Body Corporate Attraction
With house prices on the increase in Auckland, buyers and investors are continuously looking to alternative investment options. Body Corporate properties are becoming increasingly popular and are attracting all sorts of attention beyond single professionals.
An informed buyer is a more powerful consumer so let’s delve a bit deeper to see if a Body Corporate building could be right for you.
What is a Body Corporate?
A Body Corporate is made up of a collective of unit owners in properties like apartments, townhouses, car parks, industrial units, and even commercial offices. What makes the set-up unique is that decisions about certain aspects of the units, common property and shared spaces are made by the owners - who work together as a collective governing group.
What is new and exciting about Body Corporate options?
Body Corporate buildings are no longer just for single people or students in central urban areas. An increasingly competitive and pricey market means that there is more diversity in residents. Adriana Radich, from Barfoot & Thompson’s Body Corporate division, says “Families with children, retirees, couples and more are looking into these living situations. Some developers are even leveraging niches in the market such as allowing pets or installing pools, playgrounds and other amenities for which specific audiences will pay a premium.”
Understanding the role of a professional Body Corporate Manager
Adriana explains, “Unlike a property manager, they are in more of an administrative and advisory role to ensure that things run smoothly for residents - making certain that rules and regulations are followed. A body corporate has to consider and comply with a multitude of legislative requirements and having a professional on-board is a safeguard to protect the Body Corporate as an entity as well as the stakeholders.”
Body Corporate properties are increasing in popularity
Body Corporates are becoming more appealing these days due to the following:
How can you avoid some of the stereotypical problems encountered living in a Body Corporate?
Body Corporates can sometimes be negatively perceived in the real estate industry due to their collaborative nature, which allows for people from all walks of life to share spaces and work together to achieve common goals.
These are some of the things to keep in mind when considering the body corporate option:
- Age and demographics of the people that live there
- Special policies that allow for things like pets, AirBnB rentals, etc.
- Tenure of the oversight committee - turnover can indicate a tumultuous group of people to live with
- Annual fees and levies
- Bank account management, i.e. who owns and controls the funds
- Whether residents are proactive or reactive about maintenance
What are some of the latest new market trends related to Body Corporate in the last few years?
Matt Baird, Manager of Barfoot & Thompson’s Projects division says, “The next generation of Body Corporate developments are much larger, have higher specs and higher-quality building standards and materials than those used in the past in New Zealand. This is especially true for new buildings in Wynyard Quarter and the CBD as developers are catering for owner-occupiers rather than investors. Developers recognise that owner-occupiers are willing to pay more, not just for location but also additional luxuries.”
Why should owner-occupiers look to a professional Body Corporate service?
Matt says, “A professional service will look after the vendor’s investment. They will be proactive about maintenance undertakings and fix things before they break. They usually also have a strategic plan in place for improvements and maintenance that residents don’t just buy into but will also get excited about.”
If you are buying off the plans, what should you know?
Matt explains, “Know that with any Body Corporate there is going to be a learning curve for people sitting on the governing board. Engaging the right Body Corporate professional can help to mitigate most issues and simplify and clarify the induction processes.”
What do people need to understand about levies in these Body Corporates?
Adriana says, “It may sound obvious but it needs to be made clear that the more luxurious the building, the higher the levies will be. With that said, you need to take levies into account when thinking about your financial “big picture” beyond your mortgage and taxes.
Know too that levies are not set in stone and they can fluctuate if major repairs are required or if a major improvement (or amenity) is voted upon to proceed forward. Be realistic about which properties you can really afford to live in for the long term; the owners in the complex set the budget that generates the levies, so consider whether you are in the same financial arena as the majority.”
Body Corporate buildings are an interesting alternative to stand-alone homes as land options become increasingly limited and developers build up instead of out to create more housing. For homeowners who may be, over general maintenance; mowing the lawn, caring for gardens and big repairs then this lifestyle could be a feasible alternative. Sure, some concessions will have to be made such as sharing space with others, but the increased convenience makes it all the more appealing.