Would anyone have information regarding the outlook of apartments in the fringe of Melbourne? I currently own one and purchased another one in St. Kilda Rd (off the plan) due for completion in February. After reading 0 to 130 Properties in 3.5 years, I’m now thinking of flipping it because it is negatively geared and the burden of an imminent interest rise in December.[?]
Personal opinion only but there seems to be a glut of units in Melbourne and developments being cancelled. I think the unit market will be hardest hit by further rate rises or falls in property value as they don’t have the most valuable piece – the land.
Personal opinion only but there seems to be a glut of units in Melbourne and developments being cancelled. I think the unit market will be hardest hit by further rate rises or falls in property value as they don’t have the most valuable piece – the land.Thanks very much for your opinion Polar Bear, seems to be heading that way with the vacancy rate now around 4%, and more multi-unit deveopments nearing completion.
mender
Thanks very much for your opinion Polar Bear, seems to be heading that way with the vacancy rate now around 4%, and more multi-unit deveopments nearing completion.mender
Hi mender
The vacancy rate for inner city and near city properties is MUCH higer than 4% which is the Melbourne average.
Our associated company Metropole Property Management manages many near city properties and has a number of new ones for lease at present (we did not recommend the clients buy them – they came to us now that they are in trouble.)
I recently spoke to a landlord with a city fringe property that has been vacant for a number of weeks now. He is starting to hurt, esp since the valuation came in $50,000 under his contract price. I pointed out that there were 200 apartments for lease in his immediate vicinity and that’s why he is having problems leasing his property.
You may have real difficulty flipping the property as there are very few buyers at present looking for this type of property.Michael Yardney
Metropole Properties
http://www.metropole.com.auHi mender,[
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The outlook for negative geared appartments in the inner and fringe areas is pretty bleak.Whilst bearing in mind that this is a positive geared site, a discussion of some negative gearing principals are required…Boo …Hiss[]
Negative gearing is the fastest way to accumulate equity and such careful reasearch is required in order to find an area with the fastest capital growth.If it costs you money to own a depreciating asset then there is no point in doing so.
The supply/demand situation in these inner areas means low rental yeilds and high vacancy rates and this reflects in low or negative capitol growth.
Affordability issues also come into play, both with pos and neg investments, so careful reaserch is required for both classes of investment.
70% of our clients use negative gearing as there situation requires this…Boo …Hiss, sometimes this is in conjunction with positive gearing for servicability or to increase their income.
The other 30% of our clients are divided between positive geared investments—Hooray [8D],syndicated investments and self funded super.
The last paragraph is to keep all of you pos geared types from throwing tomatoes at me.Regards
Bryce Inglis
[email protected]
http://www.ipal.com.auNoddies,
I liked your post :o) And let’s face it- who wouldn’t want pozzy geared instead of neggy geared? I guess most of us are into this to be able to retire some day, instead of never. And making money is better than losing money.
Having said that, positive gearing is not always possible. You have to buy perhaps cheaper than the property is worth, and ask for pretty high rentals. Sometimes neither is possible nor desirable. Fair value and fair rental also has its merits.
Neg gearing is pretty old-fashioned now as a sales technique, I think. But who could pozz gear an OTP exxy apartment in melby? I doubt it’s possible really.
mender, have you had an independent valuation made on your apartment in st kilda road? You might want to sell it before the mum and dad investors panic and there’s a horde of sellers just like you.
kay henry
Thanks a lot for all your advise and opinions guys, it cenrtainly bring about some confidence at difficult times.
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