VIC Off the plan townhouse in Reservoir

People are willing to buy outskirts of Melbourne, with small land with brand new houses for say 500K (e.g. Point Cook). If they are going to buy small land that far away, they may as well buy inner suburbs with townhouses or house with small land component.

I found that old house with large land have very heavy holding costs compare to small houses/townhouses. For buy and hold, and don't want to lose too much money each year in holding cost, I actually think townhouses/small house in inner city have great potential.

To me the greatest risk of OTP Townhouse, is the quality of the build (cannot be guaranteed) and whether the builder will run away from their job or liquidate ......

 

The difference in location in these two examples is worth more than the extra bedroom IMO.

if the OP had a deposit saved, they could get a 3 bedder for a similar price but unfortunately, buying OTP usually has a premium attached. The one below is a few months old so may be a bit more now.

2/123 Brunswick Road, Brunswick, Vic 3056 - Property Details

 

Hard to say, it really depends on the OP whether he needs the 3rd bedroom or not.

I noticed that there are a lot of new 2 bedroom townhouses being built in Melbourne. Personally I prefer 3 bedders as it is good for family with kids.

 

This is a good investment purchase but would think ppor it is pretty old some updating would be needed maybe 30-40k and stamp duty would add up to 20-30k on top of it. And yeah last year prices have risen so maybe 100k more.

Also it is sharing walls townhouse with no front yard and also 1 carpark. Most councils for new townhosue require 2 carpark spots for a 3 bedder.

 

Well yes but if they could get something like that, it'd be a great compromise IMO.

Just saying that there are better options for that budget (i.e. an actual house in Reservoir or if a townhouse, in a bit better location).

 

You are guaranteed builder warranty insurance for that 6-7 year period. Have a full building inspection prior to handover

Townhouses give the convenience of locality and distance. I mean look at Albert park just abt every house is a townhouse cottage ppl build upper storey than subdividing

 

Yes a house further up to keon park or Ruth haven stations saw some sold in the 600kish

Nowadays even housing comm houses in Reza are selling 700kish. Even Heidelberg west can sell 800kish for some rundown house

 

Reza ain't inner city. The OP mentioned that it takes 45min to head into town by PT - it takes 1 hour from my house in inner Geelong. Brunswick is one thing, where houses with land are rare, but in Reza they are the norm.

Holding costs? TH have strata, no such worry with an established house. I'm not sure why else a house would have higher holding costs? All I see is a much higher potential for capital growth.

And you are right, the quality of the build may be questionable. I'm particularly wary of anything double story with a fibro second story and brick base.

As for the scenario you mentioned - sure some people are paying 500k for a house on tiny land in Point Cook, but I and many others would much rather use that money to buy an 80s build home on 600 square meters in somewhere like Keilor Downs, or buy a heritage home in Geelong.

Agree 100%. The property is not what I would consider investment grade. OP, think of us as friends warning you off a potential partner who just ain't up to scratch - you can do better!!

 

Fibro second storey as in new townhouse in new cement sheets for the bathrooms? I think waterproof plaster is cheaper.

As someone who has new builds and old house
Personal exp You can have a burst water heater which requires replacing or some old stove breaking down which requires replacing this all adds up. Not with new build for warranty period

 

Can't agree more. Even for PPOR it ain't a good or even an ok deal, especially at that price point. These things are popping up around the area like mushrooms and pretty poor build quality and some of the layouts are woeful - no better that some of the more woeful apartment.

Does it HAVE to be three bedroom? Does it have to be NOW? Why Rezza? Given the recent announcement on changes to stamp duty concessions and given the FHOG grant is jack all in the scheme of things.

if you are looking in the $600k-700k (a lot of money for a townhouse in reservoir!) and willing to compromise on land for location i would be considering an older style villa or townhouse in a better area.

Check out these recent sales:

4/35 Durham Road, Surrey Hills, Vic 3127 - Property Details
1/52 Union Road, Surrey Hills, Vic 3127 - Property Details
3/37 Atkins Street, Kew, Vic 3101 - Property Details
2/94 Oriel Road, Ivanhoe, Vic 3079 - Property Details
3/49 Locksley Road, Ivanhoe, Vic 3079 - Property Details
2/3 Tyrone Street, Camberwell, Vic 3124 - Property Details

Edit: To add a few more in the North in that price range which are better options that a ******* OPT townhouse:

1/28 Carlisle Street, Preston, Vic 3072 - Property Details
64 Elizabeth Street, Coburg North, Vic 3058 - Property Details
2/58 Dundas Street, Thornbury, Vic 3071 - Property Details
2/7 McCulloch Street, Essendon North, Vic 3041 - Property Details

 

Fair point about the old stuff sometimes breaking down, but you don't have to pay strata, you often get better land content and you don't pay a 'newness tax'. Not to mention, a 1972 XA Falcon ain't as reliable as a new Mazda but I know which one tickles my fancy more but if you like something shiney and new then more power to ya.

As for the fibro, I was talking about the external rendered fibro. Looks cheap and nasty and it's so common, you sometimes find it in bits around the facade, or the upper level might be made of the stuff. Ugly!
Edit: this is what I'm talking about, the stuff the top level is made out of:

 

Some people may want to stay in a newer house some don't - so really subjective.

OK - That's light weight concrete (and not necessarily fibro) - I think you have to realize the lightweight concrete is actually much more energy efficient and represents 30-40% reduction in building costs. for a 40 degree day in a double brick house and see how long it takes to cool down. To be honest, the pic you put up is no different to new houses in glen Waverley, mount Waverley, ashwood, doncaster than many people are willing to part a million dollars for. Can't see what is bad about it. Maybe ugly to you but they still sell and in demand. If you're saying fibro, even weatherboards can be made from fibre cement nowadays.

 

I live in a double story brick house with no upstairs heating or aircon and I can assure you that the heat is not a worry at all (the cold on the other hand most definitely is).

IMO it looks better than fibro, but that's subjective. However, the 1972 brick house I live in looks as good as new - no cracks or ripples in the brick like you would get in the fibro only a few years after being built. I see it all the time in the multi unit developments in Sunshine, in the McMansions of Braybrook, and in newer suburbs like Caroline Springs. I'm no builder but it just looks cheap. If I'm gonna be paying top dollar for a new build I want something that's gonna last. Maybe I'm mad because I hate the idea of a throw away society :/

 

I got a double brick house too - can tell you it is crap in hot days. takes a while to cool off. Unless your home is an art deco or some Californian bungalow (it is just old house - without the 6-7 star rating) As for cracks (that's the rendering involved), Come on - These new multi units build is what is making sunshine exp and changing the neighbourhood as it is .(not keeping it the way it is).

 

No, its actually 29 minutes by train from Reservoir Station to Flinders St!
In the past it used to take 24 minutes - I guess the loading/unloading of people from the train takes that little bit longer now due to the higher volumes.

 

I might have a bad taste but somehow those townhouses with cement sheets on top and brick on lower level do appeal to me. I also think it's good if it's cheap, as when cracks would appear it should be much easier to fix/ replace cracked parts.
As for Reza, preston, coburg I think if it's south of Bell street it can be considered as Inner north (up to 10 km from cbd), anything further north -well, its just north.

 

Lol Watergardens and Keillor Plains station takes about that and they're certainly not inner city!

 

Thank you all for great responses. After considerable research including my own finance, and some great feedback from this forum, I decided not to go with this off the plan. Again thanks to all who responded to my queries.

 

how come?

 

That is arguably one of the worst areas of Rezza imho. In general Rezza is still full of ex government housing and can be quite roughish but worth a punt having seen the same effect in Chadstone about 5 years or so ago. Same as Ashburton, same as Ashwood. Even today, travel on the Glen Waverley line and keep your eyes out between Holmesglen and Jordanville stations - you will see a lot of old ex commission housing, a lot of them dilapidated and graffiti-ed all over.

The reason why that place is so cheap (55 Elliot Street) is that it's right below a power line, I'd never live there personally speaking.

The only real punts that I have heard of paying off is when a person has over-purchased by a small amount on a particular property in a yet to boom suburb. I remember when I was in uni going to a auction with my folks and uncle on a property in Balwyn (circa 2001?). It sold for $500K for a 700m2 block and you had people laughing and saying how overpriced it was at the time. Granted, it was probably $50K or so higher than market at that stage but look at it today!

I still think Rezza has some "fat" in it considering where it is in the market and its +ves. When you pit it against Sunshine, probably the most appropriate comparison, I'd say long term Rezza would be a better bet. It has better universities (La Trobe, RMIT) vs Vic Uni., better transport options considering parts of Rezza are close enough to access the Bundoora tram line? High schools wise, I'd say it's a tie, but I think Rezza probably comes off a better basis being surrounded by more "upmarket" suburbs like Heidelberg.