The May edition of Australian Property Investor had a good story about the oversupply of inner city Melbourne high rise, which is also worth reading. See "High on High-rise". One point made is that many of the apartment buildings planned for Melbourne are aimed at being sold to investors, not owner occupiers. This is resulting in the wrong type of apartments being built and the article predicts that these apartments will not grown in value.
A similar issue is revealed in a story in The Australian today regarding Meriton apartments. Meriton is currently building two very tall high rise apartment buildings in Brisbane, Soleil and Infinity. Meriton reports that sales have mostly been to Chinese investors, who have stopped buying. Meriton says that it is Chinese investors who purchase most of the off-the-plan apartments in Australia. There is a clear risk in buying an apartment as an investment in such circumstances. As I have previously written, it is best to buy in a building where there are a large percentage of owner-occupiers in the building.
"Mr Triguboff said prices in the overheated Chinese property market were starting to fall, while the Australian dollar continued its stellar run, making Australian property increasingly expensive compared with China.