losing the view

E

eeew

damn, just learned that a new high rise is going up opposite me blocking the great views I once enjoyed.

The high rise ( some 66 stories) is about 1 city block away so its not in my face, but will take away completely my city views.

My question is how much will this hurt my property in terms of CG and sale price. The apartment is expected to take 3 yrs to build, so should i just sell now? I originally planned to hold onto it for 3 yrs before selling it. Imagine trying to sell the apartment when this monster is mostly/fully constructed. Will this put people off? Gotta say that at least it aint bad looking monster.
Reports are that its mostly 1 bedroom apts. Mine is 3 bedrooms. They just dont build 3 bedrooms thesedays unless you are looking at million dollar ones and penthouses/subpenthouses, so my main differentiator ( size/utility/location) are still all in place.
 
If i assume you're on either 163-183 city rd, southbank - yes there're planning to build across from you and also in terms of 3 bedrooms - there're plenty across the road and down the road and do a search on with 3 bedrooms and you're see plenty of them coming up. There are also larger 3 bedrooms of around 110-115sqm as well.

If It is the same developer which bought the land from crown casino then it won't be only 1 bedrooms. there will be 1,2,3 bedrooms as evidenced from the past - many of the prices have dropped and the new 3 bedders from the building opposite the road are selling close to prices similar to yours. There is Wrap, the new trictych, mainpoint and other devs coming up.There are also not as many buyers and renters compared to previous years.

Basic economics - supply exceeds demand as they is just too many around at the moment. Further down to south melbourne, st kilda road are much safer bets atm. But either way - u're already made your capital growth.
 
Melbournian said:
yup think abt the risk profile.
Click to expand...

sure there is a risk that losing a city view will reduce the CG. Also a risk that 66 floors will add considerably more supply. I think these are short term risks ( next 1-2 years).

My value drivers are defensible positions:
1. Location
2. Size
3. Utility
[ these cannot be taken away from supply]

This building is not across the street, ive got at least one city block between us, so its not in my face, and that building isnt ugly either. Its infact prettier than most city buildings.

I think ill hold for 3 yrs, then sell it. Im getting decent rent at the moment and locked in for this yr. I have already factored in oversupply and that will take a couple of years to absorb.
As long as it does not go down in value when i sell ( and i doubt it will in 3 yrs time), it should be fine.
 
My colleague's 3 bedroom apartment in South Melbourne lost about 20-30% it's value after losing a view but that was a few years ago now.
 
i'm suprised south melbourne - is very strong - so it is very suprising.

You had like celebrities, people in mercs, porches all turning up an auctions last week for a townhouse

first because of the botanical gardens, second the south melb market.
 
yeah you mentioned that - 163 City Rd, there was one 3 bedder 2 bath on the 15th floor sold 640K just recently. Low rise which are valued more recently 3 bedder were sold southbank bvld sold 640K and 590K. So you can see a sign there.

http://www.realestate.com.au/property-apartment-vic-southbank-107145046#

this one has been on the mkt for a very long time

Across the road from you - there will be development for sure.
As for the southbank one which is just across the road - their prices are moving down so would a buyer prefer a newer development as opposed to the summit? ur guess.

Not to mention - summit has the hardest parking spot ever - and it is virtually impossible to drop someone off due to 1 lane traffic so there is lots of consideration. From a feng shui point of view depending on the design of the building it could go eitherway.
 
Melbournian said:
yeah you mentioned that - 163 City Rd, there was one 3 bedder 2 bath on the 15th floor sold 640K just recently. Low rise which are valued more recently 3 bedder were sold southbank bvld sold 640K and 590K. So you can see a sign there.

http://www.realestate.com.au/property-apartment-vic-southbank-107145046#

this one has been on the mkt for a very long time

Across the road from you - there will be development for sure.
As for the southbank one which is just across the road - their prices are moving down so would a buyer prefer a newer development as opposed to the summit? ur guess.
Click to expand...


Which is another reason why i think i will wait for a few years. No one can predict the future, esp 3 yrs out, but im putting my money on supply being absorbed and CG returning.
 
eeew said:
sure there is a risk that losing a city view will reduce the CG. Also a risk that 66 floors will add considerably more supply. I think these are short term risks ( next 1-2 years).

I think ill hold for 3 yrs, then sell it. Im getting decent rent at the moment and locked in for this yr. I have already factored in oversupply and that will take a couple of years to absorb.
As long as it does not go down in value when i sell ( and i doubt it will in 3 yrs time), it should be fine.
Click to expand...

IMO selling right as the new building is completed and the view gone is the worst option. I would either sell it now, or hold it long term and take the hit of the lowered CG for loss of view.
 
Melbournian said:
not sure if you were around in 2003 where prices crash 20%.

False hopes are always deadly.
Click to expand...

hmmm....not an easy straightforward decision here.

There are 2 dimensions to equity:
1. The expected sale price ( sometimes called capital growth)
2. The owing to the bank ( principle outstanding on the home loan)


Whilst i also forsee that the expected sale price (CG)wont increase substantially in the near term, the longer i hold it, the principle owed reduces EXPONENTIALLY with time. So, my equity also increases ( even if point number 1 ( cg) does not) simply because i have then paid more and more in principle owed ( principle remaining on loan reduces exponenetially, not linearly, with time).
The 'hope' is that , of course, point number 1 does not decrease more than the second point. Its easy to project and calculate what the second point will be in 3 yrs time. Virtually impossible for point number 1.
So, the equation cant really be answered unless a lot of big time assumptions are made....and we know what they say about assumptions.
 
capital growth has grown backwards if you go back in 2003 due to oversupply in southbank.

a 2 bedder which was 400K basically went back to 330-350K (i know this coz i bought a few when it went down)
 
Why not sell your apartment now. Pocket the cash and put down a small deposit (Off the plan after doing your research on builder)on a 3 bedroom aptm in one of the new buildings which will ensure you get your views back.

You can enjoy any CG during the time it gets completed and also enjoy interest earned on the money from your sale.

Cheers,
Oracle.
 
oracle said:
Why not sell your apartment now. Pocket the cash and put down a small deposit (Off the plan after doing your research on builder)on a 3 bedroom aptm in one of the new buildings which will ensure you get your views back.

You can enjoy any CG during the time it gets completed and also enjoy interest earned on the money from your sale.

Cheers,
Oracle.
Click to expand...

the overwhelming opinion on here seems to be to sell it ( and out part of the proceeds as downpayment to another property). I might ask my realtor to see whats involved in selling.
 
eeew said:
the overwhelming opinion on here seems to be to sell it ( and out part of the proceeds as downpayment to another property). I might ask my realtor to see whats involved in selling.
Click to expand...

it is normally 2-2.7% in that area + advertising costs. If you want to stand out, renovate your place - and market it well like the person who sold 41/183 city rd for 795-810K. and that was a 2 bedder.

again it's ur decision. southbank has had a few cycles and you need to pick it at the bottom and sell at the top. This area is not for everyone though unless you identify the right apartments to buy.
 
eeew, it looks like you have been given some very sage advice here from experienced investors. I know nothing about high rise apartments, but if it was something I wanted to get into I'd be listening to Melbournian. If you can get a bit of money from somewhere for a couple of months to renovate this is definitely the best option.

I understand what you're saying about paying down the principal, but putting your after tax $ into an asset and then selling when the value has likely dropped makes no sense. Better to maximise your return now & buy something that you're more likely to make $ on over the next few years.
 
You must log in or register to reply here.

Similar threads

W
Whether to invest in Springwood QLD??
Replies
3
Views
2K
Investor78
I
P
Apartment market sunshine/albion area
Replies
13
Views
2K
Peter Parker
Peter Parker
D
Land as investment in Melbourne
Replies
2
Views
1K
Darncars
D
S
My property forecasts
2
Replies
30
Views
6K
JohnHenry
JohnHenry
Genia
Are There any Investors in South Melbourne?
Replies
1
Views
1K
Kate Ashmor
Kate Ashmor
Back
Top