South Yarra apartments

I am looking at some older style south yarra apartments, in blocks of 20 and below and between 45-50sqm for a 1 bedder. This is as an investment
My question is; does the huge influx of high rise apartments in this suburb make these older complexes less desirable? In one hand I can see potential renters want to stay in a brand new high rise with a swimming pool and so on.
On the other hand, these represent better value for money when renting out, and also are usually bigger in size
Thanks for the input
 
In my opinion there are a number of variables that could affect the prioritization of small old versus big flashy new; when the 'new' moves in to town. So, it is hard to speculate. That said, in a postcode like South Yarra, it will depend heavily on the privacy and noise factor (the more quiet and secluded/side-street versus main street location of the older dwelling, the more appealing to renters it'll likely be).

But at the end of the day, this is an investment for you so you ought to run the numbers on both and see which stacks up better for you (please included depreciation forecasts etc. In your sums as this will no doubt be better for the newer option). Last time I checked, vacancy rates in the area were under 1% which is pretty solid and makes it likely that either choice would be unlikely to have vacancy issues.

Good luck!
 
I would see if you can find something a bit bigger, closer to 60sqm if possible. This would be more appealing both to renters and if you want to sell (or refinance) in the future
 
Hi

Good morning,

I would be staying away from apartments in South Yarra or anything in the city at the moment.

There are so many apartments being built in near by suburbs and a oversupply of properties as well.
 
Old is Good

Agree with Cimbom, the size will need to be greater than 50sqm and with parking in order to be a better quality unit and more sought after than the new ones. Also, ready for rent, not something old and daggy that needs a new kitchen, just maybe paint and a tidy up.

The old style 2 bedder I bought a few months ago has increased in value because it's much larger than all those new ones and is in a great pocket of Sth Yarra surrounded by older style buildings. I also gave it a spruce up.

The much lower price of the 1 bedders compared to the 2 bedders make me think 1 bedders are good value for money atm .
 
Yep, definitely go for existing apartments, not brand new ones. Just do the reno yourself and save the huge mark-up that is put on new and shiny developments
 
Agree with Cimbom, the size will need to be greater than 50sqm and with parking in order to be a better quality unit and more sought after than the new ones. Also, ready for rent, not something old and daggy that needs a new kitchen, just maybe paint and a tidy up.

The old style 2 bedder I bought a few months ago has increased in value because it's much larger than all those new ones and is in a great pocket of Sth Yarra surrounded by older style buildings. I also gave it a spruce up.

The much lower price of the 1 bedders compared to the 2 bedders make me think 1 bedders are good value for money atm .

Most, if not all older style 1 bedders are between 40-50sqm, my minimum is 43sqm which I think is just big enough
 
I would personally see many opportunities that will present better capital growth prospects than Sth Yarra, further the yields are quite low around the 4% mark.

Definitely oversupply is a problem with vals not stacking up on many developments due to the ridiculous incentives off the plan (i.e commissions).

Even an older apartment 50-sqm+ will be above $8k psqm, and off course you are missing out on depreciation. As mentioned a high price psqm plus a low yield will work against you. If apartments are your go - head out a little more down the bay - lots of fantastic opportunities at what I feel is better value per square metre and more prospects of capital growth as there is no oversupply issue.

Again - research is key and may be off the plan if that suits however, something close to completion or completed will take away the uncertainties and provide more comfort for the average punter.

Hope that helps

Cheers, Ivan
 
I would not buy a 1 bedroom apartment anywhere that was smaller than the high 50s (sqm), preferably 60. If that's not possible, then 75-80sqm+ for a two bedder. I can't see there being long-term fundamentals for places much smaller than that unless we're talking about a place with absolutely amazing views or something.
 
I would not buy a 1 bedroom apartment anywhere that was smaller than the high 50s (sqm), preferably 60. If that's not possible, then 75-80sqm+ for a two bedder. I can't see there being long-term fundamentals for places much smaller than that unless we're talking about a place with absolutely amazing views or something.

I agree 50sqm is ideal as the lending capacity is much easier however I think most banks are becoming more lenient to properties at least 40sqm with a carapace on title. If I had thr capacity I would definitely go for a 2 bedder but I can really only look at 1 bedders. In South Yarra/prahran 45sqm doesn't seem like a bad size for a 1 bedder
 
There's far too many at that size. You really need a strong point of difference when buying in such an overbuilt area otherwise it's just not worth it. It's not for finance reasons but just for having something that will be a good long term asset.
 
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