DONCASTER HILL–CITY OF GHOST APARTMENTS?

Vacant new dwellings won’t help to boost the country’s available housing stock. Reliable studies indicate that the number of empty houses and apartments is much higher than the previous estimates, with at least twenty percent of all investor-owned properties not being occupied.

Doncaster Road High Rise 273 Apartments Click to enlarge

Doncaster Road High Rise
273 Apartments
Click to enlarge

The Pinnacle Donncaster 160 Apartments Click to enlarge

The Pinnacle Donncaster
160 Apartments
Click to enlarge

Doncaster Hill high rise apartments are now being sold off the plan through overseas agents mainly to Chinese citizens who regard Australia as a safe place to put their money. This has been called  “Land Banking” or “Bricks and Mortar banking” which has contributed to so many of Melbourne’s  apartments remaining empty after getting assurances of a high capital gain because of the strong Australian economy so they didn’t need the problems associated with renting them out. But locals are shying away from apartments particularly

on Doncaster Hill where demand has totally disappeared. Resale prices have dropped sharply to the extent that those lucky enough to find a buyer would have to bear a heavy loss. There are apartment owners who have postponed selling in the hope that the market will improve enough to at least redeem their original outlay. This is because they paid well above current selling prices, so those who know the local market will not be interested.  In one major high rise tower there is an average of 20% of its apartments for sale at any one time.

Overseas developers have come to the rescue by taking over all the key development sites on Doncaster Hill and are now building the high rise apartments and marketing them in Asia. Legitimate overseas purchasers buying off the plan have saved the high rise apartment strategy from being a complete disaster. The difficulty, however, for foreign investors is that they too will face heavy losses if and when they attempt to sell.

A lot has been written about the huge flow of money coming out of China where its citizens are quite anxious to place their money outside of the country. This is not ideal if they are buying apartments sight unseen off the plan and trusting some of the overseas agents acting for developers. There will be people taking advantage of their hunger for Australian property by presenting the apartments as high quality sought after housing with the potential for substantial capital gains when they are not, when they are so small you can hardly swing a cat and of such poor quality with common design flaws such as cramped layouts and a lack of natural light. Bedrooms without windows exist in over 40% of new residential developments studied, commonly described in the industry as “gun barrel” apartments. Some of the apartment developments are so dense that they would not pass laws in major cities throughout the world, prompting the need for an urgent review of apartment design.

One Bedroom Apts Click to enlarge

One Bedroom Apartments
Click to enlarge

Almost half of  apartments on Doncaster Hill are under 50 square metres – not much bigger than a generous double garage and most of them without a window to the Bedroom. These would be outlawed in other world cities, including Sydney. The Property Council of Australia and much of the industry acknowledges the problem.  

5 Responses to “DONCASTER HILL–CITY OF GHOST APARTMENTS?”

  1. Woody says:

    The overseas buyers, who can only buy properties that are new or off the plan, have been conned into buying Doncaster Hill apartments when the local demand for them had dried up years ago. Not only by some unscrupulous overseas agents but also Manningham’s misleading propaganda and dodgy reports on its council website. Only 12 km from the city when it is actually 18 km by bus, a rail service to Doncaster Hill which will never happen etc. The Manningham executives should be held to account, but are protected from litigation, and will have moved on by the time Doncaster Hill ceases to be “a place to be”.

  2. Glencairn says:

    There have been a number of misleading items published on the Manningham website that have been removed recently particularly on employment where council had predicted 10,000 full time jobs by 2021.

  3. Jason says:

    Manningham are playing a very dangerous game in promoting Doncaster Hill’s tiny apartment strategy… they are not the selling agents. Some of council’s claims are outrageous and may come back to bite them at the end of the day. I would not be paying council rates if my apartment was worth 8% less than what I paid the day I moved in. Stick to what you do best..rubbish collection and street repairs instead of deceiving overseas buyers.

    • Casement says:

      It won’t be a going rate that will determine resale prices of these apartments but whether they will find a buyer. Lending authorities base the amount they lend on what they are fetching..not on what the overseas buyer has paid nor what it had cost the the developer to build. They won’t be attracting cash buyers on the local market because they will looking elsewhere for better quality and infrastructure.

  4. Geraldine says:

    Doncaster Hill is a long way from the City and has no railway station or full time employment. Renting out these apartments is not going to be easy with so many nearing completion. The overseas buyers should be encouraged to appoint a real estate firm specialising in collecting rent with an authority to pay the rates and body corporate fees as they become due instead of leaving their properties vacant.

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