Why to invest in Melbourne apartments for the long term
According to The Urban Development Institute of Australia, inner city apartments are still a good property option for buyers, despite oversupply fears.
Victorian Chief Executive of The Urban Development Institute of Australia, Danni Addison, stated that much of the oversupply talk “focuses solely on the short term outlook”.
It’s important to remember that an investment in property should be for the long term and not just a short term quick win. Ideally, you should be holding onto a property for a minimum of seven to ten years to get the most out of your investment property. This is also generally the length of time that it takes for a property to double in value.
There are a number of factors though that make a Melbourne off the plan apartment purchase worthwhile. These include the following.
World’s Most Liveable City Six Years Running
Firstly, Melbourne has been named the most liveable city in the world for six years in a row by the Economist Intelligence Unit’s Liveability Survey. The EIU surveys 140 cities across five categories including healthcare, stability, culture and environment, education and infrastructure. With excellent schools and universities, first class hospitals, beautiful and plentiful parklands as well as a strong economy, purchasing off the plan apartments in Melbourne makes a smart move.
Strong Population Growth
Another important factor that is influencing the property market is population growth. Victoria is home to the fastest growing population in Australia and is expected to double between now and 2051. During this time, Melbourne’s inner middle suburbs are expected to grow by approximately 1 million people, and Melbourne will become the largest capital city by mid-century, knocking Sydney off its number one spot.
Melbourne will pretty much experience the same volume of growth that occurred over the last 85 years, in just 35 years which is a phenomenal amount of growth.
With a rapidly rising population, new homes will be urgently required to house this new population, and the Melbourne apartment market will help satisfy this need.
As well as a strong population growth, housing affordability is also influencing the Melbourne apartment market. Currently, Sydney is the most expensive capital city in Australia for property, with the median dwelling price currently standing at $880,000 at the end of June 2017, whilst Melbourne’s median dwelling price is $675,000.
Apartments also provide a more affordable housing option where the median Melbourne house price at 30 June 2017 stood at $755,000, and apartments $542,800. More and more Victorians can no longer afford to buy or live in a house, especially when property prices are outpacing wages growth. As house prices continue to soar, more and more people will be opting for apartment living instead.
Today, apartments can cater for numerous buyer types including first home buyers, young professionals, low to middle income earners, pensioners and downsizers. Larger three bedroom apartments can also accommodate families.
There is a growing trend whereby the number of persons per household is shrinking. The average people per household in Greater Melbourne sits at 2.7 persons (Census 2016) and 1.9 persons in Melbourne state suburb, calling for more one and two bedroom apartments to be built.
Apartment living also provides greater lifestyle choices, with many professionals preferring to live close to the city and their workplace, reducing their travel times. More and more of us are time poor and having everything we need close to hand makes our day to day lives far easier. We don’t always want to get in the car and drive to the local shops to pick up the daily newspaper. Having amenities within easy walking distance is far more appealing.
Apartments also provide a greater lifestyle appeal, with many hotel-style amenities found within the new apartment developments. Besides the usual fully equipped gymnasiums and swimming pools, residents of new apartments Melbourne are also treated to outdoor cinemas, stunning rooftop terraces and gardens, teppanyaki grills, stylish bars and private dining rooms, cosy libraries with log fires, games rooms and much more.
Melbourne apartment living both today and in the future is turning more and more into a 5-star hotel experience, something which you can’t really experience from a house. Apartments therefore offer the whole package – convenience and lifestyle. Plus, much of the population in Melbourne comes from Asia, where apartment living is the norm in big cities like Hong Kong.
Falling Apartment Supply
After a relatively high supply of new apartments in 2015 and 2016, there is now a falling supply of new apartments in Melbourne that are entering the market.
According to Ms Addison, “We’re now seeing a significant decline in the number of new apartments coming to market, and that really challenges the perception of an oversupply.”
With the population projected to rapidly rise in the next 35 years, and a reduction in the number of new apartments entering the property market, there’s actually a greater chance that Melbourne will face an apartment undersupply in the long term, rather than an apartment oversupply.
Although there are some suburbs in Melbourne, particularly within the inner city that are currently experiencing a property oversupply, there are many high growth suburbs that are worth investing in right now.
Get in Touch
Want to know more about buying new apartments in Melbourne as a long term investment? Interested in knowing where the high growth suburbs are to get the most out of your money? Get in touch with the iBuyNew team to find out the latest on investing in Melbourne apartments and discover why off the plan apartments could be a great option for the long term.
Simply give us a call today on 1300 123 463.