The Blog

Jan 19, 2021

Property buyers flood Queensland since border reopening

Queensland’s property and rental markets are set to soar from one of the biggest southern migrations in history with reports of interstate home hunters and holidaymakers heading north in their droves just days after the state border reopened. With liveability, affordability and a balmy climate sparking the surge, property punters say the sunshine state and Brisbane, in particular, are on track for a record-breaking summer with holiday vacancy rates plummeting to zero amid a red-hot real estate market fuelled by interstate and ex-pat buyers. Ray White New Farm principal Matt Lancashire said those hungry interstate home hunters had all but pounced on prestige homes mere hours after the border restrictions ended almost two weeks ago, revealing the strength of a new migration trend he said was only rising. “I have got a list of 30 or 40 buyers who want to come to Brisbane … and one of the greatest things I have heard is that the first flight out of Melbourne on December 1 was a domestic (flight to Brisbane) and it was full,” Mr Lancashire said. “I also had one guy who crossed the border on the first [of December] (he’d been waiting in Byron Bay), and I took him through six properties straight away. “COVID has done wonders (for our market) … and we’ve had our biggest year (of sales) yet. “We sold over $100 million in just half a year alone, and I reckon I’ll get $200 million by the end of the year. I’ve never done that before; my record is $130 million.” Mr Lancashire said the level of interstate and overseas migration to Brisbane alone was unprecedented with the city set to topple Melbourne for liveability thanks to the affordability of homes and the laidback lifestyle on offer. “And this trend is sustainable … It’s not necessarily that prices are going astronomically through the roof, it’s more that they are creeping up – but it’s also our days on market. Things are transacting incredibly quickly.” He said the appetite for high-end homes had also sparked a domino effect into the prestige rental market, with some buyers forking out thousands per week in rent while they waited for the right home. “High-end rentals and high-end sales – everything is just going bananas … I had eight auctions on Saturday, and I sold seven. The minimum amount of bidders was four, and I sold those seven for $27.5 million,” Mr Lancashire said. “It’s unbelievable because in April we were rethinking our business strategy and how we’ll adapt and how we’ll support our people … and then May came, and we had a record month.” While Queensland’s housing market has nothing short of boomed off the back of the global health crisis, it was a tougher climb back into the black for the state’s holiday rental sector, with thousands of homes sitting empty during June and July – causing millions in lost revenue from the tropics down to the Gold Coast. But even before state borders opened to release the interstate holidaymaker flood, industry experts said the sector was all but saved by stir-crazy locals who splashed serious cash from September onwards to holiday in their own backyard. Mark Beale, from Ray White Whitsunday, said while their holiday and property industry all but ground to a halt halfway through the year, both sales and holiday rentals had since soared with $2 million in properties sold sight-unseen last month alone, with the agency recently clocking a record week in holiday reservations. “A lot of people are now booking their flights and coming up here because they are not travelling overseas … instead of spending $50,000 on that trip abroad they’re saying ‘let’s put that towards a holiday (on the Whitsundays),” Mr Beale said. “During the pandemic, we had a lot of bookings in our holiday rentals, and pretty well everyone cancelled … we lost a lot. But as we got to August, they started to come back. Then four weeks ago we had really good bookings and last week we achieved double our personal best because people are booking their holidays for 2021. “And there’s a lot of interstate interest, particularly from Sydney. So, while it was all south-east Queenslanders leading up to mid-November – when the borders looked like opening – it changed. And then three days before they opened it went crazy. “On average they are paying $675 a night and the average time they are staying is now seven nights. Our sales are also double what they were last year. As for permanent rentals, we now have a 0.4 per cent vacancy rate.” Emily Thomas, of LJ Hooker Peregian Beach, said while their Sunshine Coast holiday rentals also ground to a halt during the toughest quarantine months, it was locals from Brisbane who brought it back to life in September, with interstate families quick to take up the mantle – leading to a booked-out Christmas and January period. “It’s almost back to normal now … and we have no properties available over Christmas,” Ms Thomas said. “During that tough period, more than 50 per cent of our holiday homes were sitting empty. We didn’t know what would happen and we normally have people from down south come up for three months in the winter period, and that didn’t happen. “But then November – which is normally quiet – was really busy. The locals kept us alive.” It was entirely thanks to those south-east Queenslanders that Ray White North Stradbroke agent Chris Ransley said his patch of island paradise stayed afloat, with the quiet holiday spot now undergoing a boom. “The market on the island from both holiday rentals and sales is now really strong … it has gone from strength to strength since the island reopened,” Mr Ransley said. “But when it was closed off for part-time owners and holidaymakers (from March to May), they were zero-dollar months – and that really tested the island. We did, unfortunately, lose some businesses – they just couldn’t afford to stay open. “But then in June, July and August (three normally quiet months) it was huge. “We are finding that usually, our generic customer who comes over to the island will be 80 per cent a return visitor and 20 per cent a ‘newbie’. But that’s completely changed. For June, July and August it was 80 per cent ‘newbies’, and they were people who normally go to Fiji or Bali – and instead they came here. “And I think that strength is going to continue.”

Jan 19, 2021

MOST IN-DEMAND QLD SUBURBS FOR HOUSES AMONG FIRST HOME BUYERS

QUEENSLAND’S first homeowner hot spots have been revealed as young buyers look set to continue to dominate the real estate market in 2021. Experts say COVID-19 has created prime conditions for many young people to get a foot on the property ladder, while Real Estate Institute of Australia figures show first-home buyers make up a greater percentage of property owners than they have since 2009. Realestate.com.au has revealed the most popular suburbs among first home buyers in the state, based on email inquiries, and the Gold Coast and Greater Brisbane suburbs come out on top. Upper Coomera, Coomera and Pimpama on the northern Gold Coast are the most in-demand among first home buyers when it comes to houses, according to the data. In the Greater Brisbane region, Springfield Lakes, Redbank Plains and North Lakes are the most popular. Springfield Lakes is part of Greater Springfield, the largest, privately owned masterplanned city in Australia. One of the country’s fastest growing developments, Greater Springfield is home to more than 45,000 residents, with projections forecasting a population of 80,000 by 2030. Springfield City Group managing director Raynuha Sinnathamby said first home buyers were taking advantage of federal and state incentives to enter the Greater Springfield market. “We’re finding these grants are encouraging and assisting home-ownership in Greater Springfield, and for eligible borrowers, it can be a helpful bridge towards life as a property owner,” Ms Sinnathamby said. She said about 10 per cent of buyers were coming from interstate. “They are coming from not just Victoria and New South Wales, but the Northern Territory and WA as well,” she said. “We’re finding the scarcity of land is a big issue, particularly in the Brisbane market — as there aren’t a lot of opportunities for people to purchase land so close to the CBD, so we definitely help fill that gap. “We have home sites ranging from 400 sqm to 870 sqm, so our price points present something for everyone.” realestate.com.au chief economist Nerida Conisbee said first homebuyer activity had accelerated since COVID-19, with federal and state government incentives encouraging more first time buyers into the market. Ms Conisbee said suburbs like Pimpama on the Gold Coast had become popular because of the large amount of house and land packages available. “HomeBuilder switched a lot of people who were looking at units to houses, and as a result, we saw a lot of first home buyers looking at new home locations, so they’ve become more dominant than they were before,” Ms Conisbee said. “It’s definitely having a big impact on the new home sector and house and land.” Lower interest rates, relaxed lending restrictions, declining home prices — particularly units — and the desire for more space and a better lifestyle was also driving first homebuyer activity, she said. But Ms Conisbee said one of the other factors could be the lack of investors in the market for first home buyers to have to compete with. “They seem to be picking up a lot of the investor-type apartments that were built with investors in mind,” she said. When it comes to units, first home buyers are looking to get in to Surfers Paradise and Southport on the Gold Coast, and the inner city suburbs of Nundah, Coorparoo and West End in Brisbane. “Surfers Paradise tops the list for units,” Ms Conisbee said. “There are a lot of apartments there and they’re pretty cheap. “It could also be a lifestyle choice.” AVID Property Group general manager Queensland Bruce Harper said he noticed a shift in the types of homes first homebuyers were looking for in the past six months. “They’re now wanting to purchase larger blocks of land and larger homes,” Mr Harper said. “There’s been a recent significant decrease in the desire to buy three-bedroom houses, for first homebuyers and investors alike, and an increased desire for four-bedroom homes. “With the government incentives on offer, buyers want to stretch their money that extra distance, so instead of accepting a 300 sqm block of land, they’re looking for at least 450 sqm.” Mr Harper said demand from first homebuyers for house and land in AVID’s projects on the Sunshine Coast and the Gold Coast had been particularly strong. “AVID has 12 communities across southeast Queensland and we’ve seen our strongest sales and highest percentage of first homebuyers in the Sunshine Coast at our Harmony community,” he said. MOST IN-DEMAND QLD SUBURBS FOR HOUSES AMONG FIRST HOME BUYERS 1. Upper Coomera 2. Coomera 3. Springfield Lakes 4. Redbank Plains 5. North Lakes 6. Rochedale South 7. Pimpama 8. Morayfield 9. Forest Lake 10. Narangba 11. Caboolture 12. Kallangur 13. Griffin 14. Capalaba 15. Nambour (Source: Realestate.com.au) MOST IN-DEMAND QLD SUBURBS FOR UNITS AMONG FIRST HOME BUYERS 1. Surfers Paradise 2. Southport 3. Nundah 4. Brisbane City 5. Coorparoo 6. Morningside 7. Carina 8. Palm Beach 9. West End 10. South Brisbane 11. Maroochydore 12. Robina 13. Annerley 14. Mermaid Beach 15. Clayfield (Source: Realestate.com.au)

Jan 15, 2021

Investors will chase commercial property in 2021

Offshore investors will continue buying commercial real estate assets in Australia in 2021, with half of global investors surveyed by commercial agency JLL planning to boost their exposure to the transparent market enjoying strong economic growth and low volatility of returns. But investors in a post-pandemic world will put a greater value on assets with environmental and social sustainability qualities that will make them hold value in the face of climate change and COVID-19, the agency’s Australia and New Zealand investment market themes for 2021 report says. “We believe that the COVID-19 pandemic has led to a sharper focus on environmental, social and corporate governance criteria and investment, and that organisations will gravitate towards assets with strong sustainability attributes,” JLL’s head of research for Australia, Andrew Ballantyne, said. “This creates a potential pool of pre-commitment tenants for developers and an opportunity for investors to refurbish or reposition existing assets.” The pandemic shook up commercial property in 2020, halving transaction volumes from a year earlier, as the market took a breather on transactions between March and July, when much of the country was in lockdown. But as it bounced back it set the stage for several themes that would play out this year, Mr Ballantyne said. Investors were willing to pay high prices for modern, good-quality industrial and logistics assets with long covenants, such as the Aldi portfolio of four distribution centres worth $648 million acquired by a Charter Hall CPIF-Allianz Real Estate joint venture. Portfolios tilting away from retail A stark contrast to industrial was retail property, which suffered an acceleration of the headwinds already facing bricks-and-mortar retail. While many landlords put planned disposals on hold, cutting the volume of retail investment sales by almost half, more assets are likely to come up for sale this year as investors tilt their portfolios away from retail, JLL said. The pandemic also pushed many investors to expand into alternative assets, such as childcare, healthcare and data centre property, which were less tied to the broader economy than mainstream commercial sectors such as traditional office space. “The resilience of most real estate alternatives sub-sectors was highlighted by high rent collection rates throughout COVID-19 and it has expanded the pool of investors seeking exposure to those sub-sectors,” the report says. This tendency will also probably increase the appetite for the growing build-to-rent sector. “The propensity to buy a residential dwelling reduces in an economic downturn and part of the population gravitates towards rental accommodation supporting the underlying demand for build-to-rent properties,” the report says. “The resilience of most of these sub-sectors through COVID-19 has strengthened the investment thesis, and we expect to see a more diverse range of capital sources explore established assets and development opportunities in 2021.” Non-bank lenders’ share of commercial real estate financing could expand to as much as 30 per cent of the market – or to $111.3 billion – as the greater returns on offer than equities or corporate debt draw more lenders to an area from which domestic banks are retreating, JLL says. Vaccine announcement Improving sentiment – due in part to announcements on vaccines – around assets such as office property will benefit valuations, but not make up for all losses they have suffered. “Listed investor confidence in COVID-19-exposed sectors [office, retail and hotels] led to a strong rally in unit prices for those vehicles and a significant narrowing of the discount to net tangible asset value,” JLL’s head of capital markets for Australia, Fergal G Harris, said. “We expect this confidence to flow through to direct real estate investors. While the sharemarket rally may reduce the motivation for some A-REITs to be motivated vendors, we believe that portfolio reweighting will remain a relevant theme for A-REITs and unlisted funds in 2021.”

Jan 15, 2021

REA Insights Commercial Property Snapshot, January 2021

Despite the seasonal slowdown, activity on realcommercial.com.au remained heightened in December. Given the current climate there are a myriad of forces that generate activity on realcommercial.com.au, some of which we’ll dive into in the category breakdown below. What is clear, however, is that the repeated market disruptions throughout 2020 created pent up commercial property interest and demand, which resulted in a late flurry of activity. As a result, year-on-year growth in both ‘Buy’ and ‘Lease’ searches in December was highest we’ve seen since the origin of this data set two years ago. In this month’s commercial snapshot, we continue to track search volumes over time and demand by category. We also provide a view of user behaviour by analysing the most-searched keywords per asset class as well as looking at the most popular commercial property listings for the month. How are search volumes tracking? The month of December represented the highest year-on-year growth in search on realcommercial.com.au in more than two years. Compared to the month prior however, ‘Buy’ searches decreased by 12 per cent nationally, brought about by drops in the Australian Capital Territory and New South Wales. National year-on-year growth for ‘Lease’ searches was similarly at the highest levels we’ve seen, which can be attributed to growth in New South Wales and Victoria. Month-on-month, ‘Lease’ searches in December dropped by 16 per cent nationally. The most notable decrease was New South Wales, which was down 18 per cent. There was significant year-on-year growth across all categories. Looking at the month-on-month changes, it seems offices (-20%), land/development (-15.1%), retail (-15%) and medical/consulting (-14.8%) were most impacted by the holiday season. Only two categories reported month-on-month national growth in views per listing in December: hotel/leisure (3%) and commercial farming (3%). The growth reported for the hotel/leisure category can be attributed to the increases seen in South Australia (8%), Queensland (7%) and New South Wales (6%). The category, however, recorded the most modest year-on-year growth (35%) compared to the more bullish growth figures seen in the graph above. For commercial farming, it was solely the 17 per cent month-on-month increase in New South Wales that drove the national increase for the category. It is worth noting however that the percentage change in the views per listing metric is influenced by the limited supply of commercial farms available in New South Wales. Medical/consulting listings saw the largest month-on-month national decrease out of all the categories (-16%). This dip can be attributed to the month-on-month decreases seen across all states, especially Victoria (-28.9%) and South Australia (-28.6%). Nationally, all categories recorded substantial year-on-year growth in views per listing. At a state level, only showrooms in the Australian Capital Territory (-1%) and hotel/leisure listings in Tasmania (-31%) saw a year-on-year decline. Views per listing for the hotel/leisure category were the only category that saw month-on-month growth in December nationally (7%). This can be attributed to the growth seen in multiple states including South Australia (13%), Tasmania (12%) and Western Australia (8%). Out of all the states however, New South Wales saw the largest month-on-month growth of 19 per cent despite the state’s new COVID-19 restrictions. It’s worth noting that the number of hotel/leisure listings available was down in December. The showrooms/bulky goods category saw the largest month-on-month decline of 14 per cent nationally, with all states reporting sizeable decreases in views per listing in December. All ‘Lease’ categories recorded high year-on-year growth in December, with the land/development category showing the highest growth of 90 per cent. The largest contributors to this growth were New South Wales (113%), South Australia (84%) and Queensland (81%). In December ‘kitchen’ featured as the most searched keyword for multiple categories including retail, hotel/leisure, commercial farming and showrooms. New features that are important to commercial property seekers include ‘studio’ for offices and ‘character’ for medical/consulting listings.

Dec 10, 2020

West End Footbridges

More info has also been released about the proposed West End-St Lucia bridge. BCC has released three possible alignment options for each bridge and invited public input. You can check out the details via these links: West End-Toowong footbridge West End-St Lucia footbridge These bridges represent the two biggest infrastructure projects for West End in at least 10 years, so it’s important we get them right, and thoroughly consider all impacted stakeholders and flow-on impacts. I’m extremely concerned that Brisbane City Council has only allowed two months for public consultation regarding the location options, and that this is occurring over the summer holidays. The LNP’s process is that following this consultation, they want to make an initial decision about the preferred landing points first, and then undertake a detailed business case analysis for each bridge. My position at the moment is that I’m quite supportive of a West End-Toowong footbridge, however I remain a tad dubious that the business case for the West End-St Lucia bridge will stack up. I’ve already provided the advice to the LNP and Labor that I think a Citycat terminal for the western side of West End is a higher priority than a footbridge from West End to St Lucia, but these are completely separate areas of council decision-making and budgeting, so saying ‘no’ to the West End-St Lucia bridge (or to the West End-Toowong bridge for that matter) doesn’t necessarily increase the chances of getting a second ferry stop. I think it is worthwhile to engage with council’s consultation process on the proposed bridge locations, however before residents rush to provide feedback, I think we need to be demanding more time and more information from BCC so that we as a community can hear from all stakeholders and make an informed decision. My main concerns at this stage include: - BCC has provided some estimates as to how much daily usage each bridge location would have, but hasn’t offered any detail about how those estimates were arrived at, so we need more information about how the projected trip numbers were counted - BCC has acknowledged that for some landing points, some private properties would need to be publicly acquired, but hasn’t stated clearly whether these are residential homes or vacant blocks of land, or exactly how many properties might need to be acquired - BCC hasn’t provided details about where new parkland might be created to offset potential impacts to riverside public green space - BCC hasn’t provided enough detail about exactly which trees (including species, age, location) might need to be removed for each proposed bridge location - BCC hasn’t provided much info about what investment would occur in connection points to the bridges. For example, the value of the Ryan St landing option for the St Lucia bridge depends a lot on what pedestrian and cycling improvements will be made to Ryan St, Doris St and Lower Hardgrave Rd. Adding better bike lanes, improved pedestrian crossings etc will make a significant impact to how many people use these footbridges, so we as residents need more info about what upgrades might happen to connect to each bridge location in order to evaluate which landing points are the best option So overall, I think we need more detail from council, and we also need more time. Although the ‘consultation’ period is two months (which is better than some council consultation processes), it’s over the summer holidays when a lot of people might be less likely to engage with it.

Dec 10, 2020

COVID-19 - Homebuilder Extension

Dec 10, 2020

Australia's Housing Market Proves Resilient over 2020 with Price Rises in Most States

Australia’s weighted average capital city median price for both houses and other dwellings has increased over the September 2020 quarter, the latest Real Estate Market Facts report by REIA has found. REIA President, Mr Adrian Kelly said over the September quarter, the weighted average capital city median price increased by 0.4% for houses and by 0.7% for other dwellings. “Over the year to September 2020, the average capital city median house price rose by 3.6% to $773,760 while other dwellings grew by 2.9% to $596,751. “The median house price increased in all capital cities over the September quarter, except for Melbourne (-1.7%) although over the year, Melbourne showed remarkable resilience through State 4 lockdown recording an increase of 1.3%. “At $1,154,406, Sydney’s median house price continues to be the highest amongst the capital cities, 49.2% higher than the national average. “Perth and Darwin have the lowest median house price across Australian capital cities at $480,000, 38.0% lower than the national average,” he said. Mr Kelly said the largest increase over the past year was 10.6% in Canberra. The Australian Capital Territory, bolstered by the lowest jobless rate, rose 3.9% in the last quarter. “Brisbane increased 1.7% over the past quarter and 2.1% in the past year while Adelaide’s median house price rose 3.1% in the last quarter and 4% over the last 12 months. In the west, Perth house prices increased 0.8% in the quarter but recorded a decrease in the last year. “Not to be outdone, Tasmania experienced record highs for houses in Hobart – the best growth since late 2017, and a quarterly jump in house prices by 1.9%. he said. Mr Kelly said that rents too increased in all capital cities except Melbourne, Adelaide and Canberra where they remain stable with Perth rents increasing 5.9% due to very tight demand. “Vacancy rates for rental properties in Sydney have increased substantially over the past year with Sydney at 4.3% and Melbourne recording 3.7%. “The challenges of 2021 remain significant with the continued resumption of mortgage deferrals, the lasting impacts of new foreign policy settings for residential property and the uncertain future of international tourism, international students and immigration,” he said.

Dec 10, 2020

Rise of the High Street - How Brisbane Suburbs Compare

Much like how TV killed the Radio star - it was the mall that killed the suburban high street. But it appears that as online shopping brings the end of the mall, city-dwellers are returning to the high streets once again. Rising rents and the boom of online shopping have both caused declines in multi-purpose shopping centres. As has consumers’ increasing interest in bespoke and boutique products, which has caused a resurgence in high streets. Research published in January by the Journal of Urban Design, led by Dr Dorina Pojani, studied 10 of Brisbane’s suburbs and how their high streets are designed. Boundary St in West End, Grey St in South Brisbane and James St in Fortitude Valley were some suburbs used as benchmarks for the other case study streets. In comparison, the research found the Brisbane high streets outside the 10-kilometre inner-city circle measured are poorly designed and unwelcoming to residents, needing a rethink of how such key shopping strips are designed to foster genuine community. The research said that newer cities, such as Brisbane, which have been created after the introduction of the automobile have a greater difficulty in attracting foot traffic. The research author, Dr Pojani, said while Sydney and Melbourne were designed around the traditional concept of suburban neighbourhoods, each with its individual shopping strip, Brisbane was far more central-city focused. “Brisbane remains very very monocentric and that worked well for us as a city I think when Brisbane was still very small,” Dr Pojani said. “Imagine somebody’s workday, they get up in the morning in the suburbs, they commute to the CBD, they go back to the suburb, have dinner with family, and then if the suburb was close enough to the CBD there was still time to go out to catch a show. “But now the city is more spread out it doesn’t work … there’s just no time, it’s not convenient. So then it would be good if people had some of the amenities closer to home. “If they were to go home in the evening there would be some shops, some restaurants and cafes, and a movie theatre in a high street nearby.”