By Tim Graham, Investorist.
In my previous article, we explored the idea that thousands of new apartment offerings in Melbourne, Sydney and Brisbane will fiercely compete to be noticed by buyers.
[Related article: Will Your Development Be Saleable In 2017?]Here are some more points to consider while making sure your development is a saleable development.
Local vs Foreign Buyers
As a global platform for off the plan property, we often get asked about whether the number one selling point for a project differs for local and foreign buyers. I think the basics remain. Good location, proximity to public transport and infrastructure like schools, supermarkets, parks etc are important to both types of buyers.
Where the difference comes in usually is that local buyers are often chasing larger capital gains whereas offshore investors can place a higher emphasis on yield and buying in established markets in and around CBDs.
To park or not to park?
The provision of car parking space is always an important consideration for developers wanting to maximise the profitability of the project. From my experience this is definitely both suburb dependent and state dependant. Sydney has been building apartment projects with no car spaces for years and its certainly not uncommon in Melbourne these days either.
Brisbane has started heading in the same direction, but the other capitals haven’t trended this way just yet. It would be fair to say that this is quite isolated to CBD and inner fringe areas.
From a leasing perspective, agents often have more trouble leasing apartments with car stackers than apartments with no car space. It comes back to doing thorough research as to what the likely buyers in that suburb will value most.
This is certainly a factor that buyers consider when comparing project to project, but it tends to be a higher consideration for owner-occupiers than investors. Investors treat sustainability on a ‘nice to have’, not a ‘need to have’ basis.
However, I’ve often recommended to my investor clients that they look at things like solar on their house and land or townhouse investments to give their investment a point of difference for prospective tenants. Cheaper utilities are a great selling point when listing properties for rent.
Savings begin in the kitchen
Often overlooked by developers who are chasing the maximum number of units on a block, are the savings which can be made in kitchens. Building 12 one-bedroom apartments would require 12 kitchens which is the most expensive part of any apartment.
However, if building six two-bedroom apartments that would only be six kitchens to pay for, or less if there were also three-bedroom apartments. We often see greater interest/number of views for larger apartments over smaller ones.
Avoid 'eggs in one basket'
Whilst there has been some negative sentiment about foreign buyers drying up and potential settlement risk, few developers can afford to put all their ‘eggs in the one basket’ by relying solely on the local buyer market.
They need to not only make sure their project is saleable taking into account some of the points here, they also need to work with partners who can introduce and actively promote their products to a global buyer market – a considerably bigger basket.
The cream of apartments will always rise to the top; the trick is to make sure your development is amongst them.
Tim Graham is the Sales Director – Asia Pacific for Investorist. Investorist is a B2B trading platform offering software solutions for the off plan property industry. With offices in Australia, China, SE Asia, UK and US, Investorist promotes and distributes investment properties to buyers around the globe through real estate agents, financial planners, accountants and advisors.