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Developers hold out for next property cycle

Higland Park Property Management, Property Management Highland Park

Recently approved apartment developments worth approx $1 billion will be postponed.

An impression of Tim Gurner's apartment development at 156-162 Alfred Street, Brisbane, which will now be developed in the next property cycle.

An impression of Tim Gurner’s apartment development at 156-162 Alfred Street, Brisbane, which will now be developed in the next property cycle.

Owners appear to be  waiting for the next property cycle or looking to sell out because of concerns about oversupply, financing, construction costs and government regulation.

The number of apartments approved for construction across the country in April rose to 10,490 – the highest monthly figure since last October’s 10,838. Groups such as BIS Shrapnel expect there will be more than 45,000 new apartments completed this year, rising to over 56,000 next year.

Wealthy Melbourne developer Tim Gurner, who has just received approval for a $140 million apartment project in Brisbane’s Fortitude Valley, says he will wait for the next cycle to develop.

In Melbourne developers have been flipping their apartment sites, with BRW rich lister Paul Little selling an approved 940-apartment project in Melbourne’s Fishermans Bend for $60 million to a Shanghai developer.

“There is no doubt that the Brisbane market has slowed in recent months. Developer funding challenges and increasing construction costs have made the environment increasingly difficult to get new projects off the ground in Brisbane, but we are committed to Fortitude Valley and excited to launch this project in the next market cycle,” Mr Gurner said.

Financing secure

Mr Gurner said that his financing was secure but he had known of several other projects where financing had been knocked back.

“It is the escalation of construction prices in Brisbane in the past 12-18 months that will pose more of an issue,” Mr Gurner said. “Projects that weren’t fully pre-sold last year are now not viable given the recent spike in construction costs, which is incredibly shortsighted as this will only hurt builders and trades in the following 12-36 months when there won’t be any new projects to commence construction,” he said.

His development is one of a number of projects that have received approval but will be put on ice in Brisbane.

Brisbane residential property developer ARIA was given approval for a new 82-storey residential tower at 171 Edward Street with 652 apartments which would become one of Brisbane’s tallest buildings worth hundreds of millions of dollars.

However, there is no plan to start construction or marketing. ARIA managing director Tim Forrester declined to comment on the approval.

Elsewhere, Urban Construct’s Woolloongabba development in Brisbane won approval for about 200 apartments but that property is now being offered for sale.

A similar situation is developing in Sydney and Melbourne.

Hong Kong-based Maville Group decided to sell rather than develop a property in Sydney’s CBD, for which it obtained a permit for 24-levels of hotel rooms and apartments.

Maville paid just under $48 million for the property at 333 Kent Street four years ago and is now seeking $90-$100 million.

Selling agent Vince Kernaghan of Colliers International said selling out had become a more attractive option.

“What I am noticing is that a lot of owners, who bought very well in the past, are deciding to take an early profit rather than spend money on development and construction.”

Foreign buyer taxes

While the owners did not give a reason for selling, Mr Kernaghan said the new foreign buyer taxes announced in NSW were a factor in some developers choosing to sell.

 “In some NSW metro areas, the [apartment] market has reached its peak. It’s pretty patchy. There are concerns with some markets that are over-supplied. However, the Sydney CBD is still relatively under-supplied and it’s hard to get sites,” he said.

Ami Simon of Gresham Property, which launched a $400 million institutional-backed fund last year to provide debt to property developers, said several developers had decided to delay their projects despite winning approval.

“The availability of development finance for developers has certainly tightened and a lot of the approvals and potential supply will possibly not get developed in this cycle,” Mr Simon said.

In Melbourne last year, BRW rich listers Ashley Williams and Ron Walker, who own developer Evolve, sold a $350 million infill townhouse and apartment project in Melbourne’s Williamstown to listed developer AV Jennings for between $90 million and $100 million.

“The apartment market is pretty heated at the moment with a lot of supply coming on board,” Mr Williams said at the time. “We’ll focus on smaller, city fringe apartment developments.”

A key trend emerging in Melbourne is a preference to develop in the middle suburbs, where buyers are mainly local.

Knight Frank is tracking $175 million of site sales in the inner suburbs and a move by offshore developers into the house and land market, including the likes of Chinese group Dahua, which partnered with local developer Dacland on a $60 million acquisition in Melbourne’s west.

Original article published at by Matthew Cranston & Larry Schlesinger, 23/6/16



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Construction commences on the final stage of The Peninsula Hope Island master-planned community

Peninsula Collection

Developer ASF Group has already sold around 80 percent of the apartments and all of the terrace homes on offer.

Construction has begun at Peninsula Collection and Peninsula Terraces, the final release of apartments and terrace homes in the gated community development, The Peninsula Hope Island.

The Brisbane-based builder, Constructions Group, cleared the land for development over Christmas, with earthworks and piling expected later this month. The previous two stages of the exclusive master plan are already completed.

Peninsula Collection

Peninsula Collection 52 Harbourview Drive, Hope Island QLD 4212 

The rest of the in demand mini-masterplan is already completed. Developer ASF Group has already sold around 80 percent of the apartments and all of the terrace homes on offer.

ASF Group Marketing Director Daniel Fang said there was an even split of buyers, with around half local owner-occupiers looking to downsize, and the other half interstate migrants and investors,

“We saw a lot of demand from buyers in Victoria and New South Wales, in particular from the dense inner-city postcodes of Sydney and Melbourne” Fang said.

“They were drawn to the recreational lifestyle of the northern Gold Coast, with their choice to move hastened by lockdowns in the southern states. Other interstate buyers were also attracted by the strong potential for capital gains due to the 2032 Summer Olympics, set to be hosted in Brisbane.”

On the interest from locals, Fang said the majority sought to downsize to Peninsula Collection and Peninsula Terraces which feature greater accessibility and internal buttons linked to gated community security.

“Buyers are cashing in on the Gold Coast property boom whilst placing a greater emphasis on lifestyle and recreation in their search for a new home.”

ASF has already sold out Peninsula Homes, a collection of 17 townhouses, Peninsula Residences, comprising 40 apartments, and Peninsula Terraces, just 22 terraces, which sit along side the Peninsula Collection.

Peninsula Collection is a rare opportunity for buyers to secure a home in the Hope Island Resort gated community
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Sherpa Property set for Mermaid Beach apartment development

Located on Albatross Avenue in Mermaid Beach, Perspective Albatross will be a bespoke low-rise beachside apartment building comprising six three-bedroom residences and two two-level penthouses.

Local Gold Coast developers, Sherpa Property Group, have unveiled plans for their latest development, Perspective Albatross, as demand for property on the coastline continues to be in high demand.

Located on Albatross Avenue in Mermaid Beach, Perspective Albatross will be a bespoke low-rise beachside apartment building comprising six three-bedroom residences and two two-level penthouses, both of which feature direct access to their own private rooftop areas.

The project is earmarked for a prime 810 sqm at 72-74 Albatross Avenue, Mermaid Beach, and is Sherpa Property Group’s first in the area.

The three-bedroom residences will feature spacious floor plans that are further enhanced with their own private balconies, right in the heart of Mermaid Beach.

Mermaid Beach

Perspective Albatross residences range from 190 sqm to 310 sqm and are priced from $2.1 million.

Plans for the residences come hot on the heels of the sell-out of Sherpa’s highly anticipated Perspective Nexus development in Palm Beach and the recent unveiling of its newly completed luxury residence in Bilinga, known as Perspective 202.

Sherpa’s CEO, Christie Leet said the site had been selected due to its excellent beach access and proximity to the local shopping precinct, along with the tranquil and enviable lifestyle that Mermaid Beach exudes.

“Mermaid Beach is one of the Gold Coast’s most attractive communities, offering a unique lifestyle that makes it one of the most tightly held markets on the Coast,” Leet said.

The Perspective Albatross beachside residences are expected to appeal to the local owner-occupier market and are located just a stones’ throw away from Mermaid and Nobby beaches.

“To us, Mermaid Beach has always been more than just a location, it’s the lifestyle that draws you in and makes you feel like you never want to leave.”

Designed by Cottee Parker, the residences have been influenced by the coastal surroundings, with a light and bright colour palette being implemented throughout, integrating touches of white and gold accents for a minimalist and contemporary design.

Also expected to launch in 2022 is Perspective Broadwater, just six apartments in Biggera Waters, and Perspective Nexus, Palm Beach, which is a 34 three-bedroom apartment development, across 14 levels.


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Plans Filed for Third Surfers Paradise Skyscraper

Surfers Paradise 4

Plans for a 38-storey residential tower in Surfers Paradise have been lodged with the Gold Coast City Council, the third DA for the area filed in recent weeks.

The latest skyscraper plans were lodged by AMFS 2, led by Ayrton Mansi of the Mansi Group and Freddie Sheene, son of the late world motorbike champion Barry Sheene, for a site at 17-19 First Avenue, Surfers Paradise.

Surfers Paradise is running hot, even by its standards—the suburb hit $1.2 billion in apartment sales in the 12 months to November.

The Gold Coast’s strong apartment market during the pandemic has created a spike in projects as units increased 26 per cent in value last year.

The plans for Nineteen on First Avenue were designed by Plus Architecture and included 35 full-floor apartments with three bedrooms and north-east facing balconies.

There was also a swimming pool, work from home suites, entertaining spaces and a gym on the lower levels as well as three levels of basement car parking.

It would replace two single-storey homes on the combined 810sq m site at the corner of First Avenue and Surf Parade.

Surfers Paradise

▲ Plus Architecture used inspiration from the “dynamic theatre of the ocean” to design Nineteen First Avenue in Surfers Paradise. 

The area was characterised by primarily high-rise residential developments, interspersed with older low- to high-rise developments, according to Ozone Planning Group.

“This existing character is consistent with the City Plan’s intent for Surfers Paradise to develop as a compact, high-rise neighbourhood,” the application said.

“The proposed built form incorporates elements of coastal character consistent with the existing built form within the locale as conveyed through the material and colours palette for the development.

“Being a high-end residential development, the finishes proposed are of an equivalent standard.”

In March, 2021 refinements were made to the Gold Coast city plan with mayor Tom Tate saying the city needs to be built “upwards, not outwards” in response to growing demand for new homes.

As interstate migration is expected to continue through 2022 the market fundamentals of the city are holding strong and there are no signs of an imminent bust, according to experts.


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