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Wounded under-bidders set to drive property prices as 2021 begins

under-bidders set to drive property prices

Under-bidders who’ve missed out at fiercely competitive December auctions are set to drive the property market in the first half of 2021, with their desperation to buy a home exacerbated by the fear of future rising prices and COVID-19 anxiety.

Large crowds at many of the auctions around Australia mean many hopeful buyers are sent away empty handed, and these “wounded under-bidders” are returning to auctions in later weeks even more determined to bid high.

“We had 16 people bidding on a house in North Epping which went for about $300,000 above the $1.1 million reserve, so that meant 15 people were disappointed,” said Catherine Murphy, of The Agency Epping, in Sydney.

“One of them came back to say that every single week that goes by, property is becoming more expensive, and everything that’s at entry level is going a little bit mad. I think people think they’re going to be paying even more after Christmas which is making them even keener and I think they may be right that prices will continue to rise.”

In Melbourne, where buyer advocate Mal James said he coined the term “wounded under-bidder”, there are some auctions turning “volcanic’ with several registered bidders jostling to take the prize each time.

Prices are rising as a result of more demand than supply, and those under-bidders are pushing up their limits in the hope of being luckier next time.

“When people feel wounded, demand rises more quickly because people are more hurt by their lack of success,” Mr James said. “This is for the people who want to be owner-occupiers; the investors just get dejected and withdraw more often as they didn’t have that emotional attachment to property.

“But for the others, buying property isn’t a choice, it’s a need. They don’t want to go home and tell their spouse they’ve not managed to buy and they’re still homeless, so they try even harder. And, with the market so strong at the moment, prices just rise.”

It’s not just the nervousness about price rises and the fear of missing out that are stoking the determination to buy sooner. Clinical psychologist Amanda Gordon says she’s noticed a pervading air of helplessness among many people at the moment caused by the pandemic.

“People feel they have no sense of control in relation to COVID-19, but they think the one thing they should be able to control is the place where they live,” said Ms Gordon, of Armchair Psychology. “They really want somewhere they can feel safe and snug and where the virus can’t get them.

“So, we’re seeing this level of anxiety rise even higher among those who miss out on auctions and we can see it pushing them further to offer more on a property. Their determination to buy is often unrelated to a particular home, but is a result more of this fear interfering with their sense of security.”

Ray White chair Brian White says he’s seeing this in all the capital cities and the regional areas. The longing for a property is often a result of a heightened feeling of a need for security and, with interest rates historically low and likely to remain so, demand is surging well ahead of supply.

“I’ve been in this business a long time, and I’ve never seen it like this before,” said Mr White. “It’s a career first for me, and now I think we all feel confident the market will continue like this for some time.

“The strength of demand for property in the run-up to Christmas this year [was] surprising. We’re holding auctions till the last minute and results are amazing, with so much competitive bidding and prices often going over the reserves as a result, boosted too by the availability of online bidding.”

COVID-19 is spurring on that competition between the under-bidders in another way, too. People do have some spare cash as they can’t travel, believes Sarah Hackett, of Place Estate Agents Bulimba, Brisbane, and without the distraction of holidays, they’re putting more of their savings towards finding a home.

“They’ll miss out one week on a property and then come back the next more prepared to meet sellers’ expectations,” she said. “There’s such a lack of supply, too, and with Brisbane more affordable than Sydney or Melbourne, we’re also attracting buyers from interstate and expats.

“That makes it much harder for under-bidders to be successful for the next time, especially now we have such big crowds – of 14 to 20 registered bidders – at each auction.”

 

Article Source: www.domain.com.au

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Brisbane

Honeycombes Secures Funds for Ferny Grove Village

Honeycombes

Queensland developer Honeycombes Property Group has unveiled plans for a $140 million mixed-use development at Ferny Grove train station, in Brisbane’s north-western suburbs.

Honeycombes, in partnership with Melbourne-based real estate financier MaxCap, will deliver Ferny Grove Central, a 12,000sq m neighbourhood village and an 82 apartment residential building, dubbed The Fernery.

Honeycombes, led by Peter and Vanessa Honeycombe, secured the development rights to the site in 2017 following a competitive tender process run by the Queensland government.

“We have already received a high amount of unprecedented interest from the local market, highlighting the level of demand for both residential apartments and retail opportunities,” Honeycombes managing director Peter Honeycombe said.

The joint venture partners are expecting to announce a number of major tenants in coming months with a mix of high-profile national retailers including supermarkets, fitness centres, child-care and cinema providers expected to be secured on long-term leases.

Honeycombes is also in the final stages of securing a head contractor for the project with construction set to commence shortly.

Honeycombes

▲ This project is being built on the 2.6-hectare car park site directly adjoining the rail and bus interchange at Ferny Grove station.

“We have built a very strong relationship with the Queensland state government during the formation of the development and will continue to be committed to the delivery of the transit oriented development for the residence of Ferny Grove,” Honeycombes said.

“Without the government’s contribution of $9 million and the federal government’s $11 million in funding contributions for additional park ‘n’ ride spaces planned for the project could not have been achieved.”

The development adds to Honeycombes development portfolio which totals over $2 billion in delivered projects over the last 25 years.

Non-bank lender MaxCap has previously partnered with Honeycombes, providing debt funding to its $252 million Coorparoo Square development in Brisbane in 2015.

Last year, MaxCap partnered with Melbourne developer Troon Group on several commercial projects including the development of a new 3000sq m BMW car dealership in Berwick for Jowett Motor Group in the city’s south-east and an office redevelopment in Mont Albert.

It has also provided the construction facility for JD Group’s $250 million residential development in the city’s inner-eastern suburb of Hawthorn.

Funding has also been agreed for a $120 million 20-storey mixed-use residential building in South Melbourne being developed by Milbex Group.

 

Article Source: theurbandeveloper.com

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Brisbane

Brisbane’s New Green Bridges a Step Closer

Work on two of the planned five “green bridges” to be built in Brisbane has begun with the lodging of plans for the projects.

The Brisbane City Council says construction will begin this year after the commencement of tendering for the proposed Kangaroo Point and Breakfast Creek bridges.

Construction of the $190-million Kangaroo Point green bridge, due for completion by the end of 2023, is set to begin first, subject to community feedback and approvals.

Development plans lodged this month show the new 6.8m-wide bridge will link the inner-city suburb of Kangaroo Point with Brisbane’s City Botanic Gardens.

The project is part of the council’s $550-million commitment to build five “green bridges” across the city during the next 10 years.

Green bridges accommodate pedestrian and cycle traffic, and are designed to reduce the number of motor vehicles using roads.

Green Bridges

▲ The Kangaroo Point pedestrian and cycling bridge will link the city’s botanic gardens with Kangaroo Point’s Scott Street.

The council’s plan include bridges at Breakfast Creek, Toowong to West End, St Lucia to West End, and the now-scrapped Bellbowrie-Wacol green bridge.

The Bellbowrie bridge project was cancelled after community consultation with the Pullenvale and Jamboree Wards mid-last year.

While the city is yet to announce a new location for the scrapped bridge, the council’s proposed bridge options to West End have stirred local community concern due to the potential resumption of private homes.

The preferred alignments and locations for two of the bridges, Toowong to West End and St Lucia to West End, are currently open to public comment.

The community consultation period ends on March 31.

 

Green Bridges

▲ The Breakfast Creek green bridge will link with Lores Bonney Riverwalk.

The Breakfast Creek green bridge will connect Brisbane’s northern suburbs with the CBD.

The Kangaroo green bridge concept, developed by Arup, Cox Architecture and the council, will include separate cycling and pedestrian lanes.

It will stretch from the corner of Alice and Edward streets in the city to Scott Street at Kangaroo Point.

Green Bridges

▲ The Kangaroo Point pedestrian and cycle bridge will link the eastern suburbs and the city centre.

Such a bridge was proposed in the 1860s and a design developed by 1890, but never built.

The council says the Kangaroo Point bridge is expected to accommodate 5400 daily trips and take 83,690 cars off the road annually.

 

Article Source: theurbandeveloper.com

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Brisbane

Destination Consortium Amends Queen’s Wharf Plans

The final design for Brisbane’s Queen’s Wharf development has taken another turn with amended plans put forward calling for changes in the mega project’s residential precinct.

The $3.6-billion development—which has taken a significant footprint of the CBD—is well under way, with more than 5000 tonnes of steel, 41,000 cubic metres of concrete and 400,000 cubic metres of fill delivered so far.

The northern riverfront development will feature a new casino, the overhaul of heritage buildings, five new hotels with more than 1000 guest rooms, around 50 restaurants and a major retail precinct.

Proposed amendments to the original application have now been put forward by Destination Brisbane Consortium—which includes the Star group, developers Far East Consortium and Hong Kong-based Chow Tai Fook.

The alterations will affect the project’s residential quarter and predominantly involve changing the land usage, mix and designs of towers five and six.

Tower one is a 43-storey, 667 apartment residential project, while towers two and three—located below the Arc Skydeck—will include the development’s casino and hotels.

Tower four will be the project’s tallest residential tower at 200m while the 49-storey tower five and 45-storey tower six—which were originally intended to be used hotel and residential operations—will now be subject to changes.

Queen’s Wharf

▲ Amended designs have called for a shorter format to a now commercial building six, set to sit alongside tower five which is mixed-use with commercial and retail space.

The new round of changes, submitted to Economic Development Queensland, now call for tower five and six—which were previously residential in nature—to be remixed to include commercial floor space.

Tower five is now proposed to be mixed-use and could contain commercial or retail space on the lower levels with residential in the mid and high-rise sections of the building.

Tower six opposite Parliament House, which has been reduced in size, will now become a commercial-only building.

The Cottee Parker-designed building will sit next to Cbus Property’s 1 William Street, a 76,000sq m commercial tower currently occupied by the Queensland government, which was completed in 2016.

The push to diversify the hotel and casino development by adding new A-grade commercial elements comes as landlords scramble to reposition their CBD buildings to bring workers back to the city.

The Queensland capital’s vacancy rate grew to 13.6 per cent last month from 12.9 per cent in July, with most of the increase coming from reduced tenant demand during the second half of a pandemic-hit year.

Around 44,000sq m of new space is due to come online this year and a further 82,000sq m in 2022, adding to the pressure on a market that in the past six months suffered its lowest net absorption of space since January 2018.

The development has reached the fifth level of the 172-metre concrete structure known as a “diaphragm wall”, currently sitting around 20m above the Riverside Expressway.

Destination Brisbane Consortium project director Simon Crooks said despite ongoing amendments due to the possibility of shifting market conditions, the “integrated resort” was quickly taking shape.

“This time next year towers two and three, the dual tower for The Star Grand hotel, will be topping out at around 100m, meaning Queen’s Wharf they will be sitting prominently alongside and above the Riverside expressway,” he said.

“When complete, the Dorsett and Rosewood tower, which sits behind the Printery Building between George and William streets, will be around 200m and is expected to peak around mid-2022.

“And finally, topping out at 240-metres, Queen’s Wharf Residences is expected to reach full height in about two years, well after the hotel towers top-out.”

Early works for construction of the Neville Bonner pedestrian bridge began in March last year on South Bank and will be complete in time for the integrated resort development opening in late-2022.

 

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