Luxury buyers get much more bang for their buck on the Gold Coast according to new analysis by Knight Frank. Its latest Wealth Report, shows the region had the highest growth of any Australian city last year with prestige property prices up by 4.1%. Despite the price rises the report says on the Gold Coast $1.5m will buy about 117sq m of luxury space. Recent luxury sales include a $42 million offer for a Bellagio La Villa estate at Tallebudgera Valley, the highest residential sale ever in Queensland. Knight Frank Head of Residential Erin van Tuil says the top end of the market is more resilient and much less likely to be impacted by interest rates rises. “We expect to see ongoing buyer activity in these price points over 2023 as confidence returns, particularly with an expected peak in inflation and rate rises later this year, and along with it more certainty on the economic landscape,” van Tuil says
Brisbane Builds For Sustainable Growth
Brisbane City Council has released its Sustainable Growth Strategy, which includes new height limits and options for some developers to not have to foot all infrastructure costs upfront. The plan outlines increasing the height limits in some parts of South Brisbane to similar levels within the CBD. Some buildings within the South Brisbane Kurilpa Precinct, will be able to be built to 274 metres. The strategy aims to outline ways to accommodate an additional 10,000 new dwellings. Brisbane Lord Mayor Adrian Schrinner says, “density in the right areas can be the most sustainable form of growth”. The State Government has also started a review of its South East Queensland Regional Plan. The Property Council of Queensland has welcomed both reviews. It says the Build-to-Rent proposals, and the opportunity for developers of those projects to pay for infrastructure over time will help the industry. It says the initiatives suggested by Council acknowledge the important role purpose built rental accommodation plays in tackling the housing crisis.
Quote of the Week
Density in the right areas can be the most sustainable form of growth”.
Brisbane Lord Mayor Adrian Schrinner
Consumer Confidence Improves
Consumer confidence remains stable with new figures showing a slight improvement in the longterm view of the economy. The latest ANZ-Roy Morgan Consumer Confidence ratings remain unchanged for the second week in a row, although it is still about 20 points below what it was at the same time last year. Confidence is up in Queensland and South Australia, it is unchanged in Victoria and is down in New South Wales and Western Australia. About a fifth of respondents believe their families are better off financially than this time last year while confidence in the economy remains weak with only about 12% believing it will perform well in the next five years. There has been a slight deterioration in whether consumers think now is a good time to buy a major household item with only 19% believing it is a good time. ANZ Senior Economist, Adelaide Timbrell, says confidence among those who own their home outright and those renting declined slightly.
Clearance Rates Hover Around 70%
Clearance rates and auction numbers are down slightly on the previous week, according to the latest analysis of the Australian auction market. Nationally the clearance rate last week was 69.1% compared with 72.4% the previous week. Adelaide remains one of the strongest performing auction markets with almost three quarters, 74.8%, of properties selling under the hammer. Brisbane had a clearance rate of 70.9%, followed by Sydney, 70.8%, Melbourne 70.7% and Canberra 58.2%. The number of properties offered for auction last weekend, 1682, was significantly less than the 2377 properties taken to auction at the same time last year. The top performing region in Australia was Sydney’s City and Inner South with a clearance rate of 83.3%, while Melbourne’s outer east has a clearance rate of 79.6%. Of the larger regional markets, Newcastle and Lake Macquarie had the highest clearance rate last week of 65.4%. According to CoreLogic figures auction clearance rates for 2023 have been substantially higher than late last year.
Building Slump Further Pressures Rents
Building approvals have slumped to their lowest levels in more than a decade. The reduction in supply puts further upward pressure on residential rents. Australian Bureau of Statistics figures show total new approvals were down almost 28% in January with 12,065 approvals the lowest figures since July 2012. Standalone home approvals dropped 13.5% in January, while apartments, townhouse and semidetached homes approvals dropped by 44%. BIS Oxford Economics senior economist Maree Kilroy says increasing interest rates are stopping people from committing to new housing. She says further rate rises will impact on the demand for new homes. “Inquiries for greenfield land and off-the-plan apartments are down sharply on a year ago and are set to remain weak over the year ahead,” she says. “For households that put down deposits on land lots over 2021 and 2022, finance at settlement has become challenging. “Financing the build stage has similarly become tougher, where higher borrowing costs and a near-30% run-up in construction costs are both impacting.”