Older, boutique apartments will only grow in demand as property buyers grow increasingly wary of newer builds after Sydney’s Mascot Towers evacuation, according to experts.
On Sunday night hundreds of residents were also evacuated from a Melbourne CBD high-rise built in the past decade due to water leaks.
It is the latest incident in a series of defects in new high-rise buildings making headlines.
While older apartments have traditionally been in higher demand, the latest news could push up prices and a shortage of stock as buyers flock to established and quality builds as new builds are hit by controversy, experts suggest.
“Most people are certainly worried about the apartments that have been built in the last five to 10 years … particularly the younger demographics who have been well read on all the media reports,” said Paul Obsorne, director of Melbourne-based buyers agent Secret Agent.
As a result, more people were hunting out decades-old, low-density apartments.
He said his buyers preferred art deco buildings and apartments built from the ’60s through to ’90s.
“One of the main reasons was that they weren’t complicated. They were simple and easy to understand. Before cladding, there were problems with lifts. With huge amounts of apartments, it’s difficult to understand the body corporate,” Mr Osborne said.
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- He said there was always an uneasiness with new, high-rise builds, but the latest news “accelerated the trend” away from the product. Mr Osborne expected more problems to surface from new builds in years to come.
BIS Oxford Economics senior manager Angie Zigomanis said owner-occupiers were more likely to gravitate toward older apartments.
“They may start opting for something that’s a bit less risky, in their mind,” Mr Zigomanis said. “Something that is old and has got a bit of history helps because you’re less likely to have issues.”
He said while it was too soon to know whether the news had had an impact because of such low construction activity, there was a potential of a new-build backlash that would increase demand for older apartments.
SQM Research director Louis Christopher said recent incidents had a lot of buyers on high alert.
“Right now they’re far more wary than where they were 12 months ago. There are more buyers who are cautious,” Mr Christopher said. “There has been an element of caution with off-the-plan developments, the recent case studies that have received a lot of headlines will aggravate that caution for sure.
“We need to continue to supply to that market – in part that has to be multi-storey apartments to meet the underlying demand for each city. It is vital we see an improvement in building standards across the board in order to ensure investors and home buyers and tenants don’t get burnt.”
Sydney-based buyers’ agent Henny Stier said her general advice to buyers was to steer away from high-rises and buy into double-brick, walk-up buildings.
“What’s happening in Mascot is by no means something that is new,” Ms Stier, principal of OH Property Group, said. “We don’t touch anything in Alexandria, a lot of the buildings built are so shoddy that the builders go bust, then their strata has to try and claim for defects to be fixed because their builders can’t be found.”
Ms Stier said buyers needed to look past the cosmetic finish of new builds and assess the developer and builders’ reputation and track record.
“It’s easy to change a kitchen or a bathroom, but it’s hard to change a building with major defects.”