It goes without saying that for the past twelve months the Australian property and construction industry has been booming. In many parts of the country, this can be attributed to various state and federal government stimuli including the national HomeBuilder grant that was introduced in June 2020 as part of the COVID-19 economic recovery response.
However new purchasers who no longer qualify for these grants do not seem disheartened. With record-low interest rates, forecast price growth and increasing rental yields, the current market landscape and conditions are favourable, and purchasers remain keen to capitalise on these conditions. So at least for the remainder of 2021, the construction boom doesn’t look like it’s going to let up.
Cedar Woods Managing Director Nathan Blackburne said the demand landscape across the nation was bucking typical trends.
“Traditionally when one market is firing, another market will be lagging but right now we are experiencing moderate or strong conditions across all the states we operate in, which is a significant departure from what we have seen over the last decade”, Mr Blackburne said.
“It is really pleasing to see that the desire to enter the property market has outlived the stimulus and that buyers across the country can see buying conditions are still very favourable.”
Cedar Woods itself is on the hunt for investments that will bolster its national portfolio of development projects and drive future growth. Mr Blackburne said navigating economic uncertainties was the new norm when it comes to making investment decisions.
“While it is a less favourable time for us to acquire new sites than it was twelve months ago, we still have a positive outlook and believe there are sound investment opportunities available”, Mr Blackburne said.
“On one hand with greater competition, we are needing to sharpen our pencil but on the other hand economic uncertainty is necessitating greater buffers with more stress testing and contingency planning.”
Across the Cedar Woods national portfolio construction of new stages is ramping up to meet demand.
Patrick Archer, Cedar Woods’ Chief Operating Officer said that the South Australian projects are currently the best performers in the Company’s portfolio.
“Our two active projects in SA have been going gangbusters. There’s Fletcher’s Slip, a harborside community of townhouses and apartments in Port Adelaide; and Glenside, where we have just sold out of the Botanica apartments.” Mr Archer said.
“It’s important to note that government stimulus didn’t apply to any of our South Australian products but regardless we have seen tremendous growth and currently we’re seeing excellent interest in our Glenside Monarch apartments which will launch imminently.”
“Buyers are picking up on the momentum being set across the country and are spurred on, knowing they can trust in a well-established company with Cedar Woods.”
Cedar Woods’ projects in Queensland also largely fell out of scope for the government stimulus but Mr Archer insists the outlook is good.
“The Queensland market had been fairly flat and hadn’t seen the price boosts that New South Wales and Victoria had over the last four or five years, but now enquiries at our projects are really strong, and we expect our Ellendale and Greville projects that are currently under construction, to continue performing well,” Mr Archer said.
Victoria’s recent two-week lockdown did nothing to slow down sales at Cedar Woods’ projects with buyers committing to their purchase despite COVID-19 uncertainties.
“Mason Quarter, our project in Wollert, is seeing lots of demand. We have both land and townhouse offerings, in a great location with lots of amenities that are appealing to many purchasers,” Mr Archer said.
With Lincoln apartments at Williams Landing recently selling out and over half the Aster apartment products at Jackson Green already sold, Mr Archer said both investors and owner occupiers are snapping up the apartment products.
“Investors know that the borders will eventually open again and that when they do, there will be an influx of international students coming back, especially into Victoria. Therefore, investing in an apartment that can be rented out when the market recovers makes a lot of sense,” Mr Archer said.
Cedar Woods’ Western Australian projects benefited most from the government stimulus. Ben Rosser, WA State Manager said that Western Australia has now naturally experienced a slowdown, but not a stop in growth since the grants ended.
“Construction has just commenced on Bushmead South, the highly anticipated southern extension of our hugely popular Bushmead estate with over 50% of the first release selling in only a few weeks and 500 registrations of interest being received for the 450 lots.”
“We are also releasing a new precinct in Harrisdale Green in collaboration with TERRACE Homes and Nicheliving called Greenlink Mews where we will be offering 21, single and double story homes at an affordable price. These homes provide a real opportunity for first home buyers and downsizers to get their hands on a brand-new home in a tough market.”
Cedar Woods’ diversified product mix and geographic spread positions the Company well to ride the property and construction boom with customers continuing to seek the high-quality products that Cedar Woods offers.