Melbourne Apartment Market
- Thread starter N.D
- Start date
why a unit in melbourne as opposed to a unit in sydney or somewhere else?
why a unit and not a house?
whats your short and long term strategy?
why a unit and not a house?
whats your short and long term strategy?
I am looking in Melbourne as I have previously lived there and have a fair understanding of the areas. Furthermore, I think the growth outlook for inner city apartments is positive as it is the fastest growing city in Australia. I haven't ruled out a house in the middle ring suburbs. I am certainly not looking to buy OFP.
Welcome to the forum 
Try a search of the forums on this topic as this topic comes up reasonably frequently.
To summarise though, the general concensus is that the inner city market (CBD, Docklands, Southbank etc.) is oversupplied, and will continue to be for a few years. This will keep a lid on prices in the short to medium term. I frequently read articles that state something like 23,000+ apartments to come online in the next five years or so.
I just moved from Southbank myself out into the 'burbs, and I can tell you that apartments are going up left, right and centre in Southbank. From an investment perspective, rental and purchase prices have stagnated for most apartments because of the oversupply. Many stay vacant for months. The place I moved out of is being offered well under market value, yet in six weeks on the market, still hasn't been leased.
Personally (again, from an investment perspective) I'd be looking a bit further out where supply is less of an issue, and also consider established units as well.
Try a search of the forums on this topic as this topic comes up reasonably frequently.
To summarise though, the general concensus is that the inner city market (CBD, Docklands, Southbank etc.) is oversupplied, and will continue to be for a few years. This will keep a lid on prices in the short to medium term. I frequently read articles that state something like 23,000+ apartments to come online in the next five years or so.
I just moved from Southbank myself out into the 'burbs, and I can tell you that apartments are going up left, right and centre in Southbank. From an investment perspective, rental and purchase prices have stagnated for most apartments because of the oversupply. Many stay vacant for months. The place I moved out of is being offered well under market value, yet in six weeks on the market, still hasn't been leased.
Personally (again, from an investment perspective) I'd be looking a bit further out where supply is less of an issue, and also consider established units as well.
Welcome to the forum
Try a search of the forums on this topic as this topic comes up reasonably frequently.
To summarise though, the general concensus is that the inner city market (CBD, Docklands, Southbank etc.) is oversupplied, and will continue to be for a few years. This will keep a lid on prices in the short to medium term. I frequently read articles that state something like 23,000+ apartments to come online in the next five years or so.
I just moved from Southbank myself out into the 'burbs, and I can tell you that apartments are going up left, right and centre in Southbank. From an investment perspective, rental and purchase prices have stagnated for most apartments because of the oversupply. Many stay vacant for months. The place I moved out of is being offered well under market value, yet in six weeks on the market, still hasn't been leased.
Personally (again, from an investment perspective) I'd be looking a bit further out where supply is less of an issue, and also consider established units as well.
Hey dave do you have an idea of sort of % discounts buyers can get on these properties. I love the area and wouldn't mind having a ppor in the area
Honestly I don't know, since I rented and didn't really pay a great deal of attention to the sales market. But I think that depending on the asking price and the # of bedrooms you're after, you could get a reasonable discount off the asking price, I think more so if it is a new or recent development. If it was me, I'd personally feel confident about throwing in some lowball offers (within reason of course
)Again, depends on your preferences, I think there is scope to pick up a smallish 2-bedder for the low-to-mid $400k mark.
P.S. I love the area too and would really like to move back someday myself
Good Question.
Maybe there are good discounts happening in this location. Anyone have any evidence of discounted sales ?
They are...
http://www.realestate.com.au/property-apartment-vic-southbank-113867871
was sold only for $340k on the auction. I know 1 br was sold at around $500k in 2010.
Hi N.D,
One should be careful when looking at units in and around the CBD in Melbourne. As of 6 months ago Melbourne has a dwelling oversupply of around 5,000 properties. This is mainly made up of CBD apartments in high-rises in Melbourne, South Melbourne, West Melbourne and North Melbourne.
The rest of the over supply is predominately in the far reaches of the city in the North and West (house and land developments).
What this means is that unit prices in these areas are not expected to perform and may even correct further (prices may fall).
This risk however can be mitigated and there are projections for Melbourne to perform very well over the long term; it's just about buying where the demand is much higher than the supply.
The list of criteria to minimise you risk and maximise your gain should at least consist of:
Suburb within 2km - 12km of CBD
Suburb with long term average (10 year) of 8.5%+
Suburb with 5-8 year growth predictions of 6%+
Suburb with avg. yield of 4%+
Suburb with vacancy lower than 3.8% (I'd suggest that Elwood/St Kilda areas are an exception to this).
Residential Zone 1
Strata Titled
Block of no more than 18 apartments
Quiet Street
Not a pro-development area
1 or 2 bedroom
Bigger than 50 square metres
Northern or East/West orientation
Elevated in some suburbs (St Kilda for e.g.)
Must have out door space (balcony/courtyard)
Must have a car park (off street / car port / garage)
Must NOT have lifts, gyms, tennis courts or pools, etc.
Must have body corp outgoings around $2,500 or below.
And lastly, buy something with some X-Factor ... like a good view, or close to water, or character in the building.
This is a basic list, there is much more you can research to discover "hot spots" but at least it's a start.
Hope this helps. Feel free to call me for an explanation on any of the above......
One should be careful when looking at units in and around the CBD in Melbourne. As of 6 months ago Melbourne has a dwelling oversupply of around 5,000 properties. This is mainly made up of CBD apartments in high-rises in Melbourne, South Melbourne, West Melbourne and North Melbourne.
The rest of the over supply is predominately in the far reaches of the city in the North and West (house and land developments).
What this means is that unit prices in these areas are not expected to perform and may even correct further (prices may fall).
This risk however can be mitigated and there are projections for Melbourne to perform very well over the long term; it's just about buying where the demand is much higher than the supply.
The list of criteria to minimise you risk and maximise your gain should at least consist of:
Suburb within 2km - 12km of CBD
Suburb with long term average (10 year) of 8.5%+
Suburb with 5-8 year growth predictions of 6%+
Suburb with avg. yield of 4%+
Suburb with vacancy lower than 3.8% (I'd suggest that Elwood/St Kilda areas are an exception to this).
Residential Zone 1
Strata Titled
Block of no more than 18 apartments
Quiet Street
Not a pro-development area
1 or 2 bedroom
Bigger than 50 square metres
Northern or East/West orientation
Elevated in some suburbs (St Kilda for e.g.)
Must have out door space (balcony/courtyard)
Must have a car park (off street / car port / garage)
Must NOT have lifts, gyms, tennis courts or pools, etc.
Must have body corp outgoings around $2,500 or below.
And lastly, buy something with some X-Factor ... like a good view, or close to water, or character in the building.
This is a basic list, there is much more you can research to discover "hot spots" but at least it's a start.
Hope this helps. Feel free to call me for an explanation on any of the above......
3310/1 Freshwater Place,
sold
15 July 2013 for $342k
18 August 2008 for $318k
21 August 2002 for $357k (off the Plan)
This would have been cashflow negative after interest and body corporates over that entire period.
Still there was depreciation .....
aha...now I got it why the seller is willing to let it go at that price. I saw another one bedder in that apartment is advertised for 650k-710k. Looking at the oldlistings.com.au (coz I don't have the access to sold price database), unit 3407 was advertised for $525k in Nov 2012; 3207 for $550k in Feb 2011, 3409 for $530-570k in Mar 2012.
Now the unit (3310) is advertised for $450 pw lease...that makes around 6.8% gross yield.http://www.realestate.com.au/property-apartment-vic-southbank-410790767
What's wrong with South orientation?
Which one would be better: new or old apartment?
South facing windows do not get direct sunlight so they're much darker apartments.
Established property is usually the safer bet.
Haha these people are idiots.
At that same time we've bought buildings in the CBD for $600k (same year, ie 2001) which are now worth around $2.5m each minimum.
