Steep rises in value during the construction period have prompted many buyers of off-the-plan Sydney apartments to resell their units, earning profits of as much as 40%.
“We’ve seen the value of some off-the-plan apartments rise between 25 and 40% since they were bought three years ago, particularly in the CBD, eastern suburbs, inner west, and on the north shore, often within a seven-kilometre ring of the city,” said Ian Bennett of Colliers International.
“Now they’re coming up to settlement at the end of the construction period, people are looking at what they’re worth now and, in some cases, deciding to resell for the profit.”
The strategy, known as “Pick ‘n Flick” or “Flipping,” has been used since the first major apartment building boom in the late 1990s and early 2000s and has allowed many flippers to make small fortunes.
But with the current market being used to off-the-plan sales, five years of steady price growth have led to a fresh resale frenzy. Colliers International said that resales these days are five times more than in any previous years.
However, Harris Partners’ Peter O’Malley warned that the resale bonanza might not continue.
“As an investment strategy
, it’s flawed. It’s dependent on strong price growth and, at this stage in the cycle, that looks unlikely to continue,” said O’Malley.
“A lot of off-the-plan product is priced at a premium compared to existing property, so you’re banking on the market rising between now and when construction’s completed.”
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now
Top Suburbs :
east victoria park
Get help with your investment property
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus and appointment is free.
We value your privacy and treat all your information seriously - you can check out