Melbourne market - Fitzroy

[brucory]

Hi there,

Im looking at a development in Fitzroy for my next IP. I like the area because of its proximity to Brunswick St, low vacancy rates, and reasonable rental return. The development I am looking at has large apartments compared to other new projects in the area which appeals to me.

Would be great to hear some views on this area from other investors - good or bad!

Cheers.

 

[Pins]

We just bought a place in Coburg and met the agent there today. He said the market in this neck of the woods is still running strong. They sold a single fronted averagely renovated two bedder in Brunswick for 840k!

If the numbers add up I'm sure you'll do well as there seems to be consistent demand and price growth in Fitzroy, Nth Fitzroy and Brunswick areas.

 

[MelbGal]

Hi there,

Im looking at a development in Fitzroy for my next IP. I like the area because of its proximity to Brunswick St, low vacancy rates, and reasonable rental return. The development I am looking at has large apartments compared to other new projects in the area which appeals to me.

Would be great to hear some views on this area from other investors - good or bad!

Cheers.

I have a large 3 bed apartment in the area, no vacancy and achieving just over $700 per week in rent. It's a great area and very desirable to both renters and owner occupiers. It's getting very pricey to buy in the area so if you can get something large and all other factors are good then go for it.

I've had no issues with my IP in this area.

 

[brucory]

I have a large 3 bed apartment in the area, no vacancy and achieving just over $700 per week in rent. It's a great area and very desirable to both renters and owner occupiers. It's getting very pricey to buy in the area so if you can get something large and all other factors are good then go for it.

I've had no issues with my IP in this area.

Thanks for this advice.

I have been looking for IP2 and IP3 for a while. Have generally been dissappointed with Melbourne's recent trend to build smallish apartments (e.g., 40 sqm for 1 bed and 55 for 2 bed), so when I came across this development (55sq m plus for one beds, was well impressed. I contacted two agents recently who said these 1 bed apartments in this area (Kerr ST) would get a minimum 430-450 per week rental return, with nil to minimal vacancy.

With depreciation etc, this looks good to me.

Just have to sign on the line...

 

[MelbGal]

Thanks for this advice.

I have been looking for IP2 and IP3 for a while. Have generally been dissappointed with Melbourne's recent trend to build smallish apartments (e.g., 40 sqm for 1 bed and 55 for 2 bed), so when I came across this development (55sq m plus for one beds, was well impressed. I contacted two agents recently who said these 1 bed apartments in this area (Kerr ST) would get a minimum 430-450 per week rental return, with nil to minimal vacancy.

With depreciation etc, this looks good to me.

Just have to sign on the line...

Do they have any 2+ beds available? Not sure if you will get much CG with a 1 bed. Alternatively have you considered something more unique like the warehouse developments?
Look at Collingwood too, the streets closer to the city end near Smith St. Some great aparments on Oxford St / Little Oxford St/ Cambridge St for example.
Or pick up a cheap run down terrace in the area if you can afford it. Avoid the area near Alexandra Parade where the East/West link may go.

 

[brucory]

There are 2 beds, but not good in comparison to 1 beds for returns etc...

Bit sceptical of Collingwood around those warehouses at the moment due some very large developments on the way. Average prices in that suburb for new or old(warehouse) are around 10k psm or just under... Bit high for me....

 

[dubjohnston]

They sold a single fronted averagely renovated two bedder in Brunswick for 840k! QUOTE]

Fruit, there must have been something special about it (ie, land & location) as a 3 bed on +300m2 went for <$600k on the weekend.

I think Coburg is a good buy. Especially within walking distance of the train line and Sydney rd.

 

[Pins]

They sold a single fronted averagely renovated two bedder in Brunswick for 840k! QUOTE]

Fruit, there must have been something special about it (ie, land & location) as a 3 bed on +300m2 went for <$600k on the weekend.

I think Coburg is a good buy. Especially within walking distance of the train line and Sydney rd.

Nice size but still. Quoted 600-650, went for 840!

http://www.domain.com.au/Property/For-Sale/House/VIC/Brunswick/?adid=2010544311

 

[dubjohnston]

It should never have been quoted at $600k. Thats a rort by the agent. I hate agents that knowingly do that and have dobbed in several. One I made an offer on higher than the high mark, wasn't accepted and then not changed online. Spoke to the agent about BS estimates and still did nothing.

The place above was well renovated with a nice courtyard plus the garage. Still reckon 840 was a lot for it but couldn't see a land size. Yield would be pretty low so either owner occupier or someone with enough cash to hold on a low yield and wait 5 years.

I reckon in 12 months Coburg will be a much higher talked about suburb on SS. Been looking there myself for an investment. Whats your opinion of the rental market there.

----

For the OP,

A flat in Fitzroy will always rent. $430 seems a lot to me but maybe thats the going rate these days (although who would pay that I wonder). I agree with you on avoiding the large scale Collingwood developments. I would also say this about Fitzroy. I personally love Collingwood but you have to know the area before you invest as there are so many contrasting pockets (ala Richmond). The commission flat areas of Collingwood are IMO worse than North Richmond due to the race of tenants. Because of this, it will take longer to gentrify.

I think Pins is spot on. Head a little futher north and you may get a better long term deal within your budget (im guessing your budget on a 1br new fitzroy flat). You will start with less yield but IMO more CG opportunities. If you are renting it, just ensure its a walk to both Sydney Rd and a train station. Sydney rd is awesome IMO all the way up to Bell St and has everything a renter would need. You get land too which in the long term appreciates whilst the building depreciates.


Below are a few inner city house bargains of late. They can still be found if you would rather that than a flat. I know Port Melbourne is south, but good location into the City and also the action. Has a slightly less arty and more professional crowd though. I personally prefer the vibe just north or east of the CBD than south.

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http://www.realestate.com.au/propert...orth-113768631

The Fitzroy one was in a good location

http://www.realestate.com.au/propert...lton-113481279

The Carlton one. Not ideal but renters market would be either young professions or uni students who can afford to live in Carlton.


http://www.realestate.com.au/proper...ww.realestate.com.au/propert...urne-114163771

Port Melbourne. Easily rentable for a nice yield. Plus CG potential on that price.

 

[Pins]

It should never have been quoted at $600k. Thats a rort by the agent. I hate agents that knowingly do that and have dobbed in several. One I made an offer on higher than the high mark, wasn't accepted and then not changed online. Spoke to the agent about BS estimates and still did nothing.

The place above was well renovated with a nice courtyard plus the garage. Still reckon 840 was a lot for it but couldn't see a land size. Yield would be pretty low so either owner occupier or someone with enough cash to hold on a low yield and wait 5 years.

I reckon in 12 months Coburg will be a much higher talked about suburb on SS. Been looking there myself for an investment. Whats your opinion of the rental market there.

--------

Yields still seem fairly low 3-4%, but I think these will improve (maybe not in the next 1-2 yrs) as people get priced out of Brunswick. Also it's been identified as a planning priority for medium density development. This should bring a younger, more lifestyle oriented crowd and hopefully a few more cafes etc

A friend bought in Brunswick in 2001 and there wasn't ONE cafe! Hard to imagine now.

 

[Pins]

Here is the link to the Terry Ryder article and webinar

http://bit.ly/16997Qw

 

[dubjohnston]

Pins. I think you hit the nail (pin) on the head when you said 'priced out of brunswick'. I mean, look at Thornbury prices now that everyone wants a peice of Northcote (the high street area). Preston for long term growth could be ok too.

Thats amazing re the one cafe in brunskwick. The council must be progressive to turn Brunswick and surrounds into the awesomeness of action it is today.

If they only got a freeway from the CBD straight up north, then far North would be even better and push up house prices further in (ie, south of Bell st) like prices on the east of CBD. Government should be looking at doing something more major with St Georges rd and turning it into a sort of freeway with heaps of off ramps, somehow ensuring it remains nice, clean, neat and pretty.

 

[Aaron_C]

I actually don't understand the fascination and prices in Thornbury / Northcote. I find those places pretty trashy, no matter how many hippies live there. Oh well.

 

[dubjohnston]

I think Thornbury is a bit pricey but the trent may continue outward. Plus, if council gets high st right, it could be a Sydney rd type of street (without as much old world character). But most of Northcote is close to rail and trams and the city. It has a good vibe and feel. High street south of separation st is vibrant although north of separation street needs a lot more tenants. Too many vacant shops. I think there are oodles more hippies in Fitzroy and Brunswick than Northcore and Thornbury.