One reason that you should NOT buy Central Melbourne off-plan apartments

You should NOT buy Central Melbourne off-plan apartments unless you are willing to take a loss as Melbourne units fall an average 11.5% in year one, according to the The Australian Financial Review Magazine.

Central Melbourne off-plan apartments fell about 11 per cent in the first year between their original purchase and pre-settlement valuation, figures from valuation firm WBP Property Group show.

The average 11.5 per cent decline – equivalent to nearly $68,000 in dollar terms – in the value of 14 apartments WBP valued within a year of their sale date gives an indication of the extra equity buyers of off-plan apartments may have to produce when the projects into which they have bought come due to settle.

In 2015, WBP conducted a research study on off-the-plan sales following a growing number of transactions falling short of purchase price at time of settlement.

The revaluations by WBP show an average 10.5 per cent reduction on homes in the 3000 central Melbourne postcode revalued two years after original purchase and a 7.1 per cent reduction on those revalued up to three years later. The figures are based on the price details of 197 homes in the Melbourne CBD.

In addition, rental prices of inner Melbourne apartment have largely flatlined over the last four years as a result of rising supply, consultancy BIS Shrapnel says in its latest Inner Melbourne Apartments Market Brief.

 

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