The ap­peal of apart­ments

Herald Sun - Property - - OPINION - ENZO RAI­MONDO

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

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