Proof apartments are a dud investment

There are many reasons to avoid investing in apartments (units), especially the high-rise variety:

1. They hold minimal land value: land appreciates, buildings depreciate.
2. The holding costs are high due to things like body corporates and maintenance levies.
3. The quality is often dubious: apartments tend to be built for tax minimisation and marketed to gullible investors (including foreign).
4. The apartment market is frequently oversupplied and homogenous.
5. The apartment market tends to accommodate more transient and lower-income renters (e.g. international students).

CoreLogic has released its “Pain and Gain” report for the December quarter of 2020, which illustrates why apartments (units) are dud investments.

At the national level, the proportion of loss making sales for units (16.8%) was more than double that for houses (7.6%):