Affordability concerns of buyers and feasibility concerns of developers pushed the share of site sales for medium-density sites up to 13.8 per cent of total sales value from 6.3 per cent a year earlier, the real estate agent's Australian Residential Development Review - H2 2017 report showed.
"Much of the capital growth being gained in Greater Sydney and Greater Melbourne is where many first-time buyers are now priced out of the single-dwelling, low-density market, with a clear trend emerging towards medium-density housing," Knight Frank's Australia head of residential research, Michelle Ciesielski, said.
"From a development perspective, this product offers developers less stringent financing practices by the major lending institutions. The less risk involved in not going vertical in construction allows the staged development to be more controlled. It allows the developer to kick off construction earlier, rather than waiting to achieve a high portion of sales within the residential tower project."
The report also shows the proportion of residential site sales to foreign investors – defined as a buyer with any foreign interest associated with the sale – rose from 15 per cent in 2013 to 63 per cent in 2017. The proportion increased in every market considered except the Gold Coast, where the concentration went backwards, to 32 per cent from 52 per cent.
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