St Kilda East - Unit outlook

[Trogdor]

Hi,

Upgrading PPOR currently - and looking at current holdings contemplating what to keep or sell.

Anyway one thing which struck my eye was the very poor performance of an IP in St Kilda East over the 6 years of ownership.

Bought 2007 -$415k
Current Val - $500 - 530k ("estimate" with supporting recent comparables)

At the top end of the range that's 4.2% p.a., or when you take costs out c. 2.9% p.a. (i.e. matching inflation).

Pretty disappointing in other words and not worth the effort.

My question is where do people see the outlook for this suburb in the next 2 - 3 years? Appears it hasn't moved for a while. Where to from here?

(For those who are interested, this was purchased for us by Metropole while we were living overseas at the time - to give an indication of the type of property - i.e. 1960's type small development of units - actually quite a nice building and street).

Cheers

 

[Aaron_C]

Maybe it's the demographics of the area. Not so popular with first home buyers?

 

[Trogdor]

Dunno - would have thought it very popular for FHB / younger crowd.

Oddly, got a bank val for $527k in 2011, so seems that 2007-11 was acceptable growth wise, and then absolutely nothing since then.

Wonder what the next 12 - 36 months will bring.

 

[TPI]

Dunno - would have thought it very popular for FHB / younger crowd.

Oddly, got a bank val for $527k in 2011, so seems that 2007-11 was acceptable growth wise, and then absolutely nothing since then.

Wonder what the next 12 - 36 months will bring.

I have a few Melbourne apartments/villas that didn't move that much in price from 2010 to 2012, but it was somewhat of a sideways market during this time, so not really unusual.

This year prices seem to be starting to move, particularly in the last 6 months, but not by a huge amount.

House prices are moving up faster, but I think eventually that will flow on to units prices too.

Can't comment on that particular suburb or your property, but at this point in the cycle it may be prudent to sit on your hands and watch for further price rises.

 

[Trogdor]

Thanks TPI.

Inner city house prices are definitely moving in the area we're looking at, that's for sure!!

You're right, it will have to trickle down at some point.

 

[Aaron_C]

Dunno - would have thought it very popular for FHB / younger crowd.

It doesn't have the same appeal that a Richmond/Fitzroy/South Yarra has...