Buying tips as unit values move into positive territory

The outlook for apartments has improved as the financial world predicts the burgeoning inflation that has forced up interest rates may be close to peaking.

Prices for units have increased for the first time in 11 months, according to researcher CoreLogic.

News of the 0.6% uptick in values comes as separate data shows investor income from apartments is growing at twice the pace of houses. In the first quarter of this year, units recorded a hike of 3.9% in rental prices.

The gap between rent prices for houses and apartments is narrowing. It now stands at just $65 in the medium to high-density sector. According to CoreLogic, the gap 12 months ago was $85.

As an experienced agency in your area, we’re seeing a resurgence in buyer interest in apartments, especially among first-home buyers constrained by the recent interest rate rises.

An end to those increases may not be too far away, with pundits predicting the Reserve Bank of Australia (RBA) will pull back before the end of the year.

The RBA said recently it believed inflation had “passed its peak” but remained high. It noted other positive signs for the property sector, including the 50-year low in unemployment and wage growth.

These indicators are encouraging first-time buyers. The Australian Bureau of Statistics has reported in its latest numbers that their loan commitments rose 15.8% on February’s figures.

These tips may help if you are considering buying an apartment.

Go off-market

Talk to agents about units that have not yet been advertised or those being sold “off-market”, meaning they’re not being advertised.

Don’t rush

Take your time when looking for an apartment. Panic buying can end in a costly mistake. Always conduct due diligence on the building and the strata commitments. Find out if any significant building work is planned. You’ll have to pay your share if you own a unit.

Your offer

When a market begins to rise, you need to deliver a strong offer to win a property. So, have your finances in order and act quickly. Find out if the seller wants to settle quickly, or have an extended settlement, and include their needs in your offer.

Check the position

Consider factors such as street noise and ease of access to the apartment and its facilities, such as a gym and the car park. You should note whether it’s a north-facing unit, too. Make sure you’re not going to buy a summer “hot-box”. 

Future value

Be confident the property will rise in value over a five to 10-year period. Try to ascertain any planned infrastructure projects or property zoning changes, and whether any significant releases of apartments will occur nearby. All these factors can affect the future value of your purchase.