What to pay, and what it earns. For Linh and Minh.
Every original or partly updated house on 600 to 750sqm sold in Watsonia since March. Verified on Domain and CoreLogic.
| Address | Sold | Per sqm | Date | Bed/bath/car | Land | Condition |
|---|---|---|---|---|---|---|
| 287 Greenwood Drive, WatsoniaThe closest match there is. Same beds, same baths, same 697sqm, same agency, two weeks old. | $1,120,000 | $1,607 | 26 Aug 2026EOI | 4 / 2 / 2 | 697 | Original, short walk to station~700m to station · Jellis Craig, Luke Coventry |
| 36 Princes Street, WatsoniaSame street, same block, original. Princes has one more bed, one more bath and a double garage. | $1,060,000 | $1,523 | 1 Aug 2026Auction | 3 / 1 / 1 | 696 | Largely original weatherboard, sold as a reno or rebuildSame street to station · Love & Co |
| 36 Black Street, WatsoniaLand value on the same block size. Nobody paid $1.11m for a two bedroom house. | $1,110,000 | $1,602 | 30 May 2026Auction | 2 / 1 / 2 | 693 | Original one owner home, bought for the land~1.0km to station · Stockdale & Leggo |
| 15 Eclipse Crescent, WatsoniaSame layout, 50sqm less land, a bit more done to it, further from the station. | $1,050,000 | $1,623 | 24 May 2026Private, settled 6 Jul | 4 / 2 / 2 | 647 | 1970 single storey, 124sqm floor area, partly updated, GRZ2~1.1km to station · Jellis Craig Eltham |
| 11 Bungay Street, WatsoniaSame agent, same advertised land, one less bedroom. Under $1m two weeks ago. | $999,000 | $1,378 | 24 Aug 2026Private | 3 / 2 / 2 | 725 | Original mid century, well kept, single level~900m to station · Jellis Craig, Daniel Cobern |
| 231 Nell Street West, WatsoniaOnly other original 4/2/2 on 600 plus. Six months old, smallest block. The floor. | $925,000 | $1,487 | 7 Mar 2026Auction | 4 / 2 / 2 | 622 | Original~500m to station · Jellis Craig |
Distances to Watsonia station are our estimates. Per sqm is sale price over land.
287 Greenwood Drive sets the price. 4/2/2 on 697sqm, original, Jellis Craig, sold 26 August for $1,120,000. It is the same house on the same land two weeks ago. Greenwood is a slightly longer walk to the station than Princes and on a busier road, which is worth a little in Princes' favour.
36 Princes Street backs it up. Same street, 696sqm, original, $1,060,000 at auction in August. It is a 3/1/1. Add the fourth bedroom, second bathroom and double garage at $40,000 to $60,000 and you land at $1,100,000 to $1,120,000, which is exactly where Greenwood sold.
36 Black Street is the ceiling. 693sqm, two bedroom house nobody wanted, $1,110,000 in May. That is what the land alone is worth to a builder in Watsonia right now.
11 Bungay Street is the warning. Same agent, same advertised 725sqm, original 3/2/2, sold privately for $999,000 two weeks ago. That is why the guide starts at $990,000.
231 Nell Street West is the floor. $925,000 in March for the other original 4/2/2 on 600 plus sqm. Smaller block, older sale. Nothing on this list sold under $925,000 and nothing original sold over $1,120,000.
| Measure | Low | Middle | High |
|---|---|---|---|
| Original stock on 600 to 730sqm, Watsonia, Mar to Aug 2026 | $925,000 | $1,055,000 | $1,120,000 |
| Land value per sqm from those sales | $1,378 | $1,562 | $1,623 |
| Applied to 697sqm on the title | $960,000 | $1,089,000 | $1,131,000 |
| 36 Princes Street plus the extra bed, bath and garage | $1,100,000 | $1,110,000 | $1,120,000 |
| 287 Greenwood Drive, like for like | $1,120,000 | $1,120,000 | $1,120,000 |
| Fair value | $1,090,000 | $1,110,000 | $1,125,000 |
| Watsonia, last 12 months | Figure | Source |
|---|---|---|
| Four bedroom house median | $1,090,000 | Domain, 21 sales |
| Four bedroom auction clearance | 88% | Domain |
| Three bedroom house median | $953,000 | Domain, 33 sales |
| All houses median | $1,010,000 | property.com.au, 56 sales |
| Annual growth | +2.4% | property.com.au |
| Council capital improved value, 15 Princes | $1,050,000 | Banyule, 1 Jan 2026 |
88% clearance on four bedders. These do not pass in. Plan for two other bidders and a reserve around $1,080,000.
$1,100,000 before auction is fair value and it buys certainty. At 88% clearance there will be other bidders on the day. Taking it off the market at $1.1m means no auction, no competition, and a price the comps support. The estate has a caveat to clear and an executor who wants it done, so a clean unconditional offer at the agent's number has a real chance.
$1,110,000 on the day is fair value with Greenwood Drive as the proof. Below it you are buying under the closest comp in the suburb. That is the number we hold.
$1,125,000 is your ceiling, not ours. It is $5,000 over Greenwood for a house that is a shorter walk to the station on a quieter street, so it is not silly money. But the only thing that makes the stretch worth it is a seventh room, which is worth about $12,000 a year.
7 rooms, 5 bathrooms, $280 a room, 6.5% interest. The $150,000 conversion is your own money, not borrowed, so it sits outside the loan.
| Item | At $1,100,000 | At $1,110,000 | At $1,125,000 |
|---|---|---|---|
| Borrowed | |||
| Purchase price | $1,100,000 | $1,110,000 | $1,125,000 |
| Stamp duty at 5.5%, no concession | $60,500 | $61,050 | $61,875 |
| Transfer registration and PEXA | $1,940 | $1,940 | $1,940 |
| Conveyancing. Accord at $1,500 plus GST, plus disbursements | $2,200 | $2,200 | $2,200 |
| Building and pest | $600 | $600 | $600 |
| Loan setup and valuation | $1,200 | $1,200 | $1,200 |
| d36 fee remaining, inc GST | $15,000 | $15,000 | $15,000 |
| Title searches, easement plan, council permit search | $300 | $300 | $300 |
| Loan | $1,181,740 | $1,192,290 | $1,208,115 |
| Your own money | |||
| Conversion, all up7 rooms, 5 bathrooms (3 ensuite, 2 shared) | $150,000 | $150,000 | $150,000 |
| Total in, converted and ready to rent | $1,331,740 | $1,342,290 | $1,358,115 |
| Item | Per year | Per month |
|---|---|---|
| Income | ||
| 7 rooms at $280, 52 weeks, 95% occupied$101,920 if every room is full all year | $96,824 | $8,069 |
| Costs | ||
| Management at 12.5% of rent | $12,103 | $1,009 |
| Council rates, Banyule, current year | $2,606 | $217 |
| Landlord insurance | $2,500 | $208 |
| Utilities and internet, 7 tenants, 5 bathrooms | $6,000 | $500 |
| Maintenance and wear | $3,500 | $292 |
| Land tax on a site value of $900,000 | $4,050 | $338 |
| Left before the bank | $66,065 | $5,505 |
Land tax is new. The current owner paid none because it was her home. SRO figure on this land is $4,050 a year. The exemption is in 2.4.
| 100% equity, interest only, conversion from own funds | At $1,100,000 | At $1,110,000 | At $1,125,000 |
|---|---|---|---|
| Loan | $1,181,740 | $1,192,290 | $1,208,115 |
| Interest at 6.5% | $76,813 | $77,499 | $78,527 |
| Left before the bank | $66,065 | $66,065 | $66,065 |
| Net cashflow a year | −$10,748 | −$11,434 | −$12,462 |
| A month | −$896 | −$953 | −$1,039 |
| Gross yield on total in | 7.3% | 7.2% | 7.1% |
Your $150,000 in the conversion is not borrowed so there is no interest on it, but it is money that could be earning elsewhere. At 6.5% that is about $9,750 a year you are not getting.
There is an exemption and on your rent you should get it. Section 75 of the Land Tax Act exempts land used as a registered rooming house. Four tests.
| Test | Princes Street |
|---|---|
| Registered | Registered with Banyule as a rooming house. You are doing this anyway. |
| Rent cap | A room without meals cannot go over 70% of the gross single age pension a week. Roughly $375 to $410 right now depending on how the SRO counts supplements. $280 clears it easily. |
| Long term residents | At least 80% of the rooms over the year filled by people who stayed three months or more. Working tenants on proper agreements meet this. |
| Purpose | Used mainly as low cost housing for people on low incomes. The SRO reads this through the rent cap and who lives there. Softest test, judged case by case. |
Applied for each year through the SRO. First full year you can claim is the one after it is registered and let. Worth $4,050 a year, which takes the shortfall at $1.1m from $896 a month to $558. Run it past your accountant before you bank on it.
| Scenario | At $1,100,000 | At $1,110,000 | At $1,125,000 |
|---|---|---|---|
| As asked. 7 rooms, $280, 6.5%, 95% occupied | −$10,748−$896 a month | −$11,434−$953 a month | −$12,462−$1,039 a month |
| Land tax exemption granted | −$6,698−$558 a month | −$7,384−$615 a month | −$8,412−$701 a month |
| Six rooms, not seven | −$22,851−$1,904 a month | −$23,537−$1,961 a month | −$24,565−$2,047 a month |
| Rent at $260 | −$16,800−$1,400 a month | −$17,485−$1,457 a month | −$18,514−$1,543 a month |
| Rent at $300 | −$4,697−$391 a month | −$5,382−$449 a month | −$6,411−$534 a month |
| Rate at 6.0% | −$4,839−$403 a month | −$5,472−$456 a month | −$6,422−$535 a month |
| Rate at 7.0% | −$16,657−$1,388 a month | −$17,395−$1,450 a month | −$18,503−$1,542 a month |
| Occupancy at 90% | −$15,207−$1,267 a month | −$15,893−$1,324 a month | −$16,921−$1,410 a month |
Room count and rent decide this, not the last $25,000 at auction. $1.1m to $1.125m is about $1,600 a year. Six rooms instead of seven is about $12,000 a year.
Pre auction appetite. Dineth to confirm with the agent whether the estate will sell before the day and what number gets it done.
Building inspection. Only ordered if there is genuine interest in selling prior to auction. No point spending it otherwise.
Management fee. Modelled at 12.5%, the middle of the band. Rooming house managers charge 10 to 15%. To be confirmed with a rooming house specific property manager before we lock in the numbers.
With the conversion paid from your own money, it is close to covering itself but not quite. Seven rooms at $280 brings in about $96,824 a year after vacancy. Running it costs about $30,759. That leaves $66,065, and the bank wants $76,813 on the $1,181,740 borrowed to buy and stamp it. The gap is about $896 a month at $1.1m and $1,039 at $1.125m. With the land tax exemption it is about $558 and $701.
Interest, land tax, management and depreciation on the works are all deductible, so tax time claws a fair bit of that back. Your accountant can put a number on it. The land is the case, and the rooms get you most of the way to holding it. Go into the auction knowing the shortfall rather than finding it in month three.