Many buyers go in search of the “worst home, best street” believing the value of those around them will pull their own home’s price up. A relatively new problem is the apartment owner who renovates but finds their fellow body corporate members reluctant to shell out for any external works. Around Brisbane’s inner suburbs this is a common problem: a 1970’s or 80’s vintage home unit gutted by a keen new owner and given a new lease of life, only to have its value and appeal limited by the very original lobbies, gardens and common areas. In St Lucia there’s a recent, typical example: built in 1979 the bedrooms and living areas of this building’s apartments are spacious, and it’s an elevated and central location. Great renovator ingredients. But buyer expectations of that era have been long surpassed, so walking through a basement to get to apartments is not real popular today, and there’s no security or gated entry of any sort.
No doubt all owners are happy to have ‘pocketed’ recent capital gains. Where the average apartment is now selling for close to $400,000 it was less than $200,000 only 5 years ago. But when asked to contribute to upgrading that included a security entry and opening up dingy stairwells, most owners had surprisingly short arms for their deep pockets. Real life’s not like “The Block” – for a start you don’t have Channel 9 footing the bill. And even if owners understand the need to spend it’s like all good body corporate issues where no-one wants the job. Committee members are volunteers and the paid managers don’t like the extra work. Where’s Jamie Durie when you need him!?
A body corporate can actually borrow money to fund renovations and by doing this, or extending the works program over a period of years, the real cost to each owner can be made as comfortable as necessary. Consensus amongst owners is the problem. If you’re an investor you’re “in the market” every time the apartment is vacant and you compete with newer buildings. Owner-residents might not think it’s a concern where you have no plans to move. But as the quality of tenants attracted to the building slowly declines it might start to affect your lifestyle.
One owner in that St Lucia building recently voted against common property upgrades, then complained at the AGM that he was looking to sell up, annoyed by the ‘party animal’ tenants taking over the building! And the bad news? We expect this problem to get worse as more and more buyers opt for an older apartment in the inner city ahead of a brain-numbing commute to an outer suburbs house for the same price. Maybe it’s time more owners got actively involved in their body corporate…
Tell us what you think: do older buildings limit a renovator’s opportunity? Should upgrading be mandatory? Share your thoughts!