VIC West Melbourne - PPOR - Off The Plan - 2B 2B 1C - 2023 Completion. Too Much Risk?

Hey everyone,

First home buyer here. Looking to get a PPOR. Not interested in investing or renting this out. I want to live here.
I have found is off the plan with a 2023 completion date.

• 2 Bed, 2 Bathroom, 1 Car park apartment.
• ~105SQM all up inc balcony (~85SQM internal space)
• Close to public transport (Train station and Bus Stops)
• Close to North Melbourne shops (Errol Street)
• City skylines views from the apartment.
• Balcony looking out over West Melbourne
• No permits near by that will build out views

Price is ~$900,000
10% deposit is required to secure the build, so when it comes time to settle in 2023 I will owe the developer ~$810,000. Assuming you save a 20% deposit in that time the bank will need to provide $648,000

With all the talk around COVID-19 and property price crashes. Buying off the plan being a high risk is getting myself involved in something like this something I should be avoiding? Or is the risk minimal considering the settlement date is in 2023 and all these COVID issues will have highly likely blown over by then?

Thanks.

 

Why would you want to lock yourself into something you can't even move into for at least 3 years? Possibly extended to another 2 to 6 years after that too, depending on sunset clauses.

 

The main drivers were:

• Being a first home buyer and not wanting to pay stamp duty.
• 2 Bed + 2 Bath + 1 Car Park + City Skyline Views + Balcony + Great public transport links (train and bus right near by) apartments in inner suburbs of Melbourne (West Melbourne, North Melbourne, Carlton, East Melbourne, South Melbourne, Port Melbourne, etc) generally sell for over the $750,000 threshold that properties are stamp duty except for first home buyers in Victoria.
• Alot of existing properties don't seem to have the whole package this new build appears to be offering.
• Waiting ~3 years to move in is not a big concern as it allow me to secure a place that ticks all the boxes I was after, save a decent deposit and move into a new place.
• COVID-19 concerns will hopefully be well and truely over by then, so concerns around buying off the plan and the bank valuing it less then what I need to pay is less of a concern.

But I understand I maybe seeing it through biased eyes and I may need a slap in the face with a reality check, thus the reason why I have posted on here.

 

Meh developers need to live too i guess.

op, search for otp on this site and have a read.

 

haha meaning what exactly? What I am considering doing should be avoided?

I am open to being criticized on this, I just want to have solid reasons for both sides of the argument so I can make an informed decisions. I am new to all his property stuff (being a first home buyer). The reason I am on here is to try and learn.

 

Already done to death. Just search for otp.

 

Thanks for the reply Y-Man.

Haha, no I didn't want you to tell me where to live. I am really set on the inner suburb life style. I have zero desire for owning a house 30mins out of the city in suburbs that have nothing going in in them. The inner city lifestyle means a lot to me.

CBD apartments did not appear as they are always tiny (70SQM 2 bedders). Having a 105SQM apartment a short walk out of the CBD was more appealing.

Thanks for the advice, I will look into it some more. I am currently reading through some otp threads on here too.

 

I have looked into that and done the 3D walk through.

1. Bathroom's don't get any natural light
2. Bedrooms dont really have any views. The master has a window located high up but thats it. The guest bedroom looks into a light well.
2. Living Room has a tiny window really high up, minimal natural light besides that and the light well. No views at all.
3. Not really much room for a dinner table. The location in the 3D preview seems awkward. If you had guests around they would be bashing themselves into the kitchen.
3. The 3rd bedroom is not really a bedroom, its more like a study you walk through to get onto the balcony at the top of the property.

But I agree at face value it seemed interesting. The small 3rd bathroom (powder room) in the kitchen area is a nice idea.

Would a 3 bedroom like typically be seen more desirable by the banks? Or is a better layed out/ views/ windows/ natural light 2 bed + 2 bathroom place going to be better?

 

The whole package would be:

1. Bedrooms with windows/view
3. Bathroom with windows/view
2. Living area with windows/view
3. Balcony
4. Practical living area where you can have a kitchen and dinner table without sacrifies.
5. Close to public transport (trains/bus)
6. Carpark
7. Enough space (~85+SQM internal. 100SQM+ once you include a balcony)

 

haha thats if you want to live in a hotel right?

The place I was looking at was going to have lifts, communal area on the roof with views over the city and a gym.

No Pool. No Sauna, No Wine Cellar, No Tennis Court, No cleaning service.

 

You asked for risks and there are literally 100s of threads talking about OTP risks. If you are okay with all those (Y-man summed it up nicely), then go ahead, its your residence and you should enjoy it.

 

OP, I wish I had a budget of $900k for my first PPOR
Tread carefully mate. West Melbourne, right location, wrong product IMHO
Short and sweet.. don't do it

 

Thanks for the reply.

What product do you think would be good in West Melbourne?

 

I saw this too!
What made you consider this over a apartment that I listed above?

Negatives were:
- No Carpark
- Only 1 bathroom
- Smaller 69sqm vs ~85sqm (~105sqm if you include balcony)
- No area for dining table
- 2nd bedroom has no robe
- Quite old - so may require alot of work (added expense)

Positives were:
- Attic (lots of storage)
- Court Yard
- Townhouse instead of apartment (you own the land)
- Quite old - so may require alot of work (added resale value)

But no price is listed, if it was cheaper then a $880,000 apartment it would be appealing too I guess.

 

I'd take a good look at what's available ready built. Sure you have to pay stamp duty but you know what you're getting both in terms of the physical building but also wrt OC levies and building management.

FWIW my Docklands apartment is north facing looking over the harbour (permanent view), 102m²+10m² balcony, 2+2+1 and would sell I think for low 9's. Have you thought about being a rentvestor like me: the rent I'm paying doesn't really match the capital value.