Apartment disasters driving buyers to detached housing

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The Opal Tower and Mascot Towers crises have had a significant impact on the purchasing decisions of home buyers and investors, who are now looking for alternatives to avoid the risk of buying into a strata development, according to Sydney builder, Thrive Homes.

Part of the 40 year old Rawson Group, Thrive Homes had seen a slight increase in enquiries from property investors after the federal election, but since the Mascot Towers incident and evacuation, it has experienced a significant increase in calls from potential investors and home buyers.

“More than half the calls we’ve received over the past week have been from people who said they were initially considering buying an off-the-plan apartment. They’ve changed their minds after watching the Mascot Towers issue unfold, and so soon after the Opal Tower issues last Christmas,” Thrive Homes general manager, Patrick Eather said.

“We’re also hearing that recent uncertainty around off-the-plan apartment valuations dropping in the wake of the market decline, and the delays we’re seeing in current residential apartment projects, have also contributed to potential buyers seeking alternatives.

“The questions we’re getting from these potential buyers relate to whether we stand by our 20-week build time, whether our build costs are reliable, and whether our work comes with quality and durability guarantees. They’re also looking for assistance to find land in Sydney’s high-growth corridors, particularly those earmarked for infrastructure investment.

“They’re clearly looking for a higher level of dependability, lower risk and a reliable level of investment. By building new in growth corridors, they’re also looking to avoid the impact of market fluctuations to improve their chances of stronger rental returns and capital gains.”

Financial planner, Vick Anand, who moved into his new Thrive home in Oran Park in May 2019, has been investing in property for more than 10 years. Given the low cost of his build, the speed of construction and the quality of the outcome, Vick is switching his property investment strategy to building more Thrive Homes as an alternative to apartments.

“I’ve learned the hard way that investing in apartments isn’t worth it. The costs are too high and the cost and hassles of strata are painful. This impacts on capital gains. On top of that, I really feel for people trying to sell an apartment in Sydney right now, with everything that’s going on with Mascot Towers.

“We moved from the Blacktown to Oran Park to build and live in our Thrive Home. I paid a lot less than I thought I’d have to build the home, which, even with land costs, was much lower than buying an off-the-plan apartment of similar size, and we were able to move in within five months of the first builders arriving on our block.

“My next investment will be to build another Thrive. It’s the best example of lower cost, higher return property investment I’ve seen in Sydney. I’ll end up with a much higher quality product compared to buying an existing home, and it’s a far less expensive and lower risk than buying an off-the-plan apartment,” Mr Anand said.

According to Mr Eather, Vick Anand is one of a growing number of customers looking to build more than one Thrive Home – a factor that is helping the business to grow despite the property downturn.

“We’re on-track to exceed our calendar year 2019 revenue targets by more than 20 per cent. If the recent influx of enquiries from investors converts, that number will grow further,” Mr Eather said.

Source: Thrive Homes