Small apartments, good design and the lender

News Corp featured a 23 square metre Fitzroy apartment with a fold-out kitchen, and PIPA Chair Cate Bakos said she expects to see more designs like it.

The apartment

Nathan Mawby reported for News Corp on the 4th of August 2026 on a one bedroom apartment in the 1930s Cairo Flats complex in Fitzroy, listed with an asking range of $530,000 to $575,000. The owners, architects Nicholas Agius and Claire Scorpo, converted a former bedsit so that a full kitchen folds out of a wall into the living area and closes away when not in use. The renovation was shortlisted in the 2016 Houses Awards and won an Architeam Small Project award in 2017.

Real Estate Institute of Victoria chief executive Toby Balazs said the idea could be used to add a second kitchen to other floor plans where plumbing allows. Cate Bakos, Chair of PIPA, told the Herald Sun she liked the design and expected to see more like it.

Lender size policies

Good design can make a small apartment more attractive to live in and more distinctive when it is sold. The investment case also depends on how lenders, future buyers and the building itself treat the property.

Many lenders apply minimum size policies to small apartments, commonly measured on internal living area and excluding balconies and car spaces. Below the threshold, a lender may require a larger deposit, apply a lower maximum loan to value ratio, or decline the loan. The policy affects both the buyer today and every future buyer who needs a loan, so it bears on resale as well as on purchase. Each lender’s current policy should be confirmed before an offer is made.

The buyer pool

A 23 square metre apartment appeals to a narrow group of owner-occupiers and investors. A distinctive design can widen that appeal, but the number of buyers able to finance the purchase sets a limit on it.

The building

Owners corporation fees, the condition of a building of that age and any planned capital works apply to a small apartment as they do to a large one. Against a lower rent, they take a larger share of the return. A building from the 1930s may also carry heritage controls that affect what alterations are permitted, which the planning scheme and the owners corporation records will show.

Questions before an offer

A buyer considering a small apartment, as a home or an investment, is entitled to ask for evidence of comparable sales of similar sized apartments, and confirmation of how lenders treat the property. A Qualified Property Investment Adviser can obtain both. Advisers who hold the QPIA accreditation can confirm lender treatment as part of their due diligence, and the PIPA Code of Conduct governs how they advise.