Invest
Are apartments a good investment?
As the property market surges towards 2017 highs, investors might be wondering if it is time to buy cheaper apartments closer to the city.
Are apartments a good investment?
As the property market surges towards 2017 highs, investors might be wondering if it is time to buy cheaper apartments closer to the city.
In a conversation with nestegg, InvestorKit’s head of research, Arjun Paliwal, advised investors to look beyond apartments, with freestanding properties outperforming apartments regardless of location.
“Most investors who purchase apartments are usually doing it because of a lack of knowledge or a lack of support in order to purchase in markets that are outside of areas that are familiar to the investor,” Mr Paliwal said.
He noted that recent CoreLogic stats have shown that the strength in the housing market has not translated into strong growth for apartments.
House values have driven gains in the combined capitals index over the past three months, rising 1.1 per cent. While the rate of decline has eased, capital city unit values fell by -0.6 per cent over the same period.
“This trend towards stronger conditions in detached housing markets is evident across most of the capital cities. Relative weakness in the unit market can be attributed to factors including low investment activity, higher supply levels in some regions and weaker rental market conditions across key inner-city unit precincts,” Corelogic head of research Tim Lawless said.
What to look for when buying an apartment
While highlighting the investors should look into freestanding properties, the researcher explained what investors in apartments should be looking for.
“Investors should look for a point of difference,” Mr Paliwal said.
“Now a point of difference can be room sizes, bells and whistles as part of the complex or the overall appeal of the dwelling.
“The greater differentiators are likely to happen in boutique blocks,” he said.
The researcher said investors who are going to purchase an apartment might need to purchase an entire block to protect themselves against downside risks.
“Investors could look for areas where they can purchase a block of units rather than the singular apartment,” he said.
“With the whole block, it takes away the downside of apartments, which is supply. If an investor owns the entire block, if there are zoning changes, you can use it to your advantage.
“The second advantage is when sales in a block have distress or deceased estate or any types of sales that impact comparables – you can’t control that. However, when you own the block, it’s unlikely the investor will distress sale one of two apartments,” Mr Paliwal explained.
He also pointed out the investor can control the rents, with other investors unable to impact rental returns through changing prices.
RELATED ARTICLES
About the author
About the author
Property
LJ Hooker Lake Macquarie makes a splash with Belmont buy as real estate consolidation looms
LJ Hooker Lake Macquarie’s acquisition of the Belmont office, including its rent roll, is less about shopfronts and more about balance‑sheet resilience. In a market where listings ebb and flow with ...Read more
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
Property
LJ Hooker Lake Macquarie makes a splash with Belmont buy as real estate consolidation looms
LJ Hooker Lake Macquarie’s acquisition of the Belmont office, including its rent roll, is less about shopfronts and more about balance‑sheet resilience. In a market where listings ebb and flow with ...Read more
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
