You've missed my entire point. You look at price first - this is the big mistake. What you need to look at is value through the quality of the property. How are you supposed to compare a Sydney apartment with a Melbourne CBD apartment? They aren't even in the same State!
Studio investment at upper west side in melbourne
- Thread starter kandinsky
- Start date
You've missed my entire point. You look at price first - this is the big mistake. What you need to look at is value through the quality of the property. How are you supposed to compare a Sydney apartment with a Melbourne CBD apartment? They aren't even in the same State!
it' ain't singapore mate or hong kong.
compare apples to apples rather than oranges
all these 36sqm studios that have sold for 10 years ago like in flinders st, swanston st have in fact decreased in sale price and many sold at a loss.
there are also too many of these type of apartments for sale.
for the sake of discussion, i do not understand why people would want to sell at a loss when rent is moving up. If they had bought the studios ten years ago, they would be sitting on at least 7-10% yield by now, so why would they sell at a loss? Correct me if i am wrong, but if rental goes up because rental demand is there, shouldn't the property prices rise in tandem with rental movement? This is how things work in my country, don't know about melbourne so hoping to learn something here.
No. Property prices are based on supply+demand. So many apartments (especially 1 bedders) going up for sale in the CBD - why would they grow in value?
the statistics of people moving into the inner city shows that it is rising and these apartments are built to cater to the influx of new inner city melbournians. There would come to a point when inner city would reach a saturation point and few apartments are left for sale (i.e. it has reached stabilisation). when people start spreading outwards from the inner city, and suburbs start selling at higher prices due to rising demand, inner city becomes more expensive, fueled by rising prices in the suburbs. Either that or people are speculating on the suburbs now causing prices to increase, making inner city more desirable, hence a spike in prices. This is just my theory, correct me if i am wrong.
Only tower 1 of UWS is completed and all towers of UWS are fully sold from what i know. majority of the buyers are australians. In UWS there are only 80 studio units.
You couldn't have included any more bad buzz words in one sentence even if you tried!!!!!!!!
Otp
Studio
38sqm
Rent guarantee
Furniture package
First born son give away
Otp
Studio
38sqm
Rent guarantee
Furniture package
First born son give away
So furniture package, stamp duty absorption n rental guarantee effectively reduces the actual price i pay for the unit doesnt it, assuming i am supposed to buy the furniture n pay stamp duty out of my pocket? Isnt that a good thing?
Actually i havent, just need to be proven beyond a reasonable doubt, not on a balance of probabilities, against buying uws. So far nobody has answered whether i am paying fair value for my unit.
Ok I'll come out of retirement. Did you even read what I or Melburnian even wrote?
No such thing in investing.
Yes, i did. You mentioned a big supply of such units in the market n demand is not there because Australians generally like larger units. Also banks don't lend much on such ptys. Melbournian mentioned about people selling at a loss (in the face of rising rentals) which is something I don't understand n have yet to get an answer. If a foreigner is to buy an inner city apartment with a budget of 300k, what then can anyone recommend? I have more faith in inner city ptys as opposed to the suburbs probably because of where I come from.
I've just commented on this in another thread, but I'll expand on the comments here as well.
There are so many apartments going up in the CBD and surrounding suburbs it isn't funny. I'll take your word that UWS stage 1 is sold out, because I don't know myself. Keep note that there are two other towers (I believe) to be built on this site (including the one being halfway up now). Add this to the four towers to go up on the old Age site opposite, plus I think there may be more going up on the corner of Spencer and La Trobe, and that could eventually make something like four thousand or more apartments in the space of one block. That is a hell of a saturation for an area which is arguably the quietest part of the CBD.
Don't always assume that because development is occurring that that it is because the demand is there. When these big developers see in the news and in demographic statistics that there is a shift of people moving to the inner city, they get greedy and build as much as they can, expecting to meet the current/short-term future demand. But in most cases, they always build way too much. Sure, once the developments die down, in five to ten years you may eventually begin to see the level of supply vs demand come down, but in the meantime you will suffer low or negative growth, and high vacancies. Happens everywhere.
This is why these developers offer these absurd rental guarantees. They wouldn't need to offer them if they presented a good investment from the outset, would they? They offer it because there's a high chance that without it, you wouldn't get anyone to let it. And, the developers often factor this into their asking price/profit margins anyway.
Getting back to your suggestion that most investors in UWS are Australian. I highly doubt this, because any Australian investor that has a reasonable knowledge in property investment wouldn't touch them with a barge pole, for the reasons I've listed above. Any who have I would suggest are rookies, are buying them as a live-in investment for their kids, or have received bad advice from agents or spruikers.
Ultimately the people who have commented here do have some experience in the local market. We're providing you advice because we want people to make the best investment choice
It's entirely up you whether you decide to go ahead or not, but please, do seriously consider what our thoughts are on this matter.
There are so many apartments going up in the CBD and surrounding suburbs it isn't funny. I'll take your word that UWS stage 1 is sold out, because I don't know myself. Keep note that there are two other towers (I believe) to be built on this site (including the one being halfway up now). Add this to the four towers to go up on the old Age site opposite, plus I think there may be more going up on the corner of Spencer and La Trobe, and that could eventually make something like four thousand or more apartments in the space of one block. That is a hell of a saturation for an area which is arguably the quietest part of the CBD.
Don't always assume that because development is occurring that that it is because the demand is there. When these big developers see in the news and in demographic statistics that there is a shift of people moving to the inner city, they get greedy and build as much as they can, expecting to meet the current/short-term future demand. But in most cases, they always build way too much. Sure, once the developments die down, in five to ten years you may eventually begin to see the level of supply vs demand come down, but in the meantime you will suffer low or negative growth, and high vacancies. Happens everywhere.
This is why these developers offer these absurd rental guarantees. They wouldn't need to offer them if they presented a good investment from the outset, would they? They offer it because there's a high chance that without it, you wouldn't get anyone to let it. And, the developers often factor this into their asking price/profit margins anyway.
Getting back to your suggestion that most investors in UWS are Australian. I highly doubt this, because any Australian investor that has a reasonable knowledge in property investment wouldn't touch them with a barge pole, for the reasons I've listed above. Any who have I would suggest are rookies, are buying them as a live-in investment for their kids, or have received bad advice from agents or spruikers.
Ultimately the people who have commented here do have some experience in the local market. We're providing you advice because we want people to make the best investment choice
It's entirely up you whether you decide to go ahead or not, but please, do seriously consider what our thoughts are on this matter.Where do I start? Firstly, that $300k can be leveraged with an 80% lend to $1m easily. $1m of property gives you SO much more choices - better quality properties that have a much better chance of going up. You need to understand that the real money in property investing is CAPITAL GROWTH - rental return is nice but it is secondary.
I understand your bias - you think the CBD is the epicentre of activity and therefore any boom must start there first. Good theory. However, the asset you hold is not a good one so it will not boom with the market. Other better properties proximate to the city will, however. This is why I buy close to the CBD, but not IN the CBD itself.
You should buy the prime "land" (ahem, air space) asap so my land (better located than your air space of course) keeps going up in value.
Quick. Put the deposit down.
That's right. Buy it. 6.5% yield.
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