How dare you compare an art deco with an apartment in UWS? What`s wrong with you?
Melbourne cbd growth
- Thread starter wll6568
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How dare you compare an art deco with an apartment in UWS? What`s wrong with you?
lol, well they are new. Some people get obsessed with that. One friend asked me "maybe you'll get lucky and they'll knock down that old Art Deco of yours and build a modern apartment."
Um...no...
He's still talking about art deco apartments. Not house with land in the CBD, and I wonder how many house with land you can find in Melbourne city!
And why are you comparing apples with oranges again? Comparing commercial with residential?
At first you compared keeping money in fixed deposit with buying an apartment in the CBD. You said money in fixed deposit gives better return??? Now you want to compare commercial with residential property???
my personal opinion is that CBD apartments have limited capital growth and has run it's course. you can only hope to make money on rentals if u can charge and find a tenant (corporate ones)
i personally have bought more than 10 central equity apartments so i know them quite well over the course of 13 years having bought, lived and sold them. i highly doubt 65sqm CE apartment is worth anything above 550K built in 1997 built mainly as there are better and newer deals. the only ones is 88 park st in south melbourne built ard 1997which i have owned and is worth around 550k for a 2 bedder around 88sq, which is 20sqm larger
personally i dislike art deco as well but that is just my personal taste
Thank you for your input . This should put the matter to rest about apartments in the cbd. There has been an 'oversupply since 1997' cause new ones are built every year for the forseeable future. If you are an owner occupier than it is lifestyle that is ok. not good for capital growth.
I believe Melbourne prices will follow Sydney. Sydney city and nearby suburbs's 2 bedrooms can range from $650,000 to $750,000. I have seen some Moore Park apartments at $700,000, a few years ago only asking for $590,000.
Even 1 bedroom apartments in Sydney are around $450,000 and above.
I lived in Pyrmont for 3 years in really low quality 2 bedroom apartments in a small lane, really small with tight rooms, small living rooms, and they are selling for $690,000.
Sydney's apartment went thru a few years of stagnant prices, probably around 2003 onwards, recently started to grow big time.
Even 1 bedroom apartments in Sydney are around $450,000 and above.
I lived in Pyrmont for 3 years in really low quality 2 bedroom apartments in a small lane, really small with tight rooms, small living rooms, and they are selling for $690,000.
Sydney's apartment went thru a few years of stagnant prices, probably around 2003 onwards, recently started to grow big time.
I agree melbourne will trend this way in the long term.
over the long term yes but the question of how long would it take to get there?
other methods would be to manufacturing growth as oppose to sit back and wait.
other methods would be to manufacturing growth as oppose to sit back and wait.
Sydney has a housing shortage which extends to apartments. Melbourne has an oversupply of apartments. Well documented and widely reported for many years in indepedent research reports, media and so forth.
I guess like many facets of investing, the answer in this thread is that it depends on the ability of the investor.
ALL my properties are in Melbourne CBD.
Why?
Easy to rent
High Rent
Cash Flow Positive.
Low capital growth I hear some say?
Well those that I purchased back in 2001 appreciated by around 50% by 2003. I sold all of them.
I came back to the market in 2007, acquired 5 properties. By 2010 they had appreciated by around 50%. Sold one off.
2013 came back to the market, bought two more, capital growth between 2010 to 2013 had been slightly negative. Rents have been pretty stagnant as well over the past 3 years. However the significant drop in interest rates made the last two purchases highly cash flow positive.
People investing in high rise cbd properties must understand that the market is more volatile than other suburbs.
However having said all this demand for rental has always been good, I have never ever experienced difficulty in renting out the apartments.
There are also ways to significantly increase rents such as
(a) renting out the car parks separately (car parks receive around $65 per week in rent)
(b) fully furnishing the apartments, and offering various rentals depending on the lease duration. I had one that was being offered for rent at $600 per week (no car park) on a 1year lease. Someone wanted only a two month lease, my agent offered $750 per week which was accepted. When the two month lease finished another tenant had been lined up for 6 months on $650.
During all this time the car park has been consistently rented out for $65 per week. The purchase price on the property back in 2007 was $320k (with all the furniture included, the seller had very nice furniture, so I bought on the condition I could keep all the furniture).
So I have done very well from buying and selling Melbourne CBD property, both from an income and capital growth perspective.
ALL my properties are in Melbourne CBD.
Why?
Easy to rent
High Rent
Cash Flow Positive.
Low capital growth I hear some say?
Well those that I purchased back in 2001 appreciated by around 50% by 2003. I sold all of them.
I came back to the market in 2007, acquired 5 properties. By 2010 they had appreciated by around 50%. Sold one off.
2013 came back to the market, bought two more, capital growth between 2010 to 2013 had been slightly negative. Rents have been pretty stagnant as well over the past 3 years. However the significant drop in interest rates made the last two purchases highly cash flow positive.
People investing in high rise cbd properties must understand that the market is more volatile than other suburbs.
However having said all this demand for rental has always been good, I have never ever experienced difficulty in renting out the apartments.
There are also ways to significantly increase rents such as
(a) renting out the car parks separately (car parks receive around $65 per week in rent)
(b) fully furnishing the apartments, and offering various rentals depending on the lease duration. I had one that was being offered for rent at $600 per week (no car park) on a 1year lease. Someone wanted only a two month lease, my agent offered $750 per week which was accepted. When the two month lease finished another tenant had been lined up for 6 months on $650.
During all this time the car park has been consistently rented out for $65 per week. The purchase price on the property back in 2007 was $320k (with all the furniture included, the seller had very nice furniture, so I bought on the condition I could keep all the furniture).
So I have done very well from buying and selling Melbourne CBD property, both from an income and capital growth perspective.
Hi Intrinsic,
Well done. But can I ask by selling off so often, don't you pay a lot of tax? Do you use trust structure?
Shows that it is incorrect for people to generalise and say Melbourne CBD is bad investment. I too believe Melbourne price will always be not far behind Sydney.
For those talking about Melbourne apartments such as UWS, actually UWS is in high demand when renting out because a lot of Asian people like to live there. I own an apartment there and it is easy to rent it out, no vacancies. Also, don't worry if vacancies do happen in Melbourne, because many UWS units were bought by rich Chinese, Malaysian, Singapore, Hong Kong people. These people can hold without any problem even if it is vacant.
Until today, there are a few owners who haven't collected their keycards and welcome pack from the counter, that is, they haven't actually come to inspect their apartments. They probably buy it to hold, only wanting to stay here when they come to Australia.
Also another plus for buying new apartments in Melbourne is that young people now would prefer to rent new apartments such as UWS. It's called "Lifestyle".
Well done. But can I ask by selling off so often, don't you pay a lot of tax? Do you use trust structure?
Shows that it is incorrect for people to generalise and say Melbourne CBD is bad investment. I too believe Melbourne price will always be not far behind Sydney.
For those talking about Melbourne apartments such as UWS, actually UWS is in high demand when renting out because a lot of Asian people like to live there. I own an apartment there and it is easy to rent it out, no vacancies. Also, don't worry if vacancies do happen in Melbourne, because many UWS units were bought by rich Chinese, Malaysian, Singapore, Hong Kong people. These people can hold without any problem even if it is vacant.
Until today, there are a few owners who haven't collected their keycards and welcome pack from the counter, that is, they haven't actually come to inspect their apartments. They probably buy it to hold, only wanting to stay here when they come to Australia.
Also another plus for buying new apartments in Melbourne is that young people now would prefer to rent new apartments such as UWS. It's called "Lifestyle".
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hey IV
an ychance you could put up rough figures of what you bought, just want to get a gauge of what price range you were dealing with, as you are one of very few to do well in CBD
Hey Intrinsic, generally how long it takes for u to lease out furnished apartments? I heard it could be long? Also, do you think it's better to do furnished or unfurnished, based on your experience.
And what about car park? Does it take long to lease out car park?
I wouldn't actively parade the fact I rent to short term tourists on a forum. If you do things inappropriately or illegally, there's lots of ways to make money.
That said, I'm a big fan of UWS. Because next time I'm raising the rent on my Latrobe St freeholds when the lease expires.
That said, I'm a big fan of UWS. Because next time I'm raising the rent on my Latrobe St freeholds when the lease expires.
Hi Aaron,Maybe the weather is a factor as well?...That aside though,imo i think there is more bang for your buck in the long term in melb.Comparables on distance wise/lifestlye versus syd,it's only a matter time in melb imo.
Cheers Spades.
2001:
Two bedroom with car park approximately 80sqm. Purchase price $215k sold for $290k two years later
One bedroom with carpark purchased for $180 sold for $260 several years later. Size approximately 55sqm
2007: all with car parks
Two bedroom, purchase price $310k size around 78sqm
Two bedroom, purchase price $320k size around 78sqm
Two bedroom, purchase price $370k size around 75sqm two levels in historical building
One bedroom purchase price $270k size around 74sqm
One bedroom + study purchase price $295k size around 68sqm two levels in historical building
2013: all with car parks
Two bedroom purchase price $520k size around 78sqm partially re-renovated
Two bedroom purchase price $510k size around 85sqm
Secret in my opinion to buying in the CBD:
(a) always buy with car park (car parks on new OFP developments now selling for $70k)
(b) always buy larger apartments: one bedroom at least 60sqm, two bedroom at least 75sqm (over time these larger apartments will become more valuable)
(c) Always buy around medium price
(d) buy when OFP selling price for new apartments of similar size is at least 25% more expensive than 'second hand' property.
By the way Deltaberry, not doing anything illegal. All leases (but one, that's on commercial terms) are residential leases. Nothing illegal about offering short term accommodation.
So I pay tax, nothing wrong with paying tax.
Those that sold shares prior to the GFC when share prices were significantly ahead of IV, would have been happy to pay a bit of tax, given the alternatives.
For myself I believe in absolute investing. When there are few viable alternatives and asset prices are high, I am happy to offload assets, pay tax, pay down debt and hold cash (even if that cash offers low interest rates)
Short term accom is a hot topic and if body corp found out they will have no qualms passing by laws clamping it down. Hence the idea of appropriateness.
Deltaberry,
Is it just me, or does it seem that you almost enjoy starting an argument with anyone who says "investing in Melbourne CBD is good"? Maybe you're trying hard to prove your point that outside the CBD is better.
First you had a bitter and sarcastic argument with Rodimus about Melb city apartment capital gains rate by insulting his intelligence and comparing it to fixed deposit returns(which Rodumus proved you incorrect), and then now you want to start another debate with Intrinsic Value about renting to short term tenants by assuming it is "illegal". I hope you are ok with others having a different opinion without needing to have a sharp go at them.
Renting to short term tenants is not " illegal" as you claimed, as long as you declare the rent and don't overcrowd the apartments to comply with maximum number of residents.
The only probable drawback of renting to short term people is that you or your agent have to do entry and exit inspections and condition reports more often, may may take some time and trouble in preparing documentation + additional leasing fee to agent.
Is it just me, or does it seem that you almost enjoy starting an argument with anyone who says "investing in Melbourne CBD is good"? Maybe you're trying hard to prove your point that outside the CBD is better.
First you had a bitter and sarcastic argument with Rodimus about Melb city apartment capital gains rate by insulting his intelligence and comparing it to fixed deposit returns(which Rodumus proved you incorrect), and then now you want to start another debate with Intrinsic Value about renting to short term tenants by assuming it is "illegal". I hope you are ok with others having a different opinion without needing to have a sharp go at them.
Renting to short term tenants is not " illegal" as you claimed, as long as you declare the rent and don't overcrowd the apartments to comply with maximum number of residents.
The only probable drawback of renting to short term people is that you or your agent have to do entry and exit inspections and condition reports more often, may may take some time and trouble in preparing documentation + additional leasing fee to agent.
