While mixed signals are being sent about the state of the Queensland property market, there are some bright lights emerging from the shadows.
The first home buyer market and the new product market seem to be the two sectors struggling to get traction under the weight of economic uncertainty and no doubt the forthcoming federal election.
History tells us things go quiet prior to elections and my mail over the last fortnight from industry leaders is that stronger sales tracks experienced in the first few months of the year are slowing.
Here are some exceptions:
Brisbane’s ‘new product’ success story of 2013 – Australand’s luxury riverfront villas within its $500 million Hamilton Reach project on the banks of the Brisbane River.
Only two luxury riverfront villas remain following a whirlwind of sales following its launch to market in April.
The Keelson River Villas is the latest release at Hamilton Reach where Australand has already chalked up more than $85 million in sales with its Watermarque, Watermarque on the Park and The Green Quarter apartment and terrace home releases.
Buyers have snapped up 10 of The Keelson River Villas within three weeks. The $15 million in sales have come primarily from a local catchment by local buyers choosing to make the move from surrounding suburbs including Ascot, Bulimba, Wavell Heights and Chelmer.
Purchasers included empty nesters downsizing, professionals with young families and retirees seeking a distinct level of sophistication.
Australand general manager Queensland residential division, Richard Fulcher said the release was the diversified property group’s answer to the scarcity of luxury riverfront homes in the Hamilton area that offered a low density lifestyle option on absolute riverfront.
He said the enthusiastic buyer response to the release demonstrated the pent-up demand for this style of riverfront residence at Hamilton.
“Our research indicated a distinct shortage of low density living options on the river despite growing demand,” he said.
“The Keelson River Villas have been warmly welcomed by buyers keen to secure such a lifestyle and our sales since launch reflect that.”
Mr Fulcher said The Keelson’s sales result to date had exceeded Australand’s expectations and had followed the sales trend of the earlier Green Quarter stages one and two, which sold out within months of release.
“As with the Green Quarter, we anticipated the unique and limited nature of The Keelson collection would spur buyers to act sooner rather than later,” he said.
“But to only have two remaining within weeks of the release is an outstanding result and we’re confident they too will sell quickly.”
Prices started at $1.095 million and remaining River Villas are priced at $2.425 million and $2.55 million respectively.
Construction of The Keelson River Villas is expected to begin late 2013.
The sales are undoubtedly the standout for new product in Brisbane, but there are other successes throughout the state.
On the Gold Coast, a resurgent property market has delivered the city’s largest real estate agency – Ray White Surfers Paradise Group – its best sales month in four years.
The Group chalked up a whopping $76 million in sales across its residential, prestige, commercial and new projects divisions in May.
RWSP Group CEO Andrew Bell said the bumper sales haul was the strongest sign yet that the market was bouncing back from the lows of the GFC.
He said the sales activity was driven by several factors: steady price growth across the city; interest rates now at a 50-year low; and population growth which averaged 10,000 newcomers to the Coast every year.
“In a month when property purchasers could have been swayed by negative economic indicators like the Federal Budget deficit, a significantly lower Australian dollar and the stock market falling, we recorded our strongest sales month in years,” he says.
“It demonstrates the real estate market is primarily driven by the fundamentals of price growth, attractive interest rates and a steadily rising population.
“Strong signs on all of these fronts gives buyers the confidence to act.”
In Robina, developer Robina Projects Australia is closing in on a sell-out of its $40 million Paddington Terraces project, where just 7 homes remain for sale.
RPA cites the shortage of affordable new housing product in central Gold Coast as a major driver of sales at the project, where three-bedroom terraces are in the sub-$500,000 price bracket.
North in the Whitsundays – a region which was hammered by the GFC – there are also signs of life, with one developer, Latitude Development Group, cashing in on a shortage of available land in the region.
LDG has this year pushed the button on a 2500-lot masterplanned golf-course community with blocks priced from $170,000 and sales are tracking very well for a region racked by negativity but which is showing tremendous upside.
For example, new data shows there is currently $37 billion worth of infrastructure and development projects underway or proposed in the Whitsundays region, meaning resource and infrastructure development is set to overtake tourism as its economic driver.
Not surprisingly, substantial population growth is expected to accompany the region’s economic transformation with its current 36,000 permanent residents tipped to rise to 55,000 by 2031, in turn placing pressure on already limited housing stock in the area.
The increasing preference for DIDO rather than FIFO working arrangements for resources-sector employees will also put pressure on housing stocks in desirable locations such as the Whitsundays.
Lifeline recently commissioned research into the social implications of FIFO arrangements with the findings suggesting workers’ number one stress is being away from family – LDG has cleverly positioned its project as a lifestyle alternative for resources sector workers who want to relocate their families to a safe community close to their place of work.
So while the market is tough, those developers with vision who understand the needs of the current – and future – market are cashing in during challenging times.
Let’s hope a post-election environment provides greater certainty and an environment where business and individuals can have more confidence about their next property or lifestyle play.