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Sell apartment in South Yarra?

Discussion in 'General Property Chat' started by Badr Hari, 11th Apr, 2016.

  1. Badr Hari

    Badr Hari New Member

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    Hi Guys,

    First time poster, long time lurker.

    About 8 years being young and naieve I purchased an apartment off the plan in South Yarra as an investment. This apartment embodies most of the characteristics that I have since learnt do not make a great apartment investment. It is in a high rise with many other apartments, as well as an undersized 1 bedroom apartment less then 50sqm.

    I can only its value decreasing in the short/middle term, however do you think there is any benefit to holding onto this property? If I sell now I figure I will take a hit of about ~$35K before costs which is about 10% of what I paid as the purchase value. That being said it is not costing me very much to hold and I don't really need to free up the equity. What are your thoughts? Gut feel is to realise the loss and get rid of the lemon and put it down as an expensive lesson.


    Regards

    Badr
     
  2. melbournian

    melbournian Well-Known Member

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    airbnb it and i am pretty sure you can recoup some dollars there.
     
  3. Marg4000

    Marg4000 Well-Known Member

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    Supposing you sell, have you decided what will you do with the proceeds?
    Marg
     
  4. Badr Hari

    Badr Hari New Member

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    Hi Marg,

    To be honest it would probably sit in the bank until I can find another investment vehicle. My PPOR is fully offset and I am not in dire need of cash. I just worry that the glut of these undersized apartments will impact on my rental income in the future or ability to find a tenant. Apart from being close to the train station it is unremarkable. I am tempted to just sit on it however.

    Regards

    Badr
     
    Gingin likes this.
  5. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    My first thought matches Melbourians.
     
  6. JDP1

    JDP1 Well-Known Member

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    Airbnb isnt going to appeal to e everyone..do it if appeals to OP..if not.i would think about selling and taking the hit and move on with something else. I cant see an 'unremarkable' 1 bedder less than 50 sqm do anything in years...not until supply is absorbed. Surely, there would be better uses of the sale proceeds ?
     
  7. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    To add to JDP's comment if you do decide to sell, the good thing about taking a hit now is that you can claim future CG events against this loss...
     
  8. Badr Hari

    Badr Hari New Member

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    Surely, there would be better uses of the sale proceeds ?[/QUOTE]

    How low can the value of these apartments go? I guess that is my prime concern, that if I don't sell out now I will be stuck with it for quite a while until supply is absorbed. I don't mind holding in the longer term as I don't have anything else that requires the equity at this point in time, but 8 years after purchase it really hasn't done much!
     
  9. Big Will

    Big Will Well-Known Member

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    Up to you what you wish to do just an FYI there is another 752 units completing construction in the next 365 days with a further 822 starting construction in the next 365 days. Please note only calculated places with 20 units plus (which inc 1 2 & 3+ beds) and not student accom or aged care.

    However there also hasn't been much growth in the last years with the median price being 400k for the past 6 years. South Yarra Investment Property Market Data

    So it really comes down to do you think the new supply will impact the growth yes however with prices going up elsewhere maybe people will look at South Yarra as a more affordable alternative which would increase the demand.

    Best of luck with your choice :)
     
  10. melbournian

    melbournian Well-Known Member

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    If you had a larger apt it would be different - look at the block it sold for millions in south yarra. u need an apartment that stands out.