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Older Melbourne apartments offer new opportunity

Much of the property investment in Melbourne in recent years has been in shiny, steel-and-glass dominated apartment developments. But that may be about to change somewhat.

While many new developments are still being built across the Victorian capital, the Age has reported that a large number of older apartments have now come onto the market, properties dating from the half century between the 1930s and 1980s.

According to estate agents, there is no particular reason for a sudden surge in the availability of such blocks. It may all be just a one-off coincidence. However, the fact that all these blocks are, in their entirety, up for grabs is something that is bound to interest investors. In particular, their heritage gives them extra value; not everyone wants to live in a pad that looks like the bridge of the Starship Enterprise. 

Located in suburbs ranging from Mordialloc to Thornbury, they have become available as landlords decide to cash in on a strong market and rising land values. Once again, however, it is not that every owner of such blocks is doing so, just the individual circumstances of some that have prompted them to sell up, often after decades of ownership.

Bill Stavrakis of Biggin & Scott Elsternwick, who is currently marketing a block of eight units in Elwood, told the paper: "The people at the pointy end of these transactions, I call them property hoarders.

"They have a very strong asset base and they see these as trophy investments."

Jellis Craig's Mark Josem, who is advertising a block in Hawthorn, said the appeal lies in the land value, as well as the rental returns. He remarked: "They are an effective investment, the land component will always accrue strong capital growth."

This new trend in older blocks complements the rise of new housing, such as the various developments being established on former industrial land with Asian money. 

Examples of this include the Alpha Partners investment in the Yarrabend development at the site of the former Alphington Paper Mill in Yarra.

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