi77 | 18 Aug 2015, 03:23 PM Agree 0
      Thanks Jules. I too like Cairnlea. We have lived there since 2006. If it wasn't for school zoning we would not be moving. But the things we do for our kids huh :). Realistically, Strathmore / Essendon will be too expensive as they all seem near the 1 million mark, considering the size of home we are after. Selling the Cairnlea home allows us to get a larger loan, but I think you're right, and fear that while we can get the larger loan, we will struggle to comfortably pay it off and still have some savings. So maybe its worth just keeping the Cairnlea property and buying another property with a more affordable loan amount. We guestimate that the rent in Cairnlea should cover the current mortgage on that house. All I can hope is that Cairnlea continues to grow, rather than stagnate like Hoppers Crossing.
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