Apartments in designated areas have `soared in value'

Inner city apartments have risen in value by close to 40 per cent in the last four years, according to a report by Hamilton Osborne King. The agency says apartments in designated areas have soared in value, despite the negative press some city centre developments have had in recent years. Fears that Section 23 apartments would decline in value once the tax breaks lapsed have not materialised. Although the 10-year tax breaks on a few hundred of these units ran out last year, most owners retained them because of the strong rental market in the city.

Several hundred more are due to lose their tax concessions in the coming year but there is little likelihood that the market will be flooded with this kind of property.

However, according to Hamilton Osborne King, the tax advantages are becoming a less important factor for buyers. Its report points out that many of these properties are currently being sold to investors who are more concerned about the quality and location of the development than whether it has tax advantages.