Shane Leonard, Director at Philip Chun & Associates, is our expert for January — he led a Quality in Construction round table discussion. We provide a commentary on recent construction quality disputes alongside the news summary and property analytics.

EXPERT COMMENTARY

NEWS SUMMARY

Key Themes:

• Coronavirus is impacting the commercial property industry

• Australia’s residential home sales continue to increase in price and listings

• Apartment sales are decreasing

• International property prices are falling as inflation slows

Coronavirus

Australia is on edge after coronavirus’ rapid spread around the world. It is set to hit Australian industry hard due to restricted travel for Chinese tourists, students and business people.

The Australian reported that the ailing retail sector is set to feel the impact with consumers predicted to prefer online shopping in fear of infection in public places. In particular, luxury shopping centres like Chadstone will suffer due to Chinese travel bans. (Shopping centres bracing for virus fear factor – Ben Wilmot, 28/01/20)

In the tourism sector, the Australian reports that CBD hotels will be affected most, with Chinese-based business people cancelling travel plans. (Tourism sector battens down for new hit – Lisa Allen, 29/01/20) The AFR reported that popular Chinese tourist hotspots like Cairns and the Gold Coast will be hit the hardest by the restrictions. (Queensland resorts in firing line from Chinese travel ban – Larry Schlesinger, 28/01/20)

Read The Urban Developer’s article about the Chinese government’s infrastructure response to the virus: China On Track to Deliver Two Hospital in 10 Days.

Residential Sector

The AFR reported a surge in new property listings online which is good news for ‘starved buyers’. One agency reported a 20% increase in listings compared to February of last year. (Listings drought set to end as sellers return – Nila Sweeney, 27/01/20)

Prices are likely to see further upward pressure. The AFR reported that 13% more first-home buyers than last year intend to purchase a property in 2020. This is contrasted with investors, where 5% less than last year are intending to purchase this year. (First-home buyers’ FOMO fueling market surge – Nila Sweeney, 30/01/20)

Apartment Sales

The AFR reported on alarming statistics from a CoreLogic report which found that one in five apartments sold at a loss in the September quarter.  The factors contributing to this are oversupply and construction issues along with higher vacancies on new dwellings. (Vendors’ pain as apartments sell below purchase price – Nila Sweeney, 25/01/20)   Another AFR article reports that Brisbane has been badly affected with one apartment selling  for 18.85% lower than the original purchase price 5 years ago. (Oversupply sees Brisbane unit sellers take a haircut – Nila Sweeney, 24/01/20)

Commercial Sector

The AFR reports that the retail sector’s “killing season” will not end soon. Black Friday promotions, the popularity of online shopping and increasing debt levels are all contributors to the struggling sector. There have been several nation-wide failures this summer, including Jeanswest, Bardot and Harris Scarfe, following ongoing pressure attributed to their bricks and mortar stores. (More collapses to come in retail’s ‘killing season’ – Sue Mitchell, 29/01/20)

Despite this, the general commercial sector is predicted to have another strong year, according to Urban Property Australia. Read their forecast: What lies ahead for Australia’s commercial sector in 2020?

International Property

The Australian published a Wall Street Journal article reporting that worldwide housing markets are losing steam following the global economy’s slowest growth since the GFC. Home-buyer sentiment has diminished during the current global political climate, dampened by the US-China trade war, Brexit and protests in Hong Kong. Foreign-buyer taxes have also impacted sales. Whilst it does improve housing affordability, the impact on global economies is perceived to be negative. (Fears over global property slowdown – Sarah Chaney, 28/01/20)

PROPERTY ANALYTICS

Our property analytics includes a simple collection of graphs that we update monthly. We find that it provides us with a high level dashboard to assist us in keeping track of a selection of key statistics.

Feel free to check out our selection of key market analytics:

ARCHITECTURE & DESIGN

Kengo Kuma completes first building in Australia

Spiralling ribbons of wood make this design by the Japanese Architecture firm Kengo Kuma sensational to look at. Read more at dezeen…

To learn more about Debuilt Property please visit www.debuilt.com.au or email either Paul: pabrahams@debuilt.com.au or Daniel: dburger@debuilt.com.au.

Contact us via phone at +61 3 9988 1929.

You have received this email as a client, friend or due to a past association. If you would prefer not to be included in our email communications please unsubscribe below.