inner west or inner city?

A

annmak

I am thinking of either buying an apartment in the inner city (e.g south melbourne) or a small house in yarraville/seddon/spotswood for long term investment purpose. It seems that with the price of a 3 bed apartment in inner city, I can buy a small house in the inner west. Which is a better choice? Will the inner west suburbs still have good capital growth or have they already taken off too fast?

I find many small houses in yarraville/seddon/spotswood do not have a car park. Is this a concern? Do people park off street in these areas? Is Yaraville the best out of the three?

Your advice is much appreciated.
 
annmak said:
I am thinking of either buying an apartment in the inner city (e.g south melbourne) or a small house in yarraville/seddon/spotswood for long term investment purpose. It seems that with the price of a 3 bed apartment in inner city, I can buy a small house in the inner west. Which is a better choice? Will the inner west suburbs still have good capital growth or have they already taken off too fast?

I find many small houses in yarraville/seddon/spotswood do not have a car park. Is this a concern? Do people park off street in these areas? Is Yaraville the best out of the three?

Your advice is much appreciated.
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From your thread, it seems you are asking only about capital growth/investment considerations between the two options. I personally would favour inner city apartments over 'small' houses in the suburbs as I think they will be in more demand 2+ yrs out from now, and hence higher capital growth. Also, you will almost surely have higher rents for inner city apts than a small house in the suburbs. This gives you more freedom ( live in it or rent it out).

And yes, a house without a car park is a problem, and will automatically limit your prospective buyer pool in the future.
 
eeew said:
I personally would favour inner city apartments over 'small' houses in the suburbs as I think they will be in more demand 2+ yrs out from now, and hence higher capital growth.
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But how about the supply side? It seems that there are endless supply for apartments in the inner city suburbs. And where will there will greater demand for them in 2+yrs? I am not arguing. I just want more information for I am puzzled.
 
yes, there is a lot of supply at the moment in inner city areas.

Real estate is a med-long term investment.

An increase in supply has short term pitfalls on CG, but over the med-long term these (initial) negative effects on CG are replaced by positive CG effects. Why? because over time, the supply is absorbed by the market (units bought), there is less and less land for developers to build (they need land to build on in the first place), and there is usually strong marketing of the area/properties that are built [ especially newer ones] that filters on to the entire suburb.

Moreover, in the med-long term, inner city is projected to increase population by a faster rate than suburbs [ I think city of mel did a study on it and also ANZ did as well]. Increase in pop = increase in demand. Also, inner city has the jobs- time and again, no matter what the market, proximity to jobs has been an important determinant to price stability/growth.

So if you can hold it out for at least 5-7 yrs, the initial negative effects of increased supply will gradually be replaced with increased popularity/demand resulting in more CG.

Look at real-life examples- New York, Barcelona, Beijing, and closer to home Sydney as examples of what jobs have done to peoples perceptions. Properties in these inner city areas outperformed better than their suburban peers- through the GFC, recent and ongoing debt crises, .com bust, enron/worlcom debacle and also in most bull markets.

Besides, as a potential buyer, wouldnt you want to take advantage of the softer prices in inner city as compared to the suburbs?
 
I wouldnt consider Seddon/Yarraville/Spotswood as the 'suburbs' though. They are pretty dersirable locations and for a reason they have lots of period homes all with village feel to them and still close to the city. Seddon is only 6kms from the city.
I think period homes with a backyard will always be more desirable and in demand over apartments.

As for for best out of these 3 suburbs. Yarraville is probable the best pick (some parts of yarraville not all ie to close to industry or truck routes), yarraville village with its cafes and cinema is really charming. Seddon is great too and Seddon Village has lots of cafes also now. Promiximity to Footscray may be off putting for some people.
Spotswood is great too and more value for your money, I think you would have more chance of finding something with off street parking there. The shopping village use to be a bit of a ghost town but now there are a few cafes and second hand stores. The pub which use to be a strip club has been sold and being turned into a restaurant. There are also plans for an Adli supermarket and Coles or Woolworths on Melbourne Road. So plenty of growth ahead for the suburb i feel.
 
I think the decision depends on what exactly the alternatives look like- are you above or below market rates for your budget? Are you considering buying in a big building? Is the house on flawed land?

I like land value but that doesn't necessarily guarantee enhanced capital growth relative to your alternative.

As for parking, yes, parking is at a premium, so is priced in accordingly- the width of the land doesn't necessarily allow for parking. Is it a big deal? not really unless you live next to a train station
 
Many thanks for the info about the three suburbs. The picture sounds very positive then.

Actually I have bought an apartment in Bank Street close to the Royal Melbourne Garden in South Melbourne in 2004 at the price of 330K, a big two bed room with balcony middle level. The rental return has been good but the capital growth is just so so. I think it is worth around 490K now in the market. Many of houses my friend bought have doubled or even tripled in 7 years. That's why I am intending to buy houses this time.

Yet my budget is buying a 500k to 600k, maybe stretched to 700k and I wonder if I can still acquire something of holding value in this price bracket.
 
aladdin said:
....they have lots of period homes all with village feel to them and still close to the city. Seddon is only 6kms from the city.
I think period homes with a backyard will always be more desirable and in demand over apartments.
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Are these period homes good to buy? They are what I call small houses. They usually have no carpark. And the lands seem to be small in size.

I can also find some new units being built in these areas. How do they compare with the period homes?


"some parts of yarraville not all ie to close to industry or truck routes"
Can I have the names of those quiet streets and those that I should avoid?


And what are the good streets in Seddon and Spotswood? Anything to worry if I buy something near the station? e.g. noise and vandalism.
 
annmak said:
Many thanks for the info about the three suburbs. The picture sounds very positive then.

Actually I have bought an apartment in Bank Street close to the Royal Melbourne Garden in South Melbourne in 2004 at the price of 330K, a big two bed room with balcony middle level. The rental return has been good but the capital growth is just so so. I think it is worth around 490K now in the market. Many of houses my friend bought have doubled or even tripled in 7 years. That's why I am intending to buy houses this time.

Yet my budget is buying a 500k to 600k, maybe stretched to 700k and I wonder if I can still acquire something of holding value in this price bracket.
Click to expand...

yeah - anybody who bought anything 7 years ago would have obviously doubled or tripled their money. however it is unlikely it would happen again.

As for your apartment 330K - should be worth around 500ish K but if you sold it last year would have been 600K if done up properly.
 
I just feel period homes with character will always be sort after. And Seddon Yarraville Spotswood with their village feel makes them appealing and still close to the city. I suppose new units in a nice street would also do well.
Your right houses in Seddon and Yarraville can be small with no off street parking and up in price, the horse well and truely botled on these suburbs. You might be lucky and get a bargin in this market maybe.
Spotswood and Newport have bigger land size and usually off street parking.
Seddon I would avoid Melbourne Rd too busy, and along the railway line. South of Charles st towards Yarraville there are lots of nice streets and really green. North of Charles is okay, still some really nice houses but getting close to Footscray and not as green.
Yarraville again avoid Melb Rd, Francis st and Hyde st too many trucks. West of Melb road is better value for money and bigger blocks but getting a bit of a walk from the station.
Spotswood east of Melb road is a nice pocket really green. Some noise from the freeway though but not too bad. Close to station and shopping village. I wouldnt go over the railway line is squeezed btw industrial. West of Melb road is not bad also but again more of a walk to the staion. Big blocks there so lots of houses being knocked down and large 2 storey townhouses being built.
Here is something on best Spotswood streets
http://brisbanetimes.domain.com.au/real-estate-news/best-streets-spotswood-20101129-18ctv.html
 
annmak said:
Forgive my naivety. What are period homes?
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A home with Architecural style of a definitive period, usually well sought by home buyers either renovated or to renovate.

The main period home in Melbourne are ...

Victorian Homes build up to say 1905 (Victoria Died in 1901) - usually villas

Edwardian Homes from about 1905 to 19teens or up till about 1920 (Edward reigned from 1901 till 1910) - often single fronted cottages

California Bungalows from 1920 - late 1930's - they have the gable roof at the front, usually at least 2 gables, the best period examples have three, large, medium and small.

Art Deco Homes are a period style from mid 1930's to mid 1940's; not many around Melboune, many mis labelled by Agents.

After than boring 1940's , etc bungalows and houses but not really considered period.

Other period homes are Federation style homes from around the early 1900's

I trust this helps,

cheers

Rightvalue
 
I would describe period homes as any house built pre war so up until around the mid 1940s.

Usually liked for the high ceilings, ornate ceilings and cornices, verandahs, fireplaces all those kind of period features.

Different kinds of styles would be Victorian, Federation, Edwardian, Californian Bungalow, Art Deco for example.
 
Thank you for the quick and informative replies. It's interesting to find so many types of period homes in Melbourne. May I ask one more question:

Why are these homes usually built without car park? Where do they park their cars, say in Yarraville, Seddon and Spotswood?
 
annmak said:
Thank you for the quick and informative replies. It's interesting to find so many types of period homes in Melbourne. May I ask one more question:

Why are these homes usually built without car park? Where do they park their cars, say in Yarraville, Seddon and Spotswood?
Click to expand...

Think about it ..

The car was not readily available to the masses until the late 1910's to 1920's and they were expensive. Many of the period homes in Seddon etc were built before the car!
 
There are a lot of inner city suburbs without parking ie Richmond, Brunswick, Fitzroy, Prahran to name a few.

Once the car came along then came the urban sprawl.

And yes most people park in the street if they have no space. Some streets are easier than others depending on the density of the people living on that street.
 
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