Hi Braintrust, Have been reading for a while first time posting. I have a pretty simple question. We are a couple in early 30s and looking to buy a first property in Bayside Melbourne. Esetially looking all along the bay from Mentone - Frankston. We work that way, family that way and unfortunately that's not the cheap part of Melbourne. The dilemma is, a rather uninspiring House in Frankston or 2bed unit in Mordialloc ( if lucky) or more likely Chelsea? House will have more capital gains, but with recent price rise there isn't much to choose under 700k in Frankston/ Karingal area. We went to look for houses there and there are cars half taken apart, pitbulls roaming around with their crackhead owners, maybe I just had a bad luck, many young people move there. I know it's changing and should be getting better over time. I love Mordialloc, lived there for a couple of years. So far my favourite suburb in Melbourne since I moved here 4 years ago from London. Equally getting expensive even for 2bed unit and most of them without a garage which is quite important to store stuff. Probably will have to downgrade to Chelsea/ Carrum. Which are still up and comming and should have some capital growth. For me the lifestyle seems worth living in a smaller place. However, am I making a bad finansial decision? How much financialy worse can I be in 5-7 year time if I choose a unit? Also, chealsea has A LOT of units, does that help or hurt? Anything else to consider? Thanks team
I'd buy a house over a unit, any day of the week. You may just have to move further away from the water to get a property, if you're not a fan of Frankston.
I would buy a unit if I couldn’t afford a house Most houses are out of reach even in average suburbs for the moment. With so many people knocking down houses and building townhouses, I’m surprised that people advise to not buy a unit or townhouse.
Chelsea has a lot of older type 2br villa units. Many have garages. Many are in good locations about 10 min walk to train and beach. They have had a good history of capital growth. A fair number are rentals but inhabitants are often quiet pensioners who cause no trouble. The whole area is a noisy, dusty inaccessible building site at the moment due to level crossing removal works and the retail strip is down at heel as no one can get to it (most direct roads to it are blocked). But it will have a new station and cycle paths within 6 months. And they might do something about the retail strip with the Chelsea structure plan the council is working on. Get a villa that's at the front or rear of the block for fewer adjoining neighbours and maximum courtyard size. If you pick wisely you will have quite a generous yard with a high land value component. Lots of townhouses are being built but villas not so much. But villas may offer better value, some renovation potential and single level which is handy when you get old. This is an example of one that's recently sold. Under $700k. Rear in a group of 3 (which is better than average). Good size courtyard. Not the most leafy street but it's quiet and nothing (including the beach) is more than 10 min walk away. Mordialloc is reachable via an off-road bike path with no traffic near the wetlands. https://www.realestate.com.au/property//unit-3-57-blantyre-ave-chelsea-vic-3196 Carrum, especially the pocket just east of the new Carrum station is almost as handy. You get the benefits of being near Patterson Lakes but can still walk to the beach, Aldi and eateries. Also Patterson Lakes Shopping Centre is not far but traffic on Macleod Rd can be heavy. Carrum Downs is cheaper and an option for a house. But unless you work in the nearby industrial area or up Eastlink it offers no lifestyle benefits compared to the bayside suburbs. Public transport is also limited. Even the rough Pines at Frankston North has a nice reserve that you can walk to and is nearer the beach and trains. Parts of Seaford could also be worth considering for houses but may be above your budget.
It's for this exact reason that people on here are advising the purchase of a house. They are becoming rarer by the day as the city becomes denser. Supply v demand.
House . I'd probably never buy a unit again and I've done very well with units . Houses just have a lot more scope to add value and outperform units.
But what if your only goal is to buy a place to live in forever that you really like? I’d you’ve got plans whatsoever to knock down or sub divide?
Buying for investment and for PPOR (for me) has different criteria. For PPOR buy whatever you like. For investment, it has to meet my buying criteria.
There is a hierarchy in value when it comes to property: houses are better than townhouses, and townhouses are better than units etc. The determining factor is how much land content you are getting. Obviously, it is not always affordable to buy a house in an area that you want to live in. And in Sydney and Melbourne, apartment ownership is a perfectly acceptable way to buy into this asset class. In many ways, it is more difficult to buy a good quality apartment, than it is to buy an investment class house. So just be mindful of the density, and the quality of the build if you buy a unit. Many big investors made their wealth on the back of apartment ownership - just choose wisely.
