Asia Pacific real estate investment surges 20% in Q1 2022
|
|
Andrew Peck, Director of Communications at JLL in Singapore, explains the Q1 growth in investments across the Asia Pacific region, highlighting how $40.8bn was injected into the region and retail and office markets performed well.
|
|
|
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 loans and simplify financier and investor monitoring. We would welcome the opportunity to discuss how we can assist you. Contact Daniel at dburger@debuilt.com.au
|
|
Residential sector
The AFR reported that auction listings surged by more than a third the week prior to the federal election and the market’s ‘winter hibernation’. However, the preliminary clearance rate dropped for the fourth week in a row, sitting at 64.6% according to CoreLogic. (Vendors rush to beat federal poll, winter blues, Nick Lenaghan 15/05/22)
ANZ has cut its outlook for housing growth, with faster rate rises than expected leading to a potential 3% decline in Australian dwelling prices, this year and a decline of 8% in 2023 according to the AFR. Senior economists believe the cash rate will rise to 2.35% by mid-2023, which equates to a variable mortgage rate of 4.75%. This would significantly reduce borrowing capacity and see house prices softening in coming months. ANZ predicted that Melbourne and Sydney prices would fall this year by 5% and 7% respectively, whist Brisbane and Perth would rise. (ANZ predicts a worse housing market slowdown, Michael Bleby 17/05/22)
|
|
The Australian reported that there are a number of ‘second-tier’ Australian cities whose housing markets are expected to explode in the next 10 years. Cities include Mackay, Wagga Wagga and Warnambool. (Meet the contenders: Australia’s second-tier cities with rising property markets, Bernard Salt 19/05/22)
CoreLogic also reported that the smallest cities which drive the most growth, with the Home Value Index up 0.7%. Read more…
These cities are on track to experience house price rises of up to another 20% this year. The AFR has seen regions, especially those near capital cities, increase to serious numbers, including 34.3% in the NSW Hunter Valley region. CoreLogic research director Tim Lawless explained that a 6.6% increase already seen is indicative of a further 4.4% growth through to December. (Regional house prices on track to rise by 20pc this year, Nila Sweeney 17/05/22)
CoreLogic has revealed that, despite the return of overseas migration, the demand for housing will be slow. Read more: The return of overseas arrivals and Australia’s property market.
The AFR reported that the rental market is still in strife, as SQM Research revealed that a 1.1% vacancy rate across the country is making things difficult for tenants. In Melbourne, it was slightly higher at 1.9%, the lowest level in years. It is still a landlord’s market, with rents lifting 1.4% in the last 30 days and 2.4% in the 30 days before that. (House rents jump 20 per cent despite a rise in vacancies, Nila Sweeney 16/05/22)
OTHER KEY HEADLINES
1. Super plan could lift Sydney house prices by $45,000 – AFR 16/05/22
2. Tinkering at the edges won’t fix housing affordability – The Age 17/05/22
3. Federal election 2022: Supply-demand balance ‘as safe as houses’ – The Australian 16/05/22
4. Election 2022: Property prices to fall more than expected, RBA warns – The Australian 17/05/22
5. REIA welcomes Minister Sukkar’s super housing agenda to help Australians – REIA 15/05/22
|
|
Commercial sector
Offices
The AFR reported that the pandemic has unleashed a fresh wave of investment into building technology to help people move back into the office. Technologies include links to consumer-facing portals with back-office functions. Property Council figures show Melbourne’s CBD is at 32% occupancy, nearly half that of Adelaide’s 61%. (Landlords boost proptech spend as workers return to the office, Michael Bleby 18/05/22)
Canberra, on the other hand, has a record low vacancy of 5.5%, with positive net absorption for the fourth quarter in a row. Read more by JLL…
Cushman & Wakefield has reported recording breaking commercial transaction volumes of $6.5bn in transactions, with a rolling annual transaction total of $53.9bn. Offices recorded the highest volume at $2.7bn, and ‘Other’ ($1.39bn) and Retail ($1.36bn) following close behind. Read more: Australia Investment MarketBeat Report.
The AFR reported that Mirvac has launched an ‘office on wheels’ where it is trialling a flexible and mobile workplace, involving a rotating department schedule of four-to-six week blocks. The company will track movement to investigate how employees use the space, with no allocated desks but available technology at any location a person feels happy to use. The company believes that it is encouraging people to return to the office, with approximately 18% use so far – giving employees the option to work where they want to, including from home. (Mirvac’s plug and play office on wheels is a sign of the future, Martin Kelly 18/05/22)
Industrial
Southwest Sydney’s skyrocketing demand is forcing tenants and companies to plan up to three years ahead with nearly 75% of potential tenants failing to secure tenancies. The supreme lack of stock has forced tenants to pre-empt their moves one to three years in advance at a minimum. Read more from Colliers…
OTHER KEY HEADLINES
1. Brand new industrial warehouses sell out as demand ramps up – RayWhite Commercial 16/05/22
2. Charter Hall and Cbus Property achieve Carbon Neutral Certification at 171 Collins Street, Melbourne – Charter Hall 21/04/22
3. Childcare asset sales double as demand continues – RayWhite Commercial 16/05/22
4. Retail space with plenty of character snapped up by investor – RayWhite Commercial 18/05/22
5. Investors fuel up on service stations – Commercial Real Estate 13/05/22
|
|
Construction & development
The Age reported that there will be a major correction in the construction industry as it braces for a major slump over the next year. Metricon addressed the issues, on the back of the devastating passing of their co-founder Mario Biasin, stating that the company is not in ill financial health and all of its $200m contracts to build social and affordable housing remain profitable. (‘A very major correction’ under way as building industry faces crisis, Josh Gordon, Jackson Graham, Tawar Razaghi and Elizabeth Redman 20/05/22)
The Age has reported that there is conflict within the building and construction sector, as developers blame lengthy state planning processes for an undersupply in houses and therefore increasing house prices. In return there are claims that developers are drip-feeding new supply into the market to boost their returns. (Developers blame planners for limited housing supply, critics say they’re banking land, Jackson Graham 17/05/21)
The Age reported that there are also concerns that there will be a slump, with ABS figures showing that there were 15,000 dwellings approved in March 2022, down from 23,600 in March 2021. Similarly, construction made up the most insolvencies of any sector in Victoria. Westpac chief economist warned that a “a very major correction” was already under way, unwinding the huge demand surge linked to federal pandemic stimulus measures, such as the federal HomeBuilder scheme. (‘A very major correction’ under way as building industry faces crisis, Josh Gordon, Jackson Graham, Tawar Razaghi and Elizabeth Redman 20/05/22)
The AFR reported that the surge in home-building has created a backlog in housing that will take three years to work its way through the system, as materials delays and labour shortages prolong the construction pipeline. The Australian Construction Industry Forum peak forecasting body is expecting a three-year home-building boom, however some issues or risks like fixed-cost contracts may arise. (Construction pipeline to last longer than expected, Michael Bleby 19/05/22)
Cordell’s Monthly report was released. Read it here…
OTHER KEY HEADLINES
1. Generational development site in Five Dock listed for sale – Colliers 13/05/22
2. ISPT launches large-scale Sustainable Furniture Scheme – ISPT 18/05/22
3. How small infrastructure can make a big difference – RLB 10/05/22
4. Construction pipeline to last longer than expected – AFR 19/05/22
5. Stand and Deliver: the developers dilemma in choosing project delivery methods – Tisher Liner FC Lawyers 10/05/22
|
|
Finance sector
PWC has summarised the speculation behind the future of interest rates, CPI and housing market in its Banking Matters report. View ‘Simplicity raises focus on future’ here…
Lending
CoreLogic has analysed how and why home ownership is so difficult for some Australians to obtain, especially those of a lower tax bracket. As a result of these difficulties, the government has suggested that home loan guarantees will increase. The firm explains more in: The 'pros' and 'cons' of expanding home loan guarantees.
The AFR has reported that house prices in areas where a large portion of households took low deposit mortgages could be at risk of faster and larger declines, if homeowners find it tough to meet their increased mortgage repayments. Eliza Owen of CoreLogic stated that “Highly leveraged areas tend to be more sensitive to changes in the credit environment, so we might start to see evidence of a decline in property prices sooner rather than later”. (Highly leveraged areas at risk of faster house price falls, Nila Sweeney 18/05/22)
OTHER KEY HEADLINES
1. The falls in share markets this year – the bad news and the good – AMP Capital 18/05/22
2. Econosights: The outlook for Australian wages – AMP Capital 16/05/22
3. Foreign buyers remain unfazed by hefty property taxes – Smart Property Investment 14/05/22
4. Household spending intentions fall by 3.8% in April – Commbank 10/05/22
5. Australian banks enter tech arms race as rising rates squeeze profit – Reuters 18/05/22
|
|
Deloitte has reported that women are more likely to experience ‘burnout’ than men in the workplace. 45% of women describe their work/life balance as poor or very poor and 35% say they have trouble switching off from work. Read more: Pandemic postscript: Working women face alarmingly high levels of burnout despite shifting work arrangements.
|
|
1. Kaleidoscope by Keith Courtney - 1-10 July
This exhbition at the Arts Centre Melbourne in collaboration with Melbourne's Rising festival is 'a mesmerising symphony of light, sound and joy, staged in a breathtaking mirror maze'.
2. Live walk through of development site: Finding expertise - Every 4th Sunday of the month
This event is for any beginner property developer or people who want to get into the industry to learn, gain skills and understand blueprints, whilst also networking.
3. 2022 SEQ Brisbane Property Expo - 20-21 August 2022
This expo offers amazing deals, expert advice and gives exclusive offers from developers over a weekend. It is organised by FMA Media Group and will be the largest property expo Australia has seen.
|
|
Australia: A Mixed Bag: Gehry’s Crumpled Paper-Bag Building Arrives in Sydney
Frank Gehry
Frank Genhry's Paper-Bag Building imitates a familiar object for all of us. The controversial design, home to UTS' Business School, has been described as both 'immaculate' but also 'poor man's imitation of Gaudi. Regardless, the building exhibits similarities to Gehry's infamous outlandishness and exhbits outstanding masonry. Read the discussion of the structure from Architizer...
|
|
New Zealand: Tiled facade wraps curved convention centre by Woods Bagot and Warren & Mahoney
Woods Bagot and Warren & Mahoney
Australian architecture studio Woods Bagot and Warren & Mahoney have created a curved herringbone facade on the Ta Pae Convention Exhibition Centre in Christchurch. In attempt to avoid the regular 'boxed' convention centre, the architects have created a smaller structure with a fluid exterior. Read more on Dezeen...
|
|
|
|