Apartment sales indicate return to form for real estate market
- Lilyfield, Dulwich Hill, Marrickville and Petersham considered hotspots for affordable off-the-plan properties with good returns
- Off-the-plan development in Lilyfield achieves 230 enquiries in two weeks
- Raine & Horne Projects reports one in four first home buyers purchasing property via self-managed super funds
Leading property group Raine & Horne is reporting a healthy increase of interest in off-the-plan residences in Sydney’s Inner West.
The rise is part of a wider upward trend, with Australian Bureau of Statistics data revealing that the number of finance commitments for new dwellings rose 3.5% nationally in April 2013 – the fourteenth consecutive rise since March 2012.
In addition, the number of finance commitments for the construction of dwellings for owner occupation rose 1.5% in April 2013, following a rise of 1.8% in March 2013.
“While sales for off-the-plan residences have been steady in Sydney for the first half of 2013, we have been encouraged by a jump in confidence for new off-the-plan dwellings, especially in Sydney’s Inner West,” says Angus Raine, CEO of Raine & Horne, who adds that a bounce in off-the-plan activity is a lead indicator that the real estate market is returning to form.
To illustrate, boutique off-the-plan development “Henry” at 55 Henry Street, Lilyfield, garnered 230 enquiries in just two weeks for Michael Montano, Sales Consultant at Raine & Horne Annandale.
“The development is a collection of 17 one, two and three bedroom apartments starting from $600,000 up to $1.25 million,” says Mr Montano, who initially sold the site to the developers for $2,955,000 in 2011.
“Two of the stunning modern residences, designed byBianchino + Associates, have already been sold, and we’re currently negotiating with five other potential buyers on the remaining dwellings,” says Mr Montano.
Purchasers who buy into an off-the-plan development in the Inner West are making a savvy investment for the future, says Mr Montano.
“The Inner West is a fantastic region of Sydney that has seen periods of strong growth in capital values over the last decade,” Mr Montano notes.
According to Australian Property Monitors, the current median sale price for units in Lilyfield is $598,000, with a long-term trend of 5.9%.
“Buyers are better informed about how they can access their super for investment purposes, and compared to shares and other investment opportunities, property is still seen as a tangible asset with a reliable investment return.
“Affordable off-the-plan investments around central services such as the light rail and train lines are the highest in demand; these include suburbs such as Dulwich Hill, Marrickville and Petersham,” Mr Vrisakis adds.
Raine & Horne Projects is currently selling a block of nine off-the-plan residences at 347 Trafalgar Street, Petersham, which are returning an average yield of 5.5%.
“Unit 8 sold for $485,000 and is currently leased for $510 per week, and we have sold 60% of the properties in the complex in under five weeks,” says Mr Vrisakis.
“The development has a mix of studio apartments, and one and two bedroom residences priced from $399,000 up to $700,000.
“We still have a couple of two bedroom apartments and one studio up for grabs.”
Mr Vrisakis says there are a number of positives to purchasing an off-the-plan property.
“With off-the-plan properties, your home loan repayments don’t start until construction of the dwelling is complete.
“This means if you bought off-the-plan 12 months before completion, you will have a year’s head start on your loan before you must start making repayments.”
In addition, Mr Vrisakis says, an investor purchasing off-the-plan will also receive a greater amount of depreciation on the property, compared to an established residence, as well as the added bonus of the seven-year builder’s warranty on fittings and fixtures.
“An off-the-plan property means you own a new property with new fixtures and fittings, which are less likely to need replacement.”
For further media information contact:
Alex Vrisakis, Sales Manager, Raine & Horne Projects on 0499 888 887
Andrew Harrington, National Marketing & Communications Coordinator on 02 9258 5400