THE PROPERTY DEVELOPMENT REVIEW
Market-wise, what are you forecasting for the remainder of 2023 and how will increased lending costs impact the various markets? In the last few days we’ve some good indication of long-term interest rates easing. This should provide some increased confidence to the market and we should see some mum and dad investors and owner occupiers returning. When we combine this with our extremely limited stock, we predict price increases by Q2 2024 followed by some strong off the plan selling.
Which market sectors or asset types do you anticipate being most in demand over the next 6-12 months?
We are still very under supplied in small warehouses. We also see a need for small office strata (100-500m2) and of course affordable medium and high density residential. Throughout the year, have you noticed a shift in time on market for development sites? If so, how is this shift affecting your approach to sales campaigns? Earlier in the year developers were being a bit more picky, however confidence has definitely returned with developers already being far more bullish in acquiring sites. Our last 2 high profile sites have seen over 100 enquiries on each.
What advice do you have for any prospective developers in the current climate?
In our market, they seem very fixated on the construction cost blowouts, however also need to consider the above increased in Gross realisation. We’ve seen a few miss out on sites over a relatively small percentage of the sale price then spend a significant time looking at other sites, ending up with an inferior project. They need to be a bit more confident of the good times coming and the lack of good sites available.
August / September 2023 – 23
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