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Landlords hit by rising vacancies, falling prices

Landlords hit by rising vacancies, falling prices

Property prices don’t necessarily always fall during recessions but this time you would have to think that prices will tumble significantly, given the speed and depth of the COVID-19 economic shock.

Simon Pressley, managing director of Propertyology, says the problems in the property markets will be temporary.

Even those sober economists at the big banks are forecasting price falls of up to 32 per cent over the next couple of years – though the banks’ “base” cases, or most likely scenarios, are for price declines in the order of 10 per cent.

A lot of homeowners are ahead on their mortgage repayments and have a nice buffer in case they have to drop their payments to the required minimum, and history shows most people can hold on without becoming forced sellers.

That’s also likely to be the case this time, given the level of government support through JobKeeper and JobSeeker and lenders’ granting of repayment deferrals to their home loan customers affected by the financial fallout of the pandemic.

However, the situation is trickier for property investor landlords.

Rental vacancy rates in Sydney’s CBD hit more than 13.8 per cent during April – the highest ever recorded by property researcher SQM Research.

Vacancies at Melbourne’s Southbank are similarly at 13 per cent, and in the CBD it is 7.6 per cent.

So far, the vacancy rates in the suburbs of our two largest cities have risen only slightly, with the elevated rates contained to inner-city areas.

Still, the relatively low suburban vacancy rates may be understating the true weakness in rental market, given many tenants have negotiated rent discounts or deferrals with their landlords.

Robert Mellor, executive chairman of economic and property forecaster BIS Oxford Economics, describes the high vacancy rates of inner-city areas as “alarming”.

It is the number of people out of work, fewer international students and loss of immigration that’s driving the surge, particularly in areas with many higher-density developments.

Overseas travel bans have also led to demand for short-term accommodation through sites such as Airbnb drying up, leading property owners to list their housing for long-term leasing. That’s pushing vacancy rates in holiday hotspots higher, though that will change once interstate travel resumes.

Simon Pressley, managing director and head of market research at buyer’s agency Propertyology, says many landlords with investment properties in inner-city areas are finding it tough.

And those who bought investment properties recently risk being in negative equity if prices fall significantly, where they owe more on the property than what it is now worth, he says.

However, Pressley cautions against punching out doom and gloom predictions on a negative trend.

“I’m in the minority, but I’m not seeing double-digit price falls,” he says.

“It is a dreadful thing for some landlords but we are talking about specific pockets. It is not going to be like this forever.”

The coronavirus has at least ensured that interest rates and, therefore, borrowing costs, will stay low for years to come.

Time will tell, but the almost 2 million Australians with at least one investment property will be hoping Pressley’s optimism proves correct.

 

 

 

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

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Brisbane

Brisbane’s Most Sought-After Development Projects

Brisbane’s Most Sought-After Development Projects (1)

Queensland is continuing to draw the attention of international buyers as global unrest from the Covid-19 crisis fuels a spike in inquiry for new property from foreign investors.

Residential property in both Brisbane and the Gold Coast has remained high on the radar of foreign investors—especially those located in Hong Kong—with international searches lifting 22 per cent year-on-year, according to REA Group.

REA Group chief economist Nerida Conisbee said there was strong anecdotal evidence many expats were re-evaluating their circumstances due to the coronavirus, and the low Australian dollar combined with record low interest rates proved an attractive value proposition.

Conisbee said the majority of people searching for property in Queensland were based in New Zealand, the UK, the US and Hong Kong.

High-rise developments in the inner-city suburb of South Brisbane were amongst the most-viewed products online, with Pradella Group’s under-construction Halo Residences project and R&F Property Australia’s $500 million Brisbane 1 apartment tower scoring high attention.

Conisbee noted that beach locations such as Surfers Paradise on the Gold Coast, and Noosa on the Sunshine Coast were the most in-demand among overseas buyers.

Gold Coast coast projects including Sunland Group’s soon-to-be-completed Magnoli Apartments and Spyre Group’s Natura project in Burleigh Heads also featured.

“Brisbane doesn’t see a lot of overseas searches—when people think of Queensland, they think of the beaches,” Conisbee said.

Here are the most-searched development projects by foreign investors across Brisbane and the Gold Coast.

5.

Natura—Spyre Group
Burleigh Heads

Brisbane’s Most Sought-After Development Projects (6)

Brisbane-based Spyre Group’s $77 million, 17-storey Natura project—built over a 1,011sq m site located at 112 The Esplanade, Burleigh Heads—replaces a current mid-level apartment building developed by Mimi Macpherson, the sister of Australian supermodel Elle.

The Bureau Proberts-designed development will comprise 33 apartments with 16 levels of half-floor apartments and one ground floor terrace unit.


4.

Magnoli Apartments—Sunland Group
Palm Beach

Brisbane’s Most Sought-After Development Projects (6)

Sunland’s Magnoli Apartments—which was originally submitted to the Gold Coast Council for approval in late 2016—occupies the site of a former 1.3-hectare caravan park located on the corner of Gold Coast Highway and Nineteenth Avenue.

The Palm Beach proposal comprises a 2,250sq m community park, two 12-storey apartment buildings, and six architectural terrace homes.


3.

Halo Residences—The Pradella Group
South Brisbane

Brisbane’s Most Sought-After Development Projects (6)

Pradella Group’s 123-apartment Halo Residences, located at 33 Manning Street in South Brisbane, sits alongside the iconic 88-metre SkyNeedle—a prominent feature of Brisbane’s World Expo in 1988.

The development features a residents-only rooftop Sky Lounge providing panoramic city skyline views, a private dining room with courtyard terrace, wine bar, and modern wellness centre.


2.

Brisbane 1—R&F Property Australia
South Brisbane

Brisbane’s Most Sought-After Development Projects (3)

Late last year, R&F Property Australia completed its $500 million Brisbane 1 apartment development, spanning an entire block in South Brisbane.

The residential development, built by Hutchinson Builders, transforms the site of a former TAFE college and consists of three separate towers of up to 33 storeys.


1.

Queens Wharf Residences—Destination Brisbane Consortium
Brisbane CBD

Brisbane’s Most Sought-After Development Projects (2)

As part of the $3.6 billion Queen’s Wharf development, 667 apartments will be delivered within a new 64-storey tower dubbed Queen’s Wharf Residences.

On track to open in 2022, Queen’s Wharf will showcase four hotels, 50 restaurants, cafes and bars, an extensive retail precinct, refurbished heritage buildings and a ­publicly-accessible Sky Deck offering CBD and river views.

In addition to Queen’s Wharf Residences, the development has scope for up to two more residential towers, with construction dates yet to be finalised.

 

 

 

This article is republished from theurbandeveloper.com under a Creative Commons license. Read the original article.

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Brisbane

Mirvac Secures Approval for Newstead Tower

Mirvac Secures Approval for Newstead Tower (1)

Mirvac has won approval for another residential building at its $1 billion Newstead masterplan in central Brisbane.

The ASX-listed developer’s application to develop 143-apartments across a 25-storey residential tower was approved last week.

The project, to be built on a 5,400sq m site at 58 Skyring Terrace, follows the developer’s previous completions of 336 apartments across its Pier, Park and Unison projects.

Mirvac is currently undertaking its latest Newstead development, Shore, which will contain 333 apartments spread over two towers as well as offices and retail outlets at 60 Skyring Terrace.

Mirvac head of residential Stuart Penklis said the developer had had been in close contact with the community and council prior to lodging the development application in keeping with the local area’s neighbourhood plan.

“In speaking to the community prior to developing our design, we understand just how important Waterfront Park is to residents of this area,” Penklis said.

“We are excited to be expanding—and improving—this green space as part of the development, with over 50 per cent of our 5,552sq m site dedicated to open space.”

Mirvac Secures Approval for Newstead Tower (2)

Mirvac’s forthcoming Sky Precinct development, approved in just three months, continues the developer’s longstanding presence within the waterfront corner of Newstead where it has been delivering residential schemes for more than a decade.

Stage one, which completed in 2011, saw the development of two premium residential apartment buildings comprising of a total of 99 state-of-the-art apartments.

The masterplan’s second stage, Park, was completed in 2012, featuring 102 apartments in one, two and three-bedroom configurations.

Mirvac’s $200 million twin-tower residential development, Unison, opened in early 2017, featuring 135 apartments as well as nine terrace homes.

Mirvac also has development approval in place for another future stage, the Shore Precinct.

“[This] next stage has been designed as a ‘park within a park’, drawing greenery from neighbouring Waterfront Park up its façade and across lush landscaped balconies,” Penklis said.

Mirvac Secures Approval for Newstead Tower (2)

The developer said it could not disclose pricing for the 143 units in the 25-storey tower that will include one-, two- and three-bedroom apartments, as well as a handful of four-bedroom units.

Work is anticipated to commence on site in the coming months on a new waterfront sales and display suite, on the corner of Cunningham Street and Skyring Terrace, in preparation for the project’s launch.

Brisbane developer Limitless has also received approval for its Newstead project, a mixed-use residential scheme, incorporating the former Federal Boot Factory.

The 10-storey project, located across a 1,821sq m site at 14 Maud Street, features 56 apartments and rooftop deck and pool.

It will also include the retention and adaptive reuse of the Goldsworthy and Perkins Boot Factory heritage building into a flexible-use space such as ground floor retail.

 

 

 

This article is republished from theurbandeveloper.com under a Creative Commons license. Read the original article.

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Brisbane

Crown Group Reboots $460m West End Project

Crown Group Reboots $460m West End Project (1)

Sydney-based developer Crown Group is moving ahead with plans for its controversial $460 million residential development in Brisbane’s West End.

Crown Group originally submitted its application for a FJMT-designed scheme in January 2018, soon after picking up the 1.25-hectare site—the former home of Computershare—at 117 Victoria Street for $35 million.

Crown Group placed the project on hold in mid-2019.

The application, comprising four 12-storey buildings, originally called for 463 dwellings, a mix of one, two and three-bedroom apartments, as well as terraces and four-bedroom penthouses, across a common podium adjacent to the Brisbane river.

It also planned for resort-style facilities include a 25-metre pool, cabana and poolside lounges, barbecue facilities, a gym and 4,200sq m of communal open space.

The project’s approval was granted by council in December 2018 after the developers modified initial plans for the design, subsequently reducing its scale to 455 dwellings.

The proposal was met with strong backlash from locals, who shut down West End’s Vulture Street and Montague Road intersection in March 2019, arguing the approved development didn’t have enough supporting infrastructure.

Crown Group Reboots $460m West End Project (3)

Adjustments made to the project resulted in an amended approval granted in March, however Crown Group said it is now considering a revised development application comprising 450 apartments, with the redesign phase in initial stages.

Crown Group, led by Iwan Sunito, told The Urban Developer it was now planning to provide for larger apartments with a greater project gross floor area in response to market conditions, and plans to take its amended application to council later this year.

Crown Group, which currently has projects on-the-go across Australia, Los Angeles and Jakarta, noted that the project would mark its foray into Brisbane, a residential market it has long been drawn to.

“Brisbane was set for a surge in property activity in early 2020 and since then housing data has shown the city is set to have the strongest recovery in Australia from Covid’s impact,” Crown Group development director Trent McLauchlan said.

“All the indicators show Brisbane is set to return to a state of housing undersupply and it will push apartment prices up.”

Crown Group Reboots $460m West End Project (2)

McLauchlan pointed to a potential strong rebound in 2021 and 2022, once state and international borders reopen.

“When conditions start to normalise, we will see demand as interstate buyers who have been waiting to visit start to reappear and act on the low interest rates and as foreign buyers take advantage of the strong exchange rate,” McLauchlan said.

The developer has opened a new office in West End with the project anticipated to be launched by September 2021 and completion slated for 2024.

Significant projects in the West End area include Japanese developer Sekisui House’s $800 million mixed-use precinct, West Village; the $51 million apartment development “Bohemia” by Turrisi Properties and Pradella’s Light+Co project as part of its broader $1 billion investment in West End.

Chinese developer R&F Property has plans for a seven-building development on an amalgamated 1.6-hectare site in West End, tipped to deliver 1,032 apartments staged over six years.

West End is also on track to see the addition of two new green bridges and a ferry terminal at Victoria Street.

West End State School is also currently undergoing a $25 million expansion to cater for population growth, and the headquarters of the Queensland Ballet, the Thomas Dixon Centre, is undergoing a $35 million transformation being delivered by Hutchinson Builders.

 

 

 

This article is republished from theurbandeveloper.com under a Creative Commons license. Read the original article.

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