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Brisbane rent prices increase for houses and units: Domain Rent Report

Brisbane rent prices increase for houses and units Domain Rent Report

A record high rent price rise and plummeting vacancy rates have sparked a searing-hot rental quarter across Brisbane, with the city now poised to “nationally win the global health crisis”.

According to the latest quarterly Domain Rent Report, released Thursday, prices collectively rose a record $15 a week across the city – with median house rents reaching $415 and units climbing to $395 a week.

Unit rents, September quarter 2020 – capital cities

CityMedian weekly rentQoQYoY
 Sydney$495 -1.% -4.8%
 Melbourne$400 -3.6% -4.8%
 Brisbane$395 3.9% 3.9%
 Adelaide$340 6.3% 9.7%
 Perth$340 6.3% 9.7%
 Canberra$480 1.1% 3.2%
 Darwin$390 2.6% 2.6%
 Hobart$400 5.3% 1.3%
 National$447 -0.8% -2.9%
Source: Domain Rent Report, September quarter 2020

Domain senior research analyst Nicola Powell said while the city was a two-speed market with vacancy rates higher in the CBD compared with outer suburbs, the overall performance had been outstanding with COVID-inspired lifestyle changes fuelling the growth.

“I think that South East Queensland could be the winner at the end of this health pandemic and I think that what we are seeing (within the rental market) might even be occurring at an accelerated rate because of remote working,” Dr Powell said.

“People can keep their jobs in Sydney and Melbourne and that will have some impact on the rental market because quite often when you move you rent first.

“I also think when you compare Brisbane to other cities it still remains affordable. Brisbane unit rents could overtake Melbourne in the coming months, as Melbourne unit rents tumble pushing the rent price gap to $5 between the two cities – a four-year low.”

Dr Powell said the now red-hot rental market could also be put down to the sector bouncing back from the initial shock of the pandemic.

“I wonder whether part of the growth we’ve seen over the September quarter is a reversing and a regain during the bumpy June quarter that impacted the surge of rentals and I think that what we’re seeing is the rental market shifting back to what it was,” Dr Powell said.

“I don’t think we’re likely to be seeing rents rising again at such a rapid rate but that said I think what we’ll continue to see is rental prices rising because in terms of vacancy rates, they did rise during the peak but they have been declining.”

House rents, September quarter 2020 – capital cities

CityMedian weekly rentQoQYoY
 Sydney $540 1.9% 2.9%
 Melbourne $440 2.3% 2.3%
 Brisbane $415 3.8% 2.5%
 Adelaide $405 2.5% 5.2%
 Perth $395 6.8% 6.8%
 Canberra $580 1.8% 5.5%
 Darwin $490 2.1% 0%
 Hobart $450 0% 0%
 National $460 2.9% 3.2%
Source: Domain Rent Report, September quarter 2020

While the rental figures showed an overall stellar three months for Brisbane, Dr Powell said the inner city was still suffering from a lack of tourism and international students, with vacancy rates sitting at just over 7 per cent, compared to a vacancy rate of just over 1 per cent in East Brisbane.

In contrast, Sydney’s inner city rental vacancy rate is now at 5.6 per cent, while Melbourne’s skyrocketed to 13.1 per cent.

Place director of property management Cathie Crampton said excepting the still-struggling CBD, vacancy rates in their offices were an incredible low 0.25 per cent – which had inevitably led to rising rental prices.

“What’s causing the rent increase is just sheer supply and demand – we are seeing families put off purchasing decisions because of a lack of confidence and they are going into the rental market instead,” Ms Crampton said.

“We are listing at a rate that you would typically see in January and February – which are our peak times – and you would have to link that rate to the less severe restrictions … we’ve also adapted and normalised here and I believe that’s why Brisbane is not suffering.”

Gold Coast$520$520$5200.0%0.0%
Lockyer Valley$330$320$3203.1%3.1%
Moreton Bay$400$395$3951.3%1.3%
Scenic Rim$375$378$360-0.7%4.2%
Sunshine Coast$510$500$5002.0%2.0%
Source: Domain Rent Report, September quarter 2020

Ms Crampton said a growing throng of interstate migrants were also fuelling the rental market, with Sydney and Melbourne families particularly dominating the high-end market and securing their rentals sight unseen.

She expected that growing migration and the lack of investment stock would have a continued affect on vacancy rates, with strong rental growth likely to continue for the next 18 months.

Ray White Ashgrove principal Joe Denham said his office had also witnessed a burgeoning rental market, with September proving to be a record-setting month and October set to outperform it.

“We would probably let eight to 10 properties in a month usually, and now we would be close to double that at the moment,” Mr Denham said.

“If a property comes on it will go quickly, and we have had a few cases where people have been stuck.

“I haven’t seen rental prices dramatically increase but certainly if a house is usually being rented out at $500 and it becomes vacant, we’d advise it to be put at $510.”

Gold Coast$430$425$4301.2%0.0%
Lockyer Valley*****
Moreton Bay$330$325$3251.5%1.5%
Scenic Rim*****
Sunshine Coast$420$410$4002.4%5.0%

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Construction of Brisbane’s first new and highly anticipated golf course in 70 years has begun

Construction of Brisbane's first new and highly anticipated golf course in 70 years has begun

Construction of the long awaited Minnippi 18-hole championship public Golf Course and club in Cannon Hill is underway after receiving approval from Brisbane City Council earlier this year.
The golf course stretches between the Fursden Road playing fields at Carina and the hill beside Cannon Hill Shopping Centre.

The golf course will be the first of its kind for the area and will have everything for golf beginners to championship professionals, with a standard championship length 18-hole game, two nine-hole courses and a shorter six-hole course.
The 125 hectare site which the public golf course is being built on is located on the unused Brisbane City Council land on the western side of Bulimba Creek, east of Creek Road and north of Fursden Road at Cannon Hill. Bulimba Creek separates the development site from the existing Minnippi Parklands recreation area.

Along with construction delivered by one of Australia’s biggest construction companies, BMD, Council have planted 80,000 native trees on the site. The golf course is effectively an expansion of the Minnippi Parklands at Tingalpa and will remain in public hands and be operated by the council.

This year’s pandemic has seen a tough year for construction, however the golf course moves ahead into its next stage, which will provide a great boost for local jobs and supplier opportunities. The course surrounds and brings a picturesque backdrop to Azure Development Group’s recently completed residential enclave, Cornelia Edition.

Cornelia Edition is an exclusive gated community offering 31 luxury golf course terraces with resort-style amenities for residents. Primely located in the East Brisbane suburb of Cannon Hill, the terraces interact directly with the new golf course and benefit from the areas diverse and amenities with a strong community feel.

Cornelia Edition brings resort living inspired by the Palms Springs lifestyle with resident amenities including a large resort-style pool, outdoor lounge, fireplace, and open leisure area with a selection of terraces enjoying uninterrupted views of the parklands.
Residents of Cornelia Edition will benefit from the lush green views of the high end golf course by having a direct interface to one of the holes and the natural amenity of the community. Parks, connected bikeways and the convenience of good public transport provides residents with a peaceful and easy lifestyle.

Construction on the exclusive housing enclave has completed and work on the golf estate is expected to be finished in 2022.

This article is republished from under a Creative Commons license. Read the original article
Nicholas Failla
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Novotel Brisbane sold to offshore group JLL

Novotel Brisbane sold to offshore group JLL

Further hotel transaction activity points to continued investor confidence with the Novotel Brisbane sold by CDL Hospitality Trusts (“CDLHT”) to Amora Hotels & Resorts for $67.9 million by JLL.

In further signs of continued investor confidence in the Australian hotel sector, the Novotel Brisbane has sold by CDL Hospitality Trusts (“CDLHT”) to Amora Hotels & Resorts for $67.9 million.

The transaction was brokered off-market by JLL Hotels & Hospitality Group.

Prominently situated on the north-eastern edge of the CBD next to Central Railway Station and only a short walk from many of the city’s key demand generators, the Novotel Brisbane features 296 guest rooms, full-service restaurant and bar, café, ballroom and function rooms, 70 car parking bays, an outdoor swimming pool and gymnasium. The property is currently leased until early 2021 at which time it will be rebranded and owner operated by Amora Hotels & Resorts.

Mr Vincent Yeo, Chief Executive Officer of CDLHT’s managers, said, “As part of our proactive asset management strategy, the divestment of Novotel Brisbane allows us to recycle capital to maximise long-term value for Stapled Securityholders.” CDLHT’s managers intend to utilise the proceeds from the divestment mainly to repay existing borrowings, which will further strengthen CDLHT’s balance sheet and enhance its financial flexibility through increased debt headroom, or fund acquisitions if suitable opportunities arise.

Raja David, Director/Owner Representative, Amora Hotels & Resorts, said “We are absolutely delighted to enter the Brisbane market through the acquisition of such a well-known hotel. This property will perfectly complement our existing portfolio and help to further accommodate the needs of our loyal guests. We are now looking forward to the rebranding and exploring further expansion opportunities for our Australian network.”

Peter Harper, Managing Director – Head of Investment Sales Australasia, said “The sale of the Novotel Brisbane is another clear example that high-quality hotel real estate remains sought after across Australia, despite the obvious short-term challenges ahead. This transaction follows our recent sale of the Vibe Hotel Melbourne for a reported $108 million and with several other assets in the market we expect to announce at least another $300 million of deals before year end.”

He added, “Six months on from the initial impact of COVID-19, its apparent that there is a two-tier market emerging. Given how tightly held the Australian hotel market has historically been, many investors are taking a long-term view and largely seeing the current environment as an opportunity to acquire previously ‘unobtainable’ assets. As such, investment grade hotels in good condition and locations are still seeing strong investor demand and this competitive interest is helping to maintain capital values. Whilst many purchasers were hoping to see wide-spread heavy discounts to pricing, the reality is that we are only seeing this for assets that are situated in secondary locations, require significant capex or considered likely to be the last to fully recover.”

Mike Batchelor, CEO Asia Pacific, said “Offshore investors have always been attracted to the Australian hotel market and this is even more evident in the current environment where the country

is clearly viewed as a flight to quality destination due to its strong investment fundamentals, the way our Governments have handled the COVID-19 crisis relative to other nations and a very positive medium to long term outlook.”

“Our team of 90 across Asia Pacific are currently constantly fielding interest and enquiry on Australian hotels, be it for existing sale offerings or the search for off-market opportunities. Pleasingly, it’s not just from the traditional capital source markets of Singapore, Hong Kong and Malaysia, but increasingly also emerging markets such as Thailand and Vietnam,” he noted.

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What’s Driving Land Demand In Brisbane?

What's Driving Land Demand In Brisbane?

Brisbane is set to become a property investment hotspot next year, as demand for land continues to swell, according to the latest market update from Herron Todd White.

Increased demand for land is evident across markets in Brisbane. This strong interest helps support prices for land, particularly in the city’s growth corridors where properties sell out in a matter of weeks, said David Notley, director at HTW.

“As to whether this state of affairs will continue into the medium and long term is entirely dependent on an extension to the builder’s grant, interest-rate fluctuations and also availability of stock,” he said. “If these variables remain sound, then demand will remain strong.”

There are several factors that are influencing the confidence of potential buyers and investors in the city. In fact, a recent survey by the Property Investment Professionals of Australia showed that a third of investors believe Brisbane is poised to become the best capital city for investment over the next year.

Notley said a big contributor that continues to uplift sentiment in Brisbane is the strong interstate migration to Queensland prior to the COVID-19 pandemic. A report from the Australian Bureau of Statistics showed that Queensland had a net gain of 22,831 people within the country. This figure was almost double its 10-year average of 12,409.

“Of course, that number has plummeted since the boom gate came down on our hard borders, but selling agents are reporting a rise in enquiry from out-of-towners. There’s a sense of anticipation that we’ll see some serious improvement in interstate arrivals once folk can cross state lines more freely,” Notley said.

The low interest-rate environment is also a significant factor. The relatively cheap costs of borrowing money have provided an opportunity for many would-be buyers to break into the market, Notley said. The easier access to finance is supplemented by government grants, further boosting the capacity of many buyers.

“Brisbane and its surrounds offer a relatively inexpensive option for buyers — and that’s a key incentive at present. People are being very cautious with their money in the shadow of COVID. Brisbane provides buyers with the chance to own a new home within easy reach of a major CBD at substantially less than it would cost in Sydney or Melbourne,” Notley said.

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