Chapter 1: What is the main topic discussed in this episode?
It's the Real Estate Podcast, brought to you by ANZ Home Loans for financial well-beings. And welcome to another episode of the Real Estate Podcast, available on iHeartRadio every morning and also on Spotify and Apple and wherever you get your podcasts from. Well, it's a Friday morning. Yes, the weekend is knocking on the back door. It's the 16th day for September of 2022.
Have you had a busy week? Well, the weekend nearly here. Let's just get through Friday. I see that new data from Domain reveals the clear impact that we already knew the pandemic had on demand for regional properties around Australia. Check out this. This was really fascinating. The data shows that in March of 2016, the median price for a house in regional New South Wales was $425,000.
It took more than four years for that median price to rise by $100,000, so $25,000 a year. Then COVID comes along and within 21 months, prices had jumped 200k and by June of 2022, the median price was $740,000. There are some other breakdowns for other states that you can have a look at with this report. it certainly shows that regional Australia has gone gangbusters since the pandemic started.
And changing subject, coming up next, we're going to be talking to Rich Harvey about the apartment market. And at different times, there's been negative media retention that's given apartments and units a bit of a bad rap. But does that mean there are some opportunities for you to invest? Well, we'll check on that next.
It's your weekday real estate breakfast with news, interviews and predictions every morning on The Real Estate Podcast. Hey, if you're celebrating your birthday for this day of the 16th for September, have a fantastic Friday. You share it with the singer Richard Marks. He is turning 59. David Copperfield, the magician, is turning 66.
And Mickey Rourke, one of the finest actors going at the moment, he is turning 70. We talk with leading property commentators with analysis, predictions, forecasts and what's trending every morning from 6.30. It's the main centre forecast with PRD, selling smarter every day. Let's head around Australia and check on your weather on this Friday morning.
And first we go to Sydney, expecting a sunny one and 24 degrees. The opposite for you in Melbourne, expecting the rain today. 17 is your forecast high. In Brisbane, a possible morning storm with showers and 27 is your forecast top.
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Chapter 2: What impact has the pandemic had on the apartment market?
And in Perth on our Friday morning, expecting partly cloudy conditions should be mainly dry and 21 is your forecast high. We are just as addicted to property as you are. Every weekday morning from 6.30. Let's Talk Property, a podcast series with Rich Harvey.
well the apartment market for such a long period of time has been given a bad rap and with plenty of adverse news around all sorts of people from mum and dad buyers through to experienced property experts have declared rightly or wrongly that units are off limits when it comes to savvy investments or home ownership but our world has changed dramatically over the last two plus years
And could right now in the current conditions be ripe to consider an apartment purchase? Well, it's a Friday morning, so Rich Harvey, Buyer's Advocate and CEO of propertybuyer.com.au is here to help explain the reasons on why a looming undersupply of apartments is likely to provide an excellent opportunity for potential unit purchases. And a very good morning to you, Rich.
Welcome to the Real Estate Breakfast. Good morning, Greg. Great to be with you again. Well, it's been a busy week, Rich, and perhaps tell us why apartments have received negative media attention and been given this bad rap. I think one of the main reasons we've seen a lot of negative media around apartments is particularly in Sydney.
There's been two major apartment blocks, one the Opal Towers fiasco, which was out at Homebush, and the other one was Mascot Towers near the airport where there were major, major structural defects. They're only a couple of years old, but these brand new apartments had massive cracks and massive problems with them.
So it meant that all these poor owners who bought these apartments had to move out just before Christmas, had nowhere to go. And then there's a massive dispute over who's going to fix it and who's going to pay for it. The other thing that's happened with the off the plan market is that there's a little clause called the sunset clause.
When you buy a property off the plan, there was a clause there that says that the developer can cancel the contract if the property is not built and settled within three years of signing the contract. So what happened during the boom period, some of the developers went, hey, we could actually slow things down and sell these properties for 20, 30% more than what we originally contracted them to do.
which is really, in my view, a very immoral thing to do. So there was some legislation passed to now prevent that. But I think a lot of the issues has just been around the quality of the construction of these apartments.
It's unfortunate that units have been given a bad rap because they are a fantastic alternative if you don't have the money to buy a freestanding house or if you just don't want the maintenance. The other thing is we've seen potentially in some locations an oversupply of apartments built.
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Chapter 3: Why have apartments received negative media attention?
We're going to see first home buyers going back into the apartment market. There's definitely opportunities in that apartment market. And what are your key tips when choosing the right type of apartment to buy? What should buyers look for? There's several key things to look for. Number one is always its location. You know, once you buy that property, you can't move it.
So the first thing is get the location right. Make sure it's close to shops, schools, transport amenities, education. So the second thing I look for, Craig, is the floor plan. Look for good flow, good storage space. You don't want the kitchen right next to the front door. You know, a floor plan that really, really is appealing and makes really clever use of a smaller space.
Third thing I'd say, Craig, is aspect and orientation. Make sure there's plenty of natural light coming into the property. I love apartments that have got some kind of uniqueness. So what I mean by that is good old Harry Triggerboff builds thousands and thousands of units, but they're all the same. I like to buy in boutique blocks.
I like to buy in blocks of apartments that are really appealing to the eye and really appeal to the owner-occupier. The other thing I like to buy, Craig, is properties that have got high quality finishes and fixtures. You know, it's got to really stand the test of time and not be built with cheap melamine cupboards. Another key thing to look for, Craig, is strata fees.
Make sure when you're buying either a new or existing apartment that you check what the strata fees are going to be and make sure they're not over the top. And also try and get some insight, if you can, into the body corporate politics. There's a lot of dysfunctionality when it comes to body corporates, as you can probably imagine.
Everyone wants to be the kingpin and have their say and complain about things that aren't done, but make sure it's a working and functional body corporate. The other thing to look for, Craig, is the neighbourhood and the demographic. try and get an idea of what your neighbours are going to be like and sort of their ages and stages.
Because if they're all got screaming babies or all play rock music till midnight, you know, it may not be the ideal type of location for you to buy in. And look at the noise transference. If it's a really good quality construction with double glazing and really solid flooring, then that's going to really help you to have a peaceful night's sleep.
Yeah, and you talked about the rental crisis, which brings me on to this point. People will be very interested in potential yields when buying apartments. Who are the investors, do you think? Well, Craig, the investors are coming back. We're starting to see more and more inquiries to our buyers agency from investors going, hey, look, I see that the rental market's really improving.
So they're interested. And I think apartments will be in that price range. But just to go back to basics, Craig, to explain to your listeners, yield is simply calculated by taking the weekly rent times it by 52 and divide by the purchase price. So yield is simply what we call a representation of the cash flow of the asset. It's what the cash that it throws off.
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