You may have seen the huge apartment towers that have started appearing over the past couple of years across the skylines of most major cities across Australia. You’ll find many of the hundreds of very small apartments are all very similar – the same floor plans, sizes, construction, fit and finish.
Many of the purchasers of these properties are now in a negative equity position, where they owe more money to the banks than what they can sell them for.
All too often we see an owner of one of these properties sell at an extremely low price, which in turn sets a lower price for all of the other similar apartments.
In some cases we have seen prices drop instantly for over 100 owners in the same building when another owner had to sell quickly due to financial difficulty. The land content assigned to each apartment of these bigger developments is very minimal, so in investment terms we see very large numbers of dwellings in a single development as a huge risk. And so do the banks.
The advantage of small developments
Smaller developments are not only generally better to live in, but they also offer far more financial benefits than the larger ones.
There is generally a higher ratio of owner-occupiers to investors
Locations tend to be in great suburbs within 10kms of the CBD
Smaller land allotments means a quicker build
Less dwellings on the land so a higher land component ratio
Usually very unique – more architecturally appealing and the design will usually have strict guidelines from council regarding neighbourhood character overlays
There is less chance that the other owners will need to sell cheaply as there are fewer of them
The developers are usually more flexible with changes to your dwelling
Well located so usually better capital growth
Smaller numbers of owner so body corporate decisions are easier to reach agreement on.
To see our range of smaller, boutique developments, click here