Comparing price across apartment buildings

[artlez]

Hi

I was just wondering when you guys do your DD, do you compare the price for a unit you're buying to only the other units in the same building or do you compare them with others on the same street (within reason)? e.g. compare 8/2 john street's listing to 3/4 john street's recent sale price

I'm just a little perplexed as a place I'm looking at is around 60k more than a unit (sold early this year) in an apartment block next door with the same 2x1x1 and looks to be similar age from the outside. Could there be any other things I'm missing that could cause such a huge price differential? View? Level?

If it makes any difference, another unit was sold 2-3 years ago in the building I'm looking at for about $15k less than this listed price so as far as comparing units within the building is concerned, the price looks right but just comparing across buildings has got me thinking.

I know it's all speculating but I'd love to hear your thoughts.

 

[Luv2Travel]

If it makes any difference, another unit was sold 2-3 years ago in the building I'm looking at for about $15k less than this listed price so as far as comparing units within the building is concerned, the price looks right but just comparing across buildings has got me thinking.

I'm from Melbourne, but when I was looking at apartments a couple of years ago, I noticed there was quite a difference between apartment blocks, so compared apartments within the same building. For example one block had a high number of renters and high body corporate fees. My gut feeling was that it was a bit of a young person 'party block' and my researched confirmed my initial feelings. The block I ultimately ended up buying in, had a better feeling to me. I felt the building was of more quality, and more owner occupiers in it, and my research again proved this to be correct. Therefore I compared moreso the apartments within this one block, rather than 1 bedroom apartments across all apartment blocks in this suburb.

Even today, what I was told has held true, some apartment blocks have not had such good capital growth whereas my one has had better growth than some other buildings. I don't think you can necessarily compare say 1 bedroom or 2 bedroom apartments across all of them. Some blocks may be in more demand, e.g. I think my one has over some of the other ones is, it is a nice design, nice location, good amenities, reasonable body corporate fees, higher amount of owner occupiers, and quite tightly held. I waited until a 1 bedroom one came up for sale in this block, rather than finding a 1 bedroom one in another one already for sale. Even real estate agents were telling me it was a good block to buy in, even though they had none for sale in it at the time.

So that's just my experience for my area here in Melbourne, not giving you advice as I don't even know where you're looking.

 

[Propertunity]

I was just wondering when you guys do your DD, do you compare the price for a unit you're buying to only the other units in the same building or do you compare them with others on the same street (within reason)? e.g. compare 8/2 john street's listing to 3/4 john street's recent sale price

It is perfectly acceptable to compare units within the same building and within the same suburb - but they should actually be "comparable" i.e. for size, views, number of bedrooms etc.

I'm just a little perplexed as a place I'm looking at is around 60k more than a unit (sold early this year) in an apartment block next door with the same 2x1x1 and looks to be similar age from the outside. Could there be any other things I'm missing that could cause such a huge price differential? View? Level?

Well firstly the one you are looking at is asking $60K more. It has not been sold for $60K more. Asking prices don't mean anything. It is what they sell for the counts.
Secondly, there could be other things you are missing e.g. amenities like pools, gyms & spas. Views & level certainly. BC fees and any recent history of problems with the building that may require a special levy to be raised.
Thirdly, the one you are comparing it to sold "early this year". If it was sold say in January, then in some parts of Sydney there has been 10% growth in the next 6 months to present day. So a $600K sale in January may well achieve $60K more now.

If it makes any difference, another unit was sold 2-3 years ago in the building I'm looking at for about $15k less than this listed price so as far as comparing units within the building is concerned, the price looks right but just comparing across buildings has got me thinking.

Any comparable sale has to be recent - i.e. within the last 6 months. A sale from 2-3 years ago does not count.

 

[artlez]

I'm from Melbourne, but when I was looking at apartments a couple of years ago, I noticed there was quite a difference between apartment blocks, so compared apartments within the same building. For example one block had a high number of renters and high body corporate fees. My gut feeling was that it was a bit of a young person 'party block' and my researched confirmed my initial feelings. The block I ultimately ended up buying in, had a better feeling to me. I felt the building was of more quality, and more owner occupiers in it, and my research again proved this to be correct. Therefore I compared moreso the apartments within this one block, rather than 1 bedroom apartments across all apartment blocks in this suburb.

Even today, what I was told has held true, some apartment blocks have not had such good capital growth whereas my one has had better growth than some other buildings. I don't think you can necessarily compare say 1 bedroom or 2 bedroom apartments across all of them. Some blocks may be in more demand, e.g. I think my one has over some of the other ones is, it is a nice design, nice location, good amenities, reasonable body corporate fees, higher amount of owner occupiers, and quite tightly held. I waited until a 1 bedroom one came up for sale in this block, rather than finding a 1 bedroom one in another one already for sale. Even real estate agents were telling me it was a good block to buy in, even though they had none for sale in it at the time.

So that's just my experience for my area here in Melbourne, not giving you advice as I don't even know where you're looking.

Thanks you've given me some stuff to think about!

It is perfectly acceptable to compare units within the same building and within the same suburb - but they should actually be "comparable" i.e. for size, views, number of bedrooms etc.

Well firstly the one you are looking at is asking $60K more. It has not been sold for $60K more. Asking prices don't mean anything. It is what they sell for the counts.
Secondly, there could be other things you are missing e.g. amenities like pools, gyms & spas. Views & level certainly. BC fees and any recent history of problems with the building that may require a special levy to be raised.
Thirdly, the one you are comparing it to sold "early this year". If it was sold say in January, then in some parts of Sydney there has been 10% growth in the next 6 months to present day. So a $600K sale in January may well achieve $60K more now.


Any comparable sale has to be recent - i.e. within the last 6 months. A sale from 2-3 years ago does not count.

Thanks for your reply! I just got a friend to shoot out an RPData report today as it's more detailed than ''on the house'' reports and it looks like there was a property sold earlier this year for around the same price as the listed price here. So there does look like there's a bit of a price differential here with reasoning that's not totally obvious to the eye. I'm still new to this but shouldn't similarly aged buildings, with similar (i.e. none) facilities like gyms and pools, with similar building heights, with similar 2x1x1 features and roughly size, located right next to each other, have a similar price? I mean 20k-30k I can understand but 50-60k is a huge difference.

In regards to comparing to property sold 2-3 years ago in the same building, isn't it fair to assume in a few major suburbs of western sydney that the price would have gone up by more than 15k since then and hence the deal isn't all that bad? I'm looking at the 350k range of prices

Feel free to shoot me down but I'm just throwing things out there and hoping for a bite