Inner city Melbourne - apartment or house?

Discussion in 'What to buy' started by jinx77, 8th May, 2019.

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  1. jinx77

    jinx77 Well-Known Member

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    I’m a professional who is looking to buy my first home to live in. I want to buy an apartment or small unit in Melbourne’s northern suburbs (Essendon/Moonee Ponds/Ascot Vale/Thornbury/Preston/Brunswick). But I’ve heard people caution against apartments as there’s negative market growth compared to houses or units further out (ie: Reservoir, Epping) for the same price.

    My main aim in buying is for residential rather than investment purposes but I do want to buy a property that will provide financial security in the future.

    Is it really a financial “no no” to buy an inner city apartment? Is this only due to oversupply or are there other reasons why buyers avoid apartments? What are the financial benefits of buying a property far from the CBD if I don’t plan to raise a family?
     
  2. Brady

    Brady Well-Known Member

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    Have you considered renting where you want to live and buying where you think will be a good investment?
     
  3. jinx77

    jinx77 Well-Known Member

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    If my end goal is to own a property that I can live in, what would be the benefit of buying a property in an area I'd never want to live? Obviously I wouldn't want to jeapordise my future by making a bad investment but my priority is to own a modest 1-2 bedroom property that I can reside in and fall back on, rather than to make a big profit in the future by selling an outer city house for the big bucks.
     
  4. Traveller99

    Traveller99 Well-Known Member

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    What's your budget? Would you consider older apartments?
     
  5. Brady

    Brady Well-Known Member

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    Doesn't that answer your own question.
     
  6. Shogun

    Shogun Well-Known Member

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    Older apartment in a small complex with low strata fees, money in a sinking fund, seems to be popular advice on here if you go that route.

    Choose a property that you want to live in, in a location that you like. Balance needs and wants with cost.
     
    Last edited: 8th May, 2019
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  7. jinx77

    jinx77 Well-Known Member

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    Yes I’m currently looking at older apartments as there are more available. I’m new to this but aren’t older ones better? It seems that brand new apartments are build with cheaper materials.

    Why do people advise against buying apartments? I’m happy to live in apartment but don’t want to invest in something that may depreciate in value.
     
  8. The Y-man

    The Y-man Moderator Staff Member

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    Other than being (usually) slower in growth than houses:

    - 3 dimensional proximity of neighbours - unlike a townhouse/unit, you get neighbours above and/or below you - things likes leaks from you neighbours apartment from your ceiling is one such joy. Noise can be another issue.

    - Lack of control in repairs and purchases for common areas - for better or for worse, the owners corp is a democratic setup, so if the majority of owners want to force owners to spend $X for a new painting in the front foyer or something - no choice.

    On the plus side, apartments can be more secure than houses (especially if it has a security foyer and it is not on ground floor)

    Some people get duped into buying an apartment with a view, only to have it built out later by a huge development next door.

    I don't think any of our apartments actually went down in value - the sheer fact we had to pay decent CGT when selling them is testament to this. They can stagnate in value but that is a different story.

    The Y-man
     
  9. Air_Bender

    Air_Bender Well-Known Member

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    Old and new apartments compared: Which one is the better buy?
     
  10. Paul Mete

    Paul Mete Well-Known Member

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    If you go for an apartment I suggest a larger apartment over a smaller, newer option.

    I feel time will be kind on any purchase however an undersized apartment may experience less growth.

    PAUL
     
  11. Omnidragon

    Omnidragon Well-Known Member

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    Don’t buy apartments in Melb, period
     
  12. Woodjda

    Woodjda Well-Known Member

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    That seems a bit over the top. I'd steer clear of anything built in the last 15 years because the build quality has dropped so badly. Also avoid anything high-rise. But something solidly built in a small sized block is likely to hold its value reasonably well. I doubt it's going to shoot up in value but if you can comfortably afford it and it's where you want to live getting a solidly built old apartment is a perfectly reasonable thing to do.
     
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  13. Codie

    Codie Well-Known Member

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    Absolutely, at the end of the day. It’s land value, not the house that’s on it. So if your a block of 4-6 walk up on a large parcel of land in an area where land is scarce and expensive, I don’t see it as being much different. There’s many Suburbs where there’s no zoning for high rise stock and houses are super expensive - it’s illogical to think all units are created equal
     
  14. Woodjda

    Woodjda Well-Known Member

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    Yep. Get something solid so it's not going to be a drain on resources. Get something with good land to put a floor under the value. Try and stick to a quiet street and closer to the city of anything (but still where you want to live). If it's somewhere you're happy to live for 10+ years and the repayments are such that you can get well ahead of your mortgage in the first few years then it's hard to see it as a bad decision. It's first and foremost a home not an investment.
     
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  15. ATANG

    ATANG Well-Known Member

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    Depends what you buy i think... and how much you paying.

    Bought one in melb cbd in 2016 at 900k+, just got bank re-valued at 1.1 two months ago. Not complaining, especially in the current market.
     
    Last edited: 23rd Jun, 2019
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  16. Shogun

    Shogun Well-Known Member

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