Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Sunday, 26 June 2016

Gasworks

Newstead

Had a snout around Newstead gasworks yesterday, a pleasant area which is seeing a lot of new apartment development. 

Newstead Towers are photographed below. 

Very hard to gauge from ground level, but if I had to guess, I reckon these are about one third inhabited now. 


Shops and eateries are generally quite busy, both during the day and in the evenings.


Sales and marketing teams are out in force. The interest in these new apartments generally appears skewed to buyers of Asian heritage from what I've experienced, though anecdotal evidence can mislead, of course.


It's been fairly well documented that new apartment market is in for a rough ride.

Aussies do love a whinge - as recently as less than three years ago, there was endless complaint about us building too few dwellings - fast forward three years and now it's too many! 

Such is the nature of a cycle. 

Net overseas migration is way down in Queensland since the heady days through the peak of the mining boom.

Some compensating good news for Queensland is that interstate migration jumped to its fastest rate in 8 years in the December quarter and is surging higher, helping annual population growth to lift from +55,200 in the year to September 2015 to +59,700 in the year to December. 

Still completions are running ahead of demand for new housing in the state, with a shade over 38,000 new dwelling completions in 2015.

As far as I can observe, it doesn't seem that there won't be much problem filling these new apartments over time once the construction cycle passes its peak, due to their proximity to the city and entertainment precincts.

Effective 1 July Australia's student visa rules will also be relaxed, allowing primary school students from Asia and their guardians (and possibly families) to come to live in Australia, which will further help to take up the slack. 

The most pressing challenge is settlement risk, with banks having pulled up the ladder on writing loans to non-resident buyers. 

A huge challenge given how many of these developments are reliant on foreign purchases.