Melbourne Flats

I haven't brought anything yet but looking at pulling the trigger in the new year.

After spendng some time in the area over the last few weeks it seems such a nice place to live I think over time prices will go up based on the liveability of the area.

 

Which areas have you been looking at?

I might do a trip to Melb next weekend to have a look. It might still take a long time for the apartment market to recover though with so much stock still available in docklands, cbd and areas near st kilda.

 

I have been looking around the elwood area and along the bay. But also some of the inner eastern suburbs like Hawthorn. As long as they have a good proximity to the CBD 10-15km ring I think they are sound

I agree with you, I don't think in the short term the newer apartments will grow much as the market is saturated with them. But the older styles ones may have some better growth in them, there isn't as many on the market and they tend to be a little bigger with a lower body Corp which plays into their favour

 

Despite being awash with intended puns that wasn't one.
But lets just say the bottom end of Foam Street, Elwood is aptly named.

Similar streets on the same side off Glenhuntly road suffer the same fate.
Not an anomaly, its happens time & time again.

 

Chiming in with comment on the suburbs with fairly active unit development like Elsternwick, St Kilda, Elwood and even South Yarra.
What I see in these suburbs is a dual market for units. The larger, older style apartments are one market. And the new developments are another. This is particularly so in these suburbs where they seem to be keen on building uninspiring bog standard new developments. So it makes the older apartments that have lots of character stand out even more.
So I reckon in these suburbs you need to treat the unit market like two separate markets and research each independently.

 

Agree but the unfortunate outcome is that the glut of new properties have resulted in lower rents for the older ones. Some units that I have seen has seen rents stagnant or even reversing over the last few years as tenants prefer new units. This has also affected sales price. Still amaze me how the councils could have allowed so much new high density apartments to be built.

 

This is how I am viewing the markets as well. I think in the future they will be separate markets and go their respective ways. However as others have mentioned, these new developments have stunned the growth of these units in the past, but i imagine with time this will change

 

as a buyer I'm definitely thankful for all the new apartments being built, they are pretty much the only choice of stock to choose from. People just don't list many of the older apartments - there will be less than a dozen on the market and sometimes none whilst there is 100 new apartments for sale in the same area.

I've looked in a few of the newer apartments and some of them are really nice, much nicer than the older apartments, but then again some of them feel cheap and cramped. And if you're already living in a trashy area like Footscray, the last thing you want is to live in a trashy old apartment to go with it. A new apartment in a modern complex can feel like a breath of fresh air.

What I find interesting about a lot of the new apartments is that if you look at their price history you'll see many of them were purchased for less than what they are listed for now. My assumption is that 5 years ago people bought them off-the-plan at a premium price expecting Melbourne to end up like Sydney but instead it stopped much short due to the overwhelming amount of supply.

there's currently 3000 apartments on the market for sale in Melbourne CBD and surrounding areas. You can find a real bargain, such as 2x1 50sqm unit for 370k getting $510pw rent. But even these are sitting on the market for 6 months. So the fear is that when you want to sell you'll be listing your apartment for 10% less or waiting half a year to get an offer.

 

I probably have bought and sold more Melbourne apartments that anyone on this forum over the last 10 years. even appeared on API twice for refurbishment of apartments.

the melbourne apartment market is one of many types of products. the ones that mainly are on the downturn are the ones that cookie cutter small apartments or vast mass CBD apartments.

There are always opportunities in the apartment market. take an example these apartments are similar across the board in size as loft size apartments build in the late 90s. 870K in 2016 and 1.33mil 2017. not motza money like in SEQ lol but enough return

 

Right now, Perth has 900 apartments listed for sale in the CBD area.

Sydney has 350 listed.

Melbourne has 2600 for sale.

Is that normal for Melbourne to have that many apartments for sale or is that a huge red flag?

 

@DrunkSailor of that 2600 apartments - have to narrow them down what kind of product it is ? one bedder student rental, high end penthouses, facilities, locality to parks and train stations.

that being said the southbank apartment market did go down 20+% in the early 2000s time where it stung many investors.

 

Hi @melbournian for capital growth with apartments which areas would you suggest sub $750k within 10kms of CBD and secondly would you think with your experience these would be worse than for example a house in the 10-15km ring for a similar price point?

 

Wow, 1.3 for southbank. Hm... That one prob differ in layout or direction. I think direction makes huge difference. Many buyers willing to fork out big $ for east or north facing apartments.

 

they're all facing one direction off wells st and they're loft size apartments (160-220sqm), the smart one created an extra bed upstairs - if you look a my older post - I predicted these to be a million plus 3 years ago.

you should buy a few more? how settled on sunshine already?

 

depends on your goals strategy (and how much CG you want) - and what you hope to achieve. I know someone who bought 9 docklands apartments in 1 hit last year and renting it short stays making quite a bit as opposed to buying a house getting permits etc. Or focus on the RGZ properties which I have been buying up.

10km covers a lot of suburbs (i'm mainly focused on the inner 2-3kms). personally I would buy based on buildings and locations. something close to the gardens which the views are not blocked or like next to the river (with accessibility to public transport). All the ones in the new train stations presents good opportunities

My other IP (house which I rented out myself) - had like 3-4 applicants all offering top dollar. Ended up renting it to 2 doctors moving down from Queensland.

 

You can't just look at the overall apartment numbers. There are markets within markets.

- One bedder
- One bedder with a car bay
- One bedder with oversize layout
- One bedder with unique appeal (e.g. heritage/ private lift/ view/ loft style, etc)

- Two bedders
- Two bedders with a car bay
- Two bedders with double bathroom
- Two bedders with oversize layout
- Two bedders with unique appeal (e.g. heritage/ private lift/ view/ loft style, etc)

- Three bedders
- Three bedders with a car bay
- Three bedders with double bathroom
- Three bedders with oversize layout
- Three bedders with unique appeal (e.g. heritage/ private lift/ view/ loft style, etc)

If you look more carefully, each of these niche has their own different $ per sqm and they can differ hugely. For the past 4, 5 years, only the oversize and unique appeal ones kept going up but those original standard ones stayed flat. Although lately double bathroom ones seem to have shot up as well.

 

Ya, it's been great. Very good tenants. Nah, will take a break, need to get KL one settled first, sien.

 

I’ve had some great CG on a a villa I bought in Sunshine in 2015 but I can’t see the value there now with the recent boom so I’m ideally looking for something similar within a similar distance.

So ideally looking to but and hold, within a similar distance from CBD. however I’ll re-read your thread on zoning changes to review the cheaper areas too for re-zoning potential.

 

villas are different if you are talking single standalone in block of 3-6 (you have some land) townhouses are different too

Apartments actually have potential but really depends which ones they are.