Issues affecting the off the plan property market are being reviewed by the Victorian Government. 

To obtain insights into the current state of the property market, the Hon. Melissa Horne MP, Minister for Consumer Affairs has commissioned a Property Market Review.

This review is looking for ways to improve property market laws by gaining insights from members of the public, businesses and other stakeholders on how the current laws can be improved.

A Property Market Consultation Paper has been developed by the Review Panel to assist the consultation process and identifies what the Panel believe to be some of the most pressing issues.

The review will look at what are the problems faced by consumers in respect to off-the-plan and house and land package purchases.

It noted the contracts are complex and can be over a hundred pages long. 

It further noted the contract is with the developer who in turn has a contract with the builder and it may be difficult to hold the developer to account for building defects.

It also noted the completion date for the build can be delayed resulting in additional and unexpected costs for the purchaser.

There are also issues for purchasers about the potential future financial liabilities for off-the-plan sales. 

Purchasers are often unaware about the estimated future costs associated with the property following the plan of subdivision, including rates, charges and owners corporation fees. A vendor will be unable to provide accurate figures before a plan of subdivision has been registered.

For house and land packages, similar issues arise including delays and circumstances changing between the signing of the contract and completion of the build.

Government regulation of off-the-plan sales has recognised these issues and specific provisions in the Sale of Land Act seek to protect purchasers, but the terms of reference for the review seek to explore whether further reform is required to ensure the current framework for house and land packages and off-the-plan sales provide sufficient consumer protection.

The papers lists 15 key questions for stakeholders to consider:

1) What reflections do you have on the challenges related to off-the-plan sales? Is there additional context or evidence that supports the nature or extent of the challenges highlighted?

2) What mechanisms are needed to alleviate the risks that arise during a development?

3) Should there be a requirement for designated key information to be provided in an easily accessible format?

4) Should purchasers be required to obtain legal advice prior to entering into an off-the-plan contract?

5) Should vendors be required to provide additional detailed information in the warning notice about potential changes to the lot, materials and appliances?

6) Is requiring purchasers to acknowledge they have read and understood the warning notice concerning the risks of entering into an off-the-plan sales contract a suitable and/or alternative to requiring independent legal advice being sought? What is the cost of such legal advice?

7) Are prospective purchasers sufficiently informed about reasonable cost estimates (e.g. owners corporation fees)?

8) Should vendors be required to specify details of brand/model of appliances, finishes or equivalents that may be used in the sales contract?

9) Should vendors be required to provide written notice to purchasers prior to settlement when substitutions have been made during the build and where appropriate for these to be included as a contract variation?

10) Should government prohibit specific representations as to future events being made where those matters are subject to future decisions by government or others?

11) Should vendors be required to notify purchasers of delays to completion of building projects in off the plan contracts? What should trigger the requirement and what is an appropriate timeframe?

12) Should delay or other reasons be a specified ground for recission of the contract by the purchaser? In what circumstances might this be appropriate? Should additional grounds for purchasers to rescind the contract based on delay be specified in the Sale of Land Act?

13) Should government provide guidance examples of what could constitute material changes?

14) Are there additional solutions to managing potential development delays for vendors and purchasers?

15) Are there other key issues or possible improvements other than further disclosure that the panel should consider? What would their impact be? How can government best give effect to them?

Submissions can be made at https://engage.vic.gov.au/property-market-review

The review seeks to explore whether further reform is required to ensure the current framework for house and land packages and off-the-plan sales provide sufficient consumer protection.


jchancellor-FAypfDUnLy

15 questions being asked by the Victorian government into off the plan sales industry

Probuild&rsquo;s long-delayed 443 Queen St apartment project in Brisbane was a major contributor to the construction company&rsquo;s failure as costs ran out of control, according to industry insiders.

Huchinson Builders had bid for the project but could not compete with Probuild on the construction tender price.&nbsp;

With an estimated $5 billion in office, residential and infrastructure projects, Probuild had 18 major projects underway when administrator Deloitte Australia was appointed on Wednesday.

Due to its unique design the 443 Queen St tower has been described as a &quot;tropical high rise Queenslander.&quot;

&ldquo;We came second on that job but Probuild were well under us (on price),&rdquo; Hutchinson Builders chairman Scott Hutchinson told Brisbane&#39;s Courier Mail following the rival Probuild going into administration this week.

[smartcode_project:default project_id=6226 project_image_fid=37149]

&ldquo;Costs ran out of control,&quot; Hutchinson speculated.&nbsp;

&quot;Financiers are backing these projects without asking whether they have the balance sheet to complete the jobs.&rdquo;

He said clients also had a role to play ensuring the price of building a project added up for contractors.

&ldquo;The problem is some will want to get a backyard builder to construct the Opera House,&rdquo; Mr Hutchinson said.

Mr Hutchinson said his firm would be interested in taking on incomplete projects but it was too early to make any decisions.

Hutchinson noted that Probuild&rsquo;s South African parent Wilson Bayly Holmes-Ovcon (WBHO) had realised to its peril that the Australian construction industry was one of the toughest in the world to make money.

In a statement to the Johannesburg Stock Exchange on Wednesday, WBHO said the &ldquo;level of risk versus reward&rdquo; in the Australian construction market meant the company would no longer provide financial assistance to Probuild.

[smartcode_project:default project_id=6226 project_image_fid=37089]

Responsibility for the cost blowout of completion of the 47-level apartment tower at 443 Queen Street in the heart of Brisbane&rsquo;s CBD will now be taken up by its developer Cbus Property, which is understood to have approached Melbourne lawyers Arnold Bloch Leibler on Thursday to represent them. 
&nbsp; 
The press reports have suggested the project &quot;may be haemorrhaging as much as $120 million,&quot; The Australian reported.

WBHO blamed, in part, the Australian government&rsquo;s &ldquo;hardline approach of managing Covid-19&rdquo;.

&ldquo;A combination of border restrictions, snap lockdowns and mandatory work-from-home regulations for many sectors, has had a considerable impact on property markets,&rdquo; it said in a statement.&nbsp;

[smartcode_project:default project_id=6226 project_image_fid=37148]

Stronger-than-expected pre-sales for Cbus Property&rsquo;s 443 Queen had seen the construction announcement ahead of schedule in August 2017 with the appointment of &quot;tier 1 firm ProBuild.&quot; There was a 2020 completion schedule.

At the time, more than half of the 264 apartments had been sold as demolition of the office onsite and construction got underway at what was the last riverfront location in the Brisbane central business district.&nbsp;

The 47 storey tower which will include 106 one bedroom, 106 two bedroom and 54 four bedroom apartments saw 52 sales on its November 2016 launch weekend. Prices ranged from $569,000 for a one-bedroom apartment to $3 million for a four-bedroom. The vast majority of buyers were Brisbane owner occupiers, with 10 per cent of buyers from interstate.

By October 2020 when construction had been scheduled for completion, The Courier Mail reported it was only up to level 32 &nbsp;after a &quot;revolving door of Probuild site managers.&quot;

[smartcode_project:default project_id=6226 project_image_fid=37090]

A blunder had seen windows in nine levels pulled out which threw the work sequence out for plumbers, plasterers, tilers and other trades.

COVID-19 restrictions on the three lifts on site allowed only four people at a time instead of the usual 10, so with almost 200 workers on the job, it&rsquo;s taking some of them an hour before their work started.

Probuild wanted the trades to put in longer hours, but ran into opposition from the CFMEU.

There was one crane on site instead of two as the firm sought ways to cut costs.

The development application for the project was lodged with the Brisbane City Council in 2015, with subsequent extensive court delays from neighbours who were set to have their views impacted.

[smartcode_project:default project_id=6226 project_image_fid=37090]

Stronger-than-expected pre-sales for Cbus Property’s 443 Queen saw construction begin ahead of schedule in August 2017

Hutchinson Builders could seek 443 Queen St, Brisbane construction tender second time around

Meridien has secured approval for its 52 apartment complex at Airlie Beach.

It came after an approval recommendation from council officers for the proposed three and four-storey buildings, designed by Fender Katsalidis.

Whitsunday Regional Council granted &nbsp;approval for the vacant lot on Port Drive to build three apartment blocks.

The plans for a residential and short-stay apartment development at 26-32 Port Drive includes one, two and three-bedroom layouts.

<a href="https://www.urban.com.au/new-apartments/26-32-port-drive-airlie-beach-qld-4802"><img alt="" height="584" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/screen_shot_2022-02-25_at_9.10.58_am_0.png" width="990" /></a>

Mayor Andrew Willcox voted in favour of the development.

The council report noted its proposed height was lower there than existing buildings at the Port of Airlie.

The Balmain Group secured permission last year for a 12 storey hotel at 24 Coconut Grove, Airlie Beach.

Whitsunday Regional Council granted  approval for the vacant lot on Port Drive to build three apartment blocks.



Airlie Beach apartment development gets approval

A shortage of multi-unit completions is expected between 2025-32 as household formation is expected to exceed housing supply, the latest State of the Nation report from the government’s expert housing advisers says.

According to the National Housing Finance and Investment Corporation (NHFIC), almost 120,000 detached homes and 66,000 medium-density units will be added to housing stock each year between 2021-22 to 2022-23.

Bu this is the bare minimum needed, the NHFIC State of the Nation’s Housing 2021–22 research report said as the rental market is already tightening, and demand will lift as international borders reopen.

Its expects a strong pipeline of housing supply from now until 2024 - around 184,000 new homes per year (net of demolitions) to add to supply in the next three years.

During the next 3 years, 167,400 net completions are expected in Vic, while 147,400 are expected in NSW and 111,200 in Qld, SA (32,000), WA (67,500), Tas (10,100), NT (2,300) and the ACT (13,000).

Household formation will hit more than 1.7 million in the decade to 2032, led largely by single-person households.

New home builds will outpace household formation by more than 115,000 in 2022 and then 35,000 in 2023, but with net overseas migration set to fully recover to pre-pandemic levels of about 235,000 by 2024-25, household formation is expected to outpace new housing supply by a cumulative 163,400 to 2032.

“By 2024-25, household formation and demand for vacant dwellings is expected to slightly exceed construction activity, which looks likely to remain the status quo until 2030-31,” NHFIC said.

The main shortfall will come from units, which will face increased demand from new arrivals a well as downsizing brought on by higher interest rates.

Property Council of Australia Chief Ken Morrison said the report shows that as the economy and Net Overseas Migration recovers, the demand for new households will outstrip supply.
 
“The projections in this report are concerning, and mirror the same warnings the Property Council of Australia has been making for some time.
 
“The report clearly shows that between 2025 to 2032, Australia will find itself 163,400 homes short of expected demand,” Mr Morrison said.
 
“That’s an average deficit of 20,000 homes a year, every year, until 2032.
 
“Overall housing supply is expected to fall by around one third in just four years from 2023. That can’t be good for housing affordability,” he said.

NHFIC said feedback from its business liaison program indicated adequate supply of greenfield land was holding back detached dwelling construction, while slow approvals was hindering multi-dwellings developments.

"Given it can take more than 6 years to get new housing supply to market in some areas, pulling back on development decisions now will exacerbate affordability problems in future years when population growth is expected to return to more normal levels.

“The development approval process is long and cumbersome. In some instances, it takes six years from when a medium-density and apartment development application is fist lodged to when construction is completed.

“A shortage of multi-unit completions is expected in the next 2 to 3 years, especially now the rental market is already tightening, and demand will lift as international borders reopen,” the report stated.

It noted the outlook over the next 5 years should also be put into a long-term context. 

"We estimate that, at the peak of the apartment boom in 2017, a net 106,100 medium-density and apartment dwellings were added to the housing stock compared to 88,300 in 2019–20, just after the beginning of the COVID-19 recession. 

"In other words, net additions to the medium-density and apartment market were already 17% below their peak as the recession began.

"The medium-density and apartment markets are more exposed to the closure of international borders to NOM and particularly international students, whereas the detached dwelling market is more likely to benefit from stimulus programs, such as HomeBuilder or state government building grants."


According to the National Housing Finance and Investment Corporation (NHFIC), almost 120,000 detached homes and 66,000 medium-density units will be added to housing stock each year between 2021-22 to 2022-23.


Apartment completions shortage looms from 2024: NHFIC

The South African parent company of Probuild has appointed administrators to the Australian construction company.

Workers were leaving Probuild construction sites on Wednesday.&nbsp;

Workers were first seen removing their tools from Cbus Property&rsquo;s 443 Queen St project in Brisbane, a much delayed project.

[smartcode_project:default project_id=6226 project_image_fid=37149]

Its projects also included in Melbourne, the Far East Consortium&rsquo;s West Side Place project site, a $2 billion, four-tower development.

Probuild have been constructing the latest stage at the master planned Caulfield Village, delivering over 430 Build-To-Rent (BTR) apartments, for the Beck Property Group.

Projects include the 65-storey residential UNO building in Melbourne scheduled for completion next year.

[smartcode_project:default project_id=3281 project_image_fid=46048]

The Melbourne-based firm, one of the largest construction companies in Australia, took over construction of Sydney&rsquo;s new glass IMAX building in Darling Harbour after the collapse of Grocon.

It is also doing construction for Frasers Property at Macquarie Park.

Probuild directly employs 500 staff, with the collpase set to impact on thousands working as subcontractors.

Apartment developers will need to update their off the plan buyers on revised construction timelines.

Johannesburg-listed builder Wilson Bayly Holmes-Ovcon confirmed it put the Australian business into administration after it had been operating at a loss.

&ldquo;With effect from 22 February 2022, the company... will no longer provide financial assistance to [Probuild holding company] WBHO Australia,&rdquo; WBHO said in a statement.&nbsp;

Deloitte Turnaround &amp; Restructuring partners Sal Algeri, Jason Tracy, Matt Donnelly and David Orr will be the Voluntary Administrators over certain companies within the WBHO Australia Group.

Probuild&#39;s most recent annual financial filings put revenue at $1.3billion.

Algeri confirmed WBHOA had been a &nbsp;major contributor to the construction sector and the broader economy, including as a direct and indirect employer.&nbsp;

&ldquo;The COVID-19 pandemic has created challenging trading conditions for many businesses, and for WBHOA, which has also been impacted by certain loss-making projects.&nbsp;

&ldquo;Our immediate focus will be to undertake an urgent assessment of the entities&rsquo; financial positions and work with key stakeholders to stabilise the business and projects where possible.&nbsp;

&ldquo;We will assess options to preserve value, and engage closely with creditor groups and other stakeholders across the spectrum, including clients, employees, unions, suppliers, contractors and sub-contractors.&nbsp;

&ldquo;We will also also be commencing a sale and recapitalisation process in order secure a new owner for the businesses.&rdquo;&nbsp;

A $300 million acquisition of Probuild fell through in January last year after Treasurer Josh Frydenberg said he would reject China State Construction Engineering Corporation&#39;s bid for the Australia-based and South African-owned company.

National security concerns linked to state-owned China State Construction Engineering Corporation&#39;s connections to the Chinese defence industry was understood to be a key reason for the Treasurer not to approve the foreign investment.&nbsp;

Maxwell Shifman, National President of the Urban Development Institute of Australia, recently noted cost blow-outs in the wake of the initial success of HomeBuilder had created major underlying challenges for the industry in what was emerging as possibly a &ldquo;profitless boom.&rdquo;

Its South African parent appointed administrators after propping it up over the past four years

Probuild collapse to hit apartment project delivery

ID_Land has spent $140 million on a 59-hectare site about 60 kilometres from Melbourne's CBD, the largest acquisition yet by the multi-billion-dollar company.

It is expected to yield around 1,200 housing lots at 200-230 Moores Road, Clyde, growing the company’s pipeline to 6,000 lots.

The vendors have been growing vegetables for over 110 years, with the site expected to be rezoned to residential over the next few years.

The site fits into the Clyde South Precinct Structure Plan, a proposed 1099 hectare new suburb, which will evolve with retail amenity, schools, and a potential future Clyde Railway Station. ID_Land already has a pipeline at Geelong, Gisborne and Walloon in south-east Queensland.

Headed by joint managing directors, Matthew Belford and Jeffrey Garvey, the ID_Corp group of companies, including ID_Land, is a $3b diversified organisation across development, construction and funds management. The directors believe the Clyde acquisition is a strong addition to the company’s portfolio, allowing the group to anchor a return to Melbourne’s southeast.

[smartcode_project:default project_id=112056]

“It’s no secret that we’ve seen a significant shift in buyer priorities over the last two years, with more younger buyers capitalising on the economic tailwinds for FHBs to secure their first home – we are expecting this activity to remain relatively strong, underpinned by the affordable nature of the growth area land and inner-city townhouses.” Garvey said.

The AFR reported the $2.4 million per hectare sale price set a new benchmark for un-zoned greenfield land in Melbourne. Core Projects research calculate the south-east growth corridor is the most expensive land market in Melbourne with a median lot price of $425,000.

“Looking to Melbourne’s southeast, we see a similar opportunity to that of regional Victoria. The Clyde South precinct structure plan underpins the confidence we have always had in the area, and we are looking forward to once again delivering high-quality residential stock to this growing locale.”

Recent Clyde acquisitions&nbsp;include Bathla Group's town centre development site which was bought for $67.65 million from National Pacific Properties, the development arm of home builder Burbank Group.

“Our long-term strategy for ID_Corp will see us continuing to invest in Australia’s best performing and fastest growing regions, and delivering affordable supply to where the market needs it most,” said Belford.

Last year Mirvac paid about $70 million for a 30-hectare site at 105 Smiths Lane in Clyde North that is expected to see around 300 lots.

The 59-hectare site is about 60 kilometres from the Melbourne CBD

ID_Land secure 59 hectare Clyde house and land site

Lendlease&#39;s over 55&rsquo;s vertical retirement project, Bernborough Ascot, has opened its newly designed display apartment.

It has been styled by furniture and design brands, Coco Republic. 
&nbsp; 
Designed by architects Marchese Partners, each apartment offers open plan living and large balconies for entertaining.

[smartcode_project:default project_id=8000 project_image_fid=26355]

When completed, Bernborough Ascot will feature 300 independent living apartments with amenities including a village green, health and wellness studio with a pool, spa, gymnasium and consulting rooms, a rooftop terrace, restaurant, and outdoor dining areas.&nbsp;

Two and three-bedroom apartments are available, starting from $655,000.

&ldquo;Ascot is one of Brisbane&rsquo;s most premium suburbs, so the design of the display apartment had to reflect the demographic and complement the luxury track-side location of the village,&quot; Coco Republic&rsquo;s National Commercial Manager, Charlotte Dub said.

Lendlease Retirement Living managing director, Nathan Cockerill said the availability of high-quality retirement living options was an important part of this precinct.

&ldquo;Ascot is one of Brisbane&rsquo;s most premium suburbs, so the design of the display apartment had to reflect the demographic and complement the luxury track-side location of the village.

&ldquo;Partnering with Coco Republic provides an&nbsp;excellent&nbsp;opportunity for&nbsp;retirees considering downsizing to seek&nbsp;information and advice from their team of experts.

&ldquo;The availability of high-quality retirement living options is an important part of this precinct, creating diversity and the chance for retirees to downsize in style in a genuine community setting,&rdquo; he said.

&ldquo;We&rsquo;re creating a connected community where residents have the utmost choice and opportunity to pursue an active lifestyle, being close to all essential health and community services, shopping, and sporting facilities.&rdquo;

[smartcode_project_cta: project_id=8000]

Two and three-bedroom apartments are available, starting from $655,000

Lendlease's over 55’s vertical retirement village, Bernborough Ascot opens display apartment

An entire residential building at 221 Rosslyn Street, West Melbourne hs been listed for sale with $45 million plus hopes.

It is a serviced apartment offering on a single title, comprising 99 fully self-contained studio, one and two bedroom apartments.

The 4.5 star accomodation offering comes with a ground floor restaurant over two retail tenancies positioned to the corner of Rosslyn and Adderley Streets.

There is also a rooftop bar; and 27 basement car parks. 

The serviced apartment hotel and carparks are all on the one title.
 
Colliers’ Daniel Wolman said significant tax depreciation benefits were on offer.

It would appeal to investor seeking a build-to-rent venture.
 
“The projection continues to grow for build-to-rent and co-living models as a prominent player amongst the suite of mainstream commercial property asset classes in Australia," said Wolman.

The building benefits from access to several of the wider West End amenities including a 25m lap swimming pool, plunge pool and spa including private gardens with BBQ facilities in addition to a full line Anytime Fitness Centre, Foodworks, Cellarbrations, Medical Centre and various cafes and restaurants. 

It was also suitable for investors for use as a hotel or serviced apartments, with rooms averaging 39sqm each with a terrace or balcony, Paul Jones, of Paul Jones Real Estate, said. 

The property is being marketed with vacant possession but with a strong interest from local and international operators.

The stratum freehold offered for sale forms part of Trenerry Property Group’s luxurious master planned mixed use development – West End. Completed in March 2021, the $345 million development was completed as a joint venture with partners Victor Smorgon Group and the Kanat Family. 

Situated on the north western edge of the Melbourne CBD, West End comprises five buildings incorporating residential apartments, retail and commercial spaces in addition to the serviced apartment property offering. 

“West End forms part of a steadily growing footprint of developments in this inner-city fringe location, with eminent developers Gurner, Vicland, Deague Group and UAG tapping in on the opportunity of the West Melbourne location,” Mr Wolman said. 

“The underlying blueprint of The West Melbourne Structure Plan 2018 is a driving force behind the gentrification of West Melbourne, formerly a predominantly industrial precinct. 

“Upgrades to North Melbourne Station, forthcoming Arden Railway Station, proximity to Flagstaff Gardens and the $150million Queen Victoria Market redevelopment, along with the proposed redevelopment of Festival Hall by Hillsong and nearby Marvel Stadium, further add to the appeal of West Melbourne.”


Situated on the north western edge of the Melbourne CBD, West End comprises five buildings

Melbourne West End build to rent offering for sale with $45 million plus hopes

A premium park front development opportunity in Melbourne’s inner north has been listed for sale.

It's expected to attract $17million offers. 

It has been offered by local investor and developer Colin DeLutis of DeGroup.
 
It is a substantial 4,352sqm site at 20 Leinster Grove, situated at the end of a cul de sac, with over 50m frontage overlooking Methven Park.

Colliers’ Jozef Dickinson, Trent Hobart and Yvonne Zhou, have the listing in conjunction with JLL’s Nick Peden, Jesse Radisich and and Josh Rutman.
 
“On offer is a stunning park front location, enviable scale and incredible view lines back towards the CBD which all positions the site for a prime multi-level redevelopment set to re-rate the Brunswick East market,” the marketing says.

The property was one of the first commercial aquisiitons for the vendor in 1977.

It was once part of the Westco Jeans empire. 
 
Offers for 20 Leinster Grove close March 23.

The Melbourne developer, Neometro, has seen success at Nine Wilson Ave, their final apartment project in Brunswick's Jewell Station Village, a multi-stage development that began back in 2016.

Over 35 per cent of the 73 apartments on offer were snapped up over the traditionally quiet Christmas holiday period.

Apartments in 9 Wilson Avenue, Brunswick see prices for two bedrooms from $609,000.



Brunswick East apartment develoment site for sale

A Cronulla development site has sold for $38 million in an off-market deal, setting a new record sale rate for Cronulla and the Sutherland Shire.

The property at 67 Gerrale Street, consisting of a traditional red brick 18-apartment block, Carousel Court on a 1,327sq m site, was purchased by Sammut Group.

They bought from 18 owners in a strata amalgamation, who joined together to sell the property at an average $2.1 million windfall.

The last advised sale of an apartment was $540,000 in 2014.

One buyer had paid $120,000 in 1995, according to CoreLogic.

The deal was negotiated by Knight Frank agents Anthony Pirrottina and Demi Carigliano at a rate of $9,400 per square metre on potential gross floor area.

Sammut Group Director and CEO Allen Sammut said the acquisition paved the way to help create the missing link between the station and the beach, with both residential and retail activation.  

Pirrottina said the site is arguably the best development site in Cronulla, being directly across the road from Cronulla Beach and overlooking parks on two sides. 

“It was an exceptionally rare opportunity to acquire a residential apartment block with immense development potential in one of Sydney’s most tightly-held beachside precincts.” 

“Cronulla is the premier postcode of the Sutherland Shire, with growing values for off-the-plan apartment sales, and the prime location of this particular site will ensure strong buyer demand for any future residential development,” Carigliano said. 



The property at 67 Gerrale Street, consisting of a traditional red brick 18-apartment block on a 1,327sq m site

Jonathan Chancellor

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