Q1-17 - Development Markets Wrap Up
Development Markets Wrap Up - Q1, 2017
Australian development property remains highly active with a in excess of $1.1 billion of transactions in the first quarter of 2017, in line with the first quarter of last year but down 26% from $1.5 billion last quarter.
The actual number of transactions reached a new high of 34 for the quarter up from 21 last quarter and 30 in the 1st quarter last year. The statistics show the median asset price fell to $28M down from $40 million last quarter and $30 million from the same quarter last year.
VIC accounted for over half of the transactions this quarter, followed by NSW.
What does this mean ?
The majority of Development sales this quarter were for residential development purposes with large scale vacant urban land in Victoria comprising a large proportion of sales.
Amongst the major purchasers this quarter was Acqualand, Growland and PolyGroup (all offshore buyers) as well Stockland, Mirvac and Central Equity.
The consistent acquisition of development projects amidst tightening credit conditions and surging house prices suggests that most residential developers are yet to form a view that there is an over supply of dwellings or that buyer demand is likely to soften.
The largest transaction this quarter was the purchase by Romeciti of a 10,000sqm