Houses across Australia’s major cities are often tipping over the $1 million mark and are being snapped up in the blink of an eye. So where does that leave first home buyers standing at the sideline waiting for their chance to get a piece of the competitive real estate pie?
Well, with the latest building approvals report released by the Australian Bureau of Statistics showing a fall of 8.4% for housing approvals but a 16.6% rise for other dwellings such as apartments and town houses, the way of the future might just be skywards.
Here are some of the major drawcards of purchasing an apartment:
Our research shows first home buyers are in for a decade of saving for the recommended 20% deposit. So it’s really no surprise that many are turning away from the traditional dream of owning their own house and opting for the more wallet friendly option of an apartment.
Let’s compare two properties sold this month located in North Parramatta in Sydney’s Western Suburbs. Both come with 3 bedrooms and a car space, however the house sold for $1,297,000, whereas the apartment sold for just $725,000. That’s a difference of $572,000!
2. First home owners grant
Other than offering a lower price point, if you’re a first home buyer purchasing an off the plan or brand new apartment you may fulfil the requirements of your state’s first home owners grant and receive a one off payment and stamp duty concession.
For instance in NSW if you meet the criteria you’ll receive a lump sum payment of $15,000 and be exempt from paying stamp duty.
3. Close to amenities
Most new apartments are being built in central locations that are close to local shops, parklands and public transport amenities.
Top tip: Keep in mind, many new apartments are situated on main roads. So if you’re considering one of these blocks, make sure you choose an apartment that is positioned at the back of the building as this will reduce noise pollution.
4. Modern facilities
Apartments have much greater appeal than yonder years with many new buildings coming with handy facilities like an indoor pool, spa and gym.
Take this 2 bedroom apartment that sold in Melbourne CBD for $700,000. It comes with a secure garage, security intercom, two swimming pools and a gym.
5. Stricter building standards
There are also tighter restrictions around the construction of new buildings than there used to be, which includes providing more privacy to tenants and shared outdoor green spaces for recreation.
Top tip: If you’re considering purchasing an already established apartment, make sure you conduct due diligence by asking for a Strata Report, as this will give you a clear indication of how much the ongoing strata fees will be. Also ask for the minutes of the Strata committee meetings as this will show if the building has any underlying issues like structural damage.
So will apartment living be the way of the future? Watch this space…