Victoria Property, Australia

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Melbourne land prices up

Larry Schlesinger
455 words
30 Oct 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.

The price of a residential plot of land in Melbourne has risen for the first time in almost 18 months, according to third-quarter sales figures compiled by the Oliver Hume Real Estate Group.

Melbourne's gross median land price rose from $200,000 to $205,000 over the three months to September, or from $190,000 to $198,000 once rebates are removed.

The modest gain was on the back of stronger demand for residential lots with more than 1000 monthly sales recorded over July, August and September by Oliver Hume.

Oliver Hume's head of research Andrew Perkins, said the ongoing strength of the established housing market was a factor in rising land prices. But, he said: "Don't expect to see sustained growth over the near term."

This week, Australia's biggest listed house and land developer Stockland reported its best quarterly residential results in four years.

Managing director Mark Steinert described the Melbourne market as "currently steady" with "high levels of activity".

Stockland took 1652 deposits over the first quarter of its 2015 financial year with 463 deposits taken in Victoria, compared with 345 in the corresponding period a year ago.

Folkestone, another listed ­developer, announced earlier this month it had formed an exclusive ­partnership with Melbourne developer ID_Land to jointly develop all its ­Victorian residential land interests.

Folkestone's head of real estate, Ben Dodwell, called Melbourne's residential land market "the most efficient in Australia". Mr Dodwell said the market was "strong with a continued positive growth outlook".

Appetite for Melbourne land is also rising from Asian investors. Joseph Zaja, head of property services group Ausin, said his firm would sell about 500 house and land packages to ­Chinese investors this financial year, up from just 100 last year.

Mr Zaja said Chinese investors were diversifying away from Melbourne apartments due to concerns about the market being oversupplied

According to Oliver Hume, Casey in the south east was the most expensive Melbourne land market with a net media land price of $224,725, followed by Wyndham in the south west ($221,000) and Hume in the outer north west ($207,250).

All the other growth area land ­markets have net median prices below $200,000 with Melton the most ­affordable with a net median price of $135,000.

Oliver Hume also found that lot sizes increased over the quarter with the median lot area returning to the long term median of 448 square metres.

Increases in lot size were seen across all growth areas except Mitchell and Melton. The biggest lots are in Cardinia (494 square metres) and Casey (477 square metres) and the smallest is in Wyndham (407 square metres).


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Hexacon plans 55-storey tower in Melbourne
THE AUSTRALIAN NOVEMBER 03, 2014 12:00AM

Sarah Danckert

Property Reporter
Melbourne

SINGAPOREAN builder Hexacon has landed in Melbourne with plans for a large-scale residential development in the city’s Southbank.

It can be revealed that Hexacon was behind the purchase of 65-71 Haig Street earlier this year at auction.

The group joins a throng of Singaporean groups flocking to Melbourne to build projects in the city’s already oversupplied CBD fringe.

It marks the first project for the construction company, which generally builds on behalf of developer clients. Hexacon’s majority-owned subsidiary, Sunvale Development, has recently filed plans with the state government for an apartment tower on the parcel.

Hexacon hopes to build a 55-storey tower on the site, which has two street frontages.

The building will have 361 units over 32,000sq m.

Hexacon has built several apartment projects in Singapore, including the Paradise Island project at Sentosa Cove, and the soaring The Lumiere and The Vision residential developments.

It is also an accomplished commercial property builder with at least 10 major projects in Singapore under its belt.

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Strip club owner Peter Iwaniuk plans apartment tower in Melbourne CBD
THE AUSTRALIAN NOVEMBER 06, 2014 12:00AM

Sarah Danckert

Property Reporter
Melbourne
FRESH from buying gentlemen’s club Spearmint Rhino last week, strip club owner Peter Iwaniuk is embarking on his first major apartment project in ­Melbourne that will have an end value of $300 million.

Mr Iwaniuk, through his ­private company Einwod, is ­hoping to build a 51-storey tower at 9-27 Downie Street Melbourne.

At 158m high, the building will boast 490 apartments in the Melbourne CBD.

The property is close to the club owner’s two main strip clubs — Centrefold Lounge and Spearmint Rhino — which are both located in ­notorious King Street.

His other venue, popular nude bar The Men’s Gallery, is also located in the CBD, on Lonsdale Street across the road from the old The Age building.

It marks Mr Iwaniuk’s second attempt to build a large-scale apartment project in the CBD after earlier this year his hopes to build a tower on a plot near The Men’s Gallery were dashed by Far East Consortium winning approval for a huge development next door. The new development will add even more supply to ­the CBD apartment market.

Due to the size of the project, Mr Iwaniuk will need approval from the Minister for Planning.

Mr Iwaniuk did not return calls yesterday.

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Land release to curb Melbourne prices

Michael Bleby
425 words
13 Nov 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.

The release of more land and the return to market of land that ­previous buyers paid too much for will slow price growth next year in greater Melbourne's urban growth zones, Satterley Property Group chief executive Nigel Satterley said.

As much as $2 billion worth of ­so-called "englobo" land – large ­undeveloped parcels that can be ­subdivided – is likely to come onto the market in the next year, pushing prices down, Mr Satterley said.

This was already the case in the Melton area, north-west of ­Melbourne, he said.

"Some of it appears to be overpriced, bearing in mind the high development costs and slower retail price growth," Mr Satterley said.

"Both the known englobo land agents and active local agents have been bringing more properties to us in the past eight weeks. There appears to be much land available for sale in the shire of Melton where groups paid far too much."

Melbourne growth area land prices rose slightly in the in the third quarter to a median $205,000 – or $198,000 after net rebates – their first upward movement in about 18 months, figures from consultancy Oliver Hume show. Melton is now the cheapest municipality, with a gross median price of $145,000 per hectare, having fallen below the ­Wallan-Beverige area north of ­Melbourne during the quarter.

Supply is likely to grow over the next few years, keeping pressure on prices.

Victoria's Metropolitan Planning Authority has finalised 42 precinct structure plans and a further 60 are to be completed over the next five years, as it designs new suburbs on the 52,000 hectares made available by expansions of the city's urban growth boundaries in 2010 and 2012.

At a time when banks are ­becoming more cautious about ­lending, rising development charges and infrastructure levies have left many developers with land they bought but cannot develop ­profitably, ­­Mr ­Satterley said. "The development industry is about to become even more competitive going forward," he said.

There are pressures, but not many owners are putting land back on the market, said Paul Wheate, director of residential development for valuer Herron Todd White.

"If I bought land between 2008 and 2010 and I paid anything more than $500,000 per hectare or $30,000 to $50,000 per site – for a site with more than 500 lots – it's really hard to make anything stack up," Mr Wheate said.

"But nobody's walking away."

Instead, owners were trying to renegotiate terms, he said.


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Offshore buyers swoop on Melbourne apartments
PUBLISHED: 1 HOUR 4 MINUTES AGO | UPDATE: 0 HOUR 0 MINUTES AGO

UEM Sunrise has sold down 895 units already, mostly through its strong networks in south-east Asia and China, local buyers will account for 25 per cent of the stock. Photo: Penny Stephens
NICK LENAGHAN

Malaysian developer UEM Sunrise virtually sold out a new high-rise residential tower in Melbourne’s CBD after just two weeks, with three-quarters of the apartments going to offshore buyers.

With 941 apartments sold off-the-plan, the 92-storey Aurora will be the first project in Australia by the developer.

UEM Sunrise, listed on the Malaysian stock exchange, is a subsidiary of the UEM conglomerate, which is fully owned by Malaysian sovereign fund Khazanah Nasional.

The developer has sold down 895 units already, mostly through its strong networks in south-east Asia and China, local buyers will account for 25 per cent of the stock. Around 60 per cent of buyers are investors.

Raymond Cheah, director of UEM Sunrise’s Australian subsidiary, said the sell-out was “breath-taking”, given the project launch had originally been slated for January next year.

“In UEM Sunrise’s 49 years of history in property development, the intensity and excitement of Aurora Melbourne Central is unmatched,” he said.

Mr Cheah said the project’s offshore buyers were attracted both by Melbourne’s amenity – with its status as the world’s most liveable city – and its relative value in the world market.

“As a benchmark in Australasia, Melbourne core CBD prices are on par with KL, 50 per cent cheaper than Sydney, 200 per cent cheaper than Singapore, 350 per cent cheaper than Hong Kong, and a staggering 550 per cent cheaper than London.

“So if you look at the macro context, Aurora Melbourne Central is really an affordable luxury.”

A GOOD TRACK RECORD
The development rises in the heart of the Melbourne CBD, on La Trobe Street near the State Library and RMIT University. It has direct underground connections to the city rail loop and to the central retail precinct, including Melbourne Central. The project includes serviced apartments, along with retail and offices.

Local property lawyer Eu Ming Lim, who acted for UEM Sunrise, said the developer’s reputation in the region helped secure the rapid uptake of apartments.

“Developers with a good track record whether locally or overseas will have a head start,” he said.

“Confidence in the developer as to delivery, quality and choice of location is very important to those who may not have the local knowledge and experience for making such choices on their own.”

The success of Aurora comes as a parliamentary inquiry into foreign buyers prepares to hand down its report on Friday.

UEM Sunrise has kept abreast of the debate on foreign investment in the real estate market and the prospect of extra fees or duties that may be imposed on foreign buyers.

Managing director Anwar Syahrin Abdul Ajib noted that subsequent sale of strata apartments was restricted to local buyers and those with residency status, unlike in other international cities.

“If there were new taxes on foreigners the market may suffer a knee-jerk reaction and the property market may stall and discourage foreign investments,” he said.

Foreign developers also had an important role to play, he said.

“The offshore developers have cushioned the supply in the Melbourne market, or else housing prices would definitely have greatly escalated due to the shortage of supply.

“This can be seen in the Sydney, market where the supply of apartments is extremely low causing demand push and supply pull, resulting in higher property prices.”

UEM Sunrise plans to launch a second project in Melbourne next year and is busy scouting further opportunities in Sydney and Melbourne.

The Australian Financial Review

BY NICK LENAGHAN
Nick Lenaghan
Nick covers business from our Melbourne bureau.

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Luxury property in Victoria is on the way up
THE AUSTRALIAN NOVEMBER 29, 2014 12:00AM

Sarah Danckert

Property Reporter
Melbourne
Jock Langley
Estate agent Jock Langley at a $10m-plus home he is marketing in Toorak. Source: News Corp Australia

AS Victoria goes to the polls this weekend the wealthy can rest assured the city’s $3 million and over housing market is finally improving.

Kay & Burton chairman Gerald Delany says the top end of the market has been performing strongly during the past year with strong sales in the $3m to $5m range and the $5m to $10m range.

“There’s no doubt that this year has been better than last,” Delany says. “Stock on the market over $10m has been thin, but we’ve still recorded a number of sales.”

Delany says Melbourne’s $10m-plus and $20m-plus market has been buoyed by Chinese-Australian buyers as well as buyers from mainland China.

Abercromby’s Real Estate director Jock Langley says sales during 2014 have clearly been better than last year.

“We’ve had some strong results in the $10m-plus market. That’s been healthy to see,” Langley says.

“In the $5m plus market we’ve done a lot of trans­actions in the last eight to 10 weeks — it’s been really busy. We’ve sold a number of houses.”

One of the houses to be sold via auction is 69 Lansell Road, Toorak.

Expected to fetch north of $10m, the sprawling property is kitted out with a pool and tennis court.

The Stonnington area, covering Toorak, South Yarra, Prahran, Windsor, Armadale, Kooyong, Glen Iris, Malvern and Malvern East, and Boroondara, which covers Kew, Hawthorn, Camberwell, Balwyn, Canterbury, Mont Albert North, have been neck and neck for sales and prices in the year, Langley says.

He estimates that about 70 per cent of the properties he handles are sold off market.

But Morrell and Koren buyers advocate Christopher Koren doesn’t share Langley and Delany’s chipper view of sales rates in the $8m-plus range.

Like Sydney, Morell says there is a huge gap between vendor price expectations and what a buyer is willing to fork out, describing it as a “decided disconnect”.

“There are several houses in the $8m-plus range that are just sitting there and not moving,” Koren says.

“Too many vendors are holding out for a Chinese gentleman to come in on a white horse and pay well over the asking price.”

Koren says too many agents are also misleading vendors about the actual worth of their properties. He estimates sales volumes in the uber luxury end of the market are “about 30 per cent” down on previous years.

You could be hard-pressed to find data or an open auction to gauge the market yourself, with the “private auction” another trend that’s well and truly on the up.

Koren, Delany and Langley agree that information on how the top tier of Melbourne’s houses prices are performing is also getting harder to access. They say the privacy bent often means that only a land title search will give a clue to the sale price, which in turn skews data collected by research houses.

Data from SQM Research shows Toorak’s sale prices are actually tracking down, with prices squeezed 40 per cent lower during the past year.

Langley says the fall reflects how thin available stock is in Toorak and that one poor sales performance can pull down the result. Mining speculator Socrates Vasiliades took a hit on his recently sold mansion on Towers Road, Toorak, with the circa $18m price paid by Solomon Lew’s former daughter-in-law Sarah Lew well below the $26m asking price.

Other high-end properties lie outside of Melbourne’s traditional leafy eastern suburbs. Developer Lend Lease is doing a roaring trade at its Docklands development. While many of the homes are in the sub $1m range, the company has created “marina sky homes”, code for ­really large apartments with really big views of the bay.

One of these luxury apartments is owned by artist Kerry-Anne Sullivan and her businessman husband, Paul. “We sold our house in Kew and moved in to the apartment just over two years ago and it’s been brilliant from the get-go,” she says.

Downsizing has removed the clutter from her life.

Sullivan says most of her co-residents living in the ­marina sky homes are mostly owner-occupiers.

“We’re latchkey oldies. This apartment means we can just pack a bag and be on the freeway in minutes. It’s amazing.”

Kay & Burton’s Delany says demand for apartments in the $5m to $10m range is increasing at a “rapid” rate.

“It’s the result of the ageing population,” Delany says. “Baby boomers are now in their 60s and as such they are a strong part of the market.”

Portsea dredging up high prices

THE sand may be slipping from Portsea’s bayside beaches thanks to Port Phillip Bay dredging, but the market for high-end coastal retreats is still holding its head above water.

Long the jewel in the Mornington Peninsula crown, Portsea is home to the not-so humble piles of billionaire Lindsay Fox and his equally wealthy friend, rag trader Solomon Lew. The Baillieu and Myer clans also own a whack of property in Portsea and nearby Sorrento.

Kay & Burton agent Liz Jensen says she has completed three big sales in the past fortnight in the $3 million-plus bracket.

“I’m glad you called today because it was a bit quiet a few weeks ago,” she says.

Jensen is selling a number of homes including 10 Sahara Court in Portsea, which has an asking price of $6m.

Expats and baby boomers are driving the market in Portsea, Sorrento and nearby Blairgowrie, she says.

“The market is so thin, however, that vendors don’t have to sell if the price isn’t what they were after.”

Jensen’s business also covers a strong beach house rental market, which she says is beginning to pick up heading into Christmas.

“We’ve got homes renting from $1500 a week to $15,000 a week,” she says.

“Demand for rentals hasn’t decreased at all so people have to act now if they do want to rent a home for the summer holidays.”

And often a short-stay turns into a longer one with families renting beach houses later becoming buyers, she says, given they have time during the holidays to look for a property to buy.

Rob Curtain of Sotheby’s International Realty Sorrento says recent activity points to a pick-up in the high-end home market in the pointy end of the Mornington Peninsula.

“It’s the best year we’ve had in five years,” Curtain says. “There are certainly buyers around and we’ve had our best winter that we’ve ever had.”

Curtain says prices have improved by about 10 per cent in top tier homes in the area.

“But this is after five years of no growth,” he adds.

Curtain says Sorrento has surpassed Portsea in terms of buyer demand but there are still too few houses on the market.

“People want to be near the village. They don’t want to be driving their kids around all holiday so they want a spot where they can walk into the village or walk to the beach.”

The Portsea market has been hit a little bit by the impact of dredging on the main “front beach” but he says there are other beaches along the Portsea foreshore that have not been so affected by the much higher tides.

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http://www.valuebuddies.com/thread-4912-...#pid101923

The link will be more appropriate here as Docklands overbuilding has been well documented and there is nothing new...

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Local guys are smart enough to tap on overseas connections so that oversupply can be passed on to overseas converts...

Local developers look for overseas partners
THE AUSTRALIAN DECEMBER 03, 2014 12:00AM

A GREATER number of offshore developers are expected to team up with local groups as Melbourne’s development site market continues to boom, according to experts.

Only weeks before last Saturday’s Victorian state election, the former Napthine government started an expression of interest campaign for E-Gate, an enormous residential infill site on the cusp of the CBD.

The sale process comes as Melbourne is awash with capital from developers from Malaysia, Singapore and China.

CBRE director Mark Wizel — who specialises in city sales and retail sales — said there was a good chance that the buyer of E-Gate would be a partnership between a local developer and an offshore group.

“It wouldn’t surprise me at all if a group like an A-REIT (Australian real estate investment trust) such as Lend Lease, Mirvac or Stockland bring in a partner from offshore for a project like E-Gate,” Mr Wizel said.

He said there had been a number of examples where a local developer had harnessed capital from an Asian group, with Grocon successful in brining in equity investors or direct buyers for various stages or parts of its CUB site development on the CBD fringe.

“What you are finding now is that the smart local players who probably resented Asian capital based on the fact that the Asian capital was driving up land values and making it difficult for them to compete, have changed their attitude significantly in 2014.”

Mr Wizel said that in addition to the need for capital for new projects, a lot of local developers had realised that Asian groups were in a better position to market apartment stock offshore.

“If you’ve got a developer from China who builds say 25,000 apartments a year versus a developer in Australia who builds 1500 apartments a year, the Chinese developer is going to have a pool of buyers and a pool of inquiries and a database associated with their business that’s 15 to 20 times larger than the Australian developer,” Mr Wizel said.

KPMG senior partner Bernard Salt told a crowded Melbourne Market briefing at CBRE’s offices yesterday that over the past 14 years the city’s population growth has outstripped that of Sydney in every single year.

“Melbourne is on the ascendancy at the moment. There’s only one other time in history when Melbourne has added more to its population,” Mr Salt said.

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http://www.valuebuddies.com/thread-4554-...#pid102408

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Victoria ushered in Labour govt after 1 term of Coalition... can we expect changes that will upset developers' plans???

Sector calls for planning consistency

Rebecca Thistleton
391 words
5 Dec 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.

Victoria's new government should retain the state's planning framework, Plan Melbourne, released earlier this year under the previous government, the property industry says.

Developers and the state's ­Property Council have also called for a ­renewed focus on boosting Victoria's housing stock.

Victorian Premier Daniel Andrews was sworn in on Thursday, as was his hand-picked ministry.

The state's new Planning Minister is Richard Wynne, with Martin Foley named Housing Minister. They replace former Liberals Matthew Guy and Wendy Lovell.

Property Council of Australia's ­Victorian executive director, Jennifer Cunich, said Plan Melbourne should be implemented.

Ms Cunich said the new ­gov­ernment's biggest challenges would be managing Melbourne's thriving pop­ulation while maintaining growth and starting work on proposed ­infra­structure projects.

CBRE city sales director Mark Wizel said there needed to be continuity ­following the change of government and he hoped Mr Wynne would ­continue Mr Guy's push for Melbourne to be a 24-hour, international city.

"Intervention at Fishermans Bend is probably required to encourage land owners to contribute to infrastructure, transport and amenity to ensure the value of development land can be ­crystalised, as opposed to purely ­holding paper value, which is the case in 80 per cent of land holdings within Fishermans Bend," Mr Wizel said.

Villawood Properties co-directors Rory Costelloe and Tony Johnson made a statement on Thursday following the appointments.

"We are confident that the Andrews government appreciates the industry's role as a creator of jobs and of broader economic activity. We look forward to working with a government that would further enable this role through a ­far-sighted regulatory and legislative approach."

Villawood said developers needed certainty in planning regulation.

New Planning Minister Mr Wynne was re-elected to his ­inner-city seat of Richmond. He has held the safe Labor seat for 15 years.

He has previously held the housing, local government and Aboriginal affairs portfolios in previous Labor ­governments and was the housing spokesman in opposition.

The shadow planning minister, Brian Tee, missed out on re-election to the upper house in Saturday's election.

Mr Foley, the member for the inner south-east seat of Albert Park since 2007, was appointed Housing Minister after shadowing in water, arts and youth affairs in opposition.


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