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Positive Factors that Influence Property
Property prices are affected by all sorts of reasons; there are all encompassing positive reasons such as general
affordability including low bank mortgage rates, strong employment and a strong economy but perhaps more
local reasons play an even more important role:
• Localised gentrification; including new infrastructure, new open spaces and new commercial office buildings.
Darling Quarter is an excellent example with the arrival of the CBA Headquarters and a new park. This had a very
positive impact on Millennium Towers.
• Tightly held developments; these tend to have high levels of owner occupiers.
• Pet Friendly Buildings; believe it or not, letting our four legged friends into a development in my opinion really
does add value. It is hard to quantify but I would suggest it is at least an extra 5%.
• Uplift caused by brand new off the plan developments. The gap between square metres rates tend to
narrowwith time. For exampleKingStreetWharf without losing views has had thedoublepositiveof brandnewoffice
buildings and geographically being adjacent to Barangaroo.
• Reduction of Strata Levies including removing of a special levy. For example Hyde Park Towers has benefitted
from the removal of the special levy. The short term pain of special levies seriously dampened demand, for those
that bought in at the end have had the real benefit of capital gains when the special levy was removed.
• It may be that an out of line sale, perhaps a cash buyer has caused a shift in square metre rates which is then
benchmarked by others. Cash buyers do not require finance and so are not reliant on a bank valuation valuing
the property up at the purchase price. Some of the better agents will use this evidence to put a floor on prices.
• Great service; having excellent, receptive, friendly concierge and building managers really do make a good
first impression with buyers. Making sure that common parts of a building are clean and fresh are imperative to
giving buyers the right impression.
• Communal facilities; everyone has different views on these matters. Having great facilities increases the appeal
from those buying and renting. For some gyms, pools and concierge are a prerequisite, from my experience
gyms are used more routinely than pools but this may because I tend to be around in office hours. However there
appears to be an increasing trend away from facilities as developers trim facilities in return for lower strata levies.
• Some developments may benefit from upgrades such as the common parts that are dated. Although it is
generally wise for Executive Committees and Strata Managers to exercise prudence when it comes to spending
money built up in sinking funds sometimes it really is money well spent. For example a new entrance lobby or
upgrading of the common parts may significantly add capital value to every apartment. If every apartment value
within the development rose by 5% proportionate to the actual cost of the works this could make financial sense
as well increase the wellbeing of residents.
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