Australia’s leading residential property developer Crown Group is confident of solid growth in property prices in 2019, buoyed by strong economic fundamentals and a tight supply of new homes and finance for developers.
Crown Group Chairman and Group CEO Iwan Sunito said he expected confidence would win amongst investors and homebuyers in 2019 in Australia, because underlying economic factors were still sound. “This year we will see a resurging confidence in the Australian residential property market,” he said.
“All the fundamentals are there for growth and buyers are looking to the horizon. Firstly, the economy is still very strong – we’ve had world-record consistent economic growth for 28 years, averaging about 3 per cent a year. AUSTRADE Sep 2018
“There is still a lot of wealth in Australia and people have strong employment prospects. The unemployment rate is at a historically low 5 percent (ABS Dec 2018) and we are set for a massive wage growth catch up to match the economic growth we have had consistently for nearly three decades.
“This will deliver a greater degree of buying power. Interest rates are at the lowest they have ever been, with the Reserve Bank leaving the cash rate at 1.5 percent in December 2018 (RB is expected to announce next interest rate tomorrow, 5 Feb 2019), and inflation remains low and steady at 1.8 per cent.”
Mr Sunito said Crown Group had been developing high-end apartment projects in Sydney for 22 years and had seen the costs of development increasing year by year, with no signs of decreasing soon.
“This will continue to put upward pressure on apartment prices,” he said. “The cost of borrowing for developers has gone up, the cost of construction materials is rising and the speed of getting projects off the ground is slower. It is taking longer to meet the demand of presales that the banks require, which adds pressure to holding costs.
“Also, there is limited land available in key Australian cities for development projects, which tightens up supply. As a result, we expect we will see apartment prices continue to climb in 2019 – with single digit growth – for property in the right location and the right development.” Mr Sunito said it was always a good time to buy if people chose the location and development carefully.
“People are always asking me, when is the best time to buy?” he said. “The answer is always the same: 20 years ago. The lesson is that you can never choose the wrong time to buy, if you choose in the right location and buy for the future. The reason is that you can never replace what you can build today at the same price, the cost of building something new will always go up.”
Crown Group is currently completing four major residential apartments projects in Sydney. Residents are preparing to move into the sell-out apartment development Infinity by Crown Group, with its famous looped façade, at Green Square in coming months. The lush and tropical Waterfall by Crown Group is also nearing completion at Waterloo. And construction has started on Mastery by Crown Group, the $500 million Japanese-inspired community being developed with Mitsubishi Jisho Residences at Waterloo. Eastlakes Live, the most exciting new address in the Eastern Suburbs is in planning phases.