'We’re secretly trying to get people addicted’: Developers weigh in on transformational change for Brisbane

Brisbane’s inner city is on the cusp of a transformation.

Changes are afoot that will make it a lifestyle destination for generations to come and residential developers are working together to keep cranes in the skies to meet demand.

While the long-term forecast is bright, support for new residential developments in the next few years will be critical. There is a need to ensure the right mix of housing stock is being built at a time when finance for high-rise apartments can no longer rely on an investor market.

The prestige owner-occupier apartment market has grown during the recent pandemic.

With international travel off the cards, it has led many people to instead invest in a home of distinction, and the latest Prime Global Cities Index by Knight Frank has Brisbane ranked 23rd in the world for luxury property price growth.

Yet for high-density projects, the drop off in the bread and butter investor market, traditionally comprising 70 per cent of buyers, has prompted industry stakeholders to call for an urgent increase in support for the Build-to-Rent model of development to address Australia’s housing undersupply and help Australia’s economic recovery.

Consolidated Properties Group chairman Don O’Rorke said the inner city was looking forward to boom conditions in 2020 with an undersupply of units, coupled with population and employment growth.

“Australia, Queensland and Brisbane look even more attractive given how well our health response has been to the crisis,” Mr O’Rorke said. “We’re going to see very strong renewed interest in the Brisbane apartment market because of this, the hangover of 2019 and just how good we look now.

“What that means is as a city, we need to be preparing for the onslaught of demand by having approved appropriate projects ready to bring to market.”

Seymour Group executive chairman Kevin Seymour believes part of that preparation lies in supporting initiatives such as the Build-to-Rent scheme.

“Mirvac and Frasers (Property Group) have got this right idea on the Build-to-Rent (scheme) and that should be supported,” Mr Seymour said.

“Not everyone can afford to buy a unit, so I think this is a great innovation. It’s a way to get into a brand new unit, close to the city, with good public transport for people who are working in or near the city.”

Mr Seymour said record-low interest rates would also help to kickstart development but Brisbane needed to go further.

“We need to set ourselves apart. We have a subtropical climate and the more we can green the city with shade trees and green buildings is highly desirable,” Mr Seymour said.

“Brisbane City Council is doing this already by giving benefits to developers who can demonstrate they have a green amenity in their developments. Then we need to be able to convince people to come to Queensland from the southern states. We need to increase our population and we need to be able to prove to people that it’s cheaper to live and build in Queensland. I can’t see overseas migration increasing significantly in the next couple of years so if we want to kickstart our growth we have to make it attractive to come here from other states.”

It’s partly cloudy in Melbourne today, but Kokoda Property founder Mark Stevens is looking north to Brisbane where the city and the property market is expecting mostly sunny conditions.

“You certainly have the climate, which I don’t want to underestimate,” Mr Stevens said.

“The quality of life that Brisbane offers is very different to Melbourne. It’s a very outdoors lifestyle and the weather allows that. It promotes a really healthy way of living.”

Kokoda works in the high-density multiresidential market and has completed more than 100 projects in Melbourne, but after moving to Brisbane five years ago, the company’s development activity is now evenly split between the two cities, building apartments for the rental and owner-occupier markets in Milton and Newstead.

“The amount of infrastructure that the government has invested in really allows for a great lifestyle. You have the entertainment precincts, the South Brisbane cultural precinct, Howard Smith Wharves. You seem so bolted to the side of the river, there’s an opportunity for a significant increase in city living. It’s no surprise that you’ve got a higher intake of interstate migrants.”

Queensland’s net interstate migration is traditionally the highest in the country (that’s the number of people moving in to Queensland after you’ve subtracted the number of Queenslanders who leave over the same period). In the 2018-19 financial year, Australian Bureau of Statistics figures show that net gain was 22,800 new Queenslanders.

During Melbourne’s first COVID-19 outbreak, 2100 Melburnians moved to Queensland, ABS data for the June quarter shows.

“You have an amazing transport route from the city to the airport, and a second runway, and you are going to have the largest casino in Australia and underpinning all this is the cost of living and accommodation that isn’t what it is in the southern states,” Mr Stevens said.

Cavcorp managing director Damien Cavallucci said the past two years has changed how the rest of the country views Brisbane’s inner city, which is now home to some of the top restaurants in the country, and developers who place a premium on wellness will do well in attracting interstate as well as local buyers.

“We are trying secretly to get people addicted to the buildings,” he said of his Newstead and Teneriffe developments.

“Once they’re addicted to the rooftop, and those magnesium saunas that help you get the best night’s sleep, you don’t want to go anywhere else.”

Frank Developments managing director Frank Licastro has spent time this year working out what features apartment owners in the inner city are going to value in the years to come.

“It’s the four-bedders that are driving the market for us, with people wanting to work from home,” Mr Licastro said.

“I’ve had a think over that down time we had and was trying to come up with a few other selling points in the apartments with filtration systems to try to minimise the spread of the virus, to come up with some other ways to give purchasers more comfort. There aren’t a lot of places to go but there’s a certain type of filter that we’re now looking at to put in the air conditioners and we’ve had great feedback on it.”

Mr O’Rorke said there will be a lack of cranes in Brisbane’s immediate future but as the city leverages its natural advantages and the raft of new developments already under construction, the cranes should well and truly return toward the end of 2021.

JGL Properties founder John Livingstone said the next two years will see the most significant transformational change in Brisbane’s inner city led by projects including Cross River Rail, the fast-tracking of Green Bridges throughout the inner-city, the ongoing Queens Wharf development and Brisbane’s second airport runway.

“For all of us actively participating it’s going to be quite amazing,” Mr Livingstone said.

“The prestige market particularly is accelerating and that’s why we’re active and investing in the Brisbane metro region doing good quality projects because we believe in this vision of the future.”

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