Victoria Property, Australia

[greengiraffe]

First-home buyers back in market
Nick Lenaghan
236 words
2 Jul 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.

First-home buyers are returning to the Victorian market after the February cash-rate cut stimulated renewed demand.

Loans to first-home buyers grew by more than 20 per cent compared with a year earlier, according to an Urban Development Institute of Australia survey by BIS Shrapnel.

Loans to non first-home buyers appeared to have tapered off and were down in aggregate in the 2015 March quarter. However, activity in the March month was again up on a year earlier, courtesy of the February cut that took the cash rate to 2.25 per cent.

It is now 2 per cent, after a subsequent cut in May.

"Investor demand also remains a key driver for the Victorian market, with the value of loans to investors in the last quarter up by 21 per cent from the previous year," said Danni Addison, the institute's Victorian chief executive.

Total new separate house building approvals in Victoria continued to rise in the 2015 March quarter, up by 7.7 per cent on a year earlier. Medium and high density approvals were even stronger.

"Momentum is continuing in the residential construction market with medium density (21.2 per cent) and high density (86.6 per cent) dwelling approvals in the latest quarter in Victoria all up on the same period a year ago," BIS Shrapnel's Angie Zigomanis said.


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Document AFNR000020150701eb720002e

[greengiraffe]

Jul 15 2015 at 6:26 PM Updated Jul 15 2015 at 7:26 PM

Is Melbourne's apartment market a bubble waiting to burst?


An illusion of stability or a real risk? Commentators are less concerned about a bubble in Melbourne's apartment market than they were six months ago. Penny Stephens


by Michael Bleby
Is Melbourne's apartment market a bubble waiting to burst? Figures showing that construction of apartments in Victoria took a great leap forward in the March quarter certainly encourage the idea.

The jump to 9009 commencements of apartments, townhouses and semi-detached dwellings – a 42 per cent increase on the December quarter – was the state's highest ever and was the main factor pushing the national total over the 200,000 figure for the first time.

The city is already heading for a glut of apartments, which researcher BIS Shrapnel says will number 15,000 by June next year.

DIP, NOT A TUMBLE


But is the state headed for a nasty fall? The pundits say no. Continued high immigration levels and low interest rates, along with a slowing in production will see prices dip, but not take a tumble.

"You're looking at a 12 per cent to 13 per cent fall in real terms over three years," says BIS Shrapnel associate director Kim Hawtrey. "That's state-wide. Falls in inner Melbourne apartments will almost certainly be sharper than that. But it's a correction, not a calamity."

The rise and rise of the Victorian apartment market, focused on the CBD and adjacent areas of Southbank and Docklands, has reshaped the skyline of the country's second-largest city and sent politicians scrambling to claim credit.

In the 24 months to May, Victoria's 57,534 approvals of new apartments and other denser dwellings accounted for nearly a third of the national total of 187,115. May itself chalked up a new record for apartment approvals in the state. NSW, battling to overcome a decade of under-investment in housing, approved only slightly more, with 61,749.

'HEAD AND SHOULDERS' ABOVE OTHER STATES

"In Victoria we are head and shoulders above the other states because our land is more affordable and we are giving the development industry certainty and transparency in our decision-making," Victorian planning minister Richard Wynne said on Wednesday.

There are already some signs of a downturn. In the March quarter, the proportion of Melbourne units selling for less than their purchase price stood at 10.4 per cent, higher than the capital city average of 8.1 per cent, CoreLogic RP Data says.

Figures last month showing a surge in deaths and a slowdown in births and immigration has placed a cloud over official growth forecasts and suggests housing market forecasts may be too optimistic.

But in Melbourne, some former bears have changed their minds.

Developer Lorenz Grollo, chief executive of Grollo Group, previously predicted that Melbourne's mushrooming apartment stock – supported by predominantly overseas investors – would take a tumble in value once their original owners sold and the stock came onto the secondary market that was limited to locals and permanent residents.

"I was of the view that the secondary market was going to (see prices fall) because there was going to be a glut," Grollo says.

Six months ago Grollo, a former Property Council of Victoria president, changed his mind, however.

"I think they'll hold their current pricing," he says.

DEMAND STILL STRONG

There is certainly little to suggest demand for apartment living is easing. Melbourne's vacancy rate held at 2.3 per cent in June, having tightened from 2.7 per cent a year earlier, SQM Research figures on Tuesday showed.

SQM figures show that the vacancy rate in the apartment-heavy 3008 Docklands postcode held at 4.5 per cent in June from May, and has been below the 6 per cent level for the past year, sitting comfortably below its recent 9 per cent-plus peak of January 2014. The 3006 Southbank postcode tells a similar story. The current 4.6 per cent vacancy rate is well down on the near-9 per cent of a year ago. In the CBD vacancies are rising, but are below their 6 per cent of a year ago.

"Underlying demand is absorbing that supply at a fairly fast rate, which is why vacancies have been falling," says SQM managing director Louis Christopher. "We are now less concerned about an imminent oversupply and bust in Melbourne."

Of course, that has its downsides. The failure of apartment prices to fall significantly is going to make it harder for locals to buy. In fact, citing benchmark costs for a two-bedroom, two-bathroom CBD or fringe apartment of $10,000 per square metre in Melbourne, $20,000 per sq m in Sydney and $30,000 per sq m in London, Grollo says in the longer run they will get pricier.

"Melbourne in a global context is still cheap," Grollo says. "A lot of people still want to live here. That's going to have an impact on local Melburnians and local residents and investors, but we need to view Melbourne in the context of a global market."

The inflated apartment construction sector is likely to deflate gently, Hawtrey says.

Apartment commencements totalled 29,868 in the year to March. He says the June quarter will mark the peak, "just shy" of an annual figure of 30,000.

"We see it starting to plateau in the second half of 2015 and then it'll start to ease back in the first half of 2016, still at very healthy levels, still in the mid-to-high 20,000s," he says.

It will then taper back, falling below 20,000 by the end of 2017.

But the new global context shows that Melbourne has also changed permanently.

"Just before the GFC, Victoria was only building about 8000 to 9000 apartments a year," Hawtrey says. "It's basically tripled since pre-GFC levels."

[greengiraffe]

Jul 20 2015 at 5:41 PM Updated Jul 20 2015 at 5:41 PM

Large Melbourne apartments outperform investor-grade stock

Completed and under construction apartments in Southbank, Melbourne, Paul Rovere

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by Larry Schlesinger

Demand for bigger Melbourne apartments from families and downsizing baby boomers drove the median prices of these apartments up between 5 and 7 per cent over the past financial year.

By comparison, one-bedroom apartments sold primarily to investors – where many believe an oversupply exists – delivered no capital growth at all with median prices unchanged at $380,000, according to a new report by Melbourne buyers agents, The Secret Agent.

Report author Richard Rossman said that, given the lack of price growth in one-bedroom apartments, investors in this category would be "seeking most of their returns through rental yields".

Median prices for two-bedroom apartments rose from $556,000 in 2014 to $582,000 in 2015 – growth of 4.7 per cent from nearly 2500 sales, the report, which used data sourced from the Real Estate Institute of Victoria's propertyDATA.com.au service, found.

Capital growth was even stronger for apartments with three bedroom or more –- those properties sought after by families and downsizers–- with median prices rising 7.2 per cent from $886,000 in 2014 to $950,000 in 2015 from almost 600 sales.

Average price growth across all apartments in the city and inner suburbs was 2.7 per cent with a median price of $520,000 recorded.

Last month, prolific Melbourne developer Tim Gurner sold out his apartment project, 28 Stanley Street in the hip inner suburb of Collingwood, but only after rejigging the floor plan to offer bigger apartments and fewer one-bedroom apartments. He attributed the success of his other sold-out Collingwood projects to the appetite among owner-occupiers for larger apartments.

"Our large apartment offerings have been the first to sell with many purchasers buying two apartments and customising them to suit their lifestyle – a new trend in Collingwood that only two years ago would have been unheard of," Mr Gurner said.

The report also found that Melbourne apartment sales in the CBD and inner suburbs were up 2.5 per cent over 2015 compared with 2014. Mr Rossman said this showed that "demand is strong enough to accommodate additional apartment complex developments".

He said there were three main factors driving demand for apartments: these being Melbourne's desirability among property investors; skilled migration and the desire of new migrants to live near the city and downscaling.

"As more houses in the inner city are turned into apartment buildings, many households that value the lifestyle and convenience of the inner suburbs will make the shift and make their next purchase an apartment."

[greengiraffe]

Melbourne named world's most liveable city again, Adelaide ranked fifth
Updated about 9 hours ago

Melbourne
PHOTO: It is the fifth time Melbourne has been named Australia's most liveable city. (ABC News: Kathleen Dyett)
RELATED STORY: Melbourne named world's most liveable city
MAP: Melbourne 3000
Melbourne has been named the world's most liveable city for the fifth year in a row, achieving a near perfect score on the Economist Intelligence Unit's (EIU) liveability survey of 140 cities.

The survey rated cities out of 100 in the areas of health care, education, stability, culture and environment and infrastructure.

Melbourne again achieved a score of 97.5, just two-and-a-half points shy of perfection.

The five most liveable cities:

Melbourne, Australia
Vienna, Austria
Vancouver, Canada
Toronto, Canada
Adelaide, Australia
Adelaide was ranked in fifth place again with an overall rating of 96.6.

"Those that score best tend to be mid-sized cities in wealthier countries with a relatively low population density," the EIU report said.

"These can foster a range of recreational activities without leading to high crime levels or overburdened infrastructure."

Seven of the top 10 scoring cities were in Australia and Canada.

The report said civil unrest and acts of terror had triggered stability declines around the world including in France and Tunisia.

The "ongoing actions" of Islamic State had created a further heightened threat of terrorism in many countries.

The Syrian capital Damascus saw the biggest fall in liveability scores over a five-year period.

Zimbabwe's capital Harare was the most improved city in the EIU report.

"No place like Victoria"

Melbourne is Australia's fastest-growing capital and the only city in the world to have won the title five consecutive times.

The five least liveable cities:

Tripoli, Libya
Lagos, Nigeria
Port Moresby, PNG
Dhaka, Bangladesh
Damascus, Syria
International visits have increased by 8 per cent in that time.

While celebrating the ranking, the Victorian Government said it would "never be complacent", investing $20 billion in transport infrastructure and $5.4 billion in health and education to create a stronger economy.

"Melbourne has the best of everything and this title proves it," Victorian Premier Daniel Andrews said.

"Perfect scores in health care, education and infrastructure, culture, environment and sport are all proof there's no place like Victoria."

Melbourne Mayor Robert Doyle said he was "very proud" of the accolade.

"It is particularly pleasing in a year when the Economist Intelligence Unit notes that many cities lost ground," he said.

"We must be doing something right in our cities in this part of the world."

Most liveable 'only for some': VCOSS

The Victorian Council of Social Service said Melbourne's top ranking failed to recognise the growing disparity between those who can afford to live where the services and jobs are and those who have to live in areas of high unemployment and poor transport.

"Perhaps the EIU should survey the growing number of people sleeping rough on Melbourne's streets about how liveable they find the city in the midst of winter," Emma King, VCOSS chief executive said.

"A growing body of evidence paints a starkly different picture of our community.

"Over the coming decade we need to fit millions more people into Victoria with the state's population set to boom.

"We cannot merely keep expanding Melbourne's fringe without increasing jobs, infrastructure and services there."

[greengiraffe]

• Aug 28 2015 at 5:35 PM 
   
  
  
•  Updated Aug 28 2015 at 5:35 PM
  
  
  

'I would not be investing in an apartment in Melbourne'

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NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/j/9/4/h/e/image.related.afrArticleLead.620x350.gj9twb.png/1440747344128.jpg[/img]Apartments in Docklands are among many that have been built in Melbourne in recent years.
[Image: 1426319989079.png]

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by Larry Schlesinger
Melbourne's inner city property markets could become awash with empty rental apartments according to a new report that identifies a mismatch between offshore appetite to buy off-the-plan and demand from the local occupier market.
"It is easier to match assets to a global pool of purchasers, where capital is able and willing to be deployed, than match those same assets with occupiers in the local rental market," wrote Jonathan Mayes, an analyst at Charter Keck Cramer.
"Developers can clear their stock because of the appetite from international purchasers, but in the rental market there is not that same capacity. It's not as easy," Mayes said.
The consequence of this could be softening rents and a rise in the number of empty apartments, but is unlikely to have a major impact on off-the-plan pricing so long as offshore demand remains strong.

The report noted that offshore buyers are willing to pay a premium for Australian real estate with prices and values determined by "different means" than local investors and with "current prices not dictated by rational yields".
"Australian housing represents a store of wealth that is underpinned by confidence in domestic institutions (property rights, freehold title and transparent markets, among others) which foreign purchasers may pay a relative premium for, but which domestic participants expect and therefore do not attribute any additional value towards," said Mayes.
Kim Hawtrey, a director at research firm BIS Shrapnel, said the rental market was being oversupplied broadly in Australia and to an acute degree in Melbourne with the likely result being "looming softness in the market".
"There won't be a slump or a bloodbath because population growth, while slowing, is still strong and the Victorian economy still reasonably good.


"But I would not be investing in an apartment in Melbourne. I'd be looking at detached houses or medium density townhouses. There's very much a need for more detached houses. 
"Sydney is the only apartment market you can feel reasonably safe about investing in," Hawtrey said.
Figures compiled by SQM Research show vacancy rates currently above 4 per cent in the Melbourne CBD, Docklands and Southbank, double those of Sydney, with much higher levels of stock currently on the market. 
While gross yields on Melbourne apartments look relatively attractive at between 5 and 6.5 per cent, net yields would be under 3 per cent when interest and costs are factored in.

Domain Group economist Andrew Wilson said offshore investors, many of whom did not require financing, were crowding local investors out of the market.
"For offshore buyers, it's not question of a property providing a yield. For them the yield is built into the premium they get on their capital from the lower dollar and the lower cost of capital. Some won't even engage with the rental market."
"It's good news for developers, because it offsets the perception of oversupply. But the Melbourne market certainly is oversupplied from a local perspective."

[Bibi]

My colleague and her husband bought an apartment one year back. Their intention is to use it as short stay during their holidays in Melbourne. They will sell it if the price is right, if not, they intend to send their kids there to study and stay. 

So no, they are not in desperate search for tenants. Actually they have no intention to rent it out. This is how rich overseas buyers are although it doesnt make financial sense. 

Maybe this is the case too in Singapore where there are also lots of empty condos.

[greengiraffe]

Lim Brothers... who are they?

• Sep 1 2015 at 4:52 PM 
   
  
  
•  Updated Sep 1 2015 at 8:05 PM 
  

Singapore's Lim family tip $110m car park portfolio onto the market

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NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/j/c/p/2/r/image.related.afrArticleLead.620x350.gjc36h.png/1441101910222.jpg[/img]380-406 Queen Street, a car park being sold by the Lim family.
[Image: 1426319989079.png]

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by Larry Schlesinger
Singapore's Lim family have  placed one of the largest freestanding Melbourne car park portfolios onto the market with expectations it could fetch around $110 million.
The family are selling their Kim Lim car park on a 3218 square metre site on the corner of Queen and A'Beckett Streets near Queen Victoria Market hoping for more than $70 million and a smaller car park at 16-32 Leicester Street on a 2040 square metre site in Carlton on the city fringe, asking more than $40 million.
As short-term passive investments, the two car parks with more than 1000 bays at the northern edge of the city would return about 6 per cent per annum.
But their real value lies in the ability to develop the underlying land into high-rise towers, as other Asian developers like UEM Sunrise and PJ Development Holdings have done with their car park acquisitions.

The Lim family paid $9 million for the larger six level car park on the corner of Queen and A'Beckett Streets in 1991 and $4.5m for the Carlton car park at 16-32 Leicester Street around about the same time, holding these investments through Kim Lim Australia, controlled by three brothers.
Fortuitously for the family, the two car parks failed to sell 1999 when they were listed with hopes above $15 million - a fraction of what they are worth today.
Cox Architects have prepared a development scheme for a 71-storey residential tower with more than 850 apartments on the Queen Street site and 17-storey student housing block with more than 250 apartments on the Carlton site.
Both car parks are being sold in their current use without development approval  through Matt Stagg, Daniel Wolman and Oliver Hay of Colliers International through an international expressions of interest campaign closing on October 8. They can be purchased individually or in one line.


"The sale of the two properties comes at a time when the number of purpose-built commercial car parks throughout the Melbourne CBD and city fringe is rapidly reducing," Mr Stagg said. "A number of parking facilities have recently been or are scheduled to be demolished to make way for new residential and commercial developments.
"Buyers will recognise both the significance of a commercial car park portfolio investment opportunity of this size plus the huge underlying land areas and future development potential,"  he said.
In June, listed Malaysian conglomerate PJ Development Holdings lodged a $1.5 billion development proposal for for a six-tower project on a two-hectare Southbank car park site acquired in 2014 for a record $145 million.  
Another Malaysian developer, UEM Sunrise, has reportedly sold out 1000 apartments across two 78-level towers on the site of a multi-storey car park at La Trobe Street acquired from local investor Jimmy Goh. 

Another Asian developer active in Melbourne with numerous high-rise projects, Hong Kong-based Far East Consortium owns car park operator, Care Park.

[greengiraffe]

• Sep 7 2015 at 1:17 PM 
   
  
  
•  Updated Sep 7 2015 at 1:41 PM 
  

Where to buy property in Melbourne amid infrastructure boom

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NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/j/f/k/u/o/image.related.afrArticleLead.620x350.gjf3di.png/1441597269561.jpg[/img]Don't knock the burbs: Melbourne's inner suburbs offer infrastructure-led opportunities for buyers and are still going at reasonable prices, PRD Nationwide says. Urban Angles
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by Michael Bleby
A number of inner-ring Melbourne suburbs are taking advantage of planned infrastructure projects to build affordable units with a higher rental yield than Sydney.
Maidstone in the inner west, with a median unit price of $465,000 – and rental yield at 4.5 per cent – is one such suburb that stands to benefit from a booming local infrastructure spend, agency PRD Nationwide's latest Melbourne Hotspots report said.
Developments such as the $105-million Miller Junction Business Park in Altona North, the first stage of which – with a construction cost of $35 million – has begun, is one of the catalysts for more residential development in the Maidstone area just 8 kilometres from the Melbourne CBD, PRD Nationwide national research manager Asti Mardiasmo said.
Melbourne already offers higher residential yields on both houses and apartments than Sydney, and across the Melbourne metropolitan area, commercial and transport infrastructure projects are creating opportunities for residential buyers who are prepared to look beyond established areas
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"They're not too far out of the CBD," Dr Mardiasmo said. "You just have to think outside the box."
The prices of these areas are still reasonable, well below the more commonly expected Melbourne price tag of between $750,000 and $1 million. Houses in Altona North, 14 kilometres outside the CBD, have a median price of $629,000.
On the other side of town, Banyule Council's The Mall in Heidelberg West, a $50-million redevelopment that will create a library and community facility, town square, residential buildings as well as retail and commercial facilities, will also stimulate more residential development. Houses in Heidelberg West have a median price of $515,000.
In St Albans, northwest of the city, the design and construction of two level crossing removals – part of an overall $480 million package by Leighton Contractors that includes similar work in Mitcham and Blackburn on the city's eastern suburbs – will also boost the value of residential developments, Dr Mardiasmo said. The median price of a house in St Albans is $408,000.


The ring of infrastructure spend across the city continues to Hughesdale, just south of Chadstone, the country's largest shopping mall, where about $200 million is due to be spent on building a new Hughesdale Railway Station next year.
"This kind of infrastructure will make commerce and human movement much more easier," Dr Mardiasmo said. 
Those developments are already affecting price growth. In Heidelberg West, the pace of house price growth has picked up to 11 per cent from 9.8 per cent 12 months ago. A year ago, units in Maidstone were growing at a pedestrian 1.3 per cent. That has leaped to 14.8 per cent now.
In Hughesdale, where prices were nominally falling a year ago, they are now galloping ahead at almost 28 per cent, having risen to a median price of $659,000 from $512,000, PRD Nationwide said. 

[brattzz]

aussie is like huge landbank, why all concentrate into the city and pay sky high prices?!! gosh!
grab the rail season pass and transit into city if u are working there!

[greengiraffe]

• Sep 5 2015 at 12:01 AM 
   
  
  
•  Updated Sep 5 2015 at 12:01 AM 
  

Victoria clamps down on high-rise apartment towers

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NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/j/f/a/r/g/image.related.afrArticleLead.620x350.gjeask.png/1441352957601.jpg[/img]A vision of apartments: The 67-storey residential tower under construction at 504 Elizabeth St in Melbourne. It will be one-third taller than the neighbouring tower. Josh Robenstone
[Image: 1426320577108.png]

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by Michael Bleby
Victoria, the country's leader in high-rise apartments, has taken sudden steps to curb the excesses of dense, poorly-designed CBD towers with new planning controls.
For the first time the state government has imposed limits on the density of buildings developers can put on sites. It has also made Melbourne's discretionary height limits mandatory.
The changes, which took effect at midnight Friday, come as the state seeks a firmer hand in shaping the city's development after years of lax controls that have allowed Melbourne – fuelled by local and overseas capital – to build apartments with four times the maximum density allowed in high-rise capitals like Hong Kong, New York and Tokyo.
It also seeks to rein in land speculation that sees developers 'flip' sites with approvals for dense developments that may have little regard for their surrounding environment. Singaporean developer Chip Eng Seng doubled its money this way in March. 
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"At the moment we've got very significant densities, particularly in the CBD and Southbank, without due regard to the public realm," Planning Minister Richard Wynne told AFR Weekend. 
While Melbourne is playing catch-up to Sydney, which already has density controls in place, concerns that a falling Australian dollar will draw even more foreign moneyinto an already-inflated apartment sector make the move timely. 
The state government wants well-designed housing that doesn't put residents cheek-by-jowl with those in a neighbouring tower, doesn't give the CBD a greater population than its infrastructure can support and prevents the city from becoming a network of shadowed wind tunnels. 
"You've got developments that are very, very close to each other in terms of their capability to look into the surrounding properties," Mr Wynne said. "There are issues with light, issues with ventilation, with wind shear at the ground level."


The main change is the immediate imposition of a so-called plot ratio of 24:1, meaning the floorspace created by any new development is limited to 24 times the area of its site. That doesn't necessarily cap height or shape, but sets an overall limit on the size of a project. Cities that have site ratios – including Sydney, which has a maximum ratio of 11:1 – use the ratio as a tool, expanding in exchange for concessions such as creation of public space or facilities. 
In Melbourne, which has had no effective density limit, buildings have been approved in recent years such as developer Brady Group's Vision Apartments at 504 Elizabeth Street, which has a plot ratio of 47:1. It takes up almost all of its site and the completed 67-storey building – currently under construction – will rise 226m and contain 471 apartments. CEL's planned 150 Queen St development was approved with a 71-storey tower with a ratio of almost 65:1.   
The new policies make the discretionary height limits based on so-called OLS airspace limits that exist in parts of the CBD. They also give the City of Melbourne a formal say in all development applications in the city, even those above the 25,000-square-metre threshold that makes them responsibility of the minister. The new rules do not apply to current development applications, do not apply to the Docklands or Fishermans Bend and will only partly apply to Southbank. 
The controls Mr Wynne and Melbourne Lord Mayor Robert Doyle are due to announce on Saturday will be replaced in a year's time by permanent controls after a consultation process. Mr Wynne would not say if the permanent controls will be tighter.

The changes follow a February report by City of Melbourne planner Leanne Hodyl, who warned that weak regulation was permitting a rash of tall buildings with densities that would have "negative, long-term impacts" on the city.