The trend towards apartments is strong: Investorist
With other cities around the world clearly presenting a trend towards apartments, current predictions are that this will increasingly be the case in Australia’s cities.
With tenants and owner occupiers becoming increasingly comfortable with living in higher density dwellings, particularly with younger generations aspiring to live nearer to the cities, apartments are becoming a clear long-term investment opportunity, founder of Investorist, Jon Ellis, told Property Observer.
“Look for well-priced very livable apartments in good areas and consider them for the long term,” Ellis said.
While investors have been hearing of concerns about oversupply in apartment-heavy markets, such as Docklands in Melbourne, Ellis said this view is flawed.
“Looking at an area and saying its oversupplied is problematic. I've worked on projects in Docklands now for over 10 years and I've seen oversupply issues for short periods of time,” he said, noting it is the norm for the area.
Those buying into this type of a market in a speculative fashion are likely to find themselves burnt, he said.
“People who had the investment strategy, that I believe is more sensible, for long-term growth have done extremely well,” he said.
He also noted that there has been some talk of South Yarra being oversupplied.
“But I don’t believe it is,” he said. With transport links, educational facilities and desirable aspects such as proximity to Chapel Street, it is on his list as being a good long-term pick.
“The fundamentals of Melbourne are so strong. People want to move here. We need somewhere to house these people and they’re becoming more accustomed to apartment style living,” Ellis said.
When looking at off the plan properties, he has the following advice:
- Consider the opportunities for others to develop around you. Particularly if these developments increase supply, erode your view or negatively affect your existing condition
- Ensure you have the reputation of the developer in mind
- Consider seeking advice of a buyer’s agent if you want to avoid going from display suite to display suite
With the market set to pick up now we are in a post-election market, Ellis said that he expects off the plan properties will become more popular and sales will increase.
Investorist provided the following infographic about their expectations for a market pick-up.
Source: Investorist