Garden apartments are property winners

Garden apartments are property winners
Garden apartments are property winners

The Channel Nine television series, The Block is more about entertainment than real estate.

But there are always important takeouts from the stressfully quick renovation which concluded with the Sunday night showing of its rather laboured auction finale.

The location of this year's Port Melbourne offerings was brave, not because it sat in the capital city attracting negative headlines around the increasing potential of an oversupply in apartments.

The choice pushed the envelope because Ingles Street is still very much an industrial location, so a b-grade location in most buyers' mind.

For Sydneysiders it would be like flogging prestige apartments on say Canal Road, Tempe.

Notwithstanding the nearby rubbish tip, it will be a cosmopolitan suburb, but not in the immediate future.

Its massive residential development potential is only now kicking in.

Everywhere one looked from the heritage Block apartments, there's development which is potentially a good outcome, but also a poses a risk, and at least a disruptive period for potential buyers.

It will be many years before there is anything like a village atmosphere, so the art deco office apartment offerings were only ever going to appeal to a small number of owner occupiers.

Indeed four of the five apartments were sold to investors including the winning one fitted out very well by the young Queenslanders, Will and Karlie. 

Dan and Carleen Foley’s apartment was bought by a young family of owner-occupiers.

Will and Karlie's ground floor garden apartment sold for $2.6 million, some $715,000 over its conservative reserve. Remarkably the pair only had the ground floor apartment because they came last in a challenge among the contestants.

I am a huge fan of garden apartments as they are a rarity, so should typically always make for good prices and price growth.

With some 200 sq m internal space, plus alfresco deck and lawn, it was the biggest price any apartment on The Block has ever secured, beating the $2.47 million paid in 2014 for an apartment in the converted cinema complx in upmarket Albert Park.

All five sales did much better than the current price per square metre record for Port Melbourne that sits around $7,000. 

There's no doubting the depreciation benefits attracted the investors. 

Buyers secured likely tax deductions upwards of $80,000 in the first year, totalling more than $2 million after 11-plus years of ownership.

Investors were accordingly out in force, lured by the tax treat that investors receive from depreciation.

It was interesting the only criticism of the apartments came not from the posse of buyers' agents, but rather the Melbourne radio comedian, Dave Hughes who got inside by pretending to be a potential buyer. He turned up with his cheque book, and registered for the right to bid, though never raised his auction paddle.

His major issues centred around the height of the ceilings, noting the ground floor apartment, renovated by Karlie and Will, was his obvious preference due to the high ceilings, which then disappointed elsewhere in the apartment complex conversion.

He suggested the apartment won because the ceilings were really high, and as "you got up higher the ceilings get lower and lower."

The comedian was also critical of the parking facilities.

"You've got one car port and you've gotta walk quite a way to get to the car port.

"There's no parking people!"

The 1920s converted soap factory office was, he however acknowledged, "extraordinary."

This article first appeared in the Saturday Daily Telegraph.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

The Block Residential Auctions

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