If the great Australian dream is a house on a quarter-acre block, what is an apartment? A home with no character or vision? Or is it a chance to make your money go further without compromising on lifestyle and amenity?
While there will always be staunch advocates for the dream house, there is a growing groundswell of Sydneysiders who no longer consider that you’re selling out or missing out by choosing to live in an apartment.
That said, it is absolutely true that not all apartments are the same. Some are four walls and little else. Some give no thought to community and what residents might need to live a happy, connected life. But for those that do consider all that makes life fulfilling, it is anything but a ‘compromise’.
Quality inside and out?
As apartment living becomes more commonplace, so too does the option to buy in high end developments where the quality of what is offered outside your front door is given as much thought as what you get inside. However, if you’re buying ‘off the plan’ and your apartment – and the lifestyle you hope surrounds it – doesn’t exist yet, doing your homework is critical. Dr Diaswati Mardiasmo, National Research Manager at PRDnationwide says the most important thing to research is the developer.
“You are buying into a dream / something abstract, so you really need to be able to trust the developer. Ensure they have an excellent reputation, a high track record of off the plan completions, and excellent customer service reputation.” Once you’re satisfied with the developer’s credentials, it’s important to find out all you can about the local property market conditions.
“Ensure that you know the local market – price trends, demographics of who typically lives there, rental yield and returns, and most importantly what other projects (residential, commercial, infrastructure, industrial) are planned over the next five years,” says Dr Mardiasmo.
Unless you’re a lottery winner, price is a key factor. You don’t need an expert to tell you that median house prices are higher than median apartment prices. However an expert can help you determine whether your potential purchase is a good investment.
At the end of March, CoreLogic data showed the median house value across the Hills Shire was $1,113,000 and the median unit value was $765,570. No surprises there. But, as Tim Lawless, Executive, Research Director Asia Pacific at CoreLogic explains, you need to consider how that value has changed and how it may change in the future.
“Over the past twelve months the median house value [in The Hills District] has fallen 12.7%, while the median unit value has reduced by 3.4%,” says Mr Lawless.
Although it represents a disappointing decrease for house owners, the figures highlight the consistent strength in the apartment market in The Hills Shire.
The power of connection
Sydney’s west has also benefited from the newly opened Sydney Metro which Mr Lawless says promises to substantially improve commuting times and congestion on the major transport routes.
“Buyers should look for projects that are strategically positioned close to transport options, essential amenities such as shopping, health care, schools and social opportunities,” advises Mr Lawless.
For a development like Esplanade Norwest, the Sydney Metro isn’t just a nice to have option that you still have to catch a bus or drive to, it’s right on the doorstep. Add to that a shopping centre, hospitals, restaurants and a growing community of residents to match the vibrant 9 to 5 Norwest culture and the local profile is an attractive proposition.
Value your investment
If that’s ‘liveability’ covered, what about the bricks and mortar and the amenities offered in the development itself?
The experts agree that your research should also take into consideration market trends with apartment size and whether the facilities offered can really enhance your life. “Three bedroom apartments have a lower average ‘days on the market’,” says Dr Mardiasmo. “And if we look at the capital growth over the past five years (2013–18), three bedroom apartments give you a higher capital growth of 43.3%. If we look at demand (i.e. number of sales) three bedroom apartments also recorded the lowest decline.”
Alongside a range of apartment types, Esplanade Norwest promises purchasers a resort-style life with private gardens, a swimming pool and residents club, gym, outdoor cinema, wine storage, secure bicycle storage, electric car charging bays and connected restaurant and café precinct.
With all this included in the purchase price, can an apartment in fact offer better value for money than a house?
Dr Mardiasmo says yes, it can, but you should do your own cost-benefit analysis to rate the strata fees against how often you will use these amenities.
“If you believe you will be using them heavily then there is a possibility that the benefit will outweigh the cost, so apartments with these offerings do offer better value for money than a house.
“These offerings can be extremely attractive to families and those that are environmentally conscious, as everything is in one place (thus easy to get to and less fuss with the children) and can reduce your carbon footprint as well as minimise fuel costs.” With that in mind – and developments like Esplanade raising the apartment living bar – perhaps it’s time for us all to rethink the great Australian dream.
About PRDnationwide Research
PRDnationwide’s national research team provides quality property, housing and (predominantly) residential market research to PRDnationwide’s network of franchises as well as government departments, private and non-private organisations and private investors. The team, led by Dr Diaswati Mardiasmo, has a high level understanding of public policy advocacy issues, strategic thinking, analytics and evaluation.
CoreLogic provides property information, analytics and services across Australia, New Zealand and Asia. With Australia’s most comprehensive property databases, the company’s combined data offering is derived from public, contributory and proprietary sources and includes over 500 million decision points spanning over three decades of collection, providing detailed coverage of property and other encumbrances such as tenancy, location, hazard risk and related performance information.