VIC Is an older 1 br apartment in Collingwood VIC a bad idea

Hi there,
Thanks in advance for your thoughts!
I am considering buying the apartment I currently reside in Collingwood, VIC. It is an older building (1970) apartment block with only 9 apartments. It hasn't had all that many maintenance issues in the 5 years I have been living here, but it could use renovating, the kitchen and bathroom are a bit crappy and the flooring desperately needs to be replaced.

My concern is that there are a lot of new developments planned for Collingwood in the next couple of years. 67 New Property Developments in Collingwood, VIC 3066, and 20 other Development Projects nearby

And I am worried that oversupply will happen in the area, and as a couple of people have said to me - why would you buy an old apartment when you could have a new modern apartment in these areas.

I think that I would happily live here for at least the next five years, maybe ten. It has a lovely northern aspect, and while the outlook is not brilliant it isn't the worst.

Could you please share your thoughts on the wisdom of an old apartment in some of the more leafy, residential areas of Collingwood?

Thanks so much!

 

I'm thinking the land to building ratio is healthy which is typical for older-style apartment blocks and the main reason to purchase.

If there are 9 units you technically own 1/9 of the block of land it sits on and the land is what will go up in value over time.

Also, you are familiar with the complex and neighbourhhood so if the price is fair then why not go for it.

 

That's using emotion and we all know where that can lead. The new complexes will have a very low land-to-build ratio as explained briefly above.

 

Thank you for your advice, Colin,

Yes, I hadn't considered the land to build ratio, but what you said makes sense.

It is also an advantage to know the neighbourhood - my neighbours are very nice people and mostly owner-occupiers.

I had the apartment valued, and it came in very low compared to the asking price, but I think it may have been a matter of them doing me a service as a bargaining chip and they were covering their arse.

And I figure if I renovate, I can manufacture equity that way too!

 

Thank you Y-man. I appreciate your input!!

 

Have you shown the seller the valuation report in your negotiations?

I have successfully used vals in the past to negotiate a reduction in asking price on behalf of clients. This usually only works in a depressed or neutral market, if you don't ask, you don't get so worth a try.

 

Thanks, Colin, yes, I showed the vendor. It didn't help at all, they thought it was ridiculous and I must say I tend to agree with them.

You are probably right about a depressed or neutral market.

Thanks again!