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Hi Shannon,
My advice (for what it's worth) is to buy something soon even if it might appear a bit above the market price (sometimes this is quite hard to determine) especially if you intend to live in and keep it for the long term. I bought my first home in Brunswick in 2002 and thought I might have paid a bit above the market price at the time but was determined to get in the market while I could. I have never regretted doing that even if I might have paid $30-50K over (I paid $350K). It was worth doing this to get into the market at that time. I sold that house 5 years later in 2007 and it had jumped in value (sold for $580K and we'd done very little to it). For the last 8-10 years I have watched friends hesitating around the edges of the property market waiting for a bargain but reluctant to jump in and take the risk. Some have really regretted waiting so long and now no longer can afford to enter at the level they once wanted to.
My point is you can wait and wait for the 'right conditions' to pick up an apartment at the 'right price' but that may never happen. So what's a little over the market price compared to knowing you've got your foot in the door and that hopefully, over time, your home will continue to increase in value?
Thanks so much for all that amazing info Saka888! Sounds like you've really got it covered re Melb CBD apartments.
Can anyone tell me what most buyers agents' fees are? Eg. I've heard possibly 10% on the purchase price of the property???
Thanks Richard and Steve!
Steve – thanks so much for your thoughts on apartments. We're looking at ones in small blocks of 10 or less as I had considered some of the issues you raised. The issue about valuations with apartments hadn't crossed my mind though so thanks for drawing my attention to it. Our reasons for considering a CBD apartment include lots of cashed up gen ys living in the city and prepared to pay CBD prices; what seems like high (ish) yields; and the trend toward smaller households and more people living alone. Also, we live in the inner north of Melbourne and know the inner city and CBD quite well.
A buyers agent is a great idea. I will look into getting one.
I think you're right about us being long overdue to do this given the equity we have sitting there. I was reading a post from the archives here last night and there was a conversation about financial advisers and the way they convince clients away from investing in property. That's exactly what happened to us 12 months ago. As nice as he was, he quickly steered us to invest in a managed fund (with a small amount of money). I'm happy to have a mix of IPs and managed funds just to keep it all a bit interesting. So now we just need to get the IP part happening!
Thanks again for all your advice! I will make sure our loans are structured as you've recommended.
