Deal-Breaker #1: Location, Location, Location...

Previously in this series have focused on prioritising aspects of the home search in accordance with our values. Now we look at four of the main deal-breakers in determining suitability of the property beginning with location...

It's funny when you are looking to buy a home at the same time, in the same area as friends. On the one hand, it's great, to compare notes and share tips. On the other hand, it says a lot about the personalities and in many cases highlights differences that you weren't aware of previously.

Let me tell you the tales of two families.

Family 1: My friend Julie lives in an apartment in Sydney's eastern suburbs. Together with her husband, John, they live with their 6-year-old son, Jack. It turns out Jack's been hearing from friends with backyards, BBQs and border collies, and he wants one. He's ready for us to move into a house. Julie is ready also. She's been ready for 6 years.

Jack's school 1.4 km from where they live. They are anchored to his school. They all love it. They couldn't see themselves leaving for another school. Walking him to school each day is the highlight of Julie's day. Julie doesn't want to kill the buzz from dropping him off at school, but she's happy to get the tram or bus one or two stops as a compromise.

Criteria: Their search is anchored by location. The ideal outcome is to live within 3-5 kilometres of the school.

They've been looking in the vicinity of the school but, and it's a big but... 

Value: The house prices for a 3-4 bedroom block from 150sqm to 260sqm range from $2.5m to 5.5m. Eye-watering. Given what they can afford, they would be grateful to get 3 bedrooms on 150sqm!

Family 2: The second family have same age twins, also in the same school. They too are looking for a home. They decided they wanted more "bang for buck" though so they went further east and made the decision to change schools.

Criteria: Their search was anchored by location, also but they put the net out wider and are looking at properties within a 10-15 kilometres radius from their workplace. Both Annie and her husband work in different parts of the CBD. They will have a daily commute of around 1.5 hours in total.

Value: The house prices in a 3-4 bedroom on a 550sqm to 800sqm block range from $2.5m to $6m. They're getting serious about a 5-bedroom home on a 850sqm property. They'll get change from $3m. They've found bang for their buck.

And that's where it gets interesting.

Most people would look at the above figures and specifications and question who on earth would take the low-value option of the tiny block and the high price versus the second option, which clearly represents bang for buck.

Case in point: When Julie explained her currency theory to Family 2, they looked bewildered and said, "but owning a big home on a big block is the Australian dream."

And she said, "You're right, to a degree. It was the great Australian Dream, but the Covid situation changed everything."

The currency of the ideal home as we knew it has shifted.

For a growing number of homebuyers, the traditional home with a white picket fence and a big backyard is no longer appealing. 

So many things have changed.

Our work-from-home situation has revolutionised the way we live. We can afford to live wherever we like without commuting.

To be commute free...surely that's the great Australian Dream!

There are other reasons:

Many of us are environmentally aware; we don't want to leave a carbon footprint, so we'll walk, commute by public transport or get an electric car.

Others have a social conscious and don't want to live in a home that's even a fraction bigger than precisely what they need.

Let's revisit the families

Family 1: Julie's family are not focused on the size of the land parcel; the focus is how ingenious the existing owners have been with the space and how clever it was in its execution. So long as there was an outdoor entertainment area, afresco dining and somewhere for their 6-year-old to play with the pup, everyone would be happy.

Family 2: Annie's family are bound by numbers; they said things like: "we won't accept land size smaller than..." We won't accept house size less than...."

Then there's the location 

Family 1: The main concern was quality of life which arose from those walks to and from school. It was not about the property's internal beauty or the block's size; it was about those things that sparked joy.

Commute: Since Julie and her husband work from home, they will continue to walk their son to and from school. They believe it is their greatest pleasure and in their opinion, the best way to start the day. To swap that out for driving through peak hour traffic would destroy the balance in their day.

They will pay for that commute with the tiny block but on the bright side...there's the location.

Location: The couple have wanted to live in this area since they rented there more than 20 years ago. Now, that dream could come true, but only if they are prepared to compromise land size which they will. That's because their search is anchored by location. They are committed to staying within a 5-kilometre radius of their son's school whatever it takes. If the sacrifice is a bigger backyard with extra space that they might never use anyway, then so be it.

Family 1 says: "Everything is subjective."

Currency: The morning trip from the front gate of the tiny plot of land and 3 bedrooms within walking distance of the school, represents the strongest currency to them.

Family 2: They are focused on value and say: "you won't get bang for buck so close to the school. You'll pay $ 10 million for an average-size block!"

They will pay for the value the home further out represents with their daily commute.

Commute: They will brave the traffic down one of Australia's worst roads twice a day, five days a week to go to work. 

Family 2 agrees: "Everything is subjective."

Currency: The large backyard and 4 good sized bedrooms within walking distance of the local shopping centre represents a strong currency to them, regardless of the daily commute to work.

What's the moral of the story?

At the end of the day, the choice around which home to buy and the pillars that guide the purchase are supremely personal. If this story had a moral, and it didn't, we should all listen, learn and share each others stories so we can help others.

What's the moral of the story?

The choice of which home to buy and the pillars guiding the purchase are supremely personal. If this story had a moral, and it doesn't, it would be that we learn a lot about ourselves when buying a home. Thus it would be nice to all listen, learn and share each other's stories so that we can all support and help each other with the incredible amount of self-knowledge we pick up when we buy a home.

Moral No 2

If you ask me anyone who can afford to buy a home in Sydney is doing OK.

What ho, back to the back of the garden for alfresco aperitif everyone!

If you want to explore market value, please get in touch. We know the Sydney market well and understand it. If you'd like advice about the property market, whether you want to sell, buy or lease, we're here to help. Email: sue@sueostler.com.au