HOUSE PRICE BOOM AS APARTMENTS GET CHEAPER

INVESTORS WHO KNOW THE LOCAL MARKET WILL NOT BE INTERESTED MAINLY BECAUSE OF THE FALLING APARTMENT RESALE PRICES             

Widening Gap Between House & Apartment Price Click to enlarge

Widening Gap Between House & Apartment Price
Click to enlarge

High Rise Apartment Click to enlatge

High Rise Apartments Doncaster Road
Click to enlarge

The latest SQM Research data shows all unit/apartment asking prices in Doncaster 3108 have fallen from a median high of $675,000 in August 2009 to $521,100 in March 2015. These figures include Villa Units and Town Houses which accounts for the higher asking prices in 2009 when they were about equal to the number of apartments being

completed. Villa Units and Townhouses, though still selling well, now make up a smaller proportion of total units (shown in red on graph) but are still inflating the actual apartment prices when combined together as units. e.g. Town Houses are currently fetching upwards of $750,000.

Another factor in the lower prices is the increasing number of apartments being built under 50m2 to gain a higher apartment yield to offset building costs and sell on affordability rather than value for money.

Local house hunters and first home buyers may have cause to complain about being outbid by the unbridled influx of overseas money, thanks to the lack of scrutiny from the FIRB, but the legitimate overseas purchasers “buying off the plan” have saved Manningham’s Doncaster Hill and its high rise apartment strategy from being a complete disaster. The difficulty however, for those who have purchased for higher prices from overseas intermediaries, will face heavy losses if and when they attempt to sell on the local market.  This is because they are only allowed to buy apartments off the plan so investors who know the local market will not be interested mainly because of falling apartment resales.

The lack of capital gain on Doncaster Hill apartments is also due to the high number still to be marketed and the inadequate infrastructure.

3 Responses to “HOUSE PRICE BOOM AS APARTMENTS GET CHEAPER”

  1. Ruby says:

    You won’t find many apartments on Doncaster Hill much larger than 100m2 because they are too costly to build. An apartment over 100m2 could sell for around $800,000 enough to buy a 150m2 two storey town house in the same area. Most apartment purchasers are from Asia buying off the plan through overseas intermediaries which is adding further to the cost. The bureaucrats who planned the Doncaster Hill High-rise strategy might be breathing a sigh of relief given that there is no local interest.

  2. Sherl says:

    I wrote to you last year to ask why our “planners” are imposing these dog box apartments upon us? Why can’t they be made more affordable and attractive for families? Why are there not more high-rise apartments with three or four bedrooms, with large balconies and of a comparable size to “traditional” detached homes? What would need to change for that to happen? Nurseries should be set aside in these giant buildings for working parents to leave their children instead of having to hack their way through heavy AM and PM traffic ferrying their children to a far off child minding facility?
    Sherl

  3. Coversign says:

    The resale prices of the high rise apartments continue to plummet on the local market. A one bedroom apartment in a high-rise building close to Westfield Shopping centre, purchased for $359,000 in 2011-12, is now listed for sale in March 2015 for only $340,000 and another owner in the same development, who paid $559,000, will accept $550,000 if a buyer could be found… huge losses when you add agents commission and the legal costs involved etc.

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