We all know the old real estate adage ‘location, location, location’ and the careful consideration needed to ensure capital growth. However equally important is the position of a property within that location – an unwise choice can have significant consequences if you need to sell in a soft market.
By CATHERINE CASHMORE
Homebuyers are often tempted to inspect properties on main roads, especially during periods where the market is rising and there’s reduced stock. It’s not hard to be tempted when priced out of a desired suburb and ‘lo and behold’ a seemingly attractive and affordable option arises.
I can understand the thought process – my home country is the United Kingdom. When I initially came to Australia I wouldn’t have blinked twice at the concept of main road living. However finding a property away from a main road in England is much harder to avoid considering the size of the country, and therefore not so detrimental to long-term value.
When I point out all the factors involved in main road living it doesn’t take long to educate a Melbourne-based buyer through the investment and lifestyle pitfalls it represents. Usually the only negative factor they’ve considered is noise and this is clearly the most obvious drawback. Passing traffic, including trucks and public transport, promise a constant filter of background cacophony, which will affect at the very least the outdoor areas around the property. The inside zones can be somewhat protected with double glazing and well designed doors, however in the summer it would be unreasonable to assume windows will be constantly closed, therefore noise won’t be restricted outside.
However noise from passing traffic is only one negative aspect to consider. Main roads are frequented by more than just commuting traffic. They’re our main arterials. Often zoned industrial they offer minimal protection from certain business developments and high-rise apartment blocks which are becoming increasingly common eyesores on the horizon to accommodate the booming population. Shops, pubs, takeaways, petrol stations, all attract a general ‘riff raff’ of pedestri an traffic which in turn brings
an extra layer of fracas and general security concerns.
If you think building a higher front fence will offer a layer of protection, think again. Some councils restrict height parameters for front fences, making it difficult to totally cordon off the property’s street frontage. Along with this it’s not unusual for litter to blow over into the front or delivered letters and newspapers to go missing.
Other issues can include the fear of small children or pets escaping out the front gate and running onto the road (not as uncommon as you may think).
Also, if you’ve ever experienced the immense frustration of trying to turn right onto a main road during peak hour traffic, you’ll get an idea of how frustrating it can be spending 10 minutes every morning accessing a main road from your driveway, not to mention the implications this could hold in an emergency.
With all these points factored into the equation it’s no surprise that the long-term investment potential of properties with a main road address can be affected.
To get a good price for a property the selling agent needs to attract as many buyers through the listing as possible. Real estate sales agents don’t so much sell a property as market a listing. Marketing is a challenge with main road positions. One trick is to list the property without an address; when the buyer rings to enquire the agent diminishes the negative aspects of the position by pointing out the positive features of the house.
Once a buyer attends the inspection other tricks are employed – closing the front door upon entry to diminish noise and in some cases enhancing presentation of the house with hired furniture to distract from the obvious external downside.
In a booming market (which is usually due to a shortage of listings – evident in Melbourne towards the beginning of this year), homes on main roads can often sell equally as well as properties in the surrounding quieter streets. Buyers needing to purchase and feeling the prolonged pressure of a competitive market will often overlook the negatives. However in a market as we have at present where buyer sentiment is ‘cautious’, properties in poor locations tend to hang around longer and often a drop in price is the only way to ‘do the deal’.
When looking back at historical data there are a few common factors to be noted with these listings. Owner-occupiers – and for that matter tenants – discover the downside of main road living within the first few weeks of occupation. Therefore main road property often has increased activity in its sales and rental history. If listed for auction it’s not uncommon for agents to encourage ‘prior’ auction offers – selling under the hammer is harder if desirability can’t attract enough bidders.
If all of the above doesn’t caution you to steer clear, then make sure the prominent factor in your choice to live on a main road is due to a personal lifestyle decision and not based on investment potential alone, or you could find yourself holding onto a lemon.
Catherine Cashmore is a senior property adviser and buyer advocate for JPP Buyer Advocates – the largest dedicated buyer advocacy in Melbourne. With extensive experience in all matters regarding real estate, JPP successfully purchases and negotiates over $100m worth of property each year for clients. http://www.jpp.com.au