Tuesday 26th March 2019

In the market for an apartment block?

In the market for an apartment block?

If you’re looking for an investment unit, an apartment block can be a great option to get a big return. This strategy is becoming more and more popular in Australia, and as such there isn’t quite enough supply for the demand yet, according to Commercial Real Estate.

How well your investment property does is 70-80 per cent dependent upon location, as Metropole estimated recently. You’re smart to look for an apartment block in expensive areas like city centres.

Here’s a look at how apartment block sales are doing in a few states.

How do things look in New South Wales?

While great deals on investment apartment blocks can be hard to come by, a couple of recent properties that went up for sale may keep you motivated to continue looking.

In Forestville, just 10 kilometres from Sydney’s central business district, an apartment block is expected to bring in more than $10 million. This block includes 30 apartments and is thus desirable to big investors.

Another block in the eastern suburbs of Sydney was bought for about $11.6 million, which includes eight apartments and is right on the Bondi waterfront, as Commercial Real Estate reported.

What about Victoria and Queensland?

Melbourne’s market is unique because of all the old apartment buildings from the 1930s to the 1980s and vintage walk-ups that are becoming more popular as investment units, as Domain and Metropole point out. These give investors a lot of room to cash in on character value.

To give you an idea of how things are going in Queensland, take the recent development of the new “super tower”, Spirit, which is worth $1.2 billion. As Domain says, the lowest apartment prices in the 89-level building are $1,166,000 for a one bedroom. The penthouse is $41 million. The building is expected to be completed by 2021.

Why go with apartments over an investment house?

A house may seem like a better long-term investment than an apartment. But think about a given piece of land – if there’s one house on the same amount of land as 20 apartments, which is going to be more valuable? The apartments. Your land-to-asset ratio is higher, as Your Investment Property Magazine points out.

For more information about investment properties and home loan options, speak to our team today.