VIC Blackburn (VIC) Villa Price Analysis

Looking at getting into the market with a PPOR of an older style villa units in SE Melbourne about 30min by train into the city. May convert to investment in 3-5 years.

What do we think of the price range of this 2BR/1Bath/2Car of $750-$825 in this market? Thinking of offering low $800K with current income of $100k~ and 20% deposit.

https://www.realestate.com.au/property-villa-vic-blackburn-137232894

Looked at similar units sold for around $700-$750 but none so close to the station or on this street.
Pros:
Block of 3
5min to station
5min to shops
School zone

Cons:
Small interior/land size

Thoughts appreciated!

 

I don't know the area well enough to make an informed comment re: the value of the property.

But with respect to it as an investment:

PROS:
- Lovely looking street, has owner-occupier appeal
- Close to major roads, but not so close that it's an issue re: noise
- Good access to PT
- Great proximity to services
- Block of 3, okay land content
- 2 car spots is great

CONS:
- I don't love the floor plan of the house
- Bedrooms quite small

OVERALL:
- I think it's a solid investment, the floor plan is the only downfalling. I think this property has a high likelihood of returning an average/above-average ROI. I would reccomend researching the area well and getting a "feel" for comparable prices. Remember if the true value is $750k and you pay $800k thats a 6.5% gain that needs to be made until you are "at market value". In the long-term that is quite small.

 

Yup was after single level but didn't think about the potential type of renters! Thanks for the feedback

 

I'd agree with your initial analysis. Nice and quiet location, easy access to public transport (bus, express trains, IIRC you even got non-express trains starting from Blackburn Station), even got skybus airport shuttle from Blackburn train station. I wouldn't be surprised to see such crazy prices in this location.
One thing I'd like to point out is that there is an abundance of apartments in this area which might potentially affect your future rental yields. Have a look at Pace of Blackburn project (https://www.realestate.com.au/project/pace-of-blackburn-600024182), this one itself has 200+ apartments which will be ready sometime in 2022.

 

Your point about apartment supply is very true. Blackburn's unit supply will increase by 19% over next 2 years.

 

It looks like it couldn't have 2 people in the bathroom at the same time, which would be a deal-breaker for me, but maybe the floorplan makes it look smaller than it really is.

 

Apartment stock is quite a bit different from villa units which have land content - although most listings unhelpfully refer to them all as "units". I'm not familiar with this specific suburb, but in the ones I look at, despite apartment construction, villas held their value in line with their land content, similar to houses

 

Ohhh good points re the gains needed. Yeah I'm not in love with floor plan either, chatted up the neighbours and they've done so mods to the layout so it's more open plan.

 

Oh this is interesting data!! I wonder why so many apartments going up around Blackburn...it's cute but I can't think of why you would live in an apartment there

 

There’s been apartments popping up around the station for quite a few years now. It may have been rezoned recently, though don’t know for sure.

 

This is amazing. Where did you find this? I’m keen to explore it some more!

 

There were a number of press articles on this. Here is one:

Suburbs in Apartment Oversupply ‘Danger Zone’

 

I think you could very easily and very cheaply put up a partition to create a hallway that separate the living from the bedrooms and achieve some acoustic attenuation if there's enough space.

would love to know where you got these stats from? was it paid corelogic access or was this free somewhere else?

 

Not original poster, but I found it in this news article
Suburbs where house prices will plunge

 

Hard to know how much of that will actually be built, given escalating construction costs