Purchase or Pass? Parking space DA approved but not strata approved in Maroubra

On this week’s episode of Purchase or Pass, general manager of Realestate.com.au Arthur Charlaftis joins Chris Gray to discuss what happens to your investment decision, which may have parking, but may not.

It’s a three-bedroom unit in a small block of four units, 11.1 kilometres from the Sydney CBD and less than 100 metres to the beach. It’s in a small recently refurbished Art Deco block of four units. The property itself is beautifully presented and is a large 114-square metre semi sized garden apartment. There are DA approved plans for garaging and a garden area to be added to the existing title, but there is a disagreement within the strata and so they have blocked the plans.

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Chris Gray: So, to start with, before we get into the parking issue, what are your main thoughts on that type of apartment?

Arthur Charlaftis: It’s a great property in terms of location and it seems like it’s a quiet street and it’s a small block. You kind of expect to not have too many issues with getting a resolution on adding parking.

Chris Gray: Exactly, and it looks as though the strata is actually looking after the building, so that building shot right there, it looks as though it’s pretty well maintained. Especially around the ocean, with all this sort of salt and concrete cancer and that kind of stuff. I guess the major negative we’re talking about here is the disagreement. Having DA approval, you guys call it something different in Melbourne don’t you?

Arthur Charlaftis: Yeah, we call it a planning permit.

Chris Gray: So basically they’ve gone to council, they’ve got planning permission for it, but then suddenly you need strata approval as well. Without it, you can’t do anything can you?

Arthur Charlaftis: Yeah and I think if you look at this, we’re talking about a three-bedroom unit and we’re also talking about a busy location, so parking becomes pretty important and I think it will also implicate capital growth in terms of the value of that asset going forward.

Chris Gray: The reason we brought it up this week is I’ve actually never come across this before, because normally when you go through strata’s, quite often we try to get a lot of strata’s to change the plans, is you get approval from the strata to say right, can I do something on this land? Then you go and get approval from the council, but obviously something’s gone wrong.

Arthur Charlaftis: Yeah, this is unusual so I don’t know whether they started off that way, then the cost of the development has gone beyond what they originally expected or maybe through that planning permit they had to make amendments to the plan, which then affects the commitment of wanting to actually make the change.

Chris Gray: Again, this is the difference between I guess average people going to buy units and professionals buying it, it’s always in the detail. So you can read the real estate ad that says DA approved for parking, which is factually correct but you have to go an extra step and ask the extra questions, which hopefully this lister would be doing. Purchase or Pass on this one for you?

Arthur Charlaftis: Pass, because I think there is a big risk in the parking not being done but also the fact, if you’ve only got four people there and you can’t get an agreement on an issue like that, which seems pretty obvious.

Chris Gray: For me as well, to invest almost $1 million in a property with no guarantee of parking is a very hard call, as no parking will stunt its capital growth into the future. So I would be meeting with the other owners before purchasing, and even with their positive assurance I’d find it pretty hard to buy. So I’m going to pass, until it has all been officially approved.