By Rich Harvey, CEO & Founder, propertybuyer.com.au
There aren’t too many positives to have come out of the coronavirus crisis.
We’ve spent a lot of time inside – especially those living in Melbourne – and struggled with being isolated from family, friends, colleagues and overseas holidays.
Some have lost jobs. Some have lost money. All of us have had life uprooted in some fashion.
But if there’s a silver lining to self-isolation, social distancing and working from home, it’s that many of us have clarified what’s really important. This is especially the case when it comes to the places where we live – our homes.
And I think a new property market trend could take off as a result of this, letting people live the best of both worlds. Changing fundamentals might soon see us have our cake and eat it too.
One world is the fundamental goal we share of having a home near where we work and play, which for the majority of Australians is a capital city like Sydney.
We want to be close to the CBD, or a secondary major hub, so the commute to work isn’t too arduous, so our kids are close to a good school, so we can congregate with loved ones and make the most of lifestyle amenities on offer in our downtime.
Where we live should be pleasant, with either a nice view if we can afford it or at the very least a park or access to nature nearby.
It should be safe, friendly and community driven. The young or young at heart might want a bit of entertainment or eclectic cultural attributes, while those of us who are a little older or settled might value peace and quiet.
Sometimes, especially in a city like Sydney, some buyers have to sacrifice those more pleasing fundamentals due to price. They adjust their priorities, get really strict on the list of must-haves and settle for what they can afford.
They might end up living near work but in a place that’s not their dream home, in a neighbourhood that isn’t their first choice or on a busy street that’s noisy.
Not many of us have the luxury to have our cake and eat it too.
My theory is that some buyers will take advantage of the downturn in city apartments to ensure they can have the best of both worlds. Those worlds are convenience and lifestyle.
Hear me out.
Apartments in the CBD have always been patchy performers from a property investment perspective. There are the Toasters of the world – the premium, luxury apartment complex right next door to the Sydney Opera House, that sell for a fortune and only ever grow in price. And then there are the cheaply constructed, quickly erected cookie-cutter blocks that never seem to increase value, and sometimes lose their owners money over the years.
Coronavirus, changing demographics, a long-term construction glut, seasonal trends like fluctuations in the student accommodation market and the move to Airbnb accommodation, among others, have seen apartment markets stagnate.
But this could present an opportunity for those who want to be in the thick of the action, at least some of the time, to buy a CBD unit at an affordable price and own a home elsewhere for lifestyle.
Perhaps they follow the lead of a number of other Aussies performing an exodus from capital cities and relocating to regional locations further afield.
We’ve seen anecdotal evidence of many urban dwellers packing up and heading to small country villages or thriving mini cities with a small town vibe over the course of the past year. I’m not convinced it’s a trend that on its own will dramatically alter markets, but it’s clear there’s a mood for something different.
And so, what if some buyers choose to do both? They have a city pad they can crash in when they need and want to be in Sydney, for meetings or to catch a show or see friends, as well as a lifestyle home where they can rest, relax and recharge, and perhaps even work remotely part of the week.
For those wanting a bit of both, it could be an emerging trend in the coming few years. But regardless of what happens with shifting fundamentals, some things will never change.
For one, well-located properties in sought-after and blue-chip suburbs that meet the needs and wants of people now, and into the future, will always grow in value in the long-term.
Quality homes in nice suburbs close to employment hubs, with ease of movement, that are safe, friendly and desirable, with an appealing level of amenity and near good schools, won’t suddenly fall out of favour.
Secondly, the apparent capital city exodus aside, people will always want to live in a place like Sydney. It’s vibrant, colourful, exciting and energetic. There’s lots to do. There are lots of employment opportunities. There are world-class services, from healthcare to education.
And finally, those who can’t afford a blue-chip suburb right away will continue to look for alternatives that let them have a little bit of both – an element of convenience that meets their budget and has some perks either now or in the future via gentrification.
The key will be property selection at both ends of the scale. Having expert advice when selecting a home is always helpful, but even when shooting for an inner-city crash pad, it’s important to understand the market and what drives value growth.
Buyers’ agents are well informed and in an excellent position to help. They can ensure you don’t overpay for your secondary property and guide you toward a selection with strong long-term growth and rent potential.
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