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Unit Prices Fall Over June Quarter

Unit Prices Fall Over June Quarter

The effects of Covid-19 have begun to filter through the housing market with house and apartment prices weakening nationally over the June quarter.

According to the latest Domain house price report, house prices dropped by 2 per cent and unit prices by 2.2 per cent nationally over the quarter.

Every major capital city saw unit prices fall with only Adelaide, Canberra and Hobart enjoying an increase in house prices during the period.

Domain senior analyst Nicola Powell said price falls to date had been minimal from the pre-coronavirus March quarter to June with significant government stimulus, mortgage holidays and low interest rates supporting home values.

“Price expectations have changed rapidly in recent months, with more vendors adjusting asking prices downwards to seek a timely sale,” Powell said.

“With lenders extending mortgage pauses for those under serious financial strain, and the JobKeeper subsidy being extended, the outlook for prices largely depends upon how well the economy is tracking when fiscal stimulus ends.”

Median house prices

Capital CityJun-20Mar-20Jun-19QoQYoY
Sydney$1,143,012$1,165,993$1,034,843-2.0%10.5%
Melbourne$881,369$913,277$824,580-3.5%6.9%
Brisbane$582,847$590,930$569,297-1.4%2.4%
Adelaide$553,036$552,031$536,8590.2%3.0%
Perth$522,414$530,358$529,839-1.5%-1.4%
Hobart$529,388$521,843$481,4681.4%10.0%
Canberra$819,090$786,888$748,3724.1%9,3%
Darwin$516,213$521,574$516,715-1.0%-0.7%
Combined Capitals$804,602$820,685$755,065-2.0%6.6%

Across the capital cities, the biggest reverberation in the market was felt in Melbourne, with house prices slipping 3.5 per cent and units 1.7 per cent, the deepest quarterly fall of any major city.

It has meant the first prices falls for Melbourne since early 2019, following record high house price achieved last quarter, with $32,000 stripped from house prices and $9,000 from units over the quarter.

“[Melbourne’s] rebound was swift as restrictions eased, confidence lifted from the April lows, vendors returned, and more buyers decided it was a good time to purchase—nationally rising to a six-month high,” Powell said.

“The second lockdown will stall this momentum temporarily.”

Substantial prices falls were seen across the city, predominately in Melbourne’s inner east and inner south, while the outer areas remain stable or have risen.

The report noted that over June, 13.4 per cent of sellers reduced asking prices, five times higher than the same time last year.

Property prices in Sydney have also retreated with house prices down 2 per cent and units 1.9 per cent, or $23,000 and $14,000 respectively.

“The proportion of properties discounted [in Sydney] is a leading indicator of price movement, evidence that further price weakness lies ahead,” Powell said.

In June, 15.2 per cent of sellers reduced asking prices, three times higher than the same time last year.


Median unit prices

Capital CityJun-20Mar-20Jun-19QoQYoY
Sydney$735,417$749,741$685,499-1.9%7.3%
Melbourne$537,345$546,818$504,641-1.7%6.5%
Brisbane$375,285$391,359$408,792-4.1%-8.2%
Adelaide$319,266$328,928$326,131-2.9%-2.1%
Perth$344,284$351,353$334,649-4.9%-0.1%
Hobart$429,464$435,842$366,189-1.5%17.3%
Canberra$453,750$459,772$462,924-1.3%-2%
Darwin$241,461$250,630$305,014-3.7%-20.8%
Combined Capitals$560,838$573,636$536,847-2.2%4.5%

In Brisbane, house prices fell 1.4 per cent over the quarter, the first quarterly fall seen in a year and the steepest in almost nine years. Unit prices also declined by 4.1 per cent.

“[Brisbane] house prices remain higher compared to last year, marking seven-and-a-half years of annual capital growth,” Powell said.

“Although this has reversed in the June quarter, the fall in prices to date has been minimal considering the economic aftermath of border closures and shutdowns.”

Domain highlighted coastal cities such as the Sunshine Coast and Gold Coast where housing values outperformed Brisbane over the June quarter.

Gold Coast houses pushed to a new record of $660,000 following a 1.5 per cent quarterly growth, while houses on the Sunshine Coast nudged marginally lower.

Unit values held across both cities over the quarter, with Sunshine Coast units at the record achieved last quarter.

Canberra house prices bucked the downward trend seen in most other cities and continued to rise over the June quarter.

The strong quarterly growth across the public sector city, supported by a high proportion of government employees and low job losses, pushed median house values to a record high, breaking the $800,000 mark.

Unit prices, however, slipped 1.3 per cent over the June quarter to a median of $453,750, a marginal fall compared to the steep decline of the previous quarter.

Hobart’s house prices were also pushed to new heights over the quarter.

“For the first time on record, it is now more expensive to purchase a house in Hobart than it is in Perth and Darwin,” Powell said.

“House prices are 57.3 per cent and units 70 per cent higher than five years ago, providing home owners and investors the strongest capital growth of all the major capitals during this time.”

Mirroring the slip in house and unit prices home lending by both owner occupiers and investors recorded the biggest monthly fall on record over May.

New loan commitments for housing fell by 11.6 per cent over the month—the worst on record, while the value of new loan commitments for owner occupiers fell 10.2 per cent and new loans for investors fell 15.6 per cent—the lowest level since 2002.

Recent clearance rates have been haphazard over recent weeks with Melbourne returning to lockdown and half of the city’s scheduled auctions being pulled while Sydney clearance rate to its highest level in almost two months.

 

 

 

 

 

This article is republished from theurbandeveloper.com under a Creative Commons license. Read the original article.

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Brisbane

Brisbane Property Market Update – July 2020

Brisbane Property Market Update – July 2020

There is so much variation in what is going on around Australia right now. The Brisbane market is proving its resilience yet again, compared with other capital city markets during the current pandemic, writes Melinda Jennison.

Let’s take a look at some the data and some of our real-time observations to summarise what is happening in the Brisbane housing market and also the Brisbane unit market right now.

Brisbane property market prices

According to the latest Hedonic Home Value Index data by Corelogic, dwelling values in Brisbane saw a -0.4 per cent decline in value over the month of July 2020.

Brisbane Property Market Update – July 2020 (2)

While the broader data shows some slight falls in dwelling values across the month and the quarter, the Brisbane market has proven its resilience to more widespread price falls.

Of course, there are many things in place supporting all property markets around the country. Record-low interest rates make borrowing very easy for those with secure jobs and good incomes. The record levels of government support and also the repayment holidays for distressed borrowers also help to insulate any immediate impact on property values. Additionally, the federal and state government incentives for first home buyers has increased demand for that group of buyers across the country.

In the Brisbane housing market, we saw median values for the greater Brisbane region fall -0.3 per cent across the month of July 2020. The current median value for a Brisbane house is now $555,284.

Brisbane Property Market Update – July 2020 (3)

The unit market in Brisbane saw a slightly higher median value decline of -0.5 per cent for the month of July 2020. The current unit price in Brisbane is now $384,681.

Brisbane Property Market Update – July 2020 (4)

What is happening in the rental market in Brisbane?

At a city level, the rental market in Brisbane has definitely recovered, although there are still some at risk markets around our city.

In short, 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.

Asking rents according to SQM Research across the city have also been trending higher, so this is also reassuring for property investors.

Brisbane Property Market Update – July 2020 (5)

That said, Brisbane is not one property market and caution definitely needs to be taken when looking at a postcode level.  You will see in the Brisbane CBD, for example, the situation is VERY different.

Brisbane Property Market Update – July 2020 (6)

What are we seeing on the ground across Brisbane?

In our opinion, the data above may be slightly misleading based on our on-the-ground observations.  Despite the overall median data trend showing very slight falls in house values, we are in fact seeing quality housing in very high demand. 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.

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.

There are markets within markets, and we are seeing strong prices being paid for quality properties in many regions around our city. In the most recent Herron Todd White Month in Review, it is confirmed that the coronavirus crisis has not resulted in a measurable fall in property prices across Brisbane, so buyers should not expect a bargain due to the pandemic. They also confirm that many properties are trading off-market, which is a trend we are seeing also.

How does the Brisbane property market compare with other capital cities around Australia?

Melbourne and Sydney are leading the decline in capital city values. Melbourne recorded a -1.2 per cent fall in dwelling values across the month, whereas Sydney saw a fall of -0.9 per cent in dwelling values for July 2020.

This is certainly now surprising, given the recent second wave of coronavirus cases in Melbourne. This has now resulted in stage 4 restrictions with the Victorian state government’s recent announcement.

This has impacted on consumer sentiment, with readings from the ANZ-Roy Morgan Consumer Confidence Rating weakening throughout July, despite the huge recovery from the April lows. This index shows a high correlation with housing market activity (not prices). The recent downturn might therefore suggest that buyers and sellers may once again retreat to the sidelines.

In terms of changes in rent, Brisbane is doing well compared with other capital cities. The weakest rental conditions are being experienced in Hobart (house rents down -2 per cent and units down -4.5 per cent since March), Sydney (house rents down -1.1 per cent and units down -3.2 per cent) and Melbourne (house rents down -0.7 per cent and units down -3.1 per cent). It is important to mention that the weaker rental conditions are larger in the unit markets, compared with the housing markets in these cities.

Brisbane Property Market Update – July 2020 (7)

What’s going to happen to the Brisbane property market moving forward?

There is 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. Of course, we may see a rise in distressed properties coming to the market.  What we do not know is if this will put any downward pressure on prices. This is where I think the different property markets around Australia will each experience something slightly different.

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.

Brisbane Property Market Update – July 2020 (8)

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. 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.

Real-time demand is still strong and Brisbane 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. This is good news for our local Brisbane property market, and these factors will continue to support our property values into the future.

 

 

 

 

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

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Brisbane

Brisbane’s Most Sought-After Development Projects

Brisbane’s Most Sought-After Development Projects (1)

Queensland is continuing to draw the attention of international buyers as global unrest from the Covid-19 crisis fuels a spike in inquiry for new property from foreign investors.

Residential property in both Brisbane and the Gold Coast has remained high on the radar of foreign investors—especially those located in Hong Kong—with international searches lifting 22 per cent year-on-year, according to REA Group.

REA Group chief economist Nerida Conisbee said there was strong anecdotal evidence many expats were re-evaluating their circumstances due to the coronavirus, and the low Australian dollar combined with record low interest rates proved an attractive value proposition.

Conisbee said the majority of people searching for property in Queensland were based in New Zealand, the UK, the US and Hong Kong.

High-rise developments in the inner-city suburb of South Brisbane were amongst the most-viewed products online, with Pradella Group’s under-construction Halo Residences project and R&F Property Australia’s $500 million Brisbane 1 apartment tower scoring high attention.

Conisbee noted that beach locations such as Surfers Paradise on the Gold Coast, and Noosa on the Sunshine Coast were the most in-demand among overseas buyers.

Gold Coast coast projects including Sunland Group’s soon-to-be-completed Magnoli Apartments and Spyre Group’s Natura project in Burleigh Heads also featured.

“Brisbane doesn’t see a lot of overseas searches—when people think of Queensland, they think of the beaches,” Conisbee said.

Here are the most-searched development projects by foreign investors across Brisbane and the Gold Coast.

5.

Natura—Spyre Group
Burleigh Heads

Brisbane’s Most Sought-After Development Projects (6)

Brisbane-based Spyre Group’s $77 million, 17-storey Natura project—built over a 1,011sq m site located at 112 The Esplanade, Burleigh Heads—replaces a current mid-level apartment building developed by Mimi Macpherson, the sister of Australian supermodel Elle.

The Bureau Proberts-designed development will comprise 33 apartments with 16 levels of half-floor apartments and one ground floor terrace unit.


4.

Magnoli Apartments—Sunland Group
Palm Beach

Brisbane’s Most Sought-After Development Projects (6)

Sunland’s Magnoli Apartments—which was originally submitted to the Gold Coast Council for approval in late 2016—occupies the site of a former 1.3-hectare caravan park located on the corner of Gold Coast Highway and Nineteenth Avenue.

The Palm Beach proposal comprises a 2,250sq m community park, two 12-storey apartment buildings, and six architectural terrace homes.


3.

Halo Residences—The Pradella Group
South Brisbane

Brisbane’s Most Sought-After Development Projects (6)

Pradella Group’s 123-apartment Halo Residences, located at 33 Manning Street in South Brisbane, sits alongside the iconic 88-metre SkyNeedle—a prominent feature of Brisbane’s World Expo in 1988.

The development features a residents-only rooftop Sky Lounge providing panoramic city skyline views, a private dining room with courtyard terrace, wine bar, and modern wellness centre.


2.

Brisbane 1—R&F Property Australia
South Brisbane

Brisbane’s Most Sought-After Development Projects (3)

Late last year, R&F Property Australia completed its $500 million Brisbane 1 apartment development, spanning an entire block in South Brisbane.

The residential development, built by Hutchinson Builders, transforms the site of a former TAFE college and consists of three separate towers of up to 33 storeys.


1.

Queens Wharf Residences—Destination Brisbane Consortium
Brisbane CBD

Brisbane’s Most Sought-After Development Projects (2)

As part of the $3.6 billion Queen’s Wharf development, 667 apartments will be delivered within a new 64-storey tower dubbed Queen’s Wharf Residences.

On track to open in 2022, Queen’s Wharf will showcase four hotels, 50 restaurants, cafes and bars, an extensive retail precinct, refurbished heritage buildings and a ­publicly-accessible Sky Deck offering CBD and river views.

In addition to Queen’s Wharf Residences, the development has scope for up to two more residential towers, with construction dates yet to be finalised.

 

 

 

This article is republished from theurbandeveloper.com under a Creative Commons license. Read the original article.

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Brisbane

Mirvac Secures Approval for Newstead Tower

Mirvac Secures Approval for Newstead Tower (1)

Mirvac has won approval for another residential building at its $1 billion Newstead masterplan in central Brisbane.

The ASX-listed developer’s application to develop 143-apartments across a 25-storey residential tower was approved last week.

The project, to be built on a 5,400sq m site at 58 Skyring Terrace, follows the developer’s previous completions of 336 apartments across its Pier, Park and Unison projects.

Mirvac is currently undertaking its latest Newstead development, Shore, which will contain 333 apartments spread over two towers as well as offices and retail outlets at 60 Skyring Terrace.

Mirvac head of residential Stuart Penklis said the developer had had been in close contact with the community and council prior to lodging the development application in keeping with the local area’s neighbourhood plan.

“In speaking to the community prior to developing our design, we understand just how important Waterfront Park is to residents of this area,” Penklis said.

“We are excited to be expanding—and improving—this green space as part of the development, with over 50 per cent of our 5,552sq m site dedicated to open space.”

Mirvac Secures Approval for Newstead Tower (2)

Mirvac’s forthcoming Sky Precinct development, approved in just three months, continues the developer’s longstanding presence within the waterfront corner of Newstead where it has been delivering residential schemes for more than a decade.

Stage one, which completed in 2011, saw the development of two premium residential apartment buildings comprising of a total of 99 state-of-the-art apartments.

The masterplan’s second stage, Park, was completed in 2012, featuring 102 apartments in one, two and three-bedroom configurations.

Mirvac’s $200 million twin-tower residential development, Unison, opened in early 2017, featuring 135 apartments as well as nine terrace homes.

Mirvac also has development approval in place for another future stage, the Shore Precinct.

“[This] next stage has been designed as a ‘park within a park’, drawing greenery from neighbouring Waterfront Park up its façade and across lush landscaped balconies,” Penklis said.

Mirvac Secures Approval for Newstead Tower (2)

The developer said it could not disclose pricing for the 143 units in the 25-storey tower that will include one-, two- and three-bedroom apartments, as well as a handful of four-bedroom units.

Work is anticipated to commence on site in the coming months on a new waterfront sales and display suite, on the corner of Cunningham Street and Skyring Terrace, in preparation for the project’s launch.

Brisbane developer Limitless has also received approval for its Newstead project, a mixed-use residential scheme, incorporating the former Federal Boot Factory.

The 10-storey project, located across a 1,821sq m site at 14 Maud Street, features 56 apartments and rooftop deck and pool.

It will also include the retention and adaptive reuse of the Goldsworthy and Perkins Boot Factory heritage building into a flexible-use space such as ground floor retail.

 

 

 

This article is republished from theurbandeveloper.com under a Creative Commons license. Read the original article.

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