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Property market update: Brisbane, July 2020

Property market update Brisbane, July 2020

While most major property markets struggle to stay afloat, Brisbane market is believed to be exhibiting resilience yet again. How will the Queensland capital city market fare in the remaining months of 2020?

Despite the overall median data trend showing slight falls in house values, Brisbane continues to witness a significantly high demand for quality housing, according to property professional Melinda Jennison.

“Over July, some open homes we have attended over the month of July have seen more than 30-40 groups through. This illustrates that buyers are still very active in the Brisbane property market,” she highlighted.

“Advertised properties that are listed for sale in desirable locations are being sold very quickly in Brisbane. Often, the sale is a result of multiple offers being submitted on the property. If listed for sale by auction, they are achieving high prices with multiple registered bidders.”

While Sydney and Melbourne lead the fall in capital city values with as much as a 1.2 per cent decline, Brisbane continues to witness strong prices still being paid for quality properties in many regions around the city, as well as several properties being traded off-market.

Ultimately, the COVID-19 outbreak has not resulted in a measurable fall in property prices across Brisbane, so buyers should not expect a bargain brought about by the pandemic, according to Ms Jennison.

Property values

House prices across Australia have fallen by 2 per cent, while unit prices are down even further at 2.2 per cent over the quarter, according to the latest edition of the Domain House Price Report.

While all major capital cities saw unit prices fall, house prices fell in most of them except Adelaide, Canberra and Hobart.

Brisbane, in particular, saw property values drop by just 1.4 per cent over the quarter – buffering price falls better than Sydney and Melbourne.

Over the month of July, the latest Hedonic Home Value Index data by Corelogic found dwelling values in Brisbane declining by 0.4 per cent.

Median house values for the greater Brisbane region fell by -0.3 per cent over the month, bringing the median house value to $555,284, while unit median values declined by -0.5 per cent, bringing the median unit value to $384,681.

According to Domain, Brisbane is showcasing a “two-speed property market” as Brisbane City, Moreton Bay, Scenic Rim and Somerset house prices all fell over the quarter, while Ipswich and Logan remained stable.

Domain’s Dr Nicola Powell said: “Prior to COVID-19, there was promising growth in prices for Greater Brisbane. Although this has reversed over the quarter, the fall in prices to date has been minimal considering the economic aftermath of border closures and shutdowns.”

“An initial pullback in seller and buyer activity during the lockdown acted to underpin prices, government financial support has kept distressed or urgent sales minimal, and incentives have encouraged buying journeys to begin.

“The outlook for residential property has improved vastly in recent weeks.”

Ultimately, despite value losses across major capital city markets, Domain noted that the impacts “have been minimal” as the expected drastic price falls were buffered by significant government stimulus, mortgage holidays and the continued low-interest rates supporting home values that have also kept distressed and urgent sales low.

Supply and demand

For the week ending 26 July, CoreLogic found that, of the 1,315 reported auctions, 54.1 per cent returned a successful result, which is an improvement from the week prior when a 53.1 per cent final clearance rate was recorded.

In Melbourne, 540 homes were scheduled for auction, but less than 50 per cent of these returned a successful result.

In Sydney, the final auction clearance rate fell across a higher volume of auctions last week as there were 594 homes taken to auction, which returned a final auction clearance rate of 60.6 per cent, lower than the 61.4 per cent over the week prior when 515 auctions took place.

Across the smaller cities, Canberra was the best-performing capital city, with 77.6 per cent of homes selling at auction. However, this was lower than the week prior when an 88.6 per cent final clearance rate was achieved.

Following Canberra’s results are Adelaide (60.7 per cent), Brisbane (43.9 per cent) and Perth (28.6 per cent).

Rental market

Over the quarter, unit rental yields fell by 3.2 per cent (equivalent to $15 per week), marking the biggest drop in more than 15 years as COVID-19 pushed landlords to reduce rates, Domain’s latest research found.

House and unit rental prices fell across most major capitals, with Sydney and Hobart unit rentals hardest hit.

According to Dr Powell: “The rental market has become highly fragmented in recent months. With weaker conditions for units compared to houses, tenants have a better chance of nabbing a cheaper unit.”

“This weakness has been led by significant rent reductions in Sydney and Melbourne inner-city areas due to a surge in advertised rentals from March to June.”

Meanwhile, Brisbane house and unit rents also fell over the quarter, but year-on-year data showed that rents remained flat.

At a city level, the rental market in Brisbane has definitely recovered, according to Ms Jennison.

With over 1,200 REIQ property management member agencies surveyed throughout Queensland, results show that only 6.05 per cent of residential rental tenants qualified as “COVID-19 impacted” under the state government’s COVID-19 Emergency Response Regulation. This represents approximately 3,950 renters from a state total in excess of 577,000 residential tenancies.

However, there are still some at-risk markets around the city, particularly in terms of the imbalance in supply and demand.

While Brisbane real estate has not been impacted like other cities with international border closures, plummeting foreign student numbers, job losses and pay cuts have still made their mark, with Brisbane’s CBD particularly exposed to reduced rental demand.

“The vacancy rate in many locations is trending down and is very tight. The areas where this trend is not happening are in the Brisbane CBD and locations immediately surrounding this and also in areas where there are a lot of higher-density unit developments. In these locations, vacancy is still a big problem. Therefore, these markets remain high-risk,” she said.

2020 outlook

Moving forward, there remains a lot of worry and concern about what might happen to property values across the country when the government’s fiscal response starts to taper in October and repayment holidays expire at the end of March next year.

For one, experts are forecasting a rise in distressed properties coming to the market.

However, they have yet to see whether this would also mean any downward pressure on prices.

“This is where I think the different property markets around Australia will each experience something slightly different,” according to Ms Jennison.

According to the Commonwealth Bank Home Buying Spending Intentions Index, there was a 6 per cent rise in home buying intentions nationally up to the end of June 2020. This index showed the index had returned back close to levels seen in March – after much weaker readings in April and May.

“We are definitely seeing this trend on the ground with the current high volume of buyers in Brisbane. Because of this, I’m sure we could see some moderate increase in new listings come to the market without any significant impact on the supply and demand balance,” she highlighted.

“Remember, property prices will only fall when supply outstrips demand.”

With dwelling approvals now at the lowest level in eight years, the future supply pipeline also looks tight. The most recent Australian Bureau of Statistics data showed a decline of -10.9 per cent in new detached house approvals in Queensland.

Overall, real-time demand remains strong in Brisbane as property buyers are being fuelled by the lowest-ever interest rates, good levels of affordability and strong rental yields compared with many other state capitals.

Amid economic uncertainties, Atelier Wealth’s managing director Aaron Christie-David said that conditions are likely to be more difficult in the short-term, but those with a long-term view will most likely prevail.

“For investors wanting to sell, days on the market have increased as has vendor discounting, which could further impact median prices,” Mr Christie-David highlighted.

“The good news is that while yields have been trending downward, in May rental yields recovered by 3 basis points. There continues to be opportunities for investors, with supply at record lows and demand strong in certain suburbs.

“Areas which will benefit from First Home Buyer incentives and where incomes and jobs have been less impacted by the economic downturn will remain attractive to investors and will withstand any potential deeper price falls from September.”

Home upgraders will also have good opportunities in today’s market, according to him.

“Falling property values will allow for upgraders to access better homes. Steeper falls will lead to better discounts, but will also affect those opting to sell their PPOR. Record low-interest rates are also making purchases much more affordable,” he said.

Meanwhile, first home buyers will have government incentives, record low-interest rates and falling prices providing them opportunities.

Mr Christie-David advised them to focus on saving for their deposit right now so they could take advantage of the dropping property values.

“The higher the deposit, the lower the [loan-to-value] ratio (LVR) which may potentially allow you to avoid lenders mortgage insurance… If rates fall again or remain steady, this can provide good opportunities for first home buyers,” he said.

While there’s no certainty about the future of the property market, Mr Christie-David advised investors to avoid panicking and, instead, watch the market closely.

As September is a potential danger zone, he strongly encouraged undertaking extensive and engaging professionals in order to assess how any investment decision will affect their portfolios in the short, mid and long-term.

For those keen to buy, Propertyology’s head of research Simon Pressley highlighted five major government projects in Queensland that are tipped to lift the housing market:

  • Inland Rail project: A $10 billion 1,700-kilometre rail infrastructure project connecting ports in Melbourne and Brisbane to meet demand for an anticipated 75 percent increase in Australia’s freight over the next decade. The inland route was strategically chosen to more efficiently transport food and general cargo throughout the eastern states and to reduce the volume of trucks on highways. Completion of the project will provide enormous scope for Australia’s vast agricultural precincts to ramp up production as a global giant food supplier. The post-construction economic benefits for regional communities will be substantial and will have a positive influence on property markets in communities such as Seymour, Bendigo, Shepparton, Albury-Wodonga, Wagga Wagga, Griffith, Parkes, Dubbo, Narrabri, Armidale, Goondiwindi, Toowoomba and Beaudesert.
  • Australia-Singapore Military Training hubs: The Australian and Singaporean federal governments have signed an agreement for Australia to provide advance military training to 14,000 Singaporean military personnel every year for 25 years. Singapore has committed to investing $2.25 billion, which will benefit Townsville and Rockhampton through facility infrastructure development. In addition to construction jobs, the 25-year provision of goods and services to trainees will provide long-term economic benefits for Rockhampton and Townsville, increasing the demand for real estate in both regional cities.
  • Maroochydore City: A $430 million development of a modern CBD for the Sunshine Coast. The region’s population grew at a higher rate than any other location in Australia over the last decade. The new Maroochydore city centre development will include commercial, retail, high and medium-density residential development, high-speed internet, parklands, waterways and bicycle tracks.
  • Queens Wharf: A $3.6 billion world-class entertainment precinct in Brisbane’s CBD, meaning that Australia’s third-largest city will (finally) have a world-class precinct to rival Melbourne’s Crown entertainment and Sydney’s Barangaroo precincts. Due for completion in 2022 and developed across five city blocks, this game-changing project will attract a staggering 1.39 million visitors per year, bring billions of dollars to the coffers of Brisbane’s economy each year, create approximately 10,000 new jobs and breathe an exciting new energy into the Brisbane community.
  • Hells Gate Dam: Agribusiness and general economic development for northern Australia will be big winners from this $5.3 billion irrigation and energy project by constructing an enormous dam on the upper Burdekin River, north of Charters Towers. According to a viability assessment conducted by Townsville Enterprise, if Hells Gate Dam is developed to full capacity, it has potential to inject billions of dollars into the North Queensland economy. The property market beneficiaries of this game-changing project will be Cairns, Townsville, Innisfail, Ingham, Ayr and Charters Towers.

 

 

 

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

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Brisbane

Aria Property launch South Brisbane apartments Trellis, their most sustainable development to date

Unabashedly green, as homage to it’s name,Aria Property have implemented environmentally forward practices across all aspects of the development

Aria Property Group continue to improve sustainability across their South East Queensland residential apartment developments.

Their newest tower, Trellis, in South Brisbane, is their most sustainable to date.

Unabashedly green, as an homage to it’s name, Aria have implemented environmentally forward practices across all aspects of the development, from the site itself, of which 60 percent is covered in greenery of some variety, as well as the trellises within which improve biodiversity, to solar technology and Tesla batteries.

Aria Property

Trellis 20 Edmondstone Street, South Brisbane QLD 4101

All 110 two and three-bedroom apartments in the 12-storey building feature cross flow ventilated corridors, operable architectural screen doors, double-glazed glass and more. Residents will experience significantly cooler apartments compared to competitor projects, reducing reliance on air-conditioning and facilitating cost savings

With the growing scale of landscaping and greenery on Trellis, Aria is incorporating 60,000L of rainwater tanks to capture as much rainwater as possible to irrigate planting. This will assist in reducing Body Corporate water costs and recycle rainwater typically wasted in most buildings.

This is in line with Aria’s proven track record in more than just sustainability, recognised as the Best High Density Developer in Australia from 2017 – 2019 with Oxley + Stirling Residences, The Melbourne Residences and Botanica Residences.

ARIA say Trellis is one of their most liveable apartments to date. Designed by Rothelowman, they feature three metre high ceilings, Miele appliances, operable glazing and high-end contemporary finishes.

Reminiscent of an urban retreat, Trellis reflects a new style of resort living with 1,119 sqm of recreational amenity across the Temple of Wellness on the ground floor and the Residents’ Rooftop Club on level 13. That features magnesium baths and an infinity pool with views across Brisbane.

The development also offer a podcast/boardroom, serving as a multi-use space for working at home. There’s also a Residents’ Wine Cellar.

Apartments in Trellis start from $739,000 for an apartment with two bedrooms and two bathrooms. Three-bedroom apartments are priced from $1,084,000 to $1,224,000.

Completion is slated for mid-2023

 

Article Source: www.urban.com.au

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Brisbane

Centuria Swoops on Charter Hall’s Adelaide Office Block

Centuria

Fund manager Centuria Capital has swooped on a recently completed office tower in north-west Adelaide for nearly $63 million, struck on a yield of 4.6 per cent.

The 6500sq m commercial building at 21-25 Nile Street in Port Adelaide was completed in 2018 and is fully leased under a 15-year agreement to the South Australia government’s department of transport and infrastructure.

The building was sold by Charter Hall through a direct managed fund after it acquired the asset as a fund-through development in 2017, with a total completion value of $43.6 million.

Charter Hall’s direct business currently manages $7.5 billion in assets and cash inflow from retail investors has accelerated during the past two years to now enable the funds to be running between $90 million to $100 million a month.

Charter Hall Direct chief executive Steven Bennett said the divestment would provide an opportunity for the fund to realise returns for investors and re-deploy capital into new acquisitions and fund existing developments, such as 60 King William Street, in the Adelaide CBD.

“We have continued to curate the portfolio via selective divestments and importantly upgrade the portfolio through investments in core CBD and emerging precincts,” Bennett said.

For Centuria the asset will now provide a compelling investment proposition, with strong tenant covenants and resilient revenue streams.

As well, the suburb of Port Adelaide is a gateway for the federal government-backed Osborne naval shipyard, which will deliver $90 billion of naval defence infrastructure with a 50-year pipeline.

Centuria joint chief executive Jason Huljich said the group had been drawn to the “young property” within Adelaide’s commercial real estate market, which is currently underpinned by strong employment, regeneration and infrastructure projects.

“The A-grade office building is situated in the heart of the state-backed Port Adelaide Rejuvenation Project, a 20-year regeneration initiative that is anticipated to attract up to 8000 additional residents and 1500 construction jobs,” Huljich said.

“[We] remain confident in Australia’s metropolitan and near city office markets, especially those that benefit from long-term government-backed infrastructure projects.”

The property will be held within Centuria’s unlisted real estate fund, Centuria Government Income Property Fund No. 2.

Centuria has been in a strong growth phase, expanding its funds management platform through corporate deals such as its takeover of Primewest.

It has also been active with direct deals, including its recent $224 million acquisition of a Footscray office tower from the Grollo family.

In August, Centuria picked up another recently 18,000sq m completed office tower, this time in South Melbourne, from the ell-known property clan the Deague family for $200 million.

 

Article Source: www.theurbandeveloper.com

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Brisbane

Is this Brisbane’s best art deco home? Historic house draws buyers nationwide

Brisbane’s best art deco home

Money can’t buy you love, but it can buy you Brisbane’s best art deco home with a back story so romantic it’s making buyers swoon.

Once the residence of award-winning Australian author David Malouf, the three-level abode at 19 Arran Avenue, Hamilton, hit the market just days ago for the first time in 15 years – and it’s offering more than just double brick and mortar, but the memories of a celebrated writer who penned his best works from within its walls.

Mr Malouf, whose father commissioned the exquisite three-level property back in 1947, wrote the semi-autobiographical novel Johnno before writing the prize-winning epic The Great World in 1990. He penned several other novels at his beloved Hamilton home before engraving his signature into one of the cabinets.

Brisbane’s best art deco home

19 Arran Avenue, Hamilton. Photo: Place Estate Agents Ascot 

It’s a tantalising tale that has mesmerised dozens of home-hunters from across the country ahead of the September 8 auction, selling agent and Place Estate Agents Ascot director Drew Davies said, with the rooftop terrace, bespoke features and an exquisite renovation further igniting appetite for the house that’s being dubbed an architectural marvel.

“It’s hard not to get wrapped up in the romance of that story,” Mr Davies said.

“But buyers also love the fact that it retains all the characteristics of a true art deco home … and it’s had more interest from Melbourne and Sydney people than any other home I’ve listed.”

With art deco brick homes as rare as hens’ teeth in Brisbane, Mr Davies said, savvy home hunters could fully appreciate the incredible opportunity – an opportunity he said was enhanced by the home’s high-end renovation that in today’s market was worth a small fortune.

“Any time you’re dealing with a renovation for a brick house, the price can skyrocket. This renovation by architect Philip Horwood has been done to the highest level – from the bespoke kitchen, the feature skylights in … and the rooftop terrace that has glass panelling – it’s just stunning, and it’s hard for me not to fall in love with it,” Mr Davies said.

“You would need to be having very serious chats with the bank to build something like that today.”

The art deco dream abode is bound to fetch a pretty penny at auction amid a property boom that’s catapulting prices in high-end homes across the city, ensuring a tidy profit for the current owner who snapped it up for just $950,000 back in July 2006.

And considering the home’s list of features, there’s no doubt the next custodian will feel it was money well spent.

Perched on a hill, the secluded property boasts gun barrel views of the Brisbane River – best seen from that full-floor rooftop terrace that’s accessed via a spiral staircase.

Brisbane’s best art deco home

The Darren James kitchen. Photo: Place Estate Agents Ascot 

Then there are the leadlight windows, double terrace doors and a stunning kitchen styled by Darren James that features rosewood cabinetry and Brazilian granite benchtops.

Defying the struggles of many a light-challenged brick abode, Mr Davies said the home was luminescent thanks to the eight skylights, with additional features including an opulent main suite with a dual shower, inset spa and a bidet.

“[At 637 square metres] it’s a big chunk of land, too, and it’s an extremely private location as well … that’s been a big drawcard,” Mr Davies said.

With buyer interest from couples and downsizers growing by the day, he said it was tough to say just how many bidders would throw up their hands next Wednesday, however with soaring interstate interest, there was a good chance the home’s next owner could hail from one of the nation’s two biggest cities.

“I continue to see a massive shift towards interstate buyers. Since Friday last week, I have transacted three sight unseen sales to interstate buyers alone,” Mr Davies said.

“The market couldn’t be hotter.”

The auction of 19 Arran Avenue will be held at a special Place Estate Agents in-room event at the Revival Art and Design Gallery at 3/17 Greg Chappell Street, Albion, at 6pm.

 

Article Source: www.domain.com.au

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