Hi all
I have an IP in Observation Rise in Scarborough.
Bought for $300,000. Last valuation a year and a half ago was at $550,000. We have just had a valuer go through it again and it was valued at $540,000.
What do you think I should do? I can’t see prices there going up much as it is a lifestyle only a niche group like – maybe singles/couples with no kids.
It is a 2 bedroom – 2 storey townhouse. It is right on the beach and has great views in a complex with swimming pool/gym/tennis courts.
Strata fees are a killer – about $1100 a quarter.
I have tenants in there atm paying $400 a week.I don’t know what to do – if I can’t see prices there going up – should I just get rid of it?
Anyone have any opinion on Observation Rise – Scarborough?
Thanks, Aly[biggrin]
nice dilemma to have – beats the ol “I’ve made a loss should I hold and hope or sell?”.
the property market is still on a healthy rise so there is probably no hurry to make a decision. consider what you will walk away with after REA fees and tax. $540k doesn’t sound like a lot of money for what it is, but the net yield is dreadful. when is the tenancy up? rentals are rising quite quickly and you could try a rent increase – if they walk then clean it up and sell it. it is definitely a sellers market out there and if you can’t see prices rising then…. I personally would get rid of it. you are sure to look back in 10 years time and wonder why on earth you sold it tho. I sold a townhouse a year ago (last one in a complex I developed… just wanted to close it off) for just under $300k and the new buyer was just offered close to $400k and they knocked it back… you think I aint kicking myself?! but you can’t keep everything.
if you are worried about losing your stake in the property market, you could use the cash out as deposit for 1 or 2 median priced investments.
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
thanks ausprop
i still don’t know what to do….
tenancy is up in about 3 months…. will try to put it up then
thanks a[biggrin]
Hi Alysha,
The key question for me is what outcome were you wanting from this purchase? Has the property done the job you wanted it too? What would you do with the funds if you got out now? Is the property affordable for you?
To me these are critical to your decision making process.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi
I think key now for Obs Rise is what happens when the final plans for the 3 blocks on the coast are revealed – the council finally passed an 8 storey limit last week. This means another 3 x 6 x 8 – 10 approx = 160ish high spec units dumped on the market to a finite group of buyers.
Both of the families that own the White Sands and the Luna site have suggested that they are going to modify their envelopes and not build concrete bunkers – ie: they will build to 8 storeys but not cram in a gazillion units.
So – this is bad news for Obs Rise, but probably good news for the Seashells and Sandcastles developments. This is because I think (and this is only a guess) the new builds will be specced much higher than people think and will be pitched againts obs rise, not seashells.
My bet is that in Obs rise In the next 12 – 18 months a lot of the $500k+ units will start to move discretely, and then with a little panic as the off-the-plan kicks in for the new builds. The saving grace here is that if the WA economy keeps pumping then construction costs will keep costs of the new build a LOT higher than retrofit at Obs Rise, so you’ll keep the differential.
Also – when you have the only coastal high rise development for 6000km (there’s nothing higher between Esperance and Broome in WA) then you have to watch how the banks will lend to this pocket.
In South Perth you have $2m apartments flying off the blocks. But getting cashed up boomers to buy in Scarborough? I don’t know. So if they don’t buy will the mums and dads of Perth forsake a towhouse in Sorrento for an apartment in Scarborough? And if they do will banks give them mortgages? I don’t know. But this is key.
So my guess is:
In next 6 months Obs Rise prices will wobble down around 5% – 10%
In 12 months when new build off the plan start Obs Rise prices will take a bit of a hit, no idea how much, but the strata is killing a lot of retirees in there so they will take the money and split.
In 24 months when the drama is all over people will look at it again and think – hmmmm, all 180 new units have been taken up, there is NO where else in Perth you can buy something like this – and they’ll start to go up again.
So – I’d sell now, and buy again in 12-18 months. But if you can deal emotionally with the dip and would have got dinged with the CGT anyway – then hold. Long term they are a good bet.
Regards
J.Hi,
Does anyone know if those 3 planned high rises are going ahead or still being debated?
Thanks, Mei
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