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The Australian Bureau of Statistics has recently released demographic data at a capital city level to June 2013. 
We have <a href="/expert-insights/investing/abs-stats-reveal-population-growth-is-escalating-in-nsw-and-victoria">previously covered the population data</a> however, when the data is paired with dwelling approvals data over the same period there are some very interesting findings.
Over the 12 months to June 2013, the population of the combined capital cities increased by a total of 313,387 persons.  At the same time, there were 114,825 capital city dwelling approvals over the period.  Based purely on the ratio of population growth to dwelling approvals, there was one dwelling approved for construction for every 2.73 residents added to the capital cities.
At a national level, the 2011 Census reported that average people per household at that time was 2.6 persons.  Based on that figure you can see that population growth has exceeded dwelling approvals over the past year.  Of course measuring demand for housing is not quite so simple.  Although it is a bit old now, the former Deputy Governor of the Reserve Bank (RBA) gave a speech entitled ‘Housing and the Economy’ to the National Housing Conference in November 2009, which is available <a href="https://www.rba.gov.au/publications/bulletin/2009/dec/pdf/bu-1209-5.pdf" target="_blank">here</a>.  In the speech he posed the question, ‘Are we building enough dwellings?’  Two of the most interesting revelations from the speech were:
<ol>
<li>A higher proportion of the new dwellings built are simply replacing existing homes that have been demolished.  The RBA estimated that between 2001 and 2006, around 15% of new dwellings built replaced those that had been demolished; 10-15 years earlier that figure was less than 10%. 
</li>
<li>A significant proportion of dwelling investment appears to have gone into holiday homes or second homes.  Census data (2006 Census) shows that the number of dwellings built has exceeded the increase in the number of households by a large margin.  As a result, the ratio of the number of dwellings to the number of households has been rising over time; as at 2006, there were 8% more dwellings in Australia than there were households.  Presumably, most of this surplus reflects holiday houses and second houses.</li>
</ol>
So at a national level, the former Deputy Governor’s speech suggested that in order to cater to dwelling replacements and secondary homes we need to construct 23% more dwellings than the previous simplistic analysis of measuring the rate of population growth compared to approvals.  Also keep in mind here that we are looking at approvals, they won’t necessarily all go on to become commencements and ultimately completions.
An assumption we could make here is that, holiday and second homes are generally more likely to be situated outside rather than inside a capital city.  As a result, the second revelation detailed above is probably not going to have as much of an impact at a capital city level.  Nevertheless we still have to allow for the 15% of homes which have been demolished when looking at the approvals data.
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Maybe it is time to look at ways that we can incentivise developers to bring vacant land to the market quicker rather than banking land and drip-feeding it to the market.
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Across individual capital cities, the 2011 Census reported that on average; Sydney, Brisbane and Darwin had 2.7 persons per household, Melbourne, Perth and the Australian Capital Territory had 2.6 persons per household and Adelaide and Hobart had 2.4 persons per household. 
Returning to the original findings, over the year to June 2013, the capital city population increased by 313,387 persons and 114,825 dwellings were approved for construction.  If we adjust for average household sizes as per the 2011 Census, to match population growth there would have ideally been a slightly higher 119,135 approvals over the year.  If we then further adjust for the assumption that we should approve 15% more homes to replace demolitions, there should have been 137,005 dwellings approved for construction last year, a shortfall of 22,180 capital city approvals.
<img class="aligncenter size-full wp-image-3122" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Chart-11.jpg" alt="Chart 1" width="500" height="181">
As the above chart shows, the supply of new dwelling approvals was generally quite sufficient through the 1990s however, throughout the 2000’s new dwelling approvals have been insufficient in relation to the level of population growth.  We are now seeing rising dwelling approvals on the back of escalating housing demand and rising home values which is encouraging however, it will have to continue for many years to make up for the insufficient supply response over the past decade or so. 
In Sydney and Melbourne, there was one home approved for every 2.72 and 2.48 new residents respectively indicating a level of supply closer to equilibrium with demand over the most recent year.  New supply remains very much insufficient in Brisbane and Perth where one new home was approved for every 3.26 new residents in Brisbane and 3.45 new residents in Perth.
The following charts track the annual population growth and the annual number of dwelling approvals across each capital city.
<img class="aligncenter size-full wp-image-3114" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Syd-chart.jpg" alt="Syd chart" width="500" height="179">
<img class="aligncenter size-full wp-image-3115" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Mel-chart.jpg" alt="Mel chart" width="500" height="179">
<img class="aligncenter size-full wp-image-3116" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Bne-chart.jpg" alt="Bne chart" width="500" height="179">
<img class="aligncenter size-full wp-image-3117" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Adl-chart.jpg" alt="Adl chart" width="500" height="179">
<img class="aligncenter size-full wp-image-3118" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Per-chart.jpg" alt="Per chart" width="500" height="179">
<img class="aligncenter size-full wp-image-3119" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Hob-chart.jpg" alt="Hob chart" width="500" height="179">
<img class="aligncenter size-full wp-image-3120" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Dar-chart.jpg" alt="Dar chart" width="500" height="179">
<img class="aligncenter size-full wp-image-3121" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Can-chart.jpg" alt="Can chart" width="500" height="179">
As the above charts show, the disconnect between the level of population growth and dwelling approvals over the past decade have been greatest within our largest capital cities.  It is no coincidence that these cities are also the regions that have been recording the greatest increase in population over this period.
A further important consideration when looking at the relationship between population growth and dwelling approvals is the type of product that is being developed for the market.  While the city-wide analysis is valuable new housing typically comes in the form of new houses on the outskirts of the city or medium to high density product within the inner city areas. Over time, we are seeing a shift away from greenfield housing development in most capital cities towards infill higher density development.
<img class="aligncenter size-full wp-image-3123" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Chart-21.jpg" alt="Chart 2" width="500" height="182">
Over the year to June 1991, 29.9% of all new dwelling approvals across the combined capital cities were for units as opposed to houses.  In June 2013, 49.7% of all dwelling approvals over the year were for units.  Over the year, there were more units than houses approved for construction in Sydney (66.1%), Melbourne (52.7%), Brisbane (50.1%), Darwin (64.5%) and Canberra (54.9%).  The unit category type includes townhouses and semi-detached homes as well as units. 
The 2011 Census reported that across the separate house category, the most prevalent number of bedrooms is three bedrooms (49.6%) and four bedrooms (32.4%).  When you combine the results for semi-detached and units the most prevalent number of bedrooms is two bedrooms (50.1%) and three bedrooms (28.6%). 
To look at it another way, 88.8% of detached houses have three bedrooms or more compared to 66.9% of units having two bedrooms or fewer.  The point here is that if you are going to deliver more units to the market, they typically have fewer bedrooms and therefore are likely to have a smaller average household size than a detached house would.  As a result, it is likely that as the delivery of units increases there actually needs to be a greater number of units constructed in order to cater for population growth than there would have been if houses were exclusively built.
It is clear for the analysis that particularly within the four largest capital cities there has been a growing deficiency of dwellings approved for construction over recent years when compared to population growth.  Over the past 12 to 18 months there has been a noticeable rise in dwelling approvals however they will have to continue to rise over coming years to make up for the deficiency over recent years.  Particularly in Sydney, Melbourne and Brisbane we are seeing a push to greater density in the inner city areas. 
So how do we fix the supply side problems? 
There are many solutions but I think in the main we need to approve new developments faster, increase developable land both in the inner city and within greenfield areas and reduce the costs of new development to the developer because these costs are ultimately passed on to consumers.  Remember that developers are commercial entities looking to make the best possible returns for shareholders. 
Maybe it is time to look at ways that we can incentivise developers to bring vacant land to the market quicker rather than banking land and drip-feeding it to the market.  Whether that be an additional tax on undeveloped land or some sort of financial incentive to bring stock to the market, I am not sure, but it is clear that particularly within the major capital cities the current conditions are not working and finding a way to increase the supply of new dwellings is imperative.
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Our capital city population is booming but housing supply failing to keep up

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Recently released data from the Australian Bureau of Statistics (ABS) shows that as at June 2013, the rate of population growth in Australia’s capital cities was significantly greater than that of regional markets.
Perth topped the charts as the city to consistently record the fastest rate of population growth with 395,000 new persons moving to Perth between 2006 and 2013. However in raw number terms, the increase in population has been much greater in Melbourne and in Sydney.
Between 1991 and 2013 Sydney added an additional 1,084,169 residents, Melbourne 1,153,248, Brisbane 826,621, Adelaide 198,141 and Perth 746,243.
As at June 2013, ABS reported that almost two out of every five Australian’s (39.4%) lived in either Sydney or Melbourne, however, the proportion of Australian’s living in Sydney or Melbourne fell slightly from 1991 (39.7%). This is largely due to a rising prominence of Brisbane and Perth as population centres.
In 1991, 21.3% of Australian’s lived in Sydney, 18.5% in Melbourne, 8.2% in Brisbane and 7.1% in Perth. By 2013, 20.6% of Australian’s lived in Sydney, 18.8% in Melbourne, 9.7% in Brisbane and 8.5% in Perth. Despite the declining prominence of Sydney, the proportion of Australian’s living within our four largest cities has increased from 55.0% in 1991 to 57.6% currently.
<img src="/images/2014/04/10/kusher-april-10-foru.gif" alt="">
The rising prominence of Brisbane and Perth as population centres has really emerged over recent years. Obviously the resources sector boom has driven this to some extent with escalating demand for professionals working and associated with this sector.
Darwin was the only other capital city to record an increase in its overall proportion of the national population over the period, shifting from 0.5% in 1991 to 0.6% in 2013.
Adelaide recorded the largest decline in its proportion of population over the period across the capital cities, falling from 6.3% of the national population in 1991 to 5.6% in 2013.
Sydney and Melbourne continued to be the most significant population centres however; Melbourne is catching Sydney quite quickly. In 1991, 3,672,914 persons lived in Sydney and 3,194,707 in Melbourne, a gap of 478,207 persons. By 2013, the gap had reduced to 409,128 persons.
During the same period, regional Queensland was the only regional market to record a greater increase in population than within the capital city. Over the period, Brisbane's population increased by a total of 826,621 persons compared to an 869,231 increase in Regional Queensland’s population.
The surge in population across Regional Queensland is linked to the growth in those markets directly adjacent to Brisbane, Gold Coast and Sunshine Coast.
Regional Queensland’s population has increased due to the ‘sea change’ phenomenon which has seen significant migration and development along the state’s coastal communities.
Over the year, the ABS reported that Australia's population increased by 1.8% with capital city regions recording population growth of 2.1% over the year compared to a 1.2% annual increase in regional population.
<img src="/images/2014/04/10/kusher-april-10-three.gif" alt="">
From 1995 onwards, capital city populations have consistently increased at a faster rate than those in regional areas. In June 1991, 64.6% of all Australian’s lived within a capital city and by June 2013 the proportion had risen to 66%.
Almost two thirds (66.3%) of all Australian’s live within a capital city, up from 64.6% in 1991.
Based on the ABS results, Australian’s are showing an ongoing preference to live in capital cities rather than regional markets. This is largely due to job security found in the cities.
With home values rising at a much faster rate in Sydney and in Melbourne than in other capital cities it will be interesting to see over the coming years if we see an outflow of population from Sydney and Melbourne to other more affordable capital city housing markets such as Brisbane and Adelaide.
Of course a key driver of any shift away from Sydney and Melbourne will be providing well-paid jobs and a high quality of life while ensuring that housing remains relatively more affordable than it is within Sydney and Melbourne.
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Capital cities' job security remains attraction for population growth

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Housing finance data for February 2014 was released yesterday by the Australian Bureau of Statistics (ABS).
The data showed that over the month there were 52,460 owner occupier housing finance commitments.
<img class="aligncenter size-full wp-image-3092" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Chart-1.jpg" alt="Chart 1" width="500" height="179">
The number of owner occupier housing finance commitments was at its highest level since October 2009 over the month.  Owner occupier housing finance commitments increased by 2.3% over the month and 13.8% year-on-year.  Owner occupier housing finance commitments are split into refinance commitments and non-refinance commitments. 
Refinance commitments have increased by 6.0% over the month and 15.8% higher over the year.  Non-refinance commitments rose by 0.6% over the month and by 12.9% over the year.  Refinance commitments are currently at their highest level since April 2008.
<img class="aligncenter size-full wp-image-3093" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Chart-2.jpg" alt="Chart 2" width="500" height="183">
Looking at the value of housing finance commitments, owner occupier non-refinance commitments are up 0.3% over the month, owner occupier refinance commitments are 6.0% higher and refinance commitments are 4.4% higher. 
On a year on year basis, owner occupier non-refinance commitments have increased by 17.5%, owner occupier refinance commitments are 27.9% higher and investment finance commitments are 32.3% higher.
<img class="aligncenter size-full wp-image-3094" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Chart-3.jpg" alt="Chart 3" width="500" height="183">
As a proportion of all housing finance commitments over the month, owner occupier non-refinance commitments accounted for 43.4% of lending, investment commitments accounted for 38.8% of lending and owner occupier refinance commitments accounted for 17.8%. 
As the chart shows, the proportion of lending to investors is high on an historical basis and remains at their highest levels since late 2003.
<img class="aligncenter size-full wp-image-3095" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Chart-4.jpg" alt="Chart 4" width="500" height="185">
As a proportion of all lending to owner occupiers, first home buyers continue to show a relatively small level of market participation.  In February 2014, first home buyers accounted for 12.5% of all lending to owner occupiers.  The 12.5% was down from 13.2% in January 2014 and also down from 14.4% at the same time in 2013. 
Although the proportion of lending to first home buyers is lower, the number of first home buyer loans was 0.6% higher over the month but -1.5% lower year-on-year.
<img class="aligncenter size-full wp-image-3096" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Chart-5.jpg" alt="Chart 5" width="500" height="219">
The RP Data Mortgage Index (RMI) shows a strong correlation with the ABS owner occupier housing finance commitments data. 
The benefit of the RMI is that it is a more timely indicator of finance commitments produced each week. 
At the end of March 2014 the index had recorded a further increase in activity indicating that the housing finance data results for March 2014 (when released in a month’s time) are likely to show a further rise in owner occupier housing finance commitments.
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Housing finance data for February 2014

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The number of unique residential properties advertised for sale across the country over the four weeks to 30 March 2014 was recorded at 243,941. 
This figure consists of 47,805 newly listed properties over the four weeks and 196,136 re-listed properties.
As highlighted by the <a href="https://blog.rpdata.com/2014/02/homes-prepared-sale-real-estate-agent-activity-gathers-pace-2014/" target="_blank">RP Data listings index</a>, there has been a surge in the number of new properties listed for sale and they are 18.9% higher than they were at the same time a year ago. Although new listings have surged, total properties advertised for sale are -3.8% lower than they were a year ago which is reflective of the rapid rate of sale we are seeing nationally. Although new listings are way up on a year ago, the rate of sale is much faster and total listings are falling. 
To put it simply, properties are being absorbed by the market faster than they are being listed for sale.
<img class="aligncenter size-full wp-image-3065" src="https://blog.rpdata.com/wp-content/uploads/2014/03/Chart-12.jpg" alt="Chart 1" width="500" height="180">
Looking at the different residential property types; new listings for houses are 20.2% higher than they were a year ago however, total house listings are -4.5% lower.
New unit listings are also significantly higher, up 22.6% while total unit listings are -5.1% lower.  New vacant land listings are -5.4% lower than they were a year ago however, total listings are 2.1% higher.
<img class="aligncenter size-full wp-image-3063" src="https://blog.rpdata.com/wp-content/uploads/2014/03/Chart-21.jpg" alt="Chart 2" width="444" height="262">
Looking across the individual capital cities, each region except for Canberra (-12.0%) is recording a higher number of new properties listed for sale than they were a year ago. 
Sydney and Melbourne, which are also recording the strongest capital growth conditions, have recorded the largest rise in new listings over the year, up 49.7% and 32.0% respectively compared with a year ago.  Clearly new properties are coming to the market in both cities however, evidence suggests that most are selling quite shortly after the listing.
Although new capital city property listings are generally higher than they were a year ago, total listings are generally much lower than they were a year ago. Across the combined capital cities total listings are -8.3% lower than they were a year ago and each city except Hobart (3.3%) and Darwin (25.2%) is recording fewer total listings.  
Although both Sydney and Melbourne are each recording fewer total properties advertised for sale than a year ago, it is interesting to note that total listings in Melbourne (33,144) are significantly higher than in Sydney (22,423).
It is encouraging to see that a greater number of new residential properties are coming to the market than at the same time last year however, it is important to remember that in most regions sales transactions are much higher than they were a year ago. 
Clearly buyer demand has escalated and quality properties are not staying on the market for a long period of time which is highlighted by the fact that total listings both at a national and capital city level are lower than they were a year ago.
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Housing market is absorbing new supply faster than it is being added

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Home owners in Sydney and Melbourne are holding onto their houses longer while owners in Melbourne and Hobart are doing the same with their units.
The average length of ownership for residential properties is continuing to increase. This indicates to us that home owners are moving less frequently. For houses, today’s results show that the average hold period across Australia’s capital cities was 10.1 years at the end of 2013, and for units it was 8.4 years. In the regional markets, the hold period was slightly less for houses at 9.5 years while for units it was longer at 8.6 years.
This highlights a consistent increase in the average hold period since about 2004/05. The rise coincides with the national surge in home values from 2001 to 2004 and the subsequent fall in sales volumes thereafter.
<img src="/images/2014/03/28/kusher-march-28-one.gif" alt="">
Across the individual capital city housing markets, the average hold period trended higher across each market over the past decade. The results also show that houses in particular tend to be held for much longer in Sydney and Melbourne than they do elsewhere.
By the end of 2013, Melbourne had the longest average hold period for houses and units recorded at 11.4 years and 9.4 years respectively. Sydney houses had the second longest average hold period at 11.0 years while for units Hobart held second longest hold period at 8.5 years. Each capital city has recorded an increase in the average hold period for houses and units over the past year.
<img src="/images/2014/03/28/kusher-march-28-two.gif" alt="">
Across the country’s council areas, Auburn in New South Wales is the area with the longest average period for houses at 15.5 years. For units, New South Wales and Victoria dominated the list; however, most of these areas are situated outside of the capital city.
Across the country, the shortest average hold periods are generally found in Western Australia for houses and in Queensland for units; Weipa in Far North Queensland has the shortest average hold period for both houses and units at 5.3 years for houses and 3.3 years for units. The regions with the shortest average hold periods are typically found outside of the capital cities.
<img src="/images/2014/03/28/kusher-march-28-three.gif" alt="">
The data shows that the typical hold period is increasing.
As we see a rise in property values rising, and the subsequent transactional cost of buying and selling properties increasing at the same time, it is no wonder home owners are choosing to move home less regularly.
The cost of agency fees and stamp duty acts as a disincentive to buy and sell property. Over the coming year we would expect that the trend towards longer period of home ownership will continue to be evident.
<img src="/images/2014/03/28/kusher-march-28-four.gif" alt="">
Research Notes:
An important figure to be aware of is the average length of property ownership, or the ‘hold period’ of a property. The typical hold period provides one of the best indicators about the likelihood as to whether a property will be brought to the market in the near future. RP Data measures the average hold period by looking at sales over the past year and determining the length of time each of those properties had been owned (i.e. the most recent contract date minus the previous purchase date).
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Home owners in Victoria & New South Wales hanging on to property longer

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Yesterday the Australian Bureau of Statistics (ABS) released its quarterly demographic statistics for September 2013.  Unfortunately this data set has a significant reporting lag nevertheless it is still a valuable regular release.
<img class="aligncenter size-full wp-image-3045" src="https://blog.rpdata.com/wp-content/uploads/2014/03/Chart-1.jpg" alt="Chart 1" width="500" height="183">
Over the September 2013 quarter, the national population increased by 100,556 persons or by 0.4%.  Throughout the 12 months to September 2013, the national population has increased by 1.8% from 22.8 million persons to 23.2 million persons (405,446 new residents).
<img class="aligncenter size-full wp-image-3046" src="https://blog.rpdata.com/wp-content/uploads/2014/03/Chart-2.jpg" alt="Chart 2" width="500" height="184">
Looking at the components of national population growth, natural increase (or births minus deaths) was recorded at 164,428 persons over the past year and was 2.9% higher compared to September 2012. 
<blockquote>
While the rate of population growth is accelerating in New South Wales and Victoria it is slowing or stable across all other states. 
</blockquote>
In fact, the rate of natural increase is now at a record high level. 
The other component of population growth at a national level is net overseas migration.  Over the 12 months to September 2013, there were 241,018 net overseas migrants; the figure was 1.0% higher than over the previous year.  Although net overseas migration was higher over the year, it actually fell compared to June 2013.
<img class="aligncenter size-full wp-image-3047" src="https://blog.rpdata.com/wp-content/uploads/2014/03/Chart-3.jpg" alt="Chart 3" width="500" height="185">
Looking across the individual states, population growth over the 12 months to September 2013 was greatest in Victoria (110,537), New South Wales (108,067), Queensland (83,737) and Western Australia (76,346). 
These four states accounted for 93.4% of total population growth over the year.  Annual population growth for New South Wales was at its highest level since June 2009 (110,294), in Victoria growth was at its highest level since September 2009 while in Queensland and Western Australia population growth was lower than in June 2013 (88,598 and 81,327 respectively).
<img class="aligncenter size-full wp-image-3048" src="https://blog.rpdata.com/wp-content/uploads/2014/03/Chart-4.jpg" alt="Chart 4" width="500" height="186">
Looking at the rate of population growth over the year, it was fastest in Western Australia (3.1%), Victoria (2.0%) and Queensland and the Northern Territory (both 1.8%). 
At 1.5%, New South Wales’ rate of population growth was at its highest level since September 2009 and in Victoria population growth was at its highest level since December 2009.  While the rate of population growth is accelerating in New South Wales and Victoria it is slowing or stable across all other states. 
Most notably, the rate of population growth in Queensland is at its slowest pace since September 2011 and in Western Australia it is at its slowest pace since December 2011. 
The Australian Capital Territory has also been recording strong population growth recently however, the 1.6% growth over the past year is the slowest rate of growth since December 2006.
The data indicates that population growth is escalating into the two most populous states, New South Wales and Victoria, which, perhaps not so incidentally, are also showing the strongest housing market conditions. 
In each other state and territory the rate of population growth is generally waning. 
Overseas migration may have also peaked which is no surprise given that the mining investment peak may have already or is expected to shortly pass. 
We believe that population growth will remain at high levels on an historic basis however, it would not surprise us to see the rate of growth slow further over the coming quarters.
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ABS stats reveal population growth is escalating in NSW and Victoria

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RP Data has released our latest Pain &amp; Gain Report for the December 2013 quarter. The report found that of those residential properties re-sold throughout the final quarter of 2013, 9.7% were sold for less than their previous purchase price compared to 31.8% of re-sold homes transacting for more than double their previous purchase price.
The proportion of loss making sales was down from 12.6% at the same time in 2012 and was at its lowest level since the three months to July 2011.
Across the combined capital cities the proportion of loss making re-sales was even lower. Over the quarter, just 6.5% of homes sold at a loss compared to 9.8% at the same time in 2012. The proportion of loss making re-sales was at its lowest level since the three months to May 2011.
Across each individual capital city, the proportion of homes selling at a loss is now trending lower. Given the consistently low mortgage rate environment and the rise in home values over the past year this is not an unexpected occurrence. With values rising and as we move beyond the financial crisis, the likelihood of homes re-selling at a loss is likely to continue to reduce throughout 2014.
<img class="aligncenter size-full wp-image-3020" src="https://blog.rpdata.com/wp-content/uploads/2014/03/chart-1.jpg" alt="chart 1" width="500" height="179">
A key feature of the analysis over recent years has been the consistently high proportion of loss making re-sales across some of the most high profile coastal markets.  Conversely, key regions linked to the resources sector have consistently recorded a relatively low proportion of loss making sales.  More recently conditions have started to change.
<img class="aligncenter size-full wp-image-3021" src="https://blog.rpdata.com/wp-content/uploads/2014/03/chart-2.jpg" alt="chart 2" width="500" height="179">
High profile coastal markets such as Richmond-Tweed in New South Wales, as well as Far North, Gold Coast and Sunshine Coast in Queensland and the South West region of Western Australia have generally seen a high proportion of loss making re-sales over recent years.  As the above chart highlights, the proportion of loss-making re-sales is now trending lower across each region.  At the end of the December 2013 quarter, 23.8% of re-sales in Richmond-Tweed were at a loss down from a peak of 29.1% over the three months to October 2012.  Across the Queensland regions, the proportion of loss making re-sales peaked at 41.7% in the Far North (Jun-12), 39.1% on the Gold Coast (Dec-12) and 35.7% on the Sunshine Coast (Dec-12).  At the end of last year, the proportion of loss-making re-sales were recorded at: 28.8% in the Far North, 26.9% on the Gold Coast and 25.8% on the Sunshine Coast.  South West Western Australia recorded a peak in loss making re-sales of 23.3% in May-12 and at the end of 2013 the proportion had fallen to 19.6%.
<img class="aligncenter size-full wp-image-3022" src="https://blog.rpdata.com/wp-content/uploads/2014/03/chart-3.jpg" alt="chart 3" width="500" height="179">
As the high profile coastal markets have started to show improving market conditions, resource areas have seen property values and demand begin to fall resulting in a lift in the proportion of loss making resales.  The above chart highlights the proportion of loss making re-sales over time across the major mining regions of Fitzroy and Mackay in Queensland and the Pilbara and South Eastern in Western Australia.  In Fitzroy, the proportion loss-making re-sales have risen from 9.5% at the end of 2012 to 19.5% at the end of 2013.  At the end of 2012, 10.4% of Mackay homes re-sold transacted at a loss compared to a much higher 23.6% at the end of the December 2013 quarter.  The Pilbara region recorded 13.3% of all re-sales at a loss over the final quarter of 2013 up from 2.0% a year earlier. 18.1% of re-sold homes in the South Eastern region transacted for less than their previous purchase price over the final three months of 2013, up from 11.8% over the same period in 2012.
The impact of the peak in mining investment on local housing markets is clearly the primary cause of the upswing in realised loss.  With demand for mine workers lower in the operation phase compared to the construction phase, local housing markets are often experiencing falling demand both from a rental and an ownership perspective.  As a result it is no surprise that a greater proportion of sellers are realising a loss on the sale of their home in these areas.
The analysis suggests that low mortgage rates are resulting in housing market conditions that are generally improving.  Across the country the proportion of loss making re-sales is trending lower as home values rise.  Coastal markets have seen a relatively high proportion of loss making re-sales and although, as a proportion, loss making sales remain high they are also trending lower.  This reflects the low levels of capital growth returning to these markets.  On the other hand the slowdown in mining investment is already having an impact on regions heavily linked to the resources sector.  The economies in these areas tend to not be overly diversified and it would be no surprise to see a further rise in the proportion of loss making re-sales in these areas throughout 2014.
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More gain, less pain: Fewer homes selling at a loss as dwelling values continue to rise

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In the latest ABS results it was reported that the total value of housing finance commitments for investment purposes was recorded at $10.3 billion in January 2014.
While the value of investment finance commitments had fallen by -3.3% over the month, it is clear that there has been a very strong ramp-up in investment expenditure on housing over the past 18-24 months with a significant increase in lending to investors. Although this is the case, owner occupier purchases have also ramped up sharply over the same period.
<blockquote>
The proportion of activity by investors in the housing market currently is sitting at its highest levels since late 2003.
</blockquote>
While owner occupier purchases accounted for the greatest proportion of housing finance commitments, there was a distinct rise in investment lending where in January 2014, investment lending accounted for 38.5% of all lending; a drop from 39.6% in December 2013. The proportion of activity by investors in the housing market currently is sitting at its highest levels since late 2003. It’s important to remember that late 2003 was the peak in housing market activity and at that time and shortly afterwards, value growth went flat for a number of years.
<img src="/images/2014/03/24/kusher-march-24-one.gif" alt="">
Why is investment activity so significant in the current market? 
The combined capital city housing market recorded a low point in May 2012. Since that time, values have increased by 13.2%.
Although we’ve seen a broad rise in values, the magnitude of these has varied significantly on a city-by-city basis.
<img src="/images/2014/03/24/kusher-march-24-two.gif" alt="">
Since May 2012, home values in Sydney increased by 18.6%, in Melbourne by 14.4%, in Perth by 12.4% and in Darwin by 8.8%. On the other hand, Adelaide home values are up by 1.0%, Hobart by 2.6%, Canberra by 4.4% higher and Brisbane by 4.9%. Based on this it is clear that value growth has only been particularly strong within a handful of capital cities, albeit the two largest cities, Sydney and Melbourne, have been the primary drivers of capital gains over the current cycle.
Over the same 22 month period since May 2012, rental growth has significantly underperformed home value growth. Across the combined capital cities, rental rates have increased by a total of 4.9% which was significantly less than half the growth in home values. Darwin (11.7%), Perth (8.4%) and Sydney (5.6%) have recorded the strongest increases in rents however, only Darwin has recorded stronger levels of total rental growth than value growth. Every other city has recorded less than 5% growth in rental rates. Across the remaining cities the rental change has been recorded at: Melbourne (3.4%), Brisbane (4.3%), Adelaide (2.5%), and Hobart (0.6%) while Canberra rents are -3.1% lower.
<img src="/images/2014/03/24/kusher-march-24-three.gif" alt="">
With home value growth generally outperforming rental growth, it seems that most of the investment activity in the market is focussed on capital gains rather than rental return.
With investors clearly focussed on capital growth in the market, the potential for failure is when growth slows or falls - what then will happen to the investor segment?
<img src="/images/2014/03/24/kusher-march-24-four.gif" alt="">
There’ll be some investors who won’t be overly concerned as they may have negatively gearing their investment by design. However, some will be left with a low yielding asset coupled with potentially low medium term capital gain prospects as the market moves out of the growth phase.
Potentially a portion of these recent investors will look to exit the residential property asset class if and when value growth slows or falls and move into better performing and more liquid asset classes.
Note: Housing finance data is released by the Australian Bureau of Statistics (ABS) each month and provides valuable insight into residential lending. A key trend recently has been the heightened level of activity by investors. It is important to remember that the data is based on finance commitments by Australian Authorised Deposit-taking Institutions (ADIs). Finance sourced from overseas is not included in the data.
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Investors continue to focus on property

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The price of vacant land across the capital cities continued to climb throughout 2013. At the end of the year, the median selling price was $249,000 which is an increase of 6.9% throughout the year with vacant land prices now at historic high levels.
The annual rate of growth in median selling prices was the largest annual change since they rose by 8.5% over the 12 months to August 2011.
Across each capital city, it’s easy to see an occurring disparity between the cost of land and the typical size across the cities.
<img src="/images/2014/03/17/kusher-march-14-four.gif" alt="">
Median selling prices of vacant land are highest in Sydney ($305,000) and lowest in Hobart ($150,000). Most cities have recorded a significant increase in selling prices over the past decade however; it is worth noting that growth in Sydney has been minimal.
Median lot sizes tend to be much larger in Hobart (828 square metres) than they are across the other capital cities. Typical vacant land areas are smallest in Adelaide at just 375 square metres. All capital cities have recorded a rise in median land sizes throughout 2013.
<img src="/images/2014/03/17/kusher-march-14-one.gif" alt="">
We’ve seen a large reduction in the median lot size of vacant land over recent years. When preparing today’s analysis, we were surprised to see a slight reversal of this trend throughout 2013. At the end of 2013, the average vacant lot size across the combined capital cities was 500 square metres, which is slightly higher than the 466 square metres at the end of 2012. The average lot size has reduced quite significantly over time; 20 years ago the typical lot size was a much larger 701 square metres.
Although vacant land median selling prices rose over the year, the rise in median land area has resulted in a slight fall in the median rate per square metre. Currently, the median rate per square metre for vacant land was recorded at $507.70/square metres at the end of 2013 compared to $509.39/square metres at the end of 2012.
<img src="/images/2014/03/17/kusher-march-14-two.gif" alt="">
This result highlights that as prices have risen and sizes have shrunk, there has been a sharp rise in the cost of land on a square metre basis. “Twenty years ago, the median rate per square metre for capital city vacant land was recorded at $76.47/square metre.
As a result of falling lot sizes and vacant land price increases we have seen significant rises in the rate per square metre for land across each city over the past decade. Perth land is the most expensive on this measure ($631.46/square metre) followed by Sydney ($608.27/square metre) . The rate per square metre for land in Hobart is significantly lower than all other capital cities at $147.82/square metres.
The ongoing trend across capital city vacant land markets has been diminishing lot sizes and rising prices. If you were to buy a piece of land today 701 square metres in size (which was the typical size 20 years ago) it would cost $355,896. Compare this to the current capital city median of $249,000 for 500square metres. A 500 square metre lot 20 years ago would’ve cost just $38,235.
<img src="/images/2014/03/17/kusher-march-14-three.gif" alt="">
With vacant land costs increasing over the past 20 years it is no wonder there has also been an ongoing increase in the overall cost of housing. With a starting point for land in the capital cities of $249,000 currently, when you add in build costs it is no wondering the size of land has trended so much lower as developers look to provide relatively affordable housing options for price sensitive buyers.
Overall, one of the solutions to housing affordability issues is to reduce the cost of land. The way to do this is to either greatly increase the supply (expand urban boundaries and grant approvals quicker) or reduce the built in costs of developing the land which includes taxes and government fees and charges.
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Cost of vacant land in capital cities continues to rise

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Each quarter the Australian Prudential Regulation Authority (APRA) publishes data on the exposure of Australian Authorised Deposit-taking Institutions (ADI).  The data is extremely useful as it provides highlights of all outstanding exposures (mortgages) and also some information about those written over the quarter.
<img class="aligncenter size-full wp-image-2915" alt="investor loans" src="https://blog.rpdata.com/wp-content/uploads/2014/02/investor-loans.jpg" width="470" height="171" style="margin: 0px auto 15px; padding: 3px; border: 1px solid #e6e6e6; outline-width: 0px; background-color: rgba(255, 255, 255, 0.701961); max-width: 100%; text-align: center; height: auto; display: block; vertical-align: bottom;">
The data indicates that across all ADIs, 66.7% of the value of outstanding loans is to owner-occupiers with the remaining 33.3% to investors.  Over time there has been little change to these proportions indicating pretty much a two thirds owner occupier to one third investor split.
<img class="aligncenter size-full wp-image-2916" alt="loans with offset" src="https://blog.rpdata.com/wp-content/uploads/2014/02/loans-with-offset.jpg" width="470" height="171" style="margin: 0px auto 15px; padding: 3px; border: 1px solid #e6e6e6; outline-width: 0px; background-color: rgba(255, 255, 255, 0.701961); max-width: 100%; text-align: center; height: auto; display: block; vertical-align: bottom;">
Looking at the type of loans mortgagees have is also interesting. At the end of 2013 a record high 34.6% of all mortgagees had a loan with an offset facility.  The figure was up from 34.2% over the September 2013 quarter and 33.38% at the same time in 2013. 
The rising proportion of loans with an offset facility indicates to me that many mortgagees are utilising these facilities to reduce their mortgage liability whilst still having access to those funds.  This is supported by recent RBA data which indicates the typical mortgagee is around 21 months ahead in their mortgage repayments.
<img class="aligncenter size-full wp-image-2917" alt="offset loans" src="https://blog.rpdata.com/wp-content/uploads/2014/02/offset-loans.jpg" width="470" height="171" style="margin: 0px auto 15px; padding: 3px; border: 1px solid #e6e6e6; outline-width: 0px; background-color: rgba(255, 255, 255, 0.701961); max-width: 100%; text-align: center; height: auto; display: block; vertical-align: bottom;">
Housing finance data has told us that the level of investor lending is at its highest point since late 2003 and not far off all-time highs.  Many investors choose to use interest-only mortgages mainly due to the taxation benefits they afford. 
The APRA data shows that a record high 35.0% of all outstanding loans are interest-only mortgages.  This figure is up from 34.6% at the end of the September 2013 quarter and 33.8% in December 2012.
<img class="aligncenter size-full wp-image-2918" alt="avg outstanding balance" src="https://blog.rpdata.com/wp-content/uploads/2014/02/avg-outstanding-balance.jpg" width="470" height="171" style="margin: 0px auto 15px; padding: 3px; border: 1px solid #e6e6e6; outline-width: 0px; background-color: rgba(255, 255, 255, 0.701961); max-width: 100%; text-align: center; height: auto; display: block; vertical-align: bottom;">
The average amount outstanding for a residential loan was recorded at $233,500 at the end of December 2013.  The figure is also a record high, up from $231,700 at the end of September 2013 and $228,300 at the end of December 2013.
When you consider that at the end of 2013 the median dwelling price across the combined capital cities was $540,000, the level of debt compared to the typical home price is relatively low however, this is unlikely to be the case for more recent purchasers and those with only a small deposit (we will touch on this shortly).
Perhaps more concerning is the fact that the typical amount outstanding for interest-only mortgages is $295,300, up from $294,300 at the end of the previous quarter and $294,100 at the end of 2012.  Those mortgagees that are not reducing their principal have much higher overall debt levels than those who are.
The data also highlights some information on those residential loans written over each quarter.  Over the final quarter of 2013, a record high 35.7% of new loans were for investment purposes, up from 34.4% in September 2013 and 32.8% in December 2012.  It is important to remember when I say record high the data is only available from March 2008 and housing finance data from the Australian Bureau of Statistics (ABS) suggests that investor activity was higher than current levels back in late 2003.
Over the quarter, the proportion of interest-only mortgages hit a record high of 38.8%, up from 37.2% the previous quarter and 35.0% at the same time the previous year.  Of course, the risks are that these buyers stretch themselves too far and when mortgage rates begin to be normalised they have an increased risk of default.
<img class="aligncenter size-full wp-image-2919" alt="80pct lvr loans" src="https://blog.rpdata.com/wp-content/uploads/2014/02/80pct-lvr-loans.jpg" width="470" height="172" style="margin: 0px auto 15px; padding: 3px; border: 1px solid #e6e6e6; outline-width: 0px; background-color: rgba(255, 255, 255, 0.701961); max-width: 100%; text-align: center; height: auto; display: block; vertical-align: bottom;">
Perhaps most intriguing out of all the data is the fact that more than one third of all loans have a loan to value ratio (LVR) of greater than 80%.  What this means is that the mortgagee has less than a 20% deposit when purchasing and obviously these loans are inherently more risky.  As a result most ADIs will require the mortgagee to pay mortgage insurance on these loans. 
The high proportion of loans with an LVR of more than 80% is extremely topical at the moment given that New Zealand has recently introduced macroprudential tools to their lending environment.  What the Reserve Bank of New Zealand (RBNZ) have done is reduce the amount that NZ banks can lend to higher risk mortgages (greater than 80% LVR) only 10% of total lending can be for loans with an LVR of more than 80%.
Over the quarter, 34.4% of all new loans had an LVR of more than 80% which was down slightly from 34.6% over the September 2013 quarter and the same proportion as in the December 2012 quarter.  Although there has been a slight reduction, the proportion of higher LVR lending remains quite high. 
Interestingly, only 13.6% of total lending was for a LVR of more than 90% compared to 20.8% on an LBVR of between 80% and 90%.  The data indicates that most new mortgages are less risky (less than 80%) however, the higher risk lending still accounts for a large proportion of the overall market.
Overall the data provides a useful snapshot of the current lending environment.  The data indicates that the prevalence of investors and subsequently interest-only mortgages within the market is rising.  As we have highlighted previously, this is not without risks particularly if housing market conditions or monetary policy settings shift rapidly.  Should interest rates rise rapidly in the future, the interest proportion of mortgage repayments would also quickly rise with most mortgagees on variable rate mortgages. 
From an investors perspective this may make ownership of an investment property less attractive and from a high LVR purchasers perspective it could make meeting the mortgage repayments more difficult.  A high proportion of loans are still being written at an LVR of more than 80%.  As mentioned these mortgages are typically insured so the risk to the ADI itself is lessened however it doesn’t necessarily reduce the overall market risk if we see arrears and default levels climb in the future.
Cameron Kusher is senior research analyst at <a target="_blank" rel="nofollow" href="https://www.myrp.com.au/">RP Data</a>.
               
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Decoding outstanding mortgage data: Is investment property looking less attractive?

New apartment developments with uninterrupted, north-facing views over Perth's Swan River are exceptionally rare.

Recognising just how limited those opportunities are, <a href="https://www.apartments.com.au/developers/edge-visionary-living">Edge Visionary Living</a>, one of Perth's most respected builder-developers, targeted <a href="https://www.apartments.com.au/developments/applecross-wa-6153">Applecross</a>, assembling an unrepeatable 6,342 sqm riverfront site on the corner of Moreau Mews and Canning Beach Road to create one of Perth's only new north-facing apartment developments directly overlooking the Swan River.

Today, <a href="https://www.apartments.com.au/buildings/riviere-residences-applecross-59-canning-beach-road-applecross-wa-6153">Rivière Residences</a> offers buyers a unique opportunity to choose between completed residences ready to move into now and off-the-plan homes in the final stage, Rivière West.

[smartcode_project:default project_id=28384 project_image_fid=3823]

Across the completed East and Central buildings, residents are already enjoying the development's luxury amenity, while two of the precinct's hospitality venues are now open.

The completed component of the development gives buyers the advantage of experiencing the finished product firsthand, including its uninterrupted river views, while still having the opportunity to secure a residence in the final stage.

"People are wowed by the view and the quality of the apartments,"&nbsp;Edge Visionary Living Sales Executive, Holly McSweeney, says.

"They're looking for the convenience of lock-and-leave living, but they're not looking to downsize on quality."

[smartcode_project:default project_id=28384 project_image_fid=3826]

The rarity of the development hasn't been lost on prospective buyers, McSweeney says.

For McSweeney, it all comes back to a location that is becoming increasingly difficult to replicate.

"Location, location, location," she says. "We are nestled right on the front of the Swan River. You can never get built out, so wherever you are in Rivière Residences, you've got views of the river forever."

The unique waterfront position has resonated particularly strongly with local downsizers. McSweeney says many buyers are long-time Applecross residents looking to transition from large family homes into a luxury apartment without sacrificing space, quality or the lifestyle they've enjoyed for decades.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/N_FowNW0wu8?si=vb25XFq1wZ-iufAW" title="YouTube video player" width="560"></iframe>

A major focus for Edge in recent years has been resident amenity. Across its apartment portfolio, from beachfront developments in Scarborough to luxury towers in South Perth, the developer has increasingly invested in the spaces beyond the apartment itself.

The strategy has largely been shaped by downsizer demand. Many buyers are moving from large family homes with swimming pools and established gardens. While they're looking to leave the maintenance behind, they don't want to compromise on lifestyle.

At Rivière, <a href="https://www.apartments.com.au/architects/hillam-architects">Hillam Architects</a> designed the resident facilities as an extension of each apartment. A 25-metre heated swimming pool takes advantage of the north-facing river outlook, complemented by a large gym, sauna and steam rooms, private dining spaces, residents' lounges, a cinema, games room, and dedicated wine and whisky rooms.

[smartcode_project:default project_id=28384 project_image_fid=372542]

The waterfront location has also proved to be a major drawcard. Residents are within walking distance of the Raffles Hotel, South of Perth Yacht Club, the Heathcote Cultural Precinct and the cafés, restaurants and boutiques along Ardross Street.

Beyond the location and amenity, McSweeney says many buyers take confidence from Edge's fully integrated development model.

Having delivered apartments across Perth for decades, Edge now designs, develops and constructs its projects in-house, giving the company greater control over quality, delivery and the finished product.

"What I love is when people walk through their apartment for the first time and say, 'This is better than what we imagined,'" McSweeney says. "We hear that all the time."

Completed apartments in the East and Central buildings are now available to inspect by appointment, while Rivière West, the final stage of the precinct, is expected to be completed in the first quarter of 2027.

[smartcode_project_cta:default project_id=28384]

Joel Robinson

North-facing Swan River views drive demand at Rivière Residences in Applecross

Nearly 60 per cent of apartments at McNab Group's $220 million The Tannery development in Brisbane's West End have sold ahead of the project's public launch, including a suburb-record $2.57 million sale for a two-bedroom apartment.

The early sales campaign has secured buyers for 50 of the project's 87 apartments, highlighting continued demand for larger owner-occupier apartments that combine generous floorplans with premium lifestyle amenities in one of Brisbane's most tightly held inner-city suburbs.

[smartcode_project:default project_id=143337 project_image_fid=374768]

McNab Group Executive Chairman Michael McNab said selling more than half the project before launch reflected changing buyer expectations.

"Selling more than half the project before public sales open tells us buyers are actively seeking apartments that offer something genuinely different," McNab said.

"Today's buyers are looking beyond four walls. They want homes that genuinely enhance the way they live, with spaces that support health, connection and everyday wellbeing."

[smartcode_project:default project_id=143337 project_image_fid=374767]

A key point of difference for the project is the adaptive reuse of the heritage-listed Dixon's Tannery building, which will become The Retreat, a residents-only wellness precinct rather than being redeveloped into additional apartments.

The Retreat will feature a sauna and steam room, hot and cold plunge pools, a commercial-grade gym, Pilates studio, cinema, library, co-working spaces and private dining room. Rooftop amenities will include a swimming pool, landscaped gardens, outdoor entertaining areas and dog-friendly spaces.

[smartcode_project:default project_id=143337 project_image_fid=374760]

Designed by Cottee Parker Architects with interiors by Tom Mark Henry and landscape architecture by Aspect Studios, The Tannery comprises 87 two, three and four-bedroom apartments across 11 levels overlooking the Brisbane River.

Cottee Parker principal Dee Passenger said preserving the original tannery building had been central to the project's design.

"The easy option would have been to maximise the site's development potential with additional apartments. Instead, McNab has chosen to preserve the original tannery as a shared wellness retreat, ensuring this important piece of Brisbane's history remains at the heart of the community."

Passenger said sustainability also played a key role in the design, with materials from the original industrial site salvaged and repurposed throughout the development.

[smartcode_project:default project_id=143337 project_image_fid=374761]

Motiv CEO Carly Cottam said buyers had responded strongly to the combination of larger apartments, wellness facilities and the West End lifestyle.

"We are seeing more buyers looking for homes in the sky that provide the space and functionality of a traditional home, while benefiting from the convenience and lifestyle that apartment living brings," Cottam said.

She said purchasers included both owner occupiers and investors, with demand coming from local buyers as well as interstate purchasers.

Coinciding with the public launch, McNab also announced a partnership with Queensland Ballet, whose neighbouring Thomas Dixon Centre shares historical ties with the original Dixon family.

Located on a 4,465 sqm site at 439 Montague Road, The Tannery overlooks the Brisbane River and is around 10 minutes from the CBD.

Construction is underway, with completion expected in the second half of 2027.

[smartcode_project_cta:default project_id=143337]

More than half of residences sold before public sales as McNab announces significant partnership with Queensland Ballet

McNab's The Tannery nears 60 per cent sold before public release, sets two-bedroom West End record

Iwan Sunito's vision for a landmark mixed-use precinct in Sydney's Inner West has taken a major step forward, with approval granted for the $1.9 billion Five Dock development first unveiled earlier this year.

The approved scheme by <a href="https://www.apartments.com.au/developers/one-global-capital">One Global Capital</a> will deliver an 80,500 sqm mixed-use precinct comprising 840 apartments, integrated hotel accommodation, commercial and retail space, alongside publicly accessible open space designed to create a new destination for the growing suburb.

"This is a significant milestone for One Global Capital and for the future of housing delivery in Sydney," Sunito said.

"The Housing Delivery Authority was established to identify major housing projects capable of delivering meaningful supply more efficiently, and we are delighted that Spencer Street has been recognised as one of those projects.”

He said the declaration reflected the rapid progress achieved since acquiring control of the site.

"In less than seven months we have progressed from taking control of the site to securing entry into one of the NSW Government's most important planning pathways. It reflects the experience of our team, the strength of our consultant group led by Urbis, and our long-term commitment to delivering transformational projects that contribute to Sydney's future."

When the project was revealed earlier this year, Sunito described the opportunity as one of the strongest development sites he had worked on.

"I probably hadn't appreciated the uniqueness of the site until more recently when putting together the concept plans," Sunito said.

"The proximity to the water, and the golf course opposite, is unlike any other part of Parramatta Road. We have a unique position and view corridors over the water that makes this one of the best sites I've worked on."

The development has evolved since its initial announcement, with the approved plans increasing the residential component from the originally proposed 750 apartments to 840 homes while retaining the project's focus on creating an integrated neighbourhood rather than a standalone residential development.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/a-city-within-a-city-iwan-sunito-flags-1-5-billion-mixed-use-precinct-in-five-dock">"A city within a city": Iwan Sunito flags $1.5 billion mixed-use precinct in Five Dock</a>

The precinct will combine apartments with hotel accommodation, commercial workplaces, retail offerings and public spaces, creating a mixed-use environment intended to serve both residents and the broader Five Dock community. The proposal also continues the collaboration between One Global Capital and internationally recognised architect <a href="https://www.apartments.com.au/architects/koichi-takada-architects">Koichi Takada</a>, whose previous work with Sunito includes Infinity, Arc and Skye North Sydney.

Takada previously said the design was driven by a philosophy of integrating nature into the built environment.

"The concept for this development is born from our design approach to naturalising architecture," Takada said.

"The public realm benefits from biophilic design that integrates generous landscaping, and the development is optimised for natural daylight, airflow and water views to foster wellbeing, sustainability and spaces that foster community interaction."

Sunito has consistently described the project as a "city within a city", with a strong emphasis on creating a destination that extends beyond housing.

"We want to create a development that's not only to be seen, but to be experienced by the whole local community," he said.

The approval comes as Five Dock continues its transformation ahead of the opening of the Sydney Metro West line, with the new Five Dock station set to significantly improve connections between the Inner West, Parramatta and the Sydney CBD.&nbsp;

The precinct will also benefit from its proximity to the Parramatta Road corridor, nearby waterfront parklands and established retail and dining offerings that have made Five Dock one of Sydney's most tightly held Inner West suburbs.

Iwan Sunito secures approval for $1.9 billion Five Dock mixed-use precinct

The new <a href="https://www.apartments.com.au/new-apartments/yarraville-green-42-stephen-street-yarraville-vic-3013">Yarraville Green</a> development in Melbourne's inner west is showing that landscaping can be just as influential as architecture, with buyers responding strongly to the garden-first approach adopted from the outset by developer Excelon Projects and the project's design team.

Excelon appointed Six Degrees Architects and landscape architects SBLA to work collaboratively on the development, with a brief to create "a sustainable, design-led building with a focus on community."

That approach has resonated with buyers. According to Next Chapter Director Tom Hirini, who is leading the sales campaign, the landscaped communal garden has become one of the project's defining features, alongside its boutique scale and European-inspired cluster housing concept.

Local downsizers, right-sizers and established families already living in Yarraville and surrounding suburbs have accounted for the majority of purchasers.

[smartcode_project:default project_id=144913 project_image_fid=297740]

Yarraville Green will comprise 53 homes, including apartments and townhomes, arranged around the shared central garden to maximise connections to the landscaped open space. Parking has been moved underground, allowing the ground plane to be dedicated to greenery, pedestrian movement and communal spaces.

The landscape extends well beyond passive planting. Productive garden beds, a pergola, communal gathering spaces, garden sheds and a pet wash have all been integrated into the masterplan, creating spaces designed to encourage everyday interaction between residents.

[smartcode_project:default project_id=144913 project_image_fid=297741]

The interiors continue Excelon's focus on craftsmanship, incorporating bespoke elements by Melbourne artisans including leadlight detailing by Adadaz, hand-turned timber hardware by Auburn Woodturning and blown-glass lighting by Ruth Allen.

Sustainability has also been embedded throughout the project, with Yarraville Green targeting an average 7-star NatHERS energy rating through passive design principles, rooftop solar servicing common areas and rainwater harvesting for landscape irrigation.

[smartcode_project:default project_id=144913 project_image_fid=297735]

Construction continues to progress at Yarraville Green, with structural works well underway and framing works approaching completion under builder Balmain &amp; Co. The project remains on track for completion in mid-2027.

Apartments at Yarraville Green are currently priced from $625,000, while townhomes start from $1.4 million.

[smartcode_project_cta:default project_id=144913]

Garden-led design drives buyer demand at Yarraville Green

National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.

Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.

[smartcode_project:default project_id=145922 project_image_fid=373556]

The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.

Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.

"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.

"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.

"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."

[smartcode_project:default project_id=145922 project_image_fid=373559]

Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.

The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.

[smartcode_project:default project_id=145922 project_image_fid=373583]

Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.

Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.

[smartcode_project:default project_id=145922 project_image_fid=373571]

Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.

Completion of Crest &amp; Walker is slated for late 2028.

[smartcode_project_cta:default project_id=145922]

Cameron Kusher

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