As more Australians opt for apartment living, we speak with the experts to see what’s desirable – and what to watch out for – when you’re buying an apartment.
The days of the detached family home are behind us with today’s apartments offering value, convenience and a dash of luxury, all wrapped up in a low maintenance lifestyle. John McGrath, Founder & Executive Director, McGrath Estate Agents, says “Developers are amping up the wow factor in terms of style, design and in-house services. We’re even seeing apartment complexes with concierge facilities.”
Apartment living offers greater affordability
In 2016, the penthouse of Opera Residences at Circular Quay sold for a new national apartment record of $27 million. But despite the eight-figure price tags of some prestige developments, one of the trump cards of apartments is affordability.
Across our capital cities, the median unit price is $580,418 compared to $692,340 for houses. But in our most expensive cities, that price gap widens considerably. In Sydney, the median apartment price of $781,528 is a full $286,549 less than the median house price of $1,068,077. In Melbourne the price gap sits at $259,720, while in Canberra it’s going to cost around $236,076 less to buy an apartment compared to a house.
Units offer in-demand features
The lower price tag of apartments doesn’t have to mean scrimping on luxuries. With a wealth of developments to choose from, we asked the experts what buyers should be looking for in an apartment to ensure a great lifestyle today, plus the potential for capital growth on their home tomorrow.
According to McGrath, “Basic features like good security and undercover parking are essential. Health is a big issue these days, and we’re seeing developments with pools and well-equipped gyms – we’re not talking about a few dumbbells in the corner, these are high-end workout spaces.”
The big trend, says McGrath, is mixed use developments that incorporate retail and dining precincts. He says these don’t just add to residents’ lifestyles, they also help to make apartment buildings a vibrant part of the local community, which supports long term value growth.
That said, some apartments can have an advantage in the value growth stakes. According to Angus Raine, Executive Chairman of the Raine & Horne Group, “Scarcity makes a significant contribution to long term capital gains. We see many of today’s buyers looking for smaller, more boutique developments, and this is a trend that’s likely to continue.”
Watch for high strata levies
When it comes to apartment blocks, lifestyle features can add to the maintenance – an expense that Angus Raine says is passed on to owners through strata levies.
He notes, “In some cases, body corporate fees can add up to over $1,000 per quarter. But if you’re talking about an apartment with a pool, gym, rooftop garden and barbecue areas, it’s likely that the strata levy will cost less than you would pay to maintain these sorts of facilities as an individual home owner.”
What about issues of apartment oversupply?
Rising property values have seen developers flock to the apartment market, and in October the Reserve Bank called out the oversupply in Brisbane where some apartment prices have been falling.
McGrath notes, “There has been a lot of development in the apartment market, particularly around the Docklands area of Melbourne and Fortitude Valley in Brisbane. The thing to bear in mind is that these are both very good locations and any cooling in the value of properties offers good buying opportunities. The key is for buyers to look to the long term, because values in these areas are likely to pick up in the next growth cycle.”
According to Angus Raine, “The fact is, we are following the trend of many developed nations, where more people want the convenience and vibe of near-city living. It’s hard to see how today’s buyer will lose out over time with a quality apartment located within proximity to a city centre.”
If apartment living is the right choice for you, speak with your Aussie Broker to secure the home loan that matches your budget and lifestyle.