MORETON BAY has emerged as one of the 10 best places in the country to invest in property, as some of the state’s forgotten cities undergo a regional revival.
Two Queensland regions have made the latest National Top Ten Best Buys list by hotspotting.com.au — Moreton Bay and Townsville.
Suburbs in the Moreton Bay region such as Banksia Beach, Bellmere, Deception Bay, Burpengary and Sandstone Point all saw a steady rise in sales in the first quarter of this year.
Hotspotting founder Terry Ryder said the fact there were so many markets moving in different directions and at various speeds was an advantage for investors.
“Sydney and Melbourne have been rising, while Perth and Darwin have been falling, and others cities like Brisbane and Adelaide have been marking time, with only very minor growth.”
Mr Ryder said that while only the outer ring areas of Sydney and Melbourne were still firing, Hobart was performing strongly, Canberra was rising steadily and Perth was recovering.
“We also expect better performance from Adelaide and Brisbane in the next 12 to 18 months,” he said.
The report identifies areas such as Newcastle, Geelong and the Sunshine Coast as having strong local markets, while other regional centres like Ballarat and Townsville are starting notable growth phases.
“National factors like access to finance and the level of interest rates are common across the country, but the core factors that differentiate one market from another are events in the local economy,” Mr Ryder said.
“These include population growth, business expansion and spending on infrastructure, which generate economic activity and jobs creation. Out of that comes local demand for real estate.”
THE TOP 10 BEST BUYS
1. City of Marion, SA
2. Joondalup Precinct, WA
3. Moreton Bay Region, QLD
4. Belconnen District, ACT
5. Hunter Valley, NSW
6. Townsville, QLD
7. City of Stirling, WA
8. Ballarat, VIC
9. Queanbeyan-Palerang Region, NSW
10. City of Onkaparinga, SA
Logan City Builds on ‘Family Magnet’ Study Findings
Logan could grow by an additional 56,000 dwellings in the next 15 years, with more than $18 billion in government-funded infrastructure projects planned for the city.
The City of Logan has launched its Housing Study, the first step in a three-stage strategy for the south-east Queensland district, located between Brisbane and the Gold Coast.
A number of factors are driving residential development potential, including declared priority development areas at Yarrabilla—a 2,200-hectare site—and a 7,188-hectare Greater Flagstone site, part of which Peet Limited was given approval to develop last year.
Meanwhile, in the surrounding area, Golden Gate Property has kicked off a $130 million residential project; CFMG Capital has acquired a large development site and a $460 million Logan Hospital revamp is also on the cards.
The entire Logan City Council was sacked last year over fraud and corruption allegations.
The new housing study provides the new council with options for higher-density development around transport corridors.
Since 2010, annual residential dwelling approvals have increased by 77 per cent, nearing 4000.
The City of Logan is now home to more than 334,358 residents with a growth rate of 1.9 per cent; by 2041 as many as 586,000 people are expected to live in the city.
Potential for residential development in Logan by 2036
^ Source: City of Logan Housing Study 2020
The study found that affordable choices for housing and high availability have attracted families to the area from other parts of Queensland and as far afield as New Zealand.
Other findings include the fact that nearly a quarter of residents—23 per cent—are 14 years or younger, with a further 12 per cent of the population in the 15 to 24 age bracket, 63 per cent of whom are still living at home.
The median weekly rent for a three-bedroom house is $350 and the majority of families live in stand-alone homes with double garages.
City of Logan mayor Darren Power said the results of the study allow council to set a strategic vision that meets the expectations of the community as they look towards their 2025 planning scheme.
“Families are flocking to our booming new residential developments, our established suburbs are being re-energised and we have also seen growth in the traditional Logan rural-residential lifestyle,” Power said.
“The contents of this study will now help shape our housing strategy to establish best-practice policy options for future housing and residential development across the city.”
Stage 2 of the housing strategy will involve detailed investigations on planning issues including managing development in established areas, examining lot sizes and dwelling areas as well as identifying locations for new residential growth.
This article is republished from theurbandeveloper.com under a Creative Commons license. Read the original article.
Sunland to wind down its property projects over next three years
The luxury Queensland property developer, Sunland Group, has announced plans to wind down its business operations.
It will take place over the next three to five years following the completion of its current projects. The objective of the strategy is to return to Sunland Group’s shareholders current net asset value, where possible, of $2.56 per share by way of progressive dividend and capital payments.
It reflects a premium to the 30 day volume weighted average price of $1.33 per share.
The board described its share trading price as lacklustre.
The share price reached a low of $0.55 in July 2011 and a high of $2.00 in March 2015.
The ASX listed company announced to shareholders it would repay it liabilities before the company goes private and potentially ceases operations.
The company is looking to offer shareholders a fully franked dividend payment, with $81 million credit balance available at the end of last financial year.
Sunland has been operating below its net tangible asset value for 11 years after coming through the Global Financial Crisis.
It currently sits at an estimated $2.56 per share.
It created Gold Coast landmarks such as Q1 and the Palazzo Versace.
Sales activity for the recent financial year totalled 357 lots for a value of $236.9 million (FY19: 237 sales for value of $214.6 million).
Its contracted presales for projects released across the development portfolio as at 30 June 2020 totalled 260 lots with a combined value of $296.0 million (FY19: 177 lots for a value of $192.4 million).
The group generated revenue from property sales of $159.8 million (2019: $277.6 million) during the financial year period, generated from settlements of 236 lots (2019: 382).
Following the Tuesday 9.30am announcement, the share price rose to $2 and closed the day at $1.95.
The strategic plan was devised with input from Morgans.
Approximately 70 percent of the group’s inventory value is currently under development and programmed to be completed over the course of financial years ending 30 June 2021, 2022 and 2023.
Sunland currently anticipates there will be a limited number of further projects which will commence development including Lanes Retail and Lanes Residences (West Village), which are both at Mermaid Waters, Queensland and the site at 154 Marine Parade, Coolangatta, Queensland.
“The board does not intend to reinvest surplus cash in replenishing the development portfolio of Sunland Group
“This means various roles associated with certain business segments of Sunland Group may become redundant, in which case the group will be required to pay appropriate entitlements to employees.”
Its balance sheet capacity as at 30 June 2020 was $13.1 million in cash and $139.9 million in undrawn working capital.
Its directors include Ron Eames, Christopher Freeman, Rebecca Frizelle and Vahid Saberi.
This article is republished from propertyobserver.com under a Creative Commons license. Read the original article
The retreat of property investors: which State has been most impacted?
Property investor activity in the Australian housing market has been falling since early 2015, after macro-prudential policies were implemented in Australian mortgage lending. Apart from a brief ‘bounce’ in 2016, investor participation has been consistently trending lower. The latest ABS housing finance data shows the portion of housing finance for the purchase of property lent to investors fell to a fresh record low of 23.5% in August. This is significantly lower than the decade average of 36.1%.
The decline of the property investor has been brought about by multiple factors. These include:
- temporary policies implemented between 2014 and 2019, which limited lending products favoured by investors;
- mortgage rate premiums for investor loans;
- less appetite for high LVR and interest only lending from the banking sector;
- less certainty around prospects for capital gains;
- high levels of housing construction which have softened rental returns; and,
- the recent global pandemic, which has created a particular negative demand shock to the rental market, thereby further inhibiting returns.
But can we expect investor activity to keep declining? When comparing investor activity at the state level with CoreLogic rental data, there are clear differences between markets that may appeal to investors, versus those where the retreat could last longer.
NSW. For the past decade, investor participation in mortgage activity averaged 41.9% across NSW and moved through a record high in late 2014 when investors comprised 55.6% of mortgage demand. By August 2020, investors as a proportion of housing finance had fallen 28.2 percentage points from that peak, to 27.4%.
Across NSW, returns to investors vary greatly by submarket in both the growth of the value of property assets and rental return. Broadly however, dwelling values across NSW sit 3.5% below the record high reached in July 2017. Gross rental yields across the state were 3.23% in September, which is just 2 basis points off the record low from October 2017.
Rental market performance has been highly varied through the COVID-19 period. As one of Australia’s two major international cities, the closure of international borders has created significant shock to the rental market, where new migrants to Australia typically rent. Outer suburban and regional markets have seen upward pressure on rents, but the wind-back of stimulus to households affected by COVID, and cheaper rents closer to the city, may erode this growth over the coming months. Ultimately, the biggest boost to investor returns, and an uptick in investor activity, will be dependent on international travel resuming to Australia.
VIC. Victoria, namely Melbourne, had the highest exposure to overseas migration as a source of new housing demand prior to COVID-19, which has significantly impacted rental values, particularly those in inner city markets. Across Greater Melbourne, unit rents have declined 5.5%, but in submarkets such as Melbourne City, unit rents have seen much more acute declines of -16.2% since March. Gross rental yields across the state were 3.4% in September, down from 3.7% one year ago.
With dwelling values also down 5.5% across Melbourne, and half a per cent across regional Victoria since the pandemic, investor interest is likely to remain subdued until international travel resumes. Investors who can afford low or no rental income may take advantage of lower property values towards the market trough.
QLD. Investor participation in the QLD dwelling market shifted significantly lower over 2017, and again with the onset of the COVID-19 pandemic. Inner Brisbane in particular has seen high levels of unit development, which has placed downward pressure on rents over time. Since the onset of Stage 2 pandemic restrictions in March, Inner Brisbane unit rents have declined a further -4.8%.
Despite a long period of high supply and subdued investor participation, gross rental yields across the state are far higher than NSW and VIC, largely due to relatively low dwelling values. A typical dwelling value at September was around $505,000 across Brisbane, and $388,000 across regional QLD. Gross rental yields across the state were 4.8% in September, down from 5.0% a year ago.
SA. South Australian rental markets have been tightening for the past few years, with positive growth in the Adelaide rental market since 2017. At September, Adelaide had the second highest annual rent value growth of the city markets at 2.6% over the year, putting rental income growth well above inflation.
Despite the stronger fundamentals, investor participation as a share of mortgage activity has continued to decline. The portion of investor finance was 20.4% at August, down from the decade average of 31.7%. However, the rate of decline in investment activity has not been as steep as in other parts of the country. Between record low mortgage rates, low dwelling prices, volatility and a tightening rental market, South Australia may see an increase in investor participation over the coming quarters.
WA. Western Australia has actually seen a turn in investor participation, and is bucking the general trend of subdued investor activity. Since bottoming out in April at 14.5%, the share of mortgage finance for the purchase of property to investors has climbed to 17.0%. This comes after a long period of correction in the Perth property market, which saw momentum gradually gathering in prices and rents from early 2020. Rental values across Perth grew significantly higher than the national average, at 4.8% in the year to September, which will likely see investor participation continue to rise. Typical gross rent yields across WA were 4.7% at September, up from 4.6% one year ago.
TAS. For years, Tasmania has been a source of strong capital and rental growth. Between annualised growth and rental return, total annualised return was 12.3% across the state for the past five years. However, COVID-19 has created a severe disruption to the rental market. Unit rent values in particular have declined -5.6%, which is the steepest fall of the capital city markets. The loosening of rental markets since COVID-19, which has likely had something to do with Airbnb properties converted to the long term market, has provided some much-needed relief for renters. With a steep retreat in investor participation since March, first home buyers may also face less competition. However, the return of international and inter-state travel would likely see rental markets tighten once more, as short-term accommodation owners revert their properties in preparation for increased tourism.
ACT. The portion of investment across the ACT does not appear to be as disrupted by COVID-19 as other states and territories, but has still trended down over time. Investor share of mortgage activity has fallen to 24.6%, from a decade average of 32.6%. Gross rental yields have compressed across the region, from 4.7% in September 2019 to 4.5% at September 2020. This is likely the result of dwelling value increases since the onset of COVID, and may weaken investor interest in the coming months.
NT. Across Darwin, rental yields are the highest of any capital city market at 5.9%. However, this is has largely been a function of a long property price correction, where both rent values and property values have declined over time. The start of 2020 has signaled a recovery in values, with Darwin dwellings up 2.7% from March through to September. Although investor participation was the lowest of the states and territories at 12.6%, the sheer cyclical correction of Darwin values sees the typical dwelling value at just under $400,000, and may see a gradual recovery in investor interest.
The patterns in respective rental markets suggest that from an affordability and yield perspective, smaller capital city markets may see increasing popularity from investors in the coming months. For the traditional investor markets such as inner city Sydney and Melbourne, COVID-19 has triggered a further retreat of investors that is likely to last until overseas migration and travel resumes.
This article is republished from corelogic.com under a Creative Commons license. Read the original article.
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