APARTMENTS – AUSTRALIA – DESIGN AND CONSTRUCTION

Apartment slowdown a risk to wider industry

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Original article by Michael Bleby
The Australian Financial Review – Page: 39 : 8-Aug-18

Australia’s Performance of Construction Index recorded overall growth of 1.4 points to 52.0 in July, marking the sector’s 18th consecutive month of growth. However, the sub-index for attached housing declined by 11.7 points to 36.7, and Peter Burn of the Australian Industry Group says the downturn in activity in the apartment sector could have implications for the broader construction industry if it is sustained.

CORPORATES
THE AUSTRALIAN INDUSTRY GROUP, HOUSING INDUSTRY ASSOCIATION LIMITED

Developers warned about GST trap on unsold units

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Original article by Duncan Hughes
The Australian Financial Review – Page: 37 : 15-May-18

Tax adviser Ken Fehily has urged property developers who rent out newly-completed apartments because they are struggling to sell them to be mindful of their goods and services tax liabilities. He says developers in this situation could be triggering GST liabilities without being aware of it, and that they will certainly have to pay the full GST when they eventually sell the apartment. Capital Economics expects Melbourne apartment prices to fall by nine per cent in 2018, while Sydney apartment prices are tipped to decline by four per cent.

CORPORATES
CAPITAL ECONOMICS LIMITED, AUSTRALIAN TAXATION OFFICE, FEHILY ADVISORY

Perfect storm hits apartments market

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Original article by Michael Bleby
The Australian Financial Review – Page: 31 : 2-Feb-18

Approvals for new homes, apartments and semi-detached dwellings have recorded their biggest monthly fall since July 2012. Approvals for apartments fell in all mainland states in December 2017, while approvals for new attached dwellings declined by 39 per cent. Developers have cited a number of reasons for the decline, including increased investor taxes and tightened consumer credit. However, ANZ economist Daniel Gradwell said the bank is not overly concerned by the figures.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, EVOLVE DEVELOPMENT PTY LTD, HOUSING INDUSTRY ASSOCIATION LIMITED, COSTA FOX, URBAN TASKFORCE AUSTRALIA LIMITED, MASTER BUILDERS’ ASSOCIATION

Banks watch as capital city unit crisis unfolds

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Original article by Robert Gottliebsen
The Australian – Page: 21 : 31-Jan-18

The yield on US 10-year government bonds peaked at 2.73 per cent in late January, and the policies of President Donald Trump could see yields rise further. This would have major implications for Australia’s banks, which source 30-40 per cent of their funding from offshore. Australian banks are in turn heavily exposed to the residential and retail property markets, and a sharp rise in global interest rates would put downward pressure on asset values in these sectors. This would be of particular concern for the inner city apartment markets in Melbourne, Sydney and Brisbane, where there are already fears of an oversupply.

CORPORATES
UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Apartment slowdown to hit economy hard: Triguboff

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Original article by Turi Condon
The Australian – Page: 2 : 11-Sep-17

Apartment prices have fallen by around 10 per cent over the past six months, according to Harry Triguboff. Australia’s biggest builder of apartments says governments may need to take action if prices, along with new apartment starts, continue to fall. He says trends that are seeing young people share or stay with their parents for longer is hurting new apartment construction, as is tepid wages growth.

CORPORATES
MERITON APARTMENTS PTY LTD, RESERVE BANK OF AUSTRALIA, BIS OXFORD ECONOMICS, AUSTRALIA. DEPT OF THE TREASURY

Build-to-rent will struggle in Australia

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Original article by Larry Schlesinger
The Australian Financial Review – Page: 37 : 6-Sep-17

Melbourne-based Caydon Property Group has started work on its first "build-to-rent" apartment project in the US. However, Caydon founder Joe Russo questions whether the build-to-rent model will be successful in Australia, noting that rising property values means that such an apartment building is likely to be less profitable than selling all apartments off the plan. Mirvac is undertaking a capital raising to finance its first build-to-rent project, while Salta Properties also plans to enter the sector.

CORPORATES
CAYDON PROPERTY GROUP PTY LTD, MIRVAC GROUP – ASX MGR, SALTA PROPERTIES PTY LTD, AMP CAPITAL INVESTORS LIMITED, SCAPE LIVING STUDENT ACCOMMODATION, MACQUARIE CAPITAL PTY LTD, GREYSTAR REAL ESTATE PARTNERS LLC, DOMUS HOLDINGS CORPORATION

Foreign apartment buyers to halve

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Original article by Michael Bleby
The Australian Financial Review – Page: 31 : 24-Jul-17

The number of new apartments funded by foreign investors in Australia is tipped to fall significantly over the period from 2016 to 2019, according to Master Builders Australia. It attributes the expected decline to federal and New South Wales government curbs on foreign property investors. The MBA also expects foreign investment in new standalone properties to decline, but by not as much as apartment investment. The MBA expects NSW to feel the biggest impact in terms of a decline in new foreign investor-funded apartments, but Tim Lawless of CoreLogic suggests that Victoria instead will be most affected.

CORPORATES
MASTER BUILDERS OF AUSTRALIA, CORELOGIC AUSTRALIA PTY LTD

Developers risk $100k loss on each apartment: report

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Original article by Larry Schlesinger
The Australian Financial Review – Page: 37 : 24-May-16

Secret Agent director Paul Osborne notes that there is growing concern among apartment developers that some buyers will default prior to settlement. He says this has been prompted by moves by the banks to restrict lending to offshore property investors. Secret Agent, a buyers’ advocate firm, estimates that an off-the-plan developer could lose more than $A100,000 on a two-bedroom apartment in Melbourne if the buyer defaults.

CORPORATES
SECRET AGENT PROPERTY SERVICES, MACQUARIE BANK LIMITED – ASX MBL, CBRE PTY LTD, OLIVER HUME REAL ESTATE GROUP PTY LTD, CORELOGIC AUSTRALIA PTY LTD

Apartments market warning

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Original article by Lisa Allen
The Australian – Page: 1 & 2 : 17-May-16

BPM CEO Jonathan Hallinan says the stricter lending requirements for apartment buyers has resulted in a downturn in off-the-plan sales in Melbourne. Matrix Property director Andrew Antonas adds that a crackdown on shifting money out of China and lending restrictions by Australian banks has reduced demand for apartments in Sydney among Chinese buyers. Some overseas developers are also seeking to offload their development sites due to the difficulty in obtaining financing.

CORPORATES
BPM PTY LTD, MATRIX PROPERTY GROUP PTY LTD, CORELOGIC AUSTRALIA PTY LTD, RALAN PTY LTD

‘Very messy end’ to the apartment boom predicted

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Original article by Robert Harley
The Australian Financial Review – Page: 2 : 11-Mar-16

BIS Shrapnel’s MD Robert Mellor forecasts that Australian dwelling starts will peak in the March 2016 quarter, driven by growth in apartment developments. However, he has warned that the apartment boom is also approaching its peak, and New South Wales will be the only state that does not have a dwelling oversupply by 2016-17. Mellor forecasts that Melbourne and Brisbane will be hardest hit by the downturn in the apartments market.

CORPORATES
BIS SHRAPNEL PTY LTD