Purchase or Pass? Chris Gray and Arthur Charlaftis on a Bondi studio

In our Purchase or Pass segment this week we take another look at affordable investing around the inner cities with Arthur Charlaftis, general manager of sales and operations at Realestate.com.au. What can you buy with a limited budget that is still likely to give you some growth in the future?

This Bondi property is 8.9 kilometres from the city. It’s a small studio unit in a small block of units literally right across the road from Australia’s most iconic beaches. It cost $293k last year and would rent in excess of $300 per week. So over a 5% return. There’s a surf shop and a café underneath you on the street level so you’re not going to go hungry or run out of beach gear. The unit offers no parking or ocean views but you can’t get any closer to the sand. So, Arthur, how would that suit you as a bachelor pad in your earlier days?

Arthur Charlaftis: Obviously it’s an unbelievable property. I think it’s well priced and good return so it makes a lot of sense.

Chris Gray: Certainly to buy something for under $300,000. It just seems ridiculous that you can buy in Bondi Beach and you’re there. Obviously we don’t have sizes, and the pictures show it’s not the most salubrious place, but it’s still a unit.

Arthur: From some of those pictures we know it’s opposite the beach so we know maintenance for that kind of property will always be tough. But across the road from the beach great location and a pretty reasonable price.

Chris: And looking at some of the negatives. Obviously no parking is a bit of a nightmare. If you’re right on the beach it’s even more of a nightmare because there’s no way you’re going ot get a park on a Saturday. But maybe for some of the youngsters don’t need a car.

Arthur: Transportation is pretty good, but I agree. Parking in summer, if you wanted to have a car it would be problematic.

Chris: In terms of noise there would be a few parties going on during the summer. If you like your sleep it’s probably not the place for you.

Arthur: Yeah, you’re got the parties at the night and early beachgoers in the morning, so you could be hit at both ends. But part of being there is participating in that kind of lifestyle.

Chris: These guys are probably the ones causing the chaos. Another thing is obviously we talk about these small apartments, the banks quite often don’t like these. They get more cautious.

Arthur: They do, but obviously the location is pretty good. So it’s a pretty reasonable investment. The other thing is if you took a long-term view it would be interesting whether you could buy the components over time. And obviously if you did that site would be worth a lot of money.

Chris: Exactly. I think there’s only half a dozen units in the block. so effectively a couple of million dollars. They had the Pacific sale down there and I think they had something like 80% or 90% were selling, and it was $1.5 million for a two-bedroom unit at the Swiss Grand. I don’t know if you even got a view for that. There’s plenty of money down there. So purchase or pass?

Arthur: This would be a purchase for me, definitely.

Chris: I think it’s a cracking unit, and if you are into fitness, fresh air and surfing you can’t get much better than that at such an affordable price. No parking would be OK for the youngsters as would the noise, as they would probably be the ones making it. Could also be a great one for a super fund if the banks are happy to lend on it. Probably not for the middle-aged owner-occupier who wants peace and quiet. All in all I think it’s great for the money and would go for a purchase.

Chris Gray is a buyers' agent at Empire. He is host of Your Property Empire on Fridays on the Sky News Business Channel.