Somerville Cove

Hi All,

I am considering buying a 2bdr apartment at Somerville Cove Estate – Waterfront Living.
I have hit my serviceability ceiling (have 3 IPs - all houses now in VIC) and looking at alternatives with delayed payment (90% upon completion/settlement) options.

Pros:
- New development on a water in a nice area.
- 10% deposit required only for an apartment with the balance payable upon construction completion, which is expected in 2-3 years (and that will allow me to save more $).
- Serviceability may (and more likely) will improve in 2-3 years.
- The property value may go up within next 2-3 years (that's of course not a given, but I think it will), before settlement.

Cons:
- Apartment, and not a house
- Body corporate costs are not know yet
-?

Constructive comments, questions are welcome. Thank you.

 

Pro’s - at least it’s not high rise
Con’s - everything else.

Please do some more reading / research on this site about OTP apartments and development risks,

Interstate diversification for land tax,

What happens if your borrowing gets worse by settlement instead of better (quite possible). How will you pay the balance?

Demand drivers for CG /Rental apartments a long way from anywhere (not that state CBD is everything) but does local demand want this product when/if completed?

Summary - firm no here unless this is for a PPOR (not stated) then your demand criteria might be different to renters but most of the same risks apply.

 

What is the plan if you cant onsell and your serviceability doesnt improve?

 

My serviceability has in fact improved this month, however have not spoken with my banker yet.

 

Appreciate your response. No decision is made yet...still looking for multiple options.

 

Wouldnt bank on my own assessment of serviceability. Serviceability is how the bank sees you, not how you see yourself.