The Age: Foreign buyers boost market
Nicole Lindsay
523 words
24 Jun 2013
The Age
AGEE
English
© 2013 Copyright John Fairfax Holdings Limited. Factiva.Gateway.Messages.Archive.V1_0.ELink
Property- Bumper weekend of auction sales
Melbourne property market's last hurrah before school holidays and the dormant winter market resulted in another strong 71 per cent auction clearance rate amid signs the low Australian dollar could be drawing in overseas buyers.
Low interest rates and increased consumer confidence have all contributed to resurgent property markets in Melbourne and Sydney this year. There was a flurry of bumper sales over the weekend, including several $4 million-plus results and other properties tipping their reserve prices by 20 per cent and more.
Noel Jones director David Gillham said overseas buyers have become very active since the Australian dollar started dropping in value two weeks ago.
"They're getting nearly a 10 per cent discount just bringing their money into the country," Mr Gillham said.
He auctioned a 1920s-era property at 6 Adrian Street in Glen Iris on Saturday which had a reserve of $1.52 million, but sold under the hammer for $2 million.
"We had one buyer going up in bids of $90,000 and $80,000. If that [overseas] buyer hadn't been there, it probably would have sold for around $1.6 million," he said.
Whereas some agents have reported an unexpectedly strong year, Mr Gillham said the move in his market, in the south-east suburbs, came about six weeks ago.
"The first quarter of the year was pretty sluggish but in the last six weeks we've had phenomenal results. Land in particular has been going well and selling over reserves by 20-25 per cent," he said.
Land was the key attraction at 7 Kenley Court in Toorak, one of the city's most exclusive streets, where a tired three-bedroom house on an 864 square metre parcel of land fetched $4.7 million under the hammer through RT Edgar.
The final price reflected its land value, with the house likely to be knocked down and a new property erected in its place.
RT Edgar director Warwick Anderson said some of the weekend results were likely boosted by the lack of stock available in the next few months.
"It will be at least a month if not maybe eight weeks before more properties come on the market," Mr Anderson said.
However, Lynton, the most expensive property on offer over the weekend failed to sell. The elaborate triple-fronted Victorian at 85 St Vincent Place in Albert Park passed in on a $6.2 million vendor bid.
Held in front of about 400 people, the auction elicited a single $5.8 million bid before the vendor made two bids of $6 million and $6.2 million and passed in the property.
In April, Cayzer Real Estate sold three adjoining unrenovated terraces on St Vincent Place for a total of $12.3 million.
The auction clearance rate of 71 per cent was derived from 681 results reported to the Real Estate Institute of Victoria. Of the 197 properties that passed in, 102 did so on a vendor's bid. A further 58 results are still to be reported.
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Housing market impresses again
Jason Murphy
481 words
24 Jun 2013
The Australian Financial Review
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English
Copyright 2013. Fairfax Media Management Pty Limited.
The property market continues to outperform last year as lower interest rates tempt buyers, although the top end remains quiet.
The clearance rate was 75 per cent in Sydney, as measured by Australian Property Monitors, up from 52.2 per cent the same time last year. The clearance rate was 69 per cent in Melbourne, on 280 auctions – a much stronger result than 2012, when only 54 per cent of properties sold under the hammer in the same week.
Australian Property Monitors senior economist Andrew Wilson said the market was "holding its own", but could improve. "We still really don't have any signs of a significant lift in activity in the prestige market in ¬Sydney," he said, blaming a soggy sharemarket. "We still lack that prosperity effect."
Dr Wilson said the Melbourne prestige market was below its peak, and the Sydney top end was not selling well in the $3 million to $5 million range, which he called "that meat and potatoes prestige market".
House prices rose 2.6 per cent over the past year, and 0.1 per cent in the March quarter, according to the most recent Australian Bureau of Statistics data. The next quarterly data will be released on August 6.
Other measures of the housing market remain solid. The value of housing finance commitments rose 1.2 per cent in trend terms in April, and purchase of new dwellings rose 3.5 per cent in the month. The construction side of the housing market looks set to pick up, with a 9.1 per cent increase in the number of dwelling units approved in April, according to official statistics.
Construction has not kept up with population growth in recent years, according to the Reserve Bank. It expects supply of new housing to increase as the mining boom winds down. In its quarterly statement on monetary policy, it noted that rental returns are "around their highest levels for several years". Minutes of the June meeting of the RBA board show the bank said cutting official interest rates to below 3 per cent has improved dwelling investment, housing lending and property prices.
The most expensive property to change hands via auction on Saturday was a $4.24 million home in Melbourne's bay-side suburb of Brighton .
The three-level home featured garaging for six cars, a swimming pool, six bedrooms, an office, two games rooms , a theatre room and a gym.
Meanwhile, a BIS Shrapnel report finds the growing wave of baby boomers shifting into retirement and the end of the resources investment boom will shape the winners and losers of the regional construction industry over the next two years. Sea-change regions led by Coffs Harbour and Grafton on the NSW north coast are set for a 52 per cent increase in building in 2013-14 .
With Jacob Greber
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from a value perspective, would it make sense to consider investing in property now in Australia over malaysia considering the low and going lower AUD vs SGD ?
(24-06-2013, 08:42 AM)byfaith Wrote: [ -> ]from a value perspective, would it make sense to consider investing in property now in Australia over malaysia considering the low and going lower AUD vs SGD ?
currently australia is just past the top of the cycle with highly possible downtrend as economy is getting worse by the day. Mining boom is basically over for now, thus the loss of strength in the AUD. There is also expected big budget deficit over next few years as sharp drop of mining tax and no other sector to take up the slack and ever increasing spending..
Residential property is being bought up by cash rich chinese dumping money from china, much more so than the property rise in china. Imagine what will happen to the property market if china suddenly has a crash?
Also investment property capital gains tax is quite high compared to SG.
So basically not much value if you are buying now. better wait for markets to correct first.
If everything is ok, there is no need to head overseas for sales exhibitions
Melbourne Developers turn to Asia for sales
• BY:SARAH DANCKERT
• From:The Australian
• June 27, 2013 12:00AM
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Little Projects managing director Michael Fox says the group is 'actively marketing offshore and we've been very good at it'. Picture: Stuart McEvoy Source: The Australian
AS Asian developers continue to hold court in Melbourne's apartment market, some of the city's most successful private developers are priming their offshore networks, including property expos, to sell apartments.
Earlier this month Little Projects, the company set up by former Toll boss and multi-millionaire Paul Little, sponsored a major apartment expo in Hong Kong, while Eddie Kutner's Central Equity - known for its offshore sales networks - is marketing its next Melbourne mega apartment project in Singapore and Salvo Property Group's Platinum tower, launched only last month, is already half sold after extensive marketing in Asia.
The tours come as apartment prices fell 4.4 per cent in May, with the rate of return for investors falling to a mere 2.5 per cent, according to RP Data.
Little Projects managing director Michael Fox (a former Toll executive) said the group had long used its offshore networks to market some of its projects to investors, including events such as the Smart Investor expo in Hong Kong it recently sponsored.
"There's a lot of competition. We make no bones about the fact that we're actively marketing offshore, and we've been very good at it," Mr Fox said. "The experienced campaigners like us have a number of ways that they market overseas. You can spend a lot of money for good results, but other companies can spend a lot of money and not get the same results."
Little Projects' success in offshore campaigns was in part due to the company's vertically integrated model (a model that was highly successful at Toll), which includes a real estate agency arm that looks after leasing.
Several of Central Equity's largest apartment projects in Southbank have been marketed overseas, as has the group's house-and-land packages in outer Melbourne. The company's next mega apartment project, Southbank Grand, is being soft-launched in expos in Singapore, China and Malaysia before being officially launched in Melbourne this month.
A spokeswoman for Salvo Property Group confirmed that the Platinum Project had been marketed overseas.
"Platinum has been well received by offshore and local buyers, and Salvo has very strong offshore networks," she said.
http://www.businessday.com.au/business/p...2q27p.html
The Age: Melbourne Prestige market boosted by high-end apartment sales
Date
July 17, 2013
Simon Johanson
Simon Johanson
Property Editor for The Age
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About 25,500 units are in the pipeline in the metro area this year and next, roughly four times what was built in 2005 when the apartment market last peaked.
About 25,500 units are in the pipeline in the metro area this year and next, roughly four times what was built in 2005 when the apartment market last peaked.
A suite of high-end apartments in a prime Melbourne CBD residential development has quietly sold off-market over the past three months, with one top-floor, off-the-plan penthouse fetching close to $13 million, according to Cbus Property.
Three other luxury units sold for between $7 and $10 million, several more went for between $4 and $6 million, with a total of 35 apartments selling above $2 million.
Almost half of the 270 apartments at 35 Spring Street on the corner of Flinders Lane opposite Treasury Gardens had pre-sold, enough for Cbus Property to commit to building the project, said Adrian Pozzo, the chief executive of the construction arm of the building industry's superannuation fund.
The million-dollar activity suggests the top-end property slump that has afflicted Melbourne's prestige market for the past three years has shifted.
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Fairfax Media reported in May last year that owners of penthouse flats were having to slash prices by up to 25 per cent as the property downturn took hold.
Colliers International selling agent Brett Griffith said most of the apartments in the 35 Spring Street project had been taken by local buyers. The Bates Smart-designed building (artist's impression above) had ''picked up a lot of upgraders'', particularly baby boomers wanting to downsize or move to a unique CBD location.
The 43-level tower, which won't be finished for another four years, has taken advantage of this year's upturn in residential property, which has seen home auctions surge and prices stabilise despite concerns about oversupply in Melbourne's apartment market.
About 25,500 units are in the pipeline in the metro area this year and next, roughly four times what was built in 2005 when the apartment market last peaked.
''People talk about an oversupply of residential in Melbourne. There may be, but not for this project,'' Mr Pozzo said.
The tower will step back in three stages from nearby buildings and its metallic white finish will contrast with the beige government offices nearby.
Most CBD apartment developments with smaller single or two-bedroom apartments are structured to appeal to investors. The city's prestige buildings, such as the Melburnian and Yve, - are mostly on or near St Kilda Road.
Another city development, Mirvac's 39-storey Array tower at Yarra's Edge, is yet to sell its twin-level east and west penthouses priced around $8 million.
Dingle Partners agent Anton Wongtrakun said the top-end had ''consolidated'' this year.
Mr Wongtrakun sold a unit in the Westin, bordering the city square, for $6.5 million earlier this year. Another penthouse at 99 Spring Street, formerly owned by the Holmes a Court family, recently went for $4 million, he said.
Cbus was due to begin construction of 35 Spring early next year with demolition of the existing 12-storey office building and work on the tower's six-level underground car park expected to take a year to complete. Tenders closed for construction this week with Probuild, Equiset, Brookfield Multiplex, Lend Lease and Built on the shortlist.
Cbus was concentrating on residential projects because conditions in the commercial sector were a ''bit tough'', Mr Pozzo said.
sjohanson@fairfaxmedia.com.au
Capitals race ahead in the house price stakes
BY:GREG BROWN From: The Australian July 25, 2013 12:00AM
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THE housing market has recorded its best result in more than three years, with most cities at or near record price highs in the June quarter, the latest Australian Property Moniters data shows.
National house prices rose over the quarter by 2.8 per cent to a median of $564,325 - the third consecutive quarterly rise and a level of growth not seen since March 2010.
APM's quarterly housing report showed Sydney, Perth and Canberra all posted record-high median house prices, with Melbourne just 1.4 per cent below its previous price peak. Unit prices also rose, up 2 per cent nationally to a median of $427,573.
Andrew Wilson, APM senior economist, said buyer activity would accelerate through the rest of the year, with market momentum and prices rising.
"Buyer activity in most capital city markets is now charging towards record levels, with the fastest price growth since the government-stimulated house boom of 2009 and 2010," Dr Wilson said.
"The patchiness that has characterised market activity over 2012 is diminishing."
Dr Wilson said that the performance was propelled by investors who were attracted by low interest rates, rising confidence and a generally solid economic performance.
Melbourne recorded the strongest growth result, with median house prices increasing by 5 per cent to $553,447 and median unit prices up 3.7 per cent to $411,714.
Perth continued to surge, with house prices up by 3.2 per cent to $584,487 and units up 2.5 per cent to $386,798 over the quarter. Perth has been the best-performing market over the year, with house prices up 7.5 per cent and units up 9.3 per cent.
"High levels of immigration and a still strong local economy continues to be the local catalyst for house price in Perth," Dr Wilson said.
Sydney median house prices increased over June by 2.7 per cent to $690,064, with median unit prices rising by 2.4 per cent $491,845 - both all-time highs.
Houses in Brisbane (up 0.3 per cent), Canberra (up 1.8 per cent) and Adelaide (up 0.8 per cent) grew more steadily over the quarter, although unit prices in Brisbane were down 2.4 per cent to $346,964.
Darwin (-2.1 per cent) and Hobart (0 per cent) were the only capital cities to not record house price growth over the June quarter. Units in Hobart decreased in value by 7.3 per cent, to $252,050.
Melbourne close to peak
Nick Lenaghan
506 words
30 Jul 2013
The Australian Financial Review
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English
Copyright 2013. Fairfax Media Management Pty Limited.
Melbourne's booming inner city apartment supply pipeline is forecast to peak in 2014, to more than double the amount of units expected in inner Sydney in the same year.
In Melbourne, an estimated 13,630 new apartments will come on line in central Melbourne, the city fringe and the inner city by 2014, according to the latest analysis by Charter Keck Cramer of projects under construction or being marketed.
Sydney's forecast peak is 6365 apartments in the same year.
"In Sydney, there is certainly an upward trend in terms of supply, which is mirroring what's happening in Melbourne," Sam Nathan, Charter Keck Cramer's director of residential projects said.
"The scale of supply even at the peak level is bettered in every year by Melbourne. When you put it side by side it puts Melbourne's situation into clear perspective."
There are a number of factors that have led to the sharp difference between the two capitals, including the restriction on supply in inner-city Sydney because of strict planning regimes and the difficulty of getting permits for a number of years.
The role of offshore developers has also been a major driver in the Melbourne market. There has been close to $1 billion worth of transactions involving Chinese, Malaysian and Singaporean developers on CBD and city fringe sites over the past two years.
In one of the latest deals, one of Asia's largest property developers, Far East Consortium, acquired a CBD residential development site from Industry Superannuation Property Trust for $76 million, in an off-market deal.
"Offshore developers have to come to Melbourne in part because sites are easier to purchase, they are cheaper to purchase and they are easier to get a planning outcome on," Mr Nathan said.Outlook improving
But Sydney's outlook is improving as the reforms are made to the planning system and the city's economic future looks more buoyant than Melbourne's, Mr Nathan said. "Sydney is now getting back to the levels (of supply) last seen a decade ago," he said.
"We've had a long period of under-delivery in Sydney. We now appear to be coming out the other side of that.
"In Sydney vacancy rates are still meaningfully lower than in Melbourne. Rent growth is better and Sydney as a city has a better outlook over the short to medium term."
In the Charter Keck analysis, the Sydney supply will taper slowly after 2014.
For Melbourne, the house view stops short of describing the amount of apartments coming into the market as an over-supply, although Mr Nathan agrees it is "unprecedented".
"A very high level of apartments are already sold and will not be left overhanging as unsold product after completed. That tempers this whole notion of oversupply," he said.
"It will take some time for the market to digest this level of supply and that will be expressed in changes in the rental market and potentially later in the resale market."
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Office landlords to suffer as tenants move on
BY:BRIDGET CARTER From: The Australian August 01, 2013 12:00AM
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MILLIONS of dollars are expected to be wiped from the sharemarket value of Australia's largest listed office landlords in the months ahead as investors brace for weaker earnings in two years' time, when dozens of floors in their buildings become vacant.
A leap in vacancies for the landlords, particularly Dexus Property Group, The GPT Group and the US-listed Brookfield, is forecast with tenants moving to new developments or cheaper accommodation in the suburbs. Listed rivals Investa Office Fund and the Commonwealth Property Office Fund would not be as hard hit, according to market commentators.
This week, the Property Council of Australia released its Office Market Report for the six months to July, showing vacancy rates in the nation's buildings had increased to 10.1 per cent from 8.4 per cent. "It is a reflection of the Australian economy," said the PCA's chief executive Peter Verwer. "The key issue here is the very low consumer and business sentiment."
The biggest jump in vacancy rates across the major central city markets for the six-month period, according to the PCA's report, was in Brisbane, where there was a 3.5 percentage point increase to 12.8 per cent.
Adelaide's vacancy rate gained 2.6 percentage points to 12.1 per cent, Melbourne was 2.8 percentage points higher at 9.8 per cent, Sydney's vacancy rate increased 1.7 percentage points to 8.9 per cent, Perth was 1.2 percentage points higher at 6.9 per cent and Canberra had a 0.1 percentage point lift to 12 per cent.
Analysts have pinpointed Dexus, the GPT Group and Brookfield, which have maintained their portfolio occupancy at about 97 per cent, to be among the most vulnerable to higher vacancy rates, with most of their major lease expiries due in the 2015 financial year. (Brookfield is not listed in Australia.)
"Some of the building owners have cut their own throats because, in many cases, they see a lot of their tenants going into activity-based (hot-desking) workspaces," said Geoffrey Learmonth, a director of tenant representative LPC Australia.
"It effectively means they need less space."
The groups were unlikely to suffer in 2013 financial year profit results to be delivered this month, but analysts expected earnings will be lower in the 2015 financial year. This could trigger a sell-off in shares of the companies in the coming months, they said
Dexus was trading at about $1.20 when the real estate investment trusts rallied in about May, but was now trading at about $1.05, while the GPT Group's shares are about $3.75 after trading at more than $4.10 almost two months ago.
Among the buildings to be hit by vacancies is the MLC Centre in Sydney, half-owned by the GPT Group and where Freehills will leave 19,000sq m of space. The law firm is moving to a new office tower at 161 Castlereagh Street. The NSW state government will move from Governor Macquarie Tower, while law firm Corrs Chambers Westgarth is vacating the adjoining Governor Phillip Tower. Both buildings are owned by Dexus, GPT and Lend Lease.
King & Wood Mallesons, also a tenant in the complex, is looking for about 16,000sq m.
It has been estimated that about 200,000sq m of office space will be available in 2016 when the two $1 billion office towers at Lend Lease's Barangaroo project in Sydney are finished.
The GPT Group declined to comment.
Oz dollar doesn't look promising at this moment.
http://www.afr.com/p/business/property/h...aJVoPYtehO
Homebuyers regain their appetites
PUBLISHED: 20 HOURS 26 MINUTES AGO | UPDATE: 15 HOURS 39 MINUTES AGO
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Homebuyers regain their appetites
An unrenovated Matraville home sold for almost $1 million in New South Wales on Saturday. It had not sold in 40 years.
REBECCA THISTLETON AND BIANCA HARTGE-HAZELMAN
Low stock levels and a rise in homebuyer appetite, supported by low interest rates, have spurred competition for quality homes, which may increase now the uncertainty of the election date has been erased.
Financial markets are pricing in a 91 per cent chance of a rate cut on Tuesday.
The odds increased after Reserve Bank of Australia governor Glenn Stevens said last week there was “scope” to keep cutting rates given weakness in the domestic economy.
In Sydney, homes priced under $1 million are drawing hundreds to open for inspections, and multiple bidders at auctions. An unrenovated Matraville house sold for $996,000 after eight bidders took the price $30,000 above reserve on Saturday.
Ray White agent Joe Khederlian said more than 100 people viewed the house, which sold for the first time in 40 years.
Sydney’s clearance rate was above 80 per cent for the fourth consecutive week at 81 per cent, according to Australian Property Monitors, compared with 65 per cent for the same weekend last year. The top seller was a Wahroonga home at $2.58 million.
Melbourne’s rate was 74 per cent, according to the Real Estate Institute of Victoria.
The highest sale was $2.8 million for a Balwyn North property.
Melbourne buyers advocate Mal James said sales were quiet in the million-dollar-plus market but demand was high.
“The quality of properties on offer was generally fairly average but the results demonstrate that buyers are prepared to pay good money even for homes that may need quite a bit of work or are compromised in other ways,” Mr James said. “When less than A-grade properties are selling well and with competition, that’s when you know you’re in a rising market.”
The 65.5-hectare property of five-time MotoGP world champion Mick Doohan, in the Tallebudgera Valley south of the Gold Coast, was passed in at auction on Sunday.
McGrath agent James Ledgerwood said there had been interstate and offshore interest but the property was passed in on a vendor bid of $1 million.
It now has a $1.375 million price tag.
In Brisbane, 61 houses were scheduled for auction and the top seller was a Forest Lake home at $2.58 million.
Shayne Harris of Savills Residential Sydney said uncertainty around the election had put a brake on the property market, with sellers taking a “wait and see” approach, which would ease now the September 7 date had been set.
“Buyers, on the other hand, are having to compete for low levels of stock, especially for properties up to $1.5 million,” he said. “If interest rates are cut to a record low of 2.5 per cent this week, it more than likely will result in an additional flurry of activity as buyers try to jump on the property ladder before it further strengthens and stock levels become even tighter.”
The last time rates were changed during an election campaign was in 2007, when the RBA raised rates to 6.75 per cent under former prime minister John Howard, who then lost to Kevin Rudd. Generally, higher rates aren’t popular with voters because they tend to imply bad fiscal management and mean higher mortgage costs, whereas lower rates provide mortgage relief.
Australian and New Zealand Banking Group chief economist Warren Hogan, who recently changed his forecast in favour of an August 6 rate cut, said while it is best to steer clear of an election campaign when it comes to moving rates, the RBA has little choice given the economy’s weakness and pressure on the non-mining industries from the Australian dollar.
The Australian Financial Review