This Week in Real Estate -22 February 2024
Gold Coast Apartments Sales Surge
The Gold Coast apartment market continues to boom with CoreLogic figures showing median unit prices rose 10.8% in the past year.
That increase brings the median price to $727,000.
Driving the price increases is an increase in off-the-plan sales, with an Urbis report showing 470 apartments sold in the final quarter of 2023.
Urbis Director, Paul Riga, says the areas of Surfers Paradise, Broadbeach and Main Beach were the most popular with buyers, particularly as a number of projects are underway there.
A little further north a new project has been announced for Robina, an eight-storey mixed-use project, Ombré.
Immerse Projects will deliver 95, one-, two- and three-bedroom apartments as well as integrated retail and commercial spaces.
Immerse Projects Managing Director, John Kearney, says it will have skyline and hinterland views. The building was designed by BDA Architecture.
Amenities will include a residents’ lounge, function room, games room, pool and landscaped outdoor spaces. Construction is expected to begin in May.
Land Prices Rising
The national median price of a residential block of land in Australia reached a record high in the September quarter of 2023 according to the Housing Industry Association.
The HIA-CoreLogic Residential Land Report analysed sales activity in 51 housing markets across Australia and found the median price had hit $340,000.
HIA Senior Economist, Tom Devitt, says a shortage of lots resulted in prices surging during the pandemic.
Devitt says delivering the infrastructure needed to get more residential land remains a “chokepoint” as developer contribution charges were another issue constraining home building.
“More taxes on supplying new homes means there will be less of it, which is not consistent with the Australian Government’s stated objectives,” he says.
As a result of shortages the volume of lots being sold has dropped to a 20-year low.
“Alleviating the housing shortages in Australia will require a supply-driven approach, and National Cabinet’s ambition to build 1.2 million well-located homes in five years is a step in the right direction,” he says.
Best Picks For FHBs
There are still plenty of locations where first-home buyers can afford to buy under the Federal Government’s Home Guarantee Scheme.
PropTrack economist Anne Flaherty says maybe they can’t afford to buy in their ideal suburb, or as many bedrooms as they initially wanted but in some locations a mortgage is cheaper than renting.
Under the Home Guarantee Scheme, first-home buyers can buy with a deposit as low as 5%. Property prices in the scheme are capped between $600,000 and $900,000 in capital cities and some regional centres. Otherwise, other others are capped between $400,000 and $750,000.
In Victoria, buyers can use the scheme for properties within Thomastown and Mickleham as well as Altona.
In Queensland, the top picks are Morayfield, Darra, Springfield Lakes and Beaudesert. In New South Wales the best options are in Hamilton or Mayfield in Newcastle or Armidale.
Western Australia options are Mandurah, Armadale and Rockingham while in South Australia the best options are Morphett Vale, Salisbury or Parafield Gardens.
Grandparents Forking Out For Homes
The bank of mum and dad have long been there to lend a hand to their adult children trying to break into the housing market and now research shows a growing number of grandparents are being called upon as well.
McCrindle Research says grandparents are helping buy or allowing their grandchildren to live with them rent-free to help them save a deposit.
It says 12% of Generation Z buyers received financial support from their grandparents to buy their home while 11% live with them for free or for a reduced rent.
Principal social researcher, Mark McCrindle, says grandparents are increasingly playing a greater role in the lives of their children and grandchildren, particularly for their education and home purchasing.
Almost one in five Generation Z had received help from their grandparents to pay for their education.
“As we look to the future and an increasing amount of wealth will be transferred to younger generations, grandparents will see to continue to have a building impact on the financial climate of Australia,” McCrindle says.
QUOTE OF THE WEEK
SQM Research managing director, Louis Christopher
“Vacancies were already low to start with due to the ongoing rental shortage, so this renewed increase in demand can only push rents higher at a rapid pace, certainly over the first half of the year.”
