I'm interested in buying in Melbourne CBD. Imo, oversupply led to prices not moving for almost 10 years. Peak supply has now past (mid 2017), APRA crunch and general credit crunch on developers has put a dent to feasibility for many projects over the next 5 years, pretty confident peak supply can definitely be penciled in. Population booming, no signs of slowing down. I don't see the oversupply narrative sticking around for much longer. City has major infrastructure still kicking in, e.g. underground train stations x5. There are also quiet a few properties in CBD i can see which can be net positive cash flowed after tax from day 1. super low vacancy rates despite oversupply, rental income increasing year on year. etc.etc. I'm a young guy, 6 figure PAYG, 6 figure equity ready to go, i can easily wait another 10 years for the capital growth to kick in. imo buying in Melbourne CBD over the next 18 months is pretty much buying in the absolute low of a rising major capital city of the world. how often can you say you bought into a major CBD at bargain basement prices thanks to a once in a lifetime opportunity generated by temporary over supply as the city was building its skyline foundations? Doesn't happen often at all imo.
You could, but why would you want to wait 10 years? Cbd is hard to read, because one highrise adds so much to supply. Even if your right and supply is tight, rents might go up but long term cg is questionable (your building gets older with more costs). In this lending environment tieing up borrowing capacity is an issue. Even if you make 2% net from a cbd place, you limit your capacity to buy other stuff.
A few points to consider (6 figure equity could mean 100K to 900K) 1. Flammable cladding affected buildings have been documented but list of buildings/extent has not been released to the public so you will need to do your homework on the ground 2. Some of the quality is really crap especially the newer ones with pre-fab that are warped and shipped from China with compliance certificates not worth the paper they are written on (regulators asleep on the wheel) not sure if it will last 10 years 3. Rent is OK but after body corp, rates, agent fees there will never ever be as much as you think and with property it's always about the capital gain 4. It may affect your ability to buy a PPOR (most important property)as your borrowing capacity will be impacted by this and be prepared for the valuation to come in at under the purchase price If buy don't buy new so you can see how it has aged and buy something that has something unique (a cannot be built out uninterrupted view etc.) and at least 2 bed and 2 bath. The supply of average apartments in CBD Melbourne is close to unlimited IMO
You think moving in Melbourne later this year is a good plan or not? Or can you cite some signs when it is right to move in Melbourne? I would be glad hearing some tips before taking the risks of moving in Melbourne.
Oh sorry. Let me remove the word "risks". What I meant there if the rental prices are okay for at least a 5 year stay in Melbourne. When I say okay price would be between $400-$500 for a single bedroom unit. Can't afford if the rental price would go above 500 for a single bedroom unit.
Still dont understand. Will rents rise in 5 years? Dont know. If rents rise, just move somewhere cheaper. Dont want to do that? Then you cant afford it.
My guess: the continuing supply of new apartments for now will probably keep rental prices at bay for at least 5 years . The Y-man
In case you are not aware, the high rents are related to the free tram zone. Once you are outside a short walking distance of the zone, rents plummet. https://static.ptv.vic.gov.au/siteassets/PDFs/Maps/Network-maps/PTV-Free-Tram-Zone-Map.pdf The Y-man
