South Yarra cheapie sells for $203,500 reflecting 6% rental yield
A studio apartment in South Yarra was the cheapest sale on a recent auction weekend, according to Australian Property Monitors.
The unit at 1/631 Punt Road sold for $203,500 through Hocking Stuart South Yarra.
The unit was listed with a price guide of $170,000 to $190,000.
It had been listed for rent in January last year at an asking weekly price of $260 per week.
Listing agent Nick Gatacre told Property Observer that the unit was currently rented out at $240 per week. According to the rent of $240 per week, the price reflects a 6.13% yield.
Gatacre also told Property Observer the auction “went well”, with three registered bidders and a starting bid of $170,000.
He added that the reserve price set on the day was $190,000, and the vendor’s expectations exceeded by $13,500.
He also revealed that the successful bidder was an investor who had already purchased another unit in the building.
The 1960 block of flats at 631 Punt Road is made of up studio apartments. Recorded sales include unit 21 which sold in 2003 at $104,500, unit 26 fetched $93,000 in 2002 and unit 4 sold at $71,500 in 1997.
According to RP Data, 4/631 Punt Road was listed for sale in 2010 for $279,000, with no subsequent record of its sale. The unit 9/631 Punt Road was listed for sale in 2009 for $210,000.
In addition, asking rent for units have ranged from $237 per week to $295 per week over the past two years.
Gatacre told Property Observer that size is a considerable factor where sale prices are concerned.
“They are all studio apartments with one open area and no separate bedroom. That means they are the smallest on the food chain in terms of property you can buy.
Also, it is located on Punt Road, which is the main road. It makes it affordable for those who want to buy a property in South Yarra, and it’s pretty close to Fawkner Park,” he said.
He added that the condition and location of the unit within the building is a factor for determining asking rent.
“It depends on their condition – also, some are at the back of the block, while some are at the front,” he said.
Gatacre also said the property market in South Yarra is currently “quite strong”.
“The last two years, 2011 and 2012, were initially a little down compared to 2010.
"This year, we've seen interest rates coming down and becoming much more affordable for lending. The market's picked up due to that. Prices bottomed out towards the end of last year and slowly increased. It’s picked up and gone up since then, not dramatically, but the market's gone up a bit,” he said.
The apartments have traditionally been listed quite cheaply compared with other units in South Yarra.
According to the latest RP Data report, the median sale price for units in South Yarra is $522,500, down 4.6% on last year. The average discount required to sell a unit in South Yarra is 8.1%, while private treaty sales average 98 days on market.
The median asking rent for South Yarra units is $400 per week, while gross rental yield currently stands at 4%.