Developer Interest in High-Density Apartments Plummets

The market for residential developments in Australia is under duress.

Last year, total residential site sales in the country dropped to $4 billion, close to 65% lower than its 2014 peak of $11.3 billion, according to a report Tuesday from Knight Frank.

In addition, building approvals for new apartments sank below 40,000 in 2020 for the first time since 2013, the data showed. The pipeline for such units is set to plummet over the next three years, with 86,400 set to be completed by 2024, compared to the 135,300 that came online between 2018 and 2020.

Low-density developments are faring better, the data showed. Sales for those sites jumped 23.1% last year.

“Developers across the country are continuing to shift their focus and risk toward boutique apartment developments and diversifying their portfolios with low-density sites,” Shayne Harris, Knight Frank’s head of residential for Knight Frank’s Australia offices, said in the report.

Meanwhile, interest from foreign investors plunged in 2020, the data showed. There was less than $500 million of foreign investment last year, down more than 90% from its 2016 peak of $5.2 billion. It was the first time investment from foreign developers has dropped under $1 billion since 2012.

Because of the Covid-19 pandemic, Australia closed its borders to foreign travel, meaning investors were not able to scout sites as they normally would. That’s kept many from committing to new acquisitions.

“Although we’re in uncertain times, we can’t underestimate the impact investors will have on the apartment market as they start to return across the country,” Mr. Harris said. “It’s only time before they’re lured back to the new apartment market given the cheap finance, a thinning new supply pipeline and lowered residential vacancy rates.”

Some experts also expect Australia is on the precipice of a boom in pent-up foreign demand as soon as borders open and immigration normalises, Mansion Global has reported.

Close to half of sales of residential development sites last year were in New South Wales, which had nearly $2 billion in deals in 2020, according to the Knight Frank report. Victoria followed, with just under $1.3 billion in transactions.

The Gold Coast defied the trend away from high-density developments, registering a 238% increase in site sales in 2020, the report found. At the same time, sales of such sites in Brisbane itself dropped 86%.

A unique home on the outskirts of London within a former chapel that had a starring role in the hit TV series “Call the Midwife” is on the rental market for £39,000 (US$48,568) per month.

The four-bedroom home was carved out of St Joseph’s Missionary College, which, founded in 1871, trained young Catholic priests to work as missionaries abroad, according to listing agency Dexters.

Before its conversion to a lavish private residence, the college’s chapel had a starring role as nursing convent Nonnatus House in the first two seasons of the feel-good BBC show, which focuses on a church-funded midwifery in the 1950s and 1960s, based on the bestselling memoirs of Jennifer Worth, a former London nurse.

When the historic college was sold for redevelopment in 2013, and production of “Call The Midwife” transferred to a studio set, the chapel—along with the rest of the building—was born again.

The home is part of the former St Joseph’s Missionary College, now a gated development.
Dexters

Still going by the apt moniker of the Chapel, the home is the centrepiece of the site, which is now a gated development known as St Joseph’s Gate, said Dexters, which brought the home to the market in late February.

The home spans almost 10,000 square feet and “blends historic architecture, soaring open plan living spaces and every possible contemporary comfort,” said Andy Christophi, director of Dexters Finchley.

The chapel’s nave is now the dramatic heart of the home, complete with a 45-foot high vaulted timber ceiling.

The vast open-plan area—which also has columns and gothic-style arches—has a handcrafted kitchen, temperature-controlled wine storage, a curved living area with Victorian windows and enough space to easily host 30 at a dinner table, the listing said.

Above, a mezzanine bedroom has been constructed to appear as though floating above the main living area below.

The home also has a gym, a spa area with a sauna and steam room, and a media room.

“Perfect for a family that loves to entertain, its use as a filming location…makes it particularly iconic, and means you’ll never run out of dinner party conversation,” Christophi said.

Developer Interest in High-Density Apartments Plummets

With foreign buyers staying on their own shores, local residential development suffers.

The four-bedroom home “blends historic architecture, soaring open-plan living spaces and every possible contemporary comfort”