Post to SinFongChanRE.wix on 11/12/2017 at 3:01 AM
Commenting on “First-home buyers driving apartment sales”
https://www.domain.com.au/news/melbourne-auctions-firsthome-buyers-driving-apartment-sales-20171210-h025js/
I do sincerely hope that some of these apartments sold do not have the unsafe cladding, or else the purchase will be a double whammy for these first home buyers.
Some apartments may increase in value but most will not. As more and more apartments come to the market, the existing apartments get older and older and devalue or depreciate more and more. Although the interior can be improved by individual owners, the cost of improving the exterior may not be so easy without the rest of owners' approval via the owner's corporation.
For landed property, the building may depreciate but the land value, in almost all cases, will increase. The more landed properties are built, less land will be available for construction. Scarcity pushes the price up.
Gone are the days when Council rate is based on Site Value (SV). It is now based on Capital Improved Value (CIV). The advantage of the former method is that apartments occupy less land, and therefore the rates are much less. CIV is SV plus the cost of apartment valued by the Council. To add salt to the wound, apartment owners have to incur owner's corporation fee. The bigger the foyer, more facilities available such as gym, swimming pool, library, lift, etc., the more out-of-pocket expenses are required.
Many people are happy with apartment living, but do think twice if it is part of your investment portfolio. Do consult your financial adviser and get the number crunched before signing on the sale contract dotted line.
Thank you for reading.
Commenting on “First-home buyers driving apartment sales”
https://www.domain.com.au/news/melbourne-auctions-firsthome-buyers-driving-apartment-sales-20171210-h025js/
I do sincerely hope that some of these apartments sold do not have the unsafe cladding, or else the purchase will be a double whammy for these first home buyers.
Some apartments may increase in value but most will not. As more and more apartments come to the market, the existing apartments get older and older and devalue or depreciate more and more. Although the interior can be improved by individual owners, the cost of improving the exterior may not be so easy without the rest of owners' approval via the owner's corporation.
For landed property, the building may depreciate but the land value, in almost all cases, will increase. The more landed properties are built, less land will be available for construction. Scarcity pushes the price up.
Gone are the days when Council rate is based on Site Value (SV). It is now based on Capital Improved Value (CIV). The advantage of the former method is that apartments occupy less land, and therefore the rates are much less. CIV is SV plus the cost of apartment valued by the Council. To add salt to the wound, apartment owners have to incur owner's corporation fee. The bigger the foyer, more facilities available such as gym, swimming pool, library, lift, etc., the more out-of-pocket expenses are required.
Many people are happy with apartment living, but do think twice if it is part of your investment portfolio. Do consult your financial adviser and get the number crunched before signing on the sale contract dotted line.
Thank you for reading.
