Scarcity ~ the new imperative over Location

Infinity pool

Infinity pool ~ functional and appealing

The property adage “location, location, location” is not only cliché, it is boring.

Any well-informed investor will understand that location must be a given and is one of the most important aspects of choosing the right investment property. It goes without saying that properties in less favourable locations which are close to a busy main road or having difficult access to public transport or in high density areas with overlooking issues will invariably suffer the obvious disadvantage over those which are located in more private precincts with easy access to public conveniences.

Having said this, less-informed investors will continue to buy ill-located properties perhaps out of necessity than investment savvy as these properties are often relatively more affordable. Hence, the emergence of 2-tier markets within a location and the notion the product is only as good as what you are willing to pay.

What is perhaps more telling when choosing an investment property is the “scarcity factor” of the property ~ something which is relatively unique, in short supply and in high demand to both owner-occupiers and tenants alike. Better still, an investor would be in good stead if he or she could find a scarcity factor within a well-located property. In this instance, not only do one satisfy the good location criteria, but also insulate one’s investment from the competition by having a particular feature or quality which is scarce and in demand. So what is this scarcity factor in property?

Lets examine some scarcity factors or perhaps some points of difference which makes a particular property stand out when compared to similar ones within the same vicinity / location:

  • Well-designed floor plans which are exciting and make good economic use of space – this quality will have a distinct advantage over floor plans which are less economical such as unusable long corridors or irregularly shaped areas which may limit its usability.

Unusual fireplace design

  • An apartment with an additional car space in a high demand location – there is an increasing number of suburbs close to major CBDs where street parking is becoming increasingly popular and in high demand. Visitors’ parking in apartment blocks which are well-managed are reserved strictly for visitors to avoid errant parking by owners.
  • A separate toilet and wash basin within a one bedroom apartment – most one bedroom apartments have only 1 joint bathroom and toilet.
  • A terrace house with an open plan kitchen and living areas – most terraces have long corridors with separate kitchen, dining and living areas.
  • A level backyard in a street with undulating backyards and limited private open spaces.

Unusual house design

  • An interesting house design in a street where all houses have similar facade and attributes.
  • A room with a spectacular view in a street where the majority are facing a busy and noisy street front.
  • New apartments which come with modern conveniences – these facilities include reverse cycle air-conditioning, gas cooking, internet / cable TV ducting in separate media nooks, open plan living, down lighting, external secured storage on title, private and secured parking, gymnasium and pool facilities have a clear and distinct advantage over older apartments without such amenities.
  • “Hidden” features which may not be obvious to most people or potential to add significant value – this may include an option to knock down walls and create an interesting floor plan or open concept, adding an entertainment deck that flows from internal living spaces or renovation and extensions which significantly upgrade living areas and hence create value.
Modern open kitchen concept

Modern open kitchen concept

The above examples are just some of so many “scarcity factors” which set a particular property apart from others which are more “normal” and “usual”. The important criteria is the feature must be fairly unique, interesting, scarce AND in great demand from both owners and tenants alike.

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