Numerous older-style apartment blocks are hitting the Melbourne property market at the same time. These period flats, ranging in construction dates from the 1930s to the 1980s, are some of the most valuable apartment stock in the city, largely due to their heritage appeal.
Agents insist there is no rhyme or reason as to why these heritage apartment blocks, stretching from Mordialloc to Thornbury, have come up for sale at the same time. Apparently, each block is being sold due to the unique investment circumstances of each owner.
Set against a backdrop of soaring land values and a hot property market, it’s understandable why so many savvy landlords are making the decision to cash in their investment chips.
Many of these apartment blocks are long-held investments, forming part of a diverse investor’s property portfolio. “The people at the pointy end of these transactions…I call them property hoarders,” said Bill Stavrakis, an agent at Biggin & Scott Elsternwick. “They have a very strong asset base and they see these as trophy investments.”
Stavrakis is listing a complex of eight in the suburb of Elwood. The complex is owned by a group of investors who work in finance and want to take advantage of the strong growth in Melbourne this year.
Several of the blocks for sale have been with the same families for decades. A block of 12 one-bedroom apartments in Prahran is being offered for the first time in half a century by the vendor, who received the blue chip investment from her husband as a wedding gift.
Another fully-tenanted block of eight in Thornbury has been with the same family for a decade. They decided to sell the flats in order to move on to other investment opportunities. In Mordialloc, a daughter is cashing in on several valuable villa units she’d inherited from her father after deciding she didn’t want to take on a landlord’s responsibilities.
The biggest lure of these blocks, beyond rental yields and securely tenanted investments, are the fact that they offer large land holdings, often in triple-A suburbs.
“They are an effective investment; the land component will always accrue strong capital growth,” said Mark Josem of Jellis Craig.
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