Capital growth for unit query

Hi,
I'm looking to buy a unit in reservoir in Melbourne for owner occupier but also aiming for long term capital growth as I may want to sell it in future
I have found a unit I love but it's in a block of twelve.apparently units don't go up as well when they are shared with a lot of other units?
I have been told max of six in a block is best for capital growth.this unit has everything else about it that appeals to me so would be perfect otherwise.
Anyone have any thoughts?how much difference does it make for capital growth when buying in a block of twelve as opposed to say a block of three or four?
Thankyou!

 

You are assuming the old adage that land appreciates while buildings depreciate. Hence it would follow that a small number of units on a block of land each have a larger land component in their price. It not always the case in practice.

 

12 in Melb is small

 

Yes but in reservoir there's a lot in blocks of 3-6.will it retain its value as well or nearly As well as a smaller block?
Thankyou!

 

Ah ok thanks!so would still potentially be a good investment ?

 

We had great capital gain on a unit in a complex of 80. Admittedly it was one of the better located, most tenants came from other units in the same complex.

Sold after 10-11 years at nearly triple the purchase price. One of our best capital gain results.
Marg

 

Agreed!

Take into account the other blocks in the suburb- are they all 200+ or blocks or 6- does yours stick out?

 

I'd say a mix of both...probably not a lot that are say 200 in a block but there would be some that are 20 or so in a block.quite a lot of new developments with townhouses that have quite a lot on the block

 

Interesting! You think a block of eleven is ok? I'm curious to know the difference in capital growth for a unit in say a block of four compare to say block of twelve?
Good thing about this unit is its street frontage, has the front yard on title,back courtyard,not connected to the other units in the block (back fence shares with the garage next door) and is north facing with lots of natural sunlight.has its own driveway and garage too
Will go for mid 500,000s apparently

 

If this is the situation, I would think rentvesting would be superior.
Even more so in the current low yield environment of Melbourne.

 

Can't do that,need first home buyers grant or won't be able to afford it

 

That's my conundrum;buy this or wait for one in a smaller block and pay a higher price...I have the funds to go higher so that's not a major issue
When u say well managed what do u mean?more potential for dramas because of more people with body corp?

 

It would be worthwhile exercise doing the figures on how much land content is essentially yours i.e. if its 1 of 8 units- what price 1/8th of the land, and compare that to say another block of say 1 of 6 units- what price is 1/6th of the land

 

How would I know what the total land is worth though??

 

Look at land only sales and compare by m2.
lucky for me my recent purchase in ACT they have ULV on allhomes.com.au

 

Just from my observations there are higher % owner occupiers in detached housing with a higher % of units/townhouses are rentals (Yield is probably the explanation). Especially if you intend to live there I would recommend buying/living in an area/complex with more owner occupiers

 

This is a really good point, identifying OO% at the complex level after the suburb level! nice one