Inner city unit

[Jaguar Driver]

Hi,

Ive got a IP in southbank, vic. Its a bit old [ about 12 yrs], but it does the job. Rents are pretty good.

A bit worried with all the new buildings going up around it.

Will the excess supply result in weak capital gains in the next 1 yr or so?

The age of the unit means that its quality is poor compred to the newer ones, but its age also means thats its a fair bit larger with lotsa room for improvements.

Ive heard that most of the buyers of southbank units are overseas buyers. So i assume the $A coming down is a good thing for demand?

Dont know much about property investing, so am keen to get some views.

 

[Propertunity]

Will the excess supply result in weak capital gains in the next 1 yr or so?

Yes. It will also mean that older buildings lose some tenants to the newer ones.

Ive heard that most of the buyers of southbank units are overseas buyers. So i assume the $A coming down is a good thing for demand?

Yes, this will drive demand as previously the impediment to bringing cash here was the poor exchange rate. Also o/seas buyers are usually limited to buying brand new or off the plan.

 

[Jaguar Driver]

Are you saying that overseas buyers are solely limitied by govt regs to purchase off the plan units only? If so, thats news to me!

 

[Propertunity]

Are you saying that overseas buyers are solely limitied by govt regs to purchase off the plan units only? If so, thats news to me!

The FIRB has the job of enforcing the regs.
Read about it all here: http://www.firb.gov.au/content/real_estate/real_estate.asp

 

[Tony3008]

It's possible that some older buildings may fall behind in the technological stakes. In my Docklands tower (completed end 2005) we can't have Foxtel IQ boxes as the wiring does not support them and retroffiting would be uneconomic. The same thing may or may not happen when the NBN comes along.

 

[Jaguar Driver]

thanks for the replies ...its not as bad as I thought. The FIRB basically says an overseas buyer cant come into the country on holiday, dump their money on any second hand non res place and bugger off back home and rent the place out. A lot of other countires say the same thing, with exemptions as we also have here.

tony- yes, some older ones are not tuned to tech advancements. Guess im lucky that my property is wired for foxtel. I doubt NBN will have any adverse impact though on older properties.

 

[Tony3008]

Mine's wired for Foxtel - I've got it - but AIUI the problem is that IQ boxes need two feeds which the fixed cabling doesn't support. Major issue in a 40 storey tower.