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Strength of Brisbane apartment market questioned

Investor demand for Brisbane apartments will start to moderate and both rental and capital growth will slow because of concerns over major oversupply, says leading real estate firm JLL.

The gap between home values in Brisbane and Sydney has grown and has encouraged interstate investors to south east Queensland, but there is some growing concern about the 19,800 apartments either under construction or being marketed within the inner-city precincts of Brisbane.

“The Brisbane apartment market has continued to flourish off the back of strong investor demand, as interstate and foreign investors seek to take advantage of the lower price point and higher yields Brisbane currently has to offer compared to capitals like Melbourne and Sydney,” JLL’s head of residential development valuations Troy Linnane said.

But JLL’s director of residential research Rupa Ganguli said strong demand will now start to slow.


“We do anticipate the investor market will moderate over the next 12 to 18 months, as large numbers of new apartments enter the rental market during 2016-2017,” Mr Ganguli said.


“JLL anticipates that rental growth will ease with potential for median rents to decline when the unprecedented levels of supply enters the market coinciding with decreased rate of population growth.”

He said that would create problems for “investor type” stock but opportunities would be available to those developers focused on the high-end, owner-occupier market.

“The strong supply pipeline is also expected to limit the pace of capital growth in the apartment market out to 2017. Given the intensity of competition and future supply, some developers have moved away from the highly competitive investor stock and are focused on smaller owner-occupier projects.”

The warnings from JLL echo misgivings reported in the QBE LMI Australian Housing Outlook report prepared by BIS Shrapnel.

BIS managing director Robert Mellor said there were concerns over the three-year prospects for Brisbane units.

“The message has been out there for a while on Melbourne but I’m worried about Brisbane as well,” Mr Mellor said.

For the 2015 financial year, apartments made up over 45 per cent of all approvals to build new private-sector dwellings which was a record high.

Approvals for new apartments soared almost 84 per cent to 3145 in September, pushing the overall monthly total up 42 per cent to 5168.


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Women & Men in Business Features – Profiling our local business community

Since 2002 the Madeleine Hicks name has been at the forefront of the real estate market in Brisbane’s north western suburbs.
An independent Real Estate company, Madeleine Hicks Real Estate has increasingly grown through providing outstanding customer service and the word of mouth referrals that come from serving their clients well.
To sustain this growth and maintain their leadership position, the company has elevated Justin Hicks as Principal.
Justin is a veteran in the world of Real Estate having worked in the business for 6 years.  Prior to that he ran his own construction business, so understands what goods into creating a good property..
Justin has undergone an extensive grooming process to ensure that he is fully equipped to not only run the business but to take it to new heights.
Madeleine Hicks, founder of Madeleine Hicks Real Estate, said of Justin’s appointment: “I am thrilled to hand over the reins to Justin as our new Principal.
 I love the fact he has experienced and the passion to continue our love affair with the Everton Park and McDowall region.
I know that our business will go from strength to strength moving forward.
If you are looking for advice about selling your home for the best price possible, give Justin or one of the team a call at Madeleine Hicks Real Estate at Everton Park, today.
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Regional housing market doubles capital city value growth

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Australia’s regional housing market has far outpaced value growth across Australia’s capital cities in the last 12 months, rising 13.0% compared with a 6.4% gain in capital city values.

CoreLogic’s quarterly Regional Market Update, which looks at capital growth over the 12 months to April 2021 in Australia’s 25 largest non-capital city markets, saw Richmond-Tweed take top spot for capital gains across both house and unit markets, with 21.9% and 15.5% annual growth respectively. Bunbury was the worst performer across both house and unit markets, with 3% and -4.4% yearly growth respectively.

CoreLogic’s research director, Tim Lawless, says the faster pace of growth reflects stronger demand flowing into the regional areas of Australia through the COVID-period to date.

“This can partly be explained by the new popularity of remote and flexible working arrangements, but also increased demand for lifestyle oriented properties and holiday homes. No doubt the more affordable housing options across many of Australia’s regional markets is another incentive; in April there was a $247,400 difference between the median value of capital city dwellings and regional dwellings.

“Playing into the lifestyle trend, it’s no surprise to see the Richmond-Tweed area topping the list for capital gains over the past 12 months. This region includes high profile beachside destinations such as Byron Bay, Suffolk Park and Lennox Heads as well as popular hinterland villages such a Bangalow. The median house value across the Byron council area is now $1.4 million, which is higher than Greater Sydney’s median of $1.147 million,” says Mr Lawless.

Best & Worst Performing Regional House Markets – April 2021

 housing market

Best & Worst Performing Regional Unit Markets – April 2021

 housing market

“Looking forward, regional housing markets remain well placed to record higher than average levels of demand, especially those markets that are located close enough to capital cities to provide a commuting option, and those lifestyle markets that are popular with sea and tree changers.

“While surging values are probably good news for homeowners in these regions, for those that don’t own a home, affordability is being stretched. Particularly for long-time locals whose incomes are unlikely to be rising at anywhere near the pace of house price appreciation, they may be forced to seek out housing options further afield,” says Mr Lawless.


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Labor housing policy a solid start

housing policy

The social and affordable housing policy announced by Federal Labor is a solid start to giving people on low and modest incomes greater housing options as they grapple with a runaway housing boom, according to Everybody’s Home, the national campaign against homelessness.

Labor leader Anthony Albanese has committed to a $10 billion dollar fund from which the earnings would finance 20,000 social and 10,000 affordable homes over four years. Critically, the fund would exist in perpetuity, providing a sustainable funding base to give more Australians greater housing options.

“This is a very solid start,” said Kate Colvin, spokesperson for Everybody’s Home. “While this won’t meet the full housing needs of low and modest income Australians, it does lay down a sustainable foundation.

“Booming house and rent prices are driving many Australians to desperation, especially in regional communities. Expanding social and affordable housing means greater choice and relieves pressure.

“It is noteworthy that Federal Labor recognises the important role for the Commonwealth in social and affordable housing. The states simply can not solve the rising problem of housing stress and homelessness without the Commonwealth’s financial firepower.

“The commitment to devote one-fifth of these homes to women and children escaping violence also deserves recognition. Demand for such housing is simply not being met. Last year, one-third of the 54,000 women and children escaping family violence who came to homelessness services needing accommodation had to be turned away because no accommodation was available.

“Social and affordable housing need to be recognised as entirely legitimate housing options. All of us need a home to protect our health, look after families and aspire to stability and prosperity.


Article Source: Medianet

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