Why Now is the Time to Buy an Off-the-plan Apartment

Yet again, the state of Australia’s housing market is in the news, with reports that house prices in most major centres are once again rising. This has taken economists, journalists and the public by surprise, given the RBA’s aggressive tightening of monetary policy in the past 12 months. In a typical scenario, higher interest rates will see borrowing capacity and loan serviceability decline, translating into less demand and a correction in home values. But the economic environment is anything but typical and while borrowing capacity has declined for many, higher rates aren’t reducing the value of homes.

So how has this happened? Put simply, supply and demand. Buyers are all vying for limited stock, and with many vendors holding back on their selling plans or developers cancelling projects, we are seeing limited supply meet significant demand.

Interestingly, the disparity between median apartment and established house prices remains large in most Australian cities. For astute purchasers, there remains excellent opportunities to purchase an apartment in Melbourne in projects that are either under construction or poised to commence, or recently completed. Typically, these projects have apartments still for sale, at prices that do not fully reflect recent construction cost increases that will increase pricing in future apartment developments.

In short, if you’re in the market for an apartment, there’s no better time to purchase. There’s some excellent, value for money opportunities out there, with prices unlikely to be seen again. And while interest rates are currently somewhat volatile, that won’t last forever.

View MAB’s current residential apartment projects here.