There’s a new opportunity for real-estate buyers on the horizon in Melbourne, and it’s likely to take you by surprise. According to recent reports, more people are beginning to look to the skyline of the city to help them make money. Savvy buyers are reaching for the heavens by using the air above buildings to earn more money in the future. Airspace rights are becoming increasingly popular among vendors, who believe that there may be more opportunities to build up than there are to build out right now.
According to a director from Buxton Hampton East, his phone was ringing like crazy when the rights for space above a building in Hampton opened up. The company ended up getting $120,000 for the air space within just 2 days. Countless different demographics are showing interest in this new buying trend, including people who wanted to build their own apartments, or simply “bank the air”.
Big Things on the Horizon
The rooftop, which has approved plans and permits to develop a two-bedroomed apartment would cost almost 5 times as much on the ground, according to experts. On the other hand, air rights are valued based on their developmental potential minus other factors like building costs – which make this kind of investment a more affordable solution for many real-estate developers.
Property experts believe that going forward, more buyers will consider turning to air as a long-term investment opportunity or a new way to build their homes. There have already been a handful of airspace sales in the city over the last few years, with the rooftop of a factor in Collingwood selling for more than $1 million with access to permits for a multi-story suite for a penthouse.
Additionally, an apartment shell that went up for sale in the CBD was able to achieve an extra $500,000 on top of its asking price thanks to the air rights that allowed the development to skyrocket at a faster speed. Michael Yates purchased the top floor apartments and pulled air rights into the mix for a building next to his high-rise compelx in South Yarra to prevent views from being blocked in the years to come. The residency became a huge success as a result, with apartments and leases acquired much faster than usual.
Walking on Air
The air above the Gardiner and Ormond train stations were also sold by the government to developers, with experts saying that the scarcity of land in the inner-city is likely to continue driving greater value in the air. A lot of smaller buildings simply haven’t been properly leveraged up until now, and future developers are going to continue showing their interest in air space.
Buyers will also need to be wary of barriers to development, including council laws and owner corporation groups that might get in the way. People will need to look into the rules around air rights before they get started.