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"AI is putting our jobs as architects unquestionably at risk"
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In this week's article, Professor Neil Leach's article explores the potential impact of AI on the field of architecture and its associated jobs. It argues that AI could lead to a decrease in demand for certain types of jobs, such as those related to drawing and modeling, but also highlights the potential for new job opportunities related to AI-driven design and technology. The author suggests that architects should embrace AI and its potential to enhance their work.
- Paul Abrahams & Daniel Burger, Directors at Debuilt Property
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Debuilt Property provides development and project services to developers, financiers and investors. For financiers and investors we provide specialist due diligence and project monitoring. For developers and property owners we provide development management services and can assist in securing development finance. We would welcome the opportunity to discuss how we can assist you. Contact Daniel at dburger@debuilt.com.au
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Residential sector
The AFR reported that last week Sydney saw its highest auction clearance rate in a year with nearly 80% of homes sold, as more vendors were willing to meet buyers' price expectations - ahead of expected interest rate rises. Melbourne also saw a rise in clearance rates to 67.7%, while the national rate was at 70.8%. The withdrawal rate in Sydney dropped, while the proportion of properties passed in at auction decreased to the lowest level since October.(Clearance rates rebound as Melbourne house sells $1m over reserve, Nila Sweeney, 19/02/23)
The Age reported that homeowners in Melbourne are holding back from listing properties for sale, resulting in a nearly 30% drop in the number of homes for sale in some regions year on year. New listings in Melbourne's north-east and inner south have seen the biggest drop, down 28.2% and 28.1% respectively. However, the number of homes hitting the market on the Mornington Peninsula rose 3.3%. (Melbourne real estate listings dry up as home owners sit tight in falling market, Melissa Heagney-Bayliss and Tawar Razaghi, 23/02/23)
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The AFR reported that advertised rents are set to rise by 11.5% this year amid rental supply shortage and strong demand, according to Westpac. Nationally the average asking rent would rise to $633 per week adding an additional $65. (Rents to rise 11 pc before peaking early next year: Westpac, Nila Sweeney, 22/02/23)
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The AFR reported that developers are being driven away from rental investment developments (mainly new apartments) amid rising interest rates for local investors and higher costs for overseas buyers. Of a poll undertaken at the end of last year, of 70 developers only 11% built housing stock aimed at investors for their last project, and that figure will drop to 8% for their next projects. In Sydney, the number of new apartments to be built over 2023-2024 will drop by 9.5% to 19,000 from the previous 2 years and in Melbourne it will plummet by 22% to 17,000 in Melbourne, and by 20% to 4000 in Brisbane. (Rental crunch set to worsen as developers shun property investors, Nila Sweeney, 19/02/23)
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The REA reported that despite prices continuing to remain above pre-pandemic levels, at around 30% across much of the country, sellers have lost confidence and market activity has slowed noticeably. (Prices are well up, so why are sellers so down?, Paul Ryan, 20/02/23)
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OTHER KEY HEADLINES
1. Sydney Suburbs under $1.5m tipped for price growth in 2023 - REA 21/02/23
2. Buyers rushing back into ‘stabilising’ housing market: John McGrath - AFR 20/02/23
3. Next hot housing market is out of this world: it’s in the metaverse – AFR 21/02/23
4. Home sales take double the time to sell in parts of Sydney, Brisbane – Australian 17/02/23
5. Greater Brisbane: 600 new homes to be built on 42-hectare site – REA 20/02/23
6. Housing Report Card: many sellers remain in a good position amid price declines – REA 22/02/23
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Commercial sector
The Australian reported that commercial real estate transactions in Australia fell by 18.5% to $44bn in 2022 compared to 2021. However, foreign investment increased as a percentage of total transactions, up from 38.9% to 40.9%. Australian markets remain a priority for investors, with Sydney and Melbourne the top two preferred markets for real estate investment in the Asia-Pacific region in 2023. The Australian economy is expected to grow faster than most other major global economies in 2023 and 2024. (Sydney, Melbourne still investment hotspots, Adrian Harrington, 22/02/23)
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Healthcare
The Australian reported that the popularity of the healthcare sector is growing as returns are strong despite other sectors in the property market slowing. A $21m extension of Queensland’s largest private hospital, Belmont Private Hospital, has just been completed by Canadian group Northwest Healthcare. HealthCo REIT has announced that it acquired a diversified life sciences property in Sydney's Macquarie Park Innovation Precinct for $80.75m. The REIT secured $177m of health and life sciences property acquisitions during the first half of the financial year. The increasing population would help underpin the demand for healthcare services. (Healthcare assets take prime position, Mackenzie Scott, 22/02/23)
Retail
The AFR reported that investor confidence is returning in the small malls sector. Mirvac listed Stanhope Village, in Sydney, a mall it had developed and held for almost 20 years. The mall has been sold to Revelop on a yield of around 5.5%. The deal struck at $158m was a small premium to last year's book value of $154m. However, in Gladstone Stockland sold its shopping centre for $139m, which is down on last year recording its book value at $143.6m. (Investors creep back into battered malls sector, Nick Lenaghan, 22/02/23)
Industrial
The AFR reported that the GPT Group has added 7 new fully leased logistics assets increasing the value of its logistics portfolio by $460m. The last warehouse was completed on Friday, bringing the total area of the 7 warehouses to 197,600 sqm. GPT's logistics assets under management are now valued at $4.7bn. The company expects to further boost this figure during the current financial year with the completion of 4 more facilities, which will add an additional 83,500 sqm of space. (GPT flags logistics strength as it completes $460m in warehouses , Michael Bleby, 19/02/23)
Hotels
The AFR reported that in Adelaide a portfolio of 11 pubs has sold for $160m which is almost double the $67m price tag when they were bought 7 years ago. Surging hotel values are emerging as demand grows from publicans and corporate investors. (Former Blue Sky pub portfolio sold for $160m, Larry Schlesinger, 19/02/23)
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OTHER KEY HEADLINES
1. Twiggy Forrest Pays $575m for Sydney’s Waldorf Astoria – Urban Developer 22/02/23
2. Amazon to employees: Be in the office three days a week – AFR 20/02/23
3. Council lands on Charter Hall’s Brisbane Square tower amid city shake out - Australian 2/02/23
4. Coles sets Queensland record with $27m Toowoomba supermarket sale - AFR 20/02/23
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Construction & development
The Australian reported that the HIA’s latest Economic and Industry Outlook Report shows that the construction industry will decline in 2023 and 2024. The report also predicts a further decline in housing starts as market confidence fades, with forecasts showing the number of detached houses set to decline from 120,000 starts in 2022 to 109,000 in 2023, and below 100,000 in 2024. The HIA has called on the government to overhaul the insolvency process as a wave of building company collapses is expected to continue. (HIA: Residential construction sector set for its worst year in a decade, Chris Herde, 22/02/23)
Inside construction has reported that the construction industry will continue to face challenges in 2023, but there are positive developments on the horizon. Global supply chain issues appear to be minimising, while inflation and interest rates are beginning to level out. However, some mid-tier and smaller construction companies in Australia have failed due to higher costs and contracts locked in prior to the aforementioned issues. Rental demand is at an all-time high, and the trend is shifting from inner-city apartments to standalone dwellings, increasing renovation construction and knock-down rebuilds. This will create a need for more tradespeople, which are currently in short supply. (Construction trends for 2023 - Inside Construction 18/02/23)
The Urban Developer reported that Australian build-to-rent platform GQ has raised an additional $2bn in its latest fund raising, backed by an unnamed global institutional investor, taking its total gross assets under management to $3.2bn. GQ's first fund secured $1.2bn in gross assets, which was deployed into four prime assets, comprising around 1,420 apartments that are either under construction or commencing mid-2023. The second fund will focus on Sydney, growing the already established NSW pipeline, and increasing GQ's plans to create a $5bn portfolio of 5,000 apartments under management by 2026. (Gurner, Qualitas Bank $2bn Raise for BtR Platform, Taryn Paris, 22/02/23)
Build Australia reported that the Australian Workers’ Union, the CFMEU, and the Australian Council of Trade Unions are united in requiring urgent regulatory action to ban engineered stone due to the alarming rise in cases of the occupational lung disease, silicosis which is attributed to breathing in the silica causing lung inflammation and fibrosis. Read more…
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OTHER KEY HEADLINES
1. Mirvac Moves Ahead with $2bn Sydney Harbourside plan – Urban Developer 21/02/23
2. This icy Swedish town is at the forefront of a $100b green tech boom – AFR 21/02/23
3. Brisbane builder Pantha Homes collapses amid worst industry slump in decade – Australian 21/02/23
4. Tradies vie for work as home building activity is tipped to slow – REA 22/02/23
5. First prosecution under tough NSW building legislation – Build Australia 1702/23
6. Digital technologies for construction industry will improve safety and efficiency – Build Australia 21/02/23
7. CPB Contractors one step closer towards net zero - Inside Construction 17/02/23
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Finance
The Age reported that the Victorian upper house has passed the motion to establish a parliamentary inquiry into stamp duty. The inquiry will investigate the impact of stamp duty on housing supply, labour mobility and the overall efficacy of the tax system. Revenue that the tax has generated for the government has sat at approx. $5bn every year for the past 10 years. If stamp duty was to be eradicated, then that would greatly impact Victoria’s debt which is forecast to be around $162bn by 2025. (Stamp duty inquiry to weigh up Victoria’s ‘worst tax’, Broede Carmody, 22/02/23)
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The AFR reported that Victorian developers are warning other states and territories that the 2021 legislation which introduced the windfall gains tax, a stepped tax on capital gains of $100,000 or more in land value from rezoning decisions (up to a maximum 50%), could discourage private investment in the rezoning process. This may in turn delay or stop the redevelopment of urban regeneration sites which are a key source for new housing development which is desperately required for the federal government's target of 1m new dwellings. Victoria has denied developers the chance to claim deductions for rezoning costs to offset the cost of the tax, with the industry saying these costs could reach tens of millions of dollars. (Victoria rules out deductions on windfall gains tax, Michael Bleby, AFR 22/02/23)
The AFR reported that Qualitas announced a revenue of $35.4m for the six months to December, bringing its net profit to $10.7m. The cost of capital is up at almost 2% from the last 6 months and may continue to rise given current market conditions and the commercial property market is showing ever increasing demand for private capital as a result. (With capital at a premium, Qualitas is cleaning up, Micheal Bleby, 22/02/23)
The AFR reported that the hospitality company EVT Limited has issued an interim dividend payment of 14¢ per share after a 3 year pause. EVT posted its Q3 & Q4 2022 revenue of $606.8m which is only 8% below pre-COVID levels and a 68% rise in pre-tax earnings. Of the company’s portfolio it revealed that the hotel business showed the greatest recovery in trading with generated revenue per available room (revPAR, the key industry metric) well above pre-COVID-19 levels. (EVT reinstates dividend as hotels and cinemas roar back to life, Larry Schlesinger, 20/02/23)
The Australian reported that Charter Hall has lifted its property empire to $73bn and says they will focus on premium properties in cities and investing in warehouses, health and smaller shopping centres to ride out the slowdown in office markets. Despite stocks having experienced a 6% decline, or a drop of 88 cents, to $13.63 on Monday, the shares had risen before the results were released. (Charter Hall targets growth amid tougher real estate climate, Ben Wilmot, 20/02/23
The AFR reported that GPT Group has registered earnings of $620.9m for 2022 which is an 11.9% uplift. Distributions for 2022 hit the upper end of the guidance it provided last year, up 7.8% to reach 25¢. The net profit saw a decrease of 67% to $469.3m due to an overall portfolio revaluation loss being recorded. (GPT wins on guidance, loses on office, Nick Lenaghan, 20/02/23)
Master Builders Australia is calling on the Australian government to carefully target spending to boost productivity for businesses, build resilient supply chains, and support the workforce. The organisation's pre-budget submission highlights short and long-term pressures on the building and construction sector in providing for Australia's future building and infrastructure needs. Read more…
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OTHER KEY HEADLINES
1. Stockland sold down but says housing blues will pass – Australian 21/02/23
2. RateMyAgent shares surge 52pc on Realtor.com deal to power US growth – Australian 17/02/23
3. QBCC crackdown hits more than 500 builders – Australian 20/02/23
4. McGrath says east coast cities to drive real estate comeback as interim profit slips – Australian 20/02/23
5. Westfield owner Scentre beats guidance with 10.5pc lift in payout – AFR 22/02/23
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Warrnambool, Victoria: Warrnambool Learning and Library Centre
Kosloff Architecture
The Warrnambool Library and Learning Centre consists of a new 3-storey contemporary building connected by a glazed linkway to the refurbished heritage-listed single-storey 1868 Orderly Room. The modern building features a curved façade that showcases carefully chosen views of Warrnambool and the ocean. The upper levels of the building use draped precast concrete to define their architectural style and serve as a backdrop to the nearby heritage-listed Customs House. The animated curves of the façade create an interesting contrast with the glazing elements, allowing for curated views and regulating the amount of daylight and shading throughout the building's design. The result is a much larger, brighter, and more accessible space in the heart of Warrnambool’s CDB with facilities for both the local community and South West TAFE students and staff.
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Antwerp, Belgium: Beli House
Studio Okami Architecten
This 60’s house in Belgium was in such a state that a rebuild of the house, with a strong respect for its original architectural qualities was the better option. The first floor is comprised of a mirrored box that disappears seamlessly into the surrounding forest, creating a sleek, horizontal bungalow-style look. The elongated design is further accentuated by floor-to-ceiling sliding windows beneath the cantilevered roof, while the concrete floors provide a seamless transition from the interior to the exterior terraces. The interplay between the garden, concrete, and glass and the reflections from the mirrored volume create a timeless appearance that pays homage to the original design's strength.
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