BUILDING OUR FUTURE: Part 6
BUILDING OUR FUTURE: Part 7 (THE SERIES)
PART 7: Fortitude Valley railway station gears up for $500m upgrade
For this chapter of the Building Our Future series we will be focusing on Fortitude Valley’s railway hub. Breaking down the ins and outs of this major 500 million-dollar development project by asking the tough questions to find out why this is one Brisbane project that investors cannot do without.
What is the project?
Plans have been lodged with Brisbane City Council to revitalise one of Fortitude Valley's most run-down locations with a $500 million residential, retail and business hub.
Upon approval, the hub is set to include two towers – a 30-storey residential and a 24-storey office tower – both of which plan tobe built adjacent to the Fortitude Valley railway station.
Designed by Architectus, the residential tower is expected tohouse 207 apartments, while anticipated that the commercial tower will include 35,067 square metres of office floor space and 1560 square metres of retail space.
If approved, construction was expected to begin in late 2017.
Why is the development needed?
This major redevelopment is required in order to add a new lease of life to the existing space, which is currently described by many as tired and rundown.
This includes LaSalle Investment Management’s International Director, Ian Mackie, who said he hoped the half-billion-dollar development would revitalise a tired precinct.
"We're looking to create a safer, more vibrant environment to breathe new life into the precinct," he said
"The Brunswick Street station is the gateway to the Valley for thousands of commuters a day, but the precinct around the station is in desperate need of renewal."
With so many commuters passing through on a daily basis, it seems that the Fortitude Valley development is probably well overdue.
The benefits to Brisbane
Thanks to this new and much-needed injection of life into the precinct, hopefully it will create a safer and more family-friendly environment.
In addition, Mr Mackie said LaSalle also hoped the integrated development would appeal to both commercial tenants and residents.
"Most of the commercial development in the Valley is up to a 15-minute walk from public transport, but we clearly don't have that problem," he said.
Commuters would see new entrances to the train station, with what LaSalle described as "natural light to create a light, airy environment, with family-styled entertainment, such as cinemas or bowling designed to create a seven day a week environment".
"The commercial tower on Constance Street would allow the creation of a new pedestrian entry to the site, with rail commuters currently having to walk through a multilevel car park to access the station.
"More than 15,000 commuters use the Valley Metro Station on week days, with more than half of those leaving via Constance Street rather than Brunswick Street.
"Soundproofing of apartments is planned to ensure the new residents and the Valley's nightlife can coexist peacefully."
The good news for investors
Once completed one would assume that this new $500 million residential, retail and business hub will add significant value to local Brisbane real estate (both residential and commercial) and in return create high demand for Brisbane CBD property.
Plus, we cannot forget the advantage of a strong economic boost that a project of this scale will create during construction. When the economy goes up, it typically means that property sales and rental leases follow suit – and, in our experience, this is fabulous news for investors!
If, like Fortitude Valley, you would like to revitalise and transform your investment strategy, contact Hannah and the teamat HSBP on 0419 782 133. We can help get your portfolio on track… and going full steam ahead in the future!
Australian property market comes up trumpsfollowing US election
Last Wednesday 9th November marked D-Day…the day it was announced that Donald Trump defeated Hillary Clinton in the race to become the next President of the US, following what was one of the most shocking and controversial elections in modern political history.
As soon as news hit, it become fast apparent that Trump was not the only winner! According to leading experts, thanks to Trump’s victory, the Australian property may have also won itself a new wave of foreign investors!
One might be asking: How on earth does Australia come out on top after a US political decision is made millions of miles away?Let us tell you this, it comes down to confidence… or lack thereof, in this case.
“It is no surprise that buyers are easily scared whenever a market shows any signs of uncertainty – such as the Trump win or even Brexit for that matter,” says Hannah.
“History has shown us that no investor likes to put their well-earned dollar into a market that is unstable or undergoing enormous change.”
Fortunately, experts, including REA Group chief economist,Nerida Conisbee, are saying that people are likely to look to markets, such as Australia, following the Trump victory and the uncertainty that came with it.
“Australia will be a beneficiary of this as it is considered to be one of the safest markets in the world,’’ she said.
She warned property values in the United States were likely to fall in the same way they did in Britain following Brexit.
“In uncertain markets, people don’t like to buy,’’ she said.
Whether the US will fall into a recession is anyone’s guess. (We predict Trump’s new role will be the true guide.) What we do know is that while much of the world is currently going through change, and an overall lack in confidence, the Australian market is just the opposite – stable!
Meaning many parts of Australia (especially Brisbane) are now high on the radar for many overseas investors who previously bought property in the US, but are now on the hunt for a new, more ‘stable’ alternative.
Whether you are based in Australia or overseas, we can help you find that next lucrative property, located right here in the heart of the Brisbane CBD. For more information or to set up an appointment, contact Hannah and the HSBP team on 0419 782 133.
BUILDING OUR FUTURE: Part 6
BUILDING OUR FUTURE: Part 6 (THE SERIES)
PART 6: The queen of all developments
Recently we launched a new series called Building Our Future. This is an ongoing series that explores the latest and greatest development projects for the city of Brisbane. Throughout the series we breakdown each infrastructural development by asking questions such as: Why does it benefit Brisbane? Why is it needed? What does it mean for local real estate, and investors alike?
This week we put Queen’s Wharf under the spotlight.
What is the project?
We are sure almost everyone has heard of the Queen’s Wharf by now - a major development underpinned by experts who believe it will totally transform Brisbane as we know it! Completely reshaping George Street to the river; stretching 10 blocks across the far end of the city, from Queen Street to Alice Street.
Unlike anything Brisbane (or Australia for that matter) has ever seen, the development of Queen’s Wharf Brisbane is set to include an underground shopping mall, a sky-deck containing multiple restaurants and bars with stunning views of the Brisbane River and skyline, five new hotels (three of which will be six stars) including the world renowned Ritz-Carlton and Rosewood brands, a new Lyric Theatre at South Bank and a cross-river bridge to access it.
Think infinity resort pool overlooking the Brisbane River and Southbank. Think moonlight rooftop cinema. Think 12 football fields of public event space! - This milestone project is said to deliver an iconic redevelopment at the city’s heart that invigorates the entire precinct and delivers striking landmark architecture as part of the best integrated resort in Australia.
For more information on the project, head to http://www.destinationbrisbaneconsortium.com.au/
Why is the development needed?
Really this question is a no-brainer but we will answer it anyway.
There are so many reasons why this project is pivotal, starting with a rise in revenue to the state. Premier Annastacia Palaszczuk said the project would have a significant effect on Queensland, including a guaranteed $1 billion in revenue.
"It does mean there is a huge injection of cash that is going directly to pay down debt on our state budget,” said Annastacia Palaszczuk.
Furthermore, Palaszczuk said the project would create 2000 construction jobs and 8000 operational jobs.
"We will see overall some 10,000 jobs over the coming years".
But boosting employment is just the beginning. Did you know the Queen’s Wharf is expected to generate an estimated additional 1.39 million tourists a year, creating an extra $1.69 million in tourist spend a year?
Talk about put Brisbane on the map! With projects like this underway, we could not be prouder to call Brisbane home.
The benefits to Brisbane
In terms of jobs, the development alone is tipped to inject 10,000 employment opportunities from construction through to project completion! That is a massive plus to the city of Brisbane.
But as we know the project is about much more than a boost to our local job numbers.
Overall, the Queen’s Wharf is set to deliver a truly place-defining precinct with significant transformational impacts on Brisbane’s economy, tourism, visitation, liveability, image and (of course) jobs.
The good news for investors
Okay, so first let us look at employment… more city jobs equal more city tenants; meaning thousands of people that will want to live closer to work. Thus, as construction unfolds, we can expect to see an intense upswing of new city tenants looking for places to live.
Once the Queen’s Wharf is fully functional, it is anticipated that Brisbane’s new mega-resort is set to make our city increasingly more desirable to buyers and investors alike, thus creating a newfound confidence in our city’s local market.
It is believed this anticipated appeal will have unprecedented effects on the local Brisbane real estate market, with a heightened influx of interest of buyers interested in the CBD… of course, as buyers and demand increases so do property prices.
This is certainly good news for any Brisbane buyer - new or existing.
With so many opportunities on the rise, like the Queen’s Wharf, now is the perfect time to start seriously thinking about buying property in the Brisbane CBD. To discuss all the current opportunities available contact Hannah and the HSBP team on 0419 782 133.
Brisbane CBD generates approximately 20 per cent of the city’s economic growth
As is the case with the other major capitals, most of Brisbane’s economic activity takes place in and around its CBD. Did you know that the Brisbane CBD generates approximately 20 per cent of the city’s economic growth? That is six times that of the next most productive area in the greater Brisbane area! With growth like that, it is no wonder why more and more buyers (especially investors) are opting to purchase property in the Brisbane CBD.
Why the CBD? Recently Michael Matusik wrote in an article that much of our economic activity takes place in the CBD regions because businesses are more productive when they interactive with larger number of customers, suppliers and competitors – and when they are forced to do so with more frequency.
“Think specialisation of labour; this is the real force shaping whatever lies ahead – urban development, jobs, investment, wage growth etc,” writes Matusik.
“The same phenomenon applies when looking at why larger cities are more economically productive than smaller ones, or those in other parts of country.”
Over time, as more jobs are created in our city centres, we have witnessed a vast increase in the numbers of Australians having to commute to and from work every day.
Yet, things do seem to be changing…
We are slowly seeing a shift in the way Australians think. Nowadays it appears that an increasing number of Australians want to trade in their suburban homes and long commutes for smaller pads that offer the convenience of inner-city living.
According to Matusik’s article, a large number of knowledge-based workers believe the benefits of living close to the city outweigh the higher cost of housing.
Principal of HS Brisbane Property, Hannah Schuhmann, agrees with Matusik and says that CBD apartments may offer a smaller space and generally higher expenditure for inner-city living costs. But all of this is more than compensated for with the convenience of being so central to everything - including work, cafés and shopping precincts, etc.
“Over the years we have seen a big shift in the number of people who have opted to give up their suburban three-bedroom home for a more compact CBD apartment.
“Many Australians lead a fast pace life and need a home that can keep up… maybe one day commutes will become a thing of the past, much like the good old Hills Hoist?” says Hannah
For many CBD residents, reducing the time commuting to and from work each day is more than worth the additional cost of living.
“You cannot put a value on time. With convenience a major positive for CBD living, it is no wonder we are seeing more and more workers opting to move closer to the CBD.”
However, it is not just owner occupiers that are making this shift for a more urban way of life.
These days we are also seeing a new breed of buyer called the rent-vestor. These are people who have bought a house in the suburbs or regional areas (where buying property is more affordable) but have then opted to live in a rental space which better meets their lifestyle needs - often these properties are in the CBD where people can be closer to work and other amenities.
Schuhmann says that rent-vesting is often a good alternative for buyers who want to live in the CBD but cannot afford to buy property there.
“Renting an apartment in the CBD while owning another property on the outskirts allows many buyers to still get the asset-appreciation on their purchase, while, at the same time, also enjoying all the benefits of city-living – meaning they can have their cake and eat it too!”
Whether you work or live in the city… or simply want an investment property that will generate significant capital, clearly (thanks to 20 per cent economic growth!) the Brisbane CBD is where it is at. Thankfully, at HSBP, this is our area of expertise. For more information on buying or investing in property here in the Brisbane CBD, contact Hannah and the team on 0419 782 133.
The truth about apartment oversupply
Earlier this month, Peter Switzer wrote an article on www.switzer.com.au with the title, “Could apartment oversupply KO banks and the economy?” Seems it was just a catchy headline to drive attention because once you read between the lines, the answer is a very obvious no; with Peter having more good, than bad, to say when it comes to the current Australian economy. Then why all the negativity?
According to Peter, the latest ‘supposed’ concerns relating to apartment oversupply have been linked to a ‘bank balance sheet’ problem.
He writes, “Alarmist doomsday merchants are feeding the media about all manner of problems, with the latest linking an apartment oversupply to a bank balance sheet problem.
“A few weeks back it was apartments causing a recession but all my really smart economics experts put that as a really lower order risk.”
This poses the question: If it is considered low risk, then why is everyone (mainly the media) making such a big song and dance about it?
There was also the recent editorial in The Australian, whereby David Uren wrote: “The Reserve Bank has warned that the massive number of new apartment blocks approaching completion could send some of their developers broke and leave the banks nursing big losses.”
Again, more negativity. Like Switzer said though, the keyword in the above statement is ‘could’.
Seems these days there are lots of people writing on what ‘could’ and ‘might’ be. Today, rather than focus on what ‘we do not’ know, let us look at ‘what we do’. The facts! That being said, here are 10 impressive facts about the current Australian economy, as reported by Switzer:
- Business confidence: rose from +5.6 points to +5.9 points and the long-term average is +5.8.
- Business conditions: rose from +6.8 points to 7.7 points in June and the long-term average is +4.8 points.
- Consumer confidence: The Westpac/Melbourne Institute survey of consumer sentiment rose by 1.1% in October to 102.4. The confidence index is up 4.7% on a year ago. The survey was conducted between October 3 and October 6.
- The March economic growth number was 1.1%, taking annual growth to 3.1%.
- June quarter 3.3% — 100 quarters of no recession!
- Growth is now the fastest in three and a half years.
- Unemployment at 5.6% is around a two-and-a-half year low.
- The CBA’s look at economy-wide sales is at a six-year high.
- Capital city home prices rose by 1% in September and are 7.1% higher over the year.
- Total household wealth at a record $8,891.2 billion as at end of June 2016, up $231.5 billion or 2.7% over the quarter and CommSec estimates wealth rose $368,945 in the June quarter, up $8,895 over the quarter and a record!
Hannah Schuhmann, Principal of HS Brisbane Property, says Switzer is right in that much of the negativity linked to apartment oversupply is simply media hype.
“If you look at the current economy, the fundamentals are strong!” said Schuhmann.
“Our economy is the strongest it has been in a long while and if it continues along this path, it is a good indication that the Brisbane property market is set to shine in the next five years.”
So, in the end, it seems that the facts win out over media hearsay. With the economy going great guns and only set to get better and better, maybe it is time we ignore the media circus and listen to the facts - which indicate nothing but positive signs for a strong economic future for Brisbane.
If like Switzer and Schuhmann you are excited about the future of Brisbane’s economy, then it might be a great time to discuss what current real estate opportunities are on offer here in the Brisbane CBD. For more information, contact Hannah and the team at HSBP on 0419 782 133.