Things to Note When Buying 1 Bedroom Apartments

By Janet Spencer

Things to Note When Buying 1 Bedroom Apartments

At Buyer Solutions, one of the most difficult jobs we can undertake is to constructively purchase a one bedroom apartment and satisfy lenders criteria, which vary enormously.  Generally, we advise our clients to only buy one bedroom apartments that are over 45 to 50 square meters of internal area, have out door space such as a balcony or courtyard and also have off street parking on title.  Sounds easy?  Not so!  Many one bedroom apartments are tiny, have no balcony or courtyard, may not have car parking and will be difficult to lease.  It is especially difficult when considering newer apartments.

“Property investors are being warned banks might refuse financing for increasingly popular ‘micro apartments’ being built around capital cities, particularly Melbourne and Sydney.It comes as property professionals’ row between themselves about how to accurately measure property and call on state and federal governments to provide national standards…..

Apartments of between 40 and 50 square meters are being popularly marketed as accommodation for overseas students and investments for self-managed super funds.  But, many lenders don’t like to lend on them.  Buyer beware.  If you want to make an offer on a one bedroom apartment, it may be wise to make it “subject to finance” to ensure your bank will give you the money.

Advisers, property brokers and accountants are being offered commission payments from developers of up to 8 per cent of the sale price to recommend the property, more than three-times recommended payments.  The problem is biggest in Victoria where there is disagreement between developers and surveyors about whether apartments are measured from the inside, outside or mid-point of the perimeter wall.  That means a buyer could purchase the property at an advertised size larger than a surveyor’s measurement used by the bank for assessing the loan.  Developers and estate agents usually measure from outside, resulting in a larger size than that considered by surveyors and banks, which typically measure from the inside.”

For up to date information on what’s happening in real estate in Melbourne, contact Janet at  jspencer@buyersolutions.com.au or 0418 101 146

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