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
Shayher Group see local interest at Indooroopilly townhouse collection Long Pocket
The Jacaranda Place development bordering the Indooroopilly Golf Club in Brisbane will home 45 townhouse when completed in 2023.
The Brisbane-based Shayher Group are seeing high demand from locals at their recently launched Indooroopilly townhouse development Long Pocket.
The Jacaranda Place development bordering the Indooroopilly Golf Club in Brisbane will home 45 townhouses when completed in 2023.
Shayher are expecting a mix of buyers, from downsizers wanting a lower maintenance lifestyle while retaining the space, to young professionals with young kids and families looking to be near the private St Peters Lutheran College school zone.
There’s two collections, the Rainforest Collection or the Riverview collection, the latter proving most popular so far.
Each townhouse will feature a number of living areas, a galley kitchen with Gaggenau appliances, an integrated fridge and freezer, as well as a butler’s pantry.
They will have expansive entertaining balcony as well as an outdoor courtyard. There are internal lifts available in selected townhomes which is a feature aimed at the downsizer.
The grounds will feature a 22 metre resort style pool as well as a sauna and a steam room.
There are five display homes on site ready for inspection.
About the developer
Shayher Group is privately owned Australian company that began operating in 1999 and has since grown into a diversified property group.
With their HQ in Brisbane, Shayher have developments across Queensland, New South Wales and Victoria. One of their most recognised developments is the $1 billion redevelopment of the heritage-listed Pentridge Prison in Melbourne.
Locally, Shayher have developed The One, the 82 level, 467 apartment development in the Brisbane CBD, and are set to transform the Bulimba Barracks in the next few years.
Article Source: www.urban.com.au
Councils Want Workers to Kickstart CBD Economies
A survey indicating more than half of full-time employees want a hybridised virtual and in-office working model is not helping a national bid to lure workers back to the capital city centres.
According to a McKinsey survey of about 5000 full-time corporate employees, more than half of respondents wanted a flexible hybrid working solution post-pandemic, while just over a third wanted to work in the office.
The number of people wanting to work remotely grew 3 per cent to 11 per cent.
The changing face of work models was addressed by Brisbane Lord Mayor Adrian Schrinner when he spoke to the National Cabinet on behalf of the Council of Capital City Lord Mayors, outlining the issues facing the country’s CBDs and what needed to be done to kickstart their economies.
The Kepler Retail Index for the week ending June 6 showed passer-by traffic was still 26.5 per cent down year-on-year from the same time in 2019, excluding Victoria, which remained in lockdown.
Schrinner said the CBDs were the “beating heart of Australia’s economy” and contributed 69 per cent to the nation’s gross domestic product before Covid-19.
“We can’t ignore the plight of our city centres … if we’re going to get Australia’s economy firing on all cylinders again, we have to get people back into city centres and using public transport,” he said.
“The working-from-home phenomena may suit many people but we can’t ignore the fact it has an economic consequence.
“Councils have been undertaking a range of initiatives, including waiving rates, fast-tracking maintenance and providing hospitality discounts, to help CBD businesses and to entice people back.”
Schrinner said while office occupancy rates had lifted from record lows last year, data indicated growth was plateauing.
He said traffic congestion continued to be a problem along major arterials as people chose to drive instead of use public transport to commute.
The Council of Capital City Lord Mayors has joined the growing chorus of groups calling for the federal government to expand the use of travel bubbles and fast-track the return of international students.
At the end of the third quarter in March, Melbourne’s office vacancy rate had quadrupled from 3.4 per cent to 14.3 per cent over 12 months.
Sydney’s office vacancy rate doubled to 12.1 per cent, while the already double-digit vacancy rates in other capital cities continued to increase with Perth recording a 20.2 per cent office vacancy rate.
Article Source: www.theurbandeveloper.com
Ascendas Sells $125m Australian Logistics Portfolio
Singapore’s largest listed owner of industrial and office property, Ascendas’ Real Estate Investment Trust, has sold three assets in Queensland and Victoria for $125 million.
A Coles warehouse and a neighbouring warehouse at Heathwood, south of Brisbane, were sold for $101.6 million to Arrow Capital Partners’ $1-billion logistics investment fund, Strategic Industrial Real Estate with Altis Property Partners.
The latest acquisition, which is due to complete later this year, comes in the wakes of two logistics asset acquisitions in the Irish capital Dublin recently.
The Heathwood warehouses are in the Brisbane South Industrial Park. The 35,000sq m Coles logistics warehouse at 82 Noosa Street will be vacant later this year as the retail giant moves its operations to a purpose-built facility at Redbank.
Ascendas also divested a 16,134sq m warehouse and office space at 1314 Ferntree Gully Road in Melbourne via a unit sale agreement to China Tube and Haelram worth $23.5 million.
In a statement to the Singapore Exchange Ascendas REIT said: “The proposed divestments are in line with the Manager’s proactive asset management strategy to improve the quality of Ascendas REIT’s Australian portfolio and optimise returns for unitholders”.
“The total sale price of $125.1 million is approximately 16.8 per cent higher than the total market valuations of the properties of $107.1 million as at 31 December 2020.”
The proposed divestments are expected to complete in the third quarter of 2021.
Ascendas REIT is part of CapitaLand, which owns industrial assets in Singapore, Australia, the United States and Europe.
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