To Buy Higher, Or Lower?

Market Insights
8 years ago
2 minutes

Choosing which level to buy on will always be a difficult decision; do you buy high, or low?

In consideration of off-the-plan purchases, the perception is that you are buying an apartment at today’s market value, and moving in when it is most likely worth more. 

Generally speaking, the higher the better - the prestige that higher levels provide ultimately will cost more to purchase, and should sell for more.

But what should I be wary of?

If you are buying an apartment today, on the 12th floor of a suburban development in South Yarra, the views might be fantastic - sweeping across the Yarra River with the MCG lights flickering in the distance.

However, in two years time, when the construction is complete, will those views still be there?

It is here, during your search for an apartment, that you speak to the councils as well, so that you can get an idea for what is planned for the area before you commit to buy.

The worst thing is that you have purchased an apartment with incredible views, and by the time you move in, you can see a construction site being formed right in front of you.

These higher floors will cost you a premium, and generally attract the owner occupier.

Is there a case for the lower floors?

Yes, most definitely, especially if you are an investor. 

Seeing as higher floors cost far more, the rental income required needs to be upped as well.

Apartments in the same building, but on a lower floor, will provide a lower amount per week, thus opening itself up to a broader rental catchment.

Instead of paying $580,000 for an apartment that has scenic views, an apartment that has courtyard views for $500,000 will still attract renters.

It  has also been argued that apartments below the 7th floor, still have a bond with the ground - giving the illusion that you are in a smaller apartment building, rather than a large dense one.

It is also noted that apartments right below the sewerage and water pipes (usually on the 7th floor) have slightly higher ceilings for the same price. 

Choosing an apartment on level 44, or level 7 is all about preference. It is imperative that this choice is made with the most information available at hand.