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Delay in billion-dollar City Deal a ‘cruel blow’ to Queensland recovery

Delay in billion-dollar City Deal a 'cruel blow' to Queensland recovery (1)

The COVID-19 pandemic has put a plan to direct billions of dollars towards south-east Queensland projects over the next 20 years on hold.

The plan would commit local, state and federal governments to fund specific areas to cater to a population that will grow by 1.9 million people in the next two decades.

The Property Council of Queensland and the Committee for Brisbane described the delay to 2021 as “a cruel blow” for south-east Queensland, where citizens “deserved better”.

Queensland Property Council executive director Chris Mountford questioned the wisdom of delaying the funding plan.

“To be fair, we would have expected a few months’ delay on the basis that COVID-19 has had an impact, but to simply kick the can into next year seems too much of a delay,” Mr Mountford said.

He said other states were doing a better job of locking in private-sector investment as part of their economic recovery plans.

Queensland is really slow out of the gate on this front. We are not seeing much of the critical role that private investment will need to play in that,” he said.

“I think if they were still negotiating the Western Sydney City Deal, I am fairly confident the NSW government would not be tolerating a pause.

“They would more likely be saying, ‘we want the investment faster because we want that investment sooner’.”

Queensland Treasurer Cameron Dick rejected suggestions Queensland’s economic recovery was lagging behind other states.

“The Queensland economy is actually thrashing New South Wales,” Mr Dick said.

“We were the only state to record a decline in our unemployment rate last month, and recent transaction data from the Commonwealth Bank shows Queensland private-sector spending has recovered faster and higher than any other state.”

Mr Dick said Queensland was able to attract the $2 billion Forest Wind renewable power project in Wide Bay, the $2.1 billion Dexus redevelopment of Brisbane’s Eagle Street, and the $1.5 billion Valeria coal mine.

“The reality is that the SEQ City Deal would do nothing to improve these numbers in the COVID environment because it’s about projects that only deliver years away,” Mr Dick said.

“This includes things like the 2032 Olympics, a process which is currently on hold given the IOC has delayed the 2020 Olympics.”

Cities Minister Alan Tudge signed a statement of intent in Brisbane on March 15, 2019, with Queensland’s then-treasurer, Jackie Trad, and former Brisbane lord mayor Graham Quirk, who was chair of the South East Queensland Council of Mayors at the time.

Delay in billion-dollar City Deal a 'cruel blow' to Queensland recovery (2)

The formal South-East Queensland City Deal was expected to be signed in mid-2020, before the COVID-19 pandemic struck.

However, a decision to delay planning was agreed by all three levels of government, according to a joint statement released on Tuesday.

“The Australian Government, Queensland Government and Council of Mayors (SEQ) have agreed to extend the negotiation of the SEQ City Deal into 2021 while we focus on recovery from the COVID-19 pandemic,” the statement reads.

“As governments focus on the COVID-19 impacts it will be important to assess new priorities in the context of the recovery at a later date.

“This will ensure all levels of government have greater clarity of the impacts on the SEQ region and that new and emerging priorities are considered to ensure we have a solid foundation for our future SEQ vision.”

The email was signed by Mr Tudge, Queensland Treasurer Cameron Dick and Brisbane lord mayor Adrian Schrinner, chair of the Council of Mayors (SEQ).

Mr Mountford said the effect of the coronavirus pandemic on the state’s economy “should provide added impetus to a City Deal, now”.

He and Committee for Brisbane chief executive Barton Green said in a joint statement an SEQ City Deal should be the centrepiece of recovery.

“The decision to postpone all the hard work done to date is confusing and disappointing.”

There are seven signed City Deals in place throughout Australia: Townsville, Launceston, western Sydney, Darwin, Hobart, Geelong and Adelaide.

The statement from the Property Council of Queensland and Committee for Brisbane asked governments to reconsider this decision.

“Deliver on the promises made to south-east Queensland residents to fund and prioritise City Deal projects that will support our growth and our economy.”

 

 

 

This article is republished from www.brisbanetimes.com.au under a Creative Commons license. Read the original article.

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Opinion

Sunshine Coast remains a standout market during COVID-19: Hotspotting’s Terry Ryder

Sunshine Coast remains a standout market during COVID-19 Hotspotting's Terry Ryder

The key message for property investors right now is that there are many growth markets across Australia.

There’s a tendency in mainstream media to extrapolate the situations in Sydney and Melbourne to the whole nation. If the big cities are in decline, then Australian real estate is in decline, according to news media.

This is seldom true – and it’s certainly not the case right now. Some of our smaller capital cities are pumping strongly and, in particular, regional Australia has many growth markets.

Last week I made this comment: “Regional Queensland has achieved something that few jurisdictions across Australia have managed: it has maintained its previous high levels of well-performing markets in defiance of Covid-19.”

I wrote that I rated the Sunshine Coast one of the strongest economic and real estate stories in the nation and that it continues to produce solid results in its property markets.

The anecdotal evidence from people at the coalface of the Sunshine Coast property industry is that sales are happening, vacancies remain low and there’s no evidence of values falling.

The latest data on prices and vacancy rates confirms that – with evidence of notable growth pockets.

Most of the postcodes across the Sunshine Coast region, including Noosa (which is a separate local government area), have vacancy rates between 1% and 2%. While some of the capital city CBDs and tourism-dominated locations like Surfers Paradise have had big blowouts in their vacancies, the Sunshine Coast has resisted this trend.

Although tourism is an important industry to the Sunshine Coast, its economy is insulated by the ongoing massive spend on infrastructure, including the evolving medical precinct, the new CBD now under construction, the billion-dollar highway improvements, the upgrade of the local airport to international status and the subsea internet cable link to Asia – among other projects.

And this is bolstering the local property market.

The top end of the market in particular has been boosted, thanks in part of the influx of well-paid medical specialists working in the new medical precinct, based around the $2 billion university hospital.

The two most expensive suburbs in the region, Sunshine Beach and Minyama, have both experienced notable uplift in prices recently. The median house price for Sunshine Beach, just outside Noosa, has risen 16% in the latest quarter and 27% in annual terms, to reach $1.8 million. Minyama is up 7% in the most recent quarter and 23% annually – and typical houses are now above $1.1 million.

The median house price for Noosa Heads has risen 8% in the past year, including 1.4% in the most recent quarter.

Other locations throughout the Sunshine Coast region, including Mooloolaba, Maroochydore, Coolum and Pelican Waters, have recorded more moderate growth, but nevertheless have achieved price uplift in both the past 12 months and the most recent quarter – and a time when the big cities are feeling the negative impacts of Covid-19.

Keep that in mind the next time you hear one of our chattering economists telling us that “Australian property prices” are falling.

The Sunshine Coast is a standout example among many thriving regional markets.

 

 

 

This article is republished from www.propertyobserver.com.au under a Creative Commons license. Read the original article.

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Brisbane

‘Broken’ housing system pushes gentrification from city to suburbs

'Broken' housing system pushes gentrification from city to suburbs (1)

Gentrification has moved from the CBD to the suburbs of Australia’s three largest cities, in a trend researchers say shows the country’s housing system is “broken”.

A University of Queensland team mapped urban renewal and population demographics from 2006 to 2016 to see how the process had spread through Brisbane, Sydney and Melbourne.

Broadly, gentrification is the process of wealthier people moving into previously poorer areas, pushing out people who already live there as the price of rent, housing and other cost-of-living measures rises.

UQ urban planning expert Dr Dorina Pojani, one of the authors of the research, said the data showed gentrification stabilised in the CBDs some years ago, with suburbs as far as 15 kilometres from the city centre now going through the process.

“This was quite surprising to us, because the conventional wisdom is that you get high levels of gentrification in the centre of cities and less the further out you go,” Dr Pojani said.

“Instead we found the inner cities are actually pretty stable. They’ve seen a little bit of change but not nearly enough to call it gentrification.”

'Broken' housing system pushes gentrification from city to suburbs (3)

In particular a ring of suburbs from about five kilometres to 15 kilometres outside the CBD seemed to be either fully gentrified or rapidly gentrifying.

Dr Pojani said the phenomenon was relatively uniform across all three cities and showed what she believed to be the result of Australia’s focus on housing as investment and not necessity.

“The fact that there is any gentrification is an indication of a broken housing system,” she said.

“We need to fix the housing system so this phenomenon is removed from geography and urban planning.

'Broken' housing system pushes gentrification from city to suburbs (2)

“We need to instil in our policy makers the concept that a house is a place for living. It’s not a place to store or showcase wealth.”

She said viewed through that lens, resistance to gentrification in the inner ring of the three major capitals suggested more of a drive to preserve the “character” of suburbs for wealthier residents, rather than a concern for poorer residents.

“Some of it is pure NIMBYism, people who don’t want new development no matter what, they want to keep their property prices high and one of the ways to do that is keep supply low,” Dr Pojani said.

“Gentrification has moved out from the CBDs steadily, so there might be people who want to live closer in but they just can’t afford it.”

She and the other researchers suggested stronger planning approvals across the country, rather than trying to “patch” gentrifying pockets on an ad hoc basis.

In Brisbane, suburbs such as Fairfield, Moorooka, and Sunnybank, which have had historically high immigrant populations, are now seeing more affluent groups move in, while Wooloongabba is seeing rapid change due to its proximity to the CBD.

While Brisbane has an almost perfect ring of suburbs rapidly gentrifying, Sydney’s gentrifying suburbs are mostly in a large southern strip, the research found, while the northern suburb of Ryde had been the target of infill development policies.

Melbourne has two main gentrification clusters located five-to-15 kilometres to the north and west of the CBD, typified by suburbs such as Footscray and Sunshine. Much like in Brisbane, the historically migrant populations of those areas are being replaced by more affluent residents.

The researchers used common metrics for measuring gentrification, including increasing household incomes, educational attainment, home ownership and white collar occupations as well as decreasing age and growing population density.

This data was sourced from the Australian Census as well as local council data and Google Maps.

The research has been published in the journal Australian Planner.

 

 

 

 

This article is republished from www.brisbanetimes.com.au under a Creative Commons license. Read the original article.

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Brisbane

Property market update: Brisbane, June 2020

Property market update Brisbane, June 2020

The Queensland property market has been dubbed “better than expected” as it continues to remain resilient amid the effects of the COVID-19 outbreak. How will Brisbane real estate fare in the remaining half of 2020?

During the first three months of the year, the Real Estate Institute of Queensland found that the Queensland property market has consistently shown signs of growth and resilience, particularly across the regions, which ultimately led the way for growth in the Sunshine State.

Understandably, the state offered a mixed bag of results throughout the past quarters as the pandemic affected the property market, but every region in Queensland has performed better than expected to date and continue to do so, according to REIQ CEO Antonia Mercorella.

“This despite major banks, research firms and media naysayers collectively predicting ‘worse case’ property price declines from the onset of COVID-19 – forecasting falls from anywhere between 20-40 per cent,” she said.

Ultimately, for Ms Mercorella, 2020 looks promising for the Brisbane property market.

Brisbane house prices increased by 0.5 per cent in January 2020, followed by record-high property values in February as values increased by 0.6 per cent.

March 2020 saw the initial impacts of coronavirus start to trickle through to house prices, but Brisbane once again saw dwelling prices rise by 0.6 per cent to a monthly median of $506,553.

“It’s pleasing to see that the Brisbane property market continues to show underlying strength,” Ms Mercorella highlighted.

“Understandably, the COVID-19 pandemic is still creating uncertainty, but as we continue to navigate through to the other side, Brisbane is likely to be [one] of the best-performing property markets over the next few years – particularly in light of its stability through trading restrictions and lockdowns as real estate continued to transact on the back of the federal government’s economic reforms.”

Property values

Falls in national house prices accelerated over the month of June as the effect of the COVID-19 outbreak continues to be felt across the property market, with the September cliff still looming.

Following 11 months of gains, dwelling values have been reduced by more than a per cent following 0.4 per cent in May before falling a further 0.7 per cent in June, the latest CoreLogic Hedonic Home Value Index showed.

Melbourne and Perth had the biggest reduction in house prices, falling by 1.1 per cent in June, followed by a 0.8 per cent decrease in Sydney, a 0.4 per cent fall in Brisbane and a drop of 0.2 per cent in Adelaide.

Meanwhile, prices in Hobart and Darwin grew by 0.3 per cent while the nation’s capital Canberra also increased slightly by 0.1 per cent, but this was not enough to move property into positive territory as nationally it fell by 1.3 percent over the past two months, according to CoreLogic’s head of research Tim Lawless.

The research also revealed that more expensive properties are seeing the biggest swings during the COVID-19 market correction.

“The past three months [have] seen this trend playing out, with upper quartile values down 1.7 per cent across the combined capital city index over the past three months, while lower quartile values have fallen by only 0.3 per cent,” Mr Lawless said.

He noted, however, “Importantly, the upper quartile also recorded the most significant run-up in values throughout the second half of last year.”

Despite the economic risks and the market reducing, Mr Lawless said that there are some green shoots for property investors, particularly in terms of supply and demand.

“While new listings are ramping up, the total listing count has continued to trend lower, indicating a strong rate of absorption,” he said.

Auctions are also showing signs of recovery since late May, as the ban on on-site auctions was lifted, according to him.

Supply and demand

CoreLogic’s Auction Market Preview for the week concluding 28 June saw 1,363 capital city auctions. This is up on the 1,251 auctions last week and on the 1,295 auctions held over the same week last year.

Sydney saw the highest auction volumes, with 617 auctions, followed by Melbourne with 567, Brisbane with 85, Adelaide with 45, Canberra with 31, Perth with 17 and Tasmania with one.

In terms of the previous week’s results, CoreLogic recorded final auction clearance rate of 59.6 per cent across 1,251 capital city homes, “which was a relatively steady week-on-week result after the week prior returned a final clearance rate of 59.3 per cent across a lower 1,181 auctions”.

“Both auction volumes and the clearance rate were higher over the same week last year, with 1,484 capital city homes taken to auction returning a 60.5 per cent success rate,” CoreLogic said.

Across Queensland, freehold homes have seen growing demand, prompting the rollout of a new project that highlights ownership that “has no limit in time for the landowner and its beneficiaries.”

Southern Gold Coast and Tweed Coast developer Sherpa Property Group has taken on the new Freedom Beach Homes Rainbow Bay projects, totalling $30 million. The project includes 16 “beautifully appointed, freestanding, individually titled designer homes just over 100 metres from the beach”, with prices starting at $1.4 million.

Sherpa Property Group managing director Christie Leet said the project was designed to provide buyers with something unique for the Gold Coast over recent decades – new freestanding homes close to the beach.

“There is a huge oversupply of apartments on the Gold Coast, and we think people are ready for something a bit different,” he said.

Commenting further, Mr Leet said Rainbow Bay was one of the most undersupplied house markets on the coast and had the second-lowest percentage of houses compared with units in all 82 suburbs on the Gold Coast.

Buyers of the Rainbow Bay projects can get a new home on their own land for roughly the same cost per square metre as an apartment, which has huge ongoing body corporate expenses.

According to him, body corporate living is not for everyone, so they want to make sure that people will have the freedom to choose how they live as opposed to being forced into apartment living for no other reason than lack of choice.

Looking ahead, Mr Leet expects the project to attract buyers predominantly based in the local, Brisbane and southern capitals.

“We have already sold a few to locals, and we would expect some Brisbane buyers to snap up weekenders… With the airport just a few minutes’ drive away, we would expect some interest from Sydney and Melbourne as well,” he said.

2020 outlook

Despite uncertainties, experts remind investors that the Australian property market is extraordinarily resilient.

According to Binnari Property’s managing director David Hancock, when Australia experienced similar economic and political shocks to the system such as the GFC, Y2K, September 11 and the banking royal commission, the Sydney, Melbourne and Brisbane markets experienced only small dips and recovered relatively quickly.

In fact, commentators who were predicting severe 20-30 per cent drops in the property market this year are now largely walking back on their forecasts.

AMP Capital chief economist Shane Oliver, who was forecasting falls of 20 per cent, has now revised that to falls of 5-10 per cent.

“During times of uncertainty, a drop in buyers is typically matched with a decrease in supply, which allows property values to hold firm. That means that any drop in prices is likely to be minor and short-lived. In any event, property transactions will continue as people buy their first home, upsize, downsize or look for ways to invest outside of the sharemarket,” Mr Hancock said.

Further, as Australia is faring much better than many countries when it comes to managing the COVID-19 pandemic and with even the most dire economic forecasts predicting a recovery as soon as next year, the country is expected to be an attractive and stable economy in which to invest and a secure and safe place to live.

This will lead to an influx of migrants and foreign investors from all over the world, including the UK, US, South Africa and Hong Kong.

According to Mr Hancock: “It is unlikely that the Australian property market will sustain any long-term falls due to a combination of migration, foreign investment and government intervention.”

“Many markets across Australia also have low supply with demand likely to continue to grow.”

Hotspots

KDL Property Group recently launched Hampton Pallara, a $20.4 million project at Pallara in Brisbane’s south-west, which will feature 61 home sites.

Due to the HomeBuilder stimulus, the response from first home buyers has been huge upon taking the project to the market, according to managing director Kent Leicester.

HomeBuilder will provide eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home where the contract is signed between 4 June 2020 and 31 December 2020. Construction must commence within three months of the contract date.

Since HomeBuilder was announced, KDL Property Group’s residential housing estates in South East Queensland had benefited from a 100 per cent jump in inquiry.

“Despite the economic uncertainty as a result of the COVID-19 pandemic, we believe they have been attracted due to HomeBuilder stimulus, which when added to state government funding gives them a $40,000 head start,” Mr Leicester said.

Ultimately, HomeBuilder was helping build sales for developers in new estates on registered or soon to be registered land, he said.

“Our Hampton Pallara estate will have land registered in September, meaning builders can start construction in October, which is well within the 31 December 2020, timeframe to qualify for HomeBuilder,” he said.

All 61 blocks in the Hampton Pallara estate will be levelled and range in size from 400 square metres to 541 square metres, many with frontages of up to 17 metres.

KDL has house and land packages available in Hampton Pallara as well as a select number of dwellings under construction that will be sold as finished and completed homes. Land is priced from $315,000.

“Pallara is a thriving community which has been named as one of the most family-friendly suburbs in Brisbane, with almost 25 per cent of residents aged 14 and under,” Mr Leicester concluded.

For investors chasing capital growth, the best performer for annual median house price growth for a second consecutive quarter was Mackay, with a rise of 6.2 per cent to $360,000.

Mackay’s housing market has been in recovery for over five years, with its median house price recuperating from significant falls. However, it continues to inch closer to its top median price of $390,000 recorded in December 2014 (-7.7 per cent).

“In 2019, Mackay experienced a very positive year of growth, not only in relation to property but for the local economy as well,” Ms Mercorella said.

“A dynamic resources sector, coupled with large infrastructure projects, saw a boost in employment opportunities and population growth throughout the year. That momentum gained over the last year or two has certainly continued into the first months of 2020 and is a great result for Mackay.”

REIQ also noted the Sunshine Coast property market continued to remain one of the prime spots in Australia for investment.

“Noosa has clearly seen the biggest market gains in the greater region when you consider it ushered in a record median house price of $800,000 on the back of five years’ growth of 44.1 per cent, making it the most expensive housing market in Queensland,” Ms Mercorella noted.

“And it should come as no surprise that Noosa also had the most expensive units in the state as well, which climbed 8.7 per cent to a median price of $625,000 over the last 12 months.”

 

 

 

 

This article is republished from www.smartpropertyinvestment.com.au under a Creative Commons license. Read the original article.

 

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