Melbourne inner west house VS St Kilda/Elwood apt?

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Uncertain1

Great forum! I have been reading for hours, and discovering that I know less than nothing about RE in general. :confused: I would really love some input from those in the know about the Melbourne property market.

OH and I are looking to buy a PPOR in Melbourne. It will be the first time that either of us have been owner occupiers. We are sick of renting and can't stand the thought of living on other ppl's terms any longer. My question is, which do you think is a better investment over time, considering that we will probably live in the property for around 5 years and then either keep it as an IP, or sell up, depending on the market?

a) An established 2 x 1 house in Newport/Yarraville/Footscray area at around 500k
b) An established 1/2 br apartment in inner Melbourne (but not CBD/Southbank/Docklands - more East Melbourne/Elwood/Armadale type areas) for around the same price as option A
 
Hi Uncertain1,

I'm a buyer's advocate in Melbourne who specialises in helping home buyers or investors secure A-Grade properties based on historic growth patterns.

The answer to your question is pretty straight forward. Your established suburbs as aforementioned in option b) have a higher probability to perform consistently over less developed areas in the long term. Of course no one can read the future but trends do have a way of following patterns that have already been established.

When we buy for investors we look at certain criteria such as:

Apartment
Strata Titled
2-12km radius of CBD
>50sqm
$450-$650K
Under suburbs median value
blue chip areas
residential zone 1
boutique <18 units
Quiet street
No Gyms
No Lifts
No Pools
Proactive Strata Group (owners corp)
1+ Car park
Outdoor space (courtyard / balcony)
Established Property
Quality/Character Building: 1930's / 50's / 60's / 70's etc

This model has helped our clients achieve consistent double digit growth regardless of overall market conditions.

I'm happy to have a coffee with you or a phone call to explain more about how to go about selecting your property and what to look out for. No catches.
 
Jake @ infolio said:
The answer to your question is pretty straight forward. Your established suburbs as aforementioned in option b) have a higher probability to perform consistently over less developed areas in the long term. Of course no one can read the future but trends do have a way of following patterns that have already been established.
.
Click to expand...

Jake - I would argue it is NOT straightforward in this case - because it is (if only for 5 years) a PPOR.

A lot of personal preferences come in and your formula will not necessarily get them a place they want to live in.

The Y-man
 
when it comes to PPOR, it really depends on what you like.

to simplify the question - you like living in a house or apartment?

then look at the suburb.

But if you want to consider CG, then what Jake suggested may be right.
 
The Y-man said:
Jake - I would argue it is NOT straightforward in this case - because it is (if only for 5 years) a PPOR.

A lot of personal preferences come in and your formula will not necessarily get them a place they want to live in.

The Y-man
Click to expand...

Completely agree with your point Y-Man; and as economist Dambisa Moyo would say "let the inherent, internal battle between investor and owner ensue."

"which do you think is a better investment over time, considering that we will probably live in the property for around 5 years and then either keep it as an IP, or sell up, depending on the market?"

To clarify - option b) is more likely to perform better. However your emotions and lifestyle expectations will come into play if you're buying a home, and that will ultimately sway your decision making process; in most cases away from the best investment.
 
I'm sorry, Melbournian but could you please explain how are they average!?

For example the first link, 5 Lewisham, is a completely renovated, character filled Victorian property with a rich history. The quality of finish is almost unparalleled; with original leadlight windows, double height ceilings and top of the range modern finishings. It is literally a 1 minute walk from the High street shops and transport. It is one of the best streets in the area with multi-million dollar houses surrounding it. And not to mention we bought it for $25K under the listed price.

I'm honestly shocked that you don't think that they're anything but average... There were only 331 Auctions last week - 10% less than the same time last year and the least amount of volume of stock on the market for the entire year. These were some of the best properties within their respective price brackets that were being sold.

I challenge you to find something on the market at 500K (which was where 5 Lewisham was) that is of a better quality than those listed.
 
jackbak said:
Jake these dont fit in with your criteria you listed above, where they for investment purposes or PPOR?
Click to expand...

You're right jackbak. All of the above were PPOR that would be IP's later in life; hence the compromise. We're very confident that these properties will serve well in time :)

Correction: sorry 5 Lewisham is solely an investment, sorry.
PS - 5 lewisham ticks all the investment boxes
 
Jake @ infolio said:
I challenge you to find something on the market at 500K (which was where 5 Lewisham was) that is of a better quality than those listed.
Click to expand...

500K for a 1 bedroom is that correct? or how much did it go for?

in btw - there is no need to be so shocked - it's a forum and i'm not chasing any business.
 
Correct; challenge you to find a better 1 bed, 1 bath, with outdoor area, car park and storage for equal to or less than 500K.... actually to make it easier for you maybe 550K? Up for it?
 
Jake @ infolio said:
I'm sorry, Melbournian but could you please explain how are they average!?

...

I'm honestly shocked that you don't think that they're anything but average...

I challenge you to find something on the market at 500K (which was where 5 Lewisham was) that is of a better quality than those listed.
Click to expand...

Quality is only subject to a set of requirements - those properties are of quality to you because they meet your (customer's) requirements. We don't know what Melbournian's requirement's are - we can only guess he has different requirements.

I too would baulk at the Prahran one (I associate with high mantenance for some reason - it may be unfounded) and the Elwood one (hate the looks - if I hate it, I'm sure some others will to. It is also likely to date).

By the same token, you would likely baulk at this one
http://www.realestate.com.au/property-apartment-vic-prahran-110722033
due to the number of units in block etc, but for me, this is where my comfort zone is.

The Y-man
 
if there was a gamble it would have been more worthwhile but for argument sake as i'm no agent agressively chasing business. this is what i would buy

http://www.realestate.com.au/property-apartment-vic-south+melbourne-110605065

that's a 2 bedroom 1 bath balcony 1 carspace - 85sqm place

Don't you find it strange that there are so many sales on 30th June 2012 with various figures in lewisham Rd on 1 bedders? one would suspect there is something wrong with the building.

11 5 Lewisham Rd Vic 3181 $415,000
10 5 Lewisham Rd Vic 3181 $407,000
17 5 Lewisham Rd Vic 3181 $385,000
9 5 Lewisham Rd Vic 3181 $455,000

so assuming you bought the 1 bedder your client for 500K - isn't that a bit high?

and being so close to the st kilda cemetery - hmmmmmmmmm
 
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Jake @ infolio said:
You're right jackbak. All of the above were PPOR that would be IP's later in life; hence the compromise. We're very confident that these properties will serve well in time :)

Correction: sorry 5 Lewisham is solely an investment, sorry.
PS - 5 lewisham ticks all the investment boxes
Click to expand...

Now Im being picky but I can't help myself - doesn't Lewisham St have 19 units, which is above your maximum criteria of 18? ;)
 
Interesting choice. I know that building due to working close by. There are some good points like it's proximity to the city and trams.

On the other hand it's in between two very busy roads, in a pro development area, in a mixed use zone, there are 121 units most of which are identical, the bedrooms directly open to the living area, the access to the bathroom is through one of the bedrooms (bad if there are two tenants), the outdoor space is through one of the rooms, the hallway opens directly onto living space there are expensive body corp facilities in that building such as a tennis court, pool, gym. There is nothing unique about this property and it's in a completely over saturated market of new-ish high rises close to the CBD.


There's nothing really strange about those figures. What you're seeing is the new units that have been sold from a sub-division and new building built behind the original Victorian complex; done by the same developer that renovated the front block.

PS - Anot aggressively chasing business. I'm offering information on this site for free and letting people know that I'm open to phone calls to give advice.
 
YMan - that's not a bad find - I think it may be too small - but I'm literally calling Fiona now to ask about it for a client... THANK YOU
 
jackbak said:
Now Im being picky but I can't help myself - doesn't Lewisham St have 19 units, which is above your maximum criteria of 18? ;)
Click to expand...

Haha you're right jackbak there are 19 units on the title... but 2 of those are townhouses; so there are actually 17 apartments ;)

*just double checked
 
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