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Melbourne property trap (2)

In Australia, apartments are popular due to the availability of good schools, convenient transportation, and a vibrant city life with easy access to various cuisines. However, it is important to exercise caution while purchasing an apartment to avoid being deceived. Here are some tips to help you make an informed decision:

  1. Avoid buying off-plan or residential buildings that are higher than three floors, no matter how attractive their appearance, facilities, and location are. New buildings can be expensive, and their quality is often unknown. Furthermore, most units are poorly soundproofed with narrow designs, open kitchens in corridors, and windowless rooms.

  2. Consider purchasing buildings that are more than 10 years old, as they have been tested for at least a decade and any issues have likely already arisen. While agents may claim that new buildings are well-designed and clean, old buildings may have a high depreciation rate and require extensive repairs. Therefore, it is essential to check the past transaction records and compare them to understand the impact of the depreciation rate on the building price.

  3. When evaluating the quality of a building, the builder is a key factor. In Australia, there are over 400 builders with construction qualifications, and their annual construction capacity, quality, and construction period guarantees vary widely. Builders can be divided into three levels based on their annual construction amounts: Tier 1, Tier 2, and Tier 3.

  • Tier 1 builders are the top level of builders in Australia and include well-known builders such as Probuild, LendLease, Leighton, and Brookfield Multiplex. They almost exclusively contract state government infrastructure, universities, hospitals, shopping malls, and top large-scale residences, with an annual construction amount of more than AUD 1 billion. Builders at this level are generally excellent.

  • Tier 2 builders have annual construction amounts ranging from AUD 80 million to several billion and are preferred for high-end or medium-high-end properties. Some well-known builders at this level include Meriton, Richard Crooks, Icon Co, Built, and Grocon. The overall quality and workmanship of Tier 2 builders are better than those at Tier 3.

  • Tier 3 builders have annual construction amounts of less than AUD 80 million and mostly undertake small and medium-sized projects. They may lack experience and quality.

By following these guidelines and being diligent in your research, you can reduce the risk of being deceived and ensure that you make a wise investment when purchasing an apartment in Australia.

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