Melbourne Apartments 2015

[Genia]

Just in case if someone find this interesting.

Melbourne's tipped hot spots to buy apartments in 2015:

1. Blackburn
2. Murrumbeena
3. Doncaster East
4. North Melbourne
5. Camberwell
6. South Melbourne
7. Balwyn
8. Frankston
9. Coburg
10. Ascot Vale

Source:http://news.domain.com.au/domain/re...elbournes-middle-suburbs-20150318-1m1eoq.html

Melbourne suburbs in higher risk of apartments oversupply:

1. Melbourne
2. Docklands
3. Southbank
4. North Melbourne
5. Brunswick East
6. St Kilda
7. Armadale
8. Doncaster
9. Hawthorn East
10. Preston

Source: http://news.domain.com.au/domain/re...elbournes-middle-suburbs-20150318-1m1eoq.html

 

[jpcashflow]

Hi,

I have noticed that apartments have been coming up every where.

There is going to be an oversupply of apartments soon ...

I also read that there is a shortage of quality hotels in Melbourne and Sydney.

 

[chunho01]

Melbourne suburbs in higher risk of apartments oversupply:

1. Melbourne
2. Docklands
3. Southbank

Why am I not surprised at all. So blatantly obvious that I have no idea how the Chinese buyers are still snapping them up crazily. (Disclaimer: Not a racist comment, I'm an Asian myself)

 

[albanga]

Yep, really cannot fathom how an investor would buy in the Melbourne CBD, southbank or Docklands.
What's funny though is a year back I was speaking to a BA who I asked what experience he had and he spruiked he bought in the docklands "at the right time". Has there ever been a right time to buy in the docklands?

 

[wll6568]

Oversupply or not, only the landlords know

 

[magma]

The CBD has an almost endless supply of students that come in and out at certain times of the year. There is a pattern.

As to new apartments, their target market are students who are willing to pay top dollar for shiny new apartments. These are overseas students who are well off on their home country, used to the flashy lifestyle (you wouldn't believe how many young kids are driving Ferrari's and Lambo's in the city, just saw one young gal driving a Maserati on the way to Franklin Street) This market changes drastically every year though.

Another trend going - wealthy parents want their children to study overseas, instead of renting out they buy an apartment for them to use for several years then sell if for a profit.

These young wealthy students love showing off their pads to other wealthy students, its just part of their lifestyle, no specific nationality targeted here

If you know your game, CBD is not too bad, if you are, you'd know Docklands & Southbank are on the right list above. If you like these areas though, it's so much better to rent than to buying.

If Dockland prices didn't peak up too fast ever since its development, it would have been a good place, there's nothing to fault except the single road leading to the area that always get clogged badly on peak hours.

 

[wll6568]

The CBD has an almost endless supply of students that come in and out at certain times of the year. There is a pattern.

As to new apartments, their target market are students who are willing to pay top dollar for shiny new apartments. These are overseas students who are well off on their home country, used to the flashy lifestyle (you wouldn't believe how many young kids are driving Ferrari's and Lambo's in the city, just saw one young gal driving a Maserati on the way to Franklin Street) This market changes drastically every year though.

Another trend going - wealthy parents want their children to study overseas, instead of renting out they buy an apartment for them to use for several years then sell if for a profit.

These young wealthy students love showing off their pads to other wealthy students, its just part of their lifestyle, no specific nationality targeted here

If you know your game, CBD is not too bad, if you are, you'd know Docklands & Southbank are on the right list above. If you like these areas though, it's so much better to rent than to buying.

If Dockland prices didn't peak up too fast ever since its development, it would have been a good place, there's nothing to fault except the single road leading to the area that always get clogged badly on peak hours.

Shhh... don't spoil the secret.

 

[sanj]

I have to disagree about the nothing wrong with dock lands sentiment, I think it has been a bit of a failure planning wise.

It is a soulless, windswept failure imo

 

[JDP1]

The CBD has an almost endless supply of students that come in and out at certain times of the year. There is a pattern.

As to new apartments, their target market are students who are willing to pay top dollar for shiny new apartments. These are overseas students who are well off on their home country, used to the flashy lifestyle (you wouldn't believe how many young kids are driving Ferrari's and Lambo's in the city, just saw one young gal driving a Maserati on the way to Franklin Street) This market changes drastically every year though.

Another trend going - wealthy parents want their children to study overseas, instead of renting out they buy an apartment for them to use for several years then sell if for a profit.

These young wealthy students love showing off their pads to other wealthy students, its just part of their lifestyle, no specific nationality targeted here

If you know your game, CBD is not too bad, if you are, you'd know Docklands & Southbank are on the right list above. If you like these areas though, it's so much better to rent than to buying.

If Dockland prices didn't peak up too fast ever since its development, it would have been a good place, there's nothing to fault except the single road leading to the area that always get clogged badly on peak hours.

I would agree in most part, ill make a couple of observations:
1. The guys and gals driving Maserati's etc will almost certainly be living in places like freshwater place and that quality have 7 digits in it. Think about what else that amount could get you.
2. A large target market is students and their parents-especially overseas. This is risky if you ask me. What happens if the dollar is high and thus overseas enrollments drop [ as we saw 3-4 years back].
3. A lot of locals simply don't want to touch them. This is a big put off for me. I remember an article written by a RE guru about paris real estate recently that had similar issues and he said always buy where the locals buy and don't rely too much on foreign students to make up the majority of your market. Snobby parisians are very picky about what they buy apparently
4. FIRB rules , just assume they are enforced or will be in the future, limit purchases by foreigners to new or off the plan, so what happens if its not new? who are you left with as your market? This is a huge limiter of market demand.

On the flip side:
1. Nice areas to live- safe, convenient, etc... rent sure, buy-no
2. Changing perceptions - more and more locals are migrating to CBD's and considering apartments. This however is a slow and gradual process but will happen as cities get bigger. Have seen similar trends in vast majority of cities worldwide.

Overall, investing in these could work but are high risk, at the mercy of govt rules, dollar, etc but could work if held for 20+ years.

 

[Deltaberry]

A lot of maserati/ferarri driving kids may not be as rich as you think. In China, it is common to pretend to be rich.

Many ways to do it too as the Chinese are actually pretty savvy when it comes to these things as I'm sure most have realised by now:
- use your school fees to hire a car;
- share a car between friends;
- use the money that the parents gave them to buy a house to buy the car etc

I know plenty of them who have done this. Another strategy among overseas students is to buy the car on debt, then loan it out during Fridays-Sundays to help cover the interest payments through Ar Jie's (yes another overseas student) super auto car business, and drive it yourself on the weekdays. Of course there's also the ones who can really afford it. HK was the first to catch this trend that they even created a company which is now listed on the stock exchange - Milan Station. Because Chinese always need top brands but cannot necesarilly afford it, what Milan Station allows young girls to do is buy all the newest Hermes/Channel bags they need, then trade it in to Milan Station maybe 2-3 weeks later, which then on-sells it to girls from a lower socio-economic status for a cheaper price. Can you imagine such a business thriving in Australia?

Why do Chinese buy in Docklands? Because in their culture, good is different from what us Australians consider good. Something like Docklands is considered great in China - quiet, new pavements, new apartments, looks flashy, in a business district, has the sea. It doesn't have nature strips? Great! Who wants to live in a forest in China? What do we think this is, 1990s China?

That's why the key to doing business or investing in any culture is to understand what works over there. If we took our mentality to China - eg buy old Victorian houses that are heritage listed and hope they'd go up in value - we'd go bankrupt pretty soon. Recent history has proven that your South Yarra house has probably doubled in last 4 years, while Docklands has fallen 20%.

 

[JDP1]

A lot of maserati/ferarri driving kids may not be as rich as you think. In China, it is common to pretend to be rich.

Many ways to do it too as the Chinese are actually pretty savvy when it comes to these things as I'm sure most have realised by now:
- use your school fees to hire a car;
- share a car between friends;
- use the money that the parents gave them to buy a house to buy the car etc

I know plenty of them who have done this. Another strategy among overseas students is to buy the car on debt, then loan it out during Fridays-Sundays to help cover the interest payments through Ar Jie's (yes another overseas student) super auto car business, and drive it yourself on the weekdays. Of course there's also the ones who can really afford it. HK was the first to catch this trend that they even created a company which is now listed on the stock exchange - Milan Station. Because Chinese always need top brands but cannot necesarilly afford it, what Milan Station allows young girls to do is buy all the newest Hermes/Channel bags they need, then trade it in to Milan Station maybe 2-3 weeks later, which then on-sells it to girls from a lower socio-economic status for a cheaper price. Can you imagine such a business thriving in Australia?

Why do Chinese buy in Docklands? Because in their culture, good is different from what us Australians consider good. Something like Docklands is considered great in China - quiet, new pavements, new apartments, looks flashy, in a business district, has the sea. It doesn't have nature strips? Great! Who wants to live in a forest in China? What do we think this is, 1990s China?

That's why the key to doing business or investing in any culture is to understand what works over there. If we took our mentality to China - eg buy old Victorian houses that are heritage listed and hope they'd go up in value - we'd go bankrupt pretty soon. Recent history has proven that your South Yarra house has probably doubled in last 4 years, while Docklands has fallen 20%.

Yeah ok...
Personally I would rather live in southbank,Docklands etc rather than a small shiit Victorian terrace, but I need to make money and the terrace holds greater cg potential. Agree itsbthe market...
I

 

[Deltaberry]

Oh look I think you're probably right - if value was not an issue, I think I'd almost prefer a nice Docklands apartment facing the waters.

Just the way the market and culture is I guess but hey, we're here to make money, not just buy things I'd like to live in

 

[magma]

It is a soulless, windswept failure imo

The best description I heard so far. It doesn't feel like a home at all (Docklands)

 

[big_head]

I'll take the terrace thanks.

 

[strongy1986]

I'll take the terrace thanks.

agreed

Why would you want an apartment in the CBD

It's annoying enough that I have to go there for work, can't wait to get out of there

Anyone that likes living there would most likely have a poor work life balance

 

[Kinnon Bell]

Anyone that likes living there would most likely have a poor work life balance

Or the opposite. I entertained buying an apartment in Docklands several times (I think I might be the only person who actually likes the place) and the main reason was I worked in the city and was sick of spending 3 hours of my day commuting to where I lived in the outer 'burbs. Whereas had I have lived in the city I would have gotten a lot more of my day back.

 

[magma]

agreed

Why would you want an apartment in the CBD

It's annoying enough that I have to go there for work, can't wait to get out of there

Anyone that likes living there would most likely have a poor work life balance

To me, it's the opposite. I cross the road to work, go home for lunch breaks, can work extra if I want to and am a stone's throw away from anything I can think of. My front yard is the parks scattered around the city and I get to jog anytime I want because its very unlikely to get stabbed in the major streets that doesn't sleep. We got police patrolling regularly and the council cleans the streets everyday. I don't have to worry about traffic because I tram anywhere that's too far to walk to (for free) within the CBD. If I want a holiday, I got an array of rental cars to choose from, even car share company are scattered throughout the CBD. I save a lot of money & time in this setup and the only sacrifice I can think of is the strata lifestyle and smaller floor space. CG is stagnant but this is my long term PPOR anyway.

In summary, my lifestyle has improved a lot when I moved to the city. But then again, it's a case to case basis. It all depends on the individual's preference and goal in life.

 

[magma]

Or the opposite. I entertained buying an apartment in Docklands several times (I think I might be the only person who actually likes the place) and the main reason was I worked in the city and was sick of spending 3 hours of my day commuting to where I lived in the outer 'burbs. Whereas had I have lived in the city I would have gotten a lot more of my day back.

Being in my mid 30's I couldn't agree more, every minute counts for me, time is gold! if I'm not spending it to earn money, I'd rather be resting or doing something entertaining and not behind the wheel getting stressed.

 

[Deltaberry]

Proves personal preference has little to do with whether something makes money.

 

[magma]

I wonder why Port Melbourne didn't make the cut.

There's some activity on the western part of it last time I talked to someone who has lived there for more than 10 years.