Invest
Apartment market shows signs of recovery
Despite the number of new projects dropping in recent months, a director says there may be some indication the apartment market is on track for recovery.
Apartment market shows signs of recovery
Despite the number of new projects dropping in recent months, a director says there may be some indication the apartment market is on track for recovery.
According to data derived from the Urbis Apartment Essentials Report, when it comes to new apartment supply, new project launches continued to decline in quarter two, with just 23 new projects launched nationally. In comparison, 60 projects launched for the corresponding period in 2019.
“Data for the first half of 2020 follows a continued downward trend. If the current rate of launches were to continue for the remainder of 2020, this would bring the annual total to around half the volume of projects launched in 2019, which was already half the average of the previous four years,” the tracker found.
“With the volume launching, in marketing and under construction all diminishing, market attention switches to absorbing newly completed stock. This offers buyers the advantage of viewing the finished product and suits those residents seeking a move in the short term. Owner-occupiers were the most active purchaser group in each state surveyed in the quarter.
“Across all projects, there is an overall reduction in volume selling of 8 per cent compared to this time last year, with further reductions in volume to come given the declining launch rate.”
Mark Dawson, director at Urbis, said the COVID-19 pandemic impacts were clearly felt in Q2 2020.
“Clearance of available inventory dropped from 15 per cent in Q1 to 10 per cent of available stock selling in Q2. The slowing speed of sales was very much expected given uncertainty in the economy and limited movement of people nationally.”
“In the short term, we expect to see more volatility and variation in the data as different states emerge, submerge and re-emerge in different pathways out of COVID-19-related restrictions.”
“Demand remains restricted, and when this happens, the market typically balances itself by diminishing supply, which supports prices.”
“With fewer projects launching and taking longer to sell, this flows through to total housing supply approved and delivered in years to come. We need to be careful this does not drop to levels detrimental to Australia’s recovery from the pandemic. Current jobs and future liveability and affordability are on the line, so we do need to find ways to sustain the pipeline. This could be targeted stimulus, like HomeBuilder, but for off-the-plan infill development or supporting Build to Rent to plug the gap in housing supply at risk.”
That being said, Mr Dawson said he remains optimistic.
“The development sales and marketing industry is very well equipped to reach buyers remotely. The off-the-plan industry has successfully presented virtual 3D apartment displays and fly throughs of future developments and precincts for a number of years,” he said.
“As the economy opens up and movement of people resumes, there will be continued demand for a range of housing densities throughout our cities. The drivers of demand for apartments that were there before the pandemic: affordability, views, high levels of walkability, multiple transport options and convenient local living will be just as relevant.
“We expect design and management of apartments will continue to evolve with customer preferences. This could mean more flexible spaces within apartments, but also within buildings to promote healthy and practical lifestyles ready to deal with a changing environment.”
Property
4 property trends and how first home buyers can navigate them
Finding your sense of direction in Australia’s property landscape is usually the first step towards taking advantage of it. ...Read more
Property
Do Aussies have an overweight exposure to property?
Aussies have an overweight exposure to property assets, increasing their risk to higher interest rates, an expert has warned. ...Read more
Property
Queensland is still the destination of choice for first home buyers
New data suggests that Queensland remains a sanctuary for first home buyers, while NSW and Victoria continue to fall short. ...Read more
Property
Are NFTs the answer to fractional property investing’s biggest problems?
Could NFTs be the answer to solve the questions holding back fractional property advocates? ...Read more
Property
Even experts agree that Australia’s property market doesn’t make sense anymore
The last 18 months haven’t just broken records for price growth, they’ve broken the rules for how Australia’s property market usually operates. ...Read more
Property
In a position to buy a €1 European villa? You might be better off looking local instead
So, you want to buy a €1 European villa? Here’s what you need to think about before you do. ...Read more
Property
Will the regional shift take pressures off property prices?
The COVID-19-induced regional exodus is spurring on new economic markets further away from the cities, while potentially alleviating congestion and housing affordability issues that Australia’s capi...Read more
Property
What you should know before you buy a €1 European villa
A €1 European villa might sound like a good investment to Millennials. Here’s why they should think twice. ...Read more
What to expect as the end of lockdown looms? Will the Stage 2 tax cuts boost your tax return? Where should investors be looking as the economy reopens?
Listen now
Could property prices inflate by another 20%? What’s happening in recent dividend announcements? Did your fund fail the YFYS test?
Listen now
What does the NSW regional permit mean for property investors? Who really wins from the BHP-Woodside merger?
Listen now
The sea and tree-change norm; Square’s acquisition of Afterpay; Why you should think twice before turning to TikTok for advice
Listen now
Property
4 property trends and how first home buyers can navigate them
Finding your sense of direction in Australia’s property landscape is usually the first step towards taking advantage of it. ...Read more
Property
Do Aussies have an overweight exposure to property?
Aussies have an overweight exposure to property assets, increasing their risk to higher interest rates, an expert has warned. ...Read more
Property
Queensland is still the destination of choice for first home buyers
New data suggests that Queensland remains a sanctuary for first home buyers, while NSW and Victoria continue to fall short. ...Read more
Property
Are NFTs the answer to fractional property investing’s biggest problems?
Could NFTs be the answer to solve the questions holding back fractional property advocates? ...Read more
Property
Even experts agree that Australia’s property market doesn’t make sense anymore
The last 18 months haven’t just broken records for price growth, they’ve broken the rules for how Australia’s property market usually operates. ...Read more
Property
In a position to buy a €1 European villa? You might be better off looking local instead
So, you want to buy a €1 European villa? Here’s what you need to think about before you do. ...Read more
Property
Will the regional shift take pressures off property prices?
The COVID-19-induced regional exodus is spurring on new economic markets further away from the cities, while potentially alleviating congestion and housing affordability issues that Australia’s capi...Read more
Property
What you should know before you buy a €1 European villa
A €1 European villa might sound like a good investment to Millennials. Here’s why they should think twice. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
