Luxury off-the-plan units "best bet" this spring

By Gerv Tacadena | 09 Sep 2019

The luxury off-the-plan segment is expected to reap the benefits of the housing market's resurgence, market watchers said.

Recent industry figures show that home prices recorded their biggest monthly gain since 2017 in August, with Sydney and Melbourne leading the recovery. Home prices across capital cities rose by 1% over the past month, the most substantial increase since April 2017, according to CoreLogic.

"It's likely that buyer demand and confidence are responding to the positive effect of a stable federal government, as well as lower interest rates, tax cuts and a subtle easing in credit policy," said CoreLogic research director Tim Lawless.

This apparent recovery in the market would encourage many downsizers to sell their family homes and look for "quality" off-the-plan apartments.

"Now that the correction is over we'll see more people taking the plunge — we're expecting a spike in inquiry during spring," Julian Hasemer, principal at 1st City, told Wentworth Courier.

Challenges ahead
However, the recent structural issues in high-rise apartment blocks, including Sydney's Opal Tower, are raising concerns about safety.

"We need to understand that this is going to be a very important issue over a long period of time. Many thousands of buildings are impacted – not only, of course, those being currently built, and there were 270,000 to 300,000 units now, but also those that were sold over the last 20 years," Digital Finance Analytics principal Martin North told ABC News.

North believes that owners who are aware of structural defects in their buildings are less likely to speak up because further publicity would likely result in a collapse in the value of their investment.

"This could be many billions, even a trillion dollars, worth of damage if you take the value collapse as well actually cost of repair," he said.

However, Property Council of Victoria executive director Cressida Wall said these issues would not harm the unit market.

"Overall, the clearance rates for apartments have been rising since November last year and, while there may be individual circumstances, the majority of buyers factor this in as one of the considerations that they have when making one of the biggest purchases of their life," she told ABC News.

Still, Wall believes buyers need to exercise diligence when purchasing properties.

"The majority of buildings in Australia are safe and we have some of the best regulation in the world. What's required is a national approach to make sure that safety is maintained and enhanced," she said.

Top Suburbs : st kilda west , werribee , alderley , spearwood , eagle vale


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