Location is king, but what about property type?

Discussion in 'Where to Buy' started by wirtandi, 30th Jul, 2020.

Join Australia's most dynamic and respected property investment community
  1. wirtandi

    wirtandi Member

    Joined:
    30th Jul, 2020
    Posts:
    21
    Location:
    melbourne
    Hi all, my first post here! Glad to have found this forum.

    Just a quick question

    Generally speaking we all know location is king. Close to schools, parks, shopping centres, CBD, etc. However what I want to know is, is it better to:

    1. have a unit that has better location
    2. have a house that does not have as good location

    I am quite confused. One one hand, location is king, on the other hand, it is more beneficial to own a house as you own more land.

    So in this case, do the benefits of great location outweigh the benefits of owning a house? Or vice versa?

    Hope to hear some discussion. Thank you.
     
  2. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,932
    Location:
    Brisbane
    Iā€™d say it depends on the location.
     
  3. thatbum

    thatbum Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,788
    Location:
    Perth, WA
    Location is king because of how unique or scarce it is. Property type can be similarly weighted in that way.

    Otherwise in a general sense you're just asking whether piece of string A or piece of string B is better.

    Also, welcome to the forum!
     
    TAJ likes this.
  4. alicudi

    alicudi Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    423
    Location:
    Melbourne, Australia
    Maybe if you post up a couple of examples of the units that you are looking to buy v's the houses you are looking to buy and we can give a more accurate response in regards to locations and specifics of those actual properties?
     
    MTR, Lindsay_W and wylie like this.
  5. wirtandi

    wirtandi Member

    Joined:
    30th Jul, 2020
    Posts:
    21
    Location:
    melbourne
    Do you mean that , in other words, there are many other contributing factors?

    Not looking to buy, was just looking for general guidance
     
  6. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,437
    Location:
    Melbourne
  7. PeterProperty

    PeterProperty Active Member

    Joined:
    14th Dec, 2016
    Posts:
    44
    Location:
    Melbourne
    Welcome to the forum :)

    Similar to your view, I'm a firm believer in location being king. And it is land (in a good location) that is scarce and that is the underlying appreciating asset.

    In a perfect world, we'd all buy as close to the CBD as possible on a big parcel of land. But that's not always reasonable.

    Whatever your budget, try look at something as close to the CBD as possible with as much land content as you can afford.
     
  8. wirtandi

    wirtandi Member

    Joined:
    30th Jul, 2020
    Posts:
    21
    Location:
    melbourne
    Thnaks guys
     
  9. Fargo

    Fargo Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    1,304
    Location:
    Vic
    You need to know your target, the Niche your after. Supply, demand, demographics, ( sea changers, professional, corporate, families new arrivals, students, trainees, long term or transients ), traffic, commuting time/mode, industries, point in cycle. It depends on Objective, available funds, borrowing capacity, income, your temperament. You need to figure where demand is and where it will be. It will vary from location to location from time to time. There is no rules set in stone. There are generalizations with some merit that arent always valid.
     
    Ben20 and MTR like this.
  10. balwoges

    balwoges Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    1,700
    Location:
    Lake Macquarie
    and sometimes people just inspect a house and fall in love with it, even if its not quite what they specified ... it's a gut feeling :D
     
    Property Baron and Mark F like this.
  11. MTR

    MTR Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    27,786
    Location:
    My World

    Agree
    Also the product can differ, for example a unit in larger block may not be as desirable as unit in smaller block, regardless of location

    Demand very important and how much supply is on the market
     
  12. Robbo80

    Robbo80 Well-Known Member

    Joined:
    21st May, 2018
    Posts:
    586
    Location:
    Vic
    Crikey... None of the above? If forced i would lean towards donny (schoolzone and houses there go for $1.2m+ so pretty much at replacement value) or emerald (holiday bnb potential but looks a tad shady/haunted off dirt track and most of land taken up by trees, bit far from town also). Boronia hard to see that pocket increasing in density much and block looks a bit odd shaped/sloped with large setback. Cant believe those apartments are asking for that much.

    What ya reckon?
     
  13. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,437
    Location:
    Melbourne
    The SY apartment is actually pretty rare - I'm trying to figure the age of it from photos ~ looks like the kitchen walls were blown through? Still finding a 3/2 Aprt with double carpark is pretty damn hard to find IMHO.

    But I agree the DonnyE wine hands down for me - for the reason you state + city bus 906 and 901 outside the door. Bit of a major rd, but 3Br and EDSC wraps the deal.

    So @wirtandi - here you go, a (very) quick example of where there is a "trade-off" between land/house size and location


    The Y-man
     
    Robbo80 likes this.
  14. Mark F

    Mark F Well-Known Member

    Joined:
    29th Jan, 2020
    Posts:
    1,029
    Location:
    Canberra
    I have always thought that the "flow" and feel of a house was important. This translates to the ability to renovate at minimal cost.

    For me location sets a price range and a demographic. The secret ingredient coming from this perspective is the question of the requirements of the demand (size and design) and its match to the built reality. You are seeking the choke point.
     
  15. spoon

    spoon Well-Known Member

    Joined:
    17th Nov, 2016
    Posts:
    1,762
    Location:
    Time-dependent
  16. olofmeister

    olofmeister Active Member

    Joined:
    30th Jun, 2019
    Posts:
    40
    Location:
    Melbs
    i have also asked myself this question many times...
    personally, location is king if I'm going to live there for any significant time
    if you have an eye on capital gains, then scarcity and scope to value add is also significant, as is zoning...

    personally i like inner city apartments that are established and very close to transport. no to few amenities, they are a useless money sink and your 20m pool is worthless. only problem is that some idiot councils eventually approve unbelievable 40 storey towers in the vicinity (see south yarra and box hill)
     
  17. kmrr

    kmrr Well-Known Member

    Joined:
    29th Jun, 2015
    Posts:
    267
    Location:
    Melbourne
    This is what I am thinking. I dont like any and I hate 1 bathroom dwellings where there are 3+ br but the bones look okay enough even if it is on a main road!
     
  18. Robbo80

    Robbo80 Well-Known Member

    Joined:
    21st May, 2018
    Posts:
    586
    Location:
    Vic
    Yeah tough buying in east unless you up budget to $1.1m. The road isnt actually too bad at night (donny is a very low density area hardly any traffic) and the unit is not on the main rd either.

    It is basically the size of a house two baths, and the kicker is the dual driveways. Can probably repurpose garage and use the front carport instead and front part is already fenced off.

    Similar stuff on battle axe blocks nearby going for $1m albeit done up much nicer. Wouldnt be suprised if the one next to it was worth that much, yet they are the same size.
     
    Last edited: 3rd Aug, 2020
    kmrr likes this.
  19. MelindaJennison

    MelindaJennison Brisbane Buyer's Agent & QPIA Business Member

    Joined:
    16th Mar, 2020
    Posts:
    252
    Location:
    Brisbane QLD, 4000
    The house versus unit debate - I love it!
    Of course it is location dependent ... but also I believe the local drivers of supply and demand also come to play here.
    Some cities have adapted faster to unit living than others- this weighs on the demand side of things.
    Some cities have a much higher supply of new units coming to the market than others. We know that high supply in the absence of high demand can mean price softening.
    Even older unit blocks close to the Brisbane CBD that had a good portion of land were impacted due to the new units hitting the market. In Brisbane this peaked in 2016 and the number of new units since has been declining. Over the same period houses on land further from the CBD at a similar price point have performed much better in terms of capital growth.
    So the answer depends on a lot of things. An understanding of the supply/demand metrics for the product type and the area in question is always essential before making the assessment.
     
    Robbo80 likes this.
  20. Robbo80

    Robbo80 Well-Known Member

    Joined:
    21st May, 2018
    Posts:
    586
    Location:
    Vic
    Definitely, pre-covid I really started seeing old walk up flats close to the cbd starting to boom in Melbourne largely due to houses within a reasonable commute of the cbd becoming very unaffordable for most and also traffic/trains becoming way too congested to the point you where you are sometimes better off driving to an earlier station just to get a tiny standing spot. Hence residents were starting to think about trading away size for convenience, but this has obviously unwound due to Covid. Brisbane has yet to hit that point I presume?
     

Build Passive Income WITHOUT Dropping $15K On Buyers Agents Each Time! Helping People Achieve PASSIVE INCOME Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, Anywhere In Australia