04/06/2020
“Downsizing to an Apartment – Sshhhh…. The Insider’s Guide”
Many people arrive at a time in their lives where the big family home and garden hold less appeal than in the past. The cost, time and energy required to maintain them can be more than they are now prepared to give.
Downsizing, and the equity released, allows you to do some of the things you’ve always wanted, like travel the world - and return to your home just as you left it! No overgrown lawns, dead plants and leaking roofs.
Sounds a dream? More and more people are now choosing this as their reality.
Buying an apartment off-plan can be a more affordable way of making a new home purchase and there are some beautifully designed, high-quality ones available. It’s worth doing your homework to make informed decisions and ones you won’t regret later.
Let’s start with some of the advantages of apartment living….
• Cost. The obvious main advantage is the lower cost of purchasing an apartment, compared to a house. This releases equity, providing you with choices and more freedom. You may decide to retire, travel the world or just follow your usual routines, now with more money in the bank and smaller outgoings.
• Single level apartments, realistically, mean you are more likely to be able to stay in your home longer without the added challenge of stairs. Even if stairs never become a problem for you, it will be on the mind of another downsizer, if you look to sell one day. Due to the easy of living in a single level apartment and the attractiveness to the mature downsizer, the value per square meter tends to be higher that townhouse designs with stairs i.e. in resale single level dwellings tend to reach higher sales prices.
• Environmental ratings and efficiencies. Energy rating comparisons such as NABERS (National Australian Built Environment Rating System) can be used to measure how environmentally friendly (and the cost to run) a building actually is. It can be a good comparison against other properties, allowing you to choose one above the minimum Australian standards.
• Improved security. Not only will your apartment have modern doors/windows etc, but quality apartments will have good security, for example fob key entry and cameras. With regards to your car/s, parking in an apartment may be more secure than what you’ve been used to. Apartments can be the ‘lock and leave’ answer for travelling or other long absences.
• Reduced maintenance. Your apartment is newly built, so shouldn’t have major maintenance issues. The common areas will be maintained by the body corporate. Do check what these body corporate fees will be monthly. Some developments can have huge fees to cover costs of swimming pools, etc. Just be aware of these additional regular commitments before you sign.
• Modern. Many new apartment purchasers enjoy the opportunity to own the latest trends in kitchen and bathroom design, with open plan living modelled for spaciousness and entertaining.
And now the downsides….
• Size. Your apartment is likely to be smaller than your current home. That doesn’t mean that you must purchase somewhere so small you ‘can’t swing a cat’. Do ask for approximate measurements, then compare to your existing rooms.
• Sharing. You will be sharing a floor, ceiling and/or walls with your neighbours. Quality apartments often have the walls built above the minimum Australian standards, ideally solid walls dividing each apartment and common areas.
Homework before you start….
• Firstly, accurately calculate what you can afford to spend on your apartment. Remember to include all costs, such as estate agent’s fees, advertising costs, stamp duty, removal/packing/unpacking fees, possible rental charges (if your apartment isn’t ready by the time you move from your existing home) and probably some new furniture.
• The adjustment to living in an apartment can be made easier when your neighbours in the development are similar to you i.e. other downsizers. So how do you know if the block will include many transient tenants, with the wear-and-tear of communal areas and noise associated when people move frequently? A clue will be in the size of the development and the price and size of the individual apartments. The residents of truly boutique developments (under around 20 in the block) are more likely to be owner occupiers. The cheaper, smaller individual apartments tend to appeal to investors to lease out. So, if you have many smaller and cheaper apartments in your large block, you are likely to have more tenants as neighbours.
• Does the apartment block have all residential units or are there shops/restaurants etc on the ground floor? Purchasing an apartment in a block above commercial units is often cheaper, as vendors know these can give you a nightmare of noise and smells. Deliveries can seem to take place at all hours with air vents directed, it feels, straight at your home!
• Many purchasers want to be close to the train station, cafes/bars, shops and a big supermarket. You will pay more for a good location, close to amenities. If you want to be able to gently stroll to these facilities, check how far they actually are.
• Does the developer have any prior experience building apartments? Are there any you can look around, so maybe the current owners can tell you the reality of living there? Does the developer have finance arranged through a bank?stacj If yes, don’t take this as an indication the developer is not financially strong – on the contrary, these banks have strict lending criteria and a developer who has been financed by these banks would have had to meet them.
• Can you meet the architect and developer? Quality build teams often welcome you meeting their crew, being proud and excited about their project.
• Once you’ve found a development which meets your criteria, then you can decide on other details. You ask yourself, “Do I want ground floor, top floor penthouse or in between?” Ground floor apartments are usually slightly larger - the balcony in higher floor homes would be living space on the ground floor. The penthouse will generally have a premium added, as they often have a better aspect, premium finishes, sometimes take up an entire floor, etc.
• Look at the quality of the finishes in the display suite and the practicality of them. Bear in mind they might look brand new and pristine now, but how will they last in reality?
• Consider the window dressings. Many apartments will have identical dressings at the front for uniformity. Often you have the chance to purchase these at the outset. Many purchasers choose this, so their new home completely ready when they move in.
• If there is a specific change you would like in the apartment, for example extra power points, ask for this right at the beginning. There is no point discussing these further down the track when changes can’t be made. Good developer may try to accommodate your wishes, however, please remember some requests are unlikely to be possible e.g. structural changes; ones which aren’t commercial etc.
• Will your existing furniture suit and, more importantly, will it fit? Your current large three-piece suite with big armchairs may not be suitable in your new home. Maybe this is an opportunity to replace them with new pieces, plus do some major decluttering. Decluttering can be hard, but in the end it is a surprise bonus to moving into an apartment.
• Check the number of car parking spaces you will have and their location. Side-by-side car parking is preferable over tandem parking (imagine your car juggling, trying to get the rear car out!) or a stacker. Stackers have improved vastly since they were first introduced. They can be quick, surprisingly quiet and a valuable use of space.
As a note, ‘visitor’ parking is not additional parking for your second/third car – neighbours and the body corporate may rightly pull you up on this.
• Check if and where your storage cage is. Ideally it should be close to your car parking spaces. Check if there is a dedicated bike rack.
• Ask the developer about the garden/balcony. Will it have lighting, power, water and gas for your barbeque? Will the air conditioning unit be in this area? These units take up space, can look ugly and probably will pump out large volumes of hot air. A preferable location could be in the basement, but this costs the developer more. Ask what the flooring is on your balcony? Are they ‘floating’ tiles, so if there is a water issue one can be removed without ruining the rest of the outside space?
• When is the property due to be completed? This may be 12/18/24 months in the future, so budget your time and selling of your existing home in line with this timescale. Often purchasers rent temporarily or move in with relatives, if their current home is sold before their new one is ready. Certainly, it’s worth considering a little disruption to purchase your ideal apartment.
In summary, buying any property is a big financial investment. And downsizing to an apartment will be different to other home moves you may have made.
But…. this is exactly why countless people choose it. For many it’s the chance to return to a low cost, low maintenance lifestyle that they haven’t experienced for decades. It’s an exciting new time with reduced responsibilities and more freedom. After decades of work and maybe family raising, this is now your time. I think you deserve it.
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Disclaimer
This article is based on personal opinions and does not necessary represent the opinions of any of the organisations we are affiliated with and is for information purposes only. It shouldn’t be seen as any type of advice and we recommend you speak to your own legal professional.
