Securing a site for development is not often cut and dried, with negotiations behind the scenes taking any manner of twists and turns.
For Forme’s Luna residential tower at Burleigh Heads on the Gold Coast, that was very much the case, as Forme managing director David Calvisi explains in this TUD Plus Briefing taken from The Urban Developer Boutique Development vSummit.
Luna, on Goodwin Terrace, is an eight-storey high-end tower with three-bedroom, full-floor apartments. All eight, priced from $3.9 million, sold out in January 2021. Construction was completed in February 2022.
Calvisi said the site, formerly the home of popular restaurant The Fish House, had been purchased from a group of investors in 2018 for $5.5 million.
“One of those owners was actually the ex-chief executive of Billabong, Matthew Perrin—at the time he was in jail, and it made for a pretty tricky negotiation,” he said.
“We were able to get someone to go in and see him, and get the deal done that way.
“When we bought it, the site was leased to The Fish House and it had 10 years remaining on the lease.
So, a separate deal was struck with the owner to purchase the business … just shortly after purchasing the site.
“We paid $1.8 million for the business and that obviously included all the assets of the business which we which we sold down by via an auction.”
The big four banks are predicting house prices will drop by up to -14 per cent in the next two years, an outcome that would wipe out a sizeable chunk out of the massive gains seen over the past 15 months.
Some real estate experts disagree, though, suggesting that the outlook may not be so dire.
So what does it all mean for potential sellers who are wondering how to navigate what may be a turbulent market ahead?
The banks are forecasting a substantial drop in house prices
Even before the conflict in Ukraine sent global markets into a spiral of uncertainty, economists at Australia’s big four banks were outlining a treacherous path for the country’s property price growth.
With interest rates tipped to rise later this year and housing affordability worsening, Westpac announced their forecasting for 2023 and 2024.
The bank expects an overall fall in house prices of -14 per cent from the market peak, with values beginning to dip in the second half of 2022.
“Australia’s housing market boom is showing clearer signs of slowing with sentiment pointing to a decline in turnover through the first half of 2022,” Westpac Senior Economist Matthew Hassan explained.
“More importantly, the medium-term outlook has shifted materially with an interest rate tightening cycle now expected to see a broad-based correction phase begin later this year, continuing throughout 2023 and into 2024.”
The other banks have taken a less dramatic approach, though all four are aligned on the expectation that prices will fall in 2023.
The forecasts for next year are a -10 per cent drop for NAB and CBA, with ANZ predicting a fall of -6 per cent.
If Westpac’s predictions were to hold true, the value of the median Sydney home would fall by over $150,000 from today’s prices—a major downshift for sellers.
Other experts are seeing a different outcome
Not everybody in the industry sees things playing out the way that the banks do.
Michael Yardney, director of Metropol Property Strategists and the name behind the popular Property Update blog, urged caution around the pessimistic messaging that’s out there.
He noted that predictions of a -20 per cent market crash are nothing new, “but just look at the terrible track records—they’ve been predicting this every year for the last decade and they’ve been wrong.”
As he put it, “our property markets are just going to move out of the sixth gear into third or fourth gear—they are not going into reverse.”
For the remainder of 2022, Mr Yardney expects buyer demand will remain strong, investors will be “back with a vengeance,” and property prices will continue to rise—just at a slower rate than we saw last year.
Housing economist Andrew Wilson shares that sentiment. Looking at the banks’ predictions for next year, he told The New Daily that “these are quite remarkable forecasts.”
“Historically we’ve only had three years of falling prices since 1987,” he pointed out.
Generally speaking, Dr Wilson believes that the market response to rising interest rates won’t be as rapid or severe as the banks are forecasting, so any price falls would likely be more moderate.
What does the future hold for Australian property?
With so much conflicting information and opinion out there, it can be difficult to understand how to approach the coming 12 to 24 months.
On the one hand, it does look highly likely that interest rates will begin to rise later in 2022, and the banks—Westpac especially—say that’s going to spark a significant reversal in growth.
The other perspective looks to historical data and suggests that the future won’t be as gloomy for homeowners as the banks are making it out to be.
One thing does seem certain, which is that the booming prices seen throughout 2021 are now in the past, and any future growth will be far more restrained.
Nobody has a crystal ball, but one of the best ways to understand the conditions in your market and whether or not growth has peaked is to speak to a top local agent.
Ultimately, they’re the ones who know how properties in your particular suburb are selling, what buyers are thinking, and which way things could shift.
For now, with property prices still at all-time highs across the country, conditions are still very much favourable to sellers.
The five electorates with the highest levels of housing stress have been revealed as affordability ramps up as a key issue in the coming federal election.
Following the release of 16 recommendations to improve housing affordability, the coalition claimed planning and supply was the issue while the opposition said this was a narrow focus.
However, the inquiry did little to map out a route to recovery, with the Property Council of Australia starting a campaign the same week urging political leaders to address the crisis.
House prices increased at a record rate during the pandemic while wages remained relatively stagnant.
The PCA found 70 per cent of voters feared younger people would never be able to buy a home, believing the great Australian dream was out of reach.
Meanwhile, between 50 per cent and 75 per cent of renters were living in housing stress, which was particularly felt in outer suburban and coastal communities, according to Everybody’s Home.
Electorates experiencing the highest housing stress
Rank
NSW
Qld
Vic
1
Macarther 76.5%
Bowman 59.8%
Bruce 64%
2
Chifley 73.6%
Forde 57.8%
Calwell 63.3%
3
Mitchell 73.0%
Wright 57.0%
Holt 63.1%
4
Barton 70.5%
Petrie 53.5%
Lalor 62.9%
5
Robertson 70.0%
Oxley 52.9%
McEwen 61.5%
^Source: Proportion of renters living in housing stress. Everybody’s Home, Digital Finance Analytics & UNSW City Futures Research Centre
Rental stress was between 40 per cent and 70 per cent across a majority of seats in Sydney, Melbourne and Brisbane.
Research by Finder showed the impact of housing affordability had vast differences across the generationsm with 62 per cent of baby boomers buying a home by age 30 compared to only one in three millennials.
This came despite record low interest rates, which are expected to hold until after the election, to be held before May 21.
For mortgage holders, delinquencies should hold steady during 2022 as the country transitioned to stable growth, according to Moody’s Investor Service.
PCA chief executive Ken Morrison said with an election only weeks away, the figures should rightly put pressure on federal parties as well as state, territory and local governments.
“Our research shows four of every five aspiring homeowners actually believe the dream of home ownership is unachievable, which you’d have to say is incredibly disheartening,” Morrison said
“It’s no wonder more than half of 18- to 34-year-olds say it will be an important issue for them in deciding their vote, while another quarter felt it was one of the most important issues coming into the election.”
Everybody’s Home’s Kate Colvin, who is also part of the Council to Homeless Persons management team, said both cities and regional areas were feeling the squeeze from soaring housing costs.
“Incomes are not keeping up with surging housing costs. This is no longer an issue which impacts only those on modest incomes or those living in the major cities,” Colvin said.
“Middle-income Australians can’t keep up with rent and mortgage payments. Regional communities are also experiencing housing crises never seen before.”
Colvin said federal funding for social housing is continuing to decline—in 2013-14 there was just over $2 billion spent, but on current forecasts the commonwealth will spend just $1.6 billion in 2023-24.
ARIA, led by Tim Forrester, has had Bates Smart team up with Richards & Spence in what is expected to be the first of three towers across the amalgamated site.
The sustainably conscious apartment developer, Aria Property Group, is set for further development in the exclusive South Brisbane pocket they’ve been developing in over recent years.
They’ve lodged plans on a triple block at 33 Manning Street, on the corner of Manning and Melbourne Street. The Melbourne Street sites are currently home to the former Malouf’s Fruit Shop and the former Bond’s Sweet Factory.
ARIA, led by Tim Forrester, has had Bates Smart team up with Richards & Spence in what is expected to be the first of three towers across the amalgamated site.
The first tower will have 84 apartments across 14 levels, and extensive rooftop amenity, which, alongside their sustainability efforts, is fast becoming ARIA’s signature.
“33 Manning Street offers a variety of spacious dwellings in the central urban location of South Brisbane providing opportunity for a diverse population including families and students,” the design statement submitted to the Brisbane City Council noted.
“33 Manning Street is a simple and elegant tower which takes best advantage of the opportunities afforded by its location, climate and scale to provide a distinctive lifestyle opportunity for Brisbane.”
“Each apartment has been designed to maximise natural light and cross ventilation, taking advantage of the local climate,” the design statement noted.
“All practical considerations of living are considered including private bedrooms, generous kitchens and flexible living spaces.”
The design statement also suggested that residential wellness is a key design consideration.
There will be a commercial gym tenancy located on the first level. At the heart of the rooftop amenity is the 20 metre pool. On the north-east edge of the roof is a plunge pool, positioned to take in the city views.
There’s an amphitheater which offers seating and lounging for an evening cinema, as well as a residents dining room.
The new tower, next to South Brisbane’s famous Skyneedle, is around the corner from Trellis, one of ARIA’s most sustainable projects to date. Some 60 per cent of the tower is covered in greenery. There’s Tesla charging, solar technology, and extensive rainwater tanks.
It’s also up the road from The Standard, ARIA’s flagship development in the heart of the popular Fish Lane precinct.
Local agents are reporting there is just not enough high-end stock to meet the demand for local and interstate buyers wanting to spend more on their holiday home, in the wake of the COVID-19 pandemic
The Gold Coast is running out of apartments.
That’s the data pulled by property consultancy firm Urbis, who say there is just over two months of stock left on the Gold Coast, if there were to be no new project released and current demand continued.
Local agents are reporting there is just not enough high-end stock to meet the demand for local and interstate buyers wanting to spend more on their holiday home, in the wake of the COVID-19 pandemic.
They are expecting a wave of buyers to be flying up from Sydney and Melbourne when the borders open, and are expecting little slowdown heading in to January
Urban has wrapped up the top apartments across the Gold Coast at the high-end price point.
Aperture, Broadbeach
Three-bedroom full-floor apartments from $2.1 million
Aperture Broadbeach 20 Mary Avenue, Broadbeach QLD 4218
The hotly anticipated Aperture, which will be one of the most high-end apartment developments in Broadbeach when completed in mid-2023, will have just 29 apartments across its 35 levels.
There will be 26 full-floor apartments, each spanning over 200 sqm of internal and external space. Each will comprise three bedrooms, three bathrooms, and three parking spaces.
Following on from their successful first tower in Broadbeach, Signature, which sold out earlier this year, the Melbourne-based Little Projects took a different approach to Aperture, which refers to the opening of a lens’s diaphragm through which light passes.
The AU, Surfers Paradise
Three-bedroom full-floor apartments from $3.45 million
The AU Surfers Paradise 52A The Esplanade, Surfers Paradise QLD 4217
The AU, a collection of just 12 exclusive full-floor oceanview sky homes and two opulent three-level penthouses, has just launched on the sought-after Esplanade in Surfers Paradise.
Archidiom put the plans together for the 19-storey tower, with a facade made almost entirely of golden glass. It allows each apartment to have clear panoramic views of the Surfers Paradise beach.
The developer, ASF Group, enlisted the expertise of the Sydney-based interior design legend Greg Natale to craft the interiors, something no other Gold Coast apartment development can boast.
The apartments will have the finest finishes, with natural stone bench tops, and gold fixtures and finishes throughout.
Chevron One, Chevron Island
Four-bedroom sky homes from $3,325,000
Chevron One 36-44 Stanhill Drive, Surfers Paradise QLD 4217
Chevron One, set to reign as Chevron Island’s only luxury high-rise apartment tower, recently released its Sky Home collection, starting from level 31 in the sought-after apartment development.
The Melbourne-based Bensons Property Group held off releasing the apartments publicly, but given the huge demand in ultra-luxury, large apartments in the sky, they decided to list them on the open market.
When complete, Chevron One will be the tallest tower on the exclusive island, and the tallest there ever will be, with the Gold Coast City Council two years ago bringing in strict planning laws, limiting future apartment projects to 33 metres, or 12 storeys.
There’s a number of three and four-bedroom Sky Homes, some spanning half and full-floors. Four-bedroom apartments, with over 236 sqm of living space, are priced from $3,325,000.
Emerson, Kirra Beach
Three-bedroom full-floor apartments from $2.95 million
Emerson, set on the dress circle Musgrave Street in Kirra Beach, Coolangatta, will home just 27 apartments when it is completed in late October.
There are only six apartments left to sell in the $85 million, 13-level development by the Melbourne-based developer Hirsch & Faigen, who sold out The Hemingway at Palm Beach earlier this year. They’re soon to launch their third Gold Coast project, Yves at Mermaid Beach.
Crowning Emerson, which will begin construction through Hutchies in February, will be an $8 million penthouse, which is yet to be snapped up.
123OBR, Broadbeach
Three-bedroom full-floor apartments from $2.65 million
123OBR 123 Old Burleigh Road, Broadbeach QLD 4218
The Brisbane-based developer Bottega Group are marketing their $52 million Broadbeach apartment block, 123OBR, described as vertically stacked verdant Queensland beach houses.
Named after its location of 123 Old Burleigh Road, one row back from Broadbeach, and designed by Woods Bagot, 123OBR will have 14 whole-floor apartments, as well as a whole floor resort deck half way up the tower.
Priced from $2.65 million, a typical whole-floor apartment at 123OBR will offer 224 sqm of living space with three bedrooms with walk-in wardrobes, two bathrooms and an open plan living and dining areas which have views through the floor-to-ceiling glass windows.
La Mer
Three-bedroom full-floor apartments from $3,245,000
Residents of the new luxury Main Beach apartment development, La Mer, will have the ultimate Gold Coast lifestyle on their doorstep when the whole-floor apartments are finished in late 2023.
Across the road from the beach on Main Beach Parade, La Mer comprises just 29 apartments across its 34 levels, with only a handful of apartments remaining.
Just whole-floor apartments, starting from 307 sqm, La Mer is pitching itself as the ultimate downsizer development. “Transitioning from a house to an apartment has never been easier,” NPA Projects, who are marketing the development, suggest.
Communal recreational facilities also sprawl across an entire floor, a blend of physical wellbeing and entertainment facilities. There’s a 13-metre pool, which is cleverly designed to be private, while also being open plan to take advantage of the consistent Gold Coast climate and the views to the beach.
La Mer 3580 Main Beach Parade, Main Beach QLD 4217
Cru Collective has partnered with ASX-listed CVC Limited to pay $45 million for a 5.4 hectare site at Burleigh Waters on the Gold Coast they plan to transform into a master-planned community with an end value of $1.5 billion.
It is the second partnership between the companies, which are also developing Sur Kirra Beach – part of the new wave of luxury Gold Coast apartments.
Chris Bolger, managing director of Cru Collective, a development and construction company, said the Gold Cost market is running hot, pushing the prices of prime land to more than $20,000 per square metre.
“Honestly, 2021 was a very challenging year to acquire sites, there was such demand from Sydney and Melbourne developers coming up and looking at the boutique sites in the $5 million to $10 million range,” Mr Bolger said.
“And that’s what led us to look for these larger ones because it just got so competitive.
“It’s a big buy for us but somewhat counter-cyclical. There’s a lot of land sites being bought for $20,000 a square metre. That’s big, big money and I struggle to get those sites to work.
“Although this is a big buy, it’s $830 a metre for a site that’s got ultimate planning flexibility and a 45-metre height limit.”
Mr Bolger said planning is under way based on the assumption the site will take 1300 to 1500 apartments and 15,000 to 20,000sq m of retail and commercial space.
CVC Limited chairman Craig Treasure said: “Lake Orr is a true mixed-use infill development site and provides the potential to really shape the area for decades to come.”
The site on Lake Orr Drive was sold by the Uhl family of Germany, represented by Tony Hickey from Hickey Management, who bought it in 2007 for $26 million.
They have been active in Gold Coast real estate since the 1990s with total developments worth around $800 million including Robina Dales and the Blue C apartments in Coolangatta.
Brokered by Brendan Hogan from Colliers and CBRE’s Mark Witheriff, it had been on the market since last April with an initial price guide of $50 million to $60 million.
It’s understood to be the largest greenfield site sale on the Gold Coast in almost a decade.
Mr Bolger said while the residential sales on the Gold Coast are “very strong”, construction costs have risen by 15 per cent to 20 per cent in the past year.
“I think the Gold Coast is particularly challenging as far as [construction] cost escalation goes, but I think that will iron itself out over the next six to 12 months,” he said.
Designed by the local architecture firm BDA Architecture, the proposed development comprises six luxury apartments
Mermaid Beach’s exclusive street, Albatross Avenue, is set for a luxury new boutique apartment project.
SK2 Property, headed by founder and director Stuart kirk, have lodged plans for a three-storey development at 33 Albatross Avenue.
Designed by the local architecture firm BDA Architecture, the proposed development comprises six luxury apartments, configured by a single unit at ground floor, two units per floor for levels one and two, and a single penthouse spread between level three and the rooftop.
Giving attention to the preservation and enhancement of the character of the neighbourhood, the designs embrace sub-tropical design objectives, delivering a residential building of a contemporary, minimalist coastal form and character. Responding to the beachfront location, each apartment follows open-plan living flowing out to the private balconies.
This design outcome not only optimises views toward the adjacent beach, but also accommodates the private residential bedrooms to be within the rear section of the floorplate.
The ground floor apartments are all three-bedrooms, featuring ensuites and walk-in-robes, as well as an outdoor living area and access to the communal areas on the southern side of the site.
Levels one and two house four-bedroom apartments, all with walk-in-robes and ensuites, study nooks, a laundry and drying area, and a powder room. The main indoor living and dining areas occupy the eastern part of the floor plate and lead directly onto a 20 sqm balcony, optimising access to natural daylight and the sea breeze.
Level three of the proposed development accommodates the penthouse, comprising of three-bedrooms and an office, as well as walk-in-robes and ensuites. A living area, laundry, storage, study, bar and reception area is also included, with the main living area leading directly onto a 32 sqm north-facing balcony. The southern balcony adjoins the master-bedroom, spanning 12 sqm.
The communal recreation space is placed on the ground floor, where there’s a gym and meeting room adjoining the entry, along with a pool and communal lawn located on the north-eastern corner of the site, adjoining the beachfront.
The roof terrace consists of private open space for the exclusive use of the level-three penthouse below, as well as a lawn area, seating, a powder room, barbecue facilities, a spa and a pool overlooking the beach.
The built form provides comfort and functionality to the residents while creating a visually appealing interaction with the streetscape and immediate surrounds, which is made up of a range of two to seven-storey buildings.
“The high quality built form will be a positive architectural contribution to the streetscape character of Albatross Avenue,” BDA noted in their design statement submitted to the Gold Coast City Council.
The architectural design is complemented by landscaping from LEAD Design Group, creating attractive and usable outdoor spaces within the development, as well as a high-quality and desirable interface with the street frontages and neighbouring property boundaries.
