With the year almost at an end, it’s that time when we all stop to reflect on what has passed, before we move on into the future. This most certainly applies to the development and property industry, where we take the time to reflect on the market and where it may be heading in 2017.
Experts from Colliers International in Brisbane and the Gold Coast have take the time to provide commentary on the South East Queensland capital market and metro markets to review the year-that-was and to provide a forecast for the coming new year.
By Tom Barr, National Director of Capital Markets
In 2016 we have seen an increasing buy-side capital demand, particularly from offshore capital, fuelled largely by the substantial yield arbitrage available between Brisbane, Sydney and Melbourne. Domestic asset managers have been increasingly active in the market representing offshore capital mandates, as the listed A-REIT’s have found it difficult to compete due to their required hurdle rates of return.
In 2016, our team has received over 85 per cent of bids from offshore parties for the sale campaigns of 41 George Street and Green Square, with the origin of offshore capital on these campaigns emanating from Singapore, USA, Korea and Germany.
Only three major office investments have traded thus far in the core CBD in 2016. The lack of on market core CBD office opportunities has seen investors turn their attention to quality large scale assets outside the traditional CBD grid.
We have seen that with the sales of 100 Skyring Terrace Newstead (50% interest), ATO Upper Mount Gravatt, and the pending sale of Green Square Fortitude Valley.
Record high vacancy rates in Brisbane have resulted in a two-tiered leasing and capital market, as tenants and buyers continue to be focused on the prime-grade end of the market. However with forecasts showing an improving leasing market over the next couple of years, we anticipate an increasing number of buyers willing to go up the risk curve and make counter cyclical plays in the secondary-grade CBD market. We have seen this beginning to emerge, with the transactions of 333 Adelaide Street and 444 Queen Street (66% interest) in 2016.
Given the backdrop of limited supply and unprecedented buy-side capital demand, in 2017 we anticipate market yields will continue to tighten and are expected to breach 5.5 per cent in the core CBD market. Buy-side capital demand will continue to be dominated by offshore groups
We anticipate an increase in the number of owners wanting to capitalise on the unprecedented strength of buy-side capital demand from offshore, and divest out of their investments. The demand from offshore groups will strengthen further in 2017.
Given the heightened geo-political and macro-economic situation globally, and a surprising outcome in the US presidential election, we foresee an increasing number of transactions will be driven by a motivation to repatriate offshore capital back to select origins.
We have already seen this begin to emerge with a number of transactions being driven by repatriation of Malaysian capital.
By Hunter Higgins, Director of Investment Services
In the Brisbane metro market there has been a noticeable change in the demand shift from residential development sites to quality investment stock. With this change in direction, we have also experienced a significant lift in student accommodation and aged care facility developments.
Developers are focusing on investment grade stock with value add potential, and investors are very active in the market due to low interest rates and volatile stock market.
Distinct lack of quality stock has created competitive tension between prospective purchasers, which has ultimately reflected in sharper yields and increased end sale prices. We have also had a significant increase in auction success with 87.5% of properties transacted via auction.
In 2017 we are likely to see a noticeable change in site values due to supply, and the yields for quality stock will continue to remain robust. We are already experiencing significant inbound capital from offshore, investors are now starting to focus on Queensland, due to excessive yields in Sydney and Melbourne.
Demand will remain strong for the CBD and immediate fringe quality blue chip and premium assets such as fast food, service stations, neighbourhood retail and shopping centres. Any value add opportunities with quality national and multinational tenants are favoured.
In Brisbane we are also seeing Asian buyers channeling capital into quality assets. According to CityScope, 43 out of the 137 strata-titled ground floor retail units in the Brisbane City are under Asian ownership.
Originally Published: https://www.theurbandeveloper.com/
Sydney Baby Boomers drive real estate boom in Brisbane
A MIGRATION of cashed-up Baby Boomers from Sydney will lead to a real estate boom in Brisbane, according to property investment experts.
A Property Investment Professionals of Australia (PIPA) members’ survey revealed that Brisbane was regarded as the best capital city for property investment.
Of the members who participated in the survey, 46.15 per cent rated Brisbane as the best capital for investment prospects in 2018.
PIPA chairman Peter Koulizos said the Queensland capital was expected to boom as a side effect of the Sydney property boom happening when Baby Boomers were looking at retiring.
“People that have a lot of equity in their home can retire or semi-retire by selling up and buying a home in southeast Queensland,” Mr Koulizos said.
And with the median house price in Sydney more than $1 million, he said this would give them a sizeable pile of cash left over after buying a home further north.
“That is because there is such a big price difference between Brisbane and Sydney,” he said.
A PIPA survey from last year also rated Brisbane as the best capital city in which to invest, but in the past 12 months the average house price has increased by just 2.9 per cent.
Mr Koulizos said a boom would come eventually, but picking the exact point was tricky.
“Property booms take a long time to gather momentum, I doubt you will see double digit growth in Brisbane this year but it may be different next year,” he said.
Melbourne was the next best investment option according to the survey, with 19.23 per cent believing it was a good place to invest, followed by Perth at 15.38 per cent.
Originally published: brisbaneinvestor.com.au
The property clock strikes big for hot spot areas
9 Lion St, Ipswich. Picture: realestate.com.auSource:Supplied
DESPITE last month’s previous lacklustre values, analyst Michael Matusik has identified the areas on the upswing.
While property values remained fairly stagnant during February, property analyst Michael Matusik has revealed where the housing market is on the upswing.
Mr Matusik’s latest property clock for houses, has Brisbane, Gold Coast, Logan, Redlands, Sunshine Coast and Gympie all in upswing.
He said a market’s position on the property clock was based on the strength and direction of key indicators including sales numbers, price and rent, demand and how much new supply there was.
His latest Matusik Missive also listed Ipswich, the Fraser Coast and Noosa markets as heading into upswing territory.
Ipswich has many beautiful homes, often at prices well below what something similar would cost in Brisbane’s suburbs. A four-bedroom home at 9 Lion St,Ipswich is listed for $879,000.
The land the home sits on was bought in 1904 from the family of the then Ipswich Mayor Mr Pettigrew. A home was built on it in 1907.
The period home has 3.5m high ceilings, VJ walls, period window, and timber floorboards which have all been restored.
The home has two new bathrooms, a large separate dining area and study. It is listed through Steve Athanates of NGU Real Estate Ipswich.
On the Gold Coast at Robina, 196 Easthill Drive is listed for more than $850,000.
The three-bedroom home is within the Glades Golf Community.
It has formal and informal living and dining areas, and an outdoor entertainment area with a swimming pool nearby.
It is listed through Ian and Linda Mills of McGrath – Palm Beach.
On the Sunshine Coast at Noosaville a home at 15 Bluebell Court is listed for offers of more than $740,000.
The three-bedroom home is in a cul-de-sac in a residential pocket bordered by the Lake Doonella Reserve.
The single-level home has open plan living and dining areas. An outdoor area overlooks the pool and reserve at the rear of the property.
It is listed through Tansy Grant and Justin Sykes of Ray White – Noosa.
Originally published: brisbaneinvestor.com.au
Where to invest: These are the suburbs where house prices are tipped to grow
Annaliese Bullock, 27 with husband Jared, 27 and daughter Lyla 5 months sold their Burpengary before it even went on the market. Picture: AAP/ Megan Slade.Source:News Limited
THESE are the rising stars of Brisbane’s property market, the 27 growth suburbs investors need to know about.
INVESTORS chasing capital growth in Brisbane are spoiled for choice, with a new report identifying 27 suburbs where house prices are tipped to rise — and more than half of them have a median price of less than $500,000.
Property analyst Terry Ryder has identified the rising stars of the property market — where sales are rising steadily and house prices are set to follow. And they’re not the inner-city, blue chip suburbs you might expect.
The report examines sales activity, rather than prices, to determine the best and worst local government areas for property market growth.
The Moreton Bay region has 10 rising star suburbs where sales have been steadily increasing including Banksia Beach, Bellmere and Deception Bay.
Quarterly sales in Burpengary have risen from 69 to 97 in the past six quarters, while at Sandstone Point, sales are up from around 40 per quarter to 55 to 60.
Homes are selling so fast in the area that Jared and Annaliese Bullock just sold their four-bedroom house in Burpengary for $475,000 before they had a chance to even put it on the market.
Mrs Bullock said she contacted an agent at RE/MAX Ultimate, who brought through a couple of potential buyers and the offer was made within days.
But she’s not too surprised, given how close the suburb is to the train station, shops and the highway. The couple also recently bought two units as investment properties in nearby Caboolture. Acacia Ridge, Algester, Eight Mile Plains, Kuraby and Sunnybank Hills are also predicted growth areas.
“It’s the affordable, outer areas that have got the most activity at the moment,” Mr Ryder said.
“The infrastructure is pretty good, with train links to the centre of the city, and there’s lots of shopping centres and good amenities.”
“The sweet spot is to be about 200 metres from a school, a shopping centre and a train station.”
SUBURBS WHERE SALES ARE RISING
Acacia Ridge $402,000
Banksia Beach $550,000
Caboolture South $290,000
Deception Bay $345,000
Eight Mile Plains $788,000
Ferny Grove $595,000
Kippa Ring $415,000
Mt Warren Park $390
Sandstone Point $420,000
Sinnamon Park $720,000
Sunnybank Hills $660,000
Victoria Point $522,000
Originally published: www.news.com.au
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