One-bedroom apartments: Stepping Stone or Smart Investment?

With the property market softening slightly, many home buyers and investors are eyeing one-bedroom apartments as a practical and affordable entry point. Traditionally seen as less desirable, one-bedroom apartments are gaining traction. So, are they still a risky investment?

Absolutely not! One-bedroom apartments can offer excellent ROI (Return on Investment), especially in major cities like Sydney, Melbourne and Brisbane. This shift is driven by several factors:

• Changing demographics: More single-person households, later marriages, and a growing desire for inner-city living all contribute to the demand for smaller, convenient apartments.
  
• Shifting priorities: Today's buyers prioritise affordability and convenience over sheer space.
  
• Affordability: With house prices out of reach for many people, apartments offer much better value for both investors and owner-occupiers.

However, not all one-bedroom apartments are created equal. At Propertybuyer, our buyers agents consider these crucial factors when evaluating one-bedroom investment opportunities. Below is what our agents look out for when identifying the best suburbs to invest in Australia in 2024.

Location reigns supreme when it comes to one-bedroom apartments, especially in cities like Brisbane and Melbourne. Ideally, you should only consider one-bedroom apartments in Brisbane or Melbourne if they’re as central as possible—no further than 5km to 10km from the CBD. This caters to the typical one-bedroom buyer who prioritises convenience and a close commute. They're willing to trade some space for a central location that offers a vibrant lifestyle.

Walkability Matters:

Look for properties close to amenities like cafes, restaurants, and dry cleaners. Since one-bedroom apartments often have limited living space, having these conveniences within walking distance becomes even more crucial. It allows residents to maximise their compact living areas and enjoy a vibrant lifestyle without relying solely on their apartment.  This is especially important in cities like Brisbane and Melbourne, where a walkable lifestyle is increasingly sought-after. However, don't overlook the convenience factor in Sydney either. Many desirable areas in Sydney City offer a vibrant mix of apartments and walkable amenities, perfect for those seeking a compact and convenient lifestyle.

For a wider selection of 1 bedroom apartments in Sydney City, connect with a reputable buyers agent who can help you find a property that aligns with your needs and preferences.

So, are apartments a good investment in Melbourne & Brisbane? Absolutely, especially if they meet these location criteria.

While location is crucial, the building itself also plays a significant role in your investment's success. Here are some key style considerations, especially for those looking for the best place to buy investment property in NSW, VIC & QLD.

• Avoid Oversupply: Steer clear of generic high-rises in overdeveloped areas. An overabundance of similar one-bedroom apartments can negatively impact both capital growth and rental value.
• Embrace Character: Consider older, boutique apartment blocks with a unique charm. These can offer a more desirable aesthetic and potentially higher returns on investment.
• Research Building Popularity: Investigate the overall reputation and desirability of the entire building complex before purchasing. A well-maintained and popular building attracts better tenants and fosters a sense of community.

Apartment Size and Features:

• Minimum Size: While one-bedroom apartments are by definition compact, aim for at least 50 sqm. Apartments smaller than this may be difficult to finance and resell.
• Balcony Bonus: A balcony is a highly desirable feature, especially in a small apartment. It provides valuable extra living space and enhances the overall appeal for potential tenants.
• Maximising Space: Look for apartments with built-in storage solutions or additional storage space within the building. This helps residents maximise the limited space within the apartment itself.

Amenities

While convenient, parking isn't always essential for one-bedroom apartments, especially in well-connected areas. However, consider the following:

• Accessibility: If the location lacks easy access to public transport and amenities, secure parking can improve your resale prospects and generate rental income by leasing it out.
• Public Transport: In well-serviced areas with strong public transport links, parking may not be a deal breaker.

Views can significantly enhance a one-bedroom apartment by creating a feeling of spaciousness and light. Look for apartments with larger windows and a desirable outlook over the district, water, city, or gardens. Good natural light is essential in a smaller apartment to maximise the sense of space. 

One-Bedroom Apartments: A Smart Investment

The perception of one-bedroom apartments as solely budget options has shifted.  Data shows they've experienced solid growth in recent years, making them a viable investment, particularly for first-time buyers.

A Buyer-Friendly Market:

Current market conditions offer a rare opportunity for buyers. While the future is uncertain, if you've been considering entering the property market, a one-bedroom apartment could be a strategic springboard. Consulting with a buyers agent in Melbourne or Brisbane can help you navigate the market and make a well-informed investment decision.