The Urban Developer
AdvertiseEventsWebinarsUrbanity
Industry Excellence
Urban Leader
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Interested in a TUD+ Membership for your team? Access premium content, site tours, event discounts and networking opportunities
Interested in a Corporate Membership? Access exclusive member benefits today
Enquire NowEnquire
On Demand

Fireside Chat | Inside GemLife With Adrian Puljich

Building Australia's Newest Airport: Multiplex

The Makers Of The Mondrian | Design, Vision And Delivery Behind One Of Australia’s Most Anticipated Luxury Hotels

Next Gen Now | How Emerging Developers Are Redefining The Game

View All >
Latest News
Lendlease and Mitsubishi Estate Asia are topping out sales books and construction on the One Circular Quay tower which could boast the most expensive apartment in Australia.
Residential

Sydney Penthouse Poised to Be Nation’s Priciest Home

Renee McKeown
2 Min
Development

Brookfield, GPT, Charter Hall, MSCI Join CRE Summit

David Di Marco
4 Min
Office

Golden Age Completes $180m 130 Little Collins Street Tower

Lindsay Saunders
3 Min
Infrastructure

Plans Revealed for $60m Tasmania AFL Training Centre

Lindsay Saunders
2 Min
View All >
Events
Summit

Commercial Real Estate Summit

Summit

Urban Leader Awards

One-Day Course

Property Development Masterclass Series

Lunch

Long Lunch Series

View All >
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
SHARE
11
print
Print
ResidentialRenee McKeownFri 04 Sep 20

House, Land Sales Spark REIT ‘Mini-Boom’

ff7f47bd-04bb-437b-a689-f8e511a37b06

The residential market is going through a short “mini-boom” with house and land package sales expected to grow between 7 and 10 per cent on last year, according to UBS.

Analysts from the investment bank gave their outlook on the Australian real estate sector following “stronger than expected results” as companies continue to face the fallout from Covid-19.

During the pandemic, ASX-listed company results revealed the impact of the pandemic, with only seven real estate investment trusts (REIT)s under UBS coverage providing guidance for the next financial year: Goodman Group, Charter Hall Group, Centuria Capital Group, Centuria Industrial REIT, Centuria Office REIT, Charter Hall Long WALE REIT, Rural Funds Group and BWP Trust.

The UBS analysts, Grant McCasker, Tom Bodor and Sam Merrick, said industrial REITs performed well and looking forward they also had a positive residential forecast.

“We expect affordable residential land sales to remain elevated in the first quarter of 2021 as a result of substantial government grants and stimulus, and ultra-low interest rates.”

Stockland net sales by month

^ Source: UBS, Stockland

“Over the course of FY21 we expect sales to moderate towards long-term averages and while it is likely that stimulus is extended the current demand reflects a pull forward of sales,” the analysts said.

“We expect apartments to remain subdued; however land tax changes could stimulate build-to-rent—and in turn multi-res construction—without the typical requirement for pre-sales.”

Apartment sales had more challenges with a higher price points, a drop in investor demand and less people wanting to buy off-the-plan.

Building approvals for both units and apartments jumped in July and New South Wales was the first to halve tax for build-to-rent developments.

However, McCasker, Bodor and Merrick do not see the strong residential sales momentum seen in June and July continuing throughout 2021.

Mirvac monthly sales

^ Source: UBS, Mirvac

Office, retail in strong headwinds

The UBS analysts are in no doubt that working from home will continue, but for now, office usage is offset by social distancing.

“There was limited new evidence to settle questions over the working from home structural impact to office over the longer term.

“We see some risks that if the city remains quiet beyond Christmas, tenants may start to request abatements or rent relief despite being in a position to continue paying rent.”

Meanwhile, desk utilisation levels will hit office occupancy and retail will continue to come under scrutiny.

The analysts said substantial risks remain for the retail sub-sector, with tenants expected to reduce their footprints.

“[There will be] increased scrutiny on occupancy over the next nine months,” the analysts said.

A change in shoppers’ habits will also continue to increase the demand for logistics and industrial tenants to bolster their portfolios.

ResidentialAustraliaFinancePlanningPlanningSector
AUTHOR
Renee McKeown
More articles by this author
TOP STORIES
Mirvac Liv Anura BBQ amenity
Exclusive

Mirvac Monopoly: BtR Pioneer Plots East Coast Domination

Leon Della Bosca
9 Min
The Urban Developer Industrial and Logistics Summit 2025
Exclusive

Keeping the Lights On: Growing Pains Jeopardise Industrial Boom

Vanessa Croll
8 Min
Exclusive

What’s Driving Pro-invest Push into ‘Underserved’ Micro-Apartments

Taryn Paris
6 Min
Sud-slingers are back in action in 2025, with the Sydney market recovering after years of disruption.
Exclusive

Sydney Pub Market Rebounds After Post-Covid Lows

Patrick Lau
5 Min
Gelephu Mindfulness City: Bhutan how a city of the future is planned
Exclusive

Bhutan’s Mindfulness Masterplan Resetting How Cities Work

Renee McKeown
8 Min
View All >
Article originally posted at: https://www.theurbandeveloper.com/articles/residential-reits-in-short-mini-boom