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Brisbane and Adelaide Soar as Sydney, Melbourne Stall


House price gains have continued to soften into the new year with multi-speed conditions emerging across the country as housing markets begin to deviate.

Across 2021, residential property prices surged by 22.2 per cent—the largest annual increase since 1989—fuelled by ultra-low interest rates, high household savings, government stimulus and low listings.

All capitals posted healthy yearly gains, but the markets have started to diverge, as poor affordability and a flood of listings dampened growth in Sydney and Melbourne, while the smaller and cheaper capitals have powered ahead.

Brisbane, which posted the strongest gains over the year, finished the year with a 27.4 per cent rise—the largest annual growth in 18 years.

The city’s house prices, in particular, climbed by a whopping 30.4 per cent or $253,292 over the year.

Sydney, the nation’s second strongest market, notched up a 25.3 per cent jump in dwelling values—the fastest yearly increase since 1988.

However, a surge in freshly advertised listings through December had been a key factor in removing some momentum in Sydney’s price growth, along with some demand headwinds caused by significant affordability constraints and negative interstate migration.

Adelaide, which surged by 7.2 per cent in the final quarter of the year, remains unhampered by affordability issues with advertised stock levels remaining low and demographic trends supporting housing demand.

Change in dwelling values

City Annual Houses median value Units median value
Sydney 25.3% $1,374,970 $835,104
Melbourne 15.1% $997,928 $627,047
Brisbane 27.4% $782,967 $451,258
Adelaide 23.2% $622,155 $386,420
Perth 13.1% $553,013 $400,711
Hobart 28.1% $747,187 $563,628
Darwin 14.7% $565,080 $368,847
Canberra 24.9% $1,015,900 $584,100
National 22.1% $766,377 $602,933

^Source: Corelogic

Corelogic research director Tim Lawless said Brisbane and Adelaide, along with regional Queensland, were the only broad regions where there was no evidence of value growth slowing, with the monthly rate of growth hitting a new cyclical high in December.

“These regions show less of an affordability challenge relative to the larger capitals, as well as better support for housing demand with Queensland in particular showing strong interstate migration,” Lawless said.

“Additionally, we haven’t seen the same level of supply response seen in other regions, with the trend in advertised supply remaining well below average in these markets.”

By contrast, disruptions to interstate migration caused by extended closed state borders have continued to negatively impact Perth’s housing demand with the city recording the weakest growth across 2021 at just 13.1 per cent.

Melbourne’s housing market, which has been attempting to claw its way back following a world record lockdown, lost some steam over the month of December to finish the year at a 15.1 per cent gain.

Fresh listings hold the key to housing demand

While stock levels have generally been low, the total number of home sales in 2021 was approximately 40 per cent above the decade average.

Approximately 653,000 house and unit settlements were conducted over the calendar year, the highest number of annual sales on record.

Currently, homes are selling 23 days earlier than anticipated with minimal negotiation on advertised prices as auction clearance rates hold high between the 70 per cent to early 80 per cent range.

Looking ahead, Lawless said the astronomical growth rates seen across the year were now expected to plateau as market forces that powered the housing boom begin to lose their strength.

“Such a significant mismatch between available housing supply and the level of demand is a fundamental reason why housing prices have risen so sharply over the year,” Lawless said.

“As stock levels normalise and affordability constraints along with tighter credit conditions drag down demand, it’s reasonable to expect growth conditions will be more subdued in 2022.”

All eyes on rates hike

While record low mortgage rates below 2 per cent have fuelled the property frenzy the Reserve Bank of Australia has stated it will not lift the cash rate until inflation reaches 2 to 3 per cent target range.

AMP Capital chief economist Shane Oliver told The Urban Developer further tightening in lending standards and rises in interest rates would put further pressure on house prices growth after the pandemic had “broken the back” of a 30-year trend towards lower inflation and lower interest rates.

“For 2022, this likely means higher mortgage rates and combined with a deterioration in housing affordability this will mean slowing and then, by the end of 2022, falling home prices,” Oliver said.

“For the longer term, the impact of an end—and possible reversal—to the tailwind for property prices from falling mortgage rates, combined with the work from home phenomenon driving relatively less demand for city property, means that the property bull market since the mid-1990s may be coming to an end potentially driving improved affordability.”

Oliver said home prices were poised to grow by just 5 per cent this year and likely to fall by up to 10 per cent in 2023.


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$130 million Wynnum CBD apartment development proposed

Wynnum CBD apartment development, Ora tower

The Brisbane-based property developer, HamBros, led by local developer Justin Ham, has lodged plans for a 27-level mixed-use development in the heart of Wynnum.

Ora, which will spread across a 7,278 sqm site at 74 Charlotte Street and 89 Bay Terrace, will be built behind the existing Wynnum Shopping Centre.

Ora, meaning ‘edge’ in Latin, has been designed by Ivory Collective and will comprise 275 apartments, with the amalgamation also planned to be home to retail space, as well as two-levels of commercial space.

“Ora is a development that intertwines the beautiful bayside environment of Wynnum with the ease and luxury of unit living,” architecture firm Ivory Collective noted in their design statement in the development application.

There will be 275 apartments in the development, made up of 54 one-bedroom, 148 two-bedroom and 67 three-bedroom apartments, along with six three-bed plus multi-purpose-room penthouses.

Ora’s floor plate is designed to orientate and capture as much of the East as possible, allowing for maximum exposure to the easterly breezes and bay views.

Wynnum CBD apartment development, Ora tower proposed

A full recreation level is planned for level five, with a 528 sqm restaurant and bar, set around an expansive pool terrace as well as a wet deck, space, sauna and steam rooms, private cabanas, a cinema, barbecues, meeting rooms, wine rooms and function spaces.

“The recreational level on Level 5 creates a space for both the public and residents alike to enjoy the beautiful bay views and surroundings,” the statement added.

Drawing inspiration from the Wynnum foreshore in both its material and palette and building form, Ora is made up of clean off-white concrete and bronzed feature cladding and batten, reflecting the warmth and clarity of the Wynnum/Manly beach front, Ivory Collective noted.

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Barwon secures Princess Alexandra Hospital car park

Barwon secures Princess Alexandra Hospital car park

Barwon Investment Partners has snapped up a multi-level car park and medical centre on a site with significant development upside opposite Princess Alexandra Hospital.

The Woolloongabba asset at 250 Ipswich Road is setting the healthcare focused fund manager back around $95 million, reflecting a circa four per cent net passing yield.

The property contains an eight level, 773-bay garage attached to a two floor wellness centre with 21 tenancies, anchored to Gabba Dermatology, Brisbane Cardiology and Allied Health; the Weighted Average Lease Expiry is nearly seven years.

A pedestrian overpass connects the building to the Princess Alexandra Hospital, also a major teaching campus, employing 6810.

The 5106 sqm block has significant upside – up to 15 storeys based on its zoning, according to JLL’s Seb Turnbull, Elliott O’Shea and Simon Quinn, who marketed the asset with a Blight Rayner scheme.

BIP invests again

Established in 2006, BIP holds a property portfolio worth $2.3 billion.

Its medical related product, much held in a Healthcare Property fund, is priced at about $1.4b as at March, 2022.

Seven months ago, for the trust, the manager paid Forza Capital $34.7m for a South Brisbane medical centre – not far from 250 Ipswich Rd – and two Canberra assets including Belconnen’s Ginninderra Medical & Dental Centre on nearly a hectare.

Also late last year BIP spent $75m for a 12 level St Kilda Rd office majority leased to Alfred Health.

More to come.



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Brisbane’s Office Market Greenlit for Business

Brisbane’s Office Market

Brisbane’s office market continues to shake off the pandemic doldrums with two new commercial towers approved in the CBD and fringe suburbs.

Property owner PGIM and development partner Indema’s plan for a bold adaptive reuse of a 1970s commercial building at 444 Queen Street has won approval.

The bronze 22-storey tower opposite Customs House will be stripped back to its core structure and completely remodelled with a new podium, curtain wall facade and an additional two-storey sculptural canopy.

Indema director Michael Bruderlin said they would be targeting a net zero certification for the building upon completion in the first quarter of 2024.

Bruderlin said Hutchies had been engaged in an early contractor design and construct contract to help de-risk the project and better understand the technical requirements.

The Fender Katsalidis-designed tower follows in the footsteps of another of its commercial adaptive reuse projects in Brisbane, Ashe Morgan’s Midtown, now the headquarters for Rio Tinto.

Bruderlin said retaining and repurposing the existing building is 400 per cent more environmentally friendly. Retaining the existing concrete structure provides a 70 per cent saving in embodied carbon.

The project will rejuvenate a 48-year-old building at the end of life into an A-grade commercial office asset and increase the net leasable area 40 per cent.

Bruderlin said the project would have a quicker turnaround than a normal demolish and build project and it would use clever design initiatives to increase floor plates and create a better value proposition for the asset.

PGIM purchased 444 Queen Street for $54.4 million from the Public Trustee of Queensland and Abacus Property Group in October last year.

Cornerstone has also won approval for a commercial development in the city fringe suburb of Fortitude Valley.

The Bureau Proberts-designed tower will capture the heritage brick character of the Fortitude Valley centre “borrowing from the intent of these buildings but with a stridently different and contemporary expression”, planning documents said.

“This approach is a deliberate counterpoint to the strong and solid brick structures of the immediately adjacent 47 Warner Street and McWhirters buildings.

“Brickwork or masonry is not used as a material in deference to these neighbouring buildings allowing them to become more evident and make a clear statement about the era of their inception.”

The 28-storey commercial tower at 251 Wickham Street features a stepped slanting facade fronting Warner Street, with a four-storey lobby, and an inverted podium.

There will also be a rooftop terrace, 20m pool and open-plan gym in the commercial tower, with retail offerings at the base of the building.

Brisbane’s metropolitan office market vacancy was at 16.3 per cent at the end of March and there were few transactions across the quarter, according to Colliers research.

But yields remained steady, and well above other capital cities, while incentives remained stagnant at 40 per cent.



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