This Week in Real Estate – 20 January 2024
Luxury Gold Coast Sales Soar
The Gold Coast luxury property market is continuing to chalk up big sales.
The 25-storey development, MIRA, which is being built on a site at Garfield Tce, Surfers Paradise, by Frank Developments, is achieving an average sale price of $8.25 million.
There are 12 apartments in the project, which are described as vertical beach houses. Four apartments remain for sale priced from $8.5 million.
Other developments are also securing big sales, including the $1.5 billion Jewel project also in Surfers Paradise, where 80% of purchasers have been cash buyers.
It sold 100 apartments for a total of around $200 million the first tower in the project in the past 12 months.
DD Living’s $457 million Royale Gold Coast at Surfers Paradise and $400 million Burly Residences at North Burleigh are also selling well.
Royale is 80% sold with remaining apartments from $4.5 million.
Burly Residences has secured contracts on 25 apartments for prices ranging from $2.2 million to $6.4 million.
Investors Are Back
Investors are making a return to the property market with new figures from the Australian Bureau of Statistics showing the value of new investor loans has increased by 18% in the year to November.
The figures show in November there was a 1.9% increase in investment loans, while at the same time, the number of new owner-occupier loans grew by 1%.
ABS head of finance and statistics Dr Mish Tan says the increase in lending was driven by the three most populated states, NSW, Victoria and Queensland.
She says NSW had the biggest increase in loans to owner-occupiers and investors.
The data shows investors accounted for $9.72 billion of lending in November.
The figures also show that first home buyers loans grew by 3.5% in November and 20.% over the year, with the largest number of first home buyer loans written in Victoria (3516), followed by New South Wales (2730), Queensland (2173), Western Australia (1512), South Australia (720), ACT (317) Tasmania (152) and the Northern Territory (85).
Apartment Approvals Jump
In a sign the apartment market will continue to fire in 2024, the latest Australian Bureau of Statistics figures show apartment approvals are up.
The November 2023 figures, released this week, show the total number of dwellings approved rose by 1.6% to 14,529 for the month. This followed a 7.2% increase in October.
While house approvals fell by 1.7%, apartment approvals rose by 6.7%.
The increase in apartment approvals comes on the back of a 17.4% increase in October.
Master Builders Australia chief economist, Shane Garrett, says more higher density buildings will help alleviate some of the pressure in the rental market.
HIA chief economist, Tim Reardon, says the apartment approval figures are a positive sign, but more development is needed to meet demand.
During the month of November the total number of dwellings approved rose in ACT (22.5%), Northern Territory (2.6%), Western Australia (2.1%), and Victoria (1.4%).
They declined in New South Wales (-3.9%) Tasmania (-3.9%), Queensland (-1.7%), and South Australia (-0.2%).
Renovation Boom For 2024
Stabilising building costs mean many homeowners will renovate in 2024 according to the Housing Industry Association (HIA).
It says materials costs have not changed in the past quarter, but shipping costs have lowered, meaning overall it is not as expensive to buy materials to build or renovate.
HIA chief economist Tim Reardon says with interest rates potentially being cut this year and the economy improving he thinks there may be an increase in renovation work.
“The ongoing growth in house prices is slowing, but prices have increased dramatically in the last four years,” Reardon says.
“As a result, people will still continue renovating as the cost won’t be significant compared to the rising value of their homes.”
Reardon says with the average price of a new approved house in the September quarter, up by 11.5%, he believes people will be keener to renovate than move.
“Since the pandemic, people spend more time at home, so in the course of the decade, renovations will continue to be high,” he says.
QUOTE OF THE WEEK
HIA chief economist Tim Reardon:
“Since the pandemic, people spend more time at home, so in the course of the decade, renovations will continue to be high.”
