With the development of a more complex and segregated Melbourne property market, buyers are becoming increasingly discerning.
Blogger: Robert German, sales manager, Beller Group
Buyers are becoming more discerning in the apartment market, rather than the housing market. With the former presenting a more diverse array of stock, property hunters are willing to buy but are far more conscious of what they’re paying.
Like in any marketplace, basic economic principles apply in the property realm. Standalone or semi-detached properties will always attract a premium because of the lower supply. Gone are the days when you could put B or C grade apartments nearby undesirable amenities and people would still be willing to pay above-average prices.
But even properties that consistently attract a premium are receiving less attention than they have in the past. This has been illustrated at auctions, where there is no shortage of interested parties, but the frenzy that existed in the past is no longer there.
This lack of desperation has been attributed to interest rates remaining low, combined with a government attitude that is largely in support of maintaining the property market’s status quo. In the most recent budget, this was expressed through the rhetoric surrounding a surplus generated through stamp duty, along with superannuation and negative gearing laws. Arguably, the culmination of these factors subdues the urgency of making a purchasing decision.
From a buyer’s perspective, I would refrain from being unnecessarily abstinent, given the almost guaranteed appreciation of property. If you have your eye on a dream property or even a dream suburb, do not aim to simply save, because by the time you have enough, it will likely be at an even higher price. You
will be better off building equity in areas you may find less desirable, before using that equity to launch into a neighbourhood of your choice. Such an approach can also assist in initiating your investment portfolio.
Even sub-par stock will capitalise, but patience is essential. From a developer’s perspective, it is essential you keep in tune with conversations around buyers’ habits. A great first port of call is a real estate agent you have worked with previously. While a crystal-ball insight is unrealistic, regular conversation with people who deal with buyers on a more intimate basis is the best way to tailor your development to what the market is demanding. It is also important to remember that buyers respond well to developments that utilise well-known architects, interior designers and landscapers, with a reputable body corporate.