The launch of Yarraville’s new housing development is a good time to revisit the challenges faced by buyers when considering off the plan properties.
Known as Bradmill Yarraville the former textile manufacturing plant is currently being redeveloped into a large-scale project that in its first stage over 1,400 dwellings will be built. Both townhouses and apartments are on offer.
There are two heritage listed buildings remaining on the site that will be transformed for use for residents and their guests. One of those buildings is known as the Proofing Building, it will focus on health and wellbeing having amenities such as a pool, spa and a Yoga and Pilates studio.
The other building will be known as the Boiler House, it is planned to have four levels and will consist of meeting rooms, offices and areas where residents can entertain or organise functions.
The development will also have a retail component which I have been told includes a Woolworths supermarket. Residents will also be able to enjoy a linear park that transverses the site from north to south.
On entering the display centre, potential buyers are directed to a cinema room and shown a video which mainly consists of the project’s consultants extolling the virtues of the development. After viewing the video interested buyers can then make their way upstairs to the main area which showcases a sample of the development’s swish kitchen and bathroom and other marketing materials.
The display centre and online marketing is thorough and persuasive. The developers have taken saturation marketing to a new level. Their advertising seems to be everywhere including on footpaths in strategic positions such as on the way to the local shopping centre.
Beyond the “glitz and glam” of the marketing campaign what should buyers be looking out for in an off the plan purchase?
A good place to start any analysis on a real estate purchase is remembering the three most important ingredients being location, location, location.
The developers have played heavily on the project’s Yarraville address and more particularly on the attributes of the Yarraville Village retail precinct. The reality is the project’s location is approximately 2.5 km from Yarraville Village, not what would be considered reasonably walkable from the proposed development. In fact, the site is more Brooklyn (being the adjoining suburb) than Yarraville.
After assessing the overall position of the project, buyers should then examine the next important variable related to location. Where exactly is your townhouse or apartment situated within the sub-division and what are the implications? Using Bradmill Yarraville as an example there are certainly less desirable positions that prospective buyers should be aware of.
The southern boundary of the site is in close proximity to the Westgate Freeway and a freight railway line. If you purchase a dwelling in this part of the sub-division, it is unlikely you will be experiencing “so much serenity” like Darryl Kerrigan in the movie, The Castle.
The northern boundary of the site runs along Francis Street which is a busy thoroughfare. Francis Street residents have been protesting for many years about the noise from the large trucks that use the street to access Melbourne Ports. The Westgate Tunnel project when completed should alleviate much of this problem. However, Francis Street will remain a busy street.
The eastern boundary of the site may also be problematic with plans in place to build a sports stadium including carparking on adjoining McIvor Reserve. If it goes ahead, noise, vehicle and people movement could have negative impacts on residents close to this boundary.
The western boundary of the site should also be examined by buyers before signing on the dotted line. The freight train line and an industrial zoning of neighbouring properties could cause unsavoury outcomes into the future.
To give buyers even more to contemplate the development is on a flight path to Tullamarine Airport. Buyers will need to make their own assessment as to whether the noise emitted by planes coming in to land is excessive.
There are other aspects related to off the plan sales that buyers should be wary of. How close will your home be to the development’s commercial buildings, in the case of Bradmill Yarraville the office building, wellness centre and retail precinct. Excess vehicle movement, people traffic and reduced levels of privacy need to be assessed.
How close is your proposed purchase from light poles, electrical substations, or any other unsavoury construction. In the case of an apartment purchase what will your home be overlooking? Hopefully not the bin enclosure or carpark.
Without professional assistance these types of pitfalls are difficult to identify when buying off the plan. It is no surprise that off the plan purchase contracts do not allow purchasers to make claims based on such negatives.
When buying off the plan you are essentially buying a block of land and a specification document. Buyers should know exactly what fixtures and fittings they are getting. The developer should provide make and model numbers of each item.
There are other important factors to consider such as the amount of natural light entering your new home. Orientation, position and size of window openings, potential overshadowing from neighbouring properties all effect this very important lifestyle consideration.
Investors should also think carefully before buying an off the plan property. A substantial supply of similar townhouses and apartments in a confined area combined with limited demand means capital growth will be mediocre at best.
Young buyers in particular need to way this up. Missing out on substantial capital growth will limit their choices into the future. This means making it difficult to upgrade to a bigger or better home.
Although there is the potential for nasty surprises if buyers don’t carry out meticulous research, developments like Bradmill Yarraville are badly needed in Melbourne. The housing shortage for both owner occupiers and renters does not seem to be getting better.
The project is only 8 kilometres from Melbourne’s CBD and there is a cohort of people who would love to move into a brand-new home whether they be owner occupiers or renters. Having communal buildings dedicated to health and business enhancement will also prove to be a winner for some people.
The substantial economic benefits of developments like Bradmill Yarraville cannot be underestimated. The demand created for materials and tradespeople will have a flow on benefit throughout the entire Victorian economy.
There are certain buyer demographics that will be suited to developments like Bradmill Yarraville. For example, Australia’s foreign investment regulations allow foreign nationals to purchase off the plan properties in Australia. Many of these investors are from Asia where leasehold is the predominate form of ownership. Buyers from this region have the opportunity to buy freehold title in Australia, an attractive proposition.
These types of investment purchases increase the amount of homes for rent making it a favourable outcome for all stakeholders.
Contrary to foreign investors, Australian citizens and permanent residents can buy established property without restrictions. The established property segment of the market provides the highest performing capital growth opportunities.
Bradmill Yarraville will be a good fit for certain buyers. However, for buyers who do not make the optimum selection based on their own individual circumstances, there will be a hefty price to pay in time, money and stress down the track.
