That\u2019s right, some units are effectively selling at decade-old prices.<\/strong><\/p>\n And yet, ironically, this might not be the \u201cbargain\u201d it appears to be at first glance.<\/p>\n Let\u2019s unpack what\u2019s happening.<\/p>\n And why the Allan government\u2019s plan to inject thousands of new apartments into 50 so-called \u201cactivity centres\u201d could be a ticking time bomb for capital growth.<\/p>\n The numbers don\u2019t lie.<\/p>\n In Werribee South, the median unit price today is $402,500\u2014over $100,000 below<\/em> its 2015 median.<\/p>\n Essendon North, Flemington, Abbotsford, and Prahran are all showing similar declines of 6\u201320% over the past decade.<\/p>\n That\u2019s a long time for capital growth to stagnate or go backward.<\/p>\n But here\u2019s what\u2019s interesting: many of these areas had a sharp influx of new developments\u2014particularly investor-grade apartments\u2014in the mid-2010s. \r\n\r\n Think of it as an oversupply hangover that\u2019s lingered longer than anyone expected.<\/p>\n Yet recently, a few of these suburbs have started to show signs of life.<\/p>\n Docklands, once the poster child for underperformance, has finally clawed its way back into positive territory.<\/p>\n Strathmore and Maribyrnong are also showing improvement.<\/p>\n It seems the worst may be behind us.<\/p>\n But before investors rush in thinking this is the bottom, there\u2019s a major caveat\u2026<\/p>\n The Victorian Government\u2019s plan to concentrate on new apartment development around 50 key \u201cactivity centres\u201d is meant to address the housing supply.<\/p>\n But the danger here is that we\u2019re not just repeating the mistakes of the past\u2014we could be amplifying them.<\/p>\n These activity centres are likely to become magnets for high-rise, high-density builds, particularly those aimed at affordability rather than liveability.<\/p>\n And that\u2019s where red flags start waving.<\/p>\n Commentators rightly point out that zoning issues and bank lending criteria could create financing headaches for first-time homebuyers and investors alike.<\/p>\n Properties zoned for mixed-use or dense development are often frowned upon by banks\u2014resulting in lower valuations, tougher lending terms, or outright rejections.<\/p>\n Add in the risk of oversupply, particularly in areas without strong owner-occupier demand or lifestyle appeal, and you\u2019re left with an asset class that may once again underperform.<\/p>\n There\u2019s a fundamental problem with many of the new units built in the last 10\u201315 years: they\u2019re constructed to a price point, not a quality standard.<\/strong><\/p>\n The depreciation on these buildings is real and rapid, particularly for investor-grade stock with low land-to-asset ratios.<\/p>\n Take note that when the building ages faster than the land appreciates, the overall value stagnates (or declines).<\/p>\n This is why I always warn investors: not all properties make good investments<\/em>.<\/p>\n Especially apartments in large complexes, with high body corporate fees, poor natural light, minimal scarcity, and no real point of difference.<\/p>\n Remember, you\u2019re not just buying an address\u2014you\u2019re buying a piece of land with future potential<\/em>.<\/p>\n With many of these high-density builds, the land component is minimal.<\/p>\n And that\u2019s a growth killer.<\/p>\n That depends entirely on your strategy.\r\n\r\n![\"Units](\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2018\/09\/units_sep_0-800x533.jpg\")
<\/p>\nWhere you can still buy at 2015 prices<\/span><\/h2>\n
The \u201cActivity Centres\u201d Plan: good intentions, poor execution?<\/span><\/h2>\n
Why some apartments lose value over time<\/span><\/h2>\n
![\"Apartments\"](\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/07\/apartments-800x533.jpg\")
<\/p>\nSo, should you buy units in today\u2019s market?<\/span><\/h2>\n