The appeal of apartments
BABY boomers looking to stay close to home — after selling the family house — are driving up apartment prices from bayside Melbourne to key eastern locations.
The increase is significant in these areas, which offer downsizers the chance to stay living locally in a smaller, low maintenance home.
In Sandringham, where the median unit price is $751,210, unit prices grew 25.3 per cent last year. In Camberwell (median price $730,500) the growth was 24.1 per cent. They are first and second on REIV’s list of top 20 growth suburbs.
In both areas there is a growing number of new apartments and townhouses, often finished to a high standard.
Agents say they are attractive to empty nesters who no longer need a large house and garden but are reluctant to leave the area where they have friends, have lived for decades and are part of the community.
Other suburbs on the list include Clayton, with 21.4 per cent growth in unit prices last year, Blackburn with 17.4 per cent, Caulfield South with 17.3 per cent, Glen Waverley with 17.2 per cent and Hawthorn East with 16.3 per cent.
Toorak, Melbourne’s most expensive suburb, has many established apartments attractive to downsizers. Its median apartment price of $937,500 was up 25.8 per cent in 2014’s final quarter because of the number of sales of more than $1 million.
Those apartments, mostly penthouses, included a deluxe penthouse expected to beat the suburb’s $6.2 million record.
Other suburbs to experience growth of more than 15 per cent in the final quarter of the year included Richmond, Fitzroy and Carnegie.
Melburnians have warmed to apartment living. In the second half of last year alone, more than 11,000 were sold across Melbourne as buyers sought to secure their slice of high-rise heaven.
The key suburbs for the most apartment sales also support the trend, with St Kilda (504 sales), South Yarra (473) and Richmond (403) all high in the sales stakes in 2014.
A key to the popularity of apartments is the value they can offer in many locations — the median price for apartments in St Kilda is $497,000 far more affordable than a house in the suburb.
In this way, apartment living is not only an option for those with deep pockets. Many firsttime buyers find this an ideal way to get a foot on the housing ladder. For those on a tight budget an apartment can be the answer.
This is certainly the case across Melbourne. The median price of a unit in Dandenong is just $285,000, whereas the median house price is $432,500. In Thomastown, the median unit price is $300,000, and $435,000 for a house, and in St Albans it is $313,000 compared with $383,000.
Those looking for high capital growth in outer suburbs could also turn towards Frankston, St Albans, Glenroy and Reservoir. These are all working-class suburbs, which are seeing unit and apartment prices rising — especially at the end of 2014 — as they become more popular.
It’s important for buyers to be selective when looking at apartments, and to gain good advice from local agents — including buyer’s agents, who can help by supplying detailed information.
There are factors such as location, proximity to transport, shops and other infrastructure, apartment quality and the block, the neighbourhood and even the neighbours, which can affect the price.
And, if you’re looking to downsize, many of these factors will also be high on your checklist when choosing your ideal smaller home.
Enzo Raimondo is Real Estate Institute of Victoria chief executive officer