PHOTO: Brisbane City Council wants to stop townhouses and apartments being built in areas for single homes.(ABC RN: David Lewis)
A Brisbane City Council plan to stop townhouses and apartments being built in areas for single homes is “going backwards” in terms of urban planning, experts say. University of Queensland Urban Planning expert Dr Dorina Pojani said the Lord Mayor’s attempt to “save the Brisbane backyard” could drive up property prices.
“If you have more apartment buildings in neighbourhoods it means that you have higher densities in those neighbourhoods,” Dr Pojani said.
“With higher densities you can support much better public transport, if you have very low densities … then public transport will never become viable.
Council’s opposition planning spokesman, Jared Cassidy, described it as “a multi-million-dollar mea culpa”.
“The same Lord Mayor who has waved through the worst developments in Brisbane’s history is now claiming he’s saving the backyard,” he said.
Dr Pojani said restricting the type of housing in certain neighbourhoods would just drive prices “through the roof”, and it had already produced “disastrous results” in the United States.
“We’re already in the middle of a housing crisis in Australia so it’s the opposite of what we need at the moment.”
“It’s caused urban sprawl, it’s caused problems with access to housing because housing prices end up being very expensive if you can’t have the higher densities that apartments provide,” Dr Pojani said.
“It makes neighbourhoods more homogeneous because there’s only certain people that can afford family homes.
“Now that we’ve seen all that of that experience from overseas we go and do the same thing in Australia, that’s very disappointing. It’s almost like going backwards.”
Lord Mayor Graham Quirk said the plan was about creating a city of neighbourhoods “to protect the Brisbane backyard”, with more than 100,000 people responding to the Plan Your Brisbane campaign.
“It’s about stopping the cookie-cutter style of townhouses in some cases that we have seen in our city,” Cr Quirk said.
PHOTO: Experts say the plan will drive up property prices. (Giulio Saggin: ABC News)
He said 40 action plans had been developed, which would not contribute further to urban sprawl.
“People said they wanted the growth to occur around the inner-city areas, along transport corridors, and around the regional business centres and nothing has changed in that regard,” Cr Quirk said.
“What they do want though is greater protections in those single-dwelling areas of the city, that’s come through loud and clear and that will be provided.”
He said the council would also develop a new forum for residents to help guide the preservation of tradition designs, like the Queenslander.
Mr Cassidy hit out at the Lord Mayor’s close relationship with developers at the expense of residents.
“Brisbane’s had a gutful of the orgy of over-development,” he said.
“The same Lord Mayor who cut the number of car parks that unit developers have to provide is now trying to pretend someone else did it.
“The same Lord Mayor who has waved through the worst developments in Brisbane’s history is now claiming he’s saving the backyard.”
In a notice issued to mortgage brokers today the CBA announced it will roll out a range of changes including restrictions on lending in some postcodes.
This includes forcing customers to stump up fatter deposits in order to get a home loan.
It will impact all types of properties including homes and apartments and also borrowers regardless of whether they are owner occupiers or investors.
In the notice it said from Monday, December 4 the key changes will include:
– Reducing the maximum loan-to-value ratio from 80 to 70 per cent for customers without Lenders Mortgage Insurance (an insurance the customer pays and protects the lender not the borrower.) This means borrowers with a deposit less than 30 per cent must pay expensive LMI costs.
– Reducing the amount of rental income and negative gearing eligible for servicing which will impact investors.
– Change eligibility for Lenders Mortgage Insurance waivers and LMI offers for customers in some postcodes.
CBA said the new Postcode Lookup tool which will start from Monday will allow the bank and brokers to determine whether a borrower can successfully borrow in a particularly region or postcode and it will reduce customers wasting time applying where they are likely to get knocked back on a loan.
CBA has not released the postcodes and regions these changes will impact.
The move is a result of the responsible lending restrictions put on lenders by regulators to cool the red-hot lending market.
Home Loan Experts’ managing director Otto Dargan said these changes are significant and will impact many borrowers.
“Lenders keep an eye on the economy and their exposure to different property markets and adjust their lending policies to manage their risks,” he said.
“We strongly recommend that home buyers don’t commit to buy a property until they have an unconditional approval from a bank.
“You could win an auction and then find out that your pre-approval is worthless, and then what are you going to do?”
Unconditional approval is when your loan application has been fully approved and is not subject to any terms or conditions.
There is a glut of units in Brisbane’s inner city, sitting empty as owners struggle to find tenants.
Brisbane recorded a 3.2 per cent vacancy rate in May, up from 3 per cent year on year, Domain Group data revealed.
The figures showed a continued upward trajectory of apartment vacancies at the centre of the inner-city building boom.
New Farm had the most unit vacancies, with 109 apartments advertised for rent, and recorded a median rental price of $400 per week.
Brisbane City had 95 vacancies and a median price of $550 per week, and South Brisbane had 94 vacancies and a cheaper median price of $490 per week.
Other suburbs including Nundah, Fortitude Valley, Toowong and Hamilton,all recorded more than 70 rental listings in May. However, Toowong was the cheapest of the bunch with median rentals at $395 per week.
Top 10 Brisbane suburbs for unit vacancies: May 2016
No. of vacancies
Source: Domain Group
Chermside, Kangaroo Point and Indooroopilly also had high vacancies numbers with more than 60 rental listings. The cheapest was Chermside with a median of $393 per week; the most expensive was Kangaroo Point at $450.
Domain Group chief economist Andrew Wilson said it was a familiar trend for Brisbane.
“Brisbane continues to be a favourable market for tenants,” Dr Wilson said.
“We are seeing the building boom is pushing more units into the inner city, which is also driving down the price of apartments.
“Once vacancy rates move above 3 per cent, you really enter that over-supplied market where you find much more choice for rentals.”
Older apartment investors are having to renovate or lower their prices to secure tenants.
LJ Hooker New Farm principal Brett Greensill said New Farm investors had two options to attracts tenants.
“We are seeing a lot of small renovations in New Farm, where investors are modernising, because it is either renovate or drop prices,” Mr Greensill said.
“There have been drops of up to 20 per cent, but it isn’t as bad as you might expect.
“A big reason for the high vacancy rates, is people taking advantage of low interest rates and are taking a mortgage out in other affordable suburbs.”
Top 10 Brisbane house vacancies: May 2016
Source: Domain Group
The house rental market contrasted the unit market, with vacancy rates slightly tightening by 0.1 per cent to 2.5 per cent in May.
However, Dr Wilson said Brisbane still had the second-highest house vacancies in the country.
“Darwin has seen a major improvement, leaving only Perth above Brisbane for house vacancies,” he said.
North Lakes had the highest house rental vacancies in May with 93, followed by Redbank Plains with 88.
Original article published at www.domain.com.au by Jason Quelch, 15/6/16
If you’re looking for the next hot postcode read on….
Leafy, low-rise inner suburbs of Brisbane and Adelaide with period homes on large blocks of land, plentiful amenities and great transport offer the next property hotspots for buyers.
So say property consultants who add that Sydney and Melbourne’s real estate gains are running out of puff after solid compound increases for nearly eight years.
Meridian Australia and Property Performance Advisory (PPA), consultancies that advise time-poor professionals on building residential property portfolios, base their analysis on a mix of national price trends, economic prospects, changing buyer demand and street smarts.
Former mining boom cities like Perth and Darwin are still under pressure from over-supply, rising unemployment and falling incomes and could take years to recover, they say.
The criteria used by Meridian and PPA for their recommendations include: land size; the value of the dwelling compared to the property on which it is built; proximity to amenities such as public transport and shops; prospects of value-enhancing infrastructure projects like hospitals or freeways; and recent price movements.
Longer-term trends are provided by BIS Shrapnel, well-known for its insights into the building and construction industry.
Rapid price increases in Sydney and Melbourne are so far ahead of growth in average incomes that it could take years until houses are again affordable to first-time buyers and families wanting to upgrade, says Glenn Piper, Meridian’s founder and director.
As an example median – or middle – Sydney property prices increased by about 80 per cent in the six years to 2015 as median incomes and salaries mirrored low single-digit inflation.
One pointer is comparing market performance since the beginning of the millenium.
“Brisbane went from being 46 per cent of Sydney values in 2001 (a Sydney house cost $364,000 compared to $165,000 in Brisbane) to 78 per cent of Sydney’s value in 2008,” Piper says.
“By 2015, Brisbane’s median house value was back to about 49 per cent of Sydney’s values. If this is the case of history repeating itself and Brisbane’s values rise again to 78 per cent of Sydney’s values, then Brisbane’s median house price will rise to $813,000 – almost $300,000 higher than its 2015 median house values.”
Sydney’s status as an international city – like Hong Kong, New York and London – mean there are affluent pockets in harbourside suburbs, such as Point Piper, that are likely to continue attracting big money from around the globe.
Melbourne is a similar story, with median prices nearly doubling as incomes and salaries largely stagnate.
Past performance is, of course, no guide to future returns. But it can provide valuable lessons about winning and losing strategies.
The consultants share lenders’ and financial advisers’ growing nervousness about the future value of high-rise apartments that are reshaping the skylines of inner Melbourne, Sydney, and Brisbane.
Macquarie Bank has black-spotted more than 100 postcodes, mainly in central business districts, where it will require a maximum loan-to-value ratio of 70 per cent, which means buyers will have to stump up another 10 per cent deposit.
Firstmac, which has about $8 billion under management, has told apartment buyers it prefers low-rise, high-quality residential construction to high rise apartments.
The clampdown is targeted at non-residents and investors, who in some cases will not be able to include rental income for debt servicing.
More than 210,000 apartments are expected to flood Melbourne and Sydney’s property market over the next two years – that’s equivalent to the existing number of apartments for sale, says RP Data, which analyses property sales and rents.
In another sign of weakening demand and prices, AMP, the nation’s largest diversified financial services group, is tightening lending limits and borrowing criteria for about 25 cities and outer suburbs, typically about one hour’s commute from the central business district.
Many of these suburbs have been built by developers which have sold house-and-land lots to first-time buyers
That means buyers need to consider demand for suburbs and whether supply of new dwellings is matching – or exceeding – demand.
For example, returns from houses and units are down by 10 per cent in Perth, by nearly 13 per cent in Darwin and in Melbourne and Brisbane are well below bank returns from six-month fixed-term deposits.
Both Meridian and PPA are enthusiastic about potential for long-term capital growth in Brisbane’s Holland Park and Stafford in the north of the city and Greenslopes and Everton Park in the south.
Median house prices in the suburbs are between $570,000 and $740,000, which compares to Brisbane’s median $475,000.
The suburbs offer generous land sizes of between 400 and 600 square metres that typically represent about 80 per cent of the property’s total value, says PPA.
The homes are also typically single-storey post-World War II, three-bedroom, one-bathroom weatherboards.
Another Brisbane suburb, Everton Park, is expected to get a boost from a proposed tunnel linking it to the central business district, improving convenience and commuting times.
Remember, though, that until projects are completed there is always a risk they might be shelved.
For example, Victoria’s Labor government last year paid more than $300 million in severance fees to investment bankers to stop a network of toll roads and freeways criss-crossing Melbourne’s north-east suburbs.
Consultants also like the prospects of Brisbane’s Holland Park, which is about five kilometres from the central business district, and close to quality hospitals and schools, which make the postcode popular with investors.
Adelaide, which is likely to get a big jobs boost from the major infrastructure projects, such as planned new generation submarine construction, is another future hotspot, they claim.
Leafy inner Adelaide suburbs, close to schools and other amenities, are top of the list.
Croydon, a small inner western suburb, and Plympton, about six kilometres south-east of the central business district, offer convenience, location, generous land sizes and potential for growth, they claim.
The suburbs’ median are about $500,000, or 20 per cent higher than Adelaide’s median price.
Performance Property Advisory is enthusiastic about some Melbourne suburbs.
Some emerging western suburbs, which have been traditionally lived in the shadow of tree-lined wide suburban streets of the inner eastern suburbs and bayside, will attract investors, it claims.
Sunshine, which is about 15 kilometres from Melbourne, still has generous land sizes, affordable 1950’s-style double and triple-fronted weatherboard and brick veneer houses, and is well serviced by public transport.
Median prices are $570,000, which is about $40,000 less than Melbourne as a whole.
Footscray, which is about six kilometres from the heart of the city, is rapidly under-going gentrification.
On the other side of town, Frankston, about 40 kilometres from the CBD, is benefiting from Eastlink bypass, proximity to the beach and good – and improving – public transport. Median house prices in Frankston are about $435,000.
In Hobart there are prospects for capital growth and income from suburbs around the University of Tasmania. Hobart’s median price is about $500,000.
Original article published at www.afr.com by Duncan Hughes 3/6/2016