A sudden increase in the planned stock supply of inner-city apartments should have us singing if we’re to believe spruiked reports of a huge housing shortage. However while the need for affordable rental accommodation is growing, with recorded low vacancy rates in many inner city suburbs, high-rise apartments are unlikely to satisfy the large number of homebuyers struggling to get a foot on the property ladder.
Plans have already been rushed through for a rumoured 35 per cent increase to the existing supply in Melbourne with no regard for numerous complaints by both residents and council who argue existing suburbs are not able to cope with an escalation in congestion, not to mention the visible impact high rise has in diminishing house prices in neighbouring streets. The projects are largely marketed towards investors both here and overseas who currently see our strong dollar as evidence of a safe investment haven. Unsustainable rental guarantees are often offered as an incentive to buy in, however once the guarantee expires rents drop and purchasers are left struggling with higher costs and little, if any, capital growth.
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