Market Update Postcode 2127 August 2019

This week agent Stevan Vuk-Luboya, is covering what has been happening in a market for the past 4 weeks. It is clear that Australia’s properties are moving to next cycle called “Stabilisation” but the question remains the same “What to do next”?

Covering the topics:

  • Recent sales postcode 2127
  • The importance of mortgage broker
  • High-rise apartments vs 15-20-year old apartments
  • What price brackets are in the highest demand

High-rise apartments vs 15-20-year old apartments

We have all read articles recently that have focused on the integrity of density building in our lucky country. Construction rates, conformity of builds and most importantly building defects have been highlighted as the centrepiece for scrutiny. In an era where Australians are becoming increasingly geared towards apartment lifestyle, this can be a particularly contentious issue. But we would like to shed light on the matter while bringing some real-world knowledge to the situation.

Building and construction of large high-density structures is a dynamic and fast-paced process, and the fact that intricate architecturally designed projects can be manifested in a matter of months is a master of civil engineering.

Since 2010, there has been 650,000 apartments built in what is known as “Australia’s Apartment building boom”. These structures have grown to happily accommodate over 13% of the Australian population, equating to millions of residents today.

The Opal Tower Story

One of the most well-documented projects (and possibly the worst-case scenario of a high-rise construction) is the Opal Tower merely meters away from our head office in Sydney Olympic Park. Owners of the new apartments during the first months of the year were told defects could destroy their asset values, with opportunistic buyers submitting half the original price as an offer for those wanting to offload. The result? According to RP Data, since defects were mediated and occupants returned to the building in early February, there has been one sale. An 81m2 internal, 2-bedroom apartment which sold for a massive $950,000 – a figure $208,000 higher than the original off-the-plan price.

What to do if you found the defect?

Whether major or minor, all buildings have some form of defect. The process is that your property will be built along with the rest of the structure. When completed, you have the right to order a building inspection report and any subsequent defects that are found are legally rectifiable by the developer within your contractual period (usually 3-6 months from practical completion). Anything that is deemed as uninhabitable due to defects means that tenants or owners legally will not have to settle on the property until rectified. So, the notion that you are investing or moving into a boobytrap-ridden asset, with no power to do anything, is farcical to say the least.

The bottom line is that throughout the lifespan of the average Australian home, it is highly likely that a defect or issue will arise. Maintenance and repairs of a property are as natural as buying the asset itself. When you take a step back and assess the nature of the defects, you can begin to understand how over-sensationalised these articles has become. Ask yourself in real terms, do you know anyone that has never had a leaky roof at home, an electrical problem, a plumbing issue or some cracking in the driveway? Can you even say that about the family home you grew up in or the one you currently live in?

 How media take advantage of stories?

A harsh reality, and one that I came to grips with long ago, is that media use emotions to grab views. A vanilla report on the industry would more than likely govern a flop in ratings, so it is your job to ensure you don’t get caught up the emotive side of reporting to make your next investment decision.

The fact is, Australia’s rapidly growing population needs a building industry that keep up with the pace of our evolving capital cities. We need density projects and strategic planning if we are ever going to stand a chance of housing our future population in this great nation. Don’t let the media pray on your emotions and skew your investment prospects. Quality apartments remain a great housing option for Australians and will only become more in the future.

*source Blue Wealth Property

Posted in Latest news, News on 22nd August, 2019