Warning: these are not your average rental properties.
Domain data puts Brisbane’s median asking rent price at $410 a week but some tenants are willing to pay 13 times more than that, just to get the right place.
An Ascot mansion for $5500 a week, a riverfront house at Hamilton for $3400 a week, a CBD apartment for $3050 and a South Bank unit for $2500 – these are all actual prices people have recently signed leases for.
Eadan Hockings, principal of Living Here Cush Partners, said some of Brisbane’s wealthiest home owners often used high end rentals when they were in-between buying.
“If they’ve sold their $8 million home and don’t want to jump into spending that much again without taking their time waiting for the right property, they will rent something in this price range,” he said.
“They might rent a $2500 a week apartment off us or spend $100,000 a year on rent but that’s still less than what they would have spent on a mortgage. It gives them time to think about their next purchase.”
Mr Hockings said many of Brisbane’s most expensive rentals were snapped up by business owners who used them as a base for their employees.
One of Brisbane’s landmark trophy homes at 33B Harbour Road, Hamilton recently rented for a cool $3400 a week to a PNG commodity trading company, Mr Hockings said.
He said the riverfront home known as Balaam, which sold for a record $11.8 million in 2015 and was now back on the market, was somewhere for the company’s staff to stay while they were in Brisbane on business, rather than using hotels.
The house has eight bedrooms, nine bathrooms, 48.3 metres of river frontage, a cantilevered heated swimming pool with adjoining bar and kitchen and an internal lift to all three levels.
Some of the most expensive properties recently rented out included a private Ascot residence for $5500 a week, a palatial CBD apartment at 462/30 Macrossan Street for $3050 per week and a riverfront unit at 1305/161 Grey Street, Southbank for $2500 a week.
Brooke Rowley of Ray White Paddington has an historic Queenslander high on the hill at Cochrane Street, Paddington, listed to rent at $1350 a week and says the demand is always there for beautiful, big houses.
The six-bedroom, three-bathroom home features spectacular city views and is iconic to the local area.
“Often there are people relocating from either overseas or interstate who need to rent and they want these incredible houses with lots of room,” she said.
“West End, New Farm, Ascot, all of the homes in these areas are expensive to rent but they tick all the boxes for people who want the whole package.
“Then there are also the people who are simply just renting and this is their preference. They’re happy to pay for what they want.”
Ms Rowley said the other side of the coin was the owners of these trophy homes that end up in the rental pool.
“How do properties worth this much end up being rented? Owners get transferred overseas, they don’t want to sell their biggest asset because they want to come back, so they rent it instead of selling,” she said.
“There isn’t always massive demand for rentals at this high end of the market but it is there, particularly in January and February and then six month later, in June and July, so around now.”
Mr Hockings said some home owners were wealthy enough to buy multimillion-dollar properties in Brisbane just to test the water, in case they wanted to move to the city eventually, and would rent it out in the meantime.
“We had people who bought a house on Rockbourne Terrace in Paddington recently for around $3 million, they’re still deciding whether they actually want to live in Brisbane but they’ll rent it out in the meantime,” he said.
“As properties push past $4 million to $5 million [in value], it’s difficult to get any semblance of a return and can be a costly venture. That said, there are people who do it and with negative gearing still in place, it can still work financially.”
Thinking of a luxury rental in Brisbane? Here’s a few of the best available now:
93 Villiers Street, New Farm
$1975 a week
4 bed, 2 bath, 2 car, pool
This near-new architectural home has been luxuriously appointed and is located in the heart of New Farm’s best offerings, with shops, cafes, parks and shopping all within walking distance.
16 Harmony Crescent, Seven Hills
$900 a week
4 bed, 2 bath, 2 car
A contemporary residence on an elevated block with a leafy outlook, it has large, open-plan living spaces and is located within the Seven Hill State School catchment.
4/91 Moray Street, New Farm
$2300 a week
3 bed, 3 bath, 2 car
Located on the fourth floor of the Pietra development, this whole-floor apartment features expansive views of the river and CBD and more than 300 square metres of floor space.
23 Yarradale Street, Newmarket
$2200 a week
5 bed, 4 bath, 4 car, pool
This traditional Brisbane worker’s cottage has been transformed into a beautifully executed contemporary residence complete with three levels of luxury that make the most of the elevation and views.
9 Eblin Drive, Hamilton
$1900 a week
5 bed, 4 bath, 5 car, pool
Located in one of Hamilton’s most prestigious streets, this sprawling residence features luxurious interiors and plenty of outdoor entertaining space.
Boomers a ‘Force of Change’ in Retirement Property Market
As teenagers they invented pop culture and now—much older, collectively wealthier and arguably wiser—they are defining a new age group and re-inventing retirement living.
Millenials may have surpassed them in numbers but baby boomers are still having significant influence on world economies and trends—not least in the property market.
“The baby boomers are coming through and have become a force for change in the seniors’ market,” said Cameron Kirby, managing director of Kirby Consulting Group, a retirement and aged care specialist.
“The more progressive operators are definitely getting their ducks in a line.
“And there’s a lot of developers interested in dipping their toes in the market for the first time, some of them with more than 30 years’ experience in the development industry, because they can see there is huge opportunity.
“[But] many developers that want to enter into this space are probably a bit reticent because they’re worried about the complexity of it, they’re worried about the unknowns.
“The opportunities, however, far outweigh any of their concerns.
“And if you’re offering what the market wants, you’re going to be successful.”
Kirby will be a speaker at The Urban Developer Developing For An Ageing Demographic vSummit on April 28.
“The sector is continuously changing,” he said.
“You’ve got land lease communities and over-55 developments that have been moving into the traditional retirement village space.
“And, at the moment, there’s a lot of talk about integrated care in retirement living with a greater weighting on having more retirement villages and less aged care.”
Last year, a survey by benchmarking firm StewartBrown showed 58 per cent of aged care homes were operating at a loss, up from 55 per cent the previous financial year, and 32 per cent made a cash loss.
“Aged care has got some major challenges … but in the meantime there’s also the baby boomers coming through,” Kirby said.
“What I’ve seen over the last 10 years is a bit of a slide where low-care people that used to go into aged care are more likely to go into retirement villages and, equally, people that used to go into more traditional retirement villages are now probably more interested in moving into land lease communities and over-55s concepts.
“Land lease communities are growing very fast and are hugely attractive, there’s no doubt about that … but retirement villages have upped the ante enormously as well, they tend to offer much more wellness and are moving more towards the care side of things.
“Certainly, operators who are offering care in retirement villages are going from strength to strength.
“There’s an increasing amount of quality retirement villages with hotel and resort-style living and state-of-the-art amenities coming online. Pools, gyms, spas, saunas, cinemas, you name it they’ve got it.
“But those retirement living operators that have a full continuum of care solution that’s what the market is demanding … [the boomers] know they’re going to need some support down the line so they’re planning for their future.
“It really doesn’t matter, however, whether you’re doing aged care, retirement, over-55s or land lease community … because demand is outstripping supply. There is a market for all of those and they attract very different types of buyers.”
Kirby said given Australia’s ageing demographic, the seniors and retirement market was a “much more defensive proposition” for developers.
“Just as healthcare is a defensive stock on the stock market, I think seniors living is a much more defensive play in the property sector,” he said.
“It tends to be more needs driven than what a straight-out residential property play would be.
“And so, I think if we are going to be headed towards a softer property market this is an area that can really shine because seniors will still have the wealth and will still want to move and look at downsizing opportunities.”
Article Source: www.theurbandeveloper.com
Houses still in high demand, apartment prices lag
The price growth of apartments continues to lag rocketing house prices in many suburbs across Sydney and Melbourne, with the trend showing little signs of abating.
The widening price gap between houses and units is a long-term trend driven by land scarcity in our biggest cities, with the difference tending to be widest between houses and high-rise apartments.
While house prices in Sydney’s North Ryde soared 29 per cent in the year ended March 31, unit prices in the suburb grew by a mere 6 per cent. Similarly, prices in Homebush grew 29 per cent, compared to unit price growth of just 7 per cent.
In Sydney’s Pennant Hills, house prices grew 24 per cent, while unit prices were flat, figures from CoreLogic show.
It is the same story in many parts of Melbourne, with Essendon North house prices growing by 19 per cent over the same period, while apartment prices fell by almost 1 per cent.
Houses in Melbourne’s Canterbury saw their prices jump more than 14 per cent, while units dipped 4 per cent. In inner-city Hawthorn East, houses were up 9.6 per cent, compared to a 6 per cent fall in unit prices.
Earlier analysis by CoreLogic showed more expensive property markets, particularly those close to CBDs and in areas where there are high numbers of units relative to houses, tend to have the biggest price gaps.
Eliza Owen, head of research at CoreLogic, says one of the reasons for the relative recent poor price performance of unit markets is COVID-19 related travel restrictions, including the closure of Australia’s international borders.
Demand for investment units in urbanised centres likely fell because of their high exposure to migrants and international students.
During the height of the pandemic, many units were empty, particularly in inner Melbourne.
The re-opening of international borders is seeing arrivals from overseas rising quickly, which should help to support the prices of units in both Sydney and Melbourne, she says.
However, Owen says one area of concern remains the prospect of higher mortgage interest rates, with prices of investment units more sensitive to rate movements than houses.
Many analysts expect the Reserve Bank of Australia to start increasing official interest rates this year, possible as early as June, with lenders expected to pass on any hikes in their variable rate mortgages.
Following two years of surging property prices, the big gains made over the past year appear to be over.
Sydney house prices were 0.1 per cent lower in March after being flat in February. Unit prices were 0.5 per cent lower in March and 0.3 per cent lower in February.
In Melbourne, house prices down 0.2 per cent lower in March, following flat prices February. Unit prices were 0.2 per cent higher in March and 0.1 per cent higher in February. However, those small gains came after big falls in inner-city unit property values during COVID-19 restrictions.
Coming off the back of strong annual growth, falling affordability continues to be a key factor affecting property market conditions.
A surge in the cost of living and rising rents is restricting the ability of prospective homeowners to save and borrow.
In last month’s federal budget, the government expanded the number of places available in its low-deposit scheme.
The program allows first-home buyers, and others, to buy new or existing dwellings with a deposit of only 5 per cent, instead of the usual 20 per cent that is needed to avoid paying expensive lenders’ mortgage insurance.
Article Source: www.brisbanetimes.com.au
Brisbane house prices leave units in the dust
The gap between house and apartment prices in Brisbane is now the widest in at least two decades, but is set to shrink over the next 12 months as housing affordability bites and buyers choose cheaper options, Colliers says.
Colliers residential director Queensland, Andrew Roubicek, said the price difference between houses and apartments in Brisbane has reached 45 per cent compared with an average of around 20 per cent between 2003 and 2015.
Brisbane house prices further escalated with the onset on COVID-19 when people placed a higher value on privacy with interstate migration to the Sunshine State also propelling Queensland’s property market.
Property data company CoreLogic estimates that Brisbane house prices increased 32 per cent in the year ended March 31 compared with 15 per cent growth for units over the same period.
CoreLogic said house price growth is slowing faster than units and Mr Roubicek predicted that Brisbane apartment values will rise by “at least” another 15 per cent in the next 12 months.
Mr Roubicek said rising construction costs have hit the new apartment market hard and that comparable established stock costs about 25 per cent less.
“There have been several examples of new developments achieving pre-sale [targets] only to have developers refund deposits and tear up contracts because building costs escalated to a point where it was financially unviable,” he said.
“As a consequence, developers who are looking to acquire new development sites are forced to increase their projected sales prices by around 20 per cent.
“Just 18 months ago a two-bedroom apartment in Brisbane might have sold off the plan for $9000 per square metre.
“But to build that apartment today the developer would need to achieve a sale price of $11,000 per square metre for the project to stack up.”
He said as result new stock is selling slower than established units, a trend that will play out through the rest of this year.
“The market is coming to terms with those newer prices and are seeing in the short-term better value for money in the established unit market.”
He said it is a similar scenario to when GST was introduced in 2000.
“When GST came into the market overnight the cost of housing went up 10 per cent and put more demand into the established market, where the prices of stock grew and the difference between new and second hand became narrower.”
Mr Roubicek said he believed the record price gap between houses and apartments will contract through the year.
“If you believe in history, if you believe in charts, and take a long-term view you would have to think that gap is going to narrow because everyone’s talking about affordability, everyone’s talking about interest rate movements,” he said.
“Natural forces will push what would have been a buyer of a detached home back into the unit market because of affordability.”
Article Source: www.afr.com
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