The Urban Developer
AdvertiseEventsWebinarsUrbanity
Industry Excellence
Urban Leader
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Urban Leader Awards Logos RGB White
NOMINATIONS CLOSE SEPTEMBER 12 RECOGNISING THE INDIVIDUALS BEHIND THE PROJECTS
NOMINATIONS CLOSING SEPTEMBER 12 URBAN LEADER AWARDS
LEARN MOREDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ResidentialTaryn ParisThu 29 Jun 23

[+] View from the Top: Developers Looking to Blue Skies

TUD+ MEMBER CONTENT
SHARE
3
print
Print

Land values need to find their floor to get residential development back under way to address housing supply and affordability issues. 

MaxCap’s chief investment officer Bill McWilliams believes it will be land values that will have to ameliorate in the current market.

Speaking at The Urban Developer and MaxCap Roundtable, McWilliams says “something’s got to give” in the heavily constrained property market of NSW. 

“I think on paper, development site land is the only thing that can give (in terms of valuation prices),” McWilliams says.

“And the multiplier effects can be quite high. I think most developers are seeing blue sky in terms of holding out. They’re looking to hold because the revenues have to increase.

“The reality is for some developers that are highly geared, the holding costs have gone up in both funding and land tax, and some will be forced to sell. I don’t think we will see a whole heap of sites that will be sold, but some might not be able to see through the cycle. 

“But I think there’s enough developers and capital on the sidelines and enough demand that we won’t see prices fall through the floor.”

NSW’s greenfield market is still firing as pent-up demand and low supply provide steady tailwinds for Legacy Property chief executive Matthew Hyder.

null
▲ MaxCap chief investment officer Bill McWilliams says construction contractor risk is the main concern in the debt funding space.




READ MORE FROM THIS SERIES

[+] View From the Top: Industrial is Hot, Office is Not
[+] Risk and Reward: Construction Keeps Developers Up at Night
[+] View From the Top: ‘Something Needs to Break’



“It’s a mix between high-rise and mid-rise apartment projects in metro parts of Sydney, and residential communities across north-west, west and south-west Sydney,” Hyder says. 

“There aren’t too many developers that deliver apartments and land subdivision. I didn’t realise early on just how beneficial that has been.”

“I’ve looked at Victoria and the Gold Coast, but to me Sydney to date has offered more. We have 10 projects under way with 4000 apartments and lots.”


Hyder says investors are returning to the greenfield market. He says up to 25 per cent of Legacy Property’s lots are being sold to investors.

He says Penrith is a target growth area that is growing 23 per cent faster than Greater Sydney, with a slew of state government infrastructure investment in the area. 

Hyder knows a Texas-based multi-family developer keen to take on build-to-rent in Australia. 

“But to me the tax structure that is here inhibits it. It makes so much sense, I don’t understand why the government doesn’t allow residential build-to-rent to be more tax effective,” he says.

null
▲ Legacy Property chief executive Matthew Hyder at the MaxCap roundtable event.


“Anyone here who has investigated build-to-rent is doing it knowing that right now it does not work.

“They go in thinking ‘we need legislation change, let’s experiment, we know we’re not going to make anything off the building, we experiment, cut our teeth, make mistakes. When legislation changes, bam we’re ready to go’.” 

The Urban Developer and MaxCap Group hosted the roundtable in Sydney recently to tackle the issues impacting development in NSW and get a temperature check on the health of the sector. 



You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. 
Click here to learn more.

TUD + Banner


ResidentialBuild-to-RentAustraliaSector
AUTHOR
Taryn Paris
More articles by this author
ADVERTISEMENT
TOP STORIES
Stockland bumps up its apartment pipeline in melbourne and sydney
Exclusive

Stockland Re-Enters Density in $5bn Apartment Play

Renee McKeown
4 Min
Woolloongabba Precinct Vulture St
Exclusive

Brisbane Developer in Cross River Rail Compensation Tussle

Clare Burnett
4 Min
The Mondrian Gold Coast hotel's food and beverage is driving profits
Exclusive

Touch, Taste, Theatre: What’s Driving Mondrian’s Success

Renee McKeown
6 Min
Fortis’ display suites are designed as brand environments first, with tactile details and curated design to build buyer confidence before project specifics.
Exclusive

Relevant or Redundant: Will Tech Kill Display Suites?

Vanessa Croll
7 Min
Exclusive

Missing Heart: Why The Gold Coast Needs a CBD

Phil Bartsch
7 Min
View All >
South Melbourne social housing precinct
Affordable & Social Housing

South Melbourne Housing Precinct Revamp Takes Next Step

Leon Della Bosca
Aerial view of Caboolture and Bruce highway to Brisbane with Bribie Island Road crossing, Queensland, Australia
Policy

Queensland’s $2bn Push Opens New Housing Front

Vanessa Croll
Stockland bumps up its apartment pipeline in melbourne and sydney
Exclusive

Stockland Re-Enters Density in $5bn Apartment Play

Renee McKeown
The property giant’s strategic shift to higher density is in full flight as details of two landmark projects are made pu…
LATEST
South Melbourne social housing precinct
Affordable & Social Housing

South Melbourne Housing Precinct Revamp Takes Next Step

Leon Della Bosca
2 Min
Aerial view of Caboolture and Bruce highway to Brisbane with Bribie Island Road crossing, Queensland, Australia
Policy

Queensland’s $2bn Push Opens New Housing Front

Vanessa Croll
2 Min
Stockland bumps up its apartment pipeline in melbourne and sydney
Exclusive

Stockland Re-Enters Density in $5bn Apartment Play

Renee McKeown
4 Min
The Adelaide purpose built student accommodation market is about to increase by 1058 beds with the State Commission Assessment Panel supporting two towers in the making.
Student Housing

Highrise Approvals Add 1000-Plus PBSA Beds in Adelaide

Renee McKeown
3 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/maxcap-land-values-residential-development