Buying An Apartment In Melbourne

Buying an apartment in Melbourne comes with risks, making it crucial to choose wisely and avoid a real estate money pit.

Issues like negative equity, small floor plans, high body corporate fees, poor capital growth, and low rental yields can significantly impact your bottom line—many of which can’t be fixed. That’s why getting it right the first time is key.

Off-the-plan purchases add another layer of risk, as it’s tough to assess how an apartment will function just from architectural drawings.

On top of that, Melbourne is facing an apartment oversupply, creating a buyer’s market where sellers outnumber buyers.

Buying in a seller’s market is tough, yet tempting—fear of missing out makes everything seem in demand.

So, how do you spot a buyer’s market? Attend an auction. In a seller’s market, you’ll see multiple bidders driving prices well above the advertised range. In a buyer’s market, the opposite happens—buyers are cautious, prices soften, and increased choice makes them more property-savvy.

Savvy investors thrive in market cycles. As Warren Buffett famously said, “Buy when people are selling and sell when people are buying.” This principle applies to any investment, including real estate.

With Melbourne currently in a buyer’s market, 2025 presents a prime opportunity to purchase an apartment. The key? Choosing the right property at the right price—so when it’s time to sell, buyers are lining up for yours.

Common Mistakes Buyers Make When Purchasing Apartments

Buying Generic, Oversupplied Apartments
High-rise buildings (10+ floors) with small, poorly lit floor plans are hard to lease or sell at good prices due to an oversupply of similar low-quality stock.

Buying Off the Plan
Off-the-plan purchases come with risks, such as project delays, sunset clauses allowing developers to exit contracts, and unpredictable quality.

Ignoring Sunset Clauses
A sunset clause sets a deadline for settlement, allowing both buyer and developer to walk away if the project isn’t completed in time—potentially leaving buyers empty-handed, even after years of waiting.

Overlooking Fire Cladding Issues
The 2018 Victorian Cladding Taskforce found 354 buildings with low/moderate fire risks and 275 with high/extreme risks. Non-compliant cladding remains a major safety and financial concern for apartment owners. (See: Cladding Audit Update.)

Neglecting Location Factors
Apartments far from key amenities can struggle with demand. A solid investment is within 8km of Melbourne’s CBD, near transport, cafés, schools, shopping centres, parks, or the beach. Even in the CBD, prices can vary significantly based on the street.

Underestimating Ongoing Costs
Many Melbourne apartments have steep body corporate fees—some exceeding $15,000 per year—along with council rates, water rates, and insurance. Structural issues can further devalue properties, making due diligence essential.

Read our article on Melbourne apartment market outlook. 

Apartment Buying Checklist

While some investors avoid apartments due to their low land-to-dwelling ratio, the right one can be a great low-maintenance investment. Apartments are generally more affordable than houses or units, making them a smart choice for those with a smaller budget. However, there are key factors to consider to avoid a bad investment.

General Considerations

• Can you hear noise from neighboring apartments?
• Are the other occupants respectful, especially at night?
• Is the apartment near waste collection areas, and are there any unpleasant smells?

Financial Considerations

• What are the annual owners’ corporation fees?
• Is there an outstanding balance owed to the owners’ corporation?
• Has the owners’ corporation taken on any debt?
• Is there a maintenance fund, and are you required to contribute?
• Are the finances held in a trust or a dedicated bank account?

Owners’ Corporation (OC) Considerations

Owners’ corporation fees can make or break an investment, so understanding them is essential.

• Will you be part of multiple owners’ corporations? (Rare, but possible.)
• Is the car space on the same title as the apartment? If not, ensure you have a legal right to use it.
• What are your voting rights within the OC? Not all apartments have equal voting power.

Management Considerations

• Is the OC manager registered with Consumer Affairs Victoria? (Check here.)
• Are there recurring complaints? Request annual general meeting minutes for insights.
• What are the specific rules of the OC?
• How does the OC handle disputes and complaints?

If the OC chairperson or manager is unwilling to answer questions or seems unhelpful, this may be a red flag.

Maintenance Considerations

• Are any major maintenance projects planned that will require financial contributions?
• Has funding been raised for necessary repairs? (Be cautious of cladding issues affecting many apartments.)
• Are there any visible maintenance concerns? Consider a professional building inspection if unsure.

Doing your due diligence can help ensure you buy an apartment that’s a smart investment—not a financial headache.

Using A Buyer’s Agent To Do The Work For You

Buyer’s agents Melbourne are experienced real estate buyers that understand what makes an average property vs an excellent property.

They spend all there working hours looking at property that’s for sale and negotiating deals with real estate agents. In addition to their property experience they used to be real estate selling agents, hence understand the ins and outs of negotiating a property purchase.

Their role is to short list the best property on the real estate market.  This includes property that is off market, inspect and conduct the due diligence on the property then negotiate a great price via an auction or private treaty negotiation.   

If you’re considering buying an apartment in Melbourne consider how a professional property buyer can ensure your success, contact Wise Real Estate Advice for an obligation free chat.