In a post below, I mention that the May edition of Australian Property Investor had a good story about the oversupply of inner city Melbourne high rise, titled "High on High-rises" (page 86, May 2011 edition). Some quotes about the Melbourne apartment market:"What we have sitting out there is a potential tsunami of apartments. They're all high-rises and a lot of them are aimed at the investor market.""They're missing the point altogether, building high-rises and thinking this will solve the housing dilemma. These places have poor facilities, with a lack of shops and where people don't get a chance to mix in a community.""High-rise apartments are largely marketed to investors because developers are under pressure to sell a certain percentage off the plan before they can build. You're buying brand new, so obviously paying a premium for the 'wow' appeal.""The majority of this construction will also be relatively small one and two-bedroom apartments aimed at investors, and 50 to 70% populated by students. The initial vacancy rate is likely to be high, taking significant time to absorb the necessary demand."The Age recently reported 88% of the 4,155 apartment sales in the first half of 2010 were in investment focused buildings."My concern is that with a high-rise there are so many of them and they're all the same. There's no point of difference.""Because so many come on the market at once, they get let very quickly to anybody that comes along. Before you know it they look like slums.""Investors should try and buy two-bedroom properties [rather than one-bedrooms] if they can afford it.""In a high-rise, you're buying a carbon copy of 100 or 200 other units. Your until will be completely dictated by what the last unit sold for.""Poor property struggles in the market for years."
"High Rises"
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