Our development consultancy team operates in the initial stages with our clients’ project planning team. Our services are used to best effect in the early design meetings where product mix and project design is discussed. Our expertise at this stage of the development can result in an optimised titling structure and reduced building operating costs. Efficiencies gained at this stage translate to reduced weekly levies for apartment purchasers and a smooth sales campaign.
SSKB’s New Projects Manager, Kerrie Young, is experienced in both property market research and sales and marketing and uses her skills to keep an eye on trends in supply and demand in the housing markets.
There is an entrenched belief in the industry that property market trends in Sydney and Melbourne tend to precede activity in the Queensland markets.
The market in Brisbane and the Gold Coast has historically seen an upturn in property sales volumes as the southern markets ‘overheat’ and property values increase to the point where they are no longer seen as sustainable or affordable. Property investors then turn to markets where they perceive greater prospect of capital growth and return is available.
However at the moment we are seeing strength in the apartment markets of Sydney, NSW; Melbourne, Victoria and southern QLD in both Brisbane and the Gold Coast. It may well be the case that property sales volumes in the Gold Coast market will rise further but Brisbane has been showing solid steady growth in sales for over a year. There has been an inflow of overseas capital investment particularly from Asia, in response to the relatively strong Australian economy. This has served to stimulate property development where it may not have taken place otherwise if we were wholly reliant on the Australian lending system. In this article I take the view that this investment is not as important to the market as the underlying trends for the success or failure of the development projects underway or planned.
So why is this recovery different to past cycles?
The economic environment in Australia since 2009 has changed the fundamentals of property investment for Australians. Declining consumer confidence indicators show that the Australian population is not confident in the stability of the economy, which includes job security and perhaps a forecast of interest rate rises. In the past the general effect reduced consumer confidence in the property market and would indicate slowing growth.
Interstate migration to Queensland has declined over the past few years as people sought stability. Those who did move generally did so for employment or family reasons. Lifestyle was less of a motivator. Housing prices and stamp duties no longer represent an incentive to relocate and realise a cash lump sum for investment or retirement, although we will be keeping a close eye on this tipping point in affordability between the States.
Instead property developers are responding to real demand from the changing demographics (age groups and types of households) in the respective cities. The population in South East Queensland is still growing despite commentators pointing to percentage reductions in growth rates. It is wiser to look at the actual number of people who require housing. Who are they and what type of housing is appropriate.
The common element between all three states is the change in the dominant age groups and lifecycle stages of the population. The general trend is for a housing pyramid to now look more like an hour glass. With the dominant Baby Boomers now 55 – 75 years old and the “20 – 30 Something’s” representing the largest groups for new housing demand. With both groups either downsizing boomers or mobile young adults… apartments are the answer.
I have borrowed a slide from SGS Research shown at a presentation to the UDIA in QLD. It highlights the increasing importance of 1 and 2 bedroom apartments and the decline in both the number of family households and corresponding drop in the proportion of family homes.
Their property purchase triggers are also quiet similar –
- Affordability: differing by degrees Boomers may rate affordability at a higher purchase price in return for amenity.
- Proximity to transport, amenity and infrastructure – inner city or fringe city locations are very important to both groups. Being closer to the workplace, education or to entertainment venues.
Developers are responding to this demand and the SSKB Development Consultancy Team will continue to support our clients and work with them to reduce the development and market risk using all the resources and market intelligence we have available in Victoria, NSW and Queensland.