The apartment market rebound is under way with prices on the rise—but there are three things that could change all this.
The National Apartment Market Report by JLL showed while the housing market had exceeded expectations, apartments were lagging behind.
House prices increased 17.7 per cent in a year while unit prices were only up by 8 per cent, according to Corelogic making the most gains in the past quarter.
Despite the recent gains, JLL identified the three biggest risks that could flip the apartment market.
These were another major wave of Covid-19, regulatory failure causing a boom-bust scenario and escalating construction costs.
JLL national head of residential research Leigh Warner said developers were still waiting for foreign investment to pick up and support Melbourne and Sydney further.
“It is a strange situation right now,” Warner said.
“While it’s still difficult to get projects going, the general housing market confidence is expected to steadily flow into increased investor demand.
“Developers are growing more confident towards the next supply cycle and are steadily looking to position themselves for this cycle.
“However, with very long planning, marketing and construction lags involved in large apartment projects, this next wave of supply is still quite a few years’ away and the market will tighten significantly in the interim, particularly after borders re-open and migration resumes.”
Apartment supply forecasts
Completions in 2021 will likely exceed those of 2020 and reach around 18,500 apartments across the markets.
However, this is forecast to plummet to just more than 7500 in 2022, according to the JLL report, which would indicate low supply levels through 2023 and 2024.
Inner city apartment supply
|Completed in 2021 so far||7189||1560||4688||90||49||–||802|
^Source: JLL Research, March 21
More than 40 per cent of apartments under construction are in Melbourne, concentrated in the inner-city areas.
Sydney’s apartment pipeline is spread around the city’s footprint where foreign investment is vital.
“Domestic and foreign investor demand remains much more subdued and this is keeping pre- sales demand for new apartments muted and seeing few new apartment projects commence,” Warner said.
“This is particularly the case in Sydney and Melbourne, where the population impact of Covid-19 has been greatest and where there is more residual unsold stock in recently completed projects.”
Article Source: www.theurbandeveloper.com
Bridge to 2032 – Brekky Ck span approved, missing link for Games athletes’ village
Brisbane is set to have another major infrastructure project underway by the end of the year after Lord Mayor Adrian Schrinner lodged the final design of the Breakfast Creek green bridge with planning officers for approval.
The $67 million project is likely to provide a smoother connection for pedestrians and cyclists moving between the fast-growing riverside development at Northshore Hamilton and the CBD.
The 80-metre arch will cross Breakfast Creek to connect Newstead Park with the existing Lores Bonney riverwalk which was part of the now completed Kingsford Smith Drive upgrade.
“This is a crucial step towards securing the final approvals we need to commence work on the green bridge that will provide a $67 million investment in local industry, deliver a new active transport options and create 140 local construction jobs,” Schrinner said.
“The Lores Bonney Riverwalk is currently used 2300 times a day, and this new green bridge will improve safety and increase capacity to the riverwalk by creating a continues walking and cycling connection.”
He said the Breakfast Creek project would join the now-approved Kangaroo Point green bridge as fast-tracked investments to create jobs as the city headed out of the coronavirus pandemic.
The council has also linked the project to the 2032 Olympics, saying it will be a “key connector” for the planned Athletes Village at Hamilton and provide a critical transport link for the Games.
Two other cross-river pedestrian and cycle links connecting Toowong to West End and St Lucia to West End remain on the council’s green bridge program books but are yet to be funded.
The council insists the remaining bridges need federal and state government funding to go ahead.
Article Source: inqld.com.au
Green ‘Grand Central’: Cross River Rail unveils changes to parklands vision
Developers of Queensland’s biggest infrastructure project, the $5.4 billion Cross River Rail, appear to have bowed to public pressure and moved to preserve more public space in its redesign of the city’s Roma Street parklands precinct.
The Cross River Rail Delivery Authority has confirmed it will allow more public open space in a revised development plan for the area.
A new development scheme for the Roma St precinct, which will contain the state’s most most important transport interchange (dubbed Grand Central) as well as the proposed Brisbane Live arena, identifies new green areas and more affordable housing than was originally planned.
The Palaszczuk government has insisted that the development of an underground Roma St station as part of Cross River Rail is a chance to revitalise an under-used part of Brisbane into a major opportunity for private investment.
The government expects that over the next 15 years there will be nearly 4200 new residents and more than 19,700 new workers within the 32 hectare Roma Street priority development area, bounded roughly by Wickham Terrace, North Quay and College Rd.
However, the delivery authority came under fire for giving over part of the Roma St parklands which houses a public car park and Brisbane City Council maintenance depot to residential and commercial development.
The authority now says under the finalised development scheme the precinct would have more “publicly accessible open space”.
“The existing 11 hectares of publicly accessible open space within the Roma St Parklands will not only be protected forever, but will be expanded even further by more than two hectares,” the authority said in a statement.
“The development scheme also provides for new social and affordable housing as part of new residential buildings parallel to the rail corridor, adding to the existing apartment complexes along Parkland Boulevard.”
“This scheme is all about renewing one of Brisbane’s most underutilised inner-city locations while protecting and enhancing the beautiful natural features that already exist. ‘
About 46,000 people each weekday are expected to use the new high-capacity underground station at Roma Street by 2036.
Article Source: inqld.com.au
Brisbane Olympics to Push Property Market’s Limits
Brisbane house prices will hit the $1-million median well before the 2032 Olympics with suburbs near venues tipped to move up to $3.9 million.
Property projections from PRD Research indicate the median price would reach $1.7 million by 2033 and would be “immensely” boosted on the Gold and Sunshine coasts.
PRD chief economist Diaswati Mardiasmo said it was clear that hosting major events had served the property market well.
“The year after the 2000 Sydney Olympics, Newington (site of the athletes’ villages) and surrounding suburbs’ median house prices grew by 13.4 per cent,” Mardiasmo said.
“Median house price growth was not limited to the year after the Olympics. It grew by 38.5 per cent two years after, and 66.4 per cent three years after.
“The year after World Expo 88, South Bank and its surrounding suburbs grew by an average of 19.1 per cent and by 10.3 per cent after G20 Summit 2014.”
Brisbane property price predictions: Olympics 2032
|Suburb||2011||2021||Projected Growth G20 Average|
|South Brisbane house||$805,000||$1,210,000||$2,560,360|
|Redland Bay house||$450,000||$638,000||$1,350,008|
|Spring Hill house||$950,000||$1,150,000||$2,433,400|
|Alexandra Headland house||$570,000||$1,110,000||$3,348,760|
|Twin Waters house||$651,000||$1,077,000||$2,278,932|
^Source: PRD Research, AMP Pricefinder
“Bearing in mind the 2032 Olympics are still 11 years away, and based on how the Brisbane market is travelling, the potential to eclipse this price point is high,” Mardiasmo said.
“Regardless of the calculation method, the conclusion points us to Brisbane becoming a $1-million median house price city sooner rather than later. ”
Domain’s latest house price report showed median house price in Brisbane was $678,236, up 13 per cent annually.
Meanwhile, prices on the Gold Coast and Sunshine Coast hit $792,000, up 18.2 per cent on last year, and $825,000 up 23.1 per cent, respectively.
Domain chief of research Nicola Powell said at the moment, low listing numbers and interstate migration were driving the price hike.
“It suggests that upgrading homeowners are fuelling house prices, as well as interstate and expat buyers moving from more expensive cities,” Powell said.
Melbourne and Canberra officially joined Sydney in the $1-million home club in the July results.
Article Source: www.theurbandeveloper.com
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