I have three teenage daughters, so I’ve become very aware of the increasing appeal of the concept of ‘vintage’. My girls are very environmentally (and fashion!) conscious, so the appeal and value of second-hand items is high across their community. Interestingly, in the wake of some high-profile examples of new developments revealing building issues we have seen a similar increase in the appeal of older (dare I say ‘vintage’?) apartments. But it is important to recognise there are significant differences in the new and second-hand markets.
The reason I’m raising this is because our team are seeing a bit of a disconnect in expectation and reality that I feel is important to address.
The market has created an expectation that property values will always automatically increase. I think that’s predominantly true and certainly at the moment values remain remarkably solid, but it is also true that in some cases it takes time for that value growth to solidify.
We have seen over the last twelve months or so a disproportionate increase in demand for apartments built in the 1950’s and 1960’s, an era in which buyers have confidence in quality and structure. It is somewhat frustrating that demonstrated high quality developments that offer both quality and convenience like those in Wentworth Point are not attracting the same level of interest.
And here’s the thing. The ‘new’ second-hand market for property is very different to that of off-the-plan stock. Expectations are different even when a property is almost brand new and that is important for vendors to take into consideration.
Let me explain.
For those looking to buy a property off-the-plan the expectation is that it will be perfect and suit the buyer’s needs exactly and immediately. Off-the-plan buyers have the opportunity to choose between layouts, fixtures, fittings and position in the building and they pay a premium for that choice.
But the fact is if those off-the-plan buyers then choose to list that property soon after completion, even though it is almost new they are effectively selling a second-hand property. It means the premium paid cannot automatically be factored into the value. Now I understand that can create a level of anxiety for owners watching values in their precinct so I think it is important to stress that, based on my experience, value will return over time. It’s about playing a long game.
So, in the case of Wentworth Point I believe it currently represents a spectacular property investment location and that now is a great time to buy with real potential to deliver very healthy returns. It’s a great location with great facilities, access to schools, transport and the water.
As my daughters are happy to tell me, last year’s fashion may be out-of-date this year, but if you hold onto the quality pieces they will soon return to style and increase in value.