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Battle of the States: Which Australian City Will be on Top in 2018?


Australia’s property sector has undergone significant changes over the past 12 months as macroprudential reform moderates demand in the nation’s housing market.

With credit constraints, supply concerns and affordability dominating the headlines, each state has responded differently to the unique market and regulatory conditions that govern it.

In our very own “battle of the states”, The Urban Developer interviewed industry leaders from New South Wales, Victoria, Queensland and South Australia to explore the trends, opportunities and challenges impacting their respective state’s property markets in 2018.

Sydney-based developer Fortis Development Group director Charles Mellick
Sydney-based developer Fortis Development Group director Charles Mellick


New South Wales

Charles Mellick, Director, Fortis Development Group

What have been the driving factors affecting change in your market recently?

The influx in downsizers, owner-occupiers and the decline in investment purchasers has brought a more informed purchaser who heavily invests in every detail of their new home.

This requires us as developers to ensure absolute transparency, quality and thought is delivered across all aspects of the design, marketing, sales and delivery process.

How do you think your local market is faring against other states? Are there any similarities, or is each state facing its own unique challenges and supply cycles?

We are currently working on delivering projects to the downsizer buyer in both Sydney and Melbourne. In terms of strength, we see no difference between the two. The rise in the affluent downsizer market is coming from a decade of growth in housing prices, where family homes have generated a significant amount of wealth.

Empty nesters are then selling their family home for say $5-7 million and investing in a $3 million apartment with no compromise to luxury and only added benefits to convenience and much lower-maintenance.

Related reading: Sydney Developer Launches Build-to-Rent Project in Double Bay

Victorian real estate agency Marshall White director Leonard Teplin
Victorian real estate agency Marshall White director Leonard Teplin


Victoria

Leonard Teplin, Director, Marshall White Projects

Which is the most active demographic in your local market currently? Is this typical of the last few years or has there been a shift in who’s active in the market?

Marshall White has always sold projects to discerning local owner-occupiers, however what we have seen in the last 12 months or so is an increase in buyers at the top end of the market.

Developers are now adjusting their product mix to meet this demand, offering more penthouses and three-bedroom homes than ever before.

What are your top 3 predictions for the year ahead?

1. There will be an increase in larger homes that cater to downsizers and families, with three-bedroom, two-bathroom residences with private car parking proving to be one of the more popular options for buyers.

2. As buyers become increasingly savvy and competition between developers increases, projects will continue to raise the bar in terms of their design excellence and the amenities they offer.

3. Downsizers won’t be going anywhere – this buyer demographic will continue to seek multi-million-dollar apartments in Melbourne’s blue-chip areas as they move away from traditional house and land.

Related reading: Queen Victoria Market Plans in Disarray After Heritage Refusal

Developer Pask Group recently moved beyond greenfield development into medium-density and "boutique" apartment projects. Image: The Pask Group's recent development in South Yarra, the "Millswyn" is due to be completed this year.
Developer Pask Group recently moved beyond greenfield development into medium-density and "boutique" apartment projects. Image: The Pask Group's recent development in South Yarra, the "Millswyn" is due to be completed this year.


Queensland

Dean Pask, Managing Director, Pask Group

What were the main challenges or changes affecting your local market last year, and how did you overcome them?

A shortage of well-located broad hectare englobo sites, despite the release of the new South East Queensland Regional Plan (Shaping SEQ) in August last year, continues to be a challenge.

The desire of many state/local governments to target “the missing middle” and increase the percentage of infill medium/higher density development is understandable, however, the challenges surrounding site fragmentation and planning hurdles remain.

How do you think your local market is faring against other states? Are there any similarities, or is each state facing its own unique challenges and supply cycles?

Brisbane is still very affordable and according to REA, only 6 per cent of Brisbane suburbs have a median house price of $1 million or more, compared to more than half in Sydney and a third in Melbourne.

Queensland did not participate in the same cycle as Sydney and Melbourne, however, there have been sectors that have still performed relatively well.

There has been growth in well-located mixed-use greenfield communities in proximity to employment, education and transport infrastructure, such as our Arise Estate at Rochedale.

Each state does face its own challenges and one of the frustrations of working in multiple states is dealing with different regulations at the local and state government level.

Related reading: Charter Hall, Investa Propose $650m Office Tower in Brisbane’s ‘Golden Triangle’

WA real estate agency Caporn Young associate director Stephanie Dobro
WA real estate agency Caporn Young associate director Stephanie Dobro


Western Australia

Stefanie Dobro, Associate Director, Caporn Young

How do you think your market will fare in 2018? What are your top 3 predictions?

2018 will see us build on the momentum of the good sales results that we achieved in the second half of last year and the first couple of months of 2018.

I think we’ll see an increase in house price growth, shorter days on market and an increase in demand for larger-sized homes in premium suburbs.

What have been the driving factors that have affected change in your market recently? We are slowly seeing confidence re-emerge in the WA economy and that has been building for some time but it’s now starting to come out in the media.

This confidence is driving buyer activity, which is being reflected in price growth and increasing demand across several sought-after suburbs.

Related reading: Prime Riverside “Superblock” Hits the Market

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Article originally posted at: https://theurbandeveloper.com/articles/battle-of-the-states-which-australian-city-will-be-on-top-in-2018