How do newer high density developments effect?

[schmick]

Hey Guys,

As some of you would be aware from my previous posts, I've been looking at units in the inner city as my next purchase.

With all these new high density apartment developments (ie. multiple levels, 20+ apartments, pools, gyms, etc.) popping up all over the place, I'm wondering how this would effect my purchase in say a smaller density development (ie. < 20 apartments, no pool, no gym, etc).

The new aparments sell for a premium, I'm wondering how this would influence the value of an older apartment? Would it potentially increase it's value if similar in size/features etc?

Obviously, the newer development could make it more difficult to find a tenant due to the new vs. old factor and an over supply of available options?

Any info, experience and/or guidance with the above or something similar would be appreciated...

Cheers...

 

[buzzlightyear]

Two parts to your query.

With regards to supply and rental demand, the reality is that we have a higher demand primarily as a result of population increases that is driving higher rents. Older and newer style apartments will both be beneficiaries. As for how much will depend on the usual factors ie location, features, floorplan, internal fitout & quality, transport and amenity proximity

With regards to values, the older style apartments prices will also increase. For example, there are a number of current examples of this in South Yarra, Richmond, Prahran, St Kilda, Elwood etc. In fact, especially the Art Deco apartments, do command a premium over a identical flats/apartments with the same bedroom numbers, as they are generally larger (sqm), higher ceilings, period features such as cornices, fireplaces. You will still find late 50's/60's style complexes, whilst less aesthetically pleasing, will also be beneficiaries.

 

[propertyVIC]

Art Deco II

As mentioned, Art Deco flats attract a premium... and they're not building more of them.

As an owner, new developments cost more in strata title fees so older is good as you're not paying for pools etc.

You might get slightly less rent for a 50s 60s place but your costs would be lower so overal profit probably similar. Also, the newer place would depreciate faster.