Sydney Property Bubble

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Property sales pick up
Michael Bleby
561 words
10 Jun 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
There were more auctions in Sydney and a higher proportion of properties sold over the Queen's Birthday than ­during the same holiday last year.

While down on preceding weeks, the weekend's 73.7 per cent clearance rate – based on 393 auctions monitored – was above the 69.7 per cent figure on 245 auctions on the same weekend a year ago, said Andrew Wilson of ­Australian Property Monitors, which is owned by Fairfax Media.

Melbourne's clearance rate of 69.9 per cent, based on 253 auctions, was higher than the 61.4 per cent ­clearance rate on 143 auctions a year ago. The city's market was likely to remain solid, but not as strong as ­Sydney, which also clocked up its third-highest month ever for auction ­numbers and sales, after March and November, Mr Wilson said.

"I think we'll get a record winter in Sydney," he said. "Both in the number of residential sales and auction clearance rates. There's a lot of energy, a lot of ­confidence and enthusiasm in the ­Sydney market," he said.

In Mortdale, in Sydney's south, a block of eight two-bedroom apartments sold at auction for $2.55 million, well above the $2 million reserve price.'Remarkable result'

"It was quite a remarkable result, about $350,000 over what we'd valued it at," said buyer's agent Rich Harvey.

Mr Harvey was bidding for a client who wanted to renovate the building and turn it into eight strata units.

"But another developer came in and was prepared to pay a lot more than we were," he said.

In Redfern, a largely uninhabitable four-bedroom house with parking at 9 Young Street sold for $50,000 above the reserve price, going for $1.4 million.

"It was an exceptional result," said Belle Property principal Scott Aggett. "It is quite a run-down house. It was a deceased estate. It was bought by a local couple who'd been looking for about six months."

Weekly house values fell 0.3 per cent in Sydney and 0.8 per cent in ­Melbourne, say preliminary figures from RP Data, which recorded a 65.7 per cent clearance rate for the NSW capital and 61 per cent rate in ­Melbourne. Values in both cities fell over the past month, but remain well up on a year earlier – up 16.6 per cent for Sydney and 9.8 per cent for Melbourne.Brisbane on the rise

Brisbane home values are up 7 per cent from a year ago, Adelaide is up 4.6 per cent and Perth 4.3 per cent.

Separately, a spokeswoman for ­Victorian Consumer Affairs Minister Heidi Victoria said it was against the law to make a false auction bid, but said ­collusive bidding was not a problem.

"Consumer Affairs Victoria is not aware that this practice is currently prevalent ," she said.

The AFR Weekend reported on the practice, under which two or more ­bidders represent one buyer at an auction, creating the impression there are multiple buyers. It is more of an issue in Victoria than NSW, where bidders are required to register before auction.

NSW Fair Trading Minister ­Matthew Mason-Cox said collusive bidding was already outlawed, but if new forms of the practice required a law update, "we will consider this."


Fairfax Media Management Pty Limited

Document AFNR000020140609ea6a0000a

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Sydney property is in a ‘golden decade’
PUBLISHED: 3 HOURS 28 MINUTES AGO | UPDATE: 1 HOUR 19 MINUTES AGO

Stockland chief Mark Steinert said the NSW government's efforts to increase housing supply and infrastructure plans would boost Sydney's new property market. Photo: Jessica Hromas
One of the country's largest property developers believes house prices will continue to rise for years to come, with the Sydney market set for a "golden decade".

Stockland chief executive Mark Steinert expects nationwide house prices to rise by 4 per cent to 5 per cent on average for the foreseeable future, with Sydney leading the charge.

Despite a sharp rise in house prices in the past 12 months, an undersupply of property and improving confidence meant the growth was set to continue, he said.

"At the moment it is fair to say there is at least three years of undersupply in every major capital city," Mr Steinert said.

"Because of this demand-supply fundamental, we anticipate at least 4 per cent to five per cent compound growth in new house prices for the foreseeable future."

Mr Steinert said the NSW government's efforts to increase housing supply and infrastructure plans would boost Sydney's new property market.

"We are particularly bullish on Sydney," he said.

"I think it's fair to say that we are going to see Sydney and to a certain extent NSW have a golden decade."

Mr Steinert's optimism contrasts with warnings from economists and analysts that house prices are likely to flatten or slide over the next few years.

Credit Suisse analyst James Ellis has said a collapse in prices was unlikely, but he expects prices to remain flat for several years, which would amount to a decrease in prices in real terms, relative to incomes.

"Our base case scenario is one of real erosion of house prices," he said.

Recent figures from the Australian Bureau of Statistics suggest the housing market boom is cooling, with no growth in home loan approvals in April.

Meanwhile, house prices suffered their biggest monthly fall in five years in May, dropping 3.6 per cent across capital cities, according to research from RP Data.

But prices remain substantially higher than a year ago, especially in Sydney, were prices have risen 16.6 per cent in the past 12 months.

[BlueKelah]

Follow china pattern lah, similar thing happened in late 2011 also where it became buyers market until china started pumping more credit in again.

But this time may be the end of the story as China is now moving on from housing to infrastructure instead to boost their GDP...

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http://www.afr.com/p/business/property/l...PSQ938zsSM

Lend Lease does a Barangaroo at Darling Harbour
PUBLISHED: 0 HOUR 39 MINUTES AGO | UPDATE: 0 HOUR 39 MINUTES AGO

Lend Lease does a Barangaroo at Darling Harbour
The entire Darling Quarter project comprises 1400 apartments, a retail precinct, 20,000 square metres of campus-style offices and a new town square. 
LARRY SCHLESINGER
Lend Lease topped the success of its Barangaroo apartment sellout last August with all 357 apartments in the first stage of its Darling Quarter residences selling out over the weekend.

The developer signed contracts with buyers for around half a billion dollars worth of real estate that will form a large component of its $1 billion ­revitalisation of the southern end of Darling Harbour.

Prices started from $700,000 for a 50-square-metre, one-bedroom ­apartment and rose to $3.5 million for a 130-square-metre “sky home” – a rate of $27,000 per square metre.

The Sydney central business district has been a hot market for new ­apartments. In August last year Lend Lease sold out all 159 residences in Barangaroo South generating more than $300 million in sales. Prices were as high as $40,000 per square metre for penthouses.

Chinese developer Greenland has sold more than $415 million worth of apartments in its mixed-use ­development on the former Sydney Water Board site following two staged releases.

Lend Lease project director Rob Deck told The Australian Financial Review the Darling Quarter sellout reflected the competitive pricing of the apartments and the value buyers placed on its location “right on the doorstep of Darling Harbour, Chinatown, Haymarket and Ultimo with a perfect Walkscore of 100”.

Mr Deck said 60 per cent of buyers had purchased to take advantage of the benefits of living so close to the city and included young professionals and parents who had bought apartments for their children. About 25 per cent of apartments were sold to offshore ­buyers. Construction of the 40-storey apartment block and seven-storey “boutique” block will begin in early 2015 and be completed in 2017.

The entire Darling Quarter project, comprising 1400 apartments, a retail precinct, 20,000 square metres of campus-style offices and a new town square, is due for completion in 2020.

Lend Lease is also heading the consortium undertaking the redevelopment of the Sydney Convention and Exhibition Centre – known as Darling Harbour Live – which is due open in 2016 with a new international convention centre and hotel.

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Chinese companies capitalise on Sydney apartments before market cools
GREG BROWN THE AUSTRALIAN JUNE 30, 2014 12:00AM

TWO Chinese development com­panies reaped a total of more than $300 million at the sales launch of their Sydney apartment projects on the weekend.

The splurge caps a busy first half of the year for the Australian residential market, with the number of homes sold at auction up by 38 per cent compared with last year, according to RP Data. However, analysts warn of cooler buyer activity in the next six months.

One of the Chinese development groups, Country Garden, kicked off its off-the-plan sales campaign for the Ryde Garden project, which will house three apartment towers at North Ryde, in Sydney’s northwest.

The group sold 296 apartments for $186m over just six hours on Saturday. Prices started at $488,000. The development is Country Garden’s first foray into Australia and it is aiming to become a major player in the local apartment market.

Country Garden Australia chief Johnson Zhang told The Australian last week there would be a limit on how many apartments would be sold to offshore Chinese investors, at 30 per cent of sales, so the group could build its brand among the locals.

Mr Zhang said yesterday that 20 per cent of buyers were from mainland China and most had bought in other Country Garden developments.

In the other launch, Chinese-backed Loftex Property sold 103 apartments for $115m at its Radiance development in Darling Harbour. CBRE managing director of residential projects Ben Stewart said that many of the buyers were downsizing.

But the action was not as strong in the auction market at the weekend. Sydney and Melbourne were well down on clearance-rate peaks earlier in the year.

According to RP Data, 73 per cent of homes put to auction in Sydney were sold, while 69 per cent in Melbourne sold.

Both markets were clearing more than 80 per cent of homes put to auction earlier in the year.

Domain Group senior economist Andrew Wilson said the second half of the year would produce slower auction clearance rates and price growth.

“A bit of energy is coming out of the market and part of that may be vendor (selling price) expectations need to get a reality check,” he said.

“Sydney had its lowest weekend clearance rate for the year. We are seeing a downward trend emerging in that market.”

Dr Wilson said price growth for the year would finish at about half of last year’s level, which was close to 10 per cent.

Home price growth in Sydney is expected to grow by about 3 per cent over the next six months, to 9 per cent for the year, compared with last year’s growth of nearly 15 per cent, according to Dr Wilson. Melbourne is on track for price growth of about 4 per cent to 5 per cent, he said.

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Mirvac banks on housing under-supply
Samantha Hutchinson and Rebecca Thistleton
551 words
25 Jul 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Mirvac chief executive Susan Lloyd-Hurwitz is bullish on the outlook for housing demand in Sydney, arguing a chronic under-supply is here to stay.

Ms Lloyd Hurwitz spoke at the opening of Harold Park, the group's $1.1 billion residential precinct on the former Harold Park Paceway site 2.5 kilometres from Sydney's CBD.

Despite a surge in development in the past two years, Sydney suffers from a serious shortfall in housing.

"It's our view that Sydney is fundamentally under-supplied with quality real estate," she said.

The listed developer is "very confident" that Sydney's run of strong house prices would hold up for its other development projects in the inner ring including Green Square and Bondi.

The comments coincided with fresh evidence that capital cities across the country need to drastically lift housing supply and release more land to make property more affordable.

While the number of new dwellings had risen in the past year to more than 176,000, construction needed to continue at the elevated rate in the coming years if Australia was to avoid price spikes in the most sought-after locations, according to data revealed at the Housing Industry Association's Building Better Cities Summit on Thursday.

Land release, planning blocks and excessive taxes on homes were inhibiting construction but were all reformable, HIA chief economist Harley Dale told The Australian Financial Review.

The HIA's chief executive of industry policy and media, Graham Wolfe said population growth rates showed Australia needed 190,000 homes built annually, roughly equivalent to the entire number of homes in Canberra.

Mr Wolfe said the political and community pressures to prevent higher density were weighing on housing supply and affordability as developers and builders needed certainty to invest.

"Some people just don't want more people living in their area but we need to allow more people the opportunity to live near their jobs and have good access to services," Mr Wolfe said.

Speaking at the opening of Harold Park, Sydney lord mayor Clover Moore put Sydney's supply of ­affordable housing and securing better transport infrastructure were "at the top of the list" of the council's development priorities.

"One of the greatest needs is housing for people are essential workers in the city of Sydney . . . we need people who run the city to be able to live within the city," she said.

But securing affordable housing at the Harold Park site has been a difficult process, according to Lord Mayor Moore. At Harold Park, the council had not secured as much space for affordable homes as it would have liked, according to Councillor Moore.

Located in the heart of Glebe and 2.5 kilometres from Sydney's CBD, Harold Park will house 1250 apartments. But just 1000 square metres of the 11-hectare site have been reserved for affordable housing.

The City of Sydney has also approached the NSW State Government in recent months to lobby for a policy which would stoke the supply of affordable housing in the inner city.

Last week, the Lord Mayor met State Transport Minister Gladys Berejiklian to lobby for transport infrastructure connecting Green Square and ­Erskineville's Ashmore Estate to other parts of the city.


Fairfax Media Management Pty Limited

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James Packer’s Crown penthouse tipped to fetch $100m
PUBLISHED: 0 HOUR 43 MINUTES AGO | UPDATE: 0 HOUR 18 MINUTES AGO

A three-storey penthouse at the top of James Packer’s proposed Crown Sydney hotel and casino resort at Barangaroo could be the first Australian property to break the $100 million price barrier, a leading agent has suggested.

Such a result would mean with a single apartment sale Mr Packer’s company Crown could recoup the entire $100 million licence fee it has paid the NSW government for the right to operate a VIP-only casino in the facility.

Crown has yet to even lodge a development application for the proposed 69-storey tower but last week the architecture firm which designed it, Wilkinson Eyre, revealed the latest plan for the three uppermost levels.

“Right at the top we have three floors as one apartment,” company founder Chris Wilkinson told a gathering of the property development industry in Sydney.

It is understood Crown has yet to decide whether to propose to NSW planning authorities that the residence be sold to a private buyer or reserved as a luxury “villa” to accommodate Chinese and other international high rollers it hopes to attract to gamble at its VIP-only casino.

But should Crown opt to sell, Justin Brown, chairman of real estate firm CBRE, said the price might reach nine figures given it would generate interest from international buyers.

“The penthouse at One Hyde Park [in the exclusive London suburb of Knightsbridge sold for $255 million (£140 million) recently,” said Mr Brown, whose company has previously sold apartments at Barangaroo for Lend Lease.

“Penthouse apartments are selling in New York and Hong Kong for $100 million. Something like that at Crown could be the first property in Australia to break $100 million because it will seriously position itself globally.”

At 270 metres the proposed resort – which will incorporate hotel rooms – significantly breaches the 170-metre height limit for a hotel at Barangaroo, set when the proposal was for a building on a pier jutting out into Sydney Harbour.

Barangaroo developer Lend Lease is in discussions with the state government’s Barangaroo Delivery Authority about moving the hotel on to Barangaroo South following community outcry about the original plan.

Lend Lease and Crown believe they should be rewarded with a height concession – which translates to larger profits from the proposed 80 apartments – for their willingness to relocate the building, despite having approval to build over the harbour.

This month Crown paid the NSW government a $100 million licence fee for the right to operate a VIP-only casino at Barangaroo for 99 years from November 2019. It was awarded the casino licence without tender via the government’s controversial unsolicited proposals process.

As part of the agreement Crown has also guaranteed NSW will receive a guaranteed minimum $1 billion in gambling taxes and fees over the first 15 years of the casino’s operation.

The Australian Financial Review

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Sydney leads surge in housing prices
AAP AUGUST 12, 2014 11:49AM

AUSTRALIAN capital city house prices have continued to rise, boosted by the very strong Sydney housing market.

Prices rose 1.8 per cent in the three months to June, official figures show, better than the 1 per cent rise expected by economists.

In the year to June, the Australian Bureau of Statistics’ index of house prices rose 10.1 per cent, the third month in a row the annual rate was above 10 per cent.

Leading the charge was Sydney, where prices rose 15.6 per cent in the year to June.

The next best performer was Melbourne with a 9.3 per cent gain.

JP Morgan economist Tom Kennedy said it was too early to say if surging house prices might spark an interest rate rise by the Reserve Bank of Australia.

“At this stage we think the RBA is pretty comfortable with the housing sector,” he said.

“We don’t think that this is enough to get them over the line but certainly it would be something on their radar and they would be monitoring it quite closely.”

However, national house price growth was being inflated by the outsized gain in Sydney, Mr Kennedy said.

“The details suggest that this strength is landing in one property sector,” he said.

“We think that prices will moderate a little bit further as activity cools, particularly in Sydney where price growth remains very strong at levels that won’t be sustainable.”

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Top developers plan Sydney unit bonanza
THE AUSTRALIAN AUGUST 14, 2014 12:00AM

Greg Brown

Property Reporter
Sydney
Lisa Allen

Property & Tourism Reporter
Sydney
SYDNEY’s booming apartment market has snared a couple of ­billion-dollar developers with apartment tsar Harry Triguboff planning an ambitious 900-plus unit complex in Rosebery while Toga is eyeing a Harbourfront site for a luxurious unit and serviced apartment complex.

Meriton yesterday forked out an aggressive $190 million to buy parallel sites in Rosebery from Dexus Property Group, and Mr Triguboff said it was the highest price paid for a site in the 50-year history of the private company.

The previous highest price was $145m for a land parcel in Sydney’s inner western Pagewood last year, where Meriton plans to build 2000 units. Mr Triguboff said the Rosebery project would be worth about $1 billion on completion, but he denied that the high price was a milestone for the group.

“I look upon the sales price of the whole project, so what I pay for land is only a small portion of what I get for it,” Mr Triguboff said.

“This is only one part of it and therefore it’s of low importance.”

So confident is Meriton of Sydney’s apartment market that earlier this week it tendered for a prime site from Parramatta City Council that could support about 1000 apartments, but the company missed out to a Shanghai-based buyer who offered more than $120m.

Despite a busy 18 months for Meriton, Mr Triguboff said that the group would not slow down in its hunt for sites.

“To buy land is not difficult — to build is more difficult,” Mr Triguboff said.

“The reason we are buying more land is because the sales are very buoyant, and more importantly our progress in the actual building (of apartment projects) is very good,” he said.

The 4.2 hectare Rosebery site, in Sydney’s inner southwest, will also include a childcare centre.

The deal was brokered by ­Meriton acquisitions manager Angelo Mantsis, and JLL’s ­Michael Fenton, Sam Brewer and Blair Peterken.

Meanwhile, cashed-up serviced apartment operator Toga is believed to have paid $58m for a prominent waterfront site fronting 100-102 Elliott Street, Balmain in Sydney’s inner west. Sold by the Roche Group, the trophy Sydney Harbour front site has development approval for 102 residential apartments, 19 residential serviced apartments and 1425sq m of commercial and retail area. The selling agents were Knight Frank’s Dominic Ong and Peter Krieg, who declined to comment.

Toga’s head of construction and development, Fabrizio Perilli, did not return The Australian’s calls yesterday.

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Meriton's boom year

Mercedes Ruehl
471 words
14 Aug 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Harry Triguboff's Meriton Group has pulled off its biggest and most ambitious purchase to date, snapping up a site in Sydney that will be home to an $800 million-plus apartment project.

Meriton now has the most apartments in its pipeline in history, with more than 14,000 units. It is a clear vote of confidence in Australia and more specifically Sydney's, housing market.

DEXUS Property Group sold the site to Meriton for $190 million, the most Mr Triguboff's company has ever spent. More than 1000 apartments will be built at the 4.9-hectare site.

The business park, at 5-13 Rosebery Avenue and 25-55 Rothschild Avenue in the suburb of Rosebery, was one of the assets DEXUS flagged as having residential conversion potential at the beginning of the year. It had a book value of about $100 million.

Meriton Acquisitions Manager Angelo Mantsis called the Rosebery asset an "interesting site".

"We've built next to it so we have experience in the area. We believe that what we paid is the true value. To buy land is not difficult – to build is more difficult. We plan to settle in a year and start building Stage 1 then."

JLL's Michael Fenton, Sam Brewer and Blair Peterken brokered the off-market deal on behalf of DEXUS.

The site is zoned residential with a GFA of 90,000 square metres.

Demand for residential housing has continued to grow over 2014 and off-the-plan sales of apartments have been selling out in hours. Many offshore groups have been paying large amounts of money to secure residential sites and take advantage of the conditions.

Mr Trigiboff is one Sydney developer who can compete with the eye-watering prices offshore developers have paid for inner-Sydney sites. Groups such as Far East Consortium and Greenland have elbowed out other groups with their capacity to pay for sites.

This year alone Meriton has spent hundreds of millions of dollars buying up future projects.

The investments, which have mainly been in Sydney's suburbs, have been matched by strong off the plan sales from its existing portfolio. The Macquarie Residences in Sydney's North Ryde, for example, sold all 213 apartments prior to its launch in June.

In May, Meriton spent about $40 million on another site in Sydney's Mascot. This followed hot on the heels of the purchase of 234 Sussex Street in the Sydney CBD for about $60 million.

Just this week Meriton was also understood to be the underbidder on Melrose Park in Sydney's Parramatta, which sold to a Chinese buyer for $120 million. Mr Triguboff has called for Australian rules for offshore developers to be liberalised to allow more capital to flow into the country.

With Rebecca Thistleton


Fairfax Media Management Pty Limited

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