VIC Why is Albion units so affordable?

I am looking to buy units around melbourne, which have steady population growth, access to transport and low vacancy rates. My budget is max $450k

I shortlisted a few suburbs for 2B Units (not appartments). This includes Kingsbury, Thomastown, Carrum Downs, Sydenham as well as Albion. I am very curious why Albion units are so affordable? 1/141 Anderson Road, Albion, Vic 3020 - Property Details 25 Brisbane Street, Albion, Vic 3020 - Property Details

I noticed in realestate.com that the annual growth has fallen by 0.8% as well. What is going on with Albion?

What suburbs would you recommend for a 2B units within the next 3 months timeframe?

 

There is very limited demand. Why would you pay 450k for a unit (your budget) when you can buy a house for ~550k in the likes of Sydenham and Thomastown?

Units have the biggest demand in desirable areas where there is a big difference in price between a house and a unit and enough people really want to live there to consider a unit as an alternative.

 

Yeah this is the thing about investing in property - if your budget just can not stretch to the 550k mark (for both purchase plus ongoing ongoing costs of lower yield), you are almost certainly losing something of value that is worth more than the percentage difference in price.

I made the stretch from my ideal of 425k to 550k for this reason, but there is a price that goes beyond the dollar amount. Also many don't even have this option available.

Actually, I just looked at recent sold properties in Sydenham and for decent land size it seems like you are looking at 575k which is even worse.
On top of that, the higher prices come with even more negative cash flow, which may be a serious consideration for many people.

If you absolutely had to go max 450k, yea it's a tough choice between a unit closer in and a 550sq block in Werribee. The Werribee one you may have a good chance to add value to, and possibly even find something with ability to split it and add another property later on (or knock down and build townhouses), so that might be a consideration.

I think you may be able to get something in Laverton for 450k. A coupleof months ago I was checking it out as a compromise between a tornwhouse closer in vs more land further out just as you are.
It will be on a smaller piece of land than the 550sq+ properties that cost 550k+ there, and most likely will be around 325-450sq for a cheaper price but I think you will be better off with a smaller block on its own than with a unit.

3 Pearce Street, Laverton, Vic 3028 - Property Details
22 Watts Street, Laverton, Vic 3028 - Property Details

*By the way I don't know much about the suburb of Laverton, so there could be a reason beyond the many properties on 400sqm blocks that make for a lower price - you will need to check that out yourself.

 

Thanks @Cimbom @Anthony Brew .

I have an absolute max of 450k. I don't want to be in a position of a huge negative cashflow and gearing. I am looking for something which has decent capital growth and can live with some amount of negative gearing. I started with researching the houses but soon realized most of them didn't meet my criteria, or not worth investing.

I didnt check out Laverton (perception of being industrial) but you bring up a good point..Let me check it out. What did you think of Deer park & Albanvale for houses?

 

Laverton isn't too industrial, Laverton North is. I doubt you'd find houses within walking distance to the train station for under $450k (you may get lucky near Old Geelong Road and Fitzy Road), should find units though. You might still be able to find a property in Werribee for sub 450k if you're quick. I'd take a house in Werribee any day over one in Deer Park.

 

I really can not imagine you will find anything in Deer Park for 450k now. Some of the latest sold prices are almost silly priced - especially given @Westie's remark which I assume is of it's reputation (although I thought Werribee had quite a reputation and is only improving due to gentrification of the alrea?).

I do wonder if you can find houses for the 450k-ish mark around the 20km distance from CBD wherever there are 400sq blocks. I am not sure if splitting a house into 2 titles of 400sq each is still called a unit or not, Eg if you find a house that is like 27A but is on it's own title completely separate from 27B which used to be one title - I wonder if you can get something in your price range that is still a house (albeit on a 350-425sq block) and not a unit?

 

Werribee properties under $450k with over 500sq land are becoming scarce. There was a 3/1 house that was asking for $440-450k a couple of weeks ago, called the agent yesterday and he now wants $460-470k for it!

 

For $450k, check out Sunbury. A mate bought a nice little 3BR IP there for $390k about 6 months ago. Although the market has moved, and I don't think you'll find a house on land under $400k that doesn't require work, $450k should be a feasible budget. I've not actually been there myself, but he was very positive about the place.

 

Check Diggers too. There should be properties under $450k there.

 

@Anthony Brew I am open to buying a unit, but am looking at areas where the house price is 2X times the unit and within 20k to the city. Any recommendations?