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25-05-2015, 01:20 PM
Happened over the weekend when all the bank measures were announced... demand still quite strong...
Darling Square sellout prompts $1bn unit boom
THE AUSTRALIAN MAY 25, 2015 12:00AM
Ben Wilmot
Commercial Property Editor
Sydney
Michael Bennet
Reporter
Sydney
Building has begun on the first stage of Darling Square apartments.
Building has begun on the first stage of Darling Square apartments. Source: Supplied
Developers are expected to fast-track the release of more than $1 billion worth of Sydney apartments to cash in on surging demand after Lend Lease reaped more than $600 million in the sellout of the second stage of Darling Square project on Saturday.
Listed players Mirvac Group and Payce Consolidated are advancing projects across Sydney, and developer AVJennings is eyeing a major Parramatta site, as they seek to reap rewards from the boom.
The rapid sale by Lend Lease on the site of the old Sydney Entertainment Centre highlights surging demand in the apartment market from first buyers and investors with interest rates at historic lows.
However, the rush among buyers is likely to stoke concerns among policy makers over the level of heat in the property market, with clearance rates at auctions across the nation pushing past the 80 per cent mark across $1.1bn worth of sales. In Sydney, clearance rates — a key barometer of demand — topped at 84 per cent.
Major banks are already moving to slow lending to property investors by tightening pricing discounts and scrapping cash incentives, after the Australian Prudential and Regulatory Authority intensified warnings to slow growth.
Westpac, which has the largest book of investor loans in the country, is also adjusting criteria for foreign investors in line with the government’s crackdown, while Bankwest is requiring investors to have a deposit of at least 20 per cent.
The banks are responding amid growing concerns the three-year property boom is running too hot, particularly in Sydney, increasing expectations regulators will be forced to install strict “macro prudential” tools — as in New Zealand — to head off a painful bust.
“History is littered with examples of unsustainable asset price rises emerging on the back of perfectly justifiable increases in prices. In a number of cases, this has ended badly, especially if there is leverage involved,” Reserve Bank deputy governor Philip Lowe said last week.
Lend Lease’s Darling Square sales, conducted in under five hours on Saturday, were the second release of 581 apartments in the project that is part of a Lend Lease consortium’s larger overhaul of the Darling Harbour precinct. The apartment tower is due to be built on the site of the Sydney Entertainment Centre, which is earmarked for demolition at the end of the year.
“Buyers are predominantly local, with about a third offshore, and over half are owner-occupiers,” Lend Lease managing director, urban regeneration, Jonathan Emery said.
Last year the first release of 538 apartments sold out and the second stage was brought forward to meet demand. Buyers are now awaiting further releases as Darling Square will have a total of 1500 apartments.
Building of the first-stage apartments has started, with the first Darling Square residents to arrive in 2017. Lend Lease expects that the third and final stage of apartments will be released within 18 months.
The sales were handled by agents CBRE and the highlight was the sale of two penthouses on the top floor that sold for a combined total of $22 million, to Australian buyers.
Near sellouts are becoming a feature of Sydney apartment launches. Last month Mirvac sold 221 apartments in one weekend at its 224-unit project Ovo at Green Square. Last year it sold all 174 apartments offered in the first building, Ebsworth.
The Australian can reveal that Mirvac has lodged plans for a luxury complex in the inner-Sydney suburb of Waterloo that will have 226 apartments and be sold later this year.
It is not just inner-city projects in Sydney. At a mid-month weekend launch private developer Toplace reaped $220m as 264 units of 378 sold at its Castle Hill project.
Iwan Sunito’s Crown Group also reaped strong results at the launch of its luxury nine-storey $88m development in Ashfield on Saturday, and sales at Galileo Group’s $200m residential project have been strong, with 80 out of 246 apartments selling at launch.
At the start of the month, Cbus Property sold more than $185m of luxury apartments in the days after a private launch through Colliers International of its Milsons Point residential development 88 Alfred Street. In that case, 106 of the 123 apartments were snapped up ahead of the public launch.
Lend Lease said earlier this month it was expecting a rise in pre-sales revenue by the end of the financial year, with new apartment launches in Melbourne and London over the past six months, and further launches in Sydney and Brisbane over the coming year.
Lend Lease chief executive Tony Lombardo recently told the Macquarie Investment Conference that residential demand in Australia remained strong, and a trend to urbanisation was fuelling demand for apartments .
But he said the group’s share of the Australian apartment market remained “modest” at only about 2 per cent of the sector and it is expanding offshore.
Darling Square sellout prompts $1bn unit boom
THE AUSTRALIAN MAY 25, 2015 12:00AM
Ben Wilmot
Commercial Property Editor
Sydney
Michael Bennet
Reporter
Sydney
Building has begun on the first stage of Darling Square apartments.
Building has begun on the first stage of Darling Square apartments. Source: Supplied
Developers are expected to fast-track the release of more than $1 billion worth of Sydney apartments to cash in on surging demand after Lend Lease reaped more than $600 million in the sellout of the second stage of Darling Square project on Saturday.
Listed players Mirvac Group and Payce Consolidated are advancing projects across Sydney, and developer AVJennings is eyeing a major Parramatta site, as they seek to reap rewards from the boom.
The rapid sale by Lend Lease on the site of the old Sydney Entertainment Centre highlights surging demand in the apartment market from first buyers and investors with interest rates at historic lows.
However, the rush among buyers is likely to stoke concerns among policy makers over the level of heat in the property market, with clearance rates at auctions across the nation pushing past the 80 per cent mark across $1.1bn worth of sales. In Sydney, clearance rates — a key barometer of demand — topped at 84 per cent.
Major banks are already moving to slow lending to property investors by tightening pricing discounts and scrapping cash incentives, after the Australian Prudential and Regulatory Authority intensified warnings to slow growth.
Westpac, which has the largest book of investor loans in the country, is also adjusting criteria for foreign investors in line with the government’s crackdown, while Bankwest is requiring investors to have a deposit of at least 20 per cent.
The banks are responding amid growing concerns the three-year property boom is running too hot, particularly in Sydney, increasing expectations regulators will be forced to install strict “macro prudential” tools — as in New Zealand — to head off a painful bust.
“History is littered with examples of unsustainable asset price rises emerging on the back of perfectly justifiable increases in prices. In a number of cases, this has ended badly, especially if there is leverage involved,” Reserve Bank deputy governor Philip Lowe said last week.
Lend Lease’s Darling Square sales, conducted in under five hours on Saturday, were the second release of 581 apartments in the project that is part of a Lend Lease consortium’s larger overhaul of the Darling Harbour precinct. The apartment tower is due to be built on the site of the Sydney Entertainment Centre, which is earmarked for demolition at the end of the year.
“Buyers are predominantly local, with about a third offshore, and over half are owner-occupiers,” Lend Lease managing director, urban regeneration, Jonathan Emery said.
Last year the first release of 538 apartments sold out and the second stage was brought forward to meet demand. Buyers are now awaiting further releases as Darling Square will have a total of 1500 apartments.
Building of the first-stage apartments has started, with the first Darling Square residents to arrive in 2017. Lend Lease expects that the third and final stage of apartments will be released within 18 months.
The sales were handled by agents CBRE and the highlight was the sale of two penthouses on the top floor that sold for a combined total of $22 million, to Australian buyers.
Near sellouts are becoming a feature of Sydney apartment launches. Last month Mirvac sold 221 apartments in one weekend at its 224-unit project Ovo at Green Square. Last year it sold all 174 apartments offered in the first building, Ebsworth.
The Australian can reveal that Mirvac has lodged plans for a luxury complex in the inner-Sydney suburb of Waterloo that will have 226 apartments and be sold later this year.
It is not just inner-city projects in Sydney. At a mid-month weekend launch private developer Toplace reaped $220m as 264 units of 378 sold at its Castle Hill project.
Iwan Sunito’s Crown Group also reaped strong results at the launch of its luxury nine-storey $88m development in Ashfield on Saturday, and sales at Galileo Group’s $200m residential project have been strong, with 80 out of 246 apartments selling at launch.
At the start of the month, Cbus Property sold more than $185m of luxury apartments in the days after a private launch through Colliers International of its Milsons Point residential development 88 Alfred Street. In that case, 106 of the 123 apartments were snapped up ahead of the public launch.
Lend Lease said earlier this month it was expecting a rise in pre-sales revenue by the end of the financial year, with new apartment launches in Melbourne and London over the past six months, and further launches in Sydney and Brisbane over the coming year.
Lend Lease chief executive Tony Lombardo recently told the Macquarie Investment Conference that residential demand in Australia remained strong, and a trend to urbanisation was fuelling demand for apartments .
But he said the group’s share of the Australian apartment market remained “modest” at only about 2 per cent of the sector and it is expanding offshore.