Happy New Year! As investors both foreign and domestic continue to salivate over the Australian apartment market we are now seeing new apartments being designed for investors rather than owner occupiers. This is dramatically altering apartment standards that those in Sydney take for granted.
A recent Future Living Discussion report highlighted that approximately 85% of apartments in the City of Melbourne are being purchased by investors. An even higher percentage is believed in Brisbane.
With such high percentages of investor owned apartments, some developers have continued to reduce both size and quality where possible to cater to a hungry offshore market.
With developers constantly striving to produce affordable stock with good profit margins, many apartments within major cities are now so small simple acts like sitting at a dining table are totally impractical.
These reductions commonly include bedrooms without natural light, low ceilings and second bedrooms just five metres squared. It’s this level of detail that investors need to be acutely aware of to avoid taking on a poor investment, and for this reason I will be exploring in detail at my first free live events of 2017.
RMIT planning professor Michael Buxton says some international academics have condemned Melbourne’s average one-bedroom apartment size, of about 45 square metres, as among the smallest in the world, as well as the worst in quality.
Unlike Sydney, where developers are required by law to produce apartments no smaller than 50 square metres for a one bedroom apartment, 70 square metres for two bedrooms or 95 square metres for three bedrooms, Melbourne has no such benchmark.
This, as well as a growing oversupply of apartments, may cause literal disaster for investors when a perfect storm of negative factors come into play.
But it’s not all doom and gloom, as many of us believe that 2017 will provide some fantastic buying opportunities, with previous capital growth allowing many to re-evalute current portfolios to see where some “lazy equity” may be hiding. To learn how I am constantly gaining the most for my dollar claim your free seat at my next live event near you.