When Does It Make Sense to Buy an Apartment?

YNM Real Estate
17 December 2021

Recently there has been some concern in the market that there is an oversupply of apartments which could lead to a fall in apartment prices – especially in large high-rise developments in cities such as Melbourne, Sydney and Brisbane.

However, there are some situations where it still makes financial sense to buy and apartment. Apartments offer an affordable entry point into the market, in locations that may be beyond an investor’s budget if they were looking at houses.

Highly sought-after (inner-city) locations are more attractive to tenants; offering higher rental yields and investment security. If you are looking to invest now, look for a small block – an additional benefit is that the owners corporation will be smaller and you will be able to influence decisions more easily.

Look for an apartment which is reasonably sized for the intended purpose. If the apartment is situated in a pleasant area with street appeal, so much the better. Apartments in the CBD could also fit the bill, such as characterful apartments in older style blocks.

While purchasing new off-the-plan units in or near the CBDs of Melbourne, Sydney and Brisbane may offer some great benefits, established units are also a sound investment strategy because they’re still affordable compared to houses.

However, it is good to remember that the key to successful property investment is holding for the long term – the apartment oversupply projected is going to be a short-term market situation which will rectify over time.

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