A new report on the market for apartments is an excellent reminder for first-time buyers that they should not give up their ownership dream.
Units remain excellent buying and are $170,000 cheaper than a house nationally, according to the latest CoreLogic report on apartments. If you intend to buy in any of the capital cities, that gap is a head-turning $247,000.
As the market realigns after a two-year surge in values, apartments are down 5.2% from their April peak, or $32,400. If you’re a homeowner, your wounds could be more profound. House prices are down an average of $73,000.
But as an experienced agency, we’d remind you that while national averages are interesting they’re not directly relevant to your situation.
Australia is not one huge market but thousands of micro-markets, each with different characteristics and price trends.
If you’re in the market for an apartment today, your research should focus on the size, style and locations you’re targeting. Talking to agents in those suburbs will reward you with insight into the local market as well as highlight properties that might suit your needs.
If your finances can handle the recent increase in the interest rate, then making your move in the short term could pay dividends.
That’s because property prices will likely bounce back overnight when the Reserve Bank of Australia signals it has contained inflation and will ease back on rate rises.
The CoreLogic report outlined several other positive developments for buyers.
Resilience
Apartments continue to prove themselves excellent investments. Their values have not declined to the same degree as houses.
Affordability
At just under $600,000, the median value for units is $170,000 cheaper than the average house. In the capital cities, that gap is even more significant: $247,000.
Investment
The comparative affordability of apartments and low supply levels will fortify values in the medium to long term. With the rental market running hot, this will likely encourage the return of investors.
Land taxFor NSW only, the introduction of land tax rather than the one-hit Stamp Duty levy will ease the burden for first-time buyers. CoreLogic says this might encourage young buyers to enter the market with the intention of upgrading when their finances allow. Previously, many have been put off because Stamp Duty is so expensive. For example, a property costing $800,00 would incur almost $30,000 in duty. Now, they can pay an annual $400 plus 0.3% of land value.