Would buying in Carlton VIC still be a good idea?

I'm looking at buying a 2 bedroom 1 bathroom apartment in Carlton VIC at approximately AUD470k, and I'm looking to rent it out in the short term and owner occupy it in approx 10 years. The size of the apartment is rather smallish - approx. 60 sq metres. Is this a reasonable price to pay :confused:? I'm aiming for long term capital appreciation, but will settle for short term negative cash flows in view of future appreciations.
 
I'm looking at buying a 2 bedroom 1 bathroom apartment in Carlton VIC at approximately AUD470k, and I'm looking to rent it out in the short term and owner occupy it in approx 10 years. The size of the apartment is rather smallish - approx. 60 sq metres. Is this a reasonable price to pay :confused:? I'm aiming for long term capital appreciation, but will settle for short term negative cash flows in view of future appreciations.
Hey Chrissy,

You would need to provide more information on the type of apartment. For example, is it catered towards student accommodation, is it boutique in nature, is there scarcity value (i.e. 1 of only 6), balconies, orientation, noise, quality of interior finishes, potential rent and body corp fees etc...

However, what I can comment on is the potential for long term capital appreciation and I believe there is. Firstly, the majority of the population wants to live inner city. This is unequivocal and will never change. Secondly, as people are priced out of houses and larger 'floor area' dwelling's such as penthouses, house sized apartments etc...they must resort to apartment sizes such as the one you just mentioned. That is the demand equation. Thirdly, Carlton is an awesome area...definitely a suburb many people want to live in, so the demand of suburb is there. Lastly (and I use lastly very loosen as I am sure there are other factors), the lifestyle is awesome in Carlton...close to bustling Lygon St, walkable to the CBD, parks, excellent amenities, uni. That is the Generation Y equation.

Good luck
 
I'm looking at buying a 2 bedroom 1 bathroom apartment in Carlton VIC at approximately AUD470k, and I'm looking to rent it out in the short term and owner occupy it in approx 10 years. The size of the apartment is rather smallish - approx. 60 sq metres. Is this a reasonable price to pay :confused:? I'm aiming for long term capital appreciation, but will settle for short term negative cash flows in view of future appreciations.
60sqm for 470K is a bit too expensive i would think. Student apartment size i suppose. i think it should be around 70sqm for a decent 2 bed. there're one bedders in inner city around 70sqm if you look around for less than 410K

It really depends on your objectives. - If you're on high income and need negative gearing and depreciation (new apartments) then it would be an option. But if you're looking at capital appreciation - then you might as well purchase elsewhere.
 
I'm actually an overseas investor, buying it as a hedge against future AUD appreciations against my currency as well as property inflation in Australia. Intend for my daughter to study in Australia, but looking at soaring prices of houses in Melb, decided not to wait til she hits the uni years before buying in :D We'll worry about what to do with the unit if she has other plans in the future!

The unit we're looking at is Viva Carlton, and yes, I believe that most of the tenants would be students in Melb Uni given it's close proximity to the uni.
I can't buy second hand properties as we don't have PR, and don't intend to get it in the near future.

Incidentally, we used to have a unit around the same area in Carlton...oh, 10 years ago (yeah, long time ago!), which was double the size and half the price :mad:Just hesitating a little cause we're a little bitter that prices have gone up so much, but we do like the area...and wanted to see if everybody here thinks it's a fair price to pay...
 
Aren't you able to apply to the FIRB to get the foreign investor approval?
I saw Viva Carlton. very small however if you want depreciation and negative gearing to offset that would be good.

I'm actually an overseas investor, buying it as a hedge against future AUD appreciations against my currency as well as property inflation in Australia. Intend for my daughter to study in Australia, but looking at soaring prices of houses in Melb, decided not to wait til she hits the uni years before buying in :D We'll worry about what to do with the unit if she has other plans in the future!

The unit we're looking at is Viva Carlton, and yes, I believe that most of the tenants would be students in Melb Uni given it's close proximity to the uni.
I can't buy second hand properties as we don't have PR, and don't intend to get it in the near future.

Incidentally, we used to have a unit around the same area in Carlton...oh, 10 years ago (yeah, long time ago!), which was double the size and half the price :mad:Just hesitating a little cause we're a little bitter that prices have gone up so much, but we do like the area...and wanted to see if everybody here thinks it's a fair price to pay...
 
Carlton is an excellent place to live. Your daughter would love it.

You've taken me back just thinking about it, the trams, the city, Lygon Street. :eek:

I like they way they market them as 2 bedroom when really it sounds more like 1 bed + study. ie. do the 2nd bedroom have a window or a wardrobe? My guess would be no as that would make the living space smaller. Even so, you could squash a flatmate in I guess and that would be cosy.

Seems like you just started the research, you'll get your answer if you keep asking.

Good work on being so forward thinking for your daughter by the way, clever work! :)
 
I can't buy second hand properties as we don't have PR, and don't intend to get it in the near future.
..
Hi Chrissy,

I thought rules changed recently to allow foreign investors to buy any type of residential property - whether it is new or second hand?

Does anyone know if this is the case?

Regards Jason.
 
70% of those in Carlton are renters - check out the demographics and suburb profiles on www.realestate.com.au

There is issues with this though be aware that you may just be buying another faceless unit with no disctinctive features in a large block - ie nothing setting it apart. So if the FIRB does limit you with new properties only - then try to get a unit that is different to the rest: ie higher up, outside wall, views etc etc.

Remember when it comes to financing or selling or renting for that matter in large complexes you are limited by what the last person accepted in price or is currently asking in rent. So if times are tough and they are dropping prices you will be effected by that.

However as RE is a long term investment, in my mind, and you are planning for the long term then you will obviously get the growth and the rental demand that the area experiences overall in the next 10 years.

Hope this helps

Jane

PS I have 2 houses in Carlton, I love the area.
 
Hi Chrissy,

I thought rules changed recently to allow foreign investors to buy any type of residential property - whether it is new or second hand?

Does anyone know if this is the case?

Regards Jason.
See http://assistant.treasurer.gov.au/DisplayDocs.aspx?doc=pressreleases/2008/107.htm&pageID=003&min=ceb&Year=&DocType= and http://www.firb.gov.au/content/faq.asp#real_estate. The key changes are that developers of new homes can now sell more than 50% to non-Australian buyers and temporary visa holders (note definition) are now less restricted in what they can do.
 
Hi Chrissy,

I thought rules changed recently to allow foreign investors to buy any type of residential property - whether it is new or second hand?

Does anyone know if this is the case?

Regards Jason.
FIRB approval is no longer needed for residential property. It's really just to make sure our coal, iron ore, red earth, uranium mines don't get bought up by foreign sovereign wealth funds.
 
FIRB approval is no longer needed for residential property. It's really just to make sure our coal, iron ore, red earth, uranium mines don't get bought up by foreign sovereign wealth funds.
Check out the ref I gave above http://www.firb.gov.au/content/real_estate/residential/developed.asp

"Second–Hand (Established) Dwellings

This category includes all residential dwellings which are not new dwellings (that is, they have been previously owned and/or they have been occupied for more than 12 months).

Acquisitions by individual(s)

Foreign persons are prohibited from acquiring established dwellings for investment purposes (that is, they cannot be purchased to be used as a rental or holiday property), irrespective of whether they are temporary residents in Australia or not.

Foreign persons who are temporary residents in Australia do not require approval to acquire a second-hand dwelling as their principal place of residence. ...."
 
The loophole is they are buying as their principles then. Since they normally have 4-5 people in a family, they can easily buy 4-5 mansions in leafy suburbs, courtesy of the fact most of them pay in suitcases of cash anyway so don't really understand the concept of positive/negative gearing or see the differences between the two.
 
I'm looking at buying a 2 bedroom 1 bathroom apartment in Carlton VIC at approximately AUD470k, and I'm looking to rent it out in the short term and owner occupy it in approx 10 years. The size of the apartment is rather smallish - approx. 60 sq metres. Is this a reasonable price to pay :confused:? I'm aiming for long term capital appreciation, but will settle for short term negative cash flows in view of future appreciations.
Viva is located beside the gov building and close to cementary...is this going to affect the price in the future?
 
Viva is located beside the gov building and close to cementary...is this going to affect the price in the future?
Not if it's not affecting the price now. What will affect the price in future is that student accom is probably not the best bet for CG. Add in the number of apartments in the block (bigger is not better) and an ageing building.
 
Not if it's not affecting the price now. What will affect the price in future is that student accom is probably not the best bet for CG. Add in the number of apartments in the block (bigger is not better) and an ageing building.
Thanks for your reply. There is another similar apartment. The Hiigh Apartment at Prahran. Situated directly opposite Uni of Swinburne. As you mentioned already the student accom is not a good market for Viva, will you say the same for Hiigh? I would think as these 2 developments are not dedicated student accom like Unilodge's, we still can rent it out easily to working adults or worst case for own stay...what do you think?
 
Do not buy student apartments. 60 sqm for 2 bedrooms? wtf is that all about? Like the other poster said, that would be 1 bedroom + study. You can pick up a decent sized apartment (2 bedroom) on Rathdowne St for around 550k, which would be a much better investment
 
Thanks for your reply. There is another similar apartment. The Hiigh Apartment at Prahran. Situated directly opposite Uni of Swinburne. As you mentioned already the student accom is not a good market for Viva, will you say the same for Hiigh? I would think as these 2 developments are not dedicated student accom like Unilodge's, we still can rent it out easily to working adults or worst case for own stay...what do you think?
Don't know the Hiigh development but the short answer is that Yes, i would say the same if:
- there is a large number of apartments
- in the sub $600k price range
- it's a new development.
Theoretically you could rent to anybody but if mostly investors are buying there will be a large number of the same apartments for rent at the same time. Aazar is on the money. Unless there's some pressing reason why you want to buy new you could getter potential CG for your $ elsewhere.
 
I'm looking at buying a 2 bedroom 1 bathroom apartment in Carlton VIC at approximately AUD470k, and I'm looking to rent it out in the short term and owner occupy it in approx 10 years. The size of the apartment is rather smallish - approx. 60 sq metres. Is this a reasonable price to pay :confused:? I'm aiming for long term capital appreciation, but will settle for short term negative cash flows in view of future appreciations.
Carlton is a good area to invest in but I would not buy a student apartment in those high rise blocks. There are so many of them, they all look the same. The rent return may be Ok but I dont think you will see much capital growth. If you can spend a little more then buy an apartment, but not a student apartment.
 
there's simply too many student accommodations out there now. you really need to have something that you can rent to non-students like young professionals. With the Melbourne Model a complete abysmal failure it's not clear whether the high number of foreign students in Melbourne Uni will actually continue to rise/sustain. So best to hedge your bets in Carlton
 
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