- Apartments are outpacing houses in capital growth, especially in suburban and coastal areas.
- Investors favour apartments for better yields, affordability, and lifestyle access.
- Key 2024 hotspots include Bowen Hills, Hawthorn, and Newtown.
Apartments markets are overtaking freestanding houses as the dominant force in property investment.
New analysis by Hotspotting has revealed the top ten apartment hotspots in Australia. This shows that apartment markets, particularly suburban and coastal markets, are performing extremely well. In fact, in many parts of the country, units have outperformed standalone houses in terms of 10-year capital growth averages.
Hotspotting General Manager, Tim Graham, has shared that in the past, most investors looked at houses on land for the best returns. But in many locations, apartments are now offering better yields and solid capital growth at a more affordable price point.
“There are currently some very good apartment investment opportunities, and Australians are opting for apartment living to be closer to lifestyle amenities,” Mr Graham said.
“Apartments can be great investments, particularly if you buy in low-density projects.”
Tim Graham, Hotspotting
While the dominance of apartments is growing, Mr Graham warned that like all investment properties, it still needed to be in the right location with the right attributes where there was an element of scarcity.
The markets he predicts will perform well throughout the rest of 2024 include Bowen Hills in Queensland, Hawthorn in Victoria, and Newtown in New South Wales.
Mr Graham said buyers who set aside old attitudes toward apartment investment would reap the rewards.
“Investors are often deterred by properties under a strata title or body corporate, but if you pick the right property type, the body corporate fees are no higher than your typical insurance for a stand-alone home. Body corporate insurance covers your building insurance along with much of the property’s general fixtures and fittings,” Mr Graham said.
“The sole purpose of the body corporate is to maintain the entire complex, and that can only benefit investors and protect their assets. Body corporates are not an issue that investors should always worry about, particularly once you understand their role and how they can actually help you and reduce some of your costs, such as insurance. For investors in the higher tax brackets, apartments can also provide good tax relief as you’re depreciating not only your unit but also the entire building. Body corporate fees are also a tax-deductible item.”
Mr Graham said investors could achieve good capital growth through units and solid yields would help them pay off the mortgage along the way.
