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What makes an apartment a good investment?

By Louise Morrin

According to the Housing Industry Association, much of the reason behind the construction industry's fantastic rebound in August is due to apartment building. In fact, multi-unit dwellings have consistently been a driver of rising approvals and new home building over the past year or so. 

So there's a good chance that if you're looking to buy property in Carlton, St George, Beverley Park and other areas you may end up purchasing an apartment. Many experts will tell you they can be a well-performing asset. But what is it about apartments that makes this the case?

Apartments as investments

Perhaps the most important fact is that apartments have a substantially lower price point than detached houses. That means if you choose the right neighbourhood, that apartment could end up appreciating significantly in value with you having to give up a much smaller share of your income to mortgage repayments. 

While it's true that apartments don't come with a land component, this is not necessarily the end of the world. After all, what's more desirable: A plot of land in the middle of nowhere, or a a unit in a highly desirable, growing area?

In fact, nowadays you're just as likely to find buyers who want a home near cafes, restaurants, beaches and nightlife as those looking for a spacious backyard. And with land in premium areas becoming ever scarcer, more and more people are likely to go after apartments in these neighbourhoods. 

Of course, this isn't to say that detached houses don't have their benefits too. But it's a reminder that, particularly when you're investing, it pays to keep your options open and flexible. Even if apartment life isn't for you, you're investing based on what the eventual buyer of that real estate in St George is after.

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