More than 150 people tuned into RWC’s May Between the Lines Live webinar, where a panel of experts discussed the development market across south east Queensland.
Ray White head of research Vanessa Rader hosted the webinar, and was joined by Ray White Special Projects director Mark Creevey, and Ray White Valuations regional director Ash Forbes.
Mr Creevey said the south east Queensland development site market was receiving a lot of interest from both local and interstate investors.
“Demand is across all scales of the market, but demand is constrained by the availability, so what is available is very strongly contested,” he said.
“There's a strong pool of local developers but also a lot of interest from interstate groups, particularly for large sites.
“There’s challenges in the southern markets, particularly Melbourne, and many of them see opportunities in the south east Queensland market, but that interest is creating more competition for the limited sites which are available.”
In the off-the-plan development market, Mr Forbes said a lot of developers were struggling with projects’ feasibility.
“What we’re seeing a lot of contracts being cancelled by developers at a scale i've never seen before,” Mr Forbes said.
“The projects are being given back to agents to sell a second time to improve their feasibility.
“They've had a lot of success with buyers re-engaging at the new price points. You're seeing products being sold twice before they’re even off the ground. Our laws in Queensland allow for that to happen.
“This is due to the uplift in the cost of construction. It’s really unusual times.
“People don't want to have to dip in another 15 per cent, but they realise if they don't then they might miss out entirely due to the lack of new stock coming into the Gold Coast pipeline.”
Mr Creevey said finance was not an issue in the market, but construction was providing some challenges.
“There is a lot of pressure on construction, particularly in the high density market,” he said.
“There’s still a lot of builders operating in the home builders space but you’re looking at a longer lead time than we’re used to. But as you get into high density development there’s less builders operating in that space.
“Finance is not the issue in the market. Non-bank lenders are preferred, which is not what we’ve traditionally seen.
“There is also a lot of generational wealth. A lot of deals we’ve done in the past few months have been backed by private equity.”
Ms Rader asked where the opportunities lie in south east Queensland.
“People look at the SEQ market and have confidence in the long term outlook,” Mr Creevey said.
“It’s difficult to get into the market, but once you can get something, the opportunity is enormous.
“Off the back of continued low supply, the demand for product will be sustained and with that supply and demand equation there will continue to be strong uplift in values.
“People come here for lifestyle and employment, the coastal markets have always been in high demand.”
IMAGE CAPTION: Ray White Valuations regional director Ash Forbes, Ray White Special Projects director Mark Creevey, and Ray White head of research Vanessa Rader.
