"Whether you are looking to purchase in an area that you would otherwise be unable to afford or searching for a perfect investment, it is important that you understand the differences."
Not all apartments are created equal, so know what you're buying
You may have noticed throughout your property search that units and apartments are often presented as a single group in the analyses of the residential market. However, it is important to be aware that the type and nature of these homes differs substantially.
In some parts of Melbourne, the market is dominated by multi-storey towers; in others, two-storey blocks of flats. So, whether you are looking to purchase in an area that you would otherwise be unable to afford or searching for a perfect investment, it is important that you understand the differences.
The 2011 census provides insight
The 2011 census showed that the top three suburbs for all units and apartments were, as you would expect, the CBD, Southbank and Docklands. In each suburb, between 97% and 99% of homes are apartments.
These suburbs, of course, dominate the list of apartment blocks of more than four storeys; however, when the data is analysed for one- to two-storey blocks of units and apartments, a different picture emerges.
In this instance, the top five were Glen Huntly, Dandenong, Carnegie, Fairfield and Ormond. In these suburbs, medium-density housing forms a comparatively high proportion of the housing stock, with one- or two-storey units comprising between 35% and 47% of all dwellings. In each case, median prices are well below those for detached housing, providing many people with the opportunity to live in an area they would otherwise be unable to afford.
Focusing just on three-storey blocks reveals a different set of suburbs, generally closer to the CBD: St Kilda, St Kilda East, Elwood, East Melbourne and South Yarra. In these suburbs, between 34% and 40% of all dwellings are located in three-storey complexes. As expected, median prices for these homes are lower than those for detached housing.Click to enlarge
Robert Larocca is communications manager of the Real Estate Institute of Victoria