Why buying a city apartment could turn out to be a bad investment even during a ... trends now
Apartments are selling at a loss in Australia's two biggest cities even during a housing affordability crisis, new data shows.
Record-high immigration has pushed up house prices but more inner-city units are selling at a loss in already-overcrowded Sydney and Melbourne than anywhere else.
An ultra-tight rental market and a digit-double surge in rents during the past year is also no guarantee that units will go up in value, especially if they are in a high-rise tower.
Melbourne
In the centre of Melbourne, 40.7 per cent of homes sold at a loss during the December quarter - or 6.8 times the national average loss rate of 6 per cent, CoreLogic data showed.
In the centre of Melbourne, 40.7 per cent of homes sold at a loss during the December quarter - or 6.8 times the national average loss rate of 6 per cent, CoreLogic data showed (pictured is the Docklands area near the city) - and 98 per cent of loss-making sales were units
It noted that 98 per cent of loss-making sales were units, even though sellers in the Melbourne City Council area had held on to their home for an average of nine years and eight months.
Losses are more likely to occur in areas where apartments were built during the 2010s, when interest rates were lower and building activity was much stronger.
This has led to an oversupply of apartments in some areas and in some cases, quality issues.
'Unit supply was particularly elevated in the mid-to-late 2010s, buoyed by a high concentration of investor participation in the housing market and structurally falling interest
