Western/ northern block vs little townhouse/unit in inner east [Melb]

Asking any experienced melbournians, what do you think about: acquiring a block (say 700sqm, 800sqm) in Sunshine/ Albion/ Greensborough/ Macleod/ Eltham, comparing to a little townhouse/ unit (say 300sqm) in Balwyn/ Doncaster/ Donvale/ Glen Iris/ Mount Waverley? Which one do you think will do better in 5-10 years?

 

Have you done a historical comparison on each of those suburbs in terms of capital growth and rental yield?

Is it a suburb that is gentrying?

Have you looked at the demographics for the area i.e. Higher rate of Owner occupied, do you see the suburb trending to a higher family income range, more professionals moving in, etc.

Have you got plans for adding value to the block immediately or in the future i.e. Subdivision or renovation. This might have a big impact on your overall returns but is an advanced, capital and time intensive excercise.

Have you looked at vacancy rates, quality of tenants in each area if you are planning to rent it out?

 

I'd buy a house with land with the option of adding value through Renovation/additional dwellings. Otherwise smaller places in great locations such as Balwyn will always do well over time. If you compare the average annual growth of Balwyn unit @ 5.7% vs sunshine house @ 11%.

Do people think units (which also include townhouses in the data) bring the value of townhouses down?

 

Yeah I would think a bigger land would have more potentials but then that might just not a suitable PPOR for myself due to further distance or demographic... But again, seeing some of the townhouses and units in blue chips suburbs skyrocketed, kinda wonder if they don't matter...The only thing I don't like about smaller land units or townhouses is you basically can't extend it...

 

Small land house and extend up?

 

If it's for ppor then making money isn't the first option to go with. Unless you rent where you want to live, and invest in the area/product you think will achieve the greatest return.

 

Yes this is what I was thinking when asking the question above.

If there's heaps of apartments in the area that sell at 400k, and townhouses on 300sq blocks selling for 750k, it will bundle together to give a lower overall percentage return on units when looking at data.

 

Lol not yet. Lack of stock, although it's starting to pick up I think as more has started hitting the market.

 

Is it easy to do so with standalone unit? Or even semi attached house?

 

I like that side but wife prefers Macedon/Woodend. I do too, I think.
Put an offer on this, went for more than what I thought it was worth.
After renovations and adding sheds/tanks etc etc it would cost more than buying one that's already completed.

33 Strathclyde Crescent, Woodend, Vic 3442 - Property Details

 

Check that total land to building ratio for the townhouse/unit and ideally should be 50/50 or greater. Older style smaller complexes are usually on large parcels of land where newer ones are on smaller parcels of land. Well located land will increase in value over time and a building will decrease. Land is good

 

Yeah but i am not sure how easy it is to do extension on a block like that. If it doesn't have body corporate does it mean you can do whatever you want?

 

So say if i want to add an extra level up from this, it's doable? Do you need permission from the neighbour?