The Urban Developer
AdvertiseEventsWebinarsUrbanity
Industry Excellence
Urban Leader
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
A one-day deep dive on office, retail, healthcare, childcare and alternative sectors
UPCOMING | COMMERCIAL REAL ESTATE SUMMIT
LEARN MOREDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
145
print
Print
ResidentialAna NarvaezWed 07 Aug 19

‘Cut Your Losses’: Buyers’ Agent Warns Against New Apartments

5775f07c-c48e-4ab7-9a87-95b22615407e

Mass-produced “Lego buildings”, lacklustre construction industry governance and increasing reports of building defects has created a crisis in Australia’s multi-residential sector that will not improve anytime soon, according to buyers’ agent Simon Pressley.

Unit price growth continues to significantly underperform house price growth, with the price differential between houses and apartments varying between 20 per cent and 30 per cent over the last five years.

Pressley said that he expects the price growth differential will widen for an “indefinite period” as the sector loses the trust of the buying public.

“If you’re an owner of an apartment within a medium- to high-density building that was constructed within the past 20 years, you’ve contracted Australian real estate’s equivalent of the bubonic plague,” Pressley said.

Pressley said that the proof is in the poor performance of the sector, with analysis of ABS and Corelogic property research data showing lacklustre property value growth in units across Australia’s capitals.

Despite Wednesday’s ABS lending figures showing an uplift in investor loans for the first time in nearly a year, subdued investor demand continues to weigh on development in the high-res sector.

Weak presale volumes, ongoing insurance concerns and increasing reports of high-rise building defects will also continue to put downward pressure on the market.

“The absence of good hygiene within the construction sector – that is, prudent quality control – over the past two decades has resulted in a deplorable quality of workmanship, primarily within Australia’s mass-produced dwellings in our biggest cities,” Pressley said.

Price growth differential

HousesApartments
Sydney34.7%26.1%
Melbourne37.3%17.4%
Brisbane19.7%-4.4%
Perth-6.4%-11.6%
Adelaide15%9.8%
Canberra26.5%4.8%
Hobart33.3%27.3%
Darwin-10.8%-25.4%

^House and apartment price growth over the five years to April 2019. Source: Corelogic, Propertyology.

Rapidly declining public confidence in the building sector has put federal and state governments under pressure to drive legislative reform and overhaul an industry beset by evacuations and reports of defects.

The combustible cladding crisis has prompted Victoria to fund a $600 million rectification package administered by the newly-formed Cladding Safety Victoria. Dan O’Brien was appointed the agency’s chief executive last week.

NSW set out its agenda for reform in June, adopting key recommendations from the Shergold-Weir Building Confidence report and appointing David Chandler as the state’s building commissioner.

In Queensland, QBCC building commissioner Brett Bassett said that the body receives about 4,000 defects-related complaints each year, with a “small increase” in the number of complaints coming from high-rise dwellings.

Pressley said that the federal government needs to step in to commission a new independent department to design a comprehensive building star-rating system.

“Regardless of when it was built, every Australia apartment complex should be issued with its own rating and these made available to the public via an online register.

“This is critical in restoring confidence among future real estate buyers.”

ResidentialAustraliaConstructionArchitectureReal EstatePlanningPlanningSector
AUTHOR
Ana Narvaez
The Urban Developer - Editorial Director
More articles by this author
ADVERTISEMENT
TOP STORIES
Exclusive

Queensland Decade of Gigaprojects a Developer’s Goldmine

Phil Bartsch
5 Min
Multiplex Moderna facility
Exclusive

Industrial Subsectors Win Investor Attention as Demand Blossoms

Clare Burnett
7 Min
Bee Bricks hero
Exclusive

Beyond Green: The Rise of Net-Positive Architecture in Australia

Clare Burnett
7 Min
Exclusive

Central Element Hotel Debut Spearheads Oxford Street Renewal

Taryn Paris
8 Min
London skyline near the walkie talkie tower showing the 85 gracechurch street development.
Exclusive

Basilica to Business: London Office Tower’s Historic Rework

Renee McKeown
6 Min
View All >
Planning

Melbourne Blocks Released Under Small Sites Push

Lindsay Saunders
The six warehouses are accessible from both Parramatta and the new Western Sydney International Airport.
Industrial

Frasers Moves Ahead with $345m Scheme West of Sydney

Patrick Lau
Fortis tops out 122 Moray Street commercial project HERO
Office

Fortis Tops Out $50m South Melbourne Office Scheme

Leon Della Bosca
Almost half the floorspace of the Moray Street block will become the Melbourne headquarters of the developer’s parent co…
LATEST
Planning

Melbourne Blocks Released Under Small Sites Push

Lindsay Saunders
2 Min
The six warehouses are accessible from both Parramatta and the new Western Sydney International Airport.
Industrial

Frasers Moves Ahead with $345m Scheme West of Sydney

Patrick Lau
2 Min
Fortis tops out 122 Moray Street commercial project HERO
Office

Fortis Tops Out $50m South Melbourne Office Scheme

Leon Della Bosca
2 Min
With new office space becoming unfeasible, Deicorp is pivoting to mixed hotel-residential mid-construction.
Office

Deicorp Plots Offices-to-Hotel Crows Nest Tower Switch

Patrick Lau
5 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/cut-your-losses-buyers-agent-warns-against-new-apartments