Room for Debate: Should you dismiss an investment property without a car spot?

Don’t invest in apartments without a car park: Monique Sasson Wakelin

Property investors should avoid buying an apartment that does not come with a parking space, says investment adviser Monique Sasson Wakelin.

Sasson Wakelin says there are plenty of developers and estate agents “flogging carspaceless apartments” who are happy to tell would-be investors that it is a good idea to buy these sorts of properties.

“They talk about the paradigm shift away from car ownership and all those tenants happy to limit car use to the occasional hire vehicle for weekends away,” she says in a News Limited newspaper column.

But while there are some people who are happy not to own a car, they remain in the minority.

Wakelin says this is borne out in the 2011 census data, which shows that more than four-fifth (81%) of households own one or more cars.

Among those who live in apartments and flats, the figure is slightly lower at 75%.

Sasson Wakelin says her advice has remained steadfastly constant on this issue: “Don’t handicap your investment property by restricting the pool of potential tenants and future owners. A car park space is a must."

Delving further into the census data shows that 77% of Australian use a motorised vehicle to get to work and only 12% take public transport – the rest cycle, walk or work from home.

But Sasson Wakelin says investors being close to public transport is still important for an investment property.

She says being close to public transport is a “major plus” for investors because 1.7 million Australians work in the city or in the surrounding inner suburbs, making it “neither desirable nor feasible for everyone to drive to their place of work”.

Demand for property remains high in suburbs that have good public transport options because it means they can choose between their car and catching a bus, train, tram or ferry, says Sasson Wakelin.

There are occasion when buying an apartment without a car parking space would make good sense, says David Poppleton, head of residential projects in NSW for Savills.

Poppleton says it’s very much a “case by case” issue depending on where the apartment is located relative to public transport and the city and the type of alternative property the investor is considering.

"I'd rather by an apartment (one bed or studio) in Potts Point, Surry Hills, Ultimo, etc, without a car than the same  apartment with a car space anywhere outside a five-kilometre radius of the city," he says.

He tells Property Observer it is perhaps “misguided or even slightly negligent to suggest” that investors dismiss the right property without a car space for one that does have a car space if it does not stack up as a better investment.

His comments follow property investment advisor Monique Sasson Wakelin writing that a car space is “a must” and that investors should not handicap themselves by buying a property “restricting the pool of potential tenants and future owners”.

Sasson Wakelin based her comments on census 2011 data, which shows that more than four-fifth (81%) of households own one or more cars.

Poppleton agrees that it would be “flawed advice at best” if an agent suggested buying a two-bedroom apartment away from transport and five kilometres from the city that did not have a car space.

But he says suggesting that investors avoid all apartments without car spaces “ignores the statistics, affordability, and the government’s growing obsession to reduce the number of cars in every residential project in prime areas”.

Poppleton also points to other statistics unearthed by Wakelin that show that in the Sydney CBD and inner suburb of Haymarket 67% and 62% respectively of apartment households do not own cars, which suggest that there are locations where a car space would not be  priority.

He says if it came to the choice of buying a studio in the Sydney CBD versus a period unit in a prime urban area of Brisbane, he would put his money on the Sydney studio being a better investment.