Melbourne starting to get a bit gloomy (video)

You get some complexes that list cbd units at the right price and they sell within weeks and then you get other complexes which have units in the market for months. I want to buy one of those quick selling units because they look like good deals but cbd apartments have always been considered taboo.

Do you think buying one of those ones I mentioned is risky? I’m thinking they are no more risky than any other apartment because there’s no hesitation from buyers, you see 4 or 5 listed a month and they sell immediately unless they asking too much.

 

There are a lot of buildings in CBD - it depends which ones. There will be ones that are superior and ones that inferior such as off spencer st sitting off for months or maybe even years. Low ceilings etc. A lot of ppl group apartments all in one product - (student to high end). If you ever been to apartments for sale off Clarendon st, east melb - it is totally diff ball game. Same as freshwater place - southbank, melburnian tower off st kilda road.

It really all depends on the building - in my years playing this product - there are no shortage of buyers - in fact one year some of the CBD, southbank has the highest of sales in australia due to the fact (yes it is crap investment for CG but rental wise - no issue). the demographics that come to melbourne is vastly diff to a mining boom or some other countries. Some of the ppl i have rented to in the past - include associates of gai waterhouse paying me 1 year rent in advance and also overseas students which melbourne university and the rest of the unis are not lacking off. What melbourne has over other cities -education system embedded through matriculation programs for decades.

I can tell you this there are currently more than 1000 ppl waiting to buy one development in docklands which has yet to be approved. Personally i would not buy those small apartments - but that's just me. if you want short term leasing strategy - that would be ok. Just look through carefully.

 

Yeah I love those harbour views, quiet at night, peaceful to jog along the wharf, etc. But the point is there's no scarcity which is the biggest factor pushing up prices. They can keep building those fancy condos... Cousin bought there 12 years ago for 1.5, and sold it for 1.5 last year.

 

again depends on location. i know some bought bought 600K sold 1.2 mil last 2 weeks. hard to sya though.

 

@ATANG check out this graph on the population boom

 

Yeah, just read that. But the thing is, population doesn't always guarantee growth. Otherwise all these booming suburbs would be worth a million dollar, including cbd apartments. I think population is more like the fuel, but to get it light up, you need good charcoals. Hence you need to pick the right properties, the one that sets the difference from others.

Btw, bravo for another year of population boom. Soon we won't be able to get on trams.

 

walking is good that is why good location helps.

of course - you can't just pick some random H&L or some shoe box apartment - it needs to be location or have some competitive advantage.

End of the day - right demographics for the increased population does increase growth that is given - even western suburbs would be still 300K for a house and land if that wasn't the case

 

Its population growth and ‘careful’ release of land that caused the outer suburb boom. You’ve got the demand side of the equation, now just control the supply and you’re laughing. No one wants to pay $1000/sqm in point cook, or 500k for a 3/1/1 house in Werribee.

 

What site is that from?

 

Melbourne's hyper-growth continues, as nation's east coast booms

 

I wonder if @DrunkSailor has stumbled onto a smart strategy.

I know that everyone says to buy houses because of land value, but a lot of places are yielding 2% or less. To break even prices need to rise faster than incomes are at present, so any investment is a bet that they'll continue to get less affordable.

The yields on apartments are a lot better. 4% or 5%. That suggests they're not as highly valued as houses.

What if the proverbial smart investor is engaged in a very crowded trade? In which case buying apartments might prove to be a better option.

 

Nah... timing is everything, wont matter what you buy when markets are turning

Regardless of what people say pay attention to volume, supply is coming to market which means prices will fall back

 

How long can record population growth continue to be sustained with an unemployment rate in Victoria of 5.7%?

Perths unemployment peaked at 6.9% so will need to keep an eye on it to make sure Melbourne isn’t creeping up over the coming few years.

 

This is what Shane Oliver has to say from AMP

The game has changed. Right now, population growth is booming thanks to strong immigration. Construction is also up, but not in a way that can offset the population surge, and construction has started to fall now anyway.

 

If the boom is over then the economy has to start going backwards to the way it was prior to the boom. It's the only way I see it. It could be offset by infrastructure spending but a few people I spoke to said it won't be enough to compensate for the loss of the housing boom.

 

just came walking around CBD and came to this auction on bourke st. shop away from JB hifi and the yum cha place "tim ho wan" - i decided to watched on - there were at least a hundred plus ppl there. with a lot of fan fare. the auction started at 9.5 mil - and went on for 2+ hours plus at 15 milion plus - i had to go otherwise would be fined. talking 7 bidders or more. it was so packed that the coppers had to come in to steer ppl away from blocking the trams.

there are all asian bidders in the early 10-13 mil - very aggressive - till once it went to 14 mil only 3 caucasian bidders just kept bidding each other on and off for nearly a million from 20 to 1K bids was crazy. And ppl say it is gloomy?

 

True but the body corp kills the good yield?

 

I'm still with @MTR on this one and have been since I did my DD on the financial system. Aus economy looks exhausted.

Nathan Birch is predicting hyper inflation and implies a property cliff uphead:

"I have no incentive to come here and talk you guys about a property market that could be on the edge of a cliff, however from that perspective I think there's a lot of opportunity out there".

 

The question I need answered is if you have no faith in the property market but NEED to buy something what is the best thing to buy which will bounce back in value when the dust settles?