Thanks guys for helping a super rookie (pointing to myself)
recently a real estate agent that I know of for a while mentioned some units off the plan in Newstead.. There was one that's 525k for 2 bedrooms,2baths,1 carpark, which is about 100k cheaper than rest of 2bedders in the same building, as it's north west facing the city, and slightly (8-10m2) smaller than the others. My thought was it's one of the cheapest in the building so maybe easier to sell with a bit of capital gain? Or are they already so overly overpriced the first place this is not going to happen..?
Crazy IMHO, when a house you could get for a little more.
With the units, ask yourself:
1. How many units in the building? many units means fight for tenants, if 1 stupid person sells at a low price, your unit is directly affected on reval.
2. How much is strata?
3. No room to add value as its new.
4. supply vs demand?
I know others will disagree, but from my experience, the best growth with units is buying in smaller boutique buildings, limited supply, low strata, room to add some value.
When there is a boom in a capital city, let's say in Sydney right now, wouldn't price of the units go up quite significantly, given there is really no houses within the cbd?
NO, Its all about supply and demand. There tends to be a massive oversupply of units in the CBD being built so you need to be careful. Also, buying in a major complex with hundreds of units is never a good idea. I don't care what others may say. 9/10 times its simply a poorer investment choice.
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Thanks LeoT.
I did a bit of research for the questions you mentioned:
1. there's about 250 units in the apartment I am looking at (complete date about late 2016), and there are about 3 or 4 other buildings by other developers in the vicinity (complete dates also about late 2016, but probably a few months behind). but most of the rest of the 10 hectare land was purchased by the same developer. Around the gasworks area there are also other slightly or much older apartments, as well as 2 other buildings at the waterfront by the same developer (but these overlook the water and have a much higher sale price in the millions targeting at the higher end of people.)
2. body corporate differs between apartments, some are at just $60/week, the one I am looking at in particular is $90/week (first year b/c estimated to increase by 4% per annum)
3.true, but I guess you get some back from depreciation?
4. supply is as above, plus possibly a couple of other apartments that I may not know of in the next 3-5 years, and some more from the main developer in the next 10 years. in terms of demand, the population growth was about 207 residents per annum but forecast to increase by 700 new residents per annum (13500 by 2030) given the urban renewal program in the area and Also due to the newstead employment node just around the corner, big companies like Energex, Green Square, BOQ, HQ are bringing in 250,000m2 of proposed office space on top of 440,000m2 of current office space.
I understand having hundreds of new units in the same area is a worry of oversupply, what if this is countered by the increase in demand from the new residents as well as new employment opportunities - that you don't get from a suburb say 15km away?
... ok I admit, the more research I did, the more confused I have become!