Melbourne apartment buying: key considerations and advice,
With stamp duty reforms underway in Victoria, many first-time buyers and investors are now focusing on units instead.
However, Anthony Webb, head of Victoria at Belle Property, notes that many buyers remain hesitant about committing to property purchases.
He explains that a significant number of buyers are being priced out of houses, particularly in Melbourne’s inner suburbs.
Are Melbourne apartments a wise investment?
Historically, Australians have been hesitant to invest in apartments due to concerns about lower capital growth compared to houses.
Webb explains that the main concern is the lack of land, which limits capital growth compared to houses or townhouses.
“I think there are inherent risks with buying apartments because they generally don’t appreciate as much as traditional properties,” Webb says.
However, there are strategies to reduce the risks and still achieve strong capital growth when purchasing an apartment.
“If you choose to buy an apartment, select an area with limited future apartment developments to avoid oversupply,” advises Webb.
Additionally, high strata fees can be a red flag, signaling that the investment might not be as profitable as expected.
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“Reviewing the minutes of general meetings for body corporates is crucial, as they provide valuable insights about the property,” says Webb.
He adds that in Melbourne, there were many issues with cladding, especially apartments built with combustible materials, creating significant concerns.
“As a result, some apartments face costs of $40,000 to $60,000 per unit to address recladding in the complex,” Webb explains.
Buying off the plan also carries certain risks, which come with both advantages and disadvantages for potential buyers.
“Purchasing off the plan means buyers often cannot physically inspect the apartment, missing the chance to experience it firsthand,” Webb says.
To assess quality, Webb advises researching the developer’s past projects and speaking to the seller for more information.
“Check the developer’s portfolio and visit completed projects to get a better understanding of the quality they offer,” he suggests.
Two questions you should ask your agent
The first key question to ask a selling agent is whether any new apartments are planned to be built nearby.
“Sometimes an apartment complex is sold, only for another one to be constructed next door, blocking the view,” says Webb.
Next, it’s crucial to request that the real estate agent show you all areas of the apartment complex, not just the unit itself.
“If the complex includes a carpark, take time to thoroughly inspect it. If there’s a garden, walk through it and carefully assess it,” Webb advises.
