…Thornbury

Recently we had the pleasure of assisting two first-time property purchasers who chose to make their first acquisition an investment property. We targeted areas where we felt they could achieve maximum growth, steady rental demand and tame negative cashflow outgoings with their budget of $405,000.

We chose Thornbury and Fairfield as suitable target areas, knowing that a 2BR apartment in a boutique block was achievable for our lovely couple.

Source: Thornbury Local, au.timeout.com
In the past 6 months, Thornbury has had a burst of activity with new bars, café’s and restaurants appearing along High Street and drawing the foot traffic north of Separation Street. The main strip along High Street still has a fair way to go before it resembles something like Northcote.

What High Street Thornbury doesn’t have yet is the ‘wander’ factor.

There aren’t really any clothing shops or places which you’d walk along the street to browse through. There are still quite a few empty graffitied shopfronts, accountants, used whitegoods stores and computer outlets. The big self-storage facilities and mechanics workshops also don’t do much for the streetscape. But the emergence of trendy eateries and bars are strong signals of gentrification, and Thornbury is slowly starting to do what Northcote and Fitzroy North have done.

The huge vacant block near the corner of Darebin Road is currently being developed into a permanent food truck site, something like a bigger ‘The Peoples Market’ which pops up in Collingwood each summer.

Not all suburbs will enjoy the “flow on” effect of their successful neighbours, but Thornbury shares Northcote’s desirable attributes of tree lined streets, period homes and good access to trains and trams – all elements which attract young professionals and families looking for affordability and amenity. Around 25% of the population are in the 25-34 age group, and the median price for apartments in Thornbury is around $100,000 less than those in Northcote, whilst houses are around $150-200,000 cheaper.

Our young investor couple were practical in their goals but also wanted a property which they were proud of and in an area they were comfortable in. After a few weeks of inspections and a few properties which were not quite right, we found an apartment in the western part of Thornbury which ticked all of their boxes. What we loved about the property was its renovated interior with plenty of tenant appeal, only 8 in the block, a good floorplan and not too many other apartment blocks nearby. The concerns we raised were the lack of outdoor space and the train station being a 1.5 kilometre walk away over semi-main road. This is around our upper limit for walking distance to a station, however in this case the tram stop and local village on Miller Street was only a few hundred metres away. If we took this property and plonked it onto the east side of St Georges Road this apartment would have been priced up to $40,000 more, and out of our client’s budget.

Unit 6 of 119 Keon St was set to go to auction, but based on a short-burst of listing activity, the area was experiencing a micro-glut.

… and we were going to take full advantage of that micro-glut.

We swooped in with a pre-auction offer of $405,000 and held firm, securing the property some 48 hours after our offer was submitted.

With a purchase price of $405,000 and potential rental of $360 per week, our clients will enjoy a healthy yield of 4.62% and the bonus of settling and leasing out the property in January which is peak season for rentals.
For a day out in Thornbury, you could;
Start the day at Short Round for butterscotch and jaffle waffles
Some Thai for lunch at Som Tam
Dinner at Northern Git, an English eatery by the ex-chef of La Luna
Finish the evening with a drink at Trumpy Bar

By Amy Mylius, Trainee Buyer’s Agent and Researcher