Thursday, June 30, 2016

Affordable Housing project in Armidale

Northern Tablelands MP Adam Marshall has announced that Community Housing provider Homes North will develop a six-unit Affordable Housing complex in Armidale. According to The Northern Daily Leader, the project will be undertaken in conjunction with property developer Hibbards.

Above: a Community Housing development in Northwestern NSW

National Shelter's rental affordability index provides that the rental market in Armidale is 'relatively unaffordable' for low income households - meaning they pay over 30% of their income in rent on average. 

Although Homes North manages over 1000 Social and Affordable Housing properties in New England and Northwestern NSW, this represents its first foray into property development. According to Mr. Marshall's announcement, the NSW Government "has helped Homes North to increase its borrowings in order to supply more affordable housing". It is believed this was achieved via the transfer of Public Housing stock from NSW Land and Housing Corporation to Homes North. 

The 'Future Directions' plan for the Social Housing portfolio from 2016-2026 outlines an intent to transfer management and/or ownership of Public Housing to Community Housing providers, such that community providers own or manage 35% of all Social Housing in NSW.

Tuesday, June 14, 2016

Update: Sales of Millers Point properties

A further ten Public Housing properties in Millers Point were auctioned off to private market purchasers on the evening of 9 June 2016. 

The Daily Telegraph's coverage provides that the sales generated $33.805 million in total. Prices ranged from $5.725 million for the six-bedroom home at 7 Dalgety Road, to $1.815 million for the three-bedroom property at 27 Windmill Street

Above: aerial view of Millers Point

The NSW Government's 'Discover Millers Point' page states that the next sales will consist of four terrace properties of between two and six bedrooms, to be auctioned on July 13. 

As at 10 May 2016, 330 of the 399 Social Housing properties in Millers Point and surrounds had been vacated. Of the remaining 69 homes, 12 residents have been approved to move into 13 of the 28 properties set aside for existing residents (two adjoining properties will be modified to create one tenancy). 

Update at Thursday, 15 July 2016:

Sales: Four more properties in Millers Point went under the hammer on 13 July 2016. You can check these out at: The NSW Government Real Estate 'Rediscover Millers Point' website was updated on 14 July 2016. 

Residents: At the meeting of Millers Point Estates Advisory Board NSW on 13 July 2016 Housing NSW reported that:
  • 399 properties in the portfolio
  • 344 have been vacated out.
  • Of the 55 remaining tenancies to be relocated, 50 are from FACS Housing NSW and 5 from Little Real Estate.
  • 13 of the 55 remaining tenancies have been approved for moving into alternative accommodation (both within or outside Millers Point)
  • 42 tenants are still to be rehoused. 
  • 15 proprieties set aside for remaining tenants remain unallocated. 
Of the 42 tenants still to be rehoused, 7 reside in the Sirius Building.

Our response

To date 94 properties have been sold for $264,212,000, with a median sale price of $2.48M and sales in the range $1.54M and $7.70M. You may check this out at: 

The NSW Government receives an extra bonus on each sale. Its return on the sales is at least 5% higher than the sale price received due to stamp duty to the state government. For each property, the NSW Government receives the following additional payment: over 1m - add $40,490 plus $5.50 for every $100 by which the price exceeds $1,000,000; over $3m - add $150,490 plus $7.00 for every $100 by which the price exceeds $3,000,000.

The NSW Government's stated target for total revenue from Millers Point sales is $500 million. Given the staggering sales figures to date, it is reasonable to conclude that it could comfortably meet its target through the sale of properties that already lie vacant. 

The Government should therefore allow the remaining 42 households - overwhelmingly occupied by elderly, long-term tenants - to age in place in their current homes. 

The Government should also permanently retain some workers' cottages, and units within the Sirius Building, as Public Housing. This would allow the Millers Point community to retain a social mix. It would also be consistent with the Government's firm commitment to deliver social mix through its Social Housing redevelopment programs (such as those at Airds-Bradbury, Telopea, Waterloo, Glebe, and Macquarie Park). 

Friday, June 10, 2016

The Bays Precinct: housing update

Our February 2016 analysis of NSW Government developer UrbanGrowth's plans for Sydney's Bays Precinct, and the dearth of Social and Affordable Housing options therein, noted the following regarding the Sydney Fish Market site:

"An article in The Australian dated 21 January 2016 provides that UrbanGrowth has requested submissions from commercial property agents for the sale and redevelopment of fish market site. The site is being renewed with reference to a private memorandum of understanding between its owners and UrbanGrowth. It states that the request for redevelopment is "aimed at turning the block into a world-class food market, with the winning party to also build apartments on the site." It is not provided that these apartments will include any Affordable and/or Social housing component."

Above: The current Sydney Fish Market

Singaporean property development giant Oxley Holdings has announced an intention to develop the Fish Market site. In a statement to the Singapore Stock Exchange dated May 14 2016, CEO Ching Chiat Kwong provided that "The Board of Directors of Oxley Holdings Limited wishes to announce that the group plans to enter the Australian market and is currently looking at Sydney's Bays Precinct as the location for a flagship commercial and residential project to add to its project portfolio. The Fish Market site at Pyrmont is one of several sites considered by the group as a potential redevelopment site. In line with its business strategy, the Group will collaborate with a local partner and has identified Brookfield Multiplex as a potential partner. Further information will be announced when there are material developments." 

Reporting on the announcement, The Australian newspaper noted, "The [Fish Market] site is tipped to attract a bevy of other developers, with Lend Lease, Grocon and Malaysia's UEM Sunrise Berhad among potential runners."

The announcement was not covered by UrbanGrowth's own 'Bays Precinct newsroom'. 

Our response

Though the Oxley Holdings announcement is far from definitive, it appears to signal that the wheels of Government action are very much turning on the redevelopment of the large package of land comprising the Fish Market and neighbouring waterfront. Given The Australian's previous reporting, and the top-tier status of the developers set to compete for the contract, it is also reasonable to conclude that the residential component of the project will deliver a substantial quantity of new dwellings. 

Yet Social and Affordable Housing remains, as far as we can tell, entirely off the table. We can therefore only repeat our previous concern that such an approach to redevelopment will constitute a unique opportunity lost - for the huge number awaiting Social and Affordable Housing in inner Sydney, and for the area's social mix. 

We'd also refer to the recent musings of the State MP for most of the Bays Precinct site, Jamie Parker, on the direction of the project. Mr. Parker stressed the need to provide, "sustainable, integrated, democratic, vibrant infill development that provides continuous public access to the harbour front, includes social and - importantly - affordable housing, recreation and community facilities." He is concerned that a prioritisation of commercial and private residential developments, and a shortfall in community consultation, will see the Bays Precinct end up as "Barangaroo on steroids".