Brisbane's unit market 'a snake that swallowed a possum' - Queensland Property Investor
Connect with us


Brisbane’s unit market ‘a snake that swallowed a possum’

Brisbanes unit market snake that swallowed a possum

Brisbane’s unit market is “like a snake that’s swallowed a possum” still trying to cope after an unprecedented construction boom, one expert says.

As a consequence, developers are thinking differently about the market, in terms of both what they are building and why.

At a residential property summit held by The Urban Developer in Fortitude Valley on Friday, experts in the retail sector noted how quickly Brisbane had grown up from being a “country town” to a metropolitan space with high inner-city living demand.

“I think probably the simplest way to describe it is the market is like a snake that’s swallowed a possum, and it’s just digesting it for a period of time,” Colliers International residential director Andrew Scriven said.

Mr Scriven said the city had seen “unprecedented” sales several years ago – upwards of 8000 a year – but that rate was rapidly declining. The market was trying to right itself, or “taking a breather”, he said.

“Before we went through this transformational change in the marketplace in terms of investor stock and inner-city living … the Brisbane apartment market was somewhere doing between 1500 and 2000 sales a year.

“Obviously it changed … inner-city living became a norm, town plans changed to allow for high density and we were able to … import buyers, and we did it exceptionally well.”

Mr Scriven said the “imported” buyers helped change the market but sales were softening and the number of projects being developed had dropped.

“There’s just a little bit of indigestion, so things are working their way out,” he said.

He said while the market was often being referred to as a different market, it was in fact simply returning to the pre-investor-boom market of the early 2010s, with projects still successfully completed.

Despite the hiccups, Brisbane’s situation was positive compared to the southern markets, with growth continuing and interest from interstate continuing, he said.

Cue Property Settlements director Leah Kent described the market as “very challenging” with a “trend of extremes”.

“Projects that have massive shortfalls is one extreme, and that can be anywhere from high price points to neighbouring comparable sales, which is obviously a massive factor when it comes to valuation results,” she said.

“I’ve never seen so many projects that have been successful, and there’s been a real opportunity there for developers to do well.”

Ms Kent noted a similar trend highlighted by other experts at the summit: high value and high quality apartment developments were selling better in Brisbane than lower quality.

As the glut of units left Brisbane’s market in recovery, the focus shifted from quantity to quality, and from investors to owner-occupiers.

Architect and Cottee Parker director Sandra Browne said she was increasingly being called in as part of marketing campaigns to sell high-end apartments to baby boomers with demanding standards.

But wasn’t just wealthy retirees are turning back to apartments but families as well.

Instead of owning and maintaining a large house, Ms Browne said some families with children were increasingly turning to apartment living as a more cost-effective and comfortable lifestyle.

The difference was their requirements for a high-end experience.

“It’s fair to say that the amenities have come a long way in the past few years,” Ms Browne said.

“It’s no longer good enough to put in a pool and a gym, you’ve really got to put in a lot more than that at this end of the market.”

Instead, she said, the amenities needed to go beyond retail spaces or open space to such specialised items as firepits, yoga lawns and even wine cellars.

“That was a real conversation starter for that particular project. The agent told me everybody wanted to know about the firepit,” she said.

“I think there’s a real emphasis on wellness, so places you can roll your mat out on the rooftop and do a bit of yoga, steam rooms, that sort of thing.

“We’re seeing that is the trend now, the wellness trend.”

Ms Browne said features such as private dining were becoming a standard in high-end properties designed to attract the cashed-up owner occupier.




Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


Land developers call bottom of property market

Land developers call bottom of property market

Land developers AV Jennings and Villa World have called the bottom of the property cycle after a year of slumping sales and consumer caution blew a hole in their profits.

AV Jennings said the current property cycle has “bottomed” and that it will deliver a stronger result next financial year, after its profits were cut in half to $16.4 million by wary homebuyers steering clear of big commitments.

“General market sentiment is clearly beginning to improve … a modest uptick in visitor numbers to sales offices and online is evident and is expected to be sustained during FY20,” AV Jennings said.

Villa World chief executive Craig Treasure said soft consumer sentiment, tight credit conditions and the uncertainty caused by the federal election had created “difficult headwinds”.

“We are seeing that sales enquiries have started to improve across Villa World’s projects, however buyers remain cautious,” he said.

Villa World’s profit after tax of $23 million was also shredded compared to the previous year when it earned $43.6 million.

“This result is consistent with commentary disclosed to the market since December 2018 and reflects the decline in the Australian residential housing market and softer consumer sentiment,” Mr Treasure said.

Villa World’s land projects are concentrated in Queensland and Victoria.

All metrics for the group suffered: earnings per share were down 48 per cent to 18.2c, total revenue fell 11 per cent to $391.6 million, and sales numbers slumped to 870, down from 1788 the previous year.

The property pain was similar at AVJennings where turnover fell 20.3 per cent to $296.5 million and profits crashed by 48 per cent.

“The lower profit reflects softer market conditions, particularly in Melbourne and Sydney,” the company said.

It paid an interim dividend of 1c on 22 March and will pay another 1.5c dividend on 20 September this year.

Villa World has agreed to a takeover by AVID Property group for $2.345 per share. It will declare a fully franked dividend of 31c, as a portion of the total takeover price if it goes ahead.




Continue Reading


Brisbane Prices Could Be Headed For Recovery

Brisbane Prices Could Be Headed For Recovery

Brisbane prices are at their lowest level in the cycle, according to the latest national property clock from Herron Todd White (HTW).

The house values in Brisbane, Bundaberg, Ipswich, Rockhampton, and Toowoomba were at the bottom, according HTW.

Meanwhile, prices in Cairns, Gladstone, Mackay, Townsville, and the Whitsundays are starting to recover, the data showed.

There was momentum for the price growth in Brisbane, given that the capital city had been “bouncing along the bottom for some time now”, HTW Brisbane managing director Gavin Hulcombe told The Courier-Mail.

“I think it will be (a) steady rise, but my suspicion is in a couple of years’ time we might look back and think it (now) probably wasn’t a bad time to buy. Some areas are likely to perform better than others,” he said.

Brisbane units are also at the bottom of the price cycle, along with Bundaberg, Ipswich, Mackay, Rockhampton, Toowoomba, and the Whitsundays, according to HTW.

Apartment prices in Cairns, Emerald, Gladstone, and Townsville are already rising, the figures showed.




Continue Reading


Index warns council unit ban will impact boomer downsizers

Index warns council unit ban will impact boomer downsizers

A new housing index has warned that Brisbane will face a flood of ageing baby boomers with nowhere suitable to live unless it embraces greater density in suburbs where houses dominate.

A NEW housing index has warned that Brisbane will face a flood of ageing baby boomers with nowhere suitable to live unless it embraces greater density in suburbs where houses dominate.

The DORIS Index — Downsizer Opportunity to Remain in Suburbs — compared just how ready various Brisbane suburbs were to face the challenge, marrying the availability of smaller housing options with the ageing population.

Index warns council unit ban will impact boomer downsizers 1

Suburbs like Pinjarra Hills, Pullenvale, Wacol, Riverhills, Chapel Hill, Ashgrove, Tarragindi, Wishart, Wakerley, Belmont, Geebung and Graceville were among the hardest for residents to downsize into, according to the report by Place Design Group and AHURI.

Report analyst Chris Isles of Place Design Group said the irony was the “grey haired keyboard army” had forced the issue, after fighting against higher density residential development in low density suburbs.

But he warned, it was a decision that “will come back to bite them”.

Index warns council unit ban will impact boomer downsizers 2

This as the Brisbane City Council works its way into the final week of public feedback on its proposed citywide amendment restricting townhouses and high density housing from single-home areas.

Among the changes would be the removal of provisions in zone codes, development codes and neighbourhood plans that support multiple dwellings like townhouses and apartments in low density residential zones.

A Brisbane City Council spokeswoman said the proposal came out of concerns by residents during Plan Your Brisbane consultations.

“One in five households gave feedback and stopping townhouses being built in areas for single homes was a strong theme,” she said, adding that it was not expected to impact council’s ability to meet the state target of more than 188,000 new dwellings by 2041.

Index warns council unit ban will impact boomer downsizers 2

“Brisbane City Council is currently calling for residents to help shape Brisbane and have their say on proposed plans to restrict townhouses in low density residential zones,” she said.

“These changes are about protecting the Brisbane backyard and our unique character by ensuring our planning scheme reflects community expectation on townhouse developments.

“Council is committed to supporting a broad range of housing options for all of Brisbane’s current and future residents and ensuring our city remains a great place to live, work and relax.”

She said there were several different residential and commercial zones available in suburbs across Brisbane that supported a broad range of housing types.

“While the State Government’s SEQ Regional Plan sets a target of more than 188,000 new dwellings by 2041, this amendment would not impact Council’s ability to meet this,” she said.

“The proposed amendment cannot be finalised until after community consultation and a second sign off from the State Government.”

Index warns council unit ban will impact boomer downsizers 2

Place Bulimba lead agent Matthew Hackett said buyers were already “looking for quite a while” to find properties to downsize into in their suburbs or close to them.

“In my 21 years of selling in Bulimba what I find, especially recently, is people want to downsize into the same area because they feel safe, they know the area and have friends or it may be as simple as a bridge club they go to every week,” he told The Sunday Mail.

Index warns council unit ban will impact boomer downsizers 5

Long time Bulimba residents Pauline Burchardt, 67, and Lyall Gamble, 69, were among the fortunate ones, having found property to downsize into about 800m from their family home.

The couple is trying to sell their three storey family home at 16 Shakespeare St in the $2m price range, effectively looking to sell it off for two smaller units.

They’ve already moved into a three-bedroom apartment overlooking the river. at Bulimba — though it was not their first choice — and have a holiday unit on North Stradbroke.

“We had been looking for at least two years,” Ms Burchardt told The Sunday Mail. “We wanted single storey because as you get a bit more frail you worry about stairs.”

She supported improved higher density properties in the suburbs. “Why not? I don’t see a problem with it. All of the houses here are raised but when those people get older, I wonder what will happen. If they have bigger units, that would be good, You need a spare room for when the kids come over.”

Townhouses were ideal, she said, “because you get a little garden or courtyard and we’ve got two pets” but they could not find a suitable one.

According to AHURI, new housing options “need to be designed with older Australians in mind” including not just apartments but also smaller houses.



Continue Reading

Positive Cashflow Property

duplex designs, dual occupancy homes

Property Investment Advice