Did anyone see Herald Sun yesterday about 1 Bedroom unit in Carnegie selling for $370k plus ? Does anyone have an opinion or predictions on Carnegie and surrounds over the next few years with that sort of pushing going on.?
Was that a brand new unit/flat ?
Mostly units/flats in Carnegie, murrumbeena and Ormand area look like 70s build and plenty of O/S Students live there, very good location.........
very similar to Clayton, Box Hill.
Trust your hopes, not your fears
The agent was quoted in the Sun saying they'd paid a 2 unit price for a 1 bedroom unit, so I'd presume older. I had a look for it but results for Saturday not posted yet, but perhaps this property adds to the argument that Carnegie units are booming. An unusual $349k single bedder: http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2007314737
I was comparing these suburbs (Carnegie, Box Hill, Clayton) in terms of
high numbers of units/flats build there and most of them occupied by
O/S Students which means no problem finding tenants (except Dec/Jan)
Trust your hopes, not your fears
This is about $15 per week or $700 pa, or double that for two adults.
Rents seem to vary less than house prices (ie yields tend to be higher in cheaper areas) so the difference is more significant for renters than owner occupiers.
Ignoring all other benefits of the inner suburb, you can charge $30pw more for a Zone 1 unit than a Zone 2 unit and your tenants would break even (assuming 2 earners commuting into Zone 1).
If you are a landlord looking at your tenant market you may judge this to be significant.
But if you are an owner occupier looking for somewhere to buy, the difference in house price between Zone 1 and Zone 2 is so much more than the difference in fares paid.
Taking into account lifestyle benefits for a unit purchase (A Zone 2 unit may have a backyard or be in a smaller complex than a Zone 1 unit) you are better off with the outer unit, provided the extra distance does not cause any other significant loss to convenience.
Zones have a big psychological effect in Melbourne (more than the dollar amounts involved) largely because there are so few of them (1 and 2) and the inner suburb culture you have in Melbourne (but not in a mostly newer city like Perth). The incorporation of Zone 3 into Zone 2 a couple of years back only accentuated the divide between 1 and 2.
What many do not realise is that transport zones are not necessarily fixed and payment methods vary (both can be changed at a government's whim). In the last 30 years we have seen section-based fares with fine increments, one type of zone system, its abolition in favour of a neighbourhood system, another type of zone system and lately its significant modification. Who can tell what will happen next?
Therefore buying something because it is in a particular fare zone today (and paying a premium house price for it) is not particularly smart due to the risk.
I do however take the view that there are such things as $200k suburbs and $800k suburbs and there is nothing silly about paying more but getting more (provided it is indeed more and is perceived as such over the longer term).
But people do need to be on the look out where reality and perception vary, especially if something is based on a perception that falls with a thump to reality.
I have already demonstrated that it's not worth paying much of a premium to live in a Zone 1 area (even if you calculate it over many years) if that is the only reason for buying there.
This is strenghened with ticketing changes associated with the Myki smartcard. While the fares people pay will not change by very much (and the fare zones will remain), the way people pay will change.
And it will be possible to make complex trips (even to Bendigo or Traralgon) without worrying about zone boundaries. If you choose, everything will be calculated according to the 'best fare'.
So zones will go from being something that everyone had to know to avoid fare evading to something that if you have a Myki you will not need to know much about. All you do is put (say) $20 on your card and top up when it gets low.
Just like people are more responsible and conscious with their money if they're paying cold hard cash, with the sort of 'money' on smartcard tickets (like with mobile phone plans) the payment becomes less connected with use. Some will just stop counting every cent (especially when it gets complicated)!
This plus the automatic (but complex) 'best fare' calculation will blur the real differences between zone boundaries in the minds of many. If this happens, the inflated esteem in which Zone 1 is held might come down a few notches to something nearer reality.