Top 10 areas in Australia to avoid buying an apartment revealed
The 10 best neighborhoods to avoid buying an apartment in Australia have been revealed, with inner-city suburbs taking the top spots.
Data published by RiskWise Property and CoreLogic showed that the CBD and areas adjacent to the CBD occupied eight of the top 10 suburbs suffering from an oversupply of apartments.
BuyersBuyers CEO Doron Peleg said investing in city apartments has long been a “substantial risk”, especially when buying off plan.
The pandemic has only increased the risk, as the closure of international borders and the exodus of people moving to regional areas have eroded demand for pillows in city centers.
Top 10 “dangerous” suburbs
The popular inner-city suburbs of Victoria, New South Wales, Western Australia and South Australia have a surplus of small apartments, and more are on the way.
Mr Peleg said oversupply has been a long-standing problem in those areas as developers looking to make the most of expensive land have focused on building small apartments for years.
This caused supply to exceed demand, especially during the pandemic.
Mr Peleg said people should be wary of buying apartments in the 10 listed suburbs because they present a higher risk of vacant rental housing and capital loss.
Only two of the top 10 are outside the CBD: Gosford in New South Wales and Broadbeach in Queensland.
Mr Peleg said it was “very surprising” that Gosford, a suburb 76 kilometers north of Sydney, was on the list.
He said the suburb has attracted real estate developers thanks to increased interest in the central coast and some zoning changes.
However, he found the inclusion of Broadbeach in Queensland unsurprising.
He attributed it to a “constant trend” on the Gold Coast of demolition of single-family homes for apartments, resulting in oversupply.
Over-enthusiastic investors are also paying “outrageous” apartment prices there due to limited knowledge of the area, he said.
“We are talking about hundreds of thousands of dollars [in] overpayment, ”said Peleg.
He said some Gold Coast sellers had sold property well above their real value to investors in Sydney, who had no “a clue” of what they were doing and based their offers on. Sydney prices.
Mr Peleg said Gold Coast sellers were able to sell properties valued at $ 1.3 million for around $ 1.68 million to inexperienced but aggressive buyers.
“This is the reason why the market is booming,” he said.
“They are absolutely convinced they got a good deal.”
Tips for aspiring investors
Mr. Peleg gave The new daily his top tips for people looking to invest in Australian properties.
- Think long term – Don’t let short-term market movements take you off course
- Prioritize access to capitals – “Employment hubs” such as South East Queensland, Greater Melbourne and the Central Coast of New South Wales are attractive proposals
- Consider the food chain of properties – The ranking of demand for properties goes from single-family houses, to semi-detached houses, to townhouses, and then to small family apartments
- Keep a cool head – Do your research and avoid making rash decisions
- Talk to an expert – Knowledge of local buyers’ agents and real estate experts could help you save money.