Footscray 2/2/1 Apartment - thoughts?

Discussion in 'What to buy' started by Clint G, 28th May, 2017.

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  1. Clint G

    Clint G Member

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    Hi all

    Wanted to get your thoughts for our first investment property.
    We are looking at purchasing a 2/2/1 new apartment OTP in a new development in Footscray.
    (I know well about the general sentiment around OTP on the forums at the moment), but bearing that in mind to try we are trying to foolproof this as much as we can. It has a bit going for it:
    - Full Maribyrnong river frontage and view
    - Corner apartment - only 3 on the floor. 66m2 with 10m2 balcony.
    - Strata / management fees reasonable (Body corp $2100, Council $1600)
    - Saving on the stamp duty obviously an incentive before July 1 and depreciation to offset our salaries

    Have been reading of potential oversupply in the area and slow growth, not sure how much this is the case?
    Our aim is to hold long term, possibly live in it in it a bit down the track (currently live in Syd).
    Thinking long term view, 4km from Melb CBD, gentrifying area with good transport, uni's and amenities could it be that bad an investment? Feeling it's like an Erskineville in Syd..

    Any thoughts/comments appreciated

    Cheers
     
  2. Joynz

    Joynz Well-Known Member

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    Can the view be built out?
     
  3. Iamnumber5

    Iamnumber5 Well-Known Member

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    Whats the price? and how much is the expected rent?
     
  4. MTR

    MTR Well-Known Member

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    How many apartments in the block?
     
  5. Clint G

    Clint G Member

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    Definitely not - its fronting directly onto the river.
     
  6. Clint G

    Clint G Member

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    $509k. - Expected rent $500-$510

    193 in total
     
  7. MTR

    MTR Well-Known Member

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    right, that's too many for me.
     
  8. Cimbom

    Cimbom Well-Known Member

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    66sqm is quite small for a 2x2 apartment. I'd want 75sqm at the least.

    I also wouldn't buy in a massive development like that
     
  9. Iamnumber5

    Iamnumber5 Well-Known Member

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    Wouldnt it be better to get a townhouse on the neighbouring suburb for that price?

    I understand that it's hard to get an emotion out of it, especially involving PPOR for the future.
     
    Clint G likes this.
  10. Jerry O

    Jerry O Well-Known Member

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    I agree with this. Given that a decent 1 bedder is around 40sqm. You would want a 75 sqm for a 2 bedder at the very least as mentioned.
     
  11. melbournian

    melbournian Well-Known Member

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    I don't know 500-510 is a bit for footscray standards. and for 66sqm is a very small.
     
  12. Karlos1234

    Karlos1234 Well-Known Member

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    Clint G likes this.
  13. Spiderman

    Spiderman Well-Known Member

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  14. Clint G

    Clint G Member

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  15. baussie

    baussie Member

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    Why do you say this? OTP incurs less stamp duty.
     
  16. JayWin

    JayWin Member

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    I would say still consider it.

    Footscray is one suburb that has "gotten away" for most people. It is ridiculous, it is only 4 (read: Four) kilometres from the Melbourne CBD. A bike ride is 18 mins, 10 mins by car, 8 mins by train

    Median house price:
    2013 $572k
    2014 $635k
    2015 $679k
    2016 $775k
    2017 $825k (May)

    Median unit price:
    2013 $385k
    2014 $405k
    2015 $413k
    2016 $410k
    2017 $395k (May)

    The drop in median unit prices for this suburb can be explained by more 1-bedroom units popping up.

    However, do not discount the fact that you have a Maribyrnong River facing views. There are only a few views in Melbourne that are worth anything. Yarra River views, Maribyrnong River views, beautiful park views and beach front views. We do not have the Opera House or the Harbour Bridge, so river views will be pretty sought after.

    What Footscray has got going for it is gentrification. It's got a really new and modern railway station which has cleaned up the area really well, the council has pledged to make Footscray a much safer place and are investing into making it an education hub with Victoria University's main campus there. Footscray used to be one of the worst places to be after sundown - it's also known as Footscary. You'd see druggies slurring all over the streets, it was like zombie town. Now, hip little cafes and gourmet burger joints are popping up, and a large Coles-led shopping centre has been built in Footscray Central.

    Melbourne used to be all "East is good, West is bad", and it was so extreme. Showing the numbers again, but this time, comparing it with a suburb 4 KMs away as well, but this time, 4 KMs East (Hawthorn).

    Median house price, Footscray vs Hawthorn:
    2013 $572k vs $1.43m
    2014 $635k vs $1.35m
    2015 $679k vs $1.55m
    2016 $775k vs $2.06m
    2017 $825k (May) vs $1.9m

    Median unit price:
    2013 $385k vs $482k
    2014 $405k vs $532k
    2015 $413k vs $550k
    2016 $410k vs $538k
    2017 $395k (May) vs $530k

    Hawthorn is nowhere close to affordable, it's a luxury suburb now, 4kms East of Melbourne CBD. Now Footscray on the other hand, similar distance but West of Melbourne, is roughly 60% cheaper if you're shopping around for a house.

    Of course demographics and the "type" of houses are vastly different, but if you're looking for distance to CBD (which is what determines price growth in the long run, IMO), then Footscray should be a pretty decent option. Lots of houses are now $1m+ in Footscray, which is kinda bonkers, considering everyone was afraid of even stepping foot in that suburb anytime after 6pm.

    All IMO, but just sharing a bit of my insight, as I've been looking at Footscray since 2013, but it got away from me unfortunately.
     
    Kate likes this.