Why Buying an Expensive Apartment is Risky: The Downside of Posh Areas

The allure of living in one of the world's most prestigious areas, such as Sandbanks, can be extremely tempting. However, the downsides of purchasing an apartment in a posh area can often outweigh the benefits. This article explores the risks and disadvantages of investing in such an area, using the example of Sandbanks.

The Expensive Landscape of Sandbanks

Sandbanks, located near Poole Harbour, is renowned for its high land prices. In fact, the cost per square foot of land here is often considered dearer than other expensive districts like Belgravia. This area offers the best of both worlds: beachfront apartments with panoramic views and being away from the less affluent neighborhoods, all while having multi-millionaire neighbors nearby. However, this convenience comes with significant drawbacks.

The Uneven Ground and Future Risks

The area is situated on a hill at the end of the beach road, which forms one side of the entrance to Poole Harbour. While this offers luxurious living, it also presents a significant risk. The hill's geography means that the road, which is only a few meters wide, can become a life-threatening barrier during extreme weather conditions. During one particularly severe storm, the beach road was forced to close due to flooding, leading to significant inconvenience and potential property damage. This event might be a harbinger of what's to come in the years ahead.

Alternative Locations with Lower Risk

Instead of investing in a high-risk area like Sandbanks, it may be wise to consider nearby neighborhoods such as Canford Cliffs. While Canford Cliffs is a bit cheaper, it still offers many of the benefits of a high-end area while significantly reducing the risks. In Canford Cliffs, any existential threat, such as cliff erosion, is mitigated by several safe buffers:

A natural grass area that serves as a buffer between the cliffs and potential hazards. A well-maintained road that separates the residential area from any imminent dangers. Protected front gardens that provide an additional layer of security and space.

Investing in a slightly cheaper area like Canford Cliffs may mean selling the property at a profit in the future, as these neighborhoods often experience steady growth and appreciation. Moreover, living in an area that is consistently developing can offer more stable returns compared to solely relying on a property's value.

The Downward Spiral of High-End Areas

There is always the risk that high-end areas can only go one way: down. While some might argue that these areas can stay static, history and market trends usually paint a different picture. As financial markets fluctuate, high-end areas can become less desirable, leading to decreased property values. It is crucial to recognize that these areas are prone to the same economic forces as any other.

Strategic Investment in Rising Areas

To mitigate the risks associated with purchasing in a high-end area, it's often better to invest in slightly cheaper areas that are still experiencing upward growth. By doing so, you can ensure a higher return on investment while maintaining the benefits of living in a desirable neighborhood.

Conclusion

While living in a prestigious area like Sandbanks may seem like a dream come true, the risks cannot be ignored. Investing in cheaper, safer areas such as Canford Cliffs can offer a more reliable and profitable opportunity. Understanding the potential downsides of high-end areas is key to making an informed investment decision.

Related Keywords

expensive apartment posh areas high land prices

References

[1] BBC News, Sandbanks Beach Road flood closure (2018)