Botany off-the-plan sales are slowing

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Oct 18, 2016

Botany off-the-plan sales are slowing

Slower off-the-plan apartment sales in Botany suggest that supply of new apartments is beginning to exceed demand, says John Higgins, Principal of My Place Zetland.

Image: My Place.

John Higgins of My Place Zetland sold this one bedroom apartment in Botany on the weekend for $700,000. The apartment sold for $600,000 only a year ago.

Botany is one of the epicentres of Sydney's inner-city construction boom. Though sales of established and completed apartments remain strong, sales of off-the-plan apartments are tapering off, as tighter foreign lending rules begin to take hold.

Slower off-the-plan apartment sales in Botany suggests that supply of new apartments is beginning to exceed demand, says John Higgins, Principal of My Place Zetland.

Botany is gaining popularity among first-home buyers for its location only 12km from the CBD, proximity to the airport, and good value compared to other inner-city suburbs, particularly given the amount of new construction. The municipality of Botany Bay has one of the fastest growing populations in the country, growing 4.2% in the 2014-15 year, according to population experts .id.

On the weekend, a three-bedroom townhouse at 1/21 Myrtile Street, Botany, sold at auction for $1.255 million, said Higgins. "The vendor was happy," he said.

Higgins says the property market in Botany is strong. "We've sold four properties in Botany this week," he said.

He said a one-bedroom apartment on Jasmine street sold on the weekend for $700,000, pocketing the vendor a tidy $100,000 profit in only 12 months. "It traded for $600,000 12 months ago to the day, through another agent," he said, "and I sold it for $700,000 on the weekend."

Higgins is selling a two-bedroom apartment in nearby Alexandria, for which the vendor is expected to get around $900,000. He bought the apartment off the plan for around $700,000 in early 2015.

Higgins said that while finished stock and established homes are still selling well, off-the-plan sales have slowed. Chinese buyers haven't been able to get finance to buy new apartments since tighter banking regulations were introduced in October last year, said Higgins. "I think there's an oversupply starting to happen with off-the-plan," he said.

The median price of Botany property is $1.17 million, and the auction clearance rate on the weekend was a strong 81%, according to Domain.