A flat or a unit has always been viewed as ‘second-best’. Why is this so?: Peter Chittenden
Like me you may be able to clearly recall when living in a flat or buying an apartment was seen as an entry point into the housing market.
For varied reasons a flat, or a unit was seen as ‘second-best’. Why was this so? In many respects price would have been key, and living in an inner-city flat was often a better choice because of easier access to employment or university.
Here’s another suggestion – in the 1830s the first multi-unit homes were built in New York, but these were not really flats or apartments, because as inner-city tenements a number of dwellings shared a bathroom.
It was not really until around 1870 that ‘real’ apartments started to be developed as fully self-contained multi level homes. Today from such a humble start apartment living is now a fully mature market, and when it comes to CBD apartments a very complex market and a rich demographic.
Over the last few weeks I have already suggested some key dynamics that are now common in our major cities. Recapping these include and in no particular order: the clear emergence of several well-defined sub-markets where in terms of price and quality the resident profiles are very different from other parts of the CBD.
Different types of facilities influence where people choose to live, as both buyers and of course the very high number of people renting, and so investment potential is also a strong motivation.
However most CBD apartment dwellers also have a lot in common on the list of must-haves, and these include location, convenience, design, facilities, views, public transport, prestige and the general desire for active and appealing neighbourhoods.
It is clear that in the CBD a ‘great position’ is made up of a big list of features like public amenity, a rail link to the airport (in particular in Sydney) alongside lifestyle attractions such as access to parks, cafes, shops, restaurants, what many of the buyers I speak to refer to as the ‘buzz’ – in fact as a collective narrative its perhaps the most common factor.
Another two key issues that popped up all of the time, and regardless of location and price was design and quality. While the two items might be defined very broadly, as the CBD market continues to mature design and quality are now very clearly understood by any buyer.
Some points like size will always be a function of price – other factors like privacy, noise, storage and in-house facilities are important to the keen eye of any buyer.
Building lifestyle facilities
Clearly we have come a very long way since the days of those New York tenements in the 1830s with ‘shared-bathroom facilities’ and buyers now have very clear expectations about the ins and outs of their own apartments, which brings me to some of the feedback I have noted about building facilities, common areas and how strata plan levies are impacted.
Some buildings have great facilities, like the lap pool in Sydney’s The Hyde, which the developers (Stocklands) had the vision to place on level eight of the building and so ensured all residents had a pool that appears to float above the trees of nearby Hyde Park.
They could have always put the pool in the basement or to the backside of the building. It’s like the clever thinking that saw a common roof terrace on top of the Astor in 1923 and on the roof of many early apartment buildings built in Potts Point.
It is however clear that buyers see facilities falling into two clear groups – the must have facilities and others that people might like to have but are not seen as essential. There will always be a relationship between apartment prices, the size of a project and the reality that ongoing levies will be impacted.
Buyers in the CBD also see the ground-level public amenity that surrounds their building as part of this picture, as cafes, restaurants and shops are not the usual preserve of an individual building nor are large sometimes 24 hour fitness centers but for many buyers a ‘city-pad’ surrounded by these services is an essential and likewise CBD residents who rent.
Outside of these it is important to note that other areas like security, parking and storage are must haves, although parking is under pressure and is becoming more limited with 2-bedroom and 3-bedroom apartments no longer having one plus spaces.
Most of the feedback I have garnered from buyers is that they are happy with this if local transport is good and so the car might not be used during the working week.
In Melbourne the tram network was extended to the Docklands area from the start and also in Brisbane the intensive residential development along Southbank also had rail access. Now Sydney’s light rail in the CBD will be a key transport link for city residents.
Turning back to individual buildings after we tick off security and easy access to parking (including visitor parking) the choice of desirable facilities has grown. In recent years, while we still have pools and some smaller but very well-equipped gyms appealing to most buyers, there has also been the spread of common-use areas. These now include meeting rooms, libraries, cinema rooms, and wine cellars and shared dining areas with quality BBQ facilities.
When apartments in general are tending to get smaller, what most of these facilities have in common is that they extend the ‘personal’ entertaining opportunities for the building community, which is seen as very desirable. It’s easier to entertain family and friends on special occasions and once established they are not a cost burden.
Building management is also now a keenly understood area that extends way beyond what for some may have been the novelty of a concierge – a high level of professional management is now critical.
Someway To Go
The CBD apartment market already has a long heritage and its appeal is only growing. In our major cities buyers and already well-established residents have a clear idea of what is good and not so good about city living.In taking a project into this market the demographics have some clear pointers that reveal a complex market.
This is a high-density highly urban market, a mobile and shifting market where off-shore buyers are active, many buyers are investors and accordingly a lot of your neighbours will be renting, it’s a young market, but for lifestyle reasons many high-end buyers are older with very precise expectations of location and quality. Local and building facilities are key and building services and quality continue to improve.
One of the many buyers I spoke to said to me that they had looked long and hard before they moved into the CBD, they were very aware that within 10ks of the city they also had different options, that were much cheaper. But in the end they were happy that the city offered a rich lifestyle, a good mix of facilities with easy work access – but there was room for the city (Sydney in this case) to improve.
Once More to New York
I mentioned earlier the appeal of a building concierge, and New York is the home of the ‘doorman’ and woman. A New York doorman might perhaps be the measure of a very mature CBD residential market. We all know the uniform that may even include top hat, gloves, epaulets, a jacket, embroidered with building logos, and stripe pants.
It’s worth a footnote to history as the doormen have been around ever since the Romans coined the job title — ostiarius — for the slaves who guarded their doors.
The men and women who are now an important part of many CBD apartment buildings do have a long history and while in Australia they might be spared the use of white gloves it’s a great reminder of the charm of city living as something we can all find stimulating to market.
Peter Chittenden is managing director for residential of Colliers International.