Apartments in Australia – not all is as promised

Apartments in Australia – not all is as promised

Apartments in Australia – not all is as promised

Every main city in Australia is experiencing a boom in primary apartment developments. As the cranes dot the sky in almost every suburb, worries are emerging about over-supply. Some developments have low occupancy rates, and in some areas prices have not been booming.

Analysis of the market trends suggests two things:

1. There are some areas within cities where over-supply is particularly bad, and it will be very difficult to achieve a good return on investment. Unless you have come across something unique or special, or have a real bargain, beware of these areas. If you are an interested buyer from a major city in Asia, it may come as a surprise to you too that especially in Melbourne, the inner city area is the biggest problem area. Australians have not taken to inner city living as well as in other countries, and yet this is the area where growth has been very rapid, supply clearly exceeding demand. Beware!

2.   Returns can be found in Quality. The more expensive apartments with larger living areas, balconies that face the sun, car parking, second bathrooms, etc etc, attract a higher price, but also seem to experience much better growth in value over time. It is also much easier to find tenants for these.

Property investment is a big decision, and there are many risks, especially when buying overseas. Get the best advice, and make well-informed decisions! Here we can help you to make good decisions that are best for you in the long run.

Professor Brett Inder Academic Economist, Monash University

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