Would you buy in a high rise tower?

Good point and good example.

Quality issues aside, to me, buying a high rise apartment means living in it to enjoy the convenience and view, if one can afford it.
As an investment, it rarely makes sense, as the developer has done all the calculations to make sure it has extracted maximum profit when selling, so buyers won't see much further upside after they move in.

Have seen too many real life examples where the price of an apartment has gained over 70% after a decade, yet after deducting interests and expenses, the actual profit is surprisingly small.
The real benefit though, is the hassle-free life in it over the years, as opposed to a single level old flat on a much larger block of land, where you have to worry about mowing the lawn, trimming the tree, cleaning the pool, pest control and what not. (Of course, the assumption is you bought one without serious defects like opal tower).

 

I work on a lot of construction sites doing all sorts of developments (from houses to 30+ storey high apartments).

Personally, I think high rise units are built to a better standard then a lot of the low rise apartments/townhouses I deal with. In saying that, I stil see a lot of dodgy things in high rise construction, but it’s definitely less prevalent. It’s the smaller low rise developments being built by dodgy inexperienced cowboys which really concen me. I sometimes think obtaining a builders licence in NSW is too easy.

 

What if you wanted a city pad? You can’t avoid high rises in Melbourne cbd.

I have turned away from buying in the cbd because all the apartments have lifts and high body Corp fees but I’m starting to think it might not be as bad as people make out. They might not be good for capital growth but are they really the massive liability everyone makes them out to be?

 

There are plenty of older apartment buildings in Melbourne CBD that are not huge towers but they are in the actual city - not the shiny glass towers in Southbank or Docklands.

Random example:
314/422 Collins Street, Melbourne, Vic 3000

 

I'd be happy one suburb out of the city but even here in Perth there are some older style places actually in the city - and they are dirt cheap.

 

Large tower = lots of apartments to spread the cost. Vic Point, my former PPOR, now an IP, has five lifts and 449 apartments. OC levies for last year on a dual key were $5066 against rent of $39K, and there's a significant sinking fund to cover future outlays.

 

Still got lifts though which break down and cost an arm and a leg fix. Then there’s refurbishments and things. Hard to find 2-3 level boutique blocks in the city

 

Was more referring to the building style generally rather than that specific apartment/property. 2-3 storeys are probably uncommon but there are plenty around 5-6 storeys which I'd rather live in than a massive 30+ storey tower. Many new buildings have issues with facade maintenance too and it's a lot more expensive at that size.

 

Amazing low-rise apartment here: 21/180 Little Collins Street, Melbourne, Vic 3000

Another very nice apartment (bigger building though): 101/29-31 Market Street, Melbourne, Vic 3000

 

No way, no how. No value for me. But everyones different .

 

I'd buy in a tower in the CBD or Docklands for the city vibe and convenience. I'd agree that investment yield isn't attractive but I like the area for all the sporting venues, eateries, pubs etc. I'd look at getting a one bedder for the wife and I as a weekender ( just got to talk her into it!)
Tony 3008 how are the prices at Docklands at the moment? Falling?

 

Going nowhere is my impression, but underpinned by the yield. My dual key, bought 12 years ago for $623K, would probably now sell for $660K or thereabouts, a seriously unimpressive 0.5% CG p.a. But the rental income is now $800p.w. gross, about $27K (4%) net after all expenses and one might reasonably expect this to keep pace with inflation in years to come. I guess a fair comparable would be something like a small precast warehouse/factory unit: steady slowly increasing rent but no ability to manufacture CG - what sort of net yield would they deliver?

 

Would be if I just went ahead and bought it?

 

Wonder what that one will sell for. Also curious about how high the strata levies would be for each.

 

I've found agents usually include the fees unless they are very high but who knows. Too lazy to call

 

Only penthouses in CBD. Would never buy a normal apartment