Why do people hate/dislike Docklands ??
- Thread starter xQuIz8
- Start date
I think it just had a bit of a stigma because there were lots of people who bought apartments there off the plan a few years ago and didn't do terribly well. But those things pass.
Scott
Scott
It is a reflection of the bias against OTP purchasers (for apartments) on this site, which is based on experiences that have occurred in Southbank and Docklands (in Melbourne at least), and am sure elsewhere but I am not aware of them.
OTP purchasers are also sometimes associated with slick developers (eg Henry Kaye), slick marketing or are characterised as fluff over substance. People's memories remain fixated on these negatives and you would still hear the same commentary in the general public about the risk of OTP purchasers.
In addition, especially for apartments, they are still a relatively young concept in Australia. They only really started taking off in the 90's and as such, I also think it is a generational outlook/bias.
I tend to think as more experienced investors (as many are on this site), people have progressed through the vanilla style purchase and are focused more on adding value whether through renovation, sub-division etc. With an OTP purchase, the value has already been added for you. The old adage of land appreciates and building depreciate
The ironic thing is, there are people on this site who would have and are selling OTP to other prospective purchasers.
OTP purchasers are also sometimes associated with slick developers (eg Henry Kaye), slick marketing or are characterised as fluff over substance. People's memories remain fixated on these negatives and you would still hear the same commentary in the general public about the risk of OTP purchasers.
In addition, especially for apartments, they are still a relatively young concept in Australia. They only really started taking off in the 90's and as such, I also think it is a generational outlook/bias.
I tend to think as more experienced investors (as many are on this site), people have progressed through the vanilla style purchase and are focused more on adding value whether through renovation, sub-division etc. With an OTP purchase, the value has already been added for you. The old adage of land appreciates and building depreciate
The ironic thing is, there are people on this site who would have and are selling OTP to other prospective purchasers.
Docklands was of course originally a huge building site without adequate facilities. The apartments first came on line when there was a rental glut in Melbourne that this made letting more difficult. Many were sold with a lot of marketing hype above their actual value. Many resold for less than they bought them for.
Now Docklands is more established with better amenities, the rental market is tighter.
It is still difficult to be creative and add value which is why many still don't find it attractive as an investment.
Now Docklands is more established with better amenities, the rental market is tighter.
It is still difficult to be creative and add value which is why many still don't find it attractive as an investment.
You can't really treat the Docklands like it is a suburb. A suburb has many amenities, does it not?
To me, it's a piece of reclaimed wharf area where developers have put up quite a number of apartment towers and some sterile, soul-less shops and restaurants. Good planning has been thrown away for developers' money.
The apartments are what Melbournites would have called "flats" twenty years ago - only now they are "flats" that are twenty storeys up in the air. Poorly laid-out and subject to the external building rather than open egress.
People bought OTP in 2000 and and if they sold today, some eight years later; they might just cover their costs - if lucky. Someone is still footing the bill because they keep developing. I mean....Why buy a eight year old flat when they are putting up a brand new building tower next door?
I get the impression that a number of well-heeled Asians buy into docklands because that is the way you live in many Asian capital cities. I also get the impression that these apartments are not always occupied.
I see Southbank as a little different because of its proximity to the old South Melbourne and CBD.
All IMHO, of course.
And the rumor that Sam Newman has apparently bought a penthouse there is a good reason to stay away. I'm cynical enough to believe that developers would have PAID him to go there!
To me, it's a piece of reclaimed wharf area where developers have put up quite a number of apartment towers and some sterile, soul-less shops and restaurants. Good planning has been thrown away for developers' money.
The apartments are what Melbournites would have called "flats" twenty years ago - only now they are "flats" that are twenty storeys up in the air. Poorly laid-out and subject to the external building rather than open egress.
People bought OTP in 2000 and and if they sold today, some eight years later; they might just cover their costs - if lucky. Someone is still footing the bill because they keep developing. I mean....Why buy a eight year old flat when they are putting up a brand new building tower next door?
I get the impression that a number of well-heeled Asians buy into docklands because that is the way you live in many Asian capital cities. I also get the impression that these apartments are not always occupied.
I see Southbank as a little different because of its proximity to the old South Melbourne and CBD.
All IMHO, of course.
And the rumor that Sam Newman has apparently bought a penthouse there is a good reason to stay away. I'm cynical enough to believe that developers would have PAID him to go there!
Last edited:
I worked in Docklands for about 6 months and hated it there. Nothing close by, and to catch a tram into the CBD and back would take half your lunch break. Add to that it's always windy and IMO overpriced
Lived in Southbank for 18 months and prefer that area much more, though to be honest I dont think I would invest in either suburb
Lived in Southbank for 18 months and prefer that area much more, though to be honest I dont think I would invest in either suburb
When you start talking kids, pets, and backyards...... apartments do cut out a significant portion of the demographic from an investment perspective.
Then you look at the expensive end of the apartment market (eg Docklands) which cuts out the "I can't afford to live in a house" demographic, and you are left with the "paid well, no kids, no pets, need gym, need pool, need to be near cafe/nightlife" demographic.
Now, if the economy should take a major dive, which type of properties do you think empty out first?
Cheers,
The Y-man
Invested in Docklands
www.news.com.au/heraldsun/story/0,21985,24250450-5013926,00.html
He says the interest in apartments is particularly obvious in Docklands, "where growth has been quite spectacular and will continue for the next 10 years at least, possibly the next 15".
Gerd
www.news.com.au/heraldsun/story/0,21985,24250450-5013926,00.html
He says the interest in apartments is particularly obvious in Docklands, "where growth has been quite spectacular and will continue for the next 10 years at least, possibly the next 15".
Gerd
I am not sure I agree.
I understood that people'e attitudes are changing. Even out of the burbs there is often little or no focus on creating a garden for the kids. And people do live in Docklands with kids and animals. I would assume more likely to be very young children and teenagers but its certainly happening.
And I would have thought that for city workers and high petrol prices that living in the city would allow easily for one car per household and very little petrol usage.
Here's what (IMHO) is wrong with Docklands
1. Very low land content to building ratio. You see, land goes up in value, and buildings go down in value. But once you divide the land area of each building by the number of apartments, your share of the 'growing bit' is very low.
Most of what you're paying for is concrete, steel and fittings which depreciate, not appreciate.
2. Over supply. These things went up so fast that there was a glut of supply on the market. Even though that has balanced out now, a quick drive past will reveal more apartments being built all around the place.
The equation for a developer to build is quite simple. When they thing there's enough demand to put up another building and sell most of them, then they'll build it. And then there's plenty of supply around, which keeps capital growth low. And since it doesnt take a lot of land to put up another building, the developers will keep putting them up for a long time yet, meaning an unfavourable supply/demand equation for investors.
3. Too many investors buying there, which means prices will be closely linked to rentals people get, not to people who want to buy to live there.
The article referred to does not say growth in prices, but growth in population. And before people point out that a growth in population means growth in prices, see point 2 above.
1. Very low land content to building ratio. You see, land goes up in value, and buildings go down in value. But once you divide the land area of each building by the number of apartments, your share of the 'growing bit' is very low.
Most of what you're paying for is concrete, steel and fittings which depreciate, not appreciate.
2. Over supply. These things went up so fast that there was a glut of supply on the market. Even though that has balanced out now, a quick drive past will reveal more apartments being built all around the place.
The equation for a developer to build is quite simple. When they thing there's enough demand to put up another building and sell most of them, then they'll build it. And then there's plenty of supply around, which keeps capital growth low. And since it doesnt take a lot of land to put up another building, the developers will keep putting them up for a long time yet, meaning an unfavourable supply/demand equation for investors.
3. Too many investors buying there, which means prices will be closely linked to rentals people get, not to people who want to buy to live there.
The article referred to does not say growth in prices, but growth in population. And before people point out that a growth in population means growth in prices, see point 2 above.
Since Tubs have pointed out all the bad things about Docklands,
just thought I'd point out some things :
Every year, more and more people migrate to Melbourne. People are attracted to the quality of life here, stable goverment setup and better education system. Since the city is getting really densed now, people are bound to move out to suburbs close to the city such as St Kilda, Carlton and of course Docklands. (which has caused so much controversy thus far!)
Yes, I agree with Y-man when he said that its for the more well-off people. Of course, who would pay $550 p/w for a 2 bedroom if they're just earning $40k p.a ? So, having said that, its also the lifestyle factor that is so appealing to others. Especially if it has water views / phillip bay views/ city views. Therefore, when purchasing an apartment there, it wouldnt be such a wise idea to buy OTP units as you know really know what you're getting. ie whether you're going to be built out by anohter buildings, fittings & walls etc.
If its an established property with excellent views, say the Mirvac Developments, Dock 5, of even SOME on the New Quay area, it should be a good investment.
Why do I say this ? This brings us back to the scarcity factor. Yes, there are hundreds of apartment units going up in Docklands at the moment - namely Lacrosse and others. However, do you know that there are heaps of commercial buildings that are being developed there too ? The most well known one would be the ANZ building, but there are also buildings like Myer, The Gauge, Bendigo. Buildings like this are going to create thousands of jobs. And when there are so many jobs there, many ppl will tend to move nearer to the city. When that happens, Docklands will be more desirable then it currently is. Docklands will not realise its potential now but in a few years time, trust me, many will eat their words. By then, when you wanna get into the market, it'll be even more overpriced compared to now. The new Mirvac developments which will be up in 2010..starts from 850k for a 2bedroom. And they will be building another 5 on Yarra's Edge.
Also, I totally disagree with Normailson's comment about Docklands not having any amenities. It may be (quoting Normailson) "sterila and soul-less" a few years back, but have you seen Docklands now ?
They've got a couple of IGAs, load of restaurants(mainly posh ones) but there are many average ones up already too. Tramlines are all well in store.. A shopping centre at the waterfrontcity will also be ready by the end of this year. Docklands is just 1km from the CBD and southerncross station is just 5 minutes away. What more can you ask for ?
Having said the above, I do feel that not ALL apartments in Docklands are good for money. The ones with blocked out views/no views are really not worth buying. For Docklands, the main thing is the view factor. (water) If you're planning to buy an apartment in which you have to stick your head out too have a glimpse of the water/marina, then its no good. If one were to get an investment there, water views/city views + reknowned developer(therefore good fittings) is a definite must. An apartment done by a crappy developer with no views except the next door building / the highway will be a big nono.
All in all, Docklands is great area for the future but its too expensive and overpriced for most. Its impossible to convince everyone to see it your way..
just thought I'd point out some things :
Every year, more and more people migrate to Melbourne. People are attracted to the quality of life here, stable goverment setup and better education system. Since the city is getting really densed now, people are bound to move out to suburbs close to the city such as St Kilda, Carlton and of course Docklands. (which has caused so much controversy thus far!)
Yes, I agree with Y-man when he said that its for the more well-off people. Of course, who would pay $550 p/w for a 2 bedroom if they're just earning $40k p.a ? So, having said that, its also the lifestyle factor that is so appealing to others. Especially if it has water views / phillip bay views/ city views. Therefore, when purchasing an apartment there, it wouldnt be such a wise idea to buy OTP units as you know really know what you're getting. ie whether you're going to be built out by anohter buildings, fittings & walls etc.
If its an established property with excellent views, say the Mirvac Developments, Dock 5, of even SOME on the New Quay area, it should be a good investment.
Why do I say this ? This brings us back to the scarcity factor. Yes, there are hundreds of apartment units going up in Docklands at the moment - namely Lacrosse and others. However, do you know that there are heaps of commercial buildings that are being developed there too ? The most well known one would be the ANZ building, but there are also buildings like Myer, The Gauge, Bendigo. Buildings like this are going to create thousands of jobs. And when there are so many jobs there, many ppl will tend to move nearer to the city. When that happens, Docklands will be more desirable then it currently is. Docklands will not realise its potential now but in a few years time, trust me, many will eat their words. By then, when you wanna get into the market, it'll be even more overpriced compared to now. The new Mirvac developments which will be up in 2010..starts from 850k for a 2bedroom. And they will be building another 5 on Yarra's Edge.
Also, I totally disagree with Normailson's comment about Docklands not having any amenities. It may be (quoting Normailson) "sterila and soul-less" a few years back, but have you seen Docklands now ?
They've got a couple of IGAs, load of restaurants(mainly posh ones) but there are many average ones up already too. Tramlines are all well in store.. A shopping centre at the waterfrontcity will also be ready by the end of this year. Docklands is just 1km from the CBD and southerncross station is just 5 minutes away. What more can you ask for ?
Having said the above, I do feel that not ALL apartments in Docklands are good for money. The ones with blocked out views/no views are really not worth buying. For Docklands, the main thing is the view factor. (water) If you're planning to buy an apartment in which you have to stick your head out too have a glimpse of the water/marina, then its no good. If one were to get an investment there, water views/city views + reknowned developer(therefore good fittings) is a definite must. An apartment done by a crappy developer with no views except the next door building / the highway will be a big nono.
All in all, Docklands is great area for the future but its too expensive and overpriced for most. Its impossible to convince everyone to see it your way..
Its also bloody windy.....
Working here, there isn't a day you aren't swept away by the very stiff breeze. Maybe better in summer when the northerly's come through. Or maybe you are just blown in the other direction
The restaurants might be there in Docklands.
But man they are gross.
That supposedly great indian one Bhoj is a joke.
Livebait is a seafood restaurant that wants to charge 10% surcharge for weekends and serves fish that is not fresh and stinks!
Have you been there in the weekday? It is dead. I was the only client in Kobe Jones.
But man they are gross.
That supposedly great indian one Bhoj is a joke.
Livebait is a seafood restaurant that wants to charge 10% surcharge for weekends and serves fish that is not fresh and stinks!
Have you been there in the weekday? It is dead. I was the only client in Kobe Jones.
Oh buzz you won't believe it.. There were more staff in there than customers.
One behind the bar, one to take my order and serve. And a few more behind in the kitchen. I even had the stupidity to say "can you make sure i have a nice table" when i reserved the table.
One behind the bar, one to take my order and serve. And a few more behind in the kitchen. I even had the stupidity to say "can you make sure i have a nice table" when i reserved the table.
Sure thing.. i'm sure i won't be eating my words.
I have heard great things about Kobe Jones so i was slightly disappointed. Nobu i have not tried but it didn't rate that well in good food guide.
I might add that i'm not against living in apartments. I loved living in the city and did so for almost 2 years and i was on the Spring Street end.
I have heard great things about Kobe Jones so i was slightly disappointed. Nobu i have not tried but it didn't rate that well in good food guide.
I might add that i'm not against living in apartments. I loved living in the city and did so for almost 2 years and i was on the Spring Street end.
Hey, I coined the term souless and sterile for docklands over 3 years ago. Get your own adjectives!
http://www.theage.com.au/victoria/l...nds-tenant-ready-to-leave-20110927-1kvgz.html
