<html><body>
Research by RP Data shows that while capital city values are climbing, rental yields began to decline and with further drops expected to emerge over the coming year.

Although value growth may be strong at the time when mortgage rates are incredibly low, once rates eventually increase, value growth can quickly slow which was evident in late 2009 and 2010.
While there are benefits associated with negative gearing, investors may like to look at the longer term costs and benefits associated with housing market investment rather than just speculating on a short-term capital gains. The problem with a strategy around purchasing for investment purposes in the current market is two-fold.
<img src="/images/stories/2013/10/11/kucher-oct-11-one.png" width="470" height="216" alt="kucher-oct-11-one">
Firstly, capital gains as opposed to rental return is not realised until the point of sale. Secondly, although home value growth may be strong at a time when mortgage rates are incredibly low, once rates eventually increase, value growth can quickly slow. A feature rarely seen across the residential housing market is simultaneous growth in values and growth in rental rates.
Given that yields are based on rental rates and home values, if values rise quicker than rents you will see an erosion of rental returns.
The September RP Data-Rismark Home Value Index covering capital city house values shows an increase by 5.7% over the past year while unit values increased by 4.4%. At the same time, rental rates increased by just 3.1% for capital city houses and 2.6% for capital city units.
<img src="/images/stories/2013/10/11/kucher-oct-11-two.png" width="470" height="194" alt="kucher-oct-11-two">
Over the years, the annual rate of rental growth has seldom outpaced the annual rate of home value growth. The two instances in which this has occurred was when home values fell through 2008, 2011 and 2012. Of note is that rental rates never fell on an annual basis over the period however, the growth was generally moderate.
Movement in gross rental yields over recent time shows that as home values experienced strong growth throughout early 2000, a significant deterioration in rental yields was evident. Since that time an improvement in yields during 2008 and 2011/12 can be seen as rental growth outpaced value growth. However, yields never returned to their previous highs. In recent times, gross rental yields have started to ease as growth in capital city home values outpaced rental growth.
There will always be discrepancies between the performances of rental growth across individual capital cities. If we firstly look at the annual change in major capital city rental rates we will see that the general trend is that rental growth is either slowing or quite sluggish.
<img src="/images/stories/2013/10/11/kucher-oct-11-three.png" width="470" height="192" alt="kucher-oct-11-three">
Rental growth for homes across the major capital cities over the past year has been recorded at: 3.6% in Sydney, 2.1% in Melbourne, 2.3% in Brisbane, 2.5% in Adelaide and 4.6% in Perth. At the same time 12 months ago, the annual rental growth figures were: 2.0% in Sydney, 1.2% in Melbourne, 2.5% in Brisbane, 0.3% in Adelaide and 11.4% in Perth.
Sales volumes estimates show that over the three months to July 2013, sales were higher across each major capital city than over the same period the previous year. As the number of homes purchased increases, this should alleviate many of the rental growth pressures present in the market, reducing the scope for investors to significantly lift rental rates. Given this, the outlook for rental growth is that although it may continue to rise, it is likely to do so at a moderate pace.
<img src="/images/stories/2013/10/11/kucher-oct-11-four.png" width="470" height="216" alt="kucher-oct-11-four">
For Sydney, Melbourne and Perth, value growth over the past year has outstripped rental growth. Should this continue, there will undoubtedly be a further deterioration of rental yields.
In Brisbane and Adelaide rental growth has marginally outperformed value growth however; the gap has narrowed significantly over the year.
With values anticipated to continue to increase in Sydney and Melbourne and the potential for value growth to accelerate in Brisbane and Adelaide over the coming year, we should expect further erosion of rental yields.  
<img src="/images/stories/2013/10/11/kucher-oct-11-five.png" width="470" height="218" alt="kucher-oct-11-five">

<hr>
Cameron Kusher is senior research analyst at <a target="_blank" rel="nofollow" href="https://www.myrp.com.au/">RP Data</a>.
 
 
</body></html>

ckusher-ujnxiKuFQs

Capital city home values rising while rental yield returns are declining: Cameron Kusher

<html><body>
An increase of 8.7% in property values since the market trough in May 2012 indicates that the housing market is once again back in a growth phase, however, data out today indicates more subdued conditions than some may be expecting.  

The current rate of value appreciation is nowhere near as strong as the growth in values over previous value growth phases.
Although there is some clear strengthening of values, the magnitude of the increase is less than what was recorded during previous growth cycles despite positive data released in the September RP Data-Rismark Home Value Index results earlier this week.
<img src="/images/stories/2013/10/03/kusher-oct-3-one.png" width="470" height="238" alt="kusher-oct-3-one">
While the results showed that capital city home values increased by 5.5% over the past 12 months, and by 8.7% since their recent low point in May 2012, other recent growth periods in the housing market, specifically at the beginning of 2001, 2007 and 2009 show that the rise in values during the current cycle is significantly more modest when compared with these cycles.
Home values across the combined capital cities have been rising since May last year and are now 8.7% higher over the 17 months (including May). Over the 17 months from December 2003 to April 2002, combined capital city home values had increased by 27.6%. The 2007 housing market recovery ran for exactly 17 months with home values rising by 15.1% over that period. Over the 17 months from December 2008 to April 2010 combined capital city home values increased by a total of 19.3%.
Value growth over the first 17 months from December 2001 was three times greater than value growth over the most recent growth phase. In 2007 growth was almost double that of the current period and over the same period post December 2008 values had grown at more than double the current rate of value growth.
<img src="/images/stories/2013/10/03/kusher-oct-3-two.png" width="470" height="257" alt="kusher-oct-3-two">
A further investigation into value growth data across each capital city over these three recent market growth phases shows some interesting findings.
Over the three previous growth phases Melbourne’s housing market recorded the strongest level of capital growth followed by Sydney in 2001 and 2009, and by Brisbane in 2007. In the current recovery phase, the market has taken its lead from Sydney followed by Perth and Darwin (although capital gains in these latter two markets is now decelerating).
In 2001, Darwin showed an extremely muted response to the beginning of the market growth phase and Perth’s initial growth was lower compared with most other capital cities. In 2007, value growth through the recovery was comparatively weak in Perth, Hobart and Sydney. In the 2009 growth phase it was Hobart, Adelaide and Brisbane which experienced the weakest rebound in home values. Looking at the current growth phase, it has once again been Hobart, Adelaide and Brisbane that have experienced the most moderate response.
<img src="/images/stories/2013/10/03/kusher-oct-3-three.png" width="470" height="279" alt="kusher-oct-3-three">
Based on this data it seems as if the national housing market tends to be led by the Melbourne and Sydney housing markets with the recovery across other capital cities generally lagging behind. Today’s results which are evidenced in the accompanying charts show that the remaining capital cities tend to lag the two largest cities.
Another point worth noting is that the periods of strong capital growth in Sydney and Melbourne have tended to not be as long as those in the other major capital cities. This was particularly noticeable in the 2001 growth phase where value growth had slowed in Sydney and Melbourne but continued for a much longer period in Brisbane, Adelaide and Perth.
With value growth typically commencing in Sydney and Melbourne where home values tend to be much higher than those in the other major capital cities, it is no surprise that growth phases tend to be shorter as affordability constraints arise.
<img src="/images/stories/2013/10/03/kusher-oct-3-four.png" width="470" height="237" alt="kusher-oct-3-four">
Given that historically growth periods have tended to be shorter in Sydney and Melbourne than those in Brisbane, Adelaide and Perth it would be reasonable to anticipate that the current rate of value growth will not continue for an extended period of time.
It is also reasonable to expect that over the coming month’s value growth in Brisbane and Adelaide, where the recovery to-date has been quite dormant, we may start to see stronger value growth conditions as the affordability of these cities improves relative to the other major capital cities.
 
<hr>
 Cameron Kusher is senior research analyst at <a target="_blank" rel="nofollow" href="https://www.myrp.com.au/">RP Data</a>.
 
 
</body></html>

Housing market back in growth phase, despite subdued growth: Cameron Kusher

<html><body>
Queensland’s capital city, Brisbane, is the largest municipality in Australia.  There are 1,110,473 people that live in Brisbane, comprising just fewer than 5% of Australia’s population.  The second largest council, which is also in the south-east corner of Queensland, is the Gold Coast where the population is less than half that of Brisbane’s at 526,173 persons. 
In fact, four of the top five council regions (including the entirety of the ACT) are located in south-east Queensland; the other two are Moreton Bay and Sunshine Coast.  These four council regions alone account for slightly more than 10% of the national population.
Not only is the Brisbane City Council region large in both area and population, it is growing rapidly.  Over the past 10 years the area has increased in population by about 20,200 persons each year or nearly 1,700 new residents every month.
There are some benefits of having a large council.  The taxation base is larger providing some economy of scale and the urban planning and approval process tends to be much more streamlined.
<img class="aligncenter size-full wp-image-2354" alt="Largest LGAs" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Largest-LGAs.jpg" width="470" height="160" 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 fastest growing council regions:
Six out of the top ten fastest growing council regions around the country are located across Western Australia and four of them are in the Perth metro area.  The Perth Council has recorded a population growth rate of 125% over the ten years to June 2012 to reach a population of roughly 19,000 residents.  The population growth rate across the Perth council area remains high at 3.7% over the 2011/12 financial year, however, councils like Serpentine-Jarrahdale (+8.1%), Kwinana (+6.6%), Armidale (+5.9%) and Wanneroo (+5.6%) have been outpacing Perth over the most recent 2011/12 period.
Rapid population growth provides both positive and negative factors for local governments.  The positive is that population growth is stimulatory – more people means a larger tax base and more demand for housing which provides a multiplier effect on the local economy as higher demand for housing translates to more employment, building materials, white goods, home furnishings etc.
The challenge with rapid population growth is to ensure infrastructure and local amenity keeps pace with the population.  More people means more traffic, a greater requirement for public transport, health care, schooling, retail facilities etc.  Delivering on infrastructure is expensive and is the area where many governments simply fail to deliver.
<img class="aligncenter size-full wp-image-2355" alt="Fastest growing LGAS" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Fastest-growing-LGAS.jpg" width="470" height="174" 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 fastest shrinking council regions:
The regions where population growth is in significant decline can broadly be described as regional areas often associated with agriculture.  Five of the top 10 regions where the population is shrinking the most rapidly are located across Western Australia’s wheat belt.  Camamah (-30.1%), Dalwallinu (-27.8%), Mukinbudin (-27.7%) and Wyalkatchem (-20.6%) are seeing their population dropping from an already low level.
The trend towards smaller populations across these rural areas is nothing new and is likely to continue as the average population of these areas grows older and younger cohorts move away.  A declining population creates other issues including a lack of social diversity. 
The challenge for many of these areas is to continue providing infrastructure and services across a lower taxation base.  These regions are extremely large in area which compounds the costs involved in servicing the sparse population.
<img class="aligncenter size-full wp-image-2356" alt="Largest declines in population" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Largest-declines-in-population.jpg" width="470" height="157" 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 councils with the highest population densities:
Nine of the 10 most densely populated council regions are located within the Sydney metro area.  The most densely populated council is Waverley where there are just over 7,500 residents per square kilometre.  The council includes popular suburbs such as Bondi, Tamarama, Dover Heights, Bronte and the Waverley.  About 80% of Waverly dwellings are units or semi-attached.
The regions with the highest population density tend to be located very close to the central business districts of each capital city and are of course synonymous with fewer detached homes, more apartments and town houses, efficient public transport systems and wide range of facilities and social options close by.
<img class="aligncenter size-full wp-image-2357" alt="highest density LGAs" src="https://blog.rpdata.com/wp-content/uploads/2013/09/highest-density-LGAs.jpg" width="470" height="165" 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;">
 
<hr>
 Cameron Kusher is senior research analyst at RP Data.
 
 
</body></html>

Western Australia home to the country's fastest growing council regions: Cameron Kusher

<html><body>
Australia’s rate of population growth is continuing to ramp up, placing consistent upwards pressure on demand for housing.  The macro level demographic data is only up to date to December last year and population estimates for smaller regions such as council areas and suburbs, has only just been released current to June 2012.
At a high level, based on the December 2012 demographic statistics, Australia’s population increased by 1.8% over the 2012 calendar year; the highest rate of population since December 2009.
At a lower level, it is clear that the vast majority of Australia’s population growth continues to be most concentrated within the capital cities.  About 66% of Australia’s population reside within one of the eight capital cities, however, the overt the 2011/12 financial year the capital cities accounted for 75% of the population growth.
The rate of population growth is quite diverse from city to city and region to region.  Perth is recording the highest rate of population growth at 3.6% over the 2011/12 financial year.  Importantly, the City of Perth accounts for just 8.4% of Australia’s total population but over is attracting 18% of the population growth.
Similarly, Australia’s third largest city, Brisbane, is home to 9.7% of Australia’s population but is recording 12.1% of the nation’s population growth.
At the other end of the spectrum is Tasmania.  The capital city, Hobart, is seeing its population rise by just 0.3% while the population across regional Tasmania is absolutely flat with a 0.0% change over the year.  Not much demand for housing there.
<img 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;" height="208" width="470" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Cap-city-vs-ROS-table.jpg" alt="Cap city vs ROS table" class="aligncenter size-full wp-image-2325">
The maps and tables below provide a good overview about where the trends for housing demand have been most evident over the past decade.
<img 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;" height="95" width="470" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Sydney-suburb-table.jpg" alt="Sydney suburb table" class="aligncenter size-full wp-image-2326">
<img 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;" height="280" width="470" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Sydney-580x346.jpg" alt="Sydney" class="aligncenter size-large wp-image-2327">
<img 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;" height="94" width="470" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Melbourne-suburb-table.jpg" alt="Melbourne suburb table" class="aligncenter size-full wp-image-2328">
<img 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;" height="280" width="470" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Melbourne-580x346.jpg" alt="Melbourne" class="aligncenter size-large wp-image-2329">
<img 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;" height="95" width="470" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Brisbane-suburb-table.jpg" alt="Brisbane suburb table" class="aligncenter size-full wp-image-2330">
<img 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;" height="280" width="470" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Brisbane-580x346.jpg" alt="Brisbane" class="aligncenter size-large wp-image-2331">
<img 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;" height="98" width="470" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Adelaide-suburb-table.jpg" alt="Adelaide suburb table" class="aligncenter size-full wp-image-2332">
<img 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;" height="280" width="470" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Adelaide-580x346.jpg" alt="Adelaide" class="aligncenter size-large wp-image-2333">
<img 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;" height="94" width="470" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Perth-suburb-table.jpg" alt="Perth suburb table" class="aligncenter size-full wp-image-2334">
<img 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;" height="280" width="470" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Perth-580x346.jpg" alt="Perth" class="aligncenter size-large wp-image-2335">
<img 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;" height="96" width="470" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Hobart-suburb-table.jpg" alt="Hobart suburb table" class="aligncenter size-full wp-image-2336">
<img 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;" height="280" width="470" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Hobart-580x346.jpg" alt="Hobart" class="aligncenter size-large wp-image-2337">
<img 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;" height="95" width="470" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Darwin-suburb-table.jpg" alt="Darwin suburb table" class="aligncenter size-full wp-image-2338">
<img 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;" height="280" width="470" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Darwin-580x346.jpg" alt="Darwin" class="aligncenter size-large wp-image-2339">
<img 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;" height="98" width="470" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Canberra-suburb-table.jpg" alt="Canberra suburb table" class="aligncenter size-full wp-image-2340">
<img 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;" height="280" width="470" src="https://blog.rpdata.com/wp-content/uploads/2013/09/Canberra-580x346.jpg" alt="Canberra" class="aligncenter size-large wp-image-2341">

<hr>
Cameron Kusher is senior research analyst at RP Data.  
</body></html>

Where is housing demand the strongest in our capital cities? Cameron Kusher

<html><body>
The Australian Bureau of Statistics (ABS) housing finance data released earlier this week provided further indication of an ongoing improvement in overall housing market conditions across Australia.
The data to July 2013 showed an ongoing improvement in demand for housing finance throughout the country. Given the recent rise in home values and a lift in sales transactions off the back of low mortgage rates, I am anticipating that the increase in finance commitments will continue over the coming months as the housing market enters one of its busiest periods.
Click to enlarge
<a rel="shadowbox" href="/images/stories/2013/09/12/kusher-sept-12-one-big.jpg" title="Click to enlarge"><img src="/images/stories/2013/09/12/kusher-sept-12-one-small.jpg"></a>
Housing finance data over the month showed a continued improvement in demand for mortgages with owner occupier finance commitments increasing by 2.4%. Finance commitments for loans that weren’t refinanced increased by 2.7% over the month and refinance commitments rose by 1.7%. There were 35,356 commitments for non-refinanced loans in July 2013 which was the highest monthly figure since November 2009. There were 16,848 refinance commitments over the month which was the highest number of refinances since April 2008.
The high volume of new loans to owner occupiers indicates growing demand for home loans across this sector of the market and the high volume of refinances would tend to suggest that many home owners are now shopping around for a better loan deal as the market becomes more competitive.
Click to enlarge
<a rel="shadowbox" href="/images/stories/2013/09/12/kusher-sept-12-two-big.jpg" title="Click to enlarge"><img src="/images/stories/2013/09/12/kusher-sept-12-two-small.jpg"></a>
When refinance commitments are removed and we look at the type of owner occupier finance commitment, the surge in demand is really being fuelled by an increase in demand for existing dwellings.
In July, there were 5,265 commitments for the construction of new dwellings, 3,131 commitments for the purchase of new dwellings and 26,961 commitments for existing dwellings. Over the month, more than three of every four owner occupier finance commitments were for the purchase of existing dwellings. Year-on-year, commitments for the construction of new dwellings has increased by 1.1%, commitments for the purchase of new dwellings is up 52.1% and commitments for the purchase of existing buildings has risen by 17.4%.
Click to enlarge
<a rel="shadowbox" href="/images/stories/2013/09/12/kusher-sept-12-three-big.jpg" title="Click to enlarge"><img src="/images/stories/2013/09/12/kusher-sept-12-three-small.jpg"></a>
Investment purchases are also an important component of the overall market, unfortunately the ABS only publishes investment loan data based on value, nevertheless it still shows clear trends. Based on raw figures, there was $9.3 billion in housing finance commitments for investment purposes in July 2013. The total value was slightly down on its recent peak; however, the value of commitments was 30.6% higher than at the same time last year. The result indicates a high level of activity from investors in the housing market currently.
Value-based data for all sectors of the market revels that some very clear trends emerging. On a rolling three month average basis, there has been a clear trend of improvement across the four sectors analysed (first-home buyers, upgrade buyers, refinances and investment buyers). Based on the rolling three month average figures, investment buyers are currently accounting for 37.5% of purchasers, upgraders are accounting for 35.9% of the market, refinances are 17.8% of the market and first-home buyers are just 8.8% of the market. Based on the proportion of overall market activity, first-home buyers are sitting at around their lowest proportion of market activity since June 2004 while investors are at their highest proportion since June 2004.
<a rel="shadowbox" href="/images/stories/2013/09/12/kusher-sept-12-four-big.jpg" title="Click to enlarge"><img src="/images/stories/2013/09/12/kusher-sept-12-four-small.jpg"></a>
The housing market is now largely driven by investors and upgraders.
The low mortgage rates are proving an attractive lure for those looking to upgrade into a slightly superior home. From an investor’s perspective, returns are low across most asset classes however, when you factor in gross rental returns and capital growth homes are returning fairly attractive yields of around 10% currently.
The surprising development has been the lack of response to low mortgage rates by first-time buyers. This may be due to the fact that in a number of states first-home buyers can now only receive a grant on brand new homes, these homes often tend to be more expensive than pre-existing homes. Also, a lot of first home buyer demand was probably pulled forward into 2009 when mortgage rates were at a similar level and first home buyers could buy pre-existing homes with an additional $7,000 in addition to the first-home owners grant.

<hr>
Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au/" rel="nofollow" target="_blank">RP Data</a>.
 
</body></html>

Ongoing improvement within the Australian housing market: Cameron Kusher

<html><body>
Capital gains move back to more sustainable levels in August
Capital city dwelling values rose a further 0.5% in August taking the cumulative recovery in residential home values to 7.0% since the market bottomed out in May last year.
{qtube vid:=D4TdqIRQsS0}
Sydney 2:30; Melbourne 3:09; Brisbane 3:53; Adelaide 4:44; Perth 5:43; Hobart 6:41; Darwin 7:38; Canberra 8:18; Closing comments 8:55; Q&amp;A 10:52.
<a href="https://www.youtube.com/watch?v=D4TdqIRQsS0"></a>
 
</body></html>

Cameron Kusher's roundup of capital city housing markets

<html><body>
With values once again rising across most capital cities, RP Data has looked at the capital city locations within 10 kilometres of the city centre where you can still purchase relatively affordable homes.
Many of us want to live close to the city centre or near the water, the sad fact of the matter is that these homes are in short supply and tend to cost a lot. With capital city home values once again starting to climb, we look at the areas where you can buy at a relatively affordable price point compared with many other inner city suburbs.
As you will note, these suburbs are not the most prestigious or highly sought after however, they do enjoy close proximity to the city centre. They also often have high levels of nearby amenity and in some instances are extremely well catered to by local infrastructure.
It is also interesting to note that although houses may be too expensive for price sensitive buyers, a unit can offer the same high level of amenity and in most instances at a significantly lower buy in price than purchasing a house.
Looking across the capital cities, we can see some divergences on a city-to-city basis as well as between houses and units when looking at the suburbs with the lowest median value within 10 kilometres of the CBD.
Sydney
St Peters is the most affordable suburb for houses within a 10km radius of the Sydney CBD. Located 5.7km from the city centre it has a median value of $645,681. For units, values are much lower with Darlington the most affordable with a median value of $292,271. There are 99 Sydney suburbs within a 10km radius of Sydney with a lower median unit value that the St Peters median house value. 
<img src="/images/stories/2013/09/09/nsw-ept-9.gif" width="470" height="104" alt="nsw-ept-9">
Melbourne
Bellfield is Melbourne’s most affordable suburb for houses within a 10km radius of the CBD with a median value of $493,685. Carlton has the city’s most affordable units within 10km of the city centre with a median value of $232,453, keeping in mind most units in the suburb are student accommodation. 49 suburbs within 10km of the Melbourne city centre have a lower median unit value than that of Bellfield’s median house value. <a href="https://pages.e.rpdata.com/Redirect.aspx?EQ=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" target="_blank"></a>
<img src="/images/stories/2013/09/09/vic-sept-9.gif" width="470" height="78" alt="vic-sept-9">
Brisbane
Brisbane’s most affordable suburb within 10km of the CBD is Rocklea, it has a current median house value of $298,796. Chelmer has the most affordable units within 10km of the city centre at $306,415. Rocklea house values are a bit of an outlier because it was severely inundated by floods, if we look at house values in Chermside West ($418,735), 68 suburbs within 10km of the city have a lower median unit value than median house values in Chermside West. <a href="https://pages.e.rpdata.com/Redirect.aspx?EQ=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" target="_blank"></a>
<img src="/images/stories/2013/09/09/qld-sept-9.gif" width="470" height="82" alt="qld-sept-9">
Adelaide
Dry Creek which is located right on the edge of a 10km radius of Adelaide has the lowest median house value within this region at $244,971. Ottoway has the lowest median unit value within a 10km radius of the city centre at $204,091. There are 18 Adelaide suburbs within 10km of the city centre with a lower median unit value than Dry Creek’s median house value. <a href="https://pages.e.rpdata.com/Redirect.aspx?EQ=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" target="_blank"></a>
<img src="/images/stories/2013/09/09/ssa-sept-9.gif" width="470" height="64" alt="ssa-sept-9">
Perth
Cannington has Perth’s lowest median house value within a 10km radius of the CBD at $413,925. There are 20 suburbs within the same region that have a median unit value lower than this figure, the lowest of which is found in Glendalough ($324,219). <a href="https://pages.e.rpdata.com/Redirect.aspx?EQ=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" target="_blank"></a>
<img src="/images/stories/2013/09/09/wa-sept-9.gif" width="470" height="61" alt="wa-sept-9">
Hobart
Hobart’s most affordable suburb for houses within 10km of the city centre is Clarendon Vale with a median value of $151,089. For units, the most affordable suburb within the region is Glenorchy with a median value of $190,387. Hobart is the only capital city in which the most affordable suburbs for units within 10km of the city centre is more expensive than the most affordable suburb for houses. <a href="https://pages.e.rpdata.com/Redirect.aspx?EQ=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" target="_blank"></a>
<img src="/images/stories/2013/09/09/tas-sept-9.gif" width="470" height="75" alt="tas-sept-9">
Darwin
Farrar is the most affordable suburb in which to purchase a house within 10km of the Darwin CBD with a median value of $514,344. The most affordable suburb for units is Alawa with a median value of $331,650. There are 16 Darwin suburbs within 10km of the CBD which have a lower median value for units than Farrar’s median house value. <a href="https://pages.e.rpdata.com/Redirect.aspx?EQ=5c591a8916642e73a5fbb79006cdd00de47653d7b07e3eea333fae253ede94c147051814a4736e0ae9da76077e9c069f48ed83759fa5d797000a351a204a9b812a3f8dfcae176c34f99fdc21b8a5212108e73015be209cc5dfdbfdea89c7158bd8cd141b6372558efbe59e605890a80a77dc93227028d3b59ecfbc151aa595a9e7a6a8b733640ae6cb4c9a89a275f28ae413f1bbb3dcaf6838fcb3a09a04a12035f3ced7e19f55db7fd3eaf21958af95b3fed82481e9ae5164d6831956ae3bbab82a5cc53ceef264b5241723ca80dd231df0dc65fdb3bf9721f5f9cb366b23cc3fbeffa436129c3f79cf7cc8a62155c6bd4f255d9c0c22ed2c3dd82a2a0559ae" target="_blank"></a>
<img src="/images/stories/2013/09/09/nt-sept-9.gif" width="470" height="79" alt="nt-sept-9">
Canberra
The most affordable suburb for houses within a 10km radius of the Canberra CBD is Crace with a median value of $372,672. There are 15 suburbs within a 10km radius of the Canberra CBD that have a median unit value lower than the median house value of Crace, the most affordable of which in Hughes ($209,269). <a href="https://pages.e.rpdata.com/Redirect.aspx?EQ=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" target="_blank"></a>
<img src="/images/stories/2013/09/09/act-sept-9.gif" width="470" height="77" alt="act-sept-9">
As you’d expect, house values in the inner city areas are quite high. This is due to strong demand for houses in these regions and the fact that areas closer to the city typically have the best amenity and superior infrastructure. Inner city units offer the same benefits at typically a much lower price point, as a result it is no wonder the popularity of inner city units continues to grow.
 
<hr>
 Cameron Kusher is senior research analyst at <a target="_blank" rel="nofollow" href="https://www.myrp.com.au/">RP Data</a>.
 
Image courtesy of Michael Renner/flickr.
 
</body></html>

Affordable opportunities 10 kilometres from capital cities' CBDs: Cameron Kusher

<html><body>
Recently, I looked at what happens to the housing market in the 12 months leading up to a federal election, this week I take a look at what happens in the 12 months after a federal election.  Once again, we have looked at movement in capital city home values and national house and unit sales over the 12 months following an election.

The housing market is seasonal so the time of year of the election is likely to play some part in the results however, the <a target="_blank" href="/news">12 months worth of data does show the trend in the lead-up to an election.</a>  As you will see later, the position in the market phase and changes to monetary policy may also have a significant impact on the market performance.
The five most recent federal elections have been: 3 October 1998 (Coalition win), 10 November 2001 (Coalition win), 9 October 2004 (Coalition win), 24 November 2007 (Labor win) and 21 August 2010 (hung parliament but Labor take power).
Looking specifically at the change in home values over the 12 months following a federal election you can see that in 1998, 2001 and 2004 home values rose however, following the most recent two elections home values have fallen.  Over the 12 months to July 2013, capital city home values have risen by 4.9% so the market currently has momentum going into the election, but can it be maintained for the 12 months following the election?
<a style="margin: 0px; padding: 0px; border: 0px; outline-width: 0px; vertical-align: baseline; background-color: transparent; color: #bf0000; text-decoration: none;" href="https://blog.rpdata.com/wp-content/uploads/2013/08/home-values-small1.jpg" rel="wp-prettyPhoto[g2266]"><img 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;" class="aligncenter size-full wp-image-2267" alt="home values small" src="https://blog.rpdata.com/wp-content/uploads/2013/08/home-values-small1.jpg" width="470" height="169"></a>
The strongest annual increase in home values following an election was 2001, with values increasing by 16.4% followed by the 1998 election where values rose by 10.7% over the following year.  Over the 12 months following the 2001 election, interest rates increased by 50 basis points whereas following the 1998 election they fell by 25 basis points.  It is also important to remember that between 2001 and 2004 there was a national boom in Australian home values.
In 2004, capital city home values rose by just 1.8% over the following year.  This was the tail-end of the national housing boom and over this time, interest rates rose by 25 basis points.  Following the 2007 election, home values fell by 1.2% over the next year and home values fell by 3.0% over the 12 months following the 2010 election. 
Following the 2007 election, the financial crisis hit, economic growth slowed and interest rates were cut by 150 basis points from 6.75% to 5.25%.  Following the 2010 election in August, interest rates were lifted by 25 basis points over the next year as values fell.
If we look at the change over the year in national home sales, the results are reasonably similar, with volumes falling following three of the past five elections.  The most up-to-date sales information indicates that sales to May 2013 were 19.0% higher and with interest rates moving lower more recently; sales appear likely to pick-up further over the year in the lead-up to the September election, but once again will the momentum carry through the next 12 months?
<a style="margin: 0px; padding: 0px; border: 0px; outline-width: 0px; vertical-align: baseline; background-color: transparent; color: #bf0000; text-decoration: none;" href="https://blog.rpdata.com/wp-content/uploads/2013/08/home-sales-small1.jpg" rel="wp-prettyPhoto[g2266]"><img 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;" class="aligncenter size-full wp-image-2268" alt="home sales small" src="https://blog.rpdata.com/wp-content/uploads/2013/08/home-sales-small1.jpg" width="470" height="169"></a>
 
<hr class="system-pagebreak">
The number of home sales was higher in the year following the federal election in 1998 (13.9%) and 2004 (1.7%).  In 2001, sales volumes fell by 4.6% in the year following the election, in 2007 they fell by 27.0% and in 2010 they fell by 5.7% over the year. 
It makes sense given broader economic conditions, that volumes and values fell following the past two elections however, it is a little surprising to see that in the midst of a large real estate market boom in 2001 and 2002 although values rose 16.4% over the 12 months post-election sales activity actually fell.
Over the past five elections, home values and sales increased in 1998 when the Coalition held office for their second term and in 2004 when they took office for their fourth term.  When Labor took office in 2007, values fell by 1.2% over the next year and volumes fell by 27% of course, they also had the financial crisis to deal with at that time.  In 2010 following a hung parliament, values fell 3.0% over the next 12 months and sales volumes declined 5.7%.
How much the trends outlined above can be attributed to an election is debateable however, federal elections and the subsequent following budgets no doubt have an impact on consumer and business confidence. 
It does seem from the past five elections that when there is no change of leadership that the housing market tends to respond better post-election than when there is a change in leadership or hung parliament, notwithstanding the impact of the financial crisis following the 2007 election.
Following the upcoming election it will be interesting to see the housing market’s response. 
Housing affordability, low levels of growth in housing credit and high levels of household saving are no doubt likely to be barriers to a breakout in value growth and a surge in sales volumes.  Not to mention the forecast that the national unemployment rate will reach 6.25% by mid next year which would be its highest level since September 2002.
Despite all these constraints, home values have increased by 4.9% over the past 12 months on the back of the lowest mortgage rates in more than 50 years and rising levels of consumer, but not business confidence.
If Labor holds office do we see a continuation of rising home values and increasing sales? 
If the Coalition takes office do we see even better conditions in the housing market or do we see deterioration in market conditions? 
We simply don’t really know but it will be interesting to see in the wash-up of the election what impact it does have on the housing market.
<hr>
Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au/" rel="nofollow" target="_blank">RP Data</a>.
Photo courtesy of <a href="https://www.flickr.com/photos/gusveitch/" id="yui_3_7_3_3_1377476609468_888">Angus Veitch</a>/flickr.
</body></html>

What will happen to housing prices in the wake of a federal election? Cameron Kusher

<html><body>
With property values climbing in Sydney and Perth, coupled with competition for stock intensifying in these cities and Melbourne, buyers may start to look at more affordable alternatives and focus their attention on markets such as Brisbane and Adelaide.
It will be interesting to see if this starts to happen over the coming months.
While median prices are not a preferred measure for capital growth or losses, the method is a good way to assess other aspects of the housing market such as affordability and what price points homes are currently selling for.
Around the cities, Sydney is currently, and has maintained its position as the city to hold the highest median selling prices for homes.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/2013/08/kusher-aug-22-sydney.jpg" alt="kusher-aug-22-sydney" width="470" height="201">
Based on July 2013 data, in Sydney the combined house and unit median price was $570,000 which is 16% higher than the median selling price in Melbourne ($492,000), 33% higher than Brisbane ($429,000), 49% higher than Adelaide ($382,000), 15% higher than Perth ($494,600), 87% higher than Hobart ($305,000), 16% higher than Darwin ($490,000) and 14% higher than Canberra ($500,000).
In relation to other capital cities such as Melbourne, the price differential in Sydney has recently started to narrow. While there was little change over the past year compared to Perth, the gap in pricing between Brisbane and Adelaide has become more significant. Between Sydney and Brisbane the price gap is currently at its greatest level since June 2006, while for Adelaide it is at its widest since the middle of 2007.
Over time, the differential in pricing between Sydney and the other major capital cities has compressed. The gap is unlikely to revert to these previous highs.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/2013/08/kusher-aug-22-melbourne.jpg" alt="kusher-aug-22-melbourne" width="470" height="205">
Starting with Melbourne, Sydney’s median price is 15.9% higher than across the city of Melbourne and Perth’s median price is 0.5% higher. The gap in pricing between Melbourne and Sydney is at its narrowest level since February 2012.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/2013/08/kusher-aug-22-perth.jpg" alt="kusher-aug-22-perth" width="470" height="207">
For Perth, the gap is at its lowest level since January 2012.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/2013/08/kusher-aug-22-brisbane.jpg" alt="kusher-aug-22-brisbane" width="470" height="205">
Brisbane’s median price is 12.8% lower than that of Melbourne which is the widest gap since August 2003.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/stories/2013/08/kusher-aug-22-adelaide.jpg" alt="kusher-aug-22-adelaide" width="470" height="200">
Adelaide’s median price is -22.4% lower, the largest gap since December 2010. Compared with Brisbane, home prices are higher in Sydney (32.9%),Melbourne (14.9%) and Perth (15.3%). The gap in pricing relative to Perth is 15.3% and has been relatively stable over the past year. Adelaide’s median price is -11.0% lower than those in Brisbane and the gap has been quite stable since early 2012.
The last time Adelaide home prices were higher than in any other major capital city was in November 2004 when the median house price was -0.4% lower.
There is a significant price gap between Adelaide and Sydney, Melbourne and Brisbane prices. Perth’s median price is 29.5% higher than that in Adelaide and the gap has decreased over recent months.
Based on these results, there is a significant gap in pricing between Sydney and other capital cities. Melbourne and Perth prices are relatively similar with a large step down in median price to Brisbane and then a further large gap to Adelaide prices.
With home values rising at a faster pace in Sydney, Melbourne and Perth than in Brisbane and Adelaide, we expect that gaps in selling prices will increase over the coming months which may then see a shift in focus to the more affordable markets of Brisbane and Adelaide.
Note: The median house prices across the capital cities are calculated based over a rolling three month period of sales.
 
<hr>
 Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au/" target="_blank" rel="nofollow">RP Data</a>.
</body></html>

 Are Brisbane and Adelaide ripe to pick up an investment opportunity? Cameron Kusher

<html><body>
Over recent months I have heard lots of commentary about the expected slowdown in the housing market in the lead-up to a Federal election. 
This week I have looked at the five past elections and analysed the performance of the housing market over the 12 months prior to the election in terms of capital city home value growth and national house and unit sales.
It is important to remember that the housing market is seasonal so the time of year of the election is likely to play an impact however, the 12 months’ worth of data does show the trend in the lead-up to an election.
The five most recent federal elections have been: 3 October 1998 (Coalition win), 10 November 2001 (Coalition win), 9 October 2004 (Coalition win), 24 November 2007 (Labor win) and 21 August 2010 (hung parliament but Labor take power).
Looking specifically at the change in home values over the 12 months leading up to the federal elections you can see that in each instance home values have increased.  Over the 12 months to July 2013, capital city home values have risen by 4.9% so it looks almost certain that home values will increase over the year leading up to the September federal election.
<a style="margin: 0px; padding: 0px; border: 0px; outline-width: 0px; vertical-align: baseline; background-color: transparent; color: #bf0000; text-decoration: none;" href="https://blog.rpdata.com/wp-content/uploads/2013/08/home-values-small.jpg" rel="wp-prettyPhoto[g2262]"><img 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;" class="aligncenter size-full wp-image-2263" alt="home values small" src="https://blog.rpdata.com/wp-content/uploads/2013/08/home-values-small.jpg" width="470" height="169"></a>  
The strongest annual increase in home values leading up to a federal election was in 2001, with values rising by 18.8% followed by the 2007 election where values rose by 13.2%.  Over both of these periods the housing market was already in an upswing.  On the other hand, values rose by 5.7% in the lead-up to the 1998 election, 2.8% in 2004 and 8.8% in 2010.
If we look at the change over the year in national home sales, the results are somewhat different building up to election. 
The most up-to-date sales information indicates that sales to May 2013 were 19.0% higher and with interest rates moving lower more recently; sales appear likely to pick-up further over the year in the lead-up to the September election.
<a style="margin: 0px; padding: 0px; border: 0px; outline-width: 0px; vertical-align: baseline; background-color: transparent; color: #bf0000; text-decoration: none;" href="https://blog.rpdata.com/wp-content/uploads/2013/08/home-sales-small.jpg" rel="wp-prettyPhoto[g2262]"><img 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;" class="aligncenter size-full wp-image-2264" alt="home sales small" src="https://blog.rpdata.com/wp-content/uploads/2013/08/home-sales-small.jpg" width="470" height="171"></a>  
The number of home sales was higher over the year leading up to the 2001 and the 2007 elections.  In 2001, sales volumes increased by 44.6% over the year and in 2007 they rose by 33.3%.  In 1998, sales volumes fell by -2.6% over the year, in 2004 they fell by -11.0% and in 2010 they fell by -32.4%.
So over the past five election campaigns home values have risen while in only two of the past five campaigns have home values and sales volumes risen.  Values and volumes rose in 2001 when the Coalition was returned for a second term and they also both rose in 2007 when Labor took office from John Howard.
How much the trends outlined above can be attributed to an election is debateable.  Arguably the momentum of the market cycle is influencing the trends just as much as the election.  Regardless of the cause, it looks like federal elections don’t have a slowdown effect on housing market conditions.
The cynic in me suggests that the incumbent political party would generally be quite happy to see sales volumes and home values rising in the lead-up to an election. 
For most people the family home is the single largest investment and rightly or wrongly, Australians tend to feel more confident and happy when home values are rising. 
From a political stand point, around 70% of households either own their home outright or have a mortgage and rising home values is likely to be a much more palatable message to the electorate than one where the value of their largest asset is falling. 
It also suggests to me that housing affordability will remain only a minor election issue given such a large proportion of the population either own or are paying off their own home and many also have investment properties.
Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au/" rel="nofollow" target="_blank">RP Data</a>.
</body></html>

What effect does the federal election really have on the property market?: Cameron Kusher

Melbourne developer Spacious Group has completed Voyage Altona, one of the closest new apartment developments to Altona Beach.

Off the plan purchasers have started moving into the 49-apartment project on Pier Street, with the remaining move-in-ready one-, two- and three-bedroom apartments starting from just over $500,000.

Display apartments have now been fitted out, allowing prospective buyers to inspect the completed residences by appointment.

[smartcode_project:default project_id=112195 project_image_fid=372638]

The completed apartments feature open-plan living and dining areas which extend onto private balconies and terraces, while full-height glazing maximises natural light throughout the interiors.&nbsp;

Hybrid timber-look flooring, stone benchtops, Miele appliances, porcelain-tiled bathrooms and generous storage feature throughout the building which also features landscaped communal areas, expansive shared terraces, lift access and secure on-grade parking.

Drawing inspiration from its bayside setting, Voyage adopts a restrained palette of warm neutral tones and textured finishes. Many of the apartments take advantage of views across Port Phillip Bay, while the indoor-outdoor living spaces have been designed to make the most of the coastal outlook.

[smartcode_project:default project_id=112195 project_image_fid=3286]

Voyage was developed to address what Spacious Group identified as an undersupply of higher-quality apartment product in Altona, with a focus on owner-occupiers looking to remain within the bayside community.

"Voyage responds to very strong local buyer demand for quality, owner-occupier-focused product," says Barry Plant Projects Director Jarrod Farey, who has handled sales since the project's launch.

"The project delivers an elevated lifestyle proposition, with its design and quality of finish far exceeding anything previously produced in the area, as well as its proximity to Pier Street Village and the beach."

The majority of purchasers have been local downsizers and owner-occupiers looking to stay within the Altona community but who previously had limited opportunities to buy a brand-new apartment.

[smartcode_project_cta:default project_id=112195]

Joel Robinson

Spacious Group completes Voyage Altona in Altona's beachside precinct

Homecorp has secured approval for a $360 million apartment development at Budds Beach, paving the way for one of the Gold Coast's most amenity-rich residential projects to launch later this year.

Gold Coast City Council has approved Lýon Residences, a 32-level tower that will deliver 178 two and three-bedroom apartments across a prominent corner site at 8-10 Acacia Avenue and 25-27 Oak Avenue.

The approval comes as developers continue to invest in premium lifestyle-driven apartment projects on the Gold Coast, where owner occupiers are increasingly prioritising amenity as much as apartment size and location.

<a href="https://www.apartments.com.au/new-apartments/l-on-residences-25-27-oak-avenue-surfers-paradise-qld-4217">Lýon Residences</a> has been designed around a resort-style wellness offering, headlined by a Moroccan-inspired spa precinct featuring treatment rooms, a Nordic sauna and steam room, hot and cold plunge pools, a soaking pool and a residents-only juice bar.

The rooftop will include a heated infinity pool and spa, residents' lounge with private kitchen and bar, gymnasium, yoga and Pilates studio, outdoor entertaining areas and barbecue facilities overlooking the Surfers Paradise skyline.

<img alt="Lyon" data-entity-type="file" data-entity-uuid="2d3e29af-8793-486e-a684-52cef862241f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-15%20at%204.32.26%E2%80%AFPM.png?VersionId=ayG2zpLf3SS6Zy8XmKDcQods4kVWb0gm" />

Homecorp Founder and CEO Ron Bakir said Budds Beach provided the ideal location for the company's latest luxury apartment project.

"Budds Beach represents one of the most unique and sought-after pockets of the Gold Coast, and Lýon Residences has been designed to reflect that sense of rarity and refinement," Bakir said.

The project arrives as wellness continues to become a defining feature of new residential developments both in Australia and internationally.

The latest Global Wellness Institute figures show wellness real estate remains the fastest-growing segment of the global wellness economy and is forecast to exceed $1.8 trillion by 2030. Australia continues to rank among the world's 15 largest wellness real estate markets, with developers increasingly integrating health, recreation and community facilities into apartment projects.

Queensland is also experiencing strong population growth, with the Gold Coast continuing to outperform many other Australian cities as demand for new housing remains elevated ahead of the 2032 Olympic and Paralympic Games.

Bakir said the project had been designed to respond to that shift in buyer expectations.

"Strong population growth and sustained demand across the Gold Coast continue to highlight the need for well-designed new housing supply. Lýon Residences responds directly to this demand while setting a new benchmark for residential living," he said.

Each apartment has been designed to maximise views across the coastline, the Nerang River and the Gold Coast hinterland.

Located just minutes from Surfers Paradise beach and the Broadwater, the development also offers easy access to the light rail network, Broadbeach and Burleigh Heads.

Early site works are underway, with construction expected to commence later this year.

Homecorp approved for Budds Beach apartment tower, Lýon Residences

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]

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.

Cameron Kusher

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News