Liam Proberts, Managing Director of Brisbane-based bureau^proberts, has over 20 years’ experience designing award-winning multi-residential and mixed-use developments in Australian and international markets.
Liam shares his top five tips for creating successful development projects in Brisbane.
1. Know Your Neighbourhood
Brisbane has one major city plan made up of lots of smaller neighbourhood plans that encourage developers to respond to the character of a specific city area. This allows government to influence the overarching character of Brisbane in a meaningful way by providing specific incentives to developers. This is of real benefit to developers because it helps them build projects that are more attractive to the market and maximise yield, while at the same time making a significant contribution to the urban fabric of Brisbane.
2. Respond To Trends
The Brisbane market changes quickly, especially when demand for real estate is high. What the market wants changes almost monthly and developers need to be responsive to this. This means keeping a constant eye on the market by being across social trends. Successful developers are ready to commit to a project as soon as they see an opportunity but are also flexible enough to adapt if the market changes suddenly — for example, from three bedroom apartments to one bedroom studios. Developers need an experienced team that can alter the design just as quickly, and who has strong relationships with local authorities to fast track any planning issues through the system.
Urbanisation is a key trend that has led to more diversity in city populations and is therefore driving the need for more diverse urban housing options. Student housing, aged care developments and single person residences are all big trends in Brisbane now— we’re currently working on a number of owner/occupier single-bed houses, along with single-floor apartments as an alternative to a home. Developers who take into account current social trends are able to create more successful projects because they are directly meeting the needs of the market.
3. Develop Diversity
I believe that development has the greatest influence on how we will live in and enjoy our cities in the future. The quality and variety of developments shapes the character of the city, as well as being of value to the developer because it makes projects more marketable. In the last 18 months there has been a massive boom in the building of compact and affordable apartments in Brisbane, which reflects the rising awareness that you can live comfortably in apartments in a sub-tropical city.
As this awareness grows, so too the design of these smaller dwellings is changing and becoming more diverse in response to the greater demand. We need to look at how to encourage diverse projects that can be commercially successful and create a positive experience for the people who live and work in them.
4. Learn From Other Cities
In Sydney and Melbourne you tend to get ‘champions’ of particular areas in development and I believe there is a lot we can learn from these larger Australian cities. For example, the City of Sydney has its own authority to manage development. Brisbane’s cultural centres of the CBD, Fortitude Valley and South Brisbane would benefit from more incentives for high quality design developments and a special body to promote this could strongly influence the cultural heart of the city in a positive way. Developers can play a role by being advocates for high-quality projects that work for both their bottom line as well the overall character of the city, and by working with local governments to best improve Brisbane going forward.
5. Create A Point Of Difference
We should all strive to be adventurous in finding solutions that exceed client expectations and provide outcomes that make a really positive contribution to the city. bureau^proberts achieved that with M&A in Fortitude Valley. We worked with the local Council on the pedestrian laneway that runs through it and we created a retail and residential mix that has significantly contributed to the area and really livened up that corner of the Valley.
Another point of difference we try to promote in our work is bringing in specialists to help with a project, including working with artists. While the types of residences people require have changed, a desire for a strong sense of identity to place has not. Using integrated art in our building concepts we create developments that are individual and distinguishable, meeting the needs of both the end user and the developer.
Experts warn of ‘debt bomb’ as housing downturn worsens
That’s according to the sobering 60 Minutes segment Bricks and Slaughter which aired last night, revealing the country’s property downturn was just the tip of the iceberg.
According to reporter Tom Steinfort, the current slump is actually “more like falling off a cliff”, with a number of real estate and finance experts claiming houses could plummet in value by up to 40 per cent in the next 12 months.
If that happens, it would also cause an economic “catastrophe”.
Mr Steinfort spoke with data scientist Martin North from Digital Finance Analytics, who said Australia was uniquely vulnerable when it came to an economic crash tied to a property downturn.
“At the worst end of the spectrum, if everything turns against us we could see property prices 40-45 per cent down from their peaks, which is a huge deal,” he said.
“That’s higher than any other country in the Western world by a long way.
“There’s probably no country in the world more susceptible to the ramifications of a housing crash than Australia. We are uniquely exposed at the moment.”
Mr North said Australia was now in the same position as the US was back in 2006 and 2007 — a position which triggered an economic collapse.
“As a society, and as a government, and as a regulatory system, we’re all banking on the home price engine that just goes on giving and giving and giving. It’s not going to,” he said.
“We’ve got a debt bomb, we’ve got a debt crisis and at some point it’s going to explode in our face.”
He said foreclosures had also risen by 600 per cent in the region.
“The mortgage stress is definitely being felt especially in this area,” he said.
60 Minutes also spoke with several Aussie homeowners who gave harrowing details of the stress they faced trying to pay off their mortgages, including having their power turned off and being “hounded’ by their banks.
What does a million dollars buy in Aussie capital cities?
Market analyst Louis Christopher of SQM Research said the market had been “clearly overvalued”, labelling the downturn as the “correction we had to have” — at least in Sydney and Melbourne.
“On our numbers, Sydney was effectively over 40 per cent overvalued. And Melbourne was overvalued by about the same amount,” he said.
But property investor Bushy Martin said the blame lay squarely at the feet of buyers who “mortgaged themselves up to their eyeballs” in a bid to snap up dream homes before being able to afford them.
However, the segment has also sparked backlash online, with some claiming the situation had been exaggerated.
One Reddit user branded the report as an example of “alarmist journalism and scare tactics”, while another said it was “dramatic and cringe-worthy”.
Others also criticised the segment for making it seem like all homeowners would be affected, when the downturn was actually mainly focused in the NSW and Victorian capitals.
And some said it was unfair to blame the banks for the situation, and that homeowners needed to take responsibility for their own decisions.
That was in response to comments made by one homeowner on the program, who said the bank had “suddenly switched the mortgage to interest and principal”, raising his repayments by 57 per cent.
“The interest only part annoyed me the most. The bank didn’t ‘suddenly change’ your repayment from (interest only) to (Principal and interest) your IO term expired. You a) knew this would happen and b) assumed the bank would renew it when it expired. I hope this speculator gets burnt first,” one Reddit user said.
Related article: Experts warn of ‘debt bomb’ as housing downturn worsens
Queensland is the next property hotspot, experts say
As New South Wales and Victoria continue to experience weakness. Queensland is expected to take the lead, a National Australia Bank (NAB) poll of property professionals revealed.
According to the survey, industry experts project house prices in Queensland to increase by 0.7% next year and 1.3% in two years.
Some areas seen to perform strongly over the next year include Brisbane, Cairns, the Gold Coast, and the Sunshine Coast. Out of the suburbs, Coomera and New Farm are expected to realize robust gains.
Meanwhile, Queensland’s rental market is also poised to enjoy an upward boost, growing by 1.3% next year and 1.9% in two years. This is despite the stricter rules on housing investment.
The respondents of the survey also expect Queensland to retain foreign buyer interest. In fact, the share of foreign sales hit a four-year high of 22.8% over the previous quarter.
The results of the survey go against NAB’s own projection of the market. For instance, the bank expects house prices to remain flat in Brisbane over the next three years. Unit prices, on the other hand, is seen to fall by 4.5% over the next year.
NAB chief economist Alan Oster said Brisbane’s housing market seemed to be going sideways and its unit market still creates concern.
“It hasn’t peaked yet, so that’s good. We’re seeing quite strong economic activity in Queensland, so that always helps,” Oster said, as quoted by The Courier-Mail.
Gold Coast house values record the biggest growth in Queensland
The Gold Coast has recorded the strongest growth in house prices in Queensland over the past 12 months.
GOLD Coast house prices are leading the way in Queensland, up six per cent in the past 12 months to an average $620,000.
The latest figures by the Real Estate Institute of Queensland show homes on the Glitter Strip are $35,000 more on the same time last year.
Unit prices are up 1.9 per cent to $428,000.
REIQ data reveals houses on the Glitter Strip are worth $35,000 on the same time last year.
REIQ’s Queensland Market Monitor for March said the strong population growth came on the back of infrastructure projects such as the $550 million Gold Coast Health and Knowledge Precinct and M1 upgrades.
“The property market has been one of the big winners from the sporting event as the $1.5 billion infrastructure investment has boosted confidence and demand for housing in the region,” the report stated.
“We expect house prices will show an upward path in 2018. However, this growth will most likely be more moderate.”
A quiet real estate period leading up to, and during, the Commonwealth Games likely contributed to a slight drop (-0.3 per cent) in the March quarterly median sales price, the report reveals.
Andrew Henderson says a growing population and employment opportunities were contributing to a strong property market. Picture: Jerad Williams
REIQ Gold Coast zone chairman Andrew Henderson said he expected interstate migration to continue to benefit the city.
“I expect the market to remain strong,” he said.
“There is a heavy amount of interstate buyers moving here.
“I was at an auction recently where the winning bidder was from Sydney and the underbidder was from Melbourne.”
Mr Henderson said growing employment opportunities were also attracting homebuyers to the city.
The Gold Coast property market is expected to remain strong.
“We have some of the best health facilities in the country and our universities are world recognised.
“Those two things alone complement the tourism industry and the lifestyle aspects that the Coast offers.”
The report found the fastest-selling suburbs on the Coast included Worongary, Merrimac, Highland Park, Mudgeeraba and Carrara.
It also revealed the rental vacancy held tight throughout the first quarter of the year at 1.1 per cent.
Andrew Bell says the Coast had evolved from a tourist town into a vibrant city with an expanding economy. Picture Mike Batterham
Ray White Surfers Paradise Group CEO Andrew Bell said the Games heralded the next chapter for the Coast, as it evolved from a tourist town into a vibrant city with an expanding economy.
“The city’s property market is riding the irreversible momentum that has now come to the Gold Coast in terms of economic diversity and with more employment options we will need more housing options for people,” Mr Bell said.
“We are no longer going to be subject to tourism upsides and downsides as we were in the past because our economy has well and truly diversified beyond just tourism.”