Apartments and Potts Point go hand-in-hand, but there are a few unique factors you need to watch out for and some advice you need to heed if you’re looking to buy into this inner-city enclave.
1. Things can get tight
NSW might have minimum apartment sizes now (it’s 35 square metres for a studio, by the way) but things were very different when Potts Point apartments were being established in the 1920’s and 1930’s (some of the earliest examples of flats in Australia can be found here) – and that’s a good thing.
Like most suburbs, the size of apartments can vary from spacious modern designer apartments to converted terrace houses and tiny studios. While new developments exist, a lot of apartment stock is older, and much of it is smaller than you may be used to. But here’s the thing: they’re well-built and full of character – many with exquisite period features.
Another bonus: you won’t have 200 neighbours to contend with at the lift each morning (if there is a lift!).
A smaller apartment can also mean less outlay, allowing first-time owners to get into the market. Although be warned, some banks are iffy on financing large amounts for small apartments.
2. Get ready to be part of a company
You’ve heard of buying into a community, but builders in Potts Point were once pretty keen on a thing called company title. It was a precursor to strata title and widely used right up until the 1960’s.
It differs from strata title in that an owner deals in shares, as opposed to title. When buying into a company titled building, an existing owner sells their shares to you. These shares are associated with a particular apartment in the building, giving you the right to occupy it, but are not in themselves a property title.
The ramifications of this ownership structure, if you’re an investor or an owner occupier, can be significant. In short, be ready to come under scrutiny from your potential new neighbours.
The directors of the building company get to decide if they believe the buyer is a fit and proper person to occupy the building, as opposed to a strata purchase where there is no such vetting. In addition, depending on the building’s rules, the directors may get to vet prospective tenants and the company may even restrict leasing altogether.
The maximum amount a lender will typically provide against a company titled property is 80 per cent, and values in such a building were traditionally thought to rise more slowly, although how true that holds in the current hot Sydney market is debateable.
On the plus side, company titled units tend to have well-vetted owners and tenants, with longer periods of occupancy.
3. Zoning matters
When Potts Point wasn’t the residential hotspot it is today, many commercial buildings took up home in converted terraces – sometimes combining multiple buildings together.
Many of these buildings remain zoned for either residential or commercial use or are sold on the potential to convert back to their original state or adapt to modern usage. So get ready to go into competition with commercial operators and developers if you’re wanting to buy that converted terrace.
4. The vibe has changed but it’s still got energy
Forget everything you’ve heard about Potts Point from three years ago. The notorious lockout laws – indisputably controversial – have helped transform what was once party central into a far more mature suburb. Yes, the changes have been significant, but don’t think for a second that Potts Point has become dull. It’s still a thriving hub of action, with a bustling dining and arts scene replacing the nightclub vibe.
If you’re looking to buy in Potts Point, talk to our team today.