Top Headlines Week 21, 2022
- Posted By David Brown
Australia has a record number of new homes being built and approved plans for builds to commence show that Australia’s building activity is not going to slow down for at least 12 months despite rising interest rates. In the past the first initial rate rise has led to the construction industry slowing within 6 months of the increase, but is it is expected with the perfect storm that has been affecting the construction industry there will be a delay in this affect. HIA data has shown that there were 75.7% more detached homes under construction at the end of 2021 compared to pre-COVID. There are also more homes approved and waiting commencement than has ever been seen before. In total there was 147,890 detached house starts during 2021, that is the strongest year of record, which is an increase of 30.6% on the previous year and 15.6% increase on the previous record in 1994. Assuming that the rate increases will be moderate, it isn’t anticipated it will have a dramatic decline on construction.
Gold Coast’s luxury apartment industry has not slowed down. Plans have been lodged for a new 24-storey luxury tower worth more than $85 million. Located on at 21 Broadbeach Blvd, this beachfront location is in a prime position. The project will be a joint venture between Gold Coast developer QNY Group, headed by Anthony Quinn, and Melbourne-based construction giant Glenvill Developments, it will be the first of its kind on the Coast. Reaching heights of 24-storeys, the building will comprise of nineteen whole-floor apartments and two penthouses split over four levels. All will have ocean views, as well as a stunning rooftop deck and glass-edge pool for resident use. If approved, construction will start in mid-2023, with an expected completion in early 2025.
Another Australian Builder has been placed in liquidation. Gold Coast construction company Pivotal Homes has been building homes for the past 15 years and in that time built more than 1,500 homes. Managing Director Michael Irwin said last week “Unfortunately, the rising costs which are impacting many in the industry throughout Australia have made our operations unviable”. He continues “In my 30 years’ experience, I have never seen a set of circumstances like this and obviously we are not alone in these unfortunate conditions facing the industry”. Pivotal homes had 103 contracts under construction and another 177 pending council approval. The increase in trade costs, delays, the pandemic, and recent weather events had affected the industry. This follows the collapse of Probuild and Condev that occurred earlier this year. These once very profitable and successful businesses have fallen victim to the prefect storm of events.
A new Palm Beach house with an edgy look has sold for $3.6 million ahead of the auction. This property was bought by interstate buyer who are yet to see the home. The sale has set new records with this being the highest price paid for a non-waterfront residential house in southern Gold Coast. It is said that the Melbourne buyer were drawn in by the luxury home’s avant-garde design, which was itself inspired by contemporary architecture more commonly seen in the southern state’s capital city. The home is known as Onyx and is a multi-level master built and engineered home with a dark and broody look. The dark colours contrast extremely well with the naturals textures that is used throughout the build. The house is located on a 589sqm block at 6 Denawen St. The home is newly built and was created by Story Design Collective.
The Gold Coast apartment market has finally begun to slow. With apartment sales falling below pre-COVID levels in the first three months of this year. Property consultancy Urbis released a report that shows that Gold Coast recorded 377 new apartments sales in the March quarter, about 38% down on the previous quarter and half that of the same time last year. Urbis director Lynda Campbell said, “Sales have certainly eased off their 2021 highs in the last quarter but that’s not unexpected considering the high levels achieved last year”. Last year was exceptional for the property market. Apartments sold at record high prices and continued to do so throughout the year. The cause of the apartment market slowing can be attributed to two main factors: shortage of new apartments and fear of overpaying. There was only 411 units still for sale at the end of March, which is the lowest number Urbis has seen since they began monitoring the new apartment market back in 2014. With sharp rise in apartment prices that was seen in 2021, buyers are now warily that the new apartment market is reaching its peak ad not wanting to overpay expecting the market to drop over the coming years, especially with the RBA putting up interest rates. It makes sense the increase in lodged plans for apartment buildings to increase the much-needed supply.