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Why Brisbane is hot property at the moment

A little less cosmopolitan, a little less youthful than its southern neighbours but 'Brissy' is far sunnier and growing hotter as an investment destination

Streets Beach, a manmade beach in Brisbane's inner city. Martin Valigursky/Shutterstock[/caption]

Last week, Brisbane set a record in residential property with the sale of a Kangaroo Point mansion for AUD18.48 million (USD14.28 million). The transaction surpasses the 2014 sale of an Aaron Avenue home to Gina Rinehart, the richest person in Australia, for AUD14 million.

The high-end Brisbane residential market has indeed seen a positive shift toward the end of last year, according to Ray White New Farm, which brokered the latter sale. Indeed, Brisbane registered a record number of transactions in homes above the AUD5-million threshold in 2016.

Asians in particular are waxing zealous for Brisbane, the third most searched state capital in Australia on Chinese property portal Juwai.com showed. Demand for Brisbane homes from international investors stem the most from China, followed by the United States, New Zealand and England, according to the Real Estate Institute of Queensland (REIQ).

“We see the gap between Sydney and Melbourne closing in the next couple of years," said Patrick Hunt, manager at local property titan Indigo Building Group. The northern migration from an investment point of view continues."

Brisbane enjoys far less volatility than Gold Coast, Queensland's other large metropolis. “Gold Coast tends to suffer from a boom-bust cycle more so than Brisbane,” Hunt added.

[caption id="attachment_61932" align="aligncenter" width="1000"] Winter Festival in Brisbane's King George Square. Martin Valigursky/Shutterstock[/caption]

Next to the frothy markets in New South Wales and Victoria, Brisbane's affordability has resonated with offshore investors. For perspective, the median house price in Sydney stands at AUD867,000, while that of Brisbane is AUD635,000, per REIQ data.

“People can't afford the yield that they're looking for in other cities; their returns aren't there,” said Mitch Koper, media manager at property analytics firm CoreLogic.com.au. “In Brisbane, you can buy a house for AUD600,000 and get a return of 7 or 8 percent in some cases. It's a very reasonably priced market.”

For all its lure, however, Brisbane has posed challenges to enthusiasm among international investors of late. In June, the Queensland government levied a 3 percent surcharge on foreign purchases.

More: Are Asian home buyers facing racist backlash in Australia?

Then there are more inherent challenges. Although it boasts more sunny days than the more ephemeral climes of its southern neighbours, ‘Brissy' still somehow lacks the sophistication of the south. “I moved to Sydney because Brisbane is so laidback,” said Mark Mitchell, a Filipino-Australian systems analyst. “Brisbane is a place to retire, a good place if you are old, although it does have a man-made beach in the City at Southbank.”

“What I hate about Brisbane is that it’s too small. Everyone knows each other, a bit racist,” said Angie, a Vietnamese makeup artist who married to a Greek in Brisbane. “Clubs ain’t that great, and there are not that many events like in Melbourne.

“Also, sh*t coffees.”

Read next: Has Australia had enough of Asian buyers?

 

What is it about this Australian district that has foreign investors enthralled?

Live easy, play hard

Leelakajonkij/Shutterstock

 

 

It’s tens of thousands of miles away from Shanghai or Taipei, but a suburb in Sydney is grabbing the rapt attention of Asian property investors.

Barangaroo, which sits on the edge of the city’s CBD, has placed Asian buyers in thrall with incomparable harbour views and eye-catching architecture, News.com.au reported.

“My feedback from Chinese buyers is if the property is in Barangaroo, they don’t even need to visit Australia to see it, they will just buy it because of the quality,” said James Pratt, head of auctions at property firm Raine & Horne’s, which is selling apartments in two low-rise towers in the area.

As much as 80 percent of homes in the area have gone to foreign buyers, mostly rich Chinese investors, according to The Daily Telegraph.

More: Meet the world’s richest tycoons in real estate

It also helps that Barangaroo is sited next to the location of James Packer's USD2-billion Crown Casino. Despite facing legal challenges, the casino complex, which will include a six-star hotel, is scheduled to open in 2021.

Such is the demand that apartments in the area, particularly along Barangaroo Avenue, are fetching double their off-plan prices three years ago. Raine & Horne’s has a three-bedroom penthouse unit now priced at AUD6 million (USD4.5 million), up from AUD3.995 milliion (USD3 million) in 2013, and a two-bedroom unit at AUD3.15 million (USD2.4 million), up from AUD1.875 million (USD1.4 million).

“It’s attracting buyers from China and other countries not only because of its quality but the precinct it’s in,” said Raine & Horne’s Matt Mifsud. “But there’s very little left to sell.”

Read next: Wanted: luxury Australia rentals for mystery pop star on tour

 

Chinese billionaire snaps up Aussie trophy home for USD50 million

A house that has riven a family apart has been sold

The exclusive suburb of Point Piper in Sydney, New South Wales, Australia. byvalet/Shutterstock

The exclusive suburb of Point Piper in Sydney, New South Wales, Australia. byvalet/Shutterstock

It is arguably Sydney's most famous trophy house, hosting extravagant soirees and providing lodging for celebrity guests across the decades.

Altona, a mansion in the city's swanky Point Piper suburb, has come under Chinese ownership in recent years, a trend that is now set to continue with the recent sale of the mansion to a high-net-worth Chinese family based in Hunter Hills.

Jiaer Huang, chairman of Chinese paper manufacturing company Shantou Dongfeng Printing, and his family have been identified as the new owners of the Victorian Italianate-style mansion, Domain reported. The Huangs have acquired the house for AUD60 million (USD44.8 million).

Son of Huang Bingwen, one of Australia’s 20 richest people, Jiaer is a prominent Liberal Party supporter.


The Huang family bought the property from Wang Zhijun, who heads the luxury real estate development firm Qingdao Anteisin Group. Wang had purchased the property in 2013 from publisher Deke Miskin and his wife Eve for AUD53 million (USD39.6 million), a record in Sydney at the time.

Altona has been at the centre of a family dispute that involved Wang, who did not have permanent residency in Australia, gaining ownership of the property via a family trust fronted by Ding Xiuzhen, matriarch of a Melbourne-based Chinese family.

“It’s brought nothing but stress and greed to my family,” said her daughter Holly Chang in an interview with Domain. “We all thought it was going to be this lovely house, but it has left me estranged from my son, my brother, my mother, father and my sister.”
 

A lesson in how not to solve Sydney's housing affordability crisis

It's like 'trying to put a bushfire out with a hose' Sydney Opera House during the Vivid Sydney Annual Event in May. Leah-Anne Thompson / Shutterstock.com

Sydney Opera House during the Vivid Sydney Annual Event in May. Leah-Anne Thompson / Shutterstock.com



Sydney welcomed 31,000 new homes in the 12 months to October, the New South Wales (NSW) Department of Planning announced Thursday. This is apparently the most number of new homes to arrive within a year in over four decades.

The emergence of the new dwellings puts the NSW government closer to its goal of addressing the housing backlog across the state, according to Planning Minister Rob Stokes.

"By building a simpler, more efficient planning system, we're working to improve housing supply and choice to help people get into the market," said Stokes.

More homes have not translated into lower Sydney prices, however.

More: Which Australian markets are the biggest gainers of 2016 so far?

Housing affordability is one of the hottest-button issues gripping the country's largest city. According to Domain, the median house value in Sydney currently hovers at AUD996,000 (USD736,900).

Academics and government officials are at loggerheads on the best way forward to navigating the crisis. Augmenting the supply alone won’t douse overheating home values in the city and would be akin to "trying to put a bushfire out with a hose," Peter Phibbs, head of urban and regional planning at the University of Sydney, told the Sydney Morning Herald. "We're at 40-year highs [in building completions] and it hasn't generated any significant benefit."

Although Stokes "had done everything right," Phibbs said the Australian government should take a more federal approach to addressing the affordability crisis via taxation measures.

In a speech to the Committee for Economic Development last month, Stokes railed against the practice of negative gearing and its role in the crisis. "Why should you get a tax deduction on the ownership of a multimillion-dollar holiday home that does nothing to improve supply where it's needed?" he said.

The NSW government doubled stamp taxes in June and will be introducing a 0.75 percent land-tax surcharge next year. The levies stand to net the state government more than AUD1 billion (USD739 million) in revenues within four years.

Read next: Meet the Sydney-based real estate boss who does his own PR

 

Sydney residential auctions - house prices fall 14%

 

House prices continue to fall in Sydney according to the latest monthly auction results from independent industry analysts, CPM Research.

 

During August the median price of a freestanding house sold at auction was $716,000 (US$546,800) compared to $830,000 a year earlier, a fall of 14%.

 

Clearance for all market sectors during August was only 56%, equal to the clearance for July and the lowest level of clearance for the year.

 

This compares though to significantly improved clearance at the top end of the market. During August properties valued at more than $1 million achieved a clearance of 75%.

 

"Buyers at the top end of the market are less sensitive to interest rate rises and have perceived the decline in prices as an opportunity to buy, pushing clearance up to higher levels. Equally, vendors in the $1 million market have more room to adjust reserves to achieve a successful sale", said Mr John Wakefield, managing director of CPM Research.

 

After falling 6% to only 54% in July, freestanding house clearance improved to 57% during August. At the same time, clearance of home units, at 55% in August, fell to its lowest level since November 2005.

 

The median price of a home unit sold during August at $506,000 was on a par with prices a year earlier.

 

 "Another interest rate rise later this year is still a likely scenario, not driven by house prices but consumer expenditure and economy wide capacity constraints.

 

"It is more than likely that we will continue to see price declines in the auction market as buyers continue to adjust their bidding levels with the expectation of further rate rises. Vendors will have little option but to accept lower reserves as a fact of life, and clearance will, as a result slowly improve", said Mr Wakefield.
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