The Development Digest | 15 November 2024

We are pleased to provide you with another edition of The Development Digest.

This update will cover:

• Forthcoming APDA Event – New Victorian Planning Polices
• JLL Residential Reflections Research Report
• Article of Interest – Green Star certified apartments
• Headlines of the Week
• Current & Forthcoming JLL Development Site Opportunities

Forthcoming APDA Event – New Victorian Planning Polices

We are delighted to be sponsoring another upcoming event being hosted by the APDA. The event will be covering significant proposed planning policy changes, which are predicted to have a significant impact on the development landscape.

The panel will see insightful discussions and insights shared by Colleen Peterson (Department of Transport and planning and Head of State Planning), Marc Cini (Hallmarc Group) and Mick Meyer (Urbis), alongside Romy Davidov (Best Hooper Lawyers) who will be moderating the event.

Details of the event are as follows and should you wish to secure a discounted ticket today, please reach out to the JLL team.

JLL Residential Reflections Research Report

We are delighted to share with you another edition of the fortnightly JLL Residential Reflections research piece prepared by our leading JLL Research team and managed by Leigh Warner and his team.

Please see below this issue’s highlights, with the full report available upon request.

Article of Interest - Green Building Council of Australia’s new pathway to guide developers in delivering Green Star-certified apartments 

Recently published in the Architecture & Design paper, the Green Building Council of Australia has introduced the Green Star Buildings – Apartments Pathway, offering unit-level certification for sustainable apartments within Green Star-rated projects, addressing the growing demand for healthier, energy-efficient living spaces without additional costs to developers. A summary of the article is provided below:

1. The Green Building Council of Australia (GBCA) has released the Green Star Buildings – Apartments Pathway, enabling unit-level certification for apartments within Green Star Buildings rated projects.
2. The new pathway addresses the growing demand for healthier, energy-efficient apartments and provides independent verification of individual apartments meeting Green Star standards.
3. The certification process is streamlined and included in the existing Green Star Buildings registration fee, with no additional costs for developers.
4. The pathway is optional for Class 2 multi-unit residential projects, excluding student accommodation and hotels, and projects registered from January 1, 2023, targeting 5 or 6 Star ratings must be fully electric and powered by renewable energy.

The Green Star Buildings – Apartments Pathway will be launched to the broader industry and consumers in early 2025, with six early access partners collaborating with GBCA to shape the pathway.

Headlines of the Week

The AFR – Housing market braces for Trump rate gyrations

• The national auction clearance rate rose slightly to 65.8% over the past week, but remains below average for the spring selling season.
• About 2820 auctions were held in the past week, the second-highest volume through the spring season to date, with over 2900 auctions expected in the coming week.

The AFR – Foreign Student Caps to barely affect rents

• New research suggests that mandatory caps on new overseas students will lead to lower rents in inner-city areas by only about $5 a week, with zero to no effect elsewhere.
• The Labor policy to cap new international student entries to 270,000 is expected to reduce rents by 0.6% and have almost zero impact on availability.

The AFR – Private Credit key for housing reform

• A survey of 67 industry professionals found that 72% of respondents are now sourcing loans from non-bank lenders, with 95% agreeing that higher costs are offset by faster decision-making and more flexible terms.
• The private credit sector has grown at a 23% compound annual growth rate between 2015 and 2023, expanding from less than $50 billion to be now worth $200 billion.

The AFR – Caps threaten student digs projects

• The federal government's plan to cap overseas student numbers at 270,000 next year is causing universities to reconsider planned student accommodation projects.
• Richard Crookes Construction, which has a $15 billion pipeline of projects, reported a net after-tax loss of $21 million last year but recovered to a $2 million profit in the final six months.

The AFR – Chinese property giant owed 1.4bill by Dyldam

• Beijing Capital Land, a major Chinese state-owned real estate firm, claims it is owed more than $1.4 billion by failed Sydney developer Dyldam, which collapsed in 2020.
• When Dyldam collapsed, creditors of 22 of its subsidiaries claimed they were owed $510 million, but investigations found there were hundreds of subsidiaries in the group.

The AFR – How a year long wait for regulators worsens the housing crisis

• A Thai property developer waited nearly 12 months for regulatory approvals to buy 12 Lendlease housing estates across Australia, potentially deterring other foreign developers and worsening the housing shortage.
• The $1.1 billion joint venture aims to deliver about 28,000 lo        ts, with Bangkok-based Supalai injecting about $600 million of equity into the deal.

The AFR – Build-to-rent surging on

• There is surging activity in the build-to-rent sector as developers offer sites and seek capital partners for projects.
• Examples include Hines selling three Melbourne sites potentially worth $110-120 million, Third.i Group seeking a backer for a 476-apartment project in Sydney, and GEON offering the first stage of a 1,000+ home development in Brisbane.

The AFR – Rates could stay on hold until 2026 analysts

• Analysts warn that the Reserve Bank of Australia may keep interest rates on hold until 2026 due to potential inflationary pressures from Donald Trump's economic policies.
• Financial markets have pushed back expectations for the first rate cut to September 2025, while some analysts see a 25-50% chance of no rate cuts in 2025.

The AFR – Developers hesitate to build on high density housing sites

• NSW government rezoning reforms could unlock enough land for 5,700 new apartments across Sydney's north shore, but developers are hesitating due to concerns about local council opposition.
• While some sites are being purchased, over 170,000 square meters of land near train stations remains on the market, with potential to deliver around 4,800 homes

Current JLL Development Site Opportunities

We are proud to be handling some of the most exciting development offerings in the market, with the final on-market campaigns for the year now launched.

Should you wish to receive additional information or if you have a specific requirement or mandate you would like to discuss, please contact any member of the JLL team for a confidential discussion.

We hope you have enjoyed another edition of The Development Digest. Please contact our team if there is anything we can assist you with.

Jesse