Professor, Macquarie Law School and strata consultant. Author, 'Strata Title Property Rights: Private governance of multi-owned properties' (Routledge, 2017)
And soon developers won't even be making money on luxury apartments for wealthy downsizers. If the #development and #strata industries don't stop exploiting owners with uncommercial and inequitable body corporate contracts and shared facilities costs in SMSs, wealthy downsizers with common sense will avoid these apartments like the plague. Strata Community Association Australasia #stratamanagement #BMC #strata #apartments
Talking Sense on Housing | CEO Intrapac Property / Past President UDIA (National) / Director Lightning BB / YPO
Robert Harley in the The Australian Financial Review with an excellent piece on why relatively few new homes are being built in apartment form. As Rob correctly points out, #viability or #feasibiilty is the main issue for apartment projects, not planning as some believe it. (The opposite is true for #greenfields and larger #townhouse developments, where navigating the myriad of planning issues remains a much bigger problem than feasibility.) Historically, most infill apartment projects get approved through the planning system. Recent announcements to streamline the process and increase certainty assist, but not nearly as much as would be needed to make them viable again. Substantial building cost reductions, tax incentives and regulatory reforms are all needed. None of which appear to be on the table (or affordable) currently. The chart from Richard Temlett at Charter Keck Cramer demonstrates the rapid drop off of apartment commencements since FY18 across the country. This is from a combination of: • (much) higher costs • lower productivity • increased design regulation • higher taxes and charges • growing underlying house prices This means that apartment projects remain highly risky and non-feasible across large parts of the country. Most don't appreciate the impact of the apartment "𝘎𝘰𝘭𝘥𝘪𝘭𝘰𝘤𝘬𝘴 𝘡𝘰𝘯𝘦" in the mid-2010s. A perfect combination of: • high demand (from investors, not owner occupiers) • (relatively) low construction costs • easier planning regulations • better incentives • low interest rates Meant large numbers of units could be delivered successfully over that period. Those settings have fundamentally changed, and already baked in challenges - macro and micro - mean we won't revert back any time soon to those Goldilocks conditions. 🤔𝗔𝗶𝗺𝗶𝗻𝗴 𝘁𝗼 𝘂𝗻𝗹𝗼𝗰𝗸 𝗺𝗼𝗿𝗲 𝗮𝗽𝗮𝗿𝘁𝗺𝗲𝗻𝘁 #development 𝗶𝘀 𝗮 𝘄𝗼𝗿𝘁𝗵𝘆 𝗽𝘂𝗿𝘀𝘂𝗶𝘁. 𝗕𝘂𝘁 𝗶𝘁 𝗿𝗲𝗺𝗮𝗶𝗻𝘀 𝗳𝗮𝗿 𝗺𝗼𝗿𝗲 𝗿𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝘁𝗼 𝗹𝗼𝗼𝗸 𝗮𝘁 𝗮𝗹𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝘃𝗲, 𝗳𝗮𝗿 𝗺𝗼𝗿𝗲 𝘃𝗶𝗮𝗯𝗹𝗲 𝘁𝘆𝗽𝗲𝘀 𝗼𝗳 𝗵𝗼𝘂𝘀𝗶𝗻𝗴 𝘁𝗼 𝗱𝗲𝗮𝗹 𝘄𝗶𝘁𝗵 𝘁𝗵𝗲 𝘀𝗵𝗼𝗿𝘁 𝘁𝗼 𝗺𝗶𝗱 𝘁𝗲𝗿𝗺 𝗰𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲 𝘄𝗵𝗶𝗹𝘀𝘁 𝗼𝘁𝗵𝗲𝗿 𝗶𝗻𝗶𝘁𝗶𝗮𝘁𝗶𝘃𝗲𝘀 𝗰𝗮𝗻 𝗵𝗲𝗹𝗽 𝗹𝗼𝗻𝗴𝗲𝗿 𝘁𝗲𝗿𝗺. #housingsupply #housingtargets #housingaccord #familysizedapartments #planningreform #taxreform UDIA Victoria UDIA National UDIA NSW UDIA Queensland Urban Development Institute of Australia (WA) Department of Transport and Planning Victorian Planning Authority Department of Housing, Local Government, Planning and Public Works NSW Department of Planning, Housing and Infrastructure Lendlease Don O'Rorke Ross Elliott Terry Rawnsley Sameer Chopra Peter Tulip Michael Corcoran
Alex McCormick
1mo
Cathy Sherry, developers simply won’t develop if it isn’t commercially viable. Development isn’t a public service. There’s no logical or financial reason for any entity to undertake the risk with a small profit margin as the reward. They will invest elsewhere - in more viable development markets or as non-development entities and participants in other ventures. It’s easy to take shots at developers but they are the ones assuming the risk and of course are doing so to make a profit, The ongoing consequence is that new housing stock won’t be delivered and the housing crisis will continue so long as the population continues to increase. Agree that NSW has (probably) the worst strata framework of the big three states.
Mohammed K.
1mo
Well one thing the article doesn’t take into account is the during the apartment boom in the 2010’s most of the apartments built were terrible in terms of compliance and defects and it’s only now that we are starting to feel the repercussions from taking a ‘light touch’ approach to compliance. Victoria alone has to deal with billions of dollars in defects per year from buildings built during this time and it’s mostly mums and dads that cop the pain. I don’t think it’s possible to interrogate the issues relating to increasing cost of construction without addressing the industry’s culture of non-compliance particularly with class 2 (multi residential buildings). Further to that, the lack of compliance enforcement by state bodies is central to this problem.
Owen McCaffrey
1mo
What is #RatesEquity ? It means that all property in a region pay the same rate of property tax/rates regardless of the zoning or property use. No more targeted rates or developer contributions. A single rate charged on all property between approximately 1.0% and 1.5% annually.Rebates could be provided to elderly low income homeowners and social housing providers and vacant properties could still pay a higher penalty rate
Sam Reece
1mo
It is disappointing that the industry is eroding its own future
You don't seriously believe developers can't put up 85sqm apartments for under 1.3mil per unit do you Cathy?