Cindy Huang and Robert Yin, with daughter Isabel, 4, outside their Lane Cove North townhouse. Picture: Justin Lloyd
Homebuyers on the hunt for an apartment this spring have been urged to be selective in what they buy and not just focus on price.
The inner city unit market is among the weaker performing areas in Sydney and, despite this increasing the likelihood of getting a bargain, it has also meant property selection remains critical, housing experts said.
My Housing Market economist Andrew Wilson said the worst affected properties during the pandemic were “investor stock” – units usually aimed at the landlord market.
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Prices for these properties were being slashed because landlords were struggling to tenant them while international travel remained restricted, he said. Most of the properties were usually rented out by international students, travellers or hospitality workers.
“That weakness in the inner city unit market will probably continue until international travel is allowed to resume,” Mr Wilson said.
Buyer’s agent Michelle May said due diligence was particularly important for unit buyers as there were often more factors to consider than with houses.
She recommended starting with the strata report. “You need to know the building was constructed properly and has no building defects but also run effectively with an engaged strata committee,” she said.
Older apartments were often a safer bet, she added. “I recommend buying only something that is at least five years old as the building will have had time to settle,” Ms May said.
Checking building compliance was another vital step in the due diligence process given recent construction disasters such as cladding issues in the Grenfell Tower in London, which burnt down.
“You need contract reviews and development application checks but you also need to ensure the building is on the cladding register,” Ms May said.
Buying in a larger building often means higher strata fees.
Other things to consider were the location and aspect – factors that, unlike the features and fittings in a property, couldn’t be changed.
The ideal aspect was north or east facing, while quieter roads made better locations. “Don’t buy on yellow roads,” Ms May said. “A yellow road on Google Maps indicates higher volumes of traffic.
“Properties on main roads are also the first to drop in price when the market turns (and) from a practical point of view, you want to be able to open your windows and not get noise and car fumes.”
Units in lower density suburbs with good transport links tended to hold their value better as there were fewer opportunities for larger developers. There was also more underlying demand in these areas, which meant the capital growth potential was often greater.
Smaller buildings had a key advantage in that single votes on the strata committee counted for more.
$70,000 discount: this unit on Pyrmont St in Pyrmont was $900,000, now it’s $830,000.
Large apartment buildings with amenities like gyms needed to be considered with caution, she added. The extra facilities tended to be expensive and were only worth it for those who were confident they would use them regularly.
Buildings with a high proportion of owner occupiers were also better than those with mostly landlords.
And quality trumped quantity. “You’re better off going for a good-sized one-bedder than a tiny two-bedder but I always recommend to my clients to buy with the future in mind. … many young couples who buy apartments need to make sure they have that extra space for when they decide to start a family. A second bedroom is going to make a world of difference. Buy for at least a five-year life plan.”
TOWNHOUSE BOUGHT EXTRA WELL
Most homeowners have some gripe with their properties – maybe a room that gets little sun or the parking is too narrow – but Rob Yin and Cindy Huang have a more unusual problem.
The couple say their three-bedroom townhouse in Lane Cove North was purchased so well they have struggled to leave. They had been deliberating selling for years to move to a house but kept putting it off because they didn’t think they would find a better home.
The Yin family said their townhouse ticked all the boxes.
“I grew up in a house with a backyard so I wanted that for our children, but we’ve never been motivated because the townhouse ticks every box,” Mr Yin said.
The family eventually decided if they didn’t list now they would find it even harder to part with the property down the line when they outgrew it.
“Its north facing and on a cul-de-sac which is full of kids on Sundays … it’s been perfect for us,” Mr Yin said.
Their property at 11 Sawyer Cres goes to auction September 26 with Belle Property-Lane Cove agent Patrick Lang.
The post How to buy well: the key things unit purchasers must consider during the pandemic appeared first on realestate.com.au.