Dan Andrews' ‘ghost' home legacy revealed as apartment towers stall
Thousands of Melbourne apartments have been abandoned or heavily delayed in a blow to the Victorian government's hopes to build its way out of a housing crisis.
Families who have been waiting years for their next home are now having contracts torn up as the state's development woes worsen.
Surging building costs and Daniel Andrews-era policy decisions have combined to turn huge numbers of the state's apartment pipeline into 'phantom approvals', with Victoria now ranked as one of the worst places to build units.
Packer's $100m play to live longer
Australian Bureau of Statistics data analysis shows one in six apartments approved for construction around the nation have still not been commenced two years later, with experts warning it is significantly worse in Victoria.
By contrast more than 95 per cent of houses approved are built, as are similar numbers of townhouses.
MCG Quantity Surveyors research shows that home completions in Victoria are on track to reach about 56,000 in 2025, which is 10,000 (15 per cent) below the state's peak of 66,000 in 2017.
It is significantly short of the 76,000 annual home build target to meet obligations under the National Housing Accord's 1.2 million home target by 2029, and even worse when contrasted with the state government's own 80,000 homes a year goal for the next decade.
MCG Quantity Surveyors director Mike Mortlock said the data showed far fewer homes were being built than officials citing approvals data were claiming.
'We need unit construction to be outperforming targets. The reality is the opposite,' Mr Mortlock said.
Their figures show Melbourne's south east has a less than two month supply of new apartments, while there is just over three months' supply headed to the Mornington Peninsula, followed by the city's inner east where there is an about four-month supply of units.
Mr Mortlock said there were multiple 'headwinds' to unit construction that were not as prevalent only a few years ago, a key one was that 'governments at all levels have become drunk on property taxes'.
Housing Association Industry chief economist Tim Reardon said many of the multi-unit projects approved in Sydney, Melbourne, Brisbane and other big city markets were 'phantom approvals'.
'For apartment building to increase meaningfully, we would need to wait for established units to become so scarce that the prices would catch up with those for new units,' Mr Reardon said. 'It could take years.'
He noted that a key contributor to phantom approvals issue was increased taxes on foreign investment into new housing projects, with Daniel Andrews the first premier to increase stamp duty on internationals in 2015.
'These taxes are the goose that killed the golden egg,' Mr Reardon said. 'It's one of the worst housing policy own goals. Removing the taxes would see significant increases in the homes getting built.'
A number of major Victorian projects have suffered as a result of international investment taxation as well as rising building costs.
Buyers who have splashed as much as $35m on homes in 2022 for what was planned to be Australia's tallest skyscraper, STHBNK By Beulah, are now in limbo after the project manager BSSPV Pty Ltd was placed in voluntary administration in February.
While it has since exited administration, the site is still waiting on the outcome of an expressions of interest with developer Beulah International looking to either sell the site or establish a joint venture for its continued development.
Aspects of the Malt District redevelopment of the Nylex Clock site in Cremorne also remain undeveloped, years after its developer, Caydon, collapsed.
In Alphington, Glenvill's YarraBend stopped sales for a development titled the Glass House as the cost of building soared, and while most buyers took back their deposit in the years that followed the building's launch to sales in 2022, one couple finally had their contract torn up in March this year.
'We stopped sales when we found out where building prices were headed,' said Glenvill sales and marketing director Sam Tucker.
Mr Tucker added that the Glass House was being redesigned and going back through council planning and would be included as part of its Boiler House complex, with apartment sizes and formats to be revised – including the removal of most one-bedroom offerings which had become far more difficult to sell with prices touching on $700,000 due to building cost increases.
Glenvill have been able to continue with other developments within the wider YarraBend infill project and a separate complex with close to 200 homes is due to reach settlement in the near future.
Conveyancer Andrew Curtis worked with a number of buyers affected by the project's cancellation and said he was seeing a rise in the number of people buying off-the-plan apartments only to have their contract rescinded years later.
'The vast majority of developers, you don't run into these sort of problems; and a lot of this was impacted by Covid,' Mr Curtis said.
'But the issue is becoming more common.
'And it is going to get worse. The building costs are still ridiculous and that's still causing a lot of issues for builders in the industry.'
In many instances, the conveyancer said stalled or abandoned developments would likely have gone ahead if not for the Daniel Andrews-era policy increase to stamp duty for international investors.
'One of the reasons these projects are running into trouble is that they aren't selling to offshore investors,' Mr Curtis said.
Charter Keck Cramer national executive director of research Richard Temlett said building costs had increased by 30-50 per cent, adding hundreds of thousands of dollars to the cost of many projects, with the state's tax regime also a major factor in development woes.
'Rather than tax at 5 per cent and nothing gets built, if they taxed at 2.5 per cent and 10 times the number of homes get built, they would at lease get some revenue,' Mr Temlett said.
'Melbourne is the weakest apartment market right now, because of the loss of overseas revenue. And that's one of the biggest missteps the government has made and we are now seeing it.
'It's all things lingering from the Andrews era.'
He noted buyers looking for certainty in the apartment sector could still look for well-funded groups and those with a listing on the Australian Stock Exchange as a way to find groups more likely to be able to proceed with projects in a timely way.
Australian Property Development Association president Alex Huang said Victoria had become 'probably one of the worst places that a developer can pick to launch a project'.
Over the past year he said he was hearing of contracts being torn up 'more and more frequently', estimating 100s of would have been rescinded, though he was optimistic falling interest rates would help to improve the situation for the sector in the year ahead.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
News.com.au
an hour ago
- News.com.au
‘The death of the shout': Aussies ditch round-buying at the pub
The Aussie pub shout – the sacred social tradition of 'buying a round' for your mates – has long been a staple of Australian night-life. But new data on how Aussies are spending their money reveals that this beloved custom is on the way out. Rising living costs mean a full round for a table can now easily top $100, while changing drinking habits and technological advances are encouraging punters to skip the shout altogether. Instead, Aussies are increasingly choosing to split the bill or simply pay for their own drinks. The latest research comes from Tyro Payments, a payments platform company, and revealed a huge generational spending divide is unfolding at the pub. Using data collected from over 1000 participants and more than 30 million food and drink orders, the report reveals that nearly half of Aussies (49 per cent) have changed their drinking habits due to cost pressures, with one in 10 cutting out alcohol altogether. The report also found that the traditional 'shout' is dying, as Aussies are now 35 per cent less likely to buy rounds for their friends than they were last year. Instead, they're opting to order via QR codes and sidestep the age-old question of 'whose turn is it?' The trend is most prominent among millennials, with 42 per cent saying they'd use a QR code to order drinks specifically to avoid a shout. Among Gen Z, 38 per cent said they use QR codes for the same reason, while 37 per cent of Gen X and 33 per cent of Baby Boomers are also embracing this tech-driven approach. The ease of sending a quick bank transfer to a mate has also made it simpler than ever to settle up the bill without the awkwardness of unpaid drinks or unclaimed rounds. Brian Sarkis, General Manager of ArtHouse Hotel in the Sydney CBD and co-owner of East Village Hotel in Darlinghurst said he's noticed this shift playing out in his bars. 'At East Village, we mainly see customers buy individual drinks when they're with a group of friends,' he told 'Even for birthdays or celebrations, they are more likely to just buy the birthday person a drink rather than shout the whole table.' Mr Sarkis says he's noticed that people are still keen to come out and enjoy a fun night, but they're definitely being more conscious about their spending. 'Buying a round for six people in today's market, that's a big hit to the wallet. The whole 'shouting' thing has pretty much disappeared,' he admits. 'The QR system has eliminated both the generosity and the guilt of round-buying. No one has to be the generous one, but no one has to be the tight one either. Buying someone a drink used to be a gesture, now it's just more efficient to order your own.' He's also noticed that people are much more strategic about their spending now. 'They'll calculate exactly what they want to spend before they even sit down,' he explains. 'The days of 'let's see how the night goes' spending are pretty much over. People have a budget and they stick to it.' This trend isn't unique to Australia. A recent article in The New York Times reported that a similar thing is happening in the US. Gen Z in the States are far less likely to open up a bar tab than they were a few years ago, preferring instead to swipe their cards after every drink, no matter how many rounds they end up having. While bar tabs are more common in American culture than in Australia, the reasons for this change in spending habits remain the same. Having to pull out your card each time you buy a drink serves as a reminder that you're spending money, which helps to curb overspending amid cost-of-living pressures. Gen Z is also favouring 'one-and-done' transactions, mainly using Apple Pay and tapping their phones for a purchase, as they would for a coffee at a cafe. So, it appears that not only is the Aussie shout coming to an end, but mindless pub spending in general.
Herald Sun
2 hours ago
- Herald Sun
Peter Stevens dealerships close in Geelong, Ringwood
Don't miss out on the headlines from News. Followed categories will be added to My News. Two major Victorian motorcycle dealerships closed at the weekend following the collapse of the Melbourne-based Peter Stevens retail group. The stores and showrooms at Peter Stevens Geelong and Ringwood have not been sold and have shut permanently, administrators KordaMentha said. And the City Triumph dealership which closed its West Melbourne showroom earlier this year will also not return. The stores could not be saved although a large portion of the business has been taken over, securing 250 jobs. Dozens of staff at the Peter Stevens sites at Mercer St, Geelong, and Maroondah Highway, Ringwood were only told on Friday of the closure. And customers have been left in the dark over parts and accessories orders. Triumph rider Richard Farrar ordered a $500 part from the Peter Stevens Geelong store but has no idea what's happened to his money. 'They obviously knew they were in trouble when I ordered … and it's bordering on obtaining my money deceptively,'' he said. Peter Stevens went into voluntary administration last month saddled with debt, and last week it emerged that creditors faced losses of over $65m including millions in customer deposits. The company was founded by the Chiodo brothers – Vince, Peter and Steve – in 1970 and grew into a national network of motorcycle stores and dealerships. Flagging motorcycle sales and the cost of living crisis has hit the industry hard in recent years. Some parts of the Peter Stevens group have now been taken over by private company Joe Rascal Group and ASX-listed MotorCycle Holdings. The Joe Rascal Group has will acquire the Harley Heaven stores at Dandenong, Ringwood and Melbourne, as well as Ducati South Melbourne. And Brisbane-based MotorCycle Holdings will take over the Peter Stevens Dandenong and Adelaide sites as well as Savage Motorcycles in Perth and the Harley Heaven dealerships in Sydney, Penrith, Perth and Adelaide. MotorCycle Holdings chief executive Matthew Wiesner said the company would maintain the Peter Stevens and Harley Heaven brands. The deals would mean about 250 employees would keep their jobs, Craig Shepard of KordaMentha said. The administrators said it would assist employees from the closed locations 'during the transition to closure'.
News.com.au
3 hours ago
- News.com.au
Foul sight insight house for sale as housing crisis deepens in WA
A dilapidated house complete with a dead mouse squashed into the carpet and syringes on the bathroom sink has been snapped up half an hour after its first and only home open. The property in Armadale, about 40 minutes east of Perth, sold on May 31 for $480,000 with no clean-up and its backyard resembling a stinky communal rubbish tip. The home's sale came as yet another brutal reflection of how broken Australia's housing market has become, particularly in Western Australia where properties were formerly relatively cheap. And it's not like the three-bedroom wreck at 12 Cambell Road was up for one of those 'worst home on the best street' awards either. Graffiti artists had taken liberties on fences after fence, there were front verges that looked more like car yards than residential homes, and let's just say the neighbours didn't exactly have a welcoming presence about them. Of course, none of these factors matter in a market starved of affordable supply where even houses that look like crime scenes attracted interest from dozens of keen buyers. For millennials and first-home buyers it's yet another slap in the face. If this is what your life savings can buy, you have to start asking yourself what hope is left. Andrew Byl, one of the agents representing the property, told Brooko Moves during the property's home open he didn't even know there was a dead mouse inside, nor that syringes had been left in the bathroom. 'I didn't look that far,' he said while laughing, then agreed it added to the home's 'character'. Mr Byl was rightly confident the house would sell, rodent corpse or not. 'It will be sold in the next half-hour,' he said, as upwards of 30 groups of people poured into the property, mindful not to step on the ample junk splayed throughout it. 'Well we've had it on the market for a few days and the phone hasn't stopped,' he added. A few years ago, the same house wouldn't been 'lucky to sell for $300,000', Mr Byl said. Now, he claimed that if it was cleaned up, it could easily sell for at least $600,000. The agent went on to confess he knew nothing about the home's history, apart from the fact it looked to be 'a solid home'. Beneath a massive mound of rubbish, on closer inspection, turned out to be a backyard pool. It was so heavily disguised Mr Byl hadn't realised that was there either. His projection was proved correct and the house was snapped up shortly after the inspection. It was an unbelievably quick transaction, especially considering the house was a genuine safety hazard and had more dead animals than functional lights and doorknobs (one door was being held shut with a knotted electrical cable). Still, properties like this hit the market almost every day across Perth as locals look to cash in on the house price boom. Median house prices across Perth have skyrocketed to more than $700,000 and outer suburbs like Armadale, which were once considered affordable, are surging as desperate buyers fight for scraps. The Real Estate Institute of WA recently revealed housing stock was at a record low, with fewer than 4000 properties listed for sale. This was a 40 per cent drop from the five-year average. On a national scale, the story's just as grim. CoreLogic data showed house prices in capital cities have climbed by over 35 per cent since the pandemic, while wages have barely budged. The great Australian dream isn't just slipping out of reach, it's now in full-blown free fall. Young Australians have been left competing for homes with rotting carpet, graffiti-tagged fences and biohazards in the bathroom. A full-length video of the Armadale house is available at brookomoves on YouTube.
