Recently retired relatives of mine were thinking of purchasing a pad in the CBD so I checked out a few places over the last 8 weeks.
Now I have always thought that inner city anywhere was overpriced, volatile capital growth, high rental but also higher financing costs (different LVR's for CBD) and high strata.
I was very surprised about the prices, one hand they can seem excellent but on closer inspection they falter pretty quickly.
Here's what I have found:
2 bed 2 bath 1 car spot in new-ish (built from mid 90's) 24 hr concierge, pool gym CCTV on every level. 550-650k strata 6-12k p.a 86-110sqm
These are in buildings along Kent, Pitt and Sussex st. Walk to central , chinatown, QVB etc. Buildings in Northeren end or the Rocks start from 750k (generally)
On price alone this is either on par or cheap compared to a similarly appointed building within 5km of cbd - camperdown, alexandria, etc.
From the retiress POV a 550k place in the city and a 550k townhouse in the Hills district, is a great option.
The capital growth is poor though... How poor?
Well I got a friend to look at previous sales in RPdata. Obviously the last few years saw a large turnover of units for prices cheaper than today, but many developers held their units to contract supply in specific buildings so in that regard many buildings have not had firesale prices which drags every unit down a bit.
One building in Sussex st really stood out though, prices when brand new were 400-500k, they are now trading 12 years later for 600-625k.
During the last 12 years you would have paid around 8k P.A in strata fees. I don't know what they rented for previously but units are renting for 700p.w there at the moment.
so thats a max 225k gain minus close to 100k in strata fees in 12 years.
hmmmm.
After more research I think they should invest the cash and just rent for a few years. This also gives them the flexibility to say rent in Manly over the summer if they want.
I can still see why you'd buy in the city but I certainly wouldn't want to be relying on capital growth.
Now I have always thought that inner city anywhere was overpriced, volatile capital growth, high rental but also higher financing costs (different LVR's for CBD) and high strata.
I was very surprised about the prices, one hand they can seem excellent but on closer inspection they falter pretty quickly.
Here's what I have found:
2 bed 2 bath 1 car spot in new-ish (built from mid 90's) 24 hr concierge, pool gym CCTV on every level. 550-650k strata 6-12k p.a 86-110sqm
These are in buildings along Kent, Pitt and Sussex st. Walk to central , chinatown, QVB etc. Buildings in Northeren end or the Rocks start from 750k (generally)
On price alone this is either on par or cheap compared to a similarly appointed building within 5km of cbd - camperdown, alexandria, etc.
From the retiress POV a 550k place in the city and a 550k townhouse in the Hills district, is a great option.
The capital growth is poor though... How poor?
Well I got a friend to look at previous sales in RPdata. Obviously the last few years saw a large turnover of units for prices cheaper than today, but many developers held their units to contract supply in specific buildings so in that regard many buildings have not had firesale prices which drags every unit down a bit.
One building in Sussex st really stood out though, prices when brand new were 400-500k, they are now trading 12 years later for 600-625k.
During the last 12 years you would have paid around 8k P.A in strata fees. I don't know what they rented for previously but units are renting for 700p.w there at the moment.
so thats a max 225k gain minus close to 100k in strata fees in 12 years.
hmmmm.
After more research I think they should invest the cash and just rent for a few years. This also gives them the flexibility to say rent in Manly over the summer if they want.
I can still see why you'd buy in the city but I certainly wouldn't want to be relying on capital growth.
