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Buyer demand for property eases from its peak as affordability constraints bite

Affordability constraints are starting to bite for home-buying hopefuls, with the level of buyer demand easing compared to a few months ago, new research shows.

Although the latest lockdowns prompted some potential buyers to put their plans on hold, others had already been scaling back their property searches as prices spiralled out of reach.

Interest is still stronger at this point in late winter than it usually is at this time of year across most capital cities except Sydney and Hobart, and in regional Australia, as potential buyers who missed out in recent months continue their search.

But the white-hot competition seen in March, when crowds of bidders were paying huge sums at auction, has started to come back.

The Domain Buyer Demand Indicator (BDI) measures search behaviour on to identify active buyers who are more likely to purchase, such as those who shortlist a home or send an inquiry. It tracks changes in demand over time.

Demand peaked in March for Sydney, Melbourne and Brisbane, and in July for Canberra, the indicator found.

“Buyer demand across all cities has come off its peak,” Domain chief of research and economics Nicola Powell said.

“Demand is easing overall and that is going to be the impact of affordability, and the fact we have seen price rises across all of our capital cities.”

House prices have soared in the wake of interest rate cuts, government stimuli and a widespread shift to working from home that has prompted owners to upgrade into more spacious residences. Sydney house prices jumped 24 per cent in the year to June, on Domain data, with Melbourne up 16.2 per cent and all cities up by double digits.

“Affordability [is an issue] for all buyers, not just first-home buyers but all buyers, because we’ve seen such significant jumps over the year to date,” Dr Powell said.

The research also tracked the state of the late-winter market, comparing buyer demand over a 30-day period to August 15, to average demand at this time of year.

Melbourne buyer demand is now 10 per cent higher than average at this time of year amid pent-up demand from those who have not yet been able to find their dream home, with Canberra a stunning 60 per cent higher, Brisbane up 7 per cent and Perth up 30 per cent, while regional Australia is 26 per cent higher.

Sydney is 4 per cent lower as the city goes through an extended lockdown, with the real estate industry still open for private inspections.

buyer demand

The lockdowns also cause some buyers to pause their plans until they can get more clarity about when restrictions will lift, Dr Powell said.

“What we do see during lockdown is hesitation creeps in between buyers and sellers – we see a pullback in activity,” she said. “Clarity is really important for buyers and sellers to make decisions.”

Online auctions were still offering good outcomes for those keen to press ahead, allowing buyers to secure a home when there was less competition or sellers to ink a deal quickly, she added.

Once cities reopen, Dr Powell said, we could expect a rebound in activity due to pent-up demand and supply, but she doubted the price jump would be a strong as it was earlier this year given affordability had already become a hurdle.

The affordability challenge is clear in some of the most sought-after neighbourhoods.

Buyer demand in Sydney’s eastern suburbs and northern beaches is down 14 per cent compared to the average for this time of year, as buyers reckon with eye-watering price growth that has sent prices in those pockets up 26.4 per cent and 38.7 per cent in a year, respectively.

“We’ve seen some extraordinary rates of growth in our premium areas,” Dr Powell said. “That becomes a hurdle – it’s a financial impact.”

The more affordable Central Coast, by contrast, recorded a 22 per cent jump in buyer demand as remote workers cast their eyes further afield.

In Melbourne, where prices have not boomed as much in the current cycle as Sydney, prestige neighbourhoods are still in hot demand.

Buyer demand is up 20 per cent in the inner south, 13 per cent in the inner suburbs and 10 per cent in the inner east this winter.

As for Canberra, where overall demand is up 60 per cent compared to the average for this time of year, Dr Powell highlighted the resilient jobs market, high average wage, more affordable housing than Sydney, and little impact from the pandemic until the current lockdown.

She warned the lockdowns in the ACT and Victoria could start to impact buyer demand, as is happening in Sydney.


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Gold Coast

Winten secure 60% sales in Main Beach apartment tower Belvedere

Winten’s national head of residential sales Karl Rameau said the line share of buyers have been locals that already live in the area

The local Gold Coast developer Winten Property Group has already secured over 60 per cent of its apartment sales in their latest Main Beach tower, Belvedere.

That’s seen construction of the 24-level tower at 25 Woodroffe Avenue fast-tracked, with Hutchinson Builders now kicking off the build of the 127 apartment building toward the start of October

Winten’s national head of residential sales Karl Rameau said the line share of buyers have been locals that already live in the area, as well as those from interstate who already own.

Rameau says nature of the site and the sheer size of the BDA Architecture-designed building and the apartments has been a defining difference for buyers.


Belvedere 25 Woodroffe Avenue, Main Beach QLD 4217

“It’s a fairly big building on a generous block of land”, Rameau said.

“A lot of 27-level buildings are on anywhere between 500 sqm and 1000 sqm, but Belvedere is on 2,655 sqm which gives residents a higher level of movability around the building.”

Rameau says the apartment sizes have been attractive with the downsizer.

“The two-bedroom apartments have 120 sqm to 130 sqm of living space, which is generous for the Gold Coast these days”, Rameau suggests, with the two-bed apartments starting from $780,000 and three-bedrooms from $1,075,000.

There are a handful of skyhomes rom $1.56 million and five terraces from $2.2 million.

“The bulk of sales have been between that $800,000 to $1.5 million mark to the owner-occupier.”

The Woodroffe Avenue tower is just 100 metres to Tedder Avenue, 300 metres to the beach and 450 metres to the closest tram stop.

There’s a 24 metre lap pool with cabanas and daybeds.

The development is across the road from White, the owner-occupier focused apartment block of just 27 full floor apartments.


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Teneriffe woolstore apartment sales spree


Three luxury apartments have sold in the past week in Teneriffe topped by a $1.7 million sale in an old warehouse complex.

It was in the river-facing Dakota woolstore at 407/88 Maquarie Street.

The former Goldsbrough Mort and Company Ltd building conversion was undertaken by the Meridien development group headed by Russell McCart.

It first sold at $450,000 in 2001, amid the 268 heritage listed apartments.

It had 199sqm of space in the three-bedroom, two-bathroom over two levels.

Large sash windows have a view of the Brisbane River.

It sold through Ray White agent Ben Percival.

Meridien evolved into Pacifica Developments, where McCart is chairman.

There was a $1.42 million sale in the 1911 Winchcombe Carson Woolstore.

The 54 Vernon Terrace offering had huge timber beams dissecting its dining and formal living areas in the three bedroom apartment.

The cheapest of the three sales was a modern riverfront apartment at 135 Macquarie Street, Mercantile Place.

It had two bedrooms with 120 sqm plus courtyard.

The building features include a security gated entry to car park amid extensive sub-tropical gardens.


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Brisbane Apartment Design Reflects Changing Times


A surge in owner occupier apartment buyers in prime Brisbane suburbs has triggered a dramatic shift in design outcomes as developers with vision respond to changing customer needs.

Award-winning project marketing and advisory group Position Property has played a leading role in the transition, shaping the design of a range of new projects across the inner city.

Recent examples include the now sold-out Montague & Ferry Residences at West End and the newly launched Aviary Residences in the heart of Toowong.

Position Property director Richard Lawrence said Aviary was an excellent example of a developer, architect and project marketing agency working together to deliver a new style of Brisbane apartment living.

Lawrence said the collaboration between Position Property, the State Development Corporation and Nettletontribe Architects had produced a diverse mix of apartment types suitable for different households and lifestyles in a building of just 141 apartments, and boutique by inner city standards.


▲ Position Property’s Aviary Residences includes a 20m infinity edged rooftop pool. 

“This owner-occupier approach to design is immediately evident at Aviary, which features 18 different floor plan designs,” he said.

Buyers can choose from 12 luxury sky villas, 14 three-bedroom plus multi-purpose room apartments, and a range of different one-, two- and three-bedroom designs.

Extra features include multi-purpose rooms, convenient study nooks, large private balconies, floor-to-ceiling glazing and top-quality fixtures and finishes. Many apartments offer exceptional river, city or mountain views.

“It is rare for a single project to provide so many different options for owner occupiers and across such a wide range of demographics, but this is the future of modern Brisbane apartment living,” Lawrence said.

Located 4km from the Brisbane CBD, Aviary Residences also offers a mixed-use precinct with dining, cinemas, fresh food, health services and job opportunities on the doorstep.

World-class resident-only amenity will include a 20m infinity edge pool, private garden lounge and dining alcoves, indoor-outdoor library, media room and exclusive resident lounge.


▲ Many apartments offer exceptional river, city or mountain views. 

“Getting the apartment design right is only half the story when it comes to appealing to discerning owner occupier buyers,” Lawrence said.

“Many future residents of Aviary will be making their first move into apartment living and have a long list of features they require to achieve new lifestyle goals.

“The most successful developments we take to market result from early collaboration with our team to make sure what’s being created is closely aligned to this fast-growing apartment buyer segment.

“It comes down to a simple philosophy that if you build it right, they will come.”

Position Property is Brisbane’s leading project marketer. With more than 21 years’ experience in the Brisbane property market and achieving over $500million in sales last financial year, including selling out 14 projects since the start of 2021.


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