Well, you should, because that is the reality for savvy buyers who are snapping up established older units in in-demand locations for a fraction of the cost of a house.
We all know that units are more affordable than houses, but not many people know that older stock is also usually located in top-end suburbs.
And with all Brisbane unit prices generally softer courtesy of the new apartment oversupply that means there is probably plenty of upside price potential if you hang your hat on stock that was built decades ago.
Location Location Location co-host and Empower Wealth partner Bryce Holdaway has been targeting older Brisbane unit stock for a while now – especially suburbs near the river that are aspirational.
“We want the demographic to be the people who aspire to live in the best suburbs, but they can’t afford it but they’re not prepared to not live there,” he said.
That means demand for established units is strong, which puts prices under pressure over time, he said.
Holdaway’s pick of the bunch for older established units includes New Farm and Ascot on the northside as well as Hawthorne, Bulimba and East Brisbane on the southside.
“Hawthorne, Bulimba, East Brisbane are all walking distance to CityCats, they’re nice and established, and there are no big development approvals in there with huge oversupply issues. They’re still highly desirable suburbs,” he said.
He also has been buying in Mount Gravatt because there is no oversupply issues as well as the opportunity to pick up bigger units in boutique-sized blocks.
And it seems Holdaway has a “thing” for ugly brown unit blocks built in the ’70s that are ripe for renovation.
“When they were built in the ’70s, they were built in better locations, whereas now developers have to go and find corner blocks, old petrol stations, main roads or high-density to make it work,” he said.
“Back then, what they were building was considered high-density, but now it’s not considered high-density so going forward those footprints… it almost has that built-in security that it stays small and boutique but you’re in better positions in better locations.”
Ray White Ascot agent Damon Warat’s sales patch is one of the city’s most prestigious, where only the fortunate few can afford to buy a house, probably with spectacular city views.
However, there are opportunities to own a slice of Ascot by opting for an older established units instead, he said.
“We’ve got units in streets where houses sell for over $10 million and you can a buy unit for $330,000,” he said.
“There is a lot of older unit blocks from the 1960s, ’70s and ’80s that are red brick buildings that are very low in holding costs, body corporate fees, and they’re built extremely well.
“Often they’re in locations that you’re no longer allowed to build units in so they’re in more premier positions.”
While Ascot admittedly doesn’t have a dearth of established units, he said, that meant that buyers or investors had a rare asset on their hands, which augured well for future price growth.
Established units in prestigious suburbs also didn’t attract as much of a price premium as you would think, he said.
“The other thing with established units is you find that you don’t pay a premium to get into the better suburbs,” he said.
“So you can have a property that’s a similar distance to the CBD but in a more premier suburb and you’re not really pay much more, if any, for it.”
Originally Published: www.domain.com.au