I'm with the others. Stay clear of small apartments especially studios. There is a lot of apartment development going on in the area. Supply and demand. You will be competing against hundreds if not thousands of other investors and discounting to get tenants for sure. Right beside upper west side is an entire city block that includes the former Age Newspaper site. There is talk about over 2500 apartments going there. I'd advise do your research on what is available for rent in the area and any planned developments.
Studio investment at upper west side in melbourne
- Thread starter kandinsky
- Start date
Does it have a seperate bedroom? Carspace? Is it serviced? 45 sqm isnt ideal, but if it ticks the other boxes, I wouldnt discount it out of hand.
The best things to buy are not the $500k apartments, but the $2-3m shops around there. Imagine there are 2,500 apartments coming up at Upper West Side alone as you say. Assuming on average each apartment has 2 people, there's now an extra 5,000 customers.
There's also other developments around the corner, so there're probably another 10,000 customers living on that block now. That's around 10% of most decent sized metropolitan councils in Melbourne. If you're a cafe/convenience store, and each customer spends on average $10, you just need to pick up 700 customers of this 10,000 to achieve $50k of revenue per week.
With $50k of revenue per week, the tenant can start affording to pay rent of say $250k per annum. That's 10% yield on your $2-3m investment. And that obviously means the new market value of your bulding goes up too because it'll still sell at 5% yield.
There's also other developments around the corner, so there're probably another 10,000 customers living on that block now. That's around 10% of most decent sized metropolitan councils in Melbourne. If you're a cafe/convenience store, and each customer spends on average $10, you just need to pick up 700 customers of this 10,000 to achieve $50k of revenue per week.
With $50k of revenue per week, the tenant can start affording to pay rent of say $250k per annum. That's 10% yield on your $2-3m investment. And that obviously means the new market value of your bulding goes up too because it'll still sell at 5% yield.
Exactly. There's nothing wrong with investing in the CBD if you choose the right one. My friend just bought this stunning 1 bedder, must be like 80sqm and has like 4 metre high ceilings. I've never seen anything like it. I'm absolutely positive that in 10 years she'll have something very unique that stands out from all the little studios.
But I understand you're limited in terms of what you can buy since you're not a citizen, it's a real bumber.
This has been a very interesting and informative thread. Thanks to all contributors.
I am a new member and a little background of myself, I recently started a job as a property sales consultant.
My company work under a real estate license and has a division that deals with established properties, however what I mainly do is assisting prospective foreign investors in selecting an investment property from a pool of projects (almost 80% of the new developments in CBD and inner suburbs, excluding the exclusive developers, such as Central Equity and Brady).
To clarify the FIRB regulation, any foreigners can only buy new dwellings and the definiton is: A dwelling that has not been previously sold by the developer and has not been previously occupied (such as, by tenants) for more than 12 months.
My opinion is to never buy from the developer directly or their exclusive agents, because what happens most of the time is that they will be biased to push their own projects, and they have all the reasons to do so. My company also gets paid by the developers when we sell, however we are not affiliated to any of them, so there are no incentives for us to push the not-so-good projects and risk losing a long-term client.
We sell UWS, and it has been received very positively overseas. To share you some data, Madison (Tower 2 of UWS) has been sold 99% (literally only one unit left) and Midtown (Tower 3 of UWS) has been sold about 95%, leaving only 8 low level units available, and yet there would be tower 4 that would be the tallest among all.
I think the underlying reason to the success of UWS is its price point and scale of project. Tower 2 was priced at $6,272/m2 for a 75 m2 (2 x 2). It is cheap! Especially compared to other projects like Eporo, Fulton Lane, Vision (starting at $9000/m2 plus). The scale of UWS also means that it will boost retail activities in the area, and not turning it into another Southbank (good point about investing in retail property in the area).
So to the OP, certainly compared to the 36m2 studio, there are better buys even within UWS itself, if you could afford something that's more than $300k.
Now anyone please come in anytime to criticise my suggestion, but strictly for new dwellings and looking at capital growth prospects, I think a boutique apartment (less than 50 units or so) in a suburb within 10kms of the CBD would be a better choice, such as Carnegie or Hawthorn. They are both well-established suburbs with a close proximity to universities and shopping centre. Maybe even a townhouse near Highpoint Shopping Centre (have a look at Melbourne 2030 plan). Personally I think South Yarra and Prahran are expensive.
Sorry for the long post! I'm here to learn
.
I am a new member and a little background of myself, I recently started a job as a property sales consultant.
My company work under a real estate license and has a division that deals with established properties, however what I mainly do is assisting prospective foreign investors in selecting an investment property from a pool of projects (almost 80% of the new developments in CBD and inner suburbs, excluding the exclusive developers, such as Central Equity and Brady).
To clarify the FIRB regulation, any foreigners can only buy new dwellings and the definiton is: A dwelling that has not been previously sold by the developer and has not been previously occupied (such as, by tenants) for more than 12 months.
My opinion is to never buy from the developer directly or their exclusive agents, because what happens most of the time is that they will be biased to push their own projects, and they have all the reasons to do so. My company also gets paid by the developers when we sell, however we are not affiliated to any of them, so there are no incentives for us to push the not-so-good projects and risk losing a long-term client.
We sell UWS, and it has been received very positively overseas. To share you some data, Madison (Tower 2 of UWS) has been sold 99% (literally only one unit left) and Midtown (Tower 3 of UWS) has been sold about 95%, leaving only 8 low level units available, and yet there would be tower 4 that would be the tallest among all.
I think the underlying reason to the success of UWS is its price point and scale of project. Tower 2 was priced at $6,272/m2 for a 75 m2 (2 x 2). It is cheap! Especially compared to other projects like Eporo, Fulton Lane, Vision (starting at $9000/m2 plus). The scale of UWS also means that it will boost retail activities in the area, and not turning it into another Southbank (good point about investing in retail property in the area).
So to the OP, certainly compared to the 36m2 studio, there are better buys even within UWS itself, if you could afford something that's more than $300k.
Now anyone please come in anytime to criticise my suggestion, but strictly for new dwellings and looking at capital growth prospects, I think a boutique apartment (less than 50 units or so) in a suburb within 10kms of the CBD would be a better choice, such as Carnegie or Hawthorn. They are both well-established suburbs with a close proximity to universities and shopping centre. Maybe even a townhouse near Highpoint Shopping Centre (have a look at Melbourne 2030 plan). Personally I think South Yarra and Prahran are expensive.
Sorry for the long post! I'm here to learn
.Hello,
I bump into this forum while doing online research on investing in Melbourne CBD apartment. I find this thread very informative and understand apartment smaller than 50 sqm is a BIG NO NO.
My friend offered to sell me the OTP Upper West Side, Tower 2, above 20th Floor, 2 bed + 2 bath w/o carpark lot (68.49 sqm) for A$560. A$560 is the price he bought 2 years ago.
Additional price i need to pay include 1) pay $5k agent fee, 2) pay legal fee & 3) pay interest he earn on his initial 10% deposit.
Can anyone advise if this is a reasonable deal?
Thank you.
Thank you.
I bump into this forum while doing online research on investing in Melbourne CBD apartment. I find this thread very informative and understand apartment smaller than 50 sqm is a BIG NO NO.
My friend offered to sell me the OTP Upper West Side, Tower 2, above 20th Floor, 2 bed + 2 bath w/o carpark lot (68.49 sqm) for A$560. A$560 is the price he bought 2 years ago.
Additional price i need to pay include 1) pay $5k agent fee, 2) pay legal fee & 3) pay interest he earn on his initial 10% deposit.
Can anyone advise if this is a reasonable deal?
Thank you.
Thank you.
Like many overseas people, he was clearly diddled 5 years ago. If you pay what he is asking, you can be assured of miniscule capital gain over the next few years. If you are in a hurry to sell, you may even lose a bit.
Sure, it will give you a bearable rental yield. But its really not worth the bother, IMHO.
Definitely better value elsewhere.
By all measures, KL is close to its all-time high as far as prices go. There's also plenty of new stuff coming on market, which will stifle future capital gain potentiality.
SGD200,000 for a house (as opposed to a condo) might be OK, depending on the neighbourhood. KL is a pretty large place.
The commuter train makes outer KL good value. Even as far away as Seremban - ie. within commuting distance -there are a few good deals to be found. Someone I know bought a basic house there for AUD$30,000. But he had a Malaysian wife so it was possible - non Malaysian foreigners have a certain threshold below which they are not allowed to buy.
For an idea of real values in this area, 1712/200 Spencer Street, 1-bed 50m2 with car park http://www.realestate.com.au/property-apartment-vic-melbourne-114334551 went for $368K last Saturday according to the Age auction results. Allowing $50K for the car park, then that's $6300/m2, so 69m2 + park should be $485K (needless to say, I am not a valuer!). Of course UWS is newer (but the newness will wear off) and the views may or may not be better but for an IP I'd look elsewhere.
A buyer wouldn't usually pay the agent fee (it's a seller's cost) nor would I compensate for the lost interest. Additionally, there would be some stamp duty to be paid if construction has begun already.
Hi One World,
I plan to keep it for minimum 5 years or longer. Do you think Upper West Side can be rent out easily?
Thank you
Hi Tony3008,
I can only buy OTP because i am a foreigner. In your opinion, which OTP project do you think is a good investment? Is there any published data the public can access on actual property transaction price so that as a potential buyer have a better idea on asking price by seller.
Thank you
Hi Twinkle Star,
Thank you for your advise
My friend told me if i don't want to pay agent fee, then he can sell his apartment to someone else, and this agent fee is referring to the agent fee he paid 2 years ago.
He said no need to use housing agent if i buy from him because his apartment is still OTP, just contact the Australian lawyer office for this apartment to transfer name.
As i have never buy any property in Australia yet, i am not too sure about the procedures.
Hi Tony3008,
I can only buy OTP because i am a foreigner. In your opinion, which OTP project do you think is a good investment? Is there any published data the public can access on actual property transaction price so that as a potential buyer have a better idea on asking price by seller.
Thank you
As previously related, I bought two OTP flats from Central Equity - OTP because I was a Brit at the time, and CE because they did sales tours to London and I never investigated the alternatives. In both cases I sold after seven years and more or less got back what I paid having had holding costs greater than the income in the meantime. Lesson learned.
You don't have to buy OTP; you can also buy new, never occupied, and I would be looking for a flat in a small block or townhouse in an inner suburb. Possibly a case where engaging a BA would be worthwhile.
Hi Twinkle Star,
Thank you for your advise
My friend told me if i don't want to pay agent fee, then he can sell his apartment to someone else, and this agent fee is referring to the agent fee he paid 2 years ago.
He said no need to use housing agent if i buy from him because his apartment is still OTP, just contact the Australian lawyer office for this apartment to transfer name.
As i have never buy any property in Australia yet, i am not too sure about the procedures.
If you only plan to hold it for 5 years, I suggest not to buy UWS, as the amount of apartments being developed in that area is massive!
UWS is still generally cheaper than most apartments in Melbourne CBD though (comparing OTP to OTP).
For rentals, I like Brunswick and Collingwood, they're fully grown inner-suburbs and very favourite area for local renters.
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