12 Apr The Modern Day Ark + Younger Millennials on the rise + The $30M Gold Coast Nightmare and more!
We’re back with Kieran Clair and Kevin Turner as they discuss interesting stories in the real estate industry this week.
Our first story tackles a future-proof ark that can run completely off the grid. A company in Florida has created a 75-foot yacht called the Arkup. Equipped to run on shore power or the sun, it combines a luxury yacht, a waterfront villa, and self-sustainability into a glamorous–and sturdy–floating-motoring home.
The company reports that the Arkup can withstand a Category Four hurricane and pro7vide a grand lifestyle almost anywhere there’s water. It can cruise to new locations, tie up at a dock, and hydraulically rise and stand above the water.
Arkup offers several options for prospective guests or owners. They can rent it for $6,000 a night for 8 guests or purchase a villa with prices ranging from $5.5 million to $12 million.
For our second story, we explore the effects divorce and separation has had on the apartment market. One of Queensland’s biggest strata management firms, Archers the Strata Professionals found that divorce and separation have become the new drivers for the unit market.
Partner Grant Misfud says that lifestyle and affordability were the reasons why couples preferred units after a breakup. Women would look for two-bedroom apartments, while men would look for single-bedroom apartments with a study, as it was more likely for children of a divorce to stay with the mother.
They also saw that it was more common to have children in apartments, with the figures rising 56% in the five years to 2016.
“Most find it works for them financially and offers them a lifestyle choice because unlike a home, the apartment requires little maintenance. If they are renting, they can also often secure a furnished property.
They can be closer to work and public transport and they don’t have to spend the weekend tending to the garden. Divorced and separated parents can also embrace the strata community lifestyle and they take comfort from knowing that they have neighbors close by in their complex, which makes them feel safe.
Our third story deals with young millennials and their rising home buying power. The high cost of rent and the lack of affordable housing inventory is sending adult children back to their parents’ homes. While it may be inconvenient, this allows younger potential buyers to find their financial footing. In fact, younger millennials are the most likely to move directly out of their parents’ homes and into homeownership–skipping renting altogether.
Millennials as a whole accounted for 37% of all buyers, making them the most active generation of buyers for the sixth consecutive year. 2019 is the first year the report separated younger and older millennials. The separation was necessary since younger millennials now account for a larger buying share than the silent generation.
“Older millennials are now entering the prime earning stages of their careers, and the size and costs of their homes reflect this. On the other hand, younger millennials are purchasing the least expensive and smallest homes they can find, meaning they face the greatest challenge in finding homes they can afford.
Student loan debt remains a barrier to homeownership as older millennials and Gen Xers carry the highest amount of student loan debt. Younger millennials rank second.
While the majority of buyers in all age groups are married couples, single buyers and unmarried couples continue to make a mark on the real estate market.
For our fourth story, we explore the $30 million Gold Coast nightmare. Metres from the golden sands of Surfers Paradise beach lies a conspicuously empty parcel of land in the middle of high-rises on the Esplanade.
It has lain empty for decades, with its wealthy owner doing nothing to develop it. It is reportedly owned by Sultan Hassanal Bolkiah, the Sultan of Brunei. The property is now worth around $30 million, double the price the Brunei Investment Agency paid for it 22 years ago.
The mayor of Gold Coast, Tom Tate said that he would continue to liaise with the Sultan of Brunei to see how the property could best be utilized for the benefit of the Gold Coast community. He has also reportedly sent an ultimatum to the Sultan in 2012 saying “I think he’s had long enough to do something with it. How about bequeathing it to the council and I’ll dedicate the park in his honour? It’s a win for him. The Sultan has vast holdings around the world so he probably doesn’t even know he owns it.”
The future remains uncertain for the property.
Our last story for the week deals with Sydney’s better house prices. In the March 2019 report by Domain.com.au, Sydney defied the national trend of rising rents and became the only capital city to record annual falls for houses and units.
We have also compiled snippets from their report here:
“Sydney no longer remains the most expensive capital to rent a house, as the title now belongs to Canberra.
Rental conditions have started to favor tenants, with the availability of advertised stock hitting an all time high. Towers are out and rents go down.
For a record first, it is also now cheaper to rent in Melbourne than in Hobart. This is due to rent prices remaining steady in Melbourne and surging in Hobart over the quarter. But the rental market could still tighten further as investor activity retreats, dwelling approvals fall, and apartment completions slow.
Rents and yields are rising in Brisbane with the markets slowly changing to favor landlords. Tenants will find the rental market is now entering new territory. Not only will they start to find competition to secure a lease has increased, the choice of available rental stock will be narrowing.
Gross rental yields could attract investor activity in Adelaide, particularly given the lower purchasing cost relative to the eastern seaboard.
Perth remains the most affordable capital city to rent a house or unit. However, after a prolonged period of favourable conditions for tenants we could be on the verge of a turnaround.
In two short years, house rents in Hobart have gone from the most affordable to surpassing Adelaide, Perth, Brisbane and Melbourne. The cost of purchasing a home has jumped, locking many out of homeownership and keeping them in rentals.
Canberra has experienced the strongest annual growth in rents of all the capital cities and remains the most expensive capital city to rent a house. There appears to be no reprieve in sight for tenants given the pace of rent rises is increasing. Tenants have been faced with three-and-a-half-years of growing rental prices, stretching affordability by outpacing wages growth.
Darwin experienced the greatest rental stability the city has seen in a number of years. House rents have now held flat for three consecutive quarters and unit rents for four consecutive quarters. Although house rents made the steepest annual fall of all the capital cities, the depth of falls has eased relative to last year, while units held steady.”