2br apartments in / near Melbourne CBD

I was actually looking for a house in Melb but came across all these 2br units in and near CBD for between $450k and $550k. They remind me of the new developments in in Alexandria, Waterloo, Zetland, Chatswood, and Sydney CBD which are selling for >$1m.

Compared to Sydney, they have cheaper strata, better yield and closer to CBD.

I can see there is a lot of stock for 2br apartments in and near Melb CBD, but given Melb is the second largest city after Sydney, I think it's foreseeable that these units in Melb might experience good capital gains in the next decade as local buyers look to diversify their portfolio and overseas buyers look for cheaper alternatives.

At current interest rate levels, a lot of them would probably be cashflow neutral if not positive the minute you buy them (assuming 20% deposit). So I feel they are not too risky to hold.

I'm still in my research phase, planning to fly down once I have decided on the ones I want to see.

I'm curious, has anyone on ss been buying these?
 
If they're in the new high rise blocks then that's a no for me. I do have a 2 bedder in Prahran that's been a solid performer but that's in a small walk up.
 
Hi starter, I was never into the high rise shiny stuff either. Have always bought the 3 storey walk ups in the past myself as I think they are better quality, bigger and less strata. But over the last couple years, I've noticed a shift in renters' attitude. They are prepared to pay a lot more for the newer shinier apartment that's in or close to CBD. I think people in Sydney are working longer hours, have less time to maintain the home, do not want to travel too far, and prefer onsite amenities.

They also changed strata laws in Sydney which led to significant increases in strata fees, even for 3 storey walk ups. Mine are all etching closer to $1k pq and the block has NOTHING, no gym, no pool, no lift. It's a bit of a joke. The one with lift & amenities is $1.3k pq, which is easily offset by the higher rent.

In Melb $1k strata pq is high even for a high rise with lift & amenities. A few years ago I wouldnt have given it a second look, but it's sounding more reasonable to me as I compare it to Sydney.
 
Hi Cadence,

Try and stay at least 2km out of the CBD if you are aiming to buy for capital growth.

If you're aiming for cashflow you'll be able to get better yields in those cbd apartments at the expense at growth though.

Inner/CBD apartments are predicted to perform between 0-4% over the next 5-8 years which is quite poor. The reason behind it is that there are over 24,000 new units coming online (being drip fed by large developers) over the next 24 months which is over saturating the market. High supply, low demand.

As starter said try suburbs like Prahran that are around 4-12km out of the CBD with good transport options.

Finally, Strata costs should be around 2.5k per annum if you get established property.
 
Hi Cadence,

Jake has covered it all - there's just a ridiculous amount of apartments in CBD. And if you ever come down, walk around, go to Melb Central, you'll see lots of people advertising for high-rise apartments... (in Chinese...) So yeah, who know who they're targetting.

If apartment/unit is what you're considering, then suburbs in the South would be Prahan, Elwood, Elstenwick (higher than your price range of 450-550k though). North: Brunswick, Northcote (might be able to sneak in with your range) etc.

As you know very well, prices have moved heapsss last 12 months! :(
 
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