Multi-unit dwellings: Weekly market wrap with Sam DodimeadBack
Multi-unit dwellings see values increase
Maintaining a consumer facing presence daily with Canberra’s property market has been advantageous to writing this column. Access to insights analysts who can only hypothesise about days, weeks and months ahead of time is a significant competitive advantage when working with clients on strategy and execution of sales campaigns for off-plan multi-unit developments. Recently I have noticed a divergence in data where it appears houses are outperforming apartments and townhouses.
There are many instances where sales data is not available due to the settlements having not yet occurred, resulting in opinions and forecasts which appear to miss the mark. It can take one to three years post exchange for sales data to become public. By the time sales results become public, market conditions are likely to have changed, diminishing their usefulness.
Multi-unit stock is far easier to draw like-for-like comparisons than houses as floor plans are often the same and located within metres of one another. Commercially minded vendors remove emotion from the sales process as their primary focus is to transact property in line with market conditions. This doesn’t mean all apartments and townhouses generate the same results. However, in many instances across Canberra sales data supports that quality apartments and townhouses with unique selling features have significantly outperformed the market.
According to CoreLogic’s Housing Index, Canberra multi-unit dwellings increased in value by 4.09% in 2020. After reviewing 11 transactions of like-for-like dwellings in projects with unique selling features across Canberra, from one-bedroom apartments through to four-bedroom townhouses, it became evident market demand is driving significant price growth.
For townhouses, the lowest recorded annual increase with direct comparison was 4.23% and the highest, a different dwelling type in the same development, was 20.01%. Apartments generated even bigger gains varying from 7.07% to 19.35% with double digit gains recorded for one-, two- and three-bedroom plan types with direct comparison.
Of the 11 instances where transactions occurred with a direct comparison, the average increase in value was 10.52%. Every transaction was off-plan, requiring a 5% deposit with no burden of holding costs until settlement.
Those considering an off-plan purchase may find it difficult to cut through the myriad of pretty pictures and glossy brochures to differentiate what the unique selling features really are. In my experience, the most valuable unique selling feature is demonstratable quality. It often comes with a higher cost which can be perceived as a deterrent for some. Off-plan purchasers who look past price and make decisions based on value are benefitting most from current market conditions.
With Sam Dodimead, local property professional and host of Canberra Property Podcast where you can get to know the consultants contributing toward deliver of new buildings. Stream from wherever you listen to podcasts.
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