Leonard Teplin

<html><body>
The recent release of the Banking Royal Commission's final report - which will lead to an overhaul of Australia’s financial services industry - is the latest in a series of events that have impacted the property sector over the last few years.  

The slowdown of foreign investors in the residential market, tightened lending conditions and a significant drop in house prices nationally in addition to a loss of consumer confidence have all had a significant impact on the local property market.

All these factors combined have left many uncertain of what lies ahead for the market, particularly in the lead up to the federal election later this year. Urban.com.au asked Leonard Teplin of Marshall White Projects  to share his insights into what buyers can expect in 2019 below;

Urban.com.au: What are your observations on the state of the market prior to the release of the Hayne report, particularly with regard to the uncertainty around what the outcomes and recommendations would be?

Leonard Teplin: Late 2018 certainly saw a great deal of trepidation from buyers about what the report would hold and how it would affect their ability to get credit. Some purchasers, in particular first home buyers, have held off on applying for credit until the report findings were announced. However early signs in 2019 show that, downsizers and local investors have increased their rate of enquiry and want to take advantage of low interest rates and stable house prices while they can.

U: Now that the report has been released and a series of recommendations made, what effect will these have on the market? Do you think confidence will return? Will lending become even tighter with more hoops for purchasers to jump through?

LT: Now that the commission has been finalised and the recommendations made, buyers have clearly started to feel more at ease as they start to see some consistency returning to the finance sector. There may be some precariousness ahead of the federal election, this is always the case pre-election, but we have already seen confidence begin to build back up and it will continue to do so in the coming months.

In terms of lending I don’t think there’s any more hoops purchasers can jump through, and the commissioner was cognisant of this by not making the recommendation for further lending restrictions. If anything I think the recommendation to implement a regulator that oversees APRA will see it loosen its control over banks and we will hopefully see a softening of restrictions later in the year.

U: How much do you think the upcoming Federal election and both parties' policies will focus around the recommendations from the report? 

LT: It would be political suicide for either party to go against the recommendations of the report, and given the current state of the market and all the changes that have occurred over the past few years there’s no doubt it will be a platform of the election for both parties. Affordability, housing supply, liveability and credit supply are the main issues on many people’s minds at the moment, and each party will need to address these concerns.

U: Which cross-section of the market do you think will most benefit from the banking shake up?

LT: Hopefully we will start to see local investors and second home buyers start to secure credit more easily, which will in turn decrease the pressure on the rental market by providing more supply. Until now this sector has been scrutinised by banks and passed up in favour of first home buyers or wealthy downsizers, which has seen a huge gap in the market and a decrease in supply that caters to this integral middle market.

U: Looking ahead what are your predictions over the next 12 months for the market?

LT: We will start to see a return to the norm as confidence from buyers continues to firm, which will be accompanied by more buying activity and a steady (if minimal)  increase in house prices. Savvy developers will continue to focus on lifestyle-driven projects that provide buyers an all-inclusive living experience with retail and hospitality venues either incorporated within the building or close by. There will also be an increase in developers looking outside the residential market with a rise in retirement and independent living.
</body></html>

Laurence Dragomir

Marshall White's Leonard Teplin on the Banking Royal Commission wash up

<html><body>
Melbourne's off-the-plan apartment market was put to the test last year with July 1 heralding the end of off-the-plan stamp duty savings for investors, with the concession instead redirected towards first home buyers. Additionally, investors were slugged with a tax on vacant properties, while developers were limited to 50% of sales to foreign buyers.

This, combined with tightened lending conditions, raised significant concerns among industry professionals, with many predicting a severe slow-down in off-the-plan sales and even more competition focused at traditional homes, driving prices even further out of reach.

Six months on, Marshall White Projects has instead seen an increase in sales and some unexpectedly positive consequences of the July 1 changes, which include:

<ul>
<li>Sales in the local market have increased by almost 40% (39.3%)</li>
	<li>Total (local and foreign) sales have increased by a similar amount, 38.7%</li>
	<li>The average sale price has only marginally increased to $885,106 (up 1.9%)</li>
	<li>The number of empty nesters, or those looking to spend in excess of $1.5 M for an off the plan purchase of an apartment or townhouse, has increased by 28%</li>
</ul>
Urban.com.au asked Marshall White Director Leonard Teplin for further insight into specific factors that have had an effect on the apartment market in the last six months.

According to Teplin, 2017 was the year of the downsizer, with a growing acceptance of apartment living in Australia resulting in less reliance on foreign investment. 

Looking ahead to 2018, Teplin notes developers will need to continue to evolve their strategy to accommodate growing demand for off-the-plan.

Urban.com.au: In this new climate, in your opinion what criteria is necessary to ensure a successful project?

Leonard Teplin: In a sea of competition, each developer needs to consider “what’s my point of difference?”

Location is and will always be key – purchasers want to be close to public transport, main roads, shops, parks and within a good school zone.

Beyond that, a successful project today needs to be focused on quality design. Abundant natural light in all rooms, efficient use of space and high-quality fittings and fixtures are essential in this new era. Purchasers will be drawn to projects designed by well-known and trusted architects, that stand apart from every other project on the street.

UM: What have been the most successful projects that Marshall White have been involved in in the past 6 months?

LT: A recent boutique development, Oakdon on Scott Grove in Glen Iris sold 31 penthouse-sized luxury apartments in just six weeks at an average rate of $11,300 per sqm. Designed by Conrad Architects with a prime position on the corner of High Street, it was incredibly popular with local owner-occupiers, especially downsizers.

Another highly successful development was Ashton Park at 338 Burwood Hwy, Burwood which saw 20 townhomes priced from $945,000 to $1,049,5000 sold in two stages of three weeks each.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/marshall_white_projects.jpg" rel="gallery-all" title="Oakdon, Glen Iris and Ashton Park, Burwood were recent successes for Marshall White. Images : Marshall White Projects "><img alt="" class="image-article-full-width-580px" height="169" src="/sites/urban.melbourne/files/styles/article_full_width_580px/public/pictures/article-images/marshall_white_projects.jpg?itok=VtwRJGf9" title="Oakdon, Glen Iris and Ashton Park, Burwood were recent successes for Marshall White. Images : Marshall White Projects " width="580"></a>

<figcaption>Oakdon, Glen Iris and Ashton Park, Burwood were recent successes for Marshall White. Images : Marshall White Projects</figcaption></figure>UM: There has been a trend of investor-driven stock particularly in the CBD and Southbank. Do you expect there will be a shift in these areas to more owner-occupier product such as <a href="https://maps.google.com/?q=35+Spring+Street&amp;entry=gmail&amp;source=g">35 Spring Street</a>, 85 Spring Street and Collins Arch for example?

LT: While these aren’t areas Marshall White works within, there does certainly seem to be a trend emerging that indicates that’s the case.

UM: Do you believe this shift to the down-sizer is a correction i.e. balancing the market out or is it cyclical with investment apartments set to make a comeback at some point?

LT: The shift to down-sizers is due to a variety of factors, not just limited to the recent drop in investor activity. While 2017 did see an unprecedented increase in down-sizer buyers, these changes have been many years in the making as apartments lose their reputation as ‘dog-boxes’ and start to become synonymous with luxury living. This kind of shift isn’t cyclical, but rather evidence of a long-term change in the way people are perceiving off-the-plan apartments in general.

Given the demand for high-quality apartments, not just from down-sizers but well-off young professionals and families – even the investors who are still in the market are keen to secure a quality apartment that will appeal to families and rent well into the future - it seems unlikely developers will make another pivot and return to building smaller investor-style stock anytime soon.

UM: Part of the decrease in the demand for investment apartment sales has been the stricter foreign lending criteria and changes in stamp duty. Do you believe developers need to reconsider how this type of apartment is designed and marketed? And do you think the new Better Apartment Standards have a role in making them a more attractive proposition to potential buyers?

LT: The Better Apartment Standards indicate a bare minimum requirement for apartments, any developer wanting to succeed in Melbourne’s competitive landscape will need to be creating well above the bare minimum.

The demand for the investor-style stock is too small and too subject to market conditions to be a focus for developers in 2018 and beyond. It was our experience that many if not all of the top tier and quality boutique developers were already developing projects that exceeded these standards well before they took effect.
</body></html>

Leonard Teplin

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Leonard Teplin

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News