Sydney investors and buyers are currently looking for alternatives to avoid the risk of buying into a strata development after the recent apartment disasters in the city.
The Opal Tower and Mascot Towers crises had a significant impact on the purchasing decisions of property players, according to Thrive Homes. The Sydney builder recorded only a slight increase in enquiries from property investors after the federal election, but since the Mascot Towers incident and evacuation, it has experienced a substantial increase in calls from potential investors and home buyers.
Fire and Rescue NSW arrived at the Mascot Towers nearly two weeks ago after cracks became evident in the 10-storey building. Residents occupying the block's 132 units evacuated and authorities continue to investigate the incident.
The Opal Tower fiasco, although an isolated case, also started with a loud “cracking” sound heard by the residents of the building in Christmas Eve. People in 51 units immediately evacuated. According to the final report on the building, the tower had numerous design and construction flaws such as the crucial support beams.
“More than half the calls we’ve received over the past week have been from people who said they were initially considering buying an off-the-plan apartment. They’ve changed their minds after watching the Mascot Towers issue unfold, and so soon after the Opal Tower issues last Christmas,” Thrive Homes General Manage Patrick Eather said. “We’re also hearing that recent uncertainty around off-the-plan apartment valuations dropping in the wake of the market decline, and the delays we’re seeing in current residential apartment projects, have also contributed to potential buyers seeking alternatives.
Eather said that property seekers became noticeably more prudent following the apartment-tower fiascos. “The questions we’re getting from these potential buyers relate to whether we stand by our 20-week build time, whether our build costs are reliable, and whether our work comes with quality and durability guarantees. They’re also looking for assistance to find land in Sydney’s high-growth corridors, particularly those earmarked for infrastructure investment,” he said. “They’re clearly looking for a higher level of dependability, lower risk and a reliable level of investment. By building new in growth corridors, they’re also looking to avoid the impact of market fluctuations to improve their chances of stronger rental returns and capital gains.”
Financial planner Vick Anand, who moved into his new home in Oran Park last month, has been investing in property for more than 10 years. Anand decided to change his property investment strategy to building more houses as an alternative to apartments.
“I’ve learned the hard way that investing in apartments isn’t worth it. The costs are too high, and the cost and hassles of strata are painful. This impacts on capital gains. On top of that, I really feel for people trying to sell an apartment in Sydney right now, with everything that’s going on with Mascot Towers,” he said.