The Village Appeal of Capital Growth
Posted 1 Sep '15
The boom in the residential property market is well documented. Right now weekly, if not daily, mainstream media articles herald record demand and prices that together deliver generous capital growth for property owners.
It’s what property owners have come to expect. Capital growth in the general residential property sector must be replicated in the retirement living sector.
The aim should not just be for record sales in our industry. With the right focus and expertise record sales at record levels can be achieved.
Over the last 12 months ARP staff have delivered an 18% capital growth in 2 bed ILU’s on the north shore and 12% capital growth in 3 bed ILUs. That’s right on the money with the average residential property growth in the area of 13%.
It means village residents and village operators are happy with the return on their investment and quite frankly, that level of return makes sense.
ARP sales staff monitor the surrounding residential market and use that information to inform their marketing sales strategies for potential buyers.
If a 2 bedroom home just outside the front gate of a retirement village has achieved a capital growth of 10+% then nothing less should be expected for a 2 bedroom ILU in a pristine, well managed community.
I must admit I was a little surprised to see in their February 2015 half yearly financials an average growth of just 2.5% in the resale value of Stockland retirement village assets across the country with an average of 95% occupancy.
That’s not a lot. Granted it is an average which will obviously smooth out the highs and lows achieved across the country but still, and with all due respect, that’s not a lot.
As experts in sales and village management ARP stay focussed not just on achieving a good rate of sale and resale to retain maximum occupancy but also ensuring good management of the assets which will be the foundation to delivering good capital gain.
It means everyone is winning.