St Kila East IP, growth not that great?

Hi all,

been using the search function, but thought i'd register and get stuck in :)

We're looking at an IP in St Kilda east, it's a 4/3/2 on Sycamore Ave.

Seems to be a 2007 build, not 100% sure, and may have gone for $700k at that time.

Quoting 770-840, which for 8 years, is not a great return i would think? (relative to how other areas have gone... ie imagine Malvern East 8 years ago)

However i'm getting wildly different rental estimates; bank spits out $650, agent around $700-$750 but appears a 4/2/2 thouse in the same street has been rented at $875 2-3 years ago (albeit, was brand new a couples years ago, but that's big rent on the same street for the same style of property)

With potential rent in the low $800's and potential buy price in the 7's, it would seem like a decent deal but growth since 2007 does not seem good at all and St Kilda East in general when checking 3-5 year figures seems to have under-performed (by a long shot)

Which seems a little odd considering it's close to the city and quite a lot of public transport options? (and lifestyle, carlisle, chapel etc)

Maybe it's just townhouses are stuck too much in between houses and apartments?
http://www.realestate.com.au/property-house-vic-st+kilda+east-119605111

We've been looking either side of melb, trying to find a bit of balance between yield and CG, i would have thought an inner suburb would have done well...

Anyone familiar with the area? sycamore/elm/oak/grosvenor? is it just one of "those spots" that people stay away from?

appreciate any help/insight (auction this sun)

Thanks!
 
Hi guybrush- is the property going to auction?
With a disclaimer that I'm only at this point a "looker" in the St Kilda East Market, (eg no purchases there) and only at apartments, are you confident you will get it for that price range?
From what I have seen in the past few months, agents are always horribly underquoting and it may just end up going for over a mill !
 
It's an auction, so I agree with the comments about. 840K as the highest figure in a price guide probably indicates the vendor wants at least around 950K. The rule used to be add 10% to the higher end price guide but that seems to have gone our the door in recent times. The guides are horribly deceptive.

If the house is worth a million, then the rental returns don't seem so outrageous.
 
I have been doing a lot of research in the st kilda east area. This area and these streets are more balaclava than st kilda east, its an area south of carlisle street. It is still a very nice area and well serviced by public transport with both balaclava and ripponlea stations close by.
My research has really only been on apartments and it seems apartments in these streets probably go $50-60K cheaper than what they would if they were in st kilda east itself, on streets such as alma rd and westbury street.
For what its worth and with dealing with those agents before I think that quote range is well short of what they are expecting. I would anticipate they are after something definitely in the 900s
 
Hi

Hi,

In a auction anything can happen!!!

But funny enough a mate mine bought a property a while back just of Chapel Street.

I advised him not to buy it for investment purposes but he did any way. 4 years later the home is on the market and passed through auction only two weeks ago.

There are to many apartments in the area!!!
 
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