Weekly Unit Asking Prices Since 2009 Indicate Zero Capital Gain in Doncaster

We had a great insight given to us when the SQMresearch website was sent our way… follow the link and enter your Post-Code

There is a wealth of national information on this website, in particular the unit asking price by post code since 2009.

It points towards a zero capital gain for Doncaster units in the 5 year period. Worse for apartments prospects when you consider they are statistically bundled with attached and semi detached housing (villa units & town houses) which have been performing very well. The asking rental figures are also interesting.

With the high number of apartments projects currently pre-selling, and a glut inevitable, you have to think there will be many that won’t proceed.

When looking specifically at Doncaster, over the last 3 years houses have broke even, but Units have dropped 5%-12% – see below.

SQM Research Weekly Asking Prices Index
Week ending
20 May 2014
Change on
prev week
Rolling month
% change
Rolling quarter
% change
12 month
% change
3 year
% change
Postcode 3108 All Houses
760.4
-0.4 3.2% -5.4% 11.4% 1.0%
3 br Houses
683.5
-3.5 -7.0% -12.7% 3.0% -1.0%
All Units
497.4
0.6 3.4% -1.3% -7.4% -12.2%
2 br Units
496.7
0.3 2.7% -2.0% -1.3% -4.7%

2014-05-20 SqmResearchWeeklyVendorSentiment3108

8 Responses to “Weekly Unit Asking Prices Since 2009 Indicate Zero Capital Gain in Doncaster”

  1. Tracy says:

    It seems obvious there is only one direction for apartment prices. That’s a frightening possibility especially if you’ve just purchased off the plan.
    Tracy

  2. Petro says:

    The number of apartments being approved on Doncaster Hill is unsustainable. Warnings signs abound that the market for apartments is already weakening. For example, off-the-plan purchasers, seeking a loan to settle, are finding that lenders are valuing their property at below the original purchase price. Inevitably, apartment buyers will be met with even tougher requirements from the lending authority and then have to face above average charges such as body corporate fees (for maintenance, elevators and so on), compared to lower density projects, outside of Doncaster Hill
    Petro

  3. Patrick says:

    I am not surprised that asking prices, as of the 20th of May 2014, show they are back to where they were in October 2009. As an investment I would not touch Doncaster Hill with a barge pole. Most of the apartments being sold off the plan are little better than dog boxes, with jazzy adornment tacked on to the building façade. Overseas buyers looking at the glossy brochures may imagine they will have panoramic views. The reality is, if these towers are built they will obscure each other’s view. For example, a major development site in Doncaster Road, recently sold to an overseas developer, will have limited views when built because the surrounding allotments to the South, East and West have similar prescribed heights between 32-40 metres.
    Patrick

  4. Whittens says:

    You would be lucky to get more than a 3.3% net rental yield on the average Doncaster apartment, which could be equal to the yield from a detached property in the same area, but with zero capital gain they are a very poor investment. The asking prices graph does not portray actual selling prices. Larger apartments (70 m2 living area or more) are being resold well below when they were first purchased 3 years ago, this is mainly because they are in direct conflict with cheaper residential products such as larger ground entry town houses etc. and the asking price for anything above a 90 m2 apartment could be equal to the purchase price of a local established detached house and land.
    Whittens

    .

  5. Greg says:

    A Town House in Clay Drive, Doncaster, with a living area of approximately 108m2, sold at auction for $615,000 on the weekend… very good value when compared with a similar sized apartment in a high rise tower on Doncaster Hill.
    Greg

  6. Spearmint says:

    That sounds like good value at @615,000.
    The SQM.com research update, for the third of June, shows the gap between the asking prices for all houses and all units, still well over over $260,000. This might help explain why the majority of apartments for sale are very tiny and are being marketed on the basis of affordability, rather than value for money. An apartment the size of an average established house would cost well over One Million Dollars.
    Spearmint

  7. Disaffected says:

    The Doncaster Growth plan, in particular the Doncaster Hill High Rise Strategy, would not have been foisted on the area had Manningham Council not been a likely casualty of Government’s consolidation of Councils policy and the need for political expediency of State Government’s flawed Melbourne 2030 program. It was during this period that Manningham Council, faced with extinction and massive job losses, escaped the axe by being one of the first Municipalities to present an activity centre plan for approval. The 2030 authority was delighted but astonished at the magnitude of the strategy and the speed in which it was submitted, especially considering all the procedural requirements, such as the community consultation process which proved to be nothing more than information sessions, and various consultant’s “reports” demonstrating that Doncaster had the capacity and appropriate infrastructure such as transport employment and public off street car parking etc.

    Disaffected

  8. Joseph says:

    Instead of a significant reduction in rates, that would have resulted in Manningham being divided among neighbouring councils, now, with an average of $1661.00, we are among the highest rated municipalities in the metropolitan area.
    Joseph

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