L67 Property Operators and Real Estate Services

Financiers torpedo Crown tower project

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Original article by Nick Lenaghan
The Australian Financial Review – Page: 33 : 5-Mar-19

Crown Resorts has not been able to secure an extension from the Victorian Government for a planning permit for a proposed hotel and apartment tower in Melbourne’s CBD. Crown had proposed to build the $1.75 billion tower opposite its casino under a joint venture with Schiavello Group. Under the terms of their planning permit, Crown and Schiavello had two years to commence development before the permit expired. However, they were unable to secure suitable financing arrangements for the tower, which would have been the tallest in Australia.

CORPORATES
CROWN RESORTS LIMITED – ASX CWN, SCHIAVELLO GROUP PTY LTD, VICTORIA. DEPT OF ENVIRONMENT, LAND, WATER AND PLANNING, WILKINSON EYRE ARCHITECTS

Manifestation of a system in trouble

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Original article by Michael Bleby
The Australian Financial Review – Page: 34 : 25-Feb-19

Construction lawyer Bronwyn Weir says more building failures similar to the cracks that impacted Sydney’s Opal Tower are inevitable if serious reforms are not implemented by the states. Cracks in the apartment tower led to its residents being evacuated on Christmas Eve, with some still unable to return to their homes. Weir says developers and builders have no real interest in whether what they construct will perform over the long term, and they are not being held accountable for any actions that might negatively impact future owners.

CORPORATES

‘Time to pounce’: Investors rush to beat change

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Original article by Ingrid Fuary-Wagner
The Australian Financial Review – Page: 9 : 18-Feb-19

Real estate investors are preparing to acquire established properties in the event that Labor wins the upcoming federal election. Labor intends to abolish negative gearing on established properties, although it will still allow it for newly-built homes. However, any such changes would be unlikely to take effect until 1 July 2020. Victor Kumar of Right Property Group says he would expect to see a big increase in sales of established properties in the period between the election and when any legislation takes effect.

CORPORATES
AUSTRALIAN LABOR PARTY, RIGHT PROPERTY GROUP

Reality bites for million-dollar club

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Original article by Mackenzie Scott, Remy Varga
The Australian – Page: 1 & 6 : 15-Feb-19

New data shows that just 649 suburbs across Australia now boast a median house price of $1m, compared with 741 in January 2018. There are now 366 suburbs in New South Wales where the median price exceeds $1m, while there are 129 such suburbs in Victoria. Nerida Conisbee, the chief economist at realestate.com.au, says price rises in recent years were unsustainable and some suburbs simply did not belong in the million-dollar price bracket.

CORPORATES
REALESTATE.COM.AU, CORELOGIC AUSTRALIA PTY LTD

Reforms to help protect buyers

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Original article by Michael Bleby
The Australian Financial Review – Page: 8 : 11-Feb-19

State and territory building ministers agreed to a ban on the use of unsafe aluminium composite panels in new apartment buildings at a Council of Australian Governments meeting on 8 February. However, the meeting did not define "unsafe". The meeting also agreed that builders have an ongoing duty of care to apartment owners to provide a building that meets required building code standards, and that builders will face extra liability if their buildings do not comply with such standards.

CORPORATES
COUNCIL OF AUSTRALIAN GOVERNMENTS, HIGH COURT OF AUSTRALIA, OWNERS CORPORATION NETWORK OF AUSTRALIA INCORPORATED, MASTER BUILDERS ASSOCIATION OF NEW SOUTH WALES PTY LTD, UNIVERSITY OF WESTERN SYDNEY, NEW SOUTH WALES. DEPT OF PLANNING AND ENVIRONMENT, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE

Housing lot defaults hit 25 per cent as finance hard to secure

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Original article by Larry Schlesinger
The Australian Financial Review – Page: 31 : 7-Feb-19

Satterley Property Group CEO Nigel Satterley says the default rate among buyers of housing lots in Melbourne is now 20 to 25 per cent, compared with just five per cent in late 2017. He adds that Perth and Sydney boast default rates of around 35 per cent and 15 per cent respectively. Satterley attributes the high level of defaults to factors such as tightened access to credit for both local and overseas buyers. Simonds Group CEO Kelvin Ryan notes that there has been a spike in the number of housing lots that are been offered for sale on the secondary market.

CORPORATES
THE SATTERLEY PROPERTY GROUP PTY LTD, SIMONDS GROUP LIMITED – ASX SIO, OLIVER HUME REAL ESTATE GROUP PTY LTD, RED23 PTY LTD, GUMTREE.COM AUSTRALIA PTY LTD

Apartment approvals hit four-year low

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Original article by Michael Bleby
The Australian Financial Review – Page: 4 : 5-Feb-19

Official figures show that just 53,590 units in apartment towers of at least four storeys were approved in 2018, which is about 12 per cent lower than 2017. The number of approvals for stand-alone dwellings fell slightly, to 119,668. Overall, a total of 212,316 apartments, houses and townhouses were approved in 2018, which is the lowest level in four years. JLL has forecast that just 16,000 apartments will be completed across Australia in 2019.

CORPORATES
JONES LANG LASALLE AUSTRALIA PTY LTD, BIS OXFORD ECONOMICS PTY LTD

Banks, rules to blame for house prices

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Original article by Michael Bleby, Su-Lin Tan
The Australian Financial Review – Page: 5 : 1-Feb-19

Chris Richardson of Deloitte Access Economics claims that both the banks and regulators are to blame for the current decline in house prices. He says that regulators were too slow to realise that record low interest rates were causing the housing market to overheat, while the banks suddenly went from being too generous with their credit to being too stingy. Figures released by the Reserve Bank on 31 January show that lending to owner-occupier borrowers grew by just 6.5 per cent in 2018, the weakest annual rate since 2014.

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD, RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC

Stockland, Mirvac and Lendlease face settlement risk

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Original article by Ben Wilmot, Samantha Bailey
The Australian – Page: 17 & 23 : 31-Jan-19

UBS says settlement risk could be a problem for Mirvac, Lendlease and Stockland in coming years as a result of the downturn in Australia’s apartment market. US believes that Mirvac is most vulnerable to settlement risk; however, such concerns have been downplayed by the head of Mirvac’s residential division, Stuart Penklis. Meanwhile, Dominic Lambrinos of Chifley Securities says some developers could be forced to sell development sites at a discount.

CORPORATES
UBS HOLDINGS PTY LTD, MIRVAC GROUP – ASX MGR, LEND LEASE GROUP LIMITED – ASX LLC, STOCKLAND – ASX SGP, CHIFLEY SECURITIES, CORELOGIC AUSTRALIA PTY LTD, AMP LIMITED – ASX AMP, CREDIT SUISSE (AUSTRALIA) LIMITED

Vicinity write-down hints at retail cycle’s turn: Citi

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Original article by Nick Lenaghan
The Australian Financial Review – Page: 32 : 29-Jan-19

Shopping centre landlord Vicinity Centres advised in the week ending 25 January that it had reduced the value of its portfolio by $37 million. Although the write-down represented only a 0.2 per cent reduction in the value of Vicinity’s portfolio, Citi analysts have heralded it as being "symbolically significant" in a research note. Citi has stated that retail is its least preferred property option, and that recent news regarding the retail property sector suggests that conditions are declining more quickly than had previously been thought.

CORPORATES
VICINITY CENTRES – ASX VCX, CITIGROUP PTY LTD, SCENTRE GROUP – ASX SCG, GOODMAN GROUP – ASX GMG