Wednesday 30 September 2020

Queensland’s property market defies pandemic predictions

Queensland’s real estate market has overcome predictions of property price falls as a result of the COVID-19 pandemic.

CoreLogic’s data for the April-June 2020 quarter shows that, across 13 major Queensland regions, only two reported marginal price retractions – Cairns (0.5 and 1.3 per cent drop in median house and unit prices respectively) and Mackay (2.2 per cent drop in median unit price).

“The fact is, Queensland’s residential property market continues to show remarkably stable results, with the first full quarterly COVID-19 property price report giving Queenslanders a comprehensive look at how the pandemic has affected our state’s housing market,” Real Estate Institute of Queensland CEO Antonia Mercorella said.

“Restrictions on auctions and open homes, coupled with border closures restricting interstate buyers as well as international investors, have certainly proved challenging for our market.

“To counter this, the real estate industry proved itself highly agile, adapting to technology substitutes in place of live auctions and physical property inspections at almost lightning speed. And buyers and sellers were equally quick to embrace it.

“The evidence is in the numbers, with over 8600 property transactions across Brisbane and more than 7100 across regional Queensland in the three months of April to June.”

REIQ admits that a decrease in transaction activity and rentals in the state’s capital shows that “the property market isn’t immune to the COVID-19 economic fallout”, stating that CBD job cutbacks and office shutdowns “along with hospitality and retail outlet closures have all played a significant part” in Brisbane’s negative growth across the quarter.

They also point out, however, the median house price in Brisbane increased 0.7 per cent, with house prices in the capital remaining stable with 2.8 per cent annual growth.

“Brisbane’s affordability, low income-to-debt ratio, change in investor behaviour, rise in rental vacancies and historically low interest rates, which the Reserve Bank recently highlighted will likely remain for at least the next three years, along with the range of government grants currently available has seen first home buyers come out in force, allowing our capital city property market to continue to transact,” Ms Mercorella explained.

“What’s helping drive price stability in the market is that while there’s increased demand driven by housing specific incentives such as the First Home Owner’s and HomeBuilder grants, advertised supply levels remain tight.”

The REIQ is also predicting Sydneysiders and Melbournites will move to Queensland once border restrictions are eased.

“Prior to the outbreak of the pandemic, Queensland was the number one destination for interstate relocations – particularly from major metropolitan areas such as Sydney and Melbourne,” Ms Mercorella said.

“As this pandemic continues to affect us all, it’s introduced many of us to the possibility of a ‘new normal’ way of working – that is, remotely from home.

“And spending more time at home is seeing more people considering their options.

“As a result, interstate demand continues to strengthen in Queensland with the main drawcards being affordability, livability, and the lifestyle on offer.

“And while border restrictions haven’t stopped interstate buyers from snapping up properties sight unseen over the last few months, we anticipate this demand to surge in the coming year ahead as we navigate through to the other side of this pandemic.

“Perhaps this is one prediction that will ultimately prove right!”

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from Queensland Property Investor

House price falls, recession prompt BoQ to increase bad loan provisions

House prices could fall by as much as 12.5 per cent this financial year under the most severe case scenario modelled by the Bank of Queensland that has prompted it to increase its provision for bad loans to $175 million as it braces for a longer and deeper recession.

Investors punished the bank on Tuesday causing the share price to slide by more than 7 per cent after revised modelling factored in the impact of mounting unemployment, sliding property prices and negative gross domestic product on BoQ’s loan book.

BoQ has already been the most exposed bank to loan deferrals, according to data released by the Australian Prudential Regulation Authority, with 12 per cent of home owners and 16 per cent of small business customers applying for loan relief.

The provision for loan impairments, up from $28 million in April, was based on new economic assumptions using Reserve Bank of Australia and internal data. The base case scenario predicts GDP will contract by 6 per cent, unemployment will reach 10 per cent, residential property prices will fall by 6 per cent and commercial property by 10 per cent this year.

On the most severe scenario, weighted by the bank as having a 5 per cent probability, GDP will contract by as much as 9 per cent, unemployment will reach 12 per cent, residential property prices will fall by 12.5 per cent and commercial property by 20 per cent this year.

Chief executive George Frazis said the revised provision reflects the impact of the virus but was pleased that a quarter of the bank’s customers who applied for loan relief had started making full or partial repayments.

“As we all know, this has been an unprecedented year and BoQ is committed to supporting our customers throughout this period. We are very pleased to see many of our customers returning to work and reopening their businesses and will continue to work closely with those that require further assistance,” Mr Frazis said.

Evans and Partners banking analyst Matthew Wilson said he was not surprised by the changes to BoQ’s loan impairment provision, saying he had forecast bad debts of $219 million.

Mr Wilson said the bank’s underlying assumptions were “rather bullish” as they relied heavily on the base case assumption, with only 20 per cent probability afforded the downside scenario and 5 per cent to the severe.

BOQ also announced it had conducted an audit of employee remuneration and found $2.4 million in superannuation had not been paid properly. The bank has set aside $11 million for wage issues and said it is still investigating the matter.

The Finance Sector Union national secretary Julia Angrisano said 750 staff would have to wait until March next year to be repaid, adding this was “not acceptable”. “This is wage theft and we are calling on the Bank of Queensland to accelerate the repayment program to pay affected employees immediately,” Ms Angrisano said.

Mr Frazis apologised for the errors and committed to contacting all impacted employees in the coming months. “We will get this right and we will make sure our people, past and present receive every cent they are owed. This is an absolute priority,” he said.

Mr Frazis did not provide an update on whether the bank would pay shareholders a dividend this year, only to say he realised how important the payments are to retail investors.

“We have completed our scenario analysis in relation to dividends and have consulted with APRA in line with the guidance issued on July 29, 2020. The board will make a determination on dividends in relation to FY20 at our full-year results,” Mr Frazis said.

BOQ’s full-year results will be announced on October 14.

Mr Wilson said he did not expect the bank to pay shareholders a dividend. “BOQ has much on its plate, rebuild the IT platform, rebuild the culture and grow.”

Morningstar analyst Nathan Zaia said BOQ’s deferred loan book was on the “upper end of the market” and predicted cuts to JobKeeper would put further pressure on the banks.

“The government is hoping that as they reduce JobKeeper, more of those jobs will come back so they offset each other,” he said. “But I don’t think that’s going to happen. I think we’re going to have a period where there’s more people doing it tough.”

BOQ’s share price closed at $5.89.

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from Queensland Property Investor

Tuesday 29 September 2020

Hudson Plots Bowen Hills Office Tower

ASX-listed investment group Hudson has lodged plans for a mixed-use development in Brisbane’s fast-growing inner north.

Plans have been put forward for a 24-storey mixed use building at 41 Brookes Street in Bowen Hills, set to comprise 13 levels of A-grade office space and a 128-room hotel at the building’s peak.

The investment group has enlisted Cottee Parker to design the 21,500sq m project across a 2,000sq m amalgamated site at the northern edge of Brisbane’s Fortitude Valley.

Hudson Investment Group, led by chief executive John W. Farey, picked up the site, which sits in close proximity to the Exhibition rail station and RNA Showgrounds, for $3.8 million in early 2019.

The proposed mixed-use development, set to replace two existing two-storey office and industrial buildings, lies within the 100-hectare Bowen Hills priority development area—an precinct undergoing rapid change, transitioning from low-set urban grain to predominantly medium-density towers.

The development will hold a dual frontage on both Brookes Street and Exhibition Street and will feature a four-storey green podium and green spine.

Hudson Plots Bowen Hills Office Tower

The building will feature a rooftop terrace, pool and wellness facilities oriented to the south in order to protect neighbouring amenity and promote views to the CBD.

Hudson is also implementing sustainable practices across the project, targeting a 4 Star Green Star Design Rating including 4.5-Star NABERS Office Energy rating.

To meet these goals the building will feature solar panels, waste and water management systems, as well as intelligent lighting systems throughout.

The building will offer 170 car parking spaces across one basement parking level and five additional levels within the building’s podium as well as 107 bicycle spaces and end-of-trip facilities.

The proposed mixed-use building will add to the continued regeneration of Brisbane’s burgeoning fringe CBD suburbs, sitting opposite three approved Lendlease towers and alongside the 18-storey Omega Apartments—which completed last year—and the 21-storey Belise Apartments along Brookes Street.

In July, Brisbane-based developer Gansons put forward plans for a four-tower medical precinct at a new business park at 18 Thompson Street.

In neighbouring Fortitude Valley, Empirica Developments has plans before council for a $55 million office tower at 95 Robertson Street, while Cornerstone is pushing ahead with a 28-storey commercial project at 251 Wickham Street.

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

from Queensland Property Investor

Monday 28 September 2020

Brisbane auction market runs hot as city remains in strong demand

A perfect storm of market conditions has sparked top results at auction across Brisbane this weekend, with the prestige sector continuing to “sell like hot cakes” as interstate buyers look north for luxury lifestyle homes.

Across Brisbane, a total of 52 properties went under the hammer at the weekend with 39 confirmed results, 20 sold, seven withdrawn and 12 passed in. The clearance rate was 51 per cent (compared with 48 per cent this time last year) and a total of $11,978,250 was clocked in sales, Domain figures show.

An architectural masterpiece in Highgate Hill came close to clocking the suburb record on Saturday after being snapped up for $2.75 million by two interstate surgeons seeking a slice of inner-city paradise. Across the river, a post-war cottage in Bardon sold for $1.14 million in a fiercely contested auction amid reports of soaring buyer competition fuelled by a lack of stock and Brisbane’s fast-growing reputation as a particularly liveable city.

With its timber facade and soaring ceilings, the architecturally designed abode at 9 St James Street, Highgate Hill, attracted scores of spectators and a handful of fierce bidders to the Saturday auction – eventually selling under the hammer for just over $100,000 shy of the suburb record.

The top recorded sale to date within Highgate Hill remains $2.9 million, achieved by 3 Fraser Terrace in 2017.

Co-selling agent Trent McDermott, of Hugo Alexander Property Group, said the sheer originality of the Richard Kirk-designed home at St James Street sparked the skyrocketing buyer interest that led to the near-record sale.

“We were pretty stoked We had 100 groups throughout the open homes and six registered bidders (on the day),” Mr McDermott said.

A perfect storm of market conditions has sparked top results at auction across Brisbane this weekend, with the prestige sector continuing to “sell like hot cakes” as interstate buyers look north for luxury lifestyle homes.

Across Brisbane, a total of 52 properties went under the hammer at the weekend with 39 confirmed results, 20 sold, seven withdrawn and 12 passed in. The clearance rate was 51 per cent (compared with 48 per cent this time last year) and a total of $11,978,250 was clocked in sales, Domain figures show.

An architectural masterpiece in Highgate Hill came close to clocking the suburb record on Saturday after being snapped up for $2.75 million by two interstate surgeons seeking a slice of inner-city paradise. Across the river, a post-war cottage in Bardon sold for $1.14 million in a fiercely contested auction amid reports of soaring buyer competition fuelled by a lack of stock and Brisbane’s fast-growing reputation as a particularly liveable city.

With its timber facade and soaring ceilings, the architecturally designed abode at 9 St James Street, Highgate Hill, attracted scores of spectators and a handful of fierce bidders to the Saturday auction – eventually selling under the hammer for just over $100,000 shy of the suburb record.

The top recorded sale to date within Highgate Hill remains $2.9 million, achieved by 3 Fraser Terrace in 2017.

Co-selling agent Trent McDermott, of Hugo Alexander Property Group, said the sheer originality of the Richard Kirk-designed home at St James Street sparked the skyrocketing buyer interest that led to the near-record sale.

“We were pretty stoked We had 100 groups throughout the open homes and six registered bidders (on the day),” Mr McDermott said.

“This is our highest sale this year and our fourth one above $2 million – there’s a lot of activity in that high-price bracket.

“A lot of buyers are moving from Melbourne and Sydney and it’s hard to keep a hold of properties at the moment. It’s a great time to sell, especially with anything that’s big – they are going like hot cakes.”

Ray White Paddington agent Judi O’Dea sold the post-war Bardon home at 24 Fletcher Parade on Saturday, and said the stylishly renovated three-bedroom abode was now considered an entry level buy for the popular neighbourhood.

brisbane auction market

“We would have had about 80 inspections through that one with six registered bidders,” Ms O’Dea said.

“It’s an incredibly busy market and it’s a great market for sellers, $1 million to $1.2 million is entry level for those suburbs now.

“People are asking what’s driving this (level of activity) and it’s shortage of stock number one, and number two, you can’t spend your money anywhere else.

“We also put 10 Pleasant Street in Red Hill under contract (at the weekend) and it went to a Melbourne buyer sight unseen; the sale price was north of $2 million.

“There is a lot of interest out of Melbourne – and this is not the only case and it’s going to support our market next year.”

While a local couple with two children snapped up the Bardon home on Saturday, Ms O’Dea said buyer competition from across the country was fierce with the tree and sea change trend continuing to grow among home hunters craving a better lifestyle.

She said buyers were also quick to pounce on homes with an office that was close to greenery.

“Homes near a park are now incredibly sought after, and their prices have risen. We now understand that there could be another pandemic, so people are a little bit scarred by this. They will heal, of course, but I can see the scars there,” Ms O’Dea said.

Despite these scars, she said the Bardon sale followed a hot streak for the Ray White Paddington office, with four out of four auctions going under the hammer over the past month of Saturdays.

“I think auctions are working and I’m taking most of my sellers to auction at the moment because it’s a perfect storm.”

Place Estate Agents chief auctioneer Peter Burgin echoed the weekend of positive auction results and said two of their properties sold prior, with another going under the hammer at 11 Bruce Street, Grange, for just over $1.5 million through Matthew Jabs and Ross Armstrong, of Place Newmarket.

brisbane auction market

“Last month’s clearance rate (for Place) was 88 per cent and this month will be the same. It’s a lot higher than usual,” Mr Burgin said.

“We are seeing a lot of competition and some properties are getting over the reserve, lifestyle is everything.

“I think this trend will continue to the end of the year and 2021 will be significant. Brisbane will be the most liveable city in the country; this is Brisbane’s time.”

This article is republished from under a Creative Common license. Read the original article.

from Queensland Property Investor

Rare Gold Coast Beachfront Site Hits the Market

A landmark beachfront development site at the northern end of the Gold Coast with no building height limit, suitable for a residential mixed-use project, has hit the market.

The amalgamated Pacific Point high-rise apartment building and adjoining duplex is being offered for sale by James Holland, Brendan Hogan and Gus Moors of Colliers International.

The 1,682sq m beachfront site located at 3464-3468 Main Beach Parade, Surfers Paradise, is zoned high-density residential and is being marketed by Colliers International on behalf of Aquis Australia which is linked to Hong Kong-based Tony Fung.

The property boasts extremely rare beach frontage of more than 70 metres, with an existing 10-storey apartment building and a 3-storey duplex—providing substantial holding income.

Rare Gold Coast Beachfront Site Hits the Market

The high-density residential zoning and unrestricted building height combined with the substantial site area provide the opportunity to develop a landmark beachfront project. Concept plans are available for a striking residential mixed-use tower featuring premium residences above a hotel.

The site has an existing approval for a Woods Bagot-designed 580-key resort development with circa 47,000sq m of gross building area over 50-storeys.

“There are extremely limited beachfront development sites of this scale remaining under single ownership on the Gold Coast—let alone those which have the 70-plus metres of beach frontage of this site.” Colliers International residential executive James Holland said.

“The beachfront apartment market continues to go from strength to strength and we are seeing a significant increase in demand for premium beachfront apartments – driven by a spike in local, interstate and offshore purchasers”

Rare Gold Coast Beachfront Site Hits the Market

Colliers International Residential director Brendan Hogan said that he has already seen strong interest for the site.

“And we anticipate further interest from a range of parties including developers, hotel developers and investors who may landbank—either originating locally, interstate or offshore.”

“We are seeing an increasing trend of new entrants into the south-east Queensland market who are looking for ‘high quality sites’ given the lifestyle and affordability benefits as well as the positive economic and population growth outlook, so this site would certainly appeal to these prospective buyers.”

Colliers International head of hotels Gus Moors said that now state border restrictions have lifted, the Australian travelling public will flock to regional holiday destinations.

“Gold Coast in particular will be a market in demand due to its history of being Australia’s playground. Upon lifting of international travel restrictions, the international travelling market are likely to be drawn to the Gold Coasts’ strong fundamentals around accessibility to Asia Pacific, outdoor lifestyle, and a diversified economy. ”

The international expressions of interest campaign for Pacific Point closes 28 October, if not sold prior.

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from Queensland Property Investor

$110m locked in for Cleveland Redland Bay Road

The Palaszczuk Government has announced another $40 million for priority upgrades to Cleveland Redland Bay Road, bringing the government’s total investment on the key Redlands connector to $110 million as part of Queensland’s plan for economic recovery.

Transport and Main Roads Minister Mark Bailey joined Member for Redlands Kim Richards to make the announcement while inspecting roadworks currently underway at the Anita Street intersection, part of the government’s existing $70 million commitment.

“There’s been no bigger advocate for Redlands and better roads in the community than Kim Richards,” Mr Bailey said.

“This additional $40 million will allow us to continue the duplication into Thornlands.

“We’ve already got shovels in the ground on Cleveland Redland Bay Road upgrades and this extra $40 million means will be able to extend that four-laning even further, alongside $9.1 million locked in for the Serpintine Creek Road intersection and another $500,000 to plan for the Boundary Road intersection.

“Queenslanders have stepped up when it comes to managing the health impacts of COVID-19. That has meant the Palaszczuk Government has been able to continue with Queensland’s plan for economic recovery – including getting on with investing in better roads across Redlands as part of a $23 billion pipeline of road and transport projects.”

The $70 million previously committed will see 99 jobs supported, the Anita Street intersection upgraded, with works to roll on, delivering further duplication north of Anita Street when completed.

Ms Richards said the booming population in Redlands was expected to reach almost 200,000 by 2041, meaning funding on the road was vitally important.

“Our businesses and industry generate $5.9 billion for Queensland’s economy every year, and it’s vital it doesn’t stall because roads aren’t keeping up with growth,” Ms Richards said.

“We’re seeing thousands of families move bayside and even more tourists flock to our local towns and islands, putting pressure on our roads, which is why we’re upgrading them.

“From day one, locals told me they want better local roads, transport and jobs. We’re delivering that with new ferry terminals for our Southern Moreton Bay Islands, island road green sealing, more than $20 million in upgrades for Beenleigh-Redland Bay Road and now a $110 million commitment to Redlands’ main stretch.”

Mr Bailey said the $110 million would join major upgrades across the south east including $2.3 billion in M1 upgrades, close to $3 billion for projects on the Bruce Highway between Moreton Bay and Gympie plus the $775 million commitment made last week to build a second M1.

“Seeing shovels in the ground shows Labor’s strong record of delivering for Redlands, unlike the LNP whose only record on roads was to cut funding, sack a quarter of TMR staff and waste more than $100 million trying to sell off public assets.

“It’s only the Palaszczuk Government who has a plan for Redlands roads. How can you trust the LNP, Andrew Laming and Deb Frecklington to put Redlands and Queensland first when they’ve called for the borders to open 64 times during COVID-19.

“The LNP want us all to forget they ignored Cleveland Redland Bay Road, broke promises and gutted roads funding when they were last in office under Campbell Newman and they will do it again. It is in their DNA.”

This article is republished from under a Creative Common license. Read the original article.

from Queensland Property Investor

Friday 25 September 2020

Brisbane first-home buyers need 4.5 years to save, despite pandemic

Low interest rates, falling prices and less smashed avo on toast have mixed a prime purchasing cocktail for Brisbane’s first-home buyers who are now taking less time to save for a unit compared to this time last year.

New research from Domain has revealed that despite the COVID-19 pandemic, entry-level home hunters have shaved two months off the time needed to save the average deposit before climbing their initial steps on the unit property ladder, with real estate experts citing an enticing blend of government grants, forced financial good behaviour and the still-competitive unit market as key drivers.

According to figures released in the latest Domain First-Home Buyers Report on Thursday, it’s now taking just three years and three months for the average couple to bank a 20 per cent deposit for a unit, which is two months faster than September 2019, and a whopping seven months quicker than half a decade ago.

Time to save a deposit, entry-level units

City Entry price 20% deposit Time to save Annual change, months 5-year change, months
Sydney $585,000 $117,000 5 years 7 months 1 -5
Melbourne $424,500 $84,900 4 years 3 months 1 -1
Brisbane $328,000 $65,600 3 years 3 months -2 -7
Adelaide $285,000 $57,000 3 years 0 2
Perth $257,000 $51,400 2 years 5 months -1 -6
Hobart $320,000 $64,000 3 years 6 months 1 12
Darwin $200,000 $40,000 1 years 8 months -2 -22
Canberra $370,000 $74,000 3 years 4 months 0 -1

Source: Domain

In Sydney, it takes the average first-home buyer six years and six months to save for a 20 per cent deposit on an entry-level abode.

The research assumes a couple on average earnings for a 25-34-year-old in their city can save 20 per cent of their post-tax income every month, deposited in a standard online savings account. It excludes transactional costs of buying property.

Entry-level homes are based on the 25th percentile, or the cheapest quarter of homes for sale.

In Brisbane, this means a budget of $450,000 for a house, for which a 20 per cent deposit would be $90,000.

But while the Domain report painted prime conditions for Brisbane’s first-home buyers in the unit sector, the average saving time climbed slightly for those purchasing a house (now four and a half years compared to a month less last year), with experts also warning the good times could soon end as stock levels tighten.

Domain senior research analyst Dr Nicola Powell said while the figures highlighted the city’s long-suffering unit sector, a decline in new builds and developments could spark a new trend in coming months.

“Deteriorating unit prices have really helped to fast-track that journey to first-home ownership … but I do think that construction cycle is coming to an end, so I wonder if we are also at the end of these falling prices,” she said.

“So it will be interesting to see what does unravel.

“I also think many first-home buyers are seizing this [current] opportunity to gain market access.

“There are so many things in place to entice them such as low interest rates and a number of grants … there’s the federal super scheme and the federal deposit scheme which guarantees a 5 per cent deposit, so that has super-charged that journey.”

While the Domain report revealed a two-month time drop across Greater Brisbane, the data further unearthed the city’s hottest spot for first-home buyers, with Cleveland-Stradbroke, Bald Hills-Everton Park and Kenmore-Brookfield-Moggill undergoing the greatest reduction in the time taken to save an entry-level house deposit.

Dave Harding, from Ray White Capalaba, said the prime first-home buying conditions in his patch had sparked a level of out of control activity he’d never seen before in the base end of the Redlands market, which was leading to an increase in property prices.

“I’m baffled [by the rate of activity] … but with those first-home buyers, I think it could be that they were forced to save during COVID … and they have moved out to the Redlands and the Capalaba area,” Mr Harding said.

“Before COVID most of our buyers were from the Redlands area, but now 70 per cent are from outside of it … and while I thought something like a school or a new harbour would put a spotlight on the Redlands map, what sped it up was the pandemic.

Time to save a deposit, entry-level houses

City Entry price 20% deposit Time to save Annual change, months 5-year change, months
Sydney $680,000 $136,000 6 years 6 months 2 4
Melbourne $600,000 $120,000 6 years 2 16
Brisbane $450,000 $90,000 4 years 6 months 1 8
Adelaide $375,000 $75,000 3 years 11 months 0 3
Perth $366,580 $73,316 3 years 5 months -1 -6
Hobart $380,000 $76,000 4 years 2 months 3 15
Darwin $362,000 $72,400 3 years 1 month -1 -7
Canberra $606,060 $121,212 5 years 5 months 4 12

Source: Domain

“Since COVID, people can work from home and they aren’t going to the entertainment in the city. Now anything under $600,000 is flying out the door.”

But while that attractive cocktail of purchasing conditions had fuelled the surge, he said a lack of stock was sparking fierce competition.

Ray White Holland Park agent Steve Landeta also reported a strong rise in first-home buyer activity and said many were hitting the market at a sprint, buoyed by low interest rates and the government deposit scheme.

“A lot of people weren’t spending money with COVID … and they aren’t going out as much,” Mr Landeta said.

“But stock levels are very low at the moment especially in these areas [such as Holland Park] and next year there’s a lot of economists saying early-to-mid next year it will be a bit shaky.”

The time taken to save a deposit for an entry-level unit in Capalaba and Holland Park-Yergona dropped 6.5 per cent and 6.7 per cent respectively over the past year, while on the other end of the spectrum, first-home buyers of budget units in Brisbane’s inner east are now taking 6 per cent longer to save their deposit.

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

from Queensland Property Investor

Coronavirus creates property boom on Southern Moreton Bay Islands as owners take advantage of home-builder grants

It has long been known as a haven for retirees and those seeking the cheapest land in South East Queensland, but the Southern Moreton Bay Islands have seen a renewed interest in a COVID-19 property market.

Property sales on Russell Island have effectively tripled in the last three months, while it is estimated that building activity has doubled.

Real estate agent Chris McGregor said historically around 350 blocks would sell on the islands per year, but judging from monthly figures, sales were nearly three times higher.

It is not uncommon to see bush blocks advertised as low as $16,000 on Russell Island.

Cleared land and waterfront property are more expensive, but still a fraction of the price of equivalent land on the mainland.

“We have people who sell up in capital cities, and come and buy their house outright with money left over, and we also have a lot of owner builders,” he said.

A workman wearing yellow works on construction site with wired fence and wooden frame of house.
Building activity on Queensland’s Russell Island has doubled over the past three months.(ABC News: Baz Ruddick)

Mr McGregor said property prices were rising before the pandemic, but are now at their lowest since 2007.

Mr McGregor believes the $25,000 home-builder grants that were announced as part of coronavirus economic stimulus packages are driving land sales.

Zoning, planning hold islands back

John Bonett runs an earthmoving and tree-clearing business based on Macleay Island, while servicing all of the Southern Moreton Bay Islands.

He said the demand for his services had gone up, but complexities around zoning and moving machinery between islands had made the job difficult.

He said he is worried issues around infrastructure and planning could limit the region’s growth.

The company is operating out of residential areas, with very limited industrial zoned land on Macleay Island.

covid creates property boom
John Bonett, right, says demand for his earthmoving and tree-clearing business is on the increase.(ABC: Baz Ruddick)

“At this stage, we are working out of home … and the best we can do at the moment is scatter the machines around to different employees, until we can work out what to do to better it,” Mr Bonett said.

“We have nearly 20 people working for us, and I like to think we are doing our bit for the community with keeping those people employed.

“But it is getting harder and harder when I am not only battling the everyday costing of quoting and controlling the crew, but battling neighbours and council.

“If we were having our base camp on the mainland, for example, we would be bringing people over.

“That would be taking money off the islands where we want the infrastructure to grow … we want better shops, service stations and facilities for the kids.”

queensland property
Infrastructure is struggling to keep up with the growing population of Queensland’s Southern Moreton Bay Islands.(ABC News: Baz Ruddick)

Many of the roads on the islands remain unsealed, while there is no kerb and channel drainage and no access to sewage, with every new house built having to put in a septic tank.

“If people find it too hard to build here and too complicated and expensive, they will stop building and put properties back on the market.

“So, instead of seeing a housing boom like we are now, we will see a housing slump.”

How many new residents is too many?

construction boom
Redland City Councillor Mark Edwards says he has witnessed a construction boom in his area.(ABC News: Baz Ruddick)

Redland City Councillor Mark Edwards said the area had been “chasing its tail” with infrastructure since the islands were transferred from the State Government administration to the Redland City Council.

“Probably in the last eight years we have done a lot of investment into the islands, which has been a double-edged sword, because when people come out to have a look, they see all the infrastructure that has been built, and that is driving our population growth up more,” he said.

“The biggest fear for the community is, ‘When does our population get too big?’.”

He said the population had already outgrown infrastructure.

“We have a program that has been ongoing for a number of years to seal our roads,” he said.

creates property boom
The $25,000 home-builder grants have driven the construction boom on the Southern Moreton Bay Islands.(ABC News: Baz Ruddick)

“We have about 35 kilometres of roads left, and hopefully that will be done in the next three or four years.

“The biggest fear is sewage. We are on septic here, and we know that when we get to certain levels of density those types of systems can’t cope, so we need to look at sewerage and who is going to pay for that.

“When you put sewerage into a place the population goes up again because you get density.”

Mr Edwards said the community needed to have a public discussion about what they would like in the future.

This article is republished from under a Creative Commons license.  read the original article.

from Queensland Property Investor

Thursday 24 September 2020

Up to Six Years to Save 20pc House Deposit

First-home buyers in Sydney and Melbourne will need to save for up to six-and-a-half years for a deposit to purchase an entry-level house, according to a new report from Domain.

But softening housing markets in recent months could help to support affordability with first home buyers most likely to benefit from price declines, Senior Research Analyst Dr Nicola Powell says.

“Although the majority of capital cities saw the journey to homeownership become a little longer compared to the same time last year, in recent months weakening prices will eventually translate to improved affordability,” Powell said.

Domain’s First Home Buyers Report shows the amount of time required to save a 20 per cent deposit for an entry-level house and unit for a couple aged between 25-to-34 years old on an average income in each capital city.

Entry prices are based on the lower 25th price percentile of the housing market.

Greater Sydney has an entry-level house price of $680,000. It takes six and a half years for a couple on average Sydney incomes to save a 20 per cent deposit, Domain has found.

“While first-home buyers have traditionally sought further-afield seeking value for money, the current health crisis could accelerate this trend as working from home becomes the new norm,” Powell says.

As such, the report notes that it’s fastest to save for a house in the Central Coast, Outer South West, Blue Mountains, Baulkham Hills and Hawkesbury.

Those desiring to be closer to the city will find prices have improved for entry-level units in Auburn, Parramatta, Merrylands-Guildford and Canterbury.

Time to save 20pc entry-level house deposit for a couple aged 25-34 years old

City Entry price Time to save Annual % change Time to save a 5pc deposit
Sydney $680,000 6 years 6mnths 2.6% 1 year 7mnths
Melbourne $600,000 6 years 2.9% 1 year 6mnths
Brisbane $450,000 4 years 6mnths 1.9% 1 year 1mnth
Adelaide $375,000 3 years 11mnths 0% 11 months
Perth $366,580 3 years 5 mnths -2.4% 10 months
Hobart $380,000 4 years 2mnths 6.4% 1 year
Darwin $362,000 3 years 1mnth -2.6% 9 months
Canberra $606,060 5 years 5mnths 6.6% 1 year 4mnths

^ The amount of time required to save a 20 per cent deposit is calculated by comparing salary earnings with entry-level house and unit prices, Domain.

In Melbourne, Powell says an entry-level unit will take four years and three months to save a deposit for, and six years for an entry-level house deposit.

Powell says Melbourne’s growth corridors are key areas of affordability, and include areas such as Melton-Bacchus Marsh and Wyndham, or Sunbury for entry-level houses.

For entry-level units, areas include Tullamarine-Broadmeadows, Wyndham, Melbourne City and Manningham-West.

Brisbane timeframes include four-and-a-half years to save for an entry-level house deposit and just over three years to save for a unit.

“Cleveland-Stradbroke, Bald Hills-Everton Park and Kenmore-Brookfield-Moggill had a reduction in the time taken to save an entry-level house deposit, bucking the overall trend for Greater Brisbane,” Powell notes.

“Those vying for the quickest hop on the property ladder will need to look towards Ipswich, Moreton Bay and Logan-Beaudesert region for the quickest saving times.”

Time to save 20pc entry-level unit deposit for a couple aged 25-34 years old

City Entry-level unit price Time to save Annual change % Time to save 5% deposit
Sydney $585,000 5 years 7mnths 1.5% 1 year 4mnths
Melbourne $424,500 4 years 3mnths 2% 1 year
Brisbane $328,000 3 years 3mnths -4.9% 9 months
Adelaide $285,000 3 years 0% 9 months
Perth $257,000 2 years 5mnths -3.3% 7 months
Hobart $320,000 3 years 6mnths 2.4% 10 months
Darwin $200,000 1 year 8mnths -9.1% 5 months
Canberra $370,000 3 years 4mnths 0% 10 months

^ Based on average income for a couple in each capital city using ABS figures. Incomes are based on the average employee earnings in each Greater Capital City.

The path to purchase in Perth is now 6 months quicker compared to 2015, as wage growth outperforms house price growth, the report notes.

“Outer suburban areas offer the quickest hop onto the property ladder with houses in Kwinana, Armadale and Gosnells,” Powell said.

Buyers in Perth and Darwin have a shorter time span to save for a home deposit, with the average time taking less than three and a half years.

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

from Queensland Property Investor

Stockwell Submits Fish Lane Twin Towers

Private developer Stockwell is defying headwinds in the housing market, submitting a development application for a twin tower apartment project in South Brisbane’s Fish Lane precinct.

Stockwell—the family property company founded by Bill and Necia Stockwell and now run by their son, former Olympian Mark—has long been associated with apartment projects in Brisbane’s inner south.

Its latest application, an 18,000sq m Mode-designed residential project, will comprise 124 apartments across two 27 and 23 storey buildings set above a five level brick podium that features 800sq m of ground level retail and dining.

The project, located at 30 Merivale Street, sits on a narrow 1,822sq m site currently occupied by an industrial warehouse.

The development fronts both Merivale and Cordelia Streets while running the length of the popular Fish Lane dining precinct.

The taller of the two towers will feature larger four and five bedroom apartments with views of the Brisbane CBD and river, while the smaller of the towers will mainly be comprised of two and three bedroom apartments overlooking Mount Cootha and the South Brisbane and West End district.

Stockwell Submits Fish Lane Twin Towers

The application comes as Brisbane’s apartment market continues to digest several years of record unit supply.

According to valuation firm m3property, more than 15 per cent of completed inner-Brisbane residential units remain unsold and in the ownership of developers, an increase from 12.4 per cent recorded in December 2019.

Despite this, buyers in search of high-end offerings have seen Brisbane’s prime property price growth increase 2.5 per cent over the year to June, and up 0.3 per cent over the past quarter.

At 88 Merivale Street, Brisbane-based developer Aria Property Group has plans before council for a 382 apartment 30-storey apartment tower.

The plans, designed by Koichi Takada, feature 1,000 trees set to be incorporated into the building’s exterior, two levels of common rooftop space, an array of greenery as well as a 1,350sq m public park at the base of the building and ground floor retail.

Sydney-based developer Crown Group has also rebooted its plans for a controversial $460 million residential development at 117 Victoria Street.

The developer is now considering a revised development application comprising 450 apartments, citing the need for larger apartments and a greater project gross floor area in response to shifting market conditions.

from Queensland Property Investor

Wednesday 23 September 2020

Impending boom: Property prices predicted to surge 15pc by 2023

Things are looking up for the national property market as experts predict house prices could experience a significant boom in the near future according to Westpac’s optimistic property forecast. The nation’s second biggest bank has predicted prices are set to bottom out by June after a 2.3 per cent fall before creeping back up by 15 per cent in 2023.

The bank initially predicted a 10 per cent slump for national housing prices between April 2020 and June 2021 with a slight 8 per cent recovery in store for next year, however Westpac’s chief economist Bill Evans and senior economist Matthew Hassan have improved their expectations.

The forecast now predicts the total fall to be 5 per cent – which is a further 2.3 per cent fall after already declining 2.7 per cent since April – as several capital cities are proving to be more resilient. Perth’s prices are expected to remain the same while Adelaide will actually rise by 2 per cent. However, locked-down Melbourne is expected to have the biggest drop of 12 per cent, followed by 5 per cent in Sydney and 2 per cent in Brisbane.

Westpac’s figures were the most promising compared to its fellow lenders with Commonwealth upgrading its prediction earlier this month from an expected 10 per cent drop to 6 per cent followed by a meek 3 per cent recovery in the second half of next year. Meanwhile, ANZ maintained prices would drop by 10 per cent with 15 per cent being felt in Melbourne.

Economic experts predict prices will reach their lowest in June next year following a surge in urgent or distressed sales after all mortgage deferrals expire in March. Some of this brunt could be felt in the coming weeks as around half of the more than 900,000 deferred loans will be assessed in September and October as they reach the end of the six month stint, according to the Australian Banking Association.

However, the market is expecting to see a 15 per cent surge that will be spread evenly over the two years leading up to mid-2023 with the biggest gains being felt on the east coast with Brisbane expecting a 20 per cent boom. Meanwhile, Perth will see an 18 per cent rise, Sydney with 14 per cent and 10 per cent in Adelaide. Meanwhile, Melbourne will see a 12 per cent increase which will bring the city back to its pre-Covid prices while the other capitals get substantially more expensive.

“On the basis of those increases we would see affordability modestly worse than long-run averages for the nation as a whole, with the advantage enjoyed by the smaller states diminishing,” the report read.

These increases would be aided by possible reduced fixed rates, which are already a more attractive option for borrowers than variable rates, if the Reserve Bank maintains pressure on the yield curve. Meanwhile, the impacts of the recession have also been milder than expected according to Westpac as proved by its update of the end-year unemployment forecast from 8.5 per cent to 7.8 per cent and increased growth forecast for the second half of the year from 2.8 per cent to 4 per cent.

“This recovery will be supported by sustained low rates, which are likely to be even lower than current levels; ongoing support from regulators; substantially improved affordability; sustained fiscal support from both federal and state governments; and a strengthening economic recovery (particularly once a vaccine becomes available, which we expect in 2021),” Evans said.

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.

from Queensland Property Investor

Co-Working Giant IWG Expands Despite Virus Hit

Global serviced office giant IWG has shrugged off concerns about the potential impact of coronavirus on the commercial property sector, announcing plans for 10 new locations across Australia.

The global player, which has plans to grow its network from 3,500 centres to at least 20,000 worldwide, currently has 77 co-working locations in Australia spanning 80,000 square metres.

The new centres will sit within IWG’s Regus brand, which falls under the umbrella of the global London-listed company and will be delivered in partnership with the Adams Group, which own Queensland-based convenience store and service station operator NightOwl.

“The appetite for flexible and co-working spaces was booming in Australia pre-Covid and the pandemic has only increased demand,” Adams Group chief executive Adam Adams said.

“There is a clear gap in the market for a high-quality product in Queensland and our goal is to partner with Regus, the global leader, with a strong brand, professional infrastructure and worldwide network to fulfil this need.”

The Regus brand will now look to expand into ‘second tier’ cities across Queensland, including Townsville, Cairns, Noosa, Mackay, Rockhampton, Gladstone, Bundaberg, Hervey Bay, the Sunshine Coast and Airlie Beach.

IWG head of partnership growth Mark Bhardwaj said the company’s ongoing franchise concept offered partners the opportunity to make high-yield investments while allowing IWG to expand without the use of its own capital.

Related: WeWork Defies Headwinds With New Brisbane Digs

▲ Since co-working was introduced in San Francisco in 2005, more than 17,000 spaces have opened globally, with Australia ranked sixth globally for co-working growth per capita.

IWG’s expansion plans were not enough to prevent the co-working provider from announcing a pre-tax loss of £176m (A$320m) in the six months to the end of June compared with £35.5m (A$63.3m) profit in the same period in 2019.

Despite the losses, and foot traffic across the company’s Australian portfolio falling by a third of pre-Covid-19 levels, IWG plans to push ahead with a recently-acquired £320m (A$568m) capital raise to fund its expansion drive.

With 7 million square metres across 18 major cities, flexible office space now equates to 4 per cent of total Asia-Pacific office stock, according to analysis by CBRE.

ASX-listed serviced office provider Servcorp, which has a global footprint that encompasses 145 locations in 52 cities, reported a 4.6 per cent lift in revenue to $352.9 million across the fiscal year even as its net capacity decreased.

And despite ongoing uncertainty about the company’s future, US giant WeWork recently opened its 21st location in Australia, and local start-up Workit Spaces expanded to a third site, both targeting enterprise customers.

WeWork moved into a heritage-listed corner building at 66 King St in the Sydney CBD following a $72 million restoration and upgrade.

Workit Spaces also recently secured 9,000sq m on a 15-year lease at Goodman Group’s Alexandria Industrial Estate at 39 Bourke Road, Sydney with the ability to house up to 350 small to large e-commerce businesses.

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

from Queensland Property Investor

Brisbane’s Luxury Market Lures Expat Buyers

Brisbane had the best-performing luxury market on Australia’s east coast in the second quarter of 2020, according to Knight Frank’s latest Prime Residential Review report.

The Queensland capital’s lifestyle, relative value against southern counterparts and swift recovery from lockdown emerged as the key factors underpinning its growth.

The report found that Brisbane’s prime property price growth increased 2.5 per cent over the year to June, and up 0.3 per cent over the past quarter.

Prime or luxury residential property is defined as the most expensive property in a given location, generally seen as the top 5 per cent of each market by value.

As such, prime residential sales hold a $2 million threshold in Brisbane while in Sydney and Melbourne the threshold is $3 million.

The average time for a prime property listed on the Brisbane market dropped to 112 days in the June quarter from 116 days the previous quarter.

Queensland prime rents also grew by 6.9 per cent over the past year.

Related: Expats Choose Australia to Work From Home

Rental growth, relative value in luxury sector

Knight Frank’s Head of Residential Research Australia Michelle Ciesielski said that a notable surge in global expat interest had been seen as a result of the pandemic, with an uptick in enquiries seen from Australian expats based in the Asia-Pacific region.

Ciesielski noted that in both Sydney and Brisbane’s prime property market a trend had emerged revealing an increase of renting until people find their next ideal home.

“Which has led to significant rental growth,” Ciesielski said.

“This trend has been exacerbated by a tightly held sales market, while in Brisbane it is also due to greater demand in the city, with Queensland’s capital now on the radar of returning expats attracted not only to the balmy lifestyle but the relative value.”

In terms of relative value, the Outlook notes that a buyer could secure 114sq m of internal luxury floor space in Brisbane for around US$1 million, compared to 89sq m in Melbourne and 51sq m in Sydney.

Ciesielski said Sydney’s prime market would see an ongoing undersupply of new stock, with 61 per cent fewer apartments to be developed in prime regions over the next five years.

She added that in prime regions in Brisbane there would be 62 per cent less new apartments and townhouses forecast over the next five years.

According to its City Wealth Index for 2020, Sydney ranked 15th from 100 cities around the globe, Melbourne ranked 40th, and Brisbane 67th.

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

from Queensland Property Investor

QLD island property listed for less than house in parts of Logan

This spectacular island property off Far North Queensland has two houses, a beach hut and views to rival the Maldives. But this one w...