thanks for your constructive input jake.
Boutique: Lenders like blocks of units if they’re less than 18.
The reasons:
A higher amount of loans against a building raises the risk of people defaulting and values depreciating.
Lenders look at ratios of owners vs. investors and see less risk if home ownership is high.
Established blocks have higher percentages of home owners than new developments.
Lenders also cap their investment level per building so they don’t expose their portfolios to too much risk. This means that in the future purchasers can experience lending difficulties with high rises.
i agree - new blocks currently being built have higher rates of defaulting. i to would stay clear but still consider older apartments build in the late 90s and early 2000s.
Valuers like blocks of units if they’re less than 18.
The reasons:
They’re more unique, therefore have higher demand.
Sales within the same block are less liquid so values are less volatile so a valuer can be less conservative
i would say yes but also no - as they're restrictive. SOme blocks i know and have previously owned have prices primed based on the location and people who live in there
No Lifts, Gyms, or Pools
We manage a rent roll of 250 properties and have less than 1% vacancy rate throughout our portfolio. We've found that these facilities do NOT make a difference to vacancy rate. They will mean that you accrue more rent per week however they are usually more expensive to maintain so the rental income is somewhat negated by owner's corp costs.
well - you gotto incorporate the views as well. all these blocks probably don't have a lift and will make it difficult for older people who wish to buy in the block. Not everyone likes to run up a flight of stairs esp when it comes to grocery shopping etc. by having these facilities - it makes a difference to type of tenant you are looking for. by having no lifts, gyms or pools you basically just narrowed down to very few apartment blocks around inner CBD.i have an apartment rented at 1K a week which as a owners corp of 3K a year bought at mid 400K 1.5 years ago which gives a return of over 10%. So it is really subjective though - if i had singled out only boutique blocks - i wouldn't have been able to secure a corporate client.
Newer Buildings:
The overseas market (mainly China) is aggressively targeted by developers and marketeers and they are steered towards inner city (CBD) apartments. In many CBD’s there are over saturations of new developments and less unique property. This means that those properties will always suffer from a buyer's market. The reason being is that in high density areas where apartments are all alike the only differentiation is price (basic supply v. demand) - therefore purchasers will usually just choose the cheaper option, meaning you'll never get a outperforming result.
Well i think you have to factor in location - there are many apartment blocks built in the 2000s that have good locations and everyone likes having good foyer as well as some facilities. no one wants to just walk in the cold passageway or the stairs.
Secondly New buildings are often approved more frequently on main roads rather than quiet streets. Home owners usually prefer quieter streets when looking to settle down and start a family hence demand for new buildings is actually lower than established property.
if you on the 10th floor and above - there is basically no noise from the streets. Also there is double and tripe glazing being used in the newer buildings nowadays although i have never bought anything built after 2004. you have to realize majority of the apartment blocks were also built in the early 2000s and some of the locations are even better than the ones in built in previous years
Established Property
I could go on for years about the benefits of established property but I'll keep this one brief.
The reasons:
Character. - 1930's Art Deco apartments sell for a premium and are always in demand. They have arguably inferior floor plans but make up for it in character.
Size - 1940's-60's are BIG... Bigger than most modern projects. Valuers heavily weight their CMA's based on size. Hence these decades continue to perform
1980's - inferior design, floor plans and cheap construction (chipboard floors etc)
1990's - much like the 00's property. You usually get less for you $ and have properties that are old enough to look dated but too young to have character (compare Edwardian houses to 1990's houses for e.g.)
personal taste - many of these art deco apartments - i had one myself off queens road was the only apartment which i made the least amount of dollars when coming to selling off. Many buyers at that time found it dark and heating was an issue. i agree edwardian and victorian houses ones in albert park, middle park and south melbourne are ones to keep and are a gem in its own right but of apartments - i personaly think it is hard to sell these unless it was sold at a dirt cheap price.
Asbestos
I've never encountered a unit that still has asbestos. Houses yes, it's common (especially sheds/garages). The body corporate should have removed any asbestos (e.g. 1930's garages) by now, if they haven't then they're not pro-active enough so you wouldn't buy.
i think you would have to search harder. Asbetos was only fully banned in early 2000s and they were everywhere before. had an apartment once in south yarra - a 1970s one had fibre cement sheets or asbestos cement sheets for the walls of the bathroom when i decided to change the wall and floor tiles As you know, owners corp only manages the common areas and well - yeah it cost me a bundle - i personally would steer away from these old apartments. and the noise factors are so bad - no double glazing as well as difficult in putting in heating and cooling solutions.
