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Brisbane housing woes won’t be fixed by more inner-city apartments, Grattan Institute says

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Brisbane housing woes won't be fixed by more inner-city apartments, Grattan Institute says

It’s no secret that buying a property in Brisbane is more expensive than it used to be.

Even though prices aren’t as high as Sydney or Melbourne, the housing affordability crisis is hitting those who can’t afford to buy a property but face increased rental prices.

A report by the Grattan Institute, released yesterday, said fewer than 50 per cent of Australians aged between 25 and 34 own their own property, with the highest income bracket the only exception.

The ratio of median Brisbane dwelling price to median annual gross household income was 5.7 in 2016, according to CoreLogic figures.

In 2001, that ratio was 3.7.

For many, moving further away from the inner city is the only solution to afford a slice of land.

Anita Cox has recently shifted 10 kilometres from the Brisbane suburb of Carindale to rent in Rochedale, in order to save money to buy a property closer to the city.

Rochedale resident Anita Cox
PHOTO: Anita Cox says rising property prices forced her to rent further away from the CBD. (ABC News: Donna Field)

“Back in the day mum stayed home with the kids, dad went to work, and they still had their house. Unfortunately that’s not a reality today,” she said.}

“I think it’s a little bit unfair for young people to get into the market.”

Sarah Guymer, who is pregnant with her second child, recently sold an apartment in Taringa but has found it impossible to afford a bigger property in the same area.

“We’re middle-class people with pretty good jobs but we still can’t afford to buy a house,” she said.

“The reality of that is I’m going to have to go back to work as soon as I can, and my husband won’t be able to spend as much time with his family because we have to move a lot further out.”

Ms Guymer said she had been outbid by interstate and overseas investors at recent auctions.

“It’s a bit disheartening to put in bids for houses and you go to your limit and it just gets snatched from underneath you from people who are just expanding their portfolio.”

Anti-development stance will cause long-term pain: experts

Apartments under construction in South Brisbane
PHOTO: The Grattan Institute says heritage restrictions and community opposition is hampering essential development. (ABC RN: David Lewis)

The Grattan Institute’s authors credited the construction boom on the fringe of the Brisbane CBD for keeping unit prices down, while comparable properties in Sydney and Melbourne have soared.

However, they said, that would not fix the city’s long-term housing affordability problem.

“While high-rise developments contribute to the supply of housing in good locations, they can only add so much to the housing stock because they are generally limited to the relatively confined area of city centres, especially in Melbourne and Brisbane,” the authors said.

They said Brisbane’s construction boom did not fill demand for medium density dwellings further out from the CBD.

More housing was required in Brisbane’s “middle ring”, the authors said, but that could be hampered by heritage restrictions.

Another major problem is community opposition to development.

“Any significant policy change to improve housing affordability is likely to encounter substantial opposition, even if the change is clearly in the public interest,” the authors said.

Natalie Rayment, a Brisbane town planner and responsible development advocate, said more housing was needed across the community.

“We need low-density, we need mid-rise, we need townhouses, we need aged care, we need student housing,” she said.

“That’s not all going to be met by some high-rise buildings in our inner-city.”

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Five Brisbane houses under $500,000 ripe to renovate to perfection

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Brisbane apartment valuations on the slide with thousands more units on the way

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Brisbane apartment valuations on the slide with thousands more units on the way

The large number of newly completed apartments – about 8300 – expected to hit Brisbane in 2017-18 will only worsen the problem, DFP says, quoting the latest residential data from property research group BIS Oxford Economics. A further 5000 units are in the pipeline for 2019. Yongyuan Dai/IStock

Mortgage revaluations of second-hand homes in inner Brisbaneare between 20 per cent and 30 per cent lower than the prices they originally exchanged for, one more sign of falling demand and over-supply in the Queensland capital, according to private property lender Development Finance Partners (DFP).
DFP, which provides commercial loans to residential developers, has discovered that not only are the values of new dwellings being pushed down, but secondary apartments and townhouses have been swept up in the downward slide.

The large number of newly completed apartments – about 8300 – expected to hit the city in 2017-18 will only worsen the problem DFP says, quoting the latest residential data from property research group BIS Oxford Economics. An additional 5000 units are in the pipeline for 2019.

According to BIS, the average number of apartments constructed in inner Brisbane outside of a boom year is about 2000.

DFP believes, based on information provided by its clients and industry experts, that the Brisbane apartment market will be further “tested” in the last half of the year.

“It’s a shock and it pressures those owners who do not have substantial equity,” DFP director Matthew Royal said.

“The new, shiny, state-of-the-art properties are easier to let and those owners, keen to get cash flow, may set a rental that is lower than rentals applying for nearby, older, properties.

“Making things worse is that, in a new development a large number of rental properties emerge at once, flooding the market,” Mr Royal said.

Adding to the woes of lower rents, banks are refraining from refinancing interest-only loans, forcing many borrowers to repay both principal and interest.

“Lower rents push down a property’s value, reduced cash flow arrives as principal and interest needs to be paid and an investor, financially comfortable up until then, is suddenly struggling to ‘hang on’,” Mr Royal said.

Additionally, Mr Royal is predicting more time on market for re-sales of apartments from the third quarter of 2018 onwards.

“Unfortunately I am predicting more pain than gain for the most exposed assets this time next year.”

It’s been two years since concerns about an oversupply of apartments in Brisbane began but many developers are understood to be still holding onto stock, hoping the dwellings will be absorbed by a growing population

This expectation of a gradual correction is supported by the relatively flat – as opposed to rapidly falling prices of Brisbane off-the-plan units, shown in settlement data from Corelogic.

But there are fewer projects in the city, with just 12 launched in 2017 compared with 57 in 2016.

Source: www.afr.com

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Hamilton Hill home of NASA inventor for sale for first time in half a century

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Hamilton Hill home of NASA inventor for sale for first time in half a century

This home at 29 Queens Rd, Hamilton, is for sale for the first time in over 50 years.Source:Supplied

THE Hamilton Hill home of a Brisbane inventor who helped put NASA into space has hit the market for the first time in more than 50 years.

Norman Flournoy, 88, has 27 worldwide patents to his name, including technical inventions used in ballistics and rocketry in the United States.

His wife, Marea Reed, worked from home as an optometrist for three decades and still has the original chair she used, which was made in 1876 from solid brass and bronze.

The 79-year-old hasn’t ruled out selling the chair with the house, but stressed it would have to be a good offer.

Hamilton Hill home of NASA inventor for sale for first time in half a century

The view from the back deck of the home at 29 Queens Rd, Hamilton.Source:Supplied

Mrs Reed moved into the home at 29 Queens Road in 1965 with her first husband, who was an architect.

“It was a wreck when we first came here,” she recalls.

“He did some beautiful, sensitive alterations to the house.

“It’s a wonderful mix of the traditional colonial and the new avant-garde.”

Perched high on Hamilton Hill on 890 sqm, the six-bedroom, two-bathroom colonial home is the perfect renovation project, offering spectacular river and city views.

Hamilton Hill home of NASA inventor for sale for first time in half a century

The living room in the home at 29 Queens Rd, Hamilton.Source:Supplied

“It’s got an absolutely fantastic view and position,” Mrs Reed said.

“What I love about it is the great expanse of sky.

“It’s a very happy home.”

Traditional features include a wraparound entry veranda, original timber flooring, wide hallway and VJ walls.

There is a large back deck, which extends off the living and dining area that would be perfect for alfresco dinners or parties.

Hamilton Hill home of NASA inventor for sale for first time in half a century

The hallway in the home at 29 Queens Rd, Hamilton.Source:Supplied

It overlooks the backyard, which allows plenty of room for a pool or home extension.

Underneath the home is a spacious studio with bedroom/lounge area and kitchenette — ideal for a guest wing or teenage retreat.

Marketing agent Nick Kouparitsas of Ray White Ascot said it was rare for such properties to be offered to the open market.

“We don’t come across too many of these homes that have been in the same family for so many years,” he said.

“Around Hamilton they’re pretty rare.”

Hamilton Hill home of NASA inventor for sale for first time in half a century

One of the bedrooms in the home at 29 Queens Rd, Hamilton.Source:Supplied

Mr Kouparitsas said he had fielded interest from local and interstate, mostly from owner-occupiers looking for something to renovate on a large block in a great location.

“You’ve probably got some of the best views in Brisbane there of the river and the city,” he said.

The property is scheduled for auction on-site at 4pm on May 26.

Source: www.news.com.au

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