Increasing construction of ‘unit-living’ residential developments due to higher population rates and associated increases in land prices has stimulated strong retail growth in most states, particularly in Victoria and New South Wales.
Following on from the record lowering of the cash rate by the Reserve Bank in May, the residential apartment sector is complementing consumer spending trends with sales growth in the retail sector at around five per cent for 2014-15.
With housing values at exceedingly high levels, it would seem retail trends are confirming that consumers now prefer to spend their disposable income on purchasing more household goods for their more affordable housing options.
Beginning with Victoria, recent Cordell findings show 172 new development plans for shopping centres in 2015, with a staggering 440 new developments in the pipeline for 2016. The Australian Bureau of Statistics shows a corresponding substantial growth in the homewares market, with Victoria leading the way nationally with respect to retail spending on household goods, providing a sales growth rate of nearly 14 per cent.
New South Wales is also a major contributor with a reported retail growth of 8.5 per cent and new shopping centre developments peaking at around 375 between now and the end of 2016. As an example of this proliferation, site preparations on the GPT Group’s Macarthur Square redevelopment are currently underway and construction has also commenced on the Charlestown Square additions. The trend is also continuing in regional areas, as Stockland has announced the Green Hills Shopping Centre in Maitland, scheduled to go ahead in 2016.
Queensland is also seen to be a key driver of increased shopping centre developments with 326 new projects slated for 2015-16. Western and South Australia follow closely behind with 166 and 92 new projects, respectively. Cordell’s researchers in Western Australia have identified that most shopping centres are now located within or aside town centres that are complementary to the suburbs, serving to fulfill the living needs of the residents, including everyday consumables, entertainment facilities and dining venues in engaging shopping destinations. Major shopping centre expansions are planned for Innaloo, Karrinyup, Garden City and Carrousel.
Furthermore, most states are experiencing a rise in the popularity of large retail centres that cater to both the handyman and the homemaker in the family. Such developments normally incorporate gyms, spas, cafes and other interactive areas surrounded by typical, large-scale retailers such as Domayne. This echoes the general sentiment nowadays that the ‘Australian dream’ is increasingly veering to a state in which first-home buyers are living as well as they can within their means by taking advantage of a more metropolitan, ‘unit-living’ style of life. As such, the goods that are commonly associated with comfortable apartment living have created a substantial rise in retail growth.
There are plenty of reasons to feel good about the current domestic residential landscape – beyond the aforementioned easing of economic pressures and altered first-home buyer preferences, there has also been a steady increase in the level of foreign property investment from China. In short, increased spending and lower vacancy rates are becoming the norm. Developers are now readily providing facilities like gyms and swimming pools, aiming to create more attractive residences for those looking to take advantage of the associated lifestyle factors, low maintenance issues and an added sense of security.
Future sentiment seems to favour ongoing conditions in which ‘unit-living’ and local, large-scale shopping centres will go hand in hand, boosting residential and commercial construction sectors in the process.