Recently, the REIV released research indicating that buyers looking to enter Melbourne’s most exclusive suburbs can save millions by purchasing an apartment or unit rather than a house.
In the last three months of 2017, buyers could secure an apartment in Toorak for $940,000 – less than a quarter of the suburb’s median house price of $4.6 million. Million-dollar savings were also possible for buyers purchasing an apartment in the upmarket suburbs of South Yarra, Brighton, and Balwyn.
In the opinion of Randolph Clements, Managing Director, Raine & Horne Victoria, it’s a case of buyer beware as parts of Toorak and South Yarra have many older apartment blocks that aren’t necessarily in great shape. Randolph explained, “Apartments by nature have a communal problem.
“The internal presentation of your apartment might be top-class but often the communal areas such as the lift area, hallways, stairwells, gardens and so on, tend to wear first, and their maintenance is out of the hands of individual owners.”
To spruce up communal area usually requires a majority vote by the body corporate, which may slow the makeover process, added Randolph.
In comparison, developers are pumping out immaculate and affordable apartment developments in nearby Docklands and other parts of Melbourne, with impeccable presentation and excellent floor plans. For example, Raine & Horne Brunswick has listed a generously proportioned apartment at N1106/241 Harbour Esplanade, Docklands for just $650,000.
“This apartment has panoramic views over Victoria Harbour, Central Pier and bustling Docklands shopping and entertainment precinct,” noted listing agent Pieter Speziale from Raine & Horne Brunswick. Moreover, this the apartment is generating excellent income of $33,800.00 per annum.
Randolph added, “Newer apartments also often come with rent guarantees and larger depreciation benefits if you’re a new investor, while a lower purchase price will mean you pay less stamp duty and have the prospect of proportionally more capital growth.
“There are many excellent pockets around Melbourne offering good buying opportunities for first home buyers and investors. An older apartment in a prestige suburb might not always stack up.”