Thinking of buying an apartment? Keep these things in mind

When I moved from Townsville, Queensland to Melbourne last year, a year-round summer wasn't the only thing I left behind.

I was also saying goodbye to the possibility of buying a house anytime soon. 

The average price for a house in Melbourne is just shy of a million dollars — at $911,000 — according to data from property research group CoreLogic. 

But, in comparison, the average price of an apartment in Melbourne is $590,000.

Aside from the price difference, Hayden Groves, President of the Real Estate Institute of Australia, says there are other benefits to apartment living.

But if you are starting to save for an apartment, here are a few things you might want to keep in mind.

Body corporate fees and building facilities 

Mr Groves says you need to be mindful of the additional costs that come with buying an apartment.

While both houses and units will see you paying council rates and utilities, you'll also have to factor in body corporate fees.

"And one word of caution for people buying units is you need to be really careful, particularly if the unit is off the plan," he says.

"Often the initial levies seem quite reasonable but, as the years tick by and the maintenance requirements start to increase, the levies will inevitably rise." 

While a perfect-for-the-Gram rooftop pool, state-of-the-art gym and concierge staff might sound like must-have luxuries, they come at a cost.

"[Buildings with those services] are expensive to maintain, and so levies will be higher in those complexes than those who don't have those facilities," Mr Groves says.

You may need permission to renovate or paint

Unlike buying a stand-alone home, slapping on a fresh coat of exterior paint or sprucing up the garden may require approval from a body corporate.

"Say, for example, you've got a brick façade unit, and you're wanting to paint it a different colour, more often than not, the strata company, or the community group, would not approve such a thing," Mr Groves says.

"Therefore, you're kind of stuck with the external appearance."

This may be different if you're looking to make internal updates. 

If you're wanting to add an air-conditioning unit, keep in mind this will have internal and external elements and require approval.

"Anything that's going to be external, particularly for older developments, is generally common property," Mr Groves says.

"Generally speaking, unless the strata company or body corporate approves it, you can't do it."

Additional considerations when buying off the plan

Purchasing off the plan means putting a deposit on your future home before construction has been completed. 

Consumer Affairs Victoria outlines some of the potential benefits and risks.

For example, some benefits include having more input into the layout or design of an apartment before it is completed, and locking in a price for the purchase.

Their listed risks include complex contracts, uncertain completion times and the possibility of the value of the property decreasing between contract and settlement. 

"If the value has decreased then, at valuation, it could be that the bank will no longer loan you sufficient funds based on the new value of the apartment, in order for you to affect settlement," Mr Groves says.

"Your deposit could be at risk as a result, if you can't settle."

Mr Groves does say it does go the other way, too — where the apartment's value has gone up since fronting up that per cent deposit.

"So there're risks in buying off the plan, but there're also some potentially some great financial benefits."

This article contains general information only. You should consider obtaining independent professional advice in relation to your particular circumstances.