There’s an interesting angle on apartment investment in a story (Buyers: Out with the new units...) on the front page of the website this week.

In it a buyers’ agent – an expert who finds properties for purchasers – is advising people not to buy into new apartment developments.

He is especially scathing of units in blocks being built in areas where every scrap of land is being used to squeeze in another identikit high-rise. These are not good investments because year after year new and very similar units will be built close by.

But financial investment is only part of the story. What about the liveability of these new blocks? What about the idea that you can move in, settle down and just enjoy your shiny new home?

A few years ago I made the huge mistake of buying an apartment off the plan, thinking the developer was a decent person. Maybe they were, but just before Christmas we sold out at a loss – although the debit was only financial.

The gains we made as a consequence were the time, energy and frustrations we weren’t having to waste fighting just to get what we had paid for.

To be fair, the ‘decent person’ developer had suffered a run of bad luck, starting with covid, followed by crippling rains and then the realisation that he had miscalculated the appeal of the apartments at the prices he wanted to sell.

That’s when he turned into just another dodgy developer who would answer every challenge by saying his priority was to look after his family. 

First, he loaded the strata committee – and convinced the office-bearers that there wasn’t a conflict of interest – then he exploited a quirk in the law that allows the developer of apartment blocks lower than four storeys to be involved in decisions about defects, even though there are 80 units in the block.

The initial contracts were just one sweetheart deal and embedded network after another, passed at an initial AGM run by the now most notorious strata managers in Australia.

The committee – apart from the three members from the developer’s family – were first-time strata owners who were inclined to believe the developer’s promises that he would look after them all (after he’d looked after his family, of course).

Meanwhile every claim to have a defect rectified needed to be backed by at least the threat of legal action. Now the committee and a bunch of rightly concerned owners are at loggerheads and the peaceful retirement that many of the downsizing owners hoped for is a fading dream.

In fact, the greatest irony in all of this is that those owners who just wanted a quiet life can only achieve that by pretending that there are no problems.

We could have toughed it out and eventually made a profit, especially if we’d followed the developer’s lead when he listed half a dozen unsold units on Airbnb.

But that would have required a level of hypocrisy that’s even beyond an old cynic like me. Instead we sold the apartment at a bargain price just to get it out of our lives.

There’s an interesting graphic in the story about what to do and what to avoid in buying an apartment. And it recommends buying an older flat in a quiet area.

I would get on to that now, if I were thinking of buying again. Those older pads are going to be in short supply before you know it. Especially if they’re being knocked down to build nice, shiny, cookie-cutter, defect-ridden new ones.

A version of the comment piece was sent out on our Flat Chat newsletter last week. You can subscribe to the newsletter, for free, below.