OPINION: THE significant constraints on the supply of labour and materials caused by COVID are unlikely to ease any time soon.
This means that construction timeframes will continue to be stretched, potentially increasing the attractiveness of established housing, particularly in Western Australia where the constraints have been compounded by closed borders.
Across the eastern seaboard, we have been seeing an uptick in demand for new residential sales, particularly in the outer suburban rings where demand for house and land, and land only, is strong. However we are now starting to see sentiments and demand turn, particularly in Sydney after a buoyant run on residential property.
Developers have been reporting record sales prices despite the authority delays, rising costs and interest rate rises on the horizon. We may start to see state differences emerge due to the impact of interstate migration in the next 12 – 24 months and an increased focus on sustainable developments across the nation.
The desire to realise the great Australian dream of owning property is not changing, but the property the subject of that dream is shifting as owners and occupiers seek a ‘live, work and play’ lifestyle at affordable prices.
As developers pursue opportunities in a supply constrained market and landowners look to unlock unrealised development potential in their sites, mixed use developments are on the rise – and not just building apartments on top of a desirable retail offering (although there is still plenty of that).
New developments are considering how best to provide amenity to residents, particularly in the wake of COVID-19, exploring working from home hubs, outdoor space, complementary retail and office space in the area.
However, it is the airspace above structures that is currently receiving significant attention. As traditional development sites become scarce, particularly in urban areas, developers are looking for opportunities to develop above existing structures (such as transport hubs, churches, supermarkets and commercial buildings).
Landowners are the beneficiary (and often instigator) of this trend as they either dispose of these air rights or enter into co-venture arrangements with developers for the redevelopment of their existing asset and the future asset above.
From early planning and project delivery to design, social and environmental considerations, and title structures, there are a range of challenges unique to every development which must be identified and managed to ensure the project’s successful implementation.
Having a number of stakeholders with differing interests co-locating within the one development can lead to a number of future issues and disputes. Careful consideration must be given at an early stage around how the development is intended to work in practice, with governance and management structures with appropriate rights documented.
By Natalie Bryant, partner, Corrs Chambers Westgarth.
