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Units outpace houses in growth

  • 14-08-10

THE capital growth of apartments continues to outstrip houses, with some rising in value by more than 50 per cent in less than a year.

Industry analysts are expecting the trend to continue, with a greater number of people opting to live closer to their workplace.

"With people's lifestyles, and (with people) being time-poor these days, the closer they can get to CBD areas the better, and with investors back in the market, the apartment market has been strong," said Matt Lahood, general manager of sales at real estate agency chain McGrath.

"It is probably less the situation in holiday destinations."

In the 12 months to June, unit values increased 11.4 per cent compared with 10.2 per cent for houses, according to property research firm RP Data.

It said the unit gains were stronger than houses in Sydney, Brisbane, Melbourne and Perth.

One woman who purchased a Bondi Junction apartment a year ago for $335,000 sold the property for $532,000 in April, according to McGrath.

Investor Christine Miller, who made $170,000 this month on the unit she bought in Summer Hill during 2006 for $275,000, said she had used the money to purchase two small investment properties in Punchbowl in Sydney's west. "They were very cheap and the returns were very good," she said. Already, those units had appreciated in value 20 per cent, she added.

Mr Lahood said the trend was affected by supply and demand.

Developers had struggled to secure funding for new developments, so this meant there were fewer apartments available.

However, he said demand was still strong in Brisbane, even with new stock coming on stream.

Over the past five years, units have recorded average annual value growth of 7.4 per cent compared with 7.1 per cent for houses, according to RP Data.

In the past 10 years, average annual value growth of houses has been 9.9 per cent compared with 8 per cent for units.

Bridget Carter, The Australia, August 14, 2010. 


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