Designer apartments going for a song

By Alex May

Getting a good deal on a top notch architect-designed apartment in Sydney today depends entirely on what and where it is.

While there's little room for negotiation in some locations, such as the luxurious Wallaringa Mansions at Neutral Bay, in other parts of town there's more urgency.
At buildings such as Mirvac's Ikon in Potts Point, it's possible to pick up a new architect-designed apartment for around the same price that some people paid off-the-plan two years ago.
Some Ikon investors - who had once dreamt of huge profits – are in a rush to get their money back before settlement day comes and they have to raise finance.

Moreover, agents like Belle Property’s Mark Murphy says the new state government investment property taxes have further damaged already low rental yields and made the prospect of large capital gains less likely in the short term.
So is this a chance to pick up a relative bargain?
Colliers International agent Justin Brown says today’s prices for quality apartments are an absolute steal for people prepared to hold for the long term.
“People who buy today will be considered geniuses by the first quarter of next year,” he says.
Analysts like BIS Shrapnel’s Angie Zigomanis say prices could be weak for another six months, but the long term outlook is for supply and demand to settle down by 2005.
"The weak market we are seeing now is not a long term problem,'' Macquarie Bank's head of property research Rod Cornish says.

"The softening is due to the numbers of new apartments that have come on line in the last 12 to 18 months," he says, with developments such as Encore, The Rex, Ikon, Manhattan and Top of the Town completed in the primo city fringe areas recently.
"It always comes down to supply and demand," says BIS Shrapnel's apartment analyst Angie Zigomanis.
"We are getting over the hump of these new completions which have added to supply and as investors dry up and pull out of the market, supply will drop back by 2005."
Analysts agree that apartments under $800,000 are suffering the greatest price weakness right now. "It's anyone's guess as to how good a deal you can do now - it comes down to how motivated the vendor is," says Cornish.
Cornish says it is common for off-the-plan buyers to try to dispose of their apartment before settlement, but today’s weaker market means more off-the-plan buyers will be trying to get out.
"That doesn’t necessarily mean there will be bargains because no investor likes to lose money and many will be in a position to hold rather than sell now," he says.

He warns the best bargains for architect-designed apartments will be in second-rate locations but says it could be possible to negotiate a good deal for a well-designed, unique apartment in a scarce location.
"Unique really means the site and the possibility that a similar development will not happen again," he says.
"There is a lot of so-called designer product but location and views are the real uniqueness – it’s not just a well known interior designer that may go out of fashion."
Real Estate Institute president Rowen Kelly says the best deals in today’s market will be people buying from investors.
“People looking at buying in new developments are more likely now to get a better buy if they are buying from an investor,” he says.

Finderskeepers.com.au buyers agent Gina Marchado says there are fantastic buying opportunities for quality apartments, especially for buyers prepared to hold for the long term.
Her agency just bought a warehouse apartment in Lilyfield for $840,000 which had been advertised at $960,000.
Belle Property's Mark Murphy says "A lot of apartments will be completely negotiable - especially if you make an offer before June 1."
"Some vendors, for whatever reason, have been advised by their accountants to get out now and that's what they will do," he says.

The St Margarets Hospital apartment development in Surry Hills two weeks ago reduced the asking price for apartments such as 10707 in Alba which was advertised at $1.5 million four weeks ago and reduced to $1.25 million.
Meanwhile at the top end, in places such as Wallaringa Gardens where developers opting for a staged release and there is little urgency, agents are confident.
Colliers International’s Justin Brown says the prices at Wallaringa Gardens are set at today’s prices, using comparable sales from similar waterfront houses.

"These are really closer in price to a waterfront home because these apartments are more like a house and will appeal to someone who wants a waterfront with the convenience of an apartment," he says.
Developer Robert Brennan says the uniqueness of Wallaringa Gardens and the high construction quality and finish make the prestige prices worth paying.
"These apartments are for people who understand it is something special," he says.

IKON

Head down to Ikon, the site of the former Chevron Hotel in Potts Point, this morning and you just might pick up a quality Mirvac apartment for a song.
Belle Property’s Mark Murphy says a small proportion of off-the-plan buyers are desperate for someone to buy their investment apartment and are willing to lose tens of thousands of dollars on stamp duty and exit costs just to get out of the market now.
When Ikon first sold off the plan in June 2002, 138 units sold in one weekend with prices ranging from $495,000 to $4.5 million for penthouses. There are 185 apartments in total.

Like most new apartment developments, at least 50 per cent were bought by investors expecting some of the spectacular returns that architect-designed resort buildings have enjoyed in the past, such as the neighbouring Rockwall Apartments where Laing Real Estate’s Anthony Birdsall sold apartment Apt 1804 for $1.265m a year ago and for $1.455 earlier this year .
In Rockwall Gardens, apartments that sold off the plan for $615,000 eight years ago sold for $2.105 million last year.
But today, upon entering Ikon, you will be greeted by agents from four or five different agencies representing some of the original off-the-plan buyers.

Mivac’s Peter Kermode says none of the apartments advertised for sale are at a price lower than people paid off the plan.
"These people have not been in the market long enough. Everyone knows that property is a seven-year or more investment," he says. Not everyone has to sell, obviously; some will hold out for their price, hoping for better days.

Ikon is one of the tallest buildings in Potts Point taking in views of the city skyline, Opera House and Harbour Bridge as well as the eastern harbour.
Belle Property has 11 apartments for sale in Ikon, Mirvac is selling four remaining penthouses but there are 16 other Ikon apartments listed for sale on domain.com.au.

Mirvac's Peter Kermode says Ikon is seeing the typical rush of resales "which should settle down by the end of the year".
Today Belle Property is offering a mezzanine, east-facing one-bedroom apartment, on the fifth floor, with harbour views and parking with an offer of between $640,000 and $690,000. Or on the other side of the building, an eighth-floor one-bedroom apartment with city views for between $700,000 and $745,000.

But other sources say you can pick up a one-bedder higher up with even better views for less than $595,000 - the vendor, apparently, has to sell, and quickly.
The "through" apartments on the upper floors offer unrepeatable views of the eastern harbour and city icons.
Belle Property is selling 1605, a "through" three-bedroom 185 square metre apartment with two terraces for offers around $3 million. Other twobedroom "through" apartments are available from $1.375 million.

WALLARINGA MANSIONS

Set on 7000 square metres of harbourfront land dotted with fig trees, an old lawn tennis court and sandstone walls is Wallaringa Mansions, an 1880s estate reborn as luxury apartments.
The developer, First Land Corporation, has completed just two of the eventual 28 apartments, which are firmly targeting empty-nesters but also appeal to professional families with children.
In the tradition of Babworth House in Darling Point and Tregoyd at Mosman, the development offers secure and private apartments with more than 300 square metres on title.

First Land Corporation’s Robert Brennan says the entire project should be finished by the end of 2006, but building work has taken more than four years already and there has been painstaking attention to heritage details and high quality finishes.
"We put the glass in the bathrooms and then realised it would be hard to clean so we smashed it out and $30,000 later we replaced it with coloured glass," he says.
There will be four buildings on the site, with the first stage in Figtree which will house four three-bedroom apartments. Two Figtree apartments are the first to be offered to the market, with the other two being retained by the developers to release later.
The former Art Noveau hotel buildings – the site was once a guesthouse – will be converted into apartments in Wallaringa South and Wallaringa North.

Figtree is a brand new building built in traditional Arts and Crafts style with shingles, slate roof, bay windows, copper guttering and downpipes and timber joinery.
Inside, the apartments have been fitted out with re-milled timber floors, 2.6 metre ceilings and open plan living and dining rooms with terraces overlooking the gardens and the harbour.
Apartment two is for sale at $5.25 million and has harbour views, three bedrooms, a media area, two bathrooms and two large terraces. There is smart wiring, marble and stone heated floors, video security and reverse cycle air-conditioning.
Apartment four is $3.95 million and has a mezzanine study or living area, three bedrooms, two bathrooms and three terraces including a roof terrace.
The apartments are being marketed by Colliers International and Ray White Neutral Bay.
Colliers International’s Justin Brown says he expects empty nesters who want a quality home without high maintenance.