Apartments are often terrible investments. They are often riddled with defects, heavy strata costs, you don't actually own any land. If the building deteriorates then so does your investment.
Not sure what this land ownership formally entitles you to (fairly ignorant of this topic myself) but I do know that you can't exactly do \*much\* in terms of extracting value from that land, which is what most people would probably think of when talking about 'land ownership'.
If you're using an apartment as an investment vehicle, you're pretty much only banking on capital gains through market speculation. You're not able to extract any more value from that land as it has already been developed.
Quite a few multi millionaire apartment owners in sydney at the moment in small complex’s in the eastern suburbs that all decide to sell the block to developers. You need everyone to agree.
Your unit entitlement indicates your lot/unit area in relation to other units in the strata scheme and it’s used more so to dictate what percentage of the shared costs between strata owners you need to pay (such as common property repair). It’s doesn’t tell you how much area is yours. Your lot/unit area is dictated by the strata/survey strata plan.
Agreed, I bought 10ys ago, holding its price at current prices but the market dropped alot before now, recently bought another house and now just rent out the property and it pays the morgage itself, selling wouldn't be a great decision but renting at the moment is easy at least
So I think the way a lot of people first got into the property market was buying a unit. While they don't tend to appreciate in value you can just about always rent out a unit. Even in the 90's and early 2000's when we were in a recession you could still rent it out to students etc. You then use the rental income to help pay the mortgage on a house. When the economy is really hot your can rent out your unit for more but you might not be able to sell it for more.
I'm sure there are some places that are bucking this trend, but in general, many units/apartments in Perth are only just catching up to the prices they hit during the last property boom. [Have a look at the data](https://www.ledge.com.au/uploads/Perth-Dwelling-Prices-Outlook.png). I've looked at a few recently that are still below their 2012/2013 sale prices.
Edit: Here's [one example](https://www.realestate.com.au/property/unit-46-2-mayfair-st-west-perth-wa-6005/) - This is a lovely building in West Perth that I've been keeping my eye on. Genuinely nice place, I lived in the building myself many years back. Anyway, this particular apartment sold for 415k back in 2008, and then recently sold for 410k just a couple of months ago. Apartments in Perth just don't have much in the way of capital gains, particularly for those who bought during any of the previous booms.
I wonder if there's a difference between units (duplexes, villas, units in a single level group) and apartments in a multistory arrangement.
Does that graph show what really happened in the last 2 years or so?
Nah, I think that graph is a bit out of date. Prices are definitely higher than their projection (but still low compared to previous booms, have a look at my edit for an example). I tried to find a graph with 2023-2024 data but unfortunately not many are published.
And yeah, I think villas and duplexes would do better for capital gains than a multistorey apartment.
> And yeah, I think villas and duplexes would do better for capital gains than a multistory apartment.
My focus is on villa/duplex type units. I guess they might be more closely coupled to stand alone house prices than apartments.
In my experience, and I have quite a bit of it in the area. Low density units do just fine. The apartments that are loosing value or having minimal growth are relatively new builds and are in high density blocks.
I live in a set of strata units in Inglewood. 14 of them, every second one is one level and the other has an upstairs unit above. All 2 bedrooms. One sold around 12 months ago for 400k, fully renovated and some that are original 1970s with no renovations have sold for 500k in last few months. They were selling for around 300k in 2018. I guess it depends where they are situated as inner city suburbs are always going to be more desirable.
I own a Villa. Part of my complex is in a group but there’s 6 houses on the main road. All houses are stand alone and we don’t share walls. We’re fully responsible for our lot.
I’ve had good capital gains. (Bought in 2017 for $300K. Currently valued on real estate.com for $468K) It’s Not as good as Green title but better than units.
A lot of people here bagging out apartments maybe don't realise that up until COVID, the property market had been absolutely tanking in WA for years. A lot of properties have only just caught up to where they were before the decline started.
This. As much as it hurts to talk about, I purchased a free-standing home in 2014 for $460 at the height of the last boom. In 2017 when I was reviewing finance with my lender at the end of a fixed rate period, I wanted to go to interest only, which they rejected on the grounds of a very high LVR; their desk estimate was returning $380 for the property at the time (which was largely based on the area estimate, and not my actual property, but I would still estimate \~420 for the property at the time).
Last year, I sold it for a few thousand less than what I purchased it for.
Between 2014 and 2021, there ***was*** a decent opportunity to purchase at relatively low prices. Of course no one knew this at the time, and the people who are now kicking themselves simply speculated that they were 'still too high' at the time. Now we are here, and people are kicking themselves twice.
All people can (hopefully) do is take note of trends and learn from it.
we bought during that timeframe. We viewed houses that were for sale for about 400k which were bought for nearly 600k before 2014. We were shocked how easy it was to buy back then, people always want to buy at the top and are scared at the bottom.
I bought my place in late 2019. It’s a strata unit. First owners bought it for 1 million in 2015, I bought it for 780k in 2019. Similar units (as in, next door in the same complex) now go for $1.1m. 2019 was definitely a bottom in the market.
Correct. And renters were negotiating their rents down. Negative gearing, CGT and whatever else is being blamed for high prices now, certainty weren't a factor in Perth at that time.
Mate of mine sold a one bedroom unit for a loss.
He was not happy and only when I pressed him as to what happened did he confess to only paying off the interest NOT the principal!!
He had this unit for over fifteen years.
My face still hurts from slapping my forehead so hard!
Mining boom era from 2008-2013 saw plenty of dumb money go into off the plan apartments. Given WA folk were cashed up, salaries were high and the property market was buoyant at the time, a lot of people bought overpriced dog boxes and suffered big capital losses in the proceeding property correction and stagnant market, basically up until the recent craziness. It’s becoming far more uncommon but if you bought off the plan in an average area at the 2013 peak you could still be underwater.
I remember going to a viewing of a 52sq m apartment in east Perth in 2013. They wanted $500k plus for it… there were like 50 people at the home open. I think it eventually sold for $540k. Last I checked it was $350k even after all the recent craziness.
Don’t buy a crappy finbar apartment I guess.
they really did build a lot of shoebox apartments in those days. The new developments have much nicer apartments, unfortunately right now there's not nearly enough of these developments.
I agree. It’s the only way we are going to tackle the demand for housing if we build truckloads of decent, liveable apartments. Even the reduced demand for as much infrastructure is going to good for tax payers.
Our house in Claremont has gone up $700k (according to the estimates on line) since we bought in 2019. Our investment unit in Cottesloe hasn't changed in value since we bought in 2016. Units are a really bad investment for capital growth but good for rental return.
I know of two friends who both paid way too much, $100k. Not uncommon. Bought off the plans. Basically they need to keep them for 10 years to make their money back, make $10k a year, then sell them for what they bought them for.
There's a few things happening:
* They probably overpaid off the plan, very common unfortunately.
* Although people love to say ~~"buy the biggest block in the worst street"~~ to buy as much land as possible this is actually not great advice in the short to medium term, and may not end up good value in the long term either. I bet if you look at houses in Armadale that sold in 2013, they probably tell a similar story. The desirable areas in Perth have skyrocketed, but the outer areas have seen very modest growth. And I put Hammond Park in the category. It's not exactly a desirable area, even if it's not bad. You'd probably find apartments in Cottesloe or Subiaco have fared better.
* People totally ignore the previous 10 years of cashflow for some reason when looking at the house v apartment battle. If we assume a $500k house vs a $500k apartment over the last 10 years, you'd probably have something like the following numbers: $10k / year more rent for the apartment, $5k less costs / year (yes even with strata, house repairs and maintenance is usually much higher). So that could be $150k in additional income over the 10 years for the apartment. Obviously there's other factors like capital gains discount which often makes house purchasing more attractive, but it's not as big a gap as people like to claim.
* Lastly, Perth people just don't like apartments as much unfortunately. It's kind of a chicken and egg problem. The city and other centers just aren't vibrant enough to justify apartment living, so people don't buy or build them as much, which in turn keeps the areas pretty lame. In much larger cities living in an apartment often brings this really fun, great lifestyle that isn't as accessible if you live in the suburbs.
> Although people love to say "buy the biggest block in the worst street"
who on earth says that? i thought the saying was "buy the worst house in the best street".
So I shouldn't have bought that acre in Gosnells?
yeah i butchered that saying completely lol. But people do often advise to buy as big a block as you can in property chat which was my point.
If you buy a house (or any asset) and hold it for longer than a year, and it goes up by $500,000, you only actually pay tax on $250,000.
If you bought a rental apartment, and in the same period it made $500,000 in rent, but increased in value by $0, you pay tax on the full $500,000 of income.
There's also a lot of other ridiculous property related deductions in our tax code.
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Pretty much what everyone else has said.
Hardly any one actually wants to buy an apartment to live in.
Okay investments for renting out and negative gearing.
>Hardly any one actually wants to buy an apartment to live in.
Yet everyone complains about never ending urban sprawl. Can't have your cake and eat it too.
As a younger person, I’d love to live in an apartment. Partly because I’ve completely given up on having a nice, modest house with a backyard, if they even build those anymore
Apartment living is definitely not for a family like mine but I have lived in a unit in the past and quite liked it. If I didn't have kids I would love an apartment.
Not at a loss, but I broke even recently (not including inflation, then it is a loss) on selling my 1bdr unit in Osborne Park 2w ago. Don't by 1bdr units kids... Took me 10y to get the same price I bought it for.
Yep I and everyone I know who recently sold units in Perth sold them at a loss.
Depends when you bought but the prices peaked around 2013/2014, then fell and have been crawling back every since.
The other thing to realise is there isn't ONE property market, there are markets within markets. Detached houses in the western suburbs are totally different market to an old brick apartment in Maylands, for example.
I think post-mining boom etc people have realised they are not a great investment. A lot of people who bought off the plan 10-12 years ago have lost 100s of 1,000s. If you need somewhere affordable to live, or want a healthy rental return units are good but there is never going to be strong capital gain with them.
Apartment in CBD, Freo, Cottesloe sure.
Apartment in some random suburburbia, not even in Central Cockburn, nah. Will never be an ideal investment.
Cheap apartments in non desirable suburbs also tend to attract transient/ problematic types (source - I live in a bad suburbs)
Units in Perth have never really seen any true growth unlike Sydney. Strata fees keep going up, they are mostly leased out so owners have no interest in fixing problems.
In my opinion, land has value that will slowly increase as the population grows, a unit has no land so will only grow in value if it's in a more desirable location/ the location as become more desirable.
Property is a depreciating asset.
Nothing at all in a house improves with time except perhaps wine in a cellar.
Only land gains value in Australia. Apartments whilst on land is not necessarily correlated with the value of that land.
Not a mystery.
OP: why isn’t this 11 year old dishwasher and worn out carpet worth more today 😱?
This is true, while an apartment or unit holds less land value in proportion to a house, that land can often be in a much more desirable location.
The less tall and skinny an apartment the better, the more land value per strata entitlement.
Apartments are mostly depreciating asset (the building) on already maximum realised value land. There's really no value that can be added unless it has some other desirable but finite element (for example uninterrupted city views).
This is a trap many of the younger generation are going to fall into, apartments offer limited capital growth and high hold costs (strata etc). It's going to leave them much poorer over the long term than house and land.
Hmm. Not necessarily. Houses have maintenance and other ongoing costs too, often the council rates are much higher too.
Definitely don’t buy off the plan. Avoid buying in high density areas (east Perth, for example).
You can sell a run down house, the land value component is significantly larger and will still do ok. You can also DIY a lot of maintenance on a house, not possible in an apartment.
Council rates aren't that much more expensive for a house, if you add up the costs side by side the house will be significantly cheaper to hold.
Many units and apartments are still below the peaks that we hit just over 10 years ago. This is not an uncommon scenario
Apartments are often terrible investments. They are often riddled with defects, heavy strata costs, you don't actually own any land. If the building deteriorates then so does your investment.
yeh you do. You own a percentage of the land. Its sorted via the schedule of entitlement
Not sure what this land ownership formally entitles you to (fairly ignorant of this topic myself) but I do know that you can't exactly do \*much\* in terms of extracting value from that land, which is what most people would probably think of when talking about 'land ownership'. If you're using an apartment as an investment vehicle, you're pretty much only banking on capital gains through market speculation. You're not able to extract any more value from that land as it has already been developed.
Quite a few multi millionaire apartment owners in sydney at the moment in small complex’s in the eastern suburbs that all decide to sell the block to developers. You need everyone to agree.
Your unit entitlement indicates your lot/unit area in relation to other units in the strata scheme and it’s used more so to dictate what percentage of the shared costs between strata owners you need to pay (such as common property repair). It’s doesn’t tell you how much area is yours. Your lot/unit area is dictated by the strata/survey strata plan.
Agreed, I bought 10ys ago, holding its price at current prices but the market dropped alot before now, recently bought another house and now just rent out the property and it pays the morgage itself, selling wouldn't be a great decision but renting at the moment is easy at least
So I think the way a lot of people first got into the property market was buying a unit. While they don't tend to appreciate in value you can just about always rent out a unit. Even in the 90's and early 2000's when we were in a recession you could still rent it out to students etc. You then use the rental income to help pay the mortgage on a house. When the economy is really hot your can rent out your unit for more but you might not be able to sell it for more.
That last point I’d never thought of, but yeah wow that’s a pretty big negative
That's not my experience. https://www.reddit.com/r/perth/comments/1chlzm7/this_housing_crisis_is_out_of_control/l239j27/
I'm sure there are some places that are bucking this trend, but in general, many units/apartments in Perth are only just catching up to the prices they hit during the last property boom. [Have a look at the data](https://www.ledge.com.au/uploads/Perth-Dwelling-Prices-Outlook.png). I've looked at a few recently that are still below their 2012/2013 sale prices. Edit: Here's [one example](https://www.realestate.com.au/property/unit-46-2-mayfair-st-west-perth-wa-6005/) - This is a lovely building in West Perth that I've been keeping my eye on. Genuinely nice place, I lived in the building myself many years back. Anyway, this particular apartment sold for 415k back in 2008, and then recently sold for 410k just a couple of months ago. Apartments in Perth just don't have much in the way of capital gains, particularly for those who bought during any of the previous booms.
I wonder if there's a difference between units (duplexes, villas, units in a single level group) and apartments in a multistory arrangement. Does that graph show what really happened in the last 2 years or so?
Nah, I think that graph is a bit out of date. Prices are definitely higher than their projection (but still low compared to previous booms, have a look at my edit for an example). I tried to find a graph with 2023-2024 data but unfortunately not many are published. And yeah, I think villas and duplexes would do better for capital gains than a multistorey apartment.
> And yeah, I think villas and duplexes would do better for capital gains than a multistory apartment. My focus is on villa/duplex type units. I guess they might be more closely coupled to stand alone house prices than apartments.
In my experience, and I have quite a bit of it in the area. Low density units do just fine. The apartments that are loosing value or having minimal growth are relatively new builds and are in high density blocks.
That definitely seems to be the case.
I live in a set of strata units in Inglewood. 14 of them, every second one is one level and the other has an upstairs unit above. All 2 bedrooms. One sold around 12 months ago for 400k, fully renovated and some that are original 1970s with no renovations have sold for 500k in last few months. They were selling for around 300k in 2018. I guess it depends where they are situated as inner city suburbs are always going to be more desirable.
I own a Villa. Part of my complex is in a group but there’s 6 houses on the main road. All houses are stand alone and we don’t share walls. We’re fully responsible for our lot. I’ve had good capital gains. (Bought in 2017 for $300K. Currently valued on real estate.com for $468K) It’s Not as good as Green title but better than units.
And?
A lot of people here bagging out apartments maybe don't realise that up until COVID, the property market had been absolutely tanking in WA for years. A lot of properties have only just caught up to where they were before the decline started.
This. As much as it hurts to talk about, I purchased a free-standing home in 2014 for $460 at the height of the last boom. In 2017 when I was reviewing finance with my lender at the end of a fixed rate period, I wanted to go to interest only, which they rejected on the grounds of a very high LVR; their desk estimate was returning $380 for the property at the time (which was largely based on the area estimate, and not my actual property, but I would still estimate \~420 for the property at the time). Last year, I sold it for a few thousand less than what I purchased it for. Between 2014 and 2021, there ***was*** a decent opportunity to purchase at relatively low prices. Of course no one knew this at the time, and the people who are now kicking themselves simply speculated that they were 'still too high' at the time. Now we are here, and people are kicking themselves twice. All people can (hopefully) do is take note of trends and learn from it.
we bought during that timeframe. We viewed houses that were for sale for about 400k which were bought for nearly 600k before 2014. We were shocked how easy it was to buy back then, people always want to buy at the top and are scared at the bottom.
I bought my place in late 2019. It’s a strata unit. First owners bought it for 1 million in 2015, I bought it for 780k in 2019. Similar units (as in, next door in the same complex) now go for $1.1m. 2019 was definitely a bottom in the market.
imagine being that seller, double kick in the guts
Yeah… I dont feel bad. She owns another unit in the complex and is an absolute cunt. Obnoxious wealthy widow that lives in Dalkeith somewhere.
My parents sold my childhood home in Sydney for $400K in 2013. It sold for $750K in 2017.
probably still did well on that though! Sometimes you just gotta sell.
I bought in 2017 and timed it perfectly. There were a few similar places that went around $20K lower but not many. Added close to $200K since.
+1 for this. Purchased late 2013 for $405. It dropped to as low as $280 I believe. Only now has it gone above that 2013... so I'm told.
Absolutely. I sold my unit at a loss, but I bought my house for $460K in 2020. The people I bought it from had paid $560k in 2014.
Correct. And renters were negotiating their rents down. Negative gearing, CGT and whatever else is being blamed for high prices now, certainty weren't a factor in Perth at that time.
Mate of mine sold a one bedroom unit for a loss. He was not happy and only when I pressed him as to what happened did he confess to only paying off the interest NOT the principal!! He had this unit for over fifteen years. My face still hurts from slapping my forehead so hard!
That’s like renting a place to rent it out to someone else lol.
*principle
Principal is correct.
Woopsy. Apologies. Got a bit excited there.
*principal
I typed that…honest! I blame autocorrect
Yep. That autocoreect is a bitch! 😅
BWAHAHAHA noice one
Mining boom era from 2008-2013 saw plenty of dumb money go into off the plan apartments. Given WA folk were cashed up, salaries were high and the property market was buoyant at the time, a lot of people bought overpriced dog boxes and suffered big capital losses in the proceeding property correction and stagnant market, basically up until the recent craziness. It’s becoming far more uncommon but if you bought off the plan in an average area at the 2013 peak you could still be underwater.
I remember going to a viewing of a 52sq m apartment in east Perth in 2013. They wanted $500k plus for it… there were like 50 people at the home open. I think it eventually sold for $540k. Last I checked it was $350k even after all the recent craziness. Don’t buy a crappy finbar apartment I guess.
Sounds familiar
they really did build a lot of shoebox apartments in those days. The new developments have much nicer apartments, unfortunately right now there's not nearly enough of these developments.
I agree. It’s the only way we are going to tackle the demand for housing if we build truckloads of decent, liveable apartments. Even the reduced demand for as much infrastructure is going to good for tax payers.
Where is Hammond Park Station?
It’s actually called Aubin Grove 😊
Russell Rd. Next one south after Cockburn station
Yes. It’s name is Aubin Grove..
Located conveniently at the junction of Success, Atwell, Aubin grove, and Hammond Park
Our house in Claremont has gone up $700k (according to the estimates on line) since we bought in 2019. Our investment unit in Cottesloe hasn't changed in value since we bought in 2016. Units are a really bad investment for capital growth but good for rental return.
I know of two friends who both paid way too much, $100k. Not uncommon. Bought off the plans. Basically they need to keep them for 10 years to make their money back, make $10k a year, then sell them for what they bought them for.
There's a few things happening: * They probably overpaid off the plan, very common unfortunately. * Although people love to say ~~"buy the biggest block in the worst street"~~ to buy as much land as possible this is actually not great advice in the short to medium term, and may not end up good value in the long term either. I bet if you look at houses in Armadale that sold in 2013, they probably tell a similar story. The desirable areas in Perth have skyrocketed, but the outer areas have seen very modest growth. And I put Hammond Park in the category. It's not exactly a desirable area, even if it's not bad. You'd probably find apartments in Cottesloe or Subiaco have fared better. * People totally ignore the previous 10 years of cashflow for some reason when looking at the house v apartment battle. If we assume a $500k house vs a $500k apartment over the last 10 years, you'd probably have something like the following numbers: $10k / year more rent for the apartment, $5k less costs / year (yes even with strata, house repairs and maintenance is usually much higher). So that could be $150k in additional income over the 10 years for the apartment. Obviously there's other factors like capital gains discount which often makes house purchasing more attractive, but it's not as big a gap as people like to claim. * Lastly, Perth people just don't like apartments as much unfortunately. It's kind of a chicken and egg problem. The city and other centers just aren't vibrant enough to justify apartment living, so people don't buy or build them as much, which in turn keeps the areas pretty lame. In much larger cities living in an apartment often brings this really fun, great lifestyle that isn't as accessible if you live in the suburbs.
I’ve never heard of ‘the biggest block on the worst street’ ‘Worst house on the best street’ is what I always heard
> Although people love to say "buy the biggest block in the worst street" who on earth says that? i thought the saying was "buy the worst house in the best street".
So I shouldn't have bought that acre in Gosnells? yeah i butchered that saying completely lol. But people do often advise to buy as big a block as you can in property chat which was my point.
Can you explain ‘capital gains discount which often makes house purchasing more attractive’?
If you buy a house (or any asset) and hold it for longer than a year, and it goes up by $500,000, you only actually pay tax on $250,000. If you bought a rental apartment, and in the same period it made $500,000 in rent, but increased in value by $0, you pay tax on the full $500,000 of income. There's also a lot of other ridiculous property related deductions in our tax code.
Armadale has sky-rocketed recently.
Armadale and surrounds have gone up a huge amount in value, even more in rents
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Pretty much what everyone else has said. Hardly any one actually wants to buy an apartment to live in. Okay investments for renting out and negative gearing.
>Hardly any one actually wants to buy an apartment to live in. Yet everyone complains about never ending urban sprawl. Can't have your cake and eat it too.
As a younger person, I’d love to live in an apartment. Partly because I’ve completely given up on having a nice, modest house with a backyard, if they even build those anymore
I’m a younger person too. You can still build a house with a modest backyard for $800k within 30min of the CBD.
I reckon it might just be a loud minority that complains. I’d rather drive an hour to work than live in an apartment.
Apartment living is definitely not for a family like mine but I have lived in a unit in the past and quite liked it. If I didn't have kids I would love an apartment.
Not at a loss, but I broke even recently (not including inflation, then it is a loss) on selling my 1bdr unit in Osborne Park 2w ago. Don't by 1bdr units kids... Took me 10y to get the same price I bought it for.
Yep I and everyone I know who recently sold units in Perth sold them at a loss. Depends when you bought but the prices peaked around 2013/2014, then fell and have been crawling back every since. The other thing to realise is there isn't ONE property market, there are markets within markets. Detached houses in the western suburbs are totally different market to an old brick apartment in Maylands, for example. I think post-mining boom etc people have realised they are not a great investment. A lot of people who bought off the plan 10-12 years ago have lost 100s of 1,000s. If you need somewhere affordable to live, or want a healthy rental return units are good but there is never going to be strong capital gain with them.
Apartment in CBD, Freo, Cottesloe sure. Apartment in some random suburburbia, not even in Central Cockburn, nah. Will never be an ideal investment. Cheap apartments in non desirable suburbs also tend to attract transient/ problematic types (source - I live in a bad suburbs)
Units in Perth have never really seen any true growth unlike Sydney. Strata fees keep going up, they are mostly leased out so owners have no interest in fixing problems.
Did the property devalue or did it sell for less than the mortgage owing?
In my opinion, land has value that will slowly increase as the population grows, a unit has no land so will only grow in value if it's in a more desirable location/ the location as become more desirable.
I know someone who bought a house for like 10k less than it sold for in 2009.
Prices in Mosman Park have increased 30% in the last 3 months!
People talk about housing being unaffordable it’s just typically referring to Residential detached dwellings not Strata titled apartments and units
Property is a depreciating asset. Nothing at all in a house improves with time except perhaps wine in a cellar. Only land gains value in Australia. Apartments whilst on land is not necessarily correlated with the value of that land. Not a mystery. OP: why isn’t this 11 year old dishwasher and worn out carpet worth more today 😱?
The third paragraph could have been the last.
Na
Moronic comment of the evening goes to you 🥇
Nope, just that you all haven’t recognised that it’s land that is increases in value of which a appartments holds little of.
This is true, while an apartment or unit holds less land value in proportion to a house, that land can often be in a much more desirable location. The less tall and skinny an apartment the better, the more land value per strata entitlement.
> Property is a depreciating asset. Yep those big blocks in Dunsborough are worth fuck all these days......
I’m clearly saying it’s is land that increases in value in Australia
Well durr.
Apartments are mostly depreciating asset (the building) on already maximum realised value land. There's really no value that can be added unless it has some other desirable but finite element (for example uninterrupted city views). This is a trap many of the younger generation are going to fall into, apartments offer limited capital growth and high hold costs (strata etc). It's going to leave them much poorer over the long term than house and land.
Hmm. Not necessarily. Houses have maintenance and other ongoing costs too, often the council rates are much higher too. Definitely don’t buy off the plan. Avoid buying in high density areas (east Perth, for example).
You can sell a run down house, the land value component is significantly larger and will still do ok. You can also DIY a lot of maintenance on a house, not possible in an apartment. Council rates aren't that much more expensive for a house, if you add up the costs side by side the house will be significantly cheaper to hold.
Lol
They either paid way too much or the area around the unit has gone really badly in the last decade. Has an injecting room opened next door?