I have held residential property investments in Nth Melb since 2001 and have read of the proposed developments in the area with interest.
North Melbourne (and surrounds) have been targeted by developers in recent times as the larger Hospitals (Royal Women's, Royal Melbourne and Royal Children's) are now all in the area. Francis Perry has fairly recently moved from Carlton to the North Melbourne precinct as well.
I think much of Melbourne has been targeted by developers and this, compounded by the government's back flip on migration numbers and ruling on student visas requiring them to return to their home countries after they have finished studying, as well as the high AUD has led to less rental demand for inner city areas than in previous years.
Still, if you can take a long term view in which our population is expected to increase, holding property 2kms from the city center isn't a bad thing!
I'm planning to hold onto mine as I have experienced significant capital growth, but am not actively looking to buy any more in this area.
If you are going to buy in the area and you can afford it, purchase a terrace house as the land value is significant and the type of property is limited in supply. This should result in rental demand and capital growth over the long term.
Failing that, I'd buy an older style two bedroom flat with a balcony and an undercover car park in a small block. Avoid the ground floor - these are harder to rent out. Be aware that many of the older style apartment blocks in North Melbourne do not have individual water meters, meaning that you cannot pass the cost of water onto your tenant. This problem can be overcome by increasing the rent slightly to cover water costs.
The blocks of flats around O'Shanassy Street are popular with tenants. Anywhere near Errol Street is good as well (eg Leveson Street), although I'd try to buy a terrace rather than a modern apartment in these areas.
Hotham Hill has been a popular residential area filled with terrace homes, and blocks of flats. Interestingly, I have watched properties in this area sit vacant for ages as tenants seem to prefer to be closer to properties near Errol street and the tram line which runs down Abbotsford Street. (Don't buy directly on Abbotsford Street though). I'd avoid any where near the large Commission flats (down the Western side of Hotham Hill).
All the best with your investing.
Regards Jason.
