Over the last 20 years, apartment purchases have increased to over 35% of all property transactions.
The popularity of apartment living and the focus of investors, both onshore and offshore, have fuelled this increase.
Over the past three years in particular, the demand for new and off the plan apartments has surged due to record low interest rates, the current focus on apartment living and the attractiveness of apartments as an investment option.
Downsizers, particularly baby boomers, have also played a large role in the increase in apartment sales.
Baby boomers in the last three years have taken advantage of the property price growth of the family home to sell up, buy an apartment and use the surplus funds to buy an investment property or use as retirement funds.
Apartments require less maintenance than a home as a property investment. They are also typically located close to amenities such as transport and shopping facilities, and are equipped with features that tenants in today’s rental market demand such as air conditioning, intercom entry, built-ins and a dishwasher.
As a result, apartments are in higher demand in the rental marketplace and, relative to cost, achieve a good market rent return and re-sale value.