Investing in Apartments, is it really worth it?
The relentless housing boom in Australia’s cities, especially Melbourne and Sydney, is often framed as an inter-generational conflict in which younger generations are being priced out of the market by baby boomers. This is not necessarily true if they consider buying a property type that is more affordable while establishing a career and accumulate their financial net wealth.
As a property adviser, I often meet younger people aged between 20 – 35 looking at their first home. Our My role is to help educate and source suitable properties that not only meet their living standards but also to remain within budget.
We still believe location is ultimately the largest influence on capital growth. The property type has an influence, but the holding cost to owning something large can be quite challenging. If someone wants to own a house in Mont Albert (for example) then they need to fetch a tidy $2,000,000 +. However if considering the opportunity to buy a spacious Apartment for a price range between $500,000 – $750,000, it will allow you to own a property in a blue chip location that will endeavor to grow in value, provide great access to transport and maintain a happy lifestyle.
There are many ‘lovers and haters’ when it comes to investing in Apartments. Selecting the right property is still very important. I recommend buying boutique Apartments (not high rise). It ensures a nice complement between owner occupiers and investors, ensuring a quieter and private atmosphere for all residents.
Your first property doesn’t have to be everything you ever dreamed of. Buying an Apartment allows a first home buyer a cheaper entrance without compromising location. The Apartment can either be a stepping stone to the property market or potentially become a great long-term investment that will yield generously higher than a Townhouse.
If you have a passion or desire to own land, many new developments offer great courtyards and/or terraces that allow you to entertain with friends and family, while many are close to parklands, gardens and excellent amenities such as cafes, restaurants etc.
The alternative is to buy a house and land package and potentially compromise location. It may offer you a front yard and large back yard, but given the travel times to-and-from work, do you really have the time to maintain the garden and enjoy it? Do you ever adequately landscape the back yard according to your initial intentions?
We believe all property types perform differently at different intervals. Stick to an appropriate budget, ‘think outside the box’ and consider the real benefits of buying an Apartment. They are not just catered for investors, they are very well suited to an owner occupier.
It sounds cliché, but we can’t help to quote “location, location, location”. Find out more about Why Location is so important?
Good luck and happy investing.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
Aug 2017