The Australian Residential Development Review is here.
Developed by Knight Frank, the review provides in-depth research that culminates into the company's review of development key drivers, major transactions & the outlook for the future.
Here are some of the key insights from some of the capital cities in Australia.
The greater metropolitan area continues to benefit from continued population growth from natural migration, a stable economic environment and significant commitment to major infrastructure projects including transport, roads and hospitals.
The north-west region dominates not only development site sales volumes, at $2 billion in the year to 30 June 2016, but also the number of apartments projected over the 2016-19 period.
Proposed infrastructure projects such as the Sydney Metro Northwest rail line and NorthConnex will service this region from 2020. The area has experienced multiple office sales and amalgamated super-lot sales with potential for residential conversion in 2015/16, to total $924.1 million.
With the Northern Beaches Hospital and the Northern Beaches B-Line underway, the creation of new jobs and a rapid transit busway is slated for the area.
The Sydney CBD saw $263.8 million worth of residential sites suitable for higher density sold in the year to 30 June 2016, with an average indicative rate of $600,000 per apartment. The south region of Sydney saw development sales volume total $1.2 billion in the year to 30 June 2016, with sites achieving an indicative rate of $280,000 per apartment.
Already well underway and due by 2019, the CBD and South East Light Rail will carry passengers from the upgraded Circular Quay through to the Eastern Suburbs and sporting and entertainment precinct at Moore Park.
With a heavy schedule of infrastructure planned, the south-west region is likely to see more investment in higher density residential sites over coming years. Infrastructure projects, including WestConnex and Sydney Metro City & Southwest, will improve connectivity not only in this area but through to the CBD and south west to the M5 motorway.
“There are several high-density towers underway throughout the far-west region, and there is likely to be further demand for higher density development including the introduction of terrace-style development once the Western Sydney Airport begins to take shape.
Retaining the title as the ‘World’s Most Liveable City’ by the Economist Intelligence Unit’s Global Liveability Index for the sixth consecutive year in 2016, Greater Melbourne continues to be the fastest-growing capital city in Australia with growth of 2.1% in 2014/15.
The Melbourne CBD saw $243.4 million worth of residential sites suitable for higher density sold in the year to 30 June 2016, with an average indicative rate of $120,000 per apartment.
Combined with the inner and north-west, a total 50,015 apartments are projected until the end of 2019, with 17,280 currently under construction and another 14,980 being marketed.
The inner and north-west region dominates development sales volume, with $651.1 million sold in the year to 30 June 2016 with sites averaging an indicative $105,000 per apartment.
The region will benefit from the widening of CityLink, as well as commuters travelling from the CBD, south east and Bayside to Tullamarine Airport, due for completion in 2018.
When Sydney and Melbourne were experiencing significant growth in turnover and value in higher density development sites in 2013/14, Brisbane was seen as a viable option for local and foreign investors priced out of these markets.
Since this time, the southern market has shifted with more affordable options available in Australia’s two largest capital cities.
Together with the north region, a total of 29,280 apartments are projected until the end of 2019, with 9,560 currently under construction, 5,885 being marketed and further 13,840 sitting with DA approval as at 30 June 2016.
Two key infrastructure projects in Greater Brisbane are the Queensland Government’s Cross River Rail and Metro Brisbane, projected to be completed by 2025.
Both will play a critical role in ensuring rail and bus networks can meet the city’s future public transport needs.
Once the allocation of key sites along the route is determined and access to funding is sourced, both projects will provide a good injection of stimulus into the Greater Brisbane economy
We are seeing an increase in foreign buyers in the Perth residential development site sales market.
By total value, foreign buyers purchased 72% of development sites over the year to June 2016. This was up from 41% the year prior.
Over the past year, housing construction and state government spending on public infrastructure and amenity have been relied on to compensate for the declining growth of the resources sector.
In recent months, developers in Perth have strategically re-evaluated their pipeline of projects to ensure those being marketed will achieve a large proportion of pre-sales and ultimately reach construction stage.
As a result, the timing of many projects with DA approval have been moved to 2019 or beyond, or land-banked until the current pipeline is absorbed.