One bed apartments like this one in Adelaide used to be rented back to a hotel for their short term rental pool, but are now attracting owner occupiers priced out of houses.
A new level of FOMO has hit buyers, driving up the price of one bedroom units dramatically across capitals as many priced out of houses converge.
Agents from across major capitals are reporting rising demand for one bed units from owner occupiers, with older properties in demand and uneven pricing with some areas significantly cheaper.
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This one bed unit at 6/41 Griffith Street, New Farm, sold for $860,000 – $5,000 less than Brisbane’s median house price.
That FOMO has seen Brisbane city units become red hot, with their median rising 17 per cent in the past year, with an average one-bedder such as that at 6/41 Griffith Street, New Farm, fetching $860,000 this month – 47pc higher than the apartment median price and just $5,000 shy of Brisbane house price. The owner has pocketed an 84pc rise in price in nine years, with it last selling for $465,000 in 2015.
Real estate agent Tom Lyne of Ray White New Farm who co-listed it with Jackson Roberts said the property didn’t even make it to the open market – instead being snapped up after eight interested parties emerged off their buyer database.
Eight people were keen to buy a one bedder in this building before it even hit the market.
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“We got an offer the owner was happy to take. It’s supply and demand,” he said, with rising concern among buyers over one bedder supply.
“People are jumping on them. It’s definitely owner occupiers. You couldn’t stack that up to be a positively geared investment at that number for what it would rent for,” he said. “There are a lot of owner occupiers buying at the moment just trying to make sure they get on the ladder.”
Andrew Downing of Ray White Adelaide City, who co-listed a North Terrace one bedder with Toby Shipway, said “three or four years ago, you couldn’t give away one bedroom apartments especially if they didn’t have a carpark”.
“They could take anywhere up to six months to move and the only people interested were parents buying for their kids for university.”
This one bedder at 2509/38 Rose Lane, Melbourne, sold for $350,000.
“But,” he said, “what we’ve found in the last year is that price point of one bed apartments even without car parks is attracting people who are priced out of houses and people are just grabbing an apartment to keep a foot in the market.”
In Melbourne and Adelaide, homebuyers can still pick up one bed city unit for $350,000, such as 2509/38 Rose Lane, Melbourne which sold for that price on Tuesday and 905/104 North Terrace, Adelaide, which fetched $355,000 on Wednesday.
The Melbourne unit was $34,000 less than the $384,000 the owner paid in October 2014 according to property records – with the area widely acknowledged as a buyers’ market now with bargains available for househunters.
One bed inner city units are increasingly the go-to option for buyers trying to get their foot in the property market.
Leona Wu of Property Linked Investment – Box Hill South – who marketed the property with colleague Mike Jing, said there were nine similar units for sale in the building – “the only difference is we did staging”.
“I think there are too many options (for buyers). We are lucky because we did the staging and they also bought all the furniture so they can just move in directly.”
A one bed unit at 905/104 North Terrace, Adelaide, sold for $355,000.
First home buyers and owner occupiers were dominant in one bedder sales now, Mr Downing said – with the building his most recent sale was in seeing a 40 per cent drop in rentals offered for short term rental thanks to buyers moving in to their property.
Mr Lyne said the prices across the capitals were “still a long way off from what Sydney is paying” given a one bed apartment recently sold on Bondi Beach for $11m.
The one bed record holder is 1/8-10 Notts Ave, Bondi Beach, which fetched $11m thanks to this amazing outlook.
The Sydney sale in September by PPD agents Alexander Phillips and Vince Licata was believed to be a one bedder record – equating to $83,000 per square metre – though it had the immense advantage of fronting one of Australia’s most famous beaches, Bondi.
Mr Lyne expects demand for the property type to continue to be strong given “developers aren’t building one bedder apartments at the moment”.
“Many are quoting that it costs $1.2m to build a decent one bedroom apartment, and they’re just not being built (in Brisbane). There are not a lot of them coming up so they are selling quite quickly and selling well.”
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