Off the Plan in St Kilda

Hi I am new to this forum and looking at buying my first IP. What do you all think about off the plan in St Kilda I have seen the Maxx apartments (cnr alma and st kilda rd) which I believe remaining 2 Bedders are around $786k upwards I have no idea about size but seems very expensive.. Im waiting on more info for the Halo Apartments on Fiztroy St opposite the albert park ovals which could have potential depending on price of course. Im definitely after a 2 bedder with parking of course which would be a must in this area. I believe St Kilda will still have very low occupancy rates in the future and decent rental returns due proximity to cbd public transport parks cafes bars and the bay. Im looking at going up to 650k at the most. Thanks
 
That seems really damn expensive 786K for a 2 bedder....

you could buy a 3 bedroom 2 bathroom 3 carpark with 100sqm balcony on whiteman st, southbank with that kind of money
 
Yeah 786 is way more than I want to spend I know that size and views would come into pricing but what would be a reasonable price for a 2 bedder 1 bath with parking for St Kilda any ideas? Any thoughts on future capital growth?
 
Ok have some more info on halo. Looking at a 2 beddder 1 bath 1 carpark 62 internal 8 balcony for around 545k with some views over fitzroy St north facing low body Corp around $2000 per year completion late 2012 any thoughts ??
 
62 sqm is pretty small..fro a 2 bedroom.
you can get 83sqm and above in CBD for the ard 530K if you look carefully give or take the stamp duty 23K so it comes to 555K as oppose to 545K

then again it does come down to personal preference and your finances.
 
Hi yes I agree 62internal and 8 external is small but it will be brand new and in a better location than in the cbd fitzroy St St kilda in my opinion is a much better place to live for a young professional than actually in the cbd. I suppose the potential capital growth over the next two years is important. I know most on this forum are are against otp but in my case I'm not in a position to buy existing right now but will be soon after some savings so otp is looking attractive. Stamp duty savings and hopefully no mortgage insurance on settlement if I've saved enough. Anyone else with advice/ suggestions on this one?
 
I'm not trying to be the sales agent here but 545 is not that excessive for a brand new apartment in that location at today's prices in my opinion so why wouldn't there be some capital growth?
 
I'm not trying to be the sales agent here but 545 is not that excessive for a brand new apartment in that location at today's prices in my opinion so why wouldn't there be some capital growth?

Because of this bit....

... you have paid for it in the price.

You pay a profit to the developer, builder, etc on top of higher selling agent fees (to push the product). Therefore there can be an inbuilt "lag" to market prices.

Cheers,

The Y-man
 
So what you are saying is that it is overpriced in today's market? You maybe right but it can't be overpriced by much. Tell me where you can find something simlilar in that location new for that price? There maybe other apartments around but I believe the location on this one is excellent. Opposite the ovals on fitzroy St. I realize off the plan is a risk but there would have to still be some success stories out there especially with a reputable developer which I believe this project has.
 
One of the best methods of knowing the value is to get a professional valuer to look at the property. You could do this via your bank/mortgage broker as part of a loan pre-approval application. Don't forget when a lender values the property you can expect them to be conservative. Maybe the cost is from $240 up to around $500 for the valuation, but its better to spend and know than to go several years with no CG.
 
Hi yes I agree 62internal and 8 external is small but it will be brand new and in a better location than in the cbd fitzroy St St kilda in my opinion is a much better place to live for a young professional than actually in the cbd. I suppose the potential capital growth over the next two years is important. I know most on this forum are are against otp but in my case I'm not in a position to buy existing right now but will be soon after some savings so otp is looking attractive. Stamp duty savings and hopefully no mortgage insurance on settlement if I've saved enough. Anyone else with advice/ suggestions on this one?

not sure abt fitzroy - i know other suburbs like south melb, southbank, carlton you can still find for that price range. then again you have already stated your financial position and your stance . so it's down to timing and preference.

Capital growth - might be a bit hard for 62sqm coz . the developers just use a standard stuff for the fixtures.. nothing over the top. anything to maximize their margin. How about waiting? maybe prices take a dip etc
 
nothing wrong with paying mortgage insurance, its a great thing, saving on stamp duty is false economy in most cases. Why not just buy a old art deco for $550k and get in now on a higher LVR.

IMO for what it is worth too many investors complicate things and worry too much about getting the best interest rate, saving stamp duty, depreciation, rental return, avoiding LMI, all just cream but the real Cake is the capital growth, should be the main focus by far.... better get off the soap box now!
 
I currently own 3 flats in St kilda currently and have owned 6 at one stage...yeah, yeah shouldnt have sold :(
As far as tennants go, I have had maybe 4 weeks in total over 6 yrs vacant for my properties as I (and many in Melbourne) rate St kilda one of the best suburbs to rent for youngish punters. They (renters) line up like they're are waiting at a sausage sizzle.
Off the plan, as other have said you will pay for in the price, the stamp etc but I have purchased off the plan their in 99 for a big sum 390k for a 2br primo flat and sold out for a reasonble profit, not as much as if I had hung on or purchased exiting built stock.
btw that 2br flat would be worth 1m+ now
 
Hi Raygun,

I'm new to this forum, but I've been advised buying new & especially off the plan is generally not as financially good as buying an older property.

I've been told this is because you can value-add to an older property whereas there's no scope to improve a new one (ie reno's extensions, facelifts).

Also, as others have already said, you're paying a premium price to the developer etc...don't believe what they're saying about a bargain!

Also, there are a lot of overheads (gym, lift, carpark hoists) in new apartment buildings...higher body corps etc.

Also, older buildings seem to appreciate (on the whole) faster than new ones. (Please feel free to correct me here as I'm no specialist by any means, just what I have read).

Also, newer apartments are attractive to renters, but quickly lose their appeal once an even newer block comes on the market. Then you're faced with competing with the other owners in your block for tenants...not good if it's a large block ie over 30 apartments.

I think you'd be better of buying an older property for that amount. It will have some scarcity value to it as it's not going to be exactly the same as 20 others in your block.

St Kilda east I think is fantastic - great growth, no problem finding tenants, quite trndy for a while now, but also look at elwood (similar feel & prices & also near the beach) & elsternwick..both a bit more laid back than St Kilda east, but same leafy feel to suburb, close to great shops & beach!

Probably around $430 for a decent 1BR with courtyard & OSCP in smallish block (one went in Mitford st last week & a friend attended. EPR was 330K - 360K! Furious bidding from several bidders). Was approx 60plus square metres not incl the courtyard.

PS 1 & 2BR's are getting around the same rental returns at the mome.

best of luck, very exciting time for you! Let us all know how you go!
 
Hi everyone thanks for the replies still thinking it all through. Pretty sold on these apartments at the moment. 161 fitzroy St kilda hard location to beat understand the risks. I don't have enough cash to buy existing right now wish I did. I see this as a good way to save more in the meantime. I believe there will be plenty of growth left yet in the market purely from a supply and demand point of view check the population growth figures! Staggering.. I agree with most here off the plan is risky but the market us growing fast St kilda is a great rental location and sitting back and doing nothing is not an option for me prices are not going to fall with population growth a 2.2%
 
To the y man I was just trying to state my logic for purchasing in that area with my comment in regards to low occupancy rates. No need to be sarcastic
 
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