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In Australia, demand for high-destiny residential development sites has increased.

The shortage of townhouse developments in Australia is expected to worsen in the coming years. villa

According to the latest research from Knight Frank, building sites suitable for high-density housing continue to be the preferred choice for developers across Australia's major cities.

According to Knight Frank's Australian Residential Construction Review H2 2019, high-density sites accounted for 73.1 percent of all residential development sites sold by volume in the 2018-19 financial year, led by low-density with 20.9 percent.

"Medium-density or townhouse sites, much suited to the downsizing population, and those priced out of the single dwelling market on the East Coast, last reported a 6% share of Australian sites being sold for residential development in 2018-19," says Knight Frank Partner and Head of Residential Research Michelle Ciesielski.

In recent years, there has been a significant increase in the amount of land released for low-density development in major city growth corridors. As a result, we've seen an increase in first-time buyers; however, demand for townhouse stock remains high, especially at the top end of the market.

In the 2018-19 financial year, the total amount of residential site sales reported was $5.1 billion, down 38.2 percent from the previous year, which included sites suitable for low, medium, and high-density development across Australia."

"We've recently seen a pick-up in off-market construction site operation in Sydney for quality sites," says Knight Frank Director of NSW Metro Site Sales Adam Bodon.

Many construction site sales are being structured to settle over 18-24 months, in line with capital value growth forecasts.

"The stringent financing requirement for investors has now been loosened," Ms. Ciesielski continued, "but access to conventional finance remains challenging for many local and offshore developers, resulting in many projects being placed on hold."

The pipeline of new apartments will taper dramatically over the next three years as a result of project marketing delays and, in many cases, construction delays, potentially not supporting the population growth expected for major Australian cities.

During the 2018-19 season, there was a 47 percent decrease in offshore developers and investors purchasing construction sites, compared to the previous year.

"Despite difficulties in obtaining conventional financing, offshore developers and investors remain committed to investing in Australian sites, which account for 36.9% of sites suitable for residential construction," Mr. Bodon said.

China accounted for 54.6 percent of the offshore countries purchasing Australian residential construction sites in terms of pricing, followed by Singapore (21%), Hong Kong (15.1%), and Malaysia (15.1%). (2.7 percent ).

"Among the assets pursued by foreign developers, Greater Melbourne was still the most common capital city for investment by offshore developers and investors in the year ending June 2019, with a 68.2 percent share of disclosed total residential sites sold," Ms. Ciesielski said.

In the previous financial year, offshore developers bucked the trend by investing mostly in low-density construction sites (59.5 percent), but still favored high density (35.1 percent) over medium-density sites (5.4 percent).

According to the survey, sites suitable for low, medium, and high-density construction made up 20.2 percent of total disclosed sales in Australia in 2018-19.

Vertically, with owners of individual residences, office, and industrial suites within a building, these collective sales involve horizontal sites with numerous homeowners banding together to create amalgamated residential super-lots; and horizontally, with owners of individual apartments, office, and industrial suites within a building.

"With the new regulations for strata properties coming into effect in late 2016, vertical site sales have become more prevalent in NSW," Ms Ciesielski said.

In NSW, a total of $1.45 billion in vertical sites has been sold since November 2016, accounting for 15.4 percent of development site sales ripe for regeneration. As compared to the previous 32-month cycle, where only 2.3 percent, or $364 million, was sold for this reason, the law has had a substantial effect."

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