Footscray, CBD or Docklands for 1br Apartment as IP?

This is where statistics are soooo misleading.
Why is carltons 10yr average only 3%, because of the proliferation of student accomodation (which generally shows poor growth). This effects the average.
The 10yr average on 'proper' apartments in carlton, ie ones of decent size and can be utilised by both owner occupiers and tenants have shown much much higher growth than 3%.

Decent two bedroom apartments in carlton were selling for around $180-$250k back in 2000. Those same apartments are now selling for around $450-$600k.

Thats fair capital growth:D
 
Can you tell me why you think buying off the plans is not the way to go? We are looking at a couple of possibilities in Nth Melbourne or Kensington and some of those include OTP.
 
Off-the-plan can be a good investment. It's really no different from buying an existing house - you just have to research and buy well. however you do have the additional risks of the builder stuffing up/delaying the project. The real problem with OTP is you normally pay a premium for the building because it is new
 
Off-the-plan can be a good investment. It's really no different from buying an existing house - you just have to research and buy well. however you do have the additional risks of the builder stuffing up/delaying the project. The real problem with OTP is you normally pay a premium for the building because it is new

Other issues include banks not agreeing with the amount you have paid for it come settlement time. You nee to make sure you have decent capital (or access to it) aside in case your loan application falls short (i.e. you may apply for a 90% loan, but in effect only get 70%)

Cheers,

The Y-man
 
Wise words Y-Man.

I'd hate to come up short at settlement. Especially if this bubble we have in Melbourne eventually bursts. God knows how much a property could drop over a 2 or 3 year build.

Intrinsic - thanks. It's so easy to look at a median and take it at face value without realising the true value of a particular sector. Congratulations on your success in the city!:)

Redcat - I agree. There are quite a few dodgy little student accom. in Carlton which would be having a massive impact on their average.

Thanks again everyone.

Cheers

Brett.
 
Can you tell me why you think buying off the plans is not the way to go? We are looking at a couple of possibilities in Nth Melbourne or Kensington and some of those include OTP.

I think it is only really a problem if they buyer can't accurately assess the value - ie know when they are being stitched up by the developer.

I remember going to numerous docklands auctions a few years ago. The average loss was around 25%-30% from the price paid off the plan. $800k apartments resold for $600k, $1.1million places resold for $800k etc. I doubt this is going to be such a problem in more developed areas where there is resales to compare prices with.
 
I remember people were literally lining up to buy docklands apartments off the plan many years ago. So it's definitely risky but there are many others who have made a lot of money buying OTP. It depends on what the market is like. Currently (in Melbourne at least) it is definitely a seller's market so you'll be paying a lot of money for an uncompleted project with very very small upside.
 
Can you tell me why you think buying off the plans is not the way to go? We are looking at a couple of possibilities in Nth Melbourne or Kensington and some of those include OTP.

Off the plan will not make you much money or no money
especially for the inner city places.

Take CE for example - a 2 bedder for 600K+?

Also the one in Tooronga Village. - prices are just too expensive to justify purchasing.

the developers have already price it up based on the time it takes to develop the property.
 
OTP = the sum of future expectations. It's got to be low enough to encourage people to purchase yet high enough so the developer makes a decent profit given the risk of delays, defaults etc. Given the current market people would pay a lot just to get into the market (plus the whole marketing ploy of 'save on stamp duty')

The only real OTP I would buy would be a house/townhouse. At least you own landed property
 
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