Investor interest shifts to apartments and commercial property

In Short:
– Federal budget changes have boosted investor interest in apartments, favoured for lower prices and better yields.
– Superannuation regulation changes have driven investors towards commercial real estate for higher yields and long-term leases.

Recent federal budget changes have shifted investor focus towards apartments and commercial real estate in Australia.Investor interest in new apartments has increased due to lower purchase prices and stronger yields.

Apartments are now regarded as viable alternatives to houses for owner-occupiers.

This trend is driven by location, infrastructure access, transport options, and the preference for low-maintenance living.

The price gap between houses and apartments is significant, prompting buyers to consider location and cost-of-living more seriously.

Apartments are available in various configurations, catering to families and downsizers alike.

Current data shows a strong apartment market, with 242 unit markets offering yields of 5% or higher, compared to only 48 house markets.

Historically, houses were preferred for capital growth, but apartments are now showing superior growth in specific cities like Brisbane, Adelaide, and Perth.

Analysis reveals high profitability in apartment resales, with 92% achieving nominal profit recently, as owner-occupiers pay premiums for well-located units.

Changes to superannuation regulations have prompted investors to focus on commercial properties, which provide higher net yields and long-term leases where tenants cover outgoings.

Michael Wilkins highlights these trends as significant in the evolving property landscape.