Do apartments on main roads sell? Lessons from The Block

Do apartments on main roads sell? Lessons from The Block
Jessie RichardsonDecember 7, 2020

In the aftermath of the Block Glasshouse auctions, theories about why some contestants made as little as $10,000 profit were abundant.

Just one season before, in Albert Park's Fans v Faves, all four teams received profits in excess of $500,000.

Most pointed to a particularly shallow buyer pool, thanks to what Property Observer called a "B-grade" location, with little appeal to the cashed-up boomers that usually buy Block properties.

"For Sydneysiders it would be like flogging prestige apartments on Parramatta Road, Annandale, which has very nice houses away from its busy thoroughfare, though without the trams," wrote editor at large Jonathan Chancellor.

According to Michael Townsend, director of Hodges Real Estate St Kilda, an apartment's location on a main road may rule out certain buyers.

"I suppose when we look at apartments, there is definitely certain concessions placed on main road property locations," said Townsend.

"Definitely those on major thoroughfares, with noise and pollution."

Prahran's High Street, where The Block Glasshouse apartments are located, has four lanes of traffic, with trams. Down the street is a hybrid car wash-burger diner; across the roads sits a Swinburne University campus.

While a main road location doesn't necessarily cut out buyers, Townsend explained, it will appeal to certain markets more than others.

"When we look at the apartment market as a whole, there are obviously price points and sub price points within that market place," said Townsend.

"There are buyers who definitely graduate towards main hubs and busy areas with cafe cultures and bars and restaurant areas," he said, with younger buyers and investors perhaps more interested in living among Prahran's busier strips.

But for buyers who are willing to spend the prices seen on Fans v Faves (as much as $2.47 million), a main street might not cut it.

"If someone's spending within $2 million on an apartment, they usually have very strict criteria," said Townsend.

"Avoid main roads if you can, avoid busy streets, avoid places with no outdoor space."

Upgraders with $2 million to spend are likely to have lived in areas with considerable room and amenity, Townsend said.

"Premium buyers – owner occupiers – are often coming out of a substantial home on a leafy backstreet," he explained.

"The might ask: 'Why would I sell out of leafy Hawthorn or Brighton or St kilda property? Why would i want to move out to a busy thoroughfare?'"

Those buyers, Townsend said, are more likely to move to a character home in suburbs like Albert Park, rather than an apartment complex in Prahran.

It seems there are certainly those who would pay to live amid the noise and activity of a main road – just not quite enough to make up for the money and time poured into The Block Glasshouse's renovated apartments.

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