Australia Property Investment22 May 2020 by News Desk
Australia Property Investment: Apartment living is the new norm in Australia with almost half of all new dwelling properties being apartments (units).
The traditional Aussie home of bungalow with a back yard, BBQ and pool is fast becoming a rarity – especially in Australian cities. Apartment/units now account for 47% of all new property construction.
People increasingly want to live close to city workplaces and amenities like cafes, shopping centres and transport links and apartment/units provide the ideal solution.
Apartment / units are perfect for a rising population that maybe can’t afford a detached house in the suburbs, or overseas students that need to live close to their chosen college or university.
Here’s how units compare to houses as financial investments.
Unit or House?
When deciding to invest in a unit/apartment or house you should choose a property based on your overall investment objectives and strategy. You also need to work out what you can afford, as this will determine what you can purchase.
Houses tend to outperform units, though they are generally more expensive to purchase, so most investors tend to start out with an apartment as a first investment. Domain currently lists the national median price of a house as $766,438 while a unit is currently $530,999.
What to consider when buying an investment property
Do not buy an investment property based on emotion. Consider factors like price, location and value for money.
Is the wider area likely to experience growth in the near future? An established suburb with no major development projects in the pipeline will not realise the same returns as a location these factors are present.
Research your suburb thoroughly, understand the local market and look for a unit with a unique selling point.
Consider the asking price, is it fair for the area, does the location generally have attractive rental yields and low vacancy rates.
Is oversupply an issue?
Oversupply occurs when new developments exceed demand for these properties. Signs that could point to a local oversupply of units include:
Falling prices due to oversupply
An increase in vacancy rates
A reduction in rental rates
Construction approvals falling in response to these conditions
Apartment oversupply is an issue in a number of capital cities, including parts of Brisbane’s CBD, Melbourne’s Docklands and Southbank. In Sydney’s Hills district and the Zetland area (near Green Square) there are signs of oversupply as vacancy rates have risen above the Sydney average.
Are you thinking about property in Australia – for work, for migration or for investment purposes?
We have a team of local experts who cover all aspects of renting and buying property, including specialist mortgage advisors and licensed estate agents. Find out more at: https://www.thinkingaustralia.com/property
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