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.
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.
The key thing to remember with property is that it moves in cycles, like other asset classes. Don’t put all your eggs in one basket, and don’t take on too much debt, like this poor unfortunate investor has.
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Developer Proposes Moreton Bay Marina Hotel and Apartment Project
Brisbane-based developer Kindred has lodged plans with the Moreton Bay Regional Council for two 10-storey buildings along Newport’s picturesque marina.
The 11,133sq m site is owned by local business owner Joshua Kindred, who is the CEO of Kindred Group.
The proposal, to create a “world-class marina” has been lodged on behalf of Kindred by planning group Urbis.
The first of the two proposed towers will comprise a 120-room hotel and 24-serviced apartments.
The second building will be entirely residential, with 93 apartments.
Designed by Rothelowman, the Griffith Road development will deliver a 555sq m conference facility, 980sq m of retail, as well as restaurants, bars, and office and marine facilities.
“We need more places like this. We have great festivals around here yet no where for people to stay,” Ryan Elson of the Redcliffe Peninsula Chamber of Commerce said.
“We have a lot of people coming in a 10 and leaving at 4, what we would love is for them to be able to stay the night to be able to experience the Peninsula for what it is and the short term accommodation will be amazing for that.”
The project is a record investment for a private development in Redcliffe Peninsula.
“We have more than 4 million visitors expected in the Moreton Bay region in this financial year,” Attorney General of Queensland the honorable Yvette D’Ath said.
“We don’t have enough short term accommodation or function centre space and that is what a development like this will provide.”
The development plans to create a leading education and science facility onsite, that also provides education to locals and tourist on the wonders of the bay and its inhabitants.
A 90,000L outdoor aquarium has also been proposed for the site which will double as an acoustic barrier, treating sound from the ground floor area.
An innovative bike share program for the Redcliffe Peninsula has also been sounded out as part of the development, to be set up through government agencies or a privately funded initiative.
Plans have also been sounded out for an innovative ‘shared solar car’ program within its residential offering.
Residents on site will also be able to book a shared solar car to use at their leisure.
The building heights surpass the Moreton Bay Planning Scheme where the Marine Industry precinct and surrounding buildings have a height limitation of 15 metres.
This has drawn pushback from local action groups who have voiced their concerns.
The development will now be subject to council approval.
Property Group Buys Land Plots for Development in Brisbane’s North
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.
Originally Published: theurbandeveloper.com
$250 million mixed-use development a boon for north Brisbane suburb
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.
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.
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.
Originally Published: architectureau.com
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