GSA is all for housing development.

But the recent health scare has not only shaken this sector; it’s also unnerved many would-be investors.  Just when the market was gaining momentum at the start of the year, the outbreak threw a hefty spanner in the works.

Yet, property development is merely taking a breather while it assesses the damage.  And according to the Australian Residential Development Review (2020), there are 10 major trends to watch for over the coming year.

 

1. More high-density sites

Suitable high-density development sites make up 70.6% of the housing market, reflecting ongoing demand for low-maintenance living.

 

2. Less offshore buying sites

Almost 68% of Aussie see development land as an opportunity, with fewer sites purchased by offshore developers.

 

3. Pressure on build cost & delivery

Construction crews carried on throughout the lockdown, putting pressure on building supply chains.  The cost of construction rose by 2.7% across Australia in 2019 and continues to climb.

 

4. Average block of land increases

The average land lot in Australia grew to 421 sqm in 2019, up 3 sqm from the previous year – with the average lot price falling by 4.3%.

 

5. Smaller new houses / larger new apartments

The average Aussie house in 2019 was 1.3% smaller than the previous year, while the average new apartment size was 3.2% larger.

This trend reflects the rightsizing movement as investors weight up space vs cost.

 

6. Fewer apartments in the pipeline 

The planned delivery of apartments will be 27.3% less than those completed over the past four years.

 

7. Higher buildings with more apartments

Previous high-density projects averaged nine storeys. It’s expected to rise to 14 storeys, and up to 17 storeys in Melbourne alone.

 

8. Population growth to pause

Residential vacancy is expected to be in oversupply as restrictions remain in place for overseas visitors. This will potentially reduce median weekly rents.

 

9. Favourable conditions for offshore buyers

The value of the Aussie dollar has attracted offshore interest. However, recent changes to the Foreign Investment Review Board may hinder purchase approval.

 

10. Buyers not taking any risks

Despite lower borrowing costs, the coronavirus still has investors spooked. Local buyers are sitting idle until the full impact of the virus is known.

 

With so many twists and turns, investors must be getting anxious to make a move.  But they still have to weigh up all the variables of affordability and market trends.  And quite often, neither will work in their favour.

Of course, those with a solid passive income stream have the power to invest despite the current trends.

And one of the best ways to secure passive income is to invest with our syndication model.

So, if you want to be in control of your next financial chapter, give us a call today.