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The Property Freight train Accelerates in June



Sydney and Melbourne property prices led house prices higher yet again in June, rising 2.8% and 2.9% respectively.

According to CoreLogic RP Data, Sydney’s median house price is now $900,000 while units go for $650,000. That’s even higher than Melbourne’s median house price of $615,000. Sydney and Melbourne have now posted gains of 16.2% and 10.2% respectively since last year.

Home Prices

The mining states of Western Australia and Northern Territory are going backwards though, losing 0.4% in Perth and 3.9% in Darwin in June, with both cities seeing negative growth over the past year. Other cities and regions have posted low single-digit growth over the past year, as you can see from the graphic below.

CoreLogic RP Data senior research analyst Cameron Kusher expects Darwin and Perth to experience ongoing weakness over the next 12 months, if not longer. That is primarily due to the huge slide in mining investment in those states.

CoreLogic RP Data’s head of research Tim Lawless added that interest rate cuts in February and May had contributed to growth. The RBA dropped the official cash rate by 0.25% in each month, lowering the rate to 2.0%. Interest rates on mortgages are available at under 5% from most lenders, making it more attractive for investors to borrow and existing homeowners to refinance and move up the property ladder.

But property investors should heed a new report from forecaster BIS Shrapnel. While the company says doomsday warnings of a housing crash are premature, property prices are expected to begin falling from as early as next year. BIS Shrapnel senior manager Angie Zigomanis only expects the RBA to raise the cash rate by 0.5%, but that will be enough to kill the surge in property prices.

That is expected to coincide with interest rates moving higher, a big increase in supply and weaker investment returns. BIS Shrapnel is forecasting that Sydney and Melbourne are only likely to see median prices rise by 2% and 4% respectively over the next 3 years.

AMP chief economist Shane Oliver agrees and has told the Australian Financial Review,

The real risk for property is in 2017 when the Reserve Bank starts raising rates and then you will see prices come off 5 to 10%, particularly in Sydney”.

Mr Zigomanis also noted that many capital cities are building apartments at record rates, driven by investor demand. Brisbane is the only capital city expected to see growth over the next few years, with growth languishing below that of its southern sisters Sydney and Melbourne.

That’s probably no surprise. The median house price in Brisbane-Gold Coast region is $500,000, only higher than Adelaide and Hobart, and well below that of Sydney’s $900,000. The Gold Coast is hosting the Commonwealth Games in 2018, which could spur further demand for property.

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Property Group Buys Land Plots for Development in Brisbane’s North



Property Group Buys Land Plots for Development in Brisbane’s North
Brisbane-based property group, CFMG capital has acquired two land parcels in Brisbane’s growing northern corridor to develop a 130-lot residential project.

The land parcels total 6.72-hectares at Graham Road, Morayfield, and each lot will provide a new house ranging from 300 to 687sq m. The acquisition will take CFMG’s pipeline to more than 1,000 lots across Queensland and Victoria.

CFMG managing director Scott Watson said pre-release marketing had generated strong sales enquiry from both owner -occupiers and local volume builders looking to secure land for their clients.

“The momentum of the project is expected to continue with official data indicating the demand for quality affordable projects in strong growth corridors forecast to continue,” he said.

Since 2009 Morayfield has experienced an average of 2.5 per cent population growth, higher than the state average of 1.8 per cent.

The project also benefits from close proximity parkland facilities, schools, childcare, shopping centres, specialty retailers and public transport networks.

CFMG Capital operates two core divisions: a residential communities’ development business and residential funds management business which has raised more than $90 million in third party equity.

According to the company, sales in Morayfield have already been strong with 40 pre-sales already in place and current contract exchanges totaling a sales value of $7.2 million.

In the first half of the 2017-18 financial year CFMG secured more than 200 sales across six separate projects in Queensland and Victoria.

“Through most of calendar year 2017 we saw significant spikes in both enquiry and ultimately sales, and as a result we were able to achieve incremental price growth across multiple projects without noticeable impact on sales rates,” he said.

“Particularly in the back half of 2017, there was a strong appetite for land registering in early 2018 which could attract a premium price.

CFMG recently secured a 6.8-hectare land parcel in Bridgeman Downs, 12 kilometres north of the Brisbane CBD.

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$250 million mixed-use development a boon for north Brisbane suburb



$250 million mixed-use development a boon for north Brisbane suburb

Richards and Spence has incorporated elements such as the corner clock tower to make the development feel more like a “village” and less like a shopping centre. Image: Richards and Spence

Moreton Bay Regional Council has given the green light to a 1.7-hectare mixed-use development which will transform one of Queensland’s fastest growing areas.

With Brisbane-based practice Richards and Spence as lead architects, the Laguna development will be built in the heart of the suburban area of North Lakes, 26 km north of Brisbane.

It will feature 5,000 square metres of fashion, food and beverage retail space; a 140-room hotel; 2,000 square metres of health and wellness facilities; a 1,500-square-metre “resort-style” restaurant and bar; a convention and events centre and a publicly accessible aquatic centre with a lagoon-style pool.

Laguna by Richards and Spence features a publicly accessible aquatic centre with a lagoon-style pool. Image:  Richards and Spence.

Moreton Bay mayor Allan Sutherland said at the time of approval that the project would add to the 7,700 jobs in the North Lakes area, provide public green space and bolster the suburb’s reputation.

Originally part of Mango Hill, North Lakes was gazetted as a separate suburb in 2006, with its name derived from the masterplanned estate developed by property group Stockland. The suburb’s population has since grown exponentially, with the 2011 census recording a population of 15,046 and the 2016 census recording 21,671 people living in the area.

Richard and Spence director Ingrid Richards said “middle-ring” or “fringe” suburbs such as North Lakes often lack the cultural and social amenity associated with living close to the city. She said that as Australian cities grow outwards, developers, retailers and councils alike have “not just an opportunity but an obligation to help alleviate this shortcoming.”

“It’s critically important to provide quality retail and mixed-use amenity for the population that will call these areas home,” she said.

The Laguna development is intended to deliver this amenity all in one go. Richards said, “It’s got a complexity, and it’s got a depth to it as a suburb, as a fully functioning place.”

The precinct will be centred on a tree-lined, pedestrian-orientated high street, to be known as Laguna Drive, which will feature retail, cafe and outdoor dining space.

“We’re trying to raise the bar of what is good public space, of what is a good, exciting, engaging retail environment,” Richards said.

The two office buildings, designed by Nettleton Tribe. Image:  Nettleton Tribe

In addition to the retail and hospitality offerings, the project will also feature 10,500 square metres of office space across two buildings designed by Nettleton Tribe.

Richards said it was vital that jobs were created through the development.

“As a complete, masterplanned development…you can actually work there,” she said. “Everyone’s not necessarily driving to Brisbane for work, because there is business there. So, it’s not just a housing development, and that’s an important distinction to make.”

The project is being developed by the George Group in conjunction with Pointcorp.

Construction of the project is planned to commence in early 2018, with completion slated for late 2020.

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Moreton Bay Regional Council makes decision on North Lakes commercial precinct



moreton development

DEVELOPERS of the proposed Laguna North Lakes commercial precinct will have six years to begin the project after getting council approval today.

The council this morning adopted a ­Material Change of Use ­application for the development at its coordination committee meeting at Strathpine.

The application is for a catering premises, commercial services, convention centre, hotel, indoor recreation, licensed club, ­occasional market, office, restaurant and shop.

An artist’s impression of the Laguna North Lakes development.

It was lodged by Wolter Consulting Group with the Council listed as the owner of the site, which covers land at 28-40 North Lakes Drive, 10 The Corso and 75 Lakefield Drive.

The application was ­initially lodged on May 19.

Council planners, in the report to council, said it would be a high-quality mixed-use development.

The proposed development, which would cover the 1.72ha site, would be constructed over four stages, the report stated.

“The proposal seeks to create a unique experience in the North Lakes area, ­establishing a boutique ­retail, dining and lifestyle precinct in the heart of North Lakes,” it stated.

“The proposal will ­contain a total gross floor area of 34,892sq m and consist of five new buildings ranging in height from two storeys up to six storeys.

An artist’s impression of the lagoon pool at Laguna North Lakes.

“The tallest buildings ­include the hotel and function centre and the commercial office towers (six storeys) which front The Corso and North Lakes Drive respectively.

“The development will be supported by a multi-level basement carpark, which will be integrated with the existing basement carpark situated beneath the existing council library.

“A new laneway (Laguna Drive) is proposed to connect The Corso and Lakefield Drive, internal to the site, which will enhance ­accessibility for users by providing short-term parking options and passenger set-down.”

The report recommended councillors approve the ­development, subject to amendments and conditions.

One of the recommended amendments was for a taxi rank set-down area adjacent to the function centre lobby. This would be designed to include either a drop-off/pick-up zone or a dedicated parking bay capable of accommodating a taxi suitable for use by people with ­disabilities.

The $250 million project first made headlines in ­December last year when it was announced Pointcorp and the George Group would develop the land, that at the time was being used for car parking.

Mayor Allan Sutherland said at the time the ­eventual sale price of the land would be $7.7 million and the developers were to pay a $700,000 deposit on a four-year lease.

A leasing campaign to ­attract retail and commercial tenants was launched in May.

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