VIC House in western suburbs or apartment in South-East?

Hi everyone! Recently found this site and have been reading as much as I can. Hoping someone here might be able to share some insight into my 'dilemma'.

I intend on buying my first PPOR some time next year with a budget of 700k (ideally, I'd like to make use of the first home buyer duty exemption/concession). However, I'm leaning more towards already established/ older builds so that would make me ineligible for the FHOG.

I'm tossing up between whether I should go for a house with decent land in the western suburbs (such as Sunshine or Braybrook) or if I should go for an apartment/unit in the south-eastern suburbs (such as Elsternwick, Balaclava, St Kilda). I've been looking on RE.com and have found both houses and apartments/units that fit my budget in their respective locations. I work in the CBD so I'd like to live as close to the inner-city/public transport as possible.

Example: House in Braybrook https://www.realestate.com.au/property-house-vic-braybrook-133558466
Example: Apartment in Elsternwick https://www.realestate.com.au/property-apartment-vic-elsternwick-133865466

I'd love to hear your thoughts about which direction you think I should go for or anything else I should consider as well.

Thanks in advance!

 

house in western , northern suburbs

 

Ideally, I'd like to live in the South-Eastern suburbs as most of my friends and family are there. But, I know that a 700k budget won't get me a house in the SE suburbs I've mentioned. I'm not sure if apartments/units would be wise as I've heard and read a lot about houses/land being a better investment.

 

why not try the northside instead? reservoir, fawkner...
braybrook is a ****ing dump and sunshine very um...'multicultural', not in a good way

 

I think you can still get some FHOG on older builds, just not as much.

Where you want to live is up to your personal taste and don't underestimate the value of convenience, safety and walkability - being close to your family and friends and shops.

For investment, as long as the market doesn't do a Covid tank, then I think both sound like solid options on a 700k budget as long as you stick with low density walk up apartments in Elsternwick that neighbour nice homes off main roads. I have found the yields on those around elwood and surrounds to be decent in this current climate of low interest rates (3% net pre-covid) and should experience strong demand.

The price point for an elsternwick apartment should also be much lower than a house in braybrook (during the peak some lots almost hit $1m!), but you'd also struggle to fit a family in there. So its a size vs lifestyle choice/schooling.

I think braybrook will have the potential to eventually gentrify in which case it may do well. But I am not seeing much demand in it from owner occupiers at this stage. I aslo fear it could suffer from the wfh trend where people may be happy to live further up the train line say Sydenham, Cairnlea etc just to secure a nicer home for the same price.

If you catch the train to the city alot, you may also appreciate rubbing shoulders with people from Brighton on your daily commute on the sandringham line rather than driving to tottenham station and have your car at risk of being jacked while your at work. The sandringham line also wont suffer from people looking further down the line for cheaper options as all the suburbs along that line are MEGA expensive.

 

so it sounds like you really want a house over an apartment

assuming the above : whats really being weighed up is conveniance to work vs proximity to family and friends

is saving 30-40 minutes a day on commuting (braybrook vs approx 20-25km out in the SE) worth potentially isolating yourself from friends and family?

sounds extreme but the trip.from one side of melbourne to.the other isnt really something people enjoy doing, regardless of what side your from

 

Honestly I've lived in western suburbs majority of my life and those 2 suburbs I wouldn't live in. If my budget was 700k and I was choosing a place to live purely on the location and having a house I would be going straight to Patterson Lakes as #1
Seaford - ocean side of highway #2
Altona Meadows #3.

Then if you wanna add in other regions of Melbourne
Bundoora / Watsonia #4 unless Watsonia too expensive now.
Greensborough #5

That's based on working in the city.

If I could get a job in the Eastern suburbs with $700k or if you don't mind traveling I'd buy any house I could in Belgrave or immediate area cause that area is just absolutely amazing in every way.

 

I'm tossing up between the west and the south-east because I have family and friends in both those areas (more so in SE suburbs but a few family members in Footscray so Sunshine/Braybrook are quite close to them). I'll definitely check out suburbs in the north though. Thanks for your reply!

 

I've considered Springvale and surrounds but I think 20km+ is a bit far for my liking... something around 10-15km from CBD is more preferable. However, I will definitely give it some thought and research the area more. Thanks Y-Man

 

Thanks for your reply! Really appreciate your thoughts. Elsternwick and surrounds are definitely an area I'd love to own a PPOR in. I do enjoy the Sandy line but almost all houses along that line are way out of my budget.

I guess I'm just unsure if there will be as much growth in an apartment in those SE suburbs as buying a house in the west. I have family who live in Footscray and know people from Sunshine and Braybrook who say it's not completely bad and things are improving (albeit very slowly)

 

That's a good point. I think I'm tossing up between the two locations because I have friends and family who reside in both areas (just more in the SE). I know I should choose a location I would enjoy living in but a part of me still thinks about the potential capital growth as well in which case I wouldn't mind a house in the west if over time the capital growth was higher than an apartment in the SE.

 

Thanks for your reply! I haven't considered any of those suburbs but will definitely check them out. However, regarding your #1 suggestion...I have a friend who lives in Patterson Lake and it takes him around an hour to get to the CBD by train :\

 

You bought the property in right time where property was not that expensive. No way , I would be spending 700k in clayton south. If it is near by train station then that's fine otherwise place looks like industrial area and junkyard. Lot of bogans and too much multicultural in that area.

 

Yeah that's the sacrifice side of having a house is a nice suburb on that budget over an apartment.
Why don't ya just look at units or townhouses in Altona then? Least then you're in a house not an apartment, nice location, close to city and within budget.

 

I love altona. It is great suburb. I have been renting a house for last 5 years. To be honest, I would prefer house in Seabrook and certain part of altona meadows over townhouse in altona. Townhouse in altona is not that cheap and floor plan are also not good.

 

End of the day if you have no issues living in Braybrook and have no real desire to live in Elsternwick then I think it is clear that having a house over an apartment at the same price and same distance to your areas of interest, then the house would give you more options moving forward.

Althought historical prices may not predict future movements, the old brick unit I own just north of the cbd (even though its in a large complex 20+) has outperformed a similar property a family member used to own in sunshine north (close to vic uni) despite that area being rezoned to the highest density.

I picked up the unit for $300k 2010 for the school zone, now its prob worth $550k. It has been positively geared since I bought, now renting for $450pw and I've probably only paid $1k max on repairs and no rennovations, body corp is only $1k a year and we put $900 each into the sinking fund annually.

The house is 4 bdr 1 bath brick on a normal block was around $500k in 2010, now worth perhaps $800k if optimistic - has been losing like 10k pa before tax (spent like $30k on repairs and refurbing the kitchen just the get $400pw rent).

These results though are skewed based upon when we bought in. If we had both bought in 2015, then I think the performance would have skewed to the house due to the rezoning and inner west boom/ripple effect that occurred after that. So make sure you do the math on each specific asset you are comparing and not just look at general figures for capital growth.

Another important factor for buying to live is whether you are planning on having kids in which case, as a parent, what are you willing to sacrifice for yourself vs what are you willing to sacrific for your kids. I.e. you might be ok with a certain area and school but will you be fine with it for your kids or your spouse etc. If you are unsure at this stage and you feel your borrowing capacity will increase in the future, then is eating up all your borrowing capacity in one go over something that may not meet your needs a wise thing to do or are you better off waiting until things become clearer.