Apartments took a big hit during the COVID-19 pandemic, as regional areas with large living and outdoor spaces became the emerging market for investors, renters and owner-occupiers. However, as Australia is transitioning safely into post-COVID property market, apartments again have the biggest search volume online.
There is a demand imbalance from a record low supply of new apartments in Australia’s capital cities currently. Across the Australian east coast, only 20,000 apartments are scheduled to be built in 2022 compared to 50,000 completed in 2019. The lack of new supply is good news for apartment investors as median sale prices will start to appreciate to reflect the looming shortage.
Here’s why apartment prices could surge up:
- Due to easing of COVID-19 restrictions, many workers are returning to their city job, and long commutes could negate the positives of regional living.
- As international students and migration increase with national borders reopening, it will cause apartment prices to surge as they often require transitionary accommodation before they potentially purchase a house.
- Surging house prices across the country are fuelling the demand for apartments.
- Undersupply and persistently underlying solid demand for apartments/high-density living may boost the prices.
A review of housing and apartment prices over the last 25 years shows prices have doubled every five to seven years. Stretched housing affordability and population growth is likely to surge once Australia’s borders open up, suggesting there will again be a structural shift to higher density living. A similar pattern has emerged across most developed economies.
Do you want to invest in apartments?
If you are buying a unit in the central business districts, there is more to consider than buying a house in the suburbs.
We’ve helped countless customers like you to finance the purchase of their high rise unit, and as a result, we’ve specialised in the niche.
Please call us on 1300 889 743 or enquire online. Our expert mortgage brokers can assist you in determining how much you can borrow and which lenders you qualify with.