Melbourne CBD or lease or sell?

[CjtheFisho]

Hey all,

First time poster here, my wife and I went with Parktrent (yes i was newbie) 3 years and 8 months ago, (11/09 mid 20's young and ignorant), we put a 10% deposit on AURA 534 Flinder St Melbourne 3000. It was suppose to settle in 2 years but it took this long to build. Settlement is mid August and by now the market is over supplied and there wouldn't be any more CG in the short-mid term.

I got a 2 roomer 1bath no car space, total 61 square metres for 457k. It is level 19 and it was 5k per level higher. I do feel for someone else who bought for 412k 1 roomer on level 10. which totals to if she bought on my level it would be exactly the same price and its a 1roomer...

So the question is, do I sell after settlement, hopefully get it out in time before the mass blocks come out into the market 2014-2015. Hopefully break even if i sell for 480k and anything over i will make some money on...

or hold on and hope long term wise, so all of this will be worth it in terms of rental return and CG.

all feedback will be much appreciated.

 

[Aaron_C]

Can you sell it on the secondary market prior to settlement?

 

[CjtheFisho]

advice

Can you sell it on the secondary market prior to settlement?

My solicitor says I can not, I would need to add something called nominees in the contract.

I am not quite sure what that means.

I have the funds for settlement but after that, should I hold or should I sell is the question.

Cut my losses and try to recover else where? If I break even I will be happy.

Long term CG possibilities?

 

[Melbournian]

If the vendor solicitors are both agreeable to put "and/or nominees" it should be fine, it just goes on as an admendment

Have done something like that before.

 

[CjtheFisho]

advice

even with nominees Parktrent is unable to advertise directly for adding a nominee to the contract as the developers will find out. Developers have rejected "On sale of contract". So my only option is to settle.

the projected market price by Parktrent is 480-490k

I break even at 481k.

I can try to sell it at the same time as well as lease it out and delay settlement if a tenant moves in.

So back to the original question, sell and make a small loss/break even or keep it long term wise and hope that it was all worth it?

With the over supply, i would guess at least 3 years before CG generally gets better...

do you all think cut my losses now and get my 20% back to go invest somewhere else and take this as a huge lesson or wait and see?

 

[Bigtone]

sell sell sell

if you get anywhere near break even that is a miracle and should be celebrated

don't let it put you off property, just learn from the mistakes and move on to something better

 

[Deltaberry]

Irresponsible planning policies have allowed the CBD to be flooded with developments that the mainstream market doesn't want. Sad state of nepotism at the regulatory level, although it has led to significant economic benefits for us as people bid up the land around us and exhaust the option value over bought land by building garbage on it (making the option value on our land triple+)

 

[tep846]

I was in a new apartment in Southbank yesterday. I was really surprised to see about 20 people came for an open inspection held by Park Trent.

After 1 month vacant, my bf's studio apartment on Queen St sized around 28-30m2 leased for $370/week. It was leased for $360 pw previously. Not bad, as he purchased it for $230k. But surely he can't expect capital gain.

If I were u, I'll sell if the unit does not have competitive advantage (low price or good view) and if it is too costly too maintain. But if the unit is good, low body corp, and can generate pretty good yield, i'll hold

 

[CjtheFisho]

Your bf did pretty well, positive gearing by the looks of it. With a deposit of 20%, borrowing $366,000 and if it rents out 80% of the time (42 weeks) at $500, after my depreciation rebate for the first year. It will cost me $130 p/a to hold. However Year 2 when the depreciation falls it will cost me another few hundred, if rent does not rise.

With a 20% deposit tied up, I guess there are better opportunities out there, thing is when compared to Sydney, a new apartment 1 bedder apartment 10-15km from the CBD is already $450,000.

I've read that older apartments for high yeilds are better 20-25km from the CBD, but will need to learn more about that,

anyone keen to share their ideas about units for 6-7% yields far west from Sydney CBD?

 

[gtellys]

Sorry OP but even 4 years ago, I don't think you could expect reasonable CG if you only intend to hold 3-5 years, especially in the CBD.

Do you have 'and/or nominee' written in your contract?

Which orientation is it facing? Is it possible for me to see the floorplan?

There are many foreign buyers who are looking for something immediate to settle, and honestly speaking the price you're paying isn't too bad IF the apartment is of good quality.

When there are massive supplies of properties in an area, only the good ones can stand a chance. Unfortunately, location-wise AURA isn't really high up on the list.

Hey all,

First time poster here, my wife and I went with Parktrent (yes i was newbie) 3 years and 8 months ago, (11/09 mid 20's young and ignorant), we put a 10% deposit on AURA 534 Flinder St Melbourne 3000. It was suppose to settle in 2 years but it took this long to build. Settlement is mid August and by now the market is over supplied and there wouldn't be any more CG in the short-mid term.

I got a 2 roomer 1bath no car space, total 61 square metres for 457k. It is level 19 and it was 5k per level higher. I do feel for someone else who bought for 412k 1 roomer on level 10. which totals to if she bought on my level it would be exactly the same price and its a 1roomer...

So the question is, do I sell after settlement, hopefully get it out in time before the mass blocks come out into the market 2014-2015. Hopefully break even if i sell for 480k and anything over i will make some money on...

or hold on and hope long term wise, so all of this will be worth it in terms of rental return and CG.

all feedback will be much appreciated.