ONH: [Gilberton] 45 Park | 35m | 10lvls | Residential

[Ben]

http://www.45park.com.au/

And they wonder why no one enters the apartment market?

1 bedroom from $385k
2 bedroom from $555k
3 bedroom from $1.05m
Penthouses from $1.7m

What a joke!!!

[Waewick]

that is about the market unfortunately.

[Ben]

that is about the market unfortunately.

Well i'd gladly take my new 3 bedroom house at Marion for $400,000 over a tiny 1 bedroom apartment for the same price. I think most would. The apartment market will never grow unless it becomes competetive.

[AG]

Part of the issue is in the cost of constructing apartment buildings versus detached dwellings. The average apartment costs more to construct per square metre than your average detached house does. In a 2010 report by URBIS, the average cost of a dwelling in greenfield development in Adelaide was estimated to be $370000 (3 bedrooms) compared with $468000 for an apartment (2 bedrooms).

[AtD]

Article and render in today's AFR on p72 if anyone's interested.

[Waewick]

that is about the market unfortunately.

Well i'd gladly take my new 3 bedroom house at Marion for $400,000 over a tiny 1 bedroom apartment for the same price. I think most would. The apartment market will never grow unless it becomes competetive.

well I guess the Governmnet needs to remove subsidies from the greenfields sites and perhaps increase the cost of land?

unless we can find savings from building up there is never going to be an equal position.

[AG]

Well i'd gladly take my new 3 bedroom house at Marion for $400,000 over a tiny 1 bedroom apartment for the same price. I think most would. The apartment market will never grow unless it becomes competetive.

well I guess the Governmnet needs to remove subsidies from the greenfields sites and perhaps increase the cost of land?

unless we can find savings from building up there is never going to be an equal position.

Sydney is the only place in Australia where infill development is cheaper than greenfield. But it's not because infill is cheap, it's because greenfield is expensive due to the heavily restricted supply of land as well as high land and infrastructure taxes applied to greenfield development in NSW. Making greenfield development more expensive has a high political price as well as seen in NSW. Just take a look at the backlash by numerous councils across Sydney to high-rise development.

[Waewick]

I guess Sydney have the luxury of population density.

but surely people understand there needs to be a point when a city needs to stop expanding outwards.

(hence my post on another thread.... about population centres....)

[adamd]

It was my understanding that 45Park was being developed, marketed and sold as an exclusive, luxury development? Not your average apartment building but rather a niche type development similar to what Air and Edge were? This would explain the pricing surely?

[skyliner]

Agreed Adamd. The location, according to the info and photos, is fantastic - a real standout. Also agree with waewick - that is about the market level.

ADELAIDE - TOWARDS A GREATER CITY SKYLINE

[Ben]

From in Daily:

Tuesday, 29 May 2012

Stamp duty shock for $180m Gilberton project

THE property developer behind a major Gilberton apartment project says he is shocked at being excluded from a state government decision to abolish stamp duty just for Adelaide City.

Project director Mick O’Connor says the decision has imposed an unfair financial burden on his $180 million venture, 45 Park, given the stamp duty holiday now on offer to city buyers.

“All of a sudden we’re left out in the cold – I just can’t see the logic in that,” Mr O’Connor, of Watersun Property, told Indaily.

45 Park, a 216 apartment complex on the old Channel 7 site on Park Terrace, is within 1.5km of the CBD and walking distance from North Adelaide where the concession will apply.

Premier Jay Weatherill announced at the weekend that this Thursday’s state budget will contain a two-year stamp duty holiday for off-the-plan city apartments valued up to $500,000, a saving of $21,330.

There will be a partial concession for a further two years amount to $15,000.

O’Connor said he feared sales interest in 45 Park, which went on the market earlier this year, would fall away because buyers would be unwilling to pay stamp duty that was not required in the CBD.

“The people who are about to buy think, hang on, I’m not going to buy until that’s rectified; or what are you going to do about it?

“So we’re really in between a rock and a hard place.

“Do we try and make a commercial deal with our buyers when you really can’t afford to carry all those costs ourselves. Or do we simply keep trying to change it?

“If we can’t get it changed it’s a real burden on our project. We are carrying all the risk in a very tough market, and we need all the help we can get.”

He said SA-based investors were currently taking their money to Melbourne because of the massive savings available in stamp duty on apartment projects there.

“When you’ve got a $500,000 project, apples-for-apples, Melbourne to Adelaide, they pay around $1900 and we pay $23,300. That’s purely off-the-plan.”

O’Connor said he had been negotiating with the state government since last year about an industry-wide stamp duty concession “purely on the basis that the industry needs a kick-start”.

He said that almost from the minute Jay Weatherill became premier, he had been selling city population growth as the centrepiece of Adelaide’s economic and social revival.

But not everyone wanted to live in the city, O’Connor said.

“At the end of the day the people we’re targeting are owner-occupiers who won’t go into the city to live, but who will buy property in our location before the city because it’s a vastly superior location. So that’s the area we’re going to hurt on.”

When completed, 45 Park will consist of three buildings each of 72 apartments, over 85 per cent one or two bedrooms. Prices range from $395,000 for a one bedroom apartment to penthouses from $1.94 million.

The project’s display suite has been open for two months at Gilberton. O’Connor said they had received over 2000 expressions of interest but many buyers were “waiting for some stability” before committing to a purchase. Actual sales were in the mid-teens, he said.

He said that when 45 Park was given development approval in 2010, it had been “showcased” by the state government as the way of the future under the 30 Year Plan for metropolitan Adelaide.

He said discussions would continue with the government on expanding the concession to cover projects such as Park 45, as well as the government’s own inner-urban residential development at Bowden.

“I’m confident we’ll get it changed because when government changed our zoning [45 Park] up to 10 levels, all as part of the 30 Year Plan, it used our project as a model way of going about it.”

In the city, meantime, the developer of Palladio, the $140 million apartment project planned for Angas Street, has brought forward the construction date by six months off the back of the stamp duty suspension

Palladio is currently before planning authorities for development approval with a decision expected later this year.

“We would expect the suspension of stamp duty will see acceleration in sales off-the-plan and the construction phase of the project brought forward by at least six months,” Palladio Property Group managing director Bing Chen said in a media statement.

“More broadly I predict this reform will create an upsurge in residential property development in the CBD as more people realise they can afford to make the move to city living.”

“I have seen this reform work well in Melbourne, where I am from, and we fully expect it to be effective here in South Australia as well.”

[Waewick]

it is a rahter large over sight really. but I guess CBD is CBD.

do we know the logic behind it only being a 2 year window followed by 2 years at a reduced rate?

why wouldn't it be a flat say 5 years and review after that.

[Ben]

Probably to make people "commit" within 2 years to get things going. If they know they have 5 years nothing much will change in the shorterm.

[ghs]

CBD is CBD.

I think this development might not go ahead now, as most people looking to buy an apartment will
be better off buying in the city and saving on $tamp duty.

[Nort]

I'm torn, there is a bit of conflict in his statements though:

O’Connor said he feared sales interest in 45 Park, which went on the market earlier this year, would fall away because buyers would be unwilling to pay stamp duty that was not required in the CBD.
...
“At the end of the day the people we’re targeting are owner-occupiers who won’t go into the city to live, but who will buy property in our location before the city because it’s a vastly superior location. So that’s the area we’re going to hurt on.”

Given the fairly significant nature of this project I wouldn't be opposed to it getting the CBD duty rates, however on the other hand that measure is intended to bring life into the city and he seems to be saying himself that that isn't what his project is intended to do.