First-time property investors buying off the plan should consider low-rise apartments over high-rise units, according to developers and market analysts.
WBP Property Group chief executive Greville Pabst discourages investors against looking at developments because they don’t have the element of scarcity, can have very high body corporate fees and historically have not provided much in the way of capital growth.
WBP is forecasting values in high-rise apartments to fall by as much as 5% in 2012 in some developments and is particurlarly bearish about investing in multi-unit projects.
According to APM senior economist Dr Andrew Wilson, low-rise developments are typically directed towards owner-occupiers rather than investors, which make them even more appealing for investors.
"It can be very easy to attract tenants, especially if it's close to employment and transport,” he told the Sydney Morning Herald
According to Manhattan Hanson director of developer Daved Lambert, low-rise are usually much more boutique developments and are smaller and are more exclusive.
"You know at any point, you can resell them without being in competition with 300 other identical apartments,” he says.
A first-time property investment survey carried out in July last year by Mortgage Choice found that nearly two-thirds of respondents (62%) were looking to buy a house.
Of the remaining 38% looking to buy an apartment, about half were considering a one- or two-bedroom unit.
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