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The last time we saw mortgage rates this low was in 2009 and prior to that it was a brief period in 2001 and in 1970.
RP Data confirms that it has been more than 50 years since official interest rates have been this low and subsequently, the cost of borrowings, particularly for housing, is at some of the lowest levels seen over this time.
The standard variable mortgage rate is currently recorded at 6.2% and is much lower than the 20 year average of 7.6%.
<img height="209" width="470" src="/images/stories/2013/08/kusher-aug-5-chart-1.gif" alt="kusher-aug-5-chart-1">
Outside of a brief period in late 2008/early 2009, the current average standard variable mortgage rate is at its lowest levels since late 2001.
Discounted variable mortgage rates have been introduced over recent years and the vast majority of mortgagees receive these mortgage rates on their home loan which means that many variable home loans are now available at an interest rates below 5.5% with the big four banks advertising average rates of 5.4%.
With mortgage interest rates so low, it is no surprise that there has been a ramp-up in housing finance commitments, albeit from historically low levels throughout 2013, and a subsequent rise in transaction activity.
Another feature of the current market is that the less popular three year fixed mortgage rates are available at a particularly low interest rate. The average three year fixed mortgage rate was recorded at 5.15% at the end of June 2013.
<img height="239" width="470" src="/images/stories/2013/08/kusher-aug-5-chart-2.jpg" alt="kusher-aug-5-chart-2">
It seems more likely they will fall rather than rise over the short-term.
Of course, the vast majority of mortgagees continue to choose variable mortgages which have a higher interest rate - it is interesting to note the rising prominence of fixed rate mortgages.
 A number of lenders are currently offering fixed rate products at less than 5%.
<img height="237" width="470" src="/images/stories/2013/08/kusher-aug-5-chart-3.jpg" alt="kusher-aug-5-chart-3">
I expect that the housing market is likely to continue on its current trajectory of moderate value increases.
In fact, should the two additional cuts to interest rates come to fruition, value growth may start to accelerate.
Lower interest rates and the subsequent lower mortgage rates are undoubtedly providing an impetus for greater housing market activity.
<img height="238" width="470" src="/images/stories/2013/08/kusher-aug-5-chart-4.jpg" alt="kusher-aug-5-chart-4">
The key challenge will be maintaining this higher level of housing activity as the unemployment rate nudges higher, commodity prices head lower and with slower economic growth.
As a result, the markets more closely linked to the resources sector such as Perth and Darwin may record lower levels of value and rental growth whereas those such as Brisbane and Adelaide that have recorded a sustained period of under performance may start to pick-up as they start to look relatively more affordable, particularly compared to Sydney, Melbourne and Perth where value growth is currently much stronger.
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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Two more rates cuts before any major residential price acceleration: Cameron Kusher

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According to the RP Data-Rismark Home Value Index results for June 2013, combined capital city home values increased by 3.8% over the 2012/13 financial year. 
The growth in home values has been moderate, as we have noted in recent weeks, the response to the low mortgage rate environment has not been as strong as in the past.  This begs the question: where to from here?
<img alt="cap city values" src="https://blog.rpdata.com/wp-content/uploads/2013/07/cap-city-values.jpg" width="470" height="171">
The June results of the RP Data-Rismark Home Value Index showed a variety of performances across the capital cities and as I see it, the performances of individual capital city housing markets are likely to continue to diverge based on their own unique circumstances. 
We also know that<a href="https://www.propertyobserver.com.au/economy/july-19-observer-cameron-kusher/2013071963428" target="_blank"> activity is being driven by investors</a> (who can be fickle and exit the market quickly) and upgraders whose activity is most likely linked to the recent pick-up in consumer sentiment and in some instances the recent pick-up may not continue based on the direction of the economy from here.
Broadly speaking, I can’t see anything in the current housing or broader economic conditions that will see the market’s performance return to what we saw prior to the financial crisis for a number of reasons.
Firstly, household debt to disposable income currently sits at 147.3%. 
No doubt Australian households have a large amount of debt, most of which (133.2%) is housing debt.  If you look at the chart below, you will see that the debt to disposable income ratio has been virtually unchanged since the end of 2005, which is seven and a half years ago now! 
Clearly households have reached the limits to how much debt they can take on.  Whether this limit continues into the future remains to be seen but at the moment it is clear we largely don’t want to take on more household debt and around 90% of this debt is related to housing.
<img alt="household debt to disposable income" src="https://blog.rpdata.com/wp-content/uploads/2013/07/household-debt-to-disposable-income.jpg" width="470" height="173">
Secondly, and which directly relates to the first point, households have increased their level of savings and shown less of a propensity to spend. 
The national accounts data includes an item for the household saving ratio and looking at this over time (below) provides valuable insight. 
Over the past 12 months, the household savings ratio has been recorded at 10.5% and over the past five years it has been recorded at an average of 9.8%. 
The level of household savings currently is at its highest level since late 1987 (25 years ago now) and the recent trend of higher savings has reversed a 30 year trend over which time savings by households continued to deteriorate.
<img alt="household saving ratio" src="https://blog.rpdata.com/wp-content/uploads/2013/07/household-saving-ratio.jpg" width="470" height="172">
 
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Thirdly, consumers are changing the way they spend and doing it with their own money rather than with credit cards. 
Over the 12 months to May 2013, the number of credit card accounts increased by just 2.1%, in comparison debit card accounts increased by 6.2%. Total credit card transactions increased by 6.9% over the year but cash advances fell by -2.4%.  Total debit card transactions increased by 13.9% over the year.  Credit cards had an average outstanding balance of $3,236 and the average credit limit was $9,091. 
On an historical level both are quite high however, the average outstanding balance was down -3.5% over the year which was the biggest year-on-year fall on record and the average credit limit was -1.0% lower on  the year a near record fall.
<img alt="credit card stats" src="https://blog.rpdata.com/wp-content/uploads/2013/07/credit-card-stats.jpg" width="470" height="175">
The previous run-up in home values had been assisted by significant changes to economic conditions such as financial deregulation, significant falls in mortgage rates, a large reduction in unemployment, much lower inflation and strong growth in housing credit.
Mortgage rates are below historic levels currently however the impact of shifting from 17% at the start of the 1990’s to around 7% at the end of the decade is not as significant as a further 1% to 2% reduction.
<img alt="variable mortgage rates" src="https://blog.rpdata.com/wp-content/uploads/2013/07/variable-mortgage-rates.jpg" width="470" height="173">
It’s a similar story for unemployment which shifted from around 11% in 1992 to around 6.5% by the end of the decade.  In fact, an anticipated increase in unemployment from the current low levels is one of the major factors contributing to the changes to consumer behaviour.
<img alt="unemployment chart" src="https://blog.rpdata.com/wp-content/uploads/2013/07/unemployment-chart.jpg" width="470" height="174">
In 1990, annual inflation was running at 7%, by the end of the decade it had fallen to around 2% and today it sits at 2.5%.  The lower level of inflation since the end of the last recession has clearly contributed to the lower mortgage rates which in-turn has assisted the run-up in home values.
<img alt="inflation" src="https://blog.rpdata.com/wp-content/uploads/2013/07/inflation.jpg" width="470" height="173">
Credit growth throughout the early 2000’s was sitting at an annual rate of 16% to 20% as the housing market surged.  Ever since 2004, growth in housing credit has been slowing and over the past year credit has grown at a near record low level of 4.5%.
<img alt="housing credit growth" src="https://blog.rpdata.com/wp-content/uploads/2013/07/housing-credit-growth.jpg" width="470" height="173">
In my opinion, none of these economic measures are likely to shift as significantly as they have in the past and therefore any changes are not as likely to be as conducive to significant growth in home values as they have been in the past.
 
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Now looking at individual capital city markets we can see my anticipated variances in performance over the coming year.
I suspect Sydney will continue to be one of the standout performers and will continue to see values grow, this is largely due to the fact that value growth has failed to beat inflation over the past decade and dwelling construction remains insufficient.
<img alt="sydney values" src="https://blog.rpdata.com/wp-content/uploads/2013/07/sydney-values.jpg" width="470" height="172">
Melbourne continues to surprise however, it has not had a significant period of value correction as what has been seen across other major capital cities such as Sydney, Brisbane and Melbourne. 
We also know that housing supply is much more sufficient across the city than it is across most other major capital cities.  Although values are currently rising on the back of low mortgage rates I do question the sustainability of the current rises, particularly once mortgage rates start to rise again
<img alt="melbourne values" src="https://blog.rpdata.com/wp-content/uploads/2013/07/melbourne-values.jpg" width="470" height="171">
Brisbane home values are currently -10.8% lower than they were at their peak and to date, values have increased by just 1.6% from their recent low point.  Brisbane has experienced a long period of correction in values, with values currently at a similar level to what they were in late 2007. 
Given this, we do anticipate a pick-up in value growth in Brisbane on the back of the recent increase in sales activity.
<img alt="brisbane values" src="https://blog.rpdata.com/wp-content/uploads/2013/07/brisbane-values.jpg" width="470" height="171">
 
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Adelaide home values have shown only moderate levels of growth recently, increasing by 2.7 per cent since values bottomed in July of last year.  I anticipate that increases in home values across the city will remain modest over the coming year.
<img alt="adelaide values" src="https://blog.rpdata.com/wp-content/uploads/2013/07/adelaide-values.jpg" width="470" height="169">
Home values in Perth have reacted strongly to the ongoing lowering of mortgage rates. 
Home values across the city have increased by 6.0% over the past year and are now just -1.6% lower than their historic peak.  The key challenge for the Perth market will be the slowing of the mining and resources sector and what impact that has on the housing market. 
Over recent months we have seen the rate of home value growth and rental growth start to slow and I anticipate the slowdown is likely to continue over the coming months.
<img alt="perth values" src="https://blog.rpdata.com/wp-content/uploads/2013/07/perth-values.jpg" width="470" height="171">
Hobart is the only capital city housing market that has recorded a fall in values over the past year.  With a high unemployment rate and little in the way of economic or population growth it is difficult to see how the housing market in Hobart can, at this stage, build any sort of sustainable recovery.
<img alt="hobart values" src="https://blog.rpdata.com/wp-content/uploads/2013/07/hobart-values.jpg" width="470" height="172">
Darwin has been the standout housing market over the past decade and this has continued with values rising by 6.1% over the past year.  Despite the recent strength, values in Darwin remain -11.1% lower than they were at their peak.  Much like Perth, the Darwin housing market is likely to be impacted by the slowdown in the resources sector.  This is already being seen with slowing rates of rental growth and home values having fallen by -0.4% over the first six months of 2013.
<img alt="darwin values" src="https://blog.rpdata.com/wp-content/uploads/2013/07/darwin-values.jpg" width="470" height="169">
Canberra home values have not recorded the same extent of value falls as most other capital city markets. 
Over the past year, home values in the city have increased by 1.1% however, as the below graph shows there are signs of a recent slowing of market conditions. 
With a looming federal election and likely cuts to the public service we would expect this will adversely affect demand for housing in the city and subsequently may result in some value falls.
<img alt="canberra values" src="https://blog.rpdata.com/wp-content/uploads/2013/07/canberra-values.jpg" width="470" height="171">
Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au/" rel="nofollow" target="_blank">RP Data</a>.
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Melbourne property continues to surprise without a significant period of correction: RP Data's Cameron Kusher

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Most home owners who are seeking to sell their property have the goal of selling their home quickly and at a price equal to or above market value.
The reality is that in many instances, homes don’t sell at the list price and there is a level of negotiation on the price.
Given this fact, many vendors will ponder whether to accept early offers or wait it out for buyers with higher price offerings.
If you wait longer will you get a better price or is an initial offer going to be the best one you get? This week’s analysis suggests that the latter is generally the better option.
Based on private treaty sales on a month-to-month basis, RP Data has looked at the average discounting level for homes sold across a number of time frames: less than 30 days, 30 to 59 days, 60 to 89 days, 90 to 119 days and 120 days or more.
As the first chart shows, if a home sells in less than 30 days, it has consistently recorded the lowest level of discounting by vendors. On the other hand, homes that sell after 120 days on the market have consistently recorded the highest level of discounting by vendors.
<img style="border: 1px solid #000000;" src="https://image.e.rpdata.com/lib/fe591570776d03757d17/m/4/2013_07_19_disc+by+tom_national.jpg" alt="RP Data Property Pulse - research article">
Over the past five years, homes selling in less than 30 days have recorded an average vendor discount of -3.9% on a monthly basis.
In comparison, home selling between 30 and 60 days have recorded an average of -5.2% followed by: 60 to 90 days (-6.5%), 90 to 120 days (-7.6%) and 120 days or more (-10.1%).
The second chart highlights these same figures but specifically at a combined capital city level.
As you can see, properties selling in less than 30 days once again typically sell with the lowest level of discounting and those selling after 120 days have the highest discount levels.
<img style="border: 1px solid #000000;" src="https://image.e.rpdata.com/lib/fe591570776d03757d17/m/4/2013_07_19_disc+by+tom_cap+city.jpg" alt="RP Data Property Pulse - research article">
 
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The capital city data also highlights the typically superior selling conditions across these markets compared to the broader national housing market.
Whereas at a national level homes selling in less than 30 days had a typical discount of -3.9% over the past five years, it was slightly better at -3.8% across the capital cities.
On the other hand, capital city homes taking longer than 120 days to sell have had an average discount of -9.6% compared to -10.1% across the whole nation.
Across the individual capital city markets the trends are once again fairly consistent with quick sales experiencing low levels of discounting while properties that sit on the market for a longer time typically see excessive levels of discount.
Over the past five years, home sales that have taken less than 30 days to sell have recorded an average vendor discount of as little as -2.0% in Canberra and as much as -4.6% in Brisbane.
Those homes that have taken more than 120 days to sell have been discounted by an average of as much as -10.7% in Brisbane and as little as -7.1% in Canberra.
The other important component of this equation is understanding what proportion of sales occur in less than 30 days.
Analysing the results on a month-to-month basis shows that over the past five years, 22.7% of home sales sold in less than 30 days.
In comparison, an average of 28.2% of homes took more than 120 days to sell. What this data suggests is that the majority of vendors are taking more than 30 days to sell their home and are subsequently having to offer larger discounts in order to sell.
<img style="border: 1px solid #000000;" src="https://image.e.rpdata.com/lib/fe591570776d03757d17/m/4/2013_07_19_sales+30d_v_120_cap.jpg" alt="RP Data Property Pulse - research article">
 
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Across the combined capital cities we once again see similar trends to those across the nation however, slightly more people have, on average, sold their homes in less than 30 days.
On a monthly basis over the five years to May 2013, 26.0% of capital city sales have occurred in less than 30 days compared to 23.6% of sales taking 120 days or more.
<img style="border: 1px solid #000000;" src="https://image.e.rpdata.com/lib/fe591570776d03757d17/m/4/2013_07_19_sales+30d_v_120_national.jpg" alt="RP Data Property Pulse - research article">
It is important to remember that not every home is going to get an offer within the 30 days of listing, but a property is most likely to receive offers when it is newly listed for sale.
These statistics highlight the importance of setting a realistic asking price from the outset.
If the vendors do this they are likely to sell the home quickly with a relatively low level of discount, if not they run the risk of the home sitting on the market for a long time and ultimately having to be discounted significantly.
Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au/" rel="nofollow" target="_blank">RP Data</a>.
 
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The longer you wait, the less you may get: Cameron Kusher

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An ongoing theme in the recent increase in housing market activity has been that it has largely been driven by investors and upgraders rather than the first-home buyers.  If you recall, it was first-home buyers that led the market recovery back in 2009.
The surge in first-home buyer activity saw this cohort of the market account for as much as 31.4% of the total number of owner occupier finance commitments back in May 2009.
In May 2013 they accounted for just 14.6% of all owner occupier commitments and in terms of the number of commitments there were more than 10,000 fewer first-home buyer commitments in May 2013 than there were in May 2009. 
The first-home buyer market is much thinner this time round which may be due to a number of factors however, it is clear that the fact that there is no boost to the first-home owner’s grant is partially responsible. 
So too is the fact that in New South Wales and Queensland the first-home owner’s grant is only available for new homes with Victoria recently following suit (as at July 1 this year). 
This has seen the proportion of first-home buyers sink to just 7.3% of all owner occupier finance commitments in New South Wales and 9.8% in Queensland, both at pretty much record low levels. 
Although you would think incentives for first-home buyers to purchase new product would be a positive, new stock is typically more expensive than pre-existing stock and therefore it may actually act as a disincentive for these first time buyers to move into the market.
<a href="https://blog.rpdata.com/wp-content/uploads/2013/07/FHB-chart.jpg" rel="wp-prettyPhoto[g2221]"><img alt="FHB chart" src="https://blog.rpdata.com/wp-content/uploads/2013/07/FHB-chart.jpg" width="570" height="215"></a>
 
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So with first-home buyers making up just a small overall proportion of the housing market, it is the upgraders and investors which are really driving the overall market activity.  Data relating to investment activity in the housing market is only presented in terms of the total value rather than the number of loans, nevertheless the trend is quite clear.
In May 2013, $8.4 billion worth of housing finance for investment purposes was committed to. 
The $8.4 billion was the highest level of finance for investment purposes since January 2008 ($8.3 billion). 
As the below chart highlights, investment finance commitments have been ramping up sharply over the past 12 months, increasing by 23.7% on a year-on-year basis and indicating a surge in investment activity in the housing market.
<a href="https://blog.rpdata.com/wp-content/uploads/2013/07/Investment-chart.jpg" rel="wp-prettyPhoto[g2221]"><img alt="Investment chart" src="https://blog.rpdata.com/wp-content/uploads/2013/07/Investment-chart.jpg" width="570" height="211"></a>
As already highlighted, first-home buyer finance commitments are at extremely low levels. However, the total value of owner occupier new loan commitments (which exclude refinances) has increased by 18.5% year-on-year to May 2013. 
This data highlights that upgraders are also playing a significant role in the market currently albeit it is being outstripped by the rise in investment activity.
<a href="https://blog.rpdata.com/wp-content/uploads/2013/07/Total-value-of-finance-commitments.jpg" rel="wp-prettyPhoto[g2221]"><img alt="Total value of finance commitments" src="https://blog.rpdata.com/wp-content/uploads/2013/07/Total-value-of-finance-commitments.jpg" width="570" height="210"></a>
 
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So why are upgraders and investors so active in the current market?
Clearly the low mortgage rate environment is proving to be an attractive incentive to investors and upgraders but one would think that it would also be attractive to first time buyers.
However, this has not been the case perhaps due to the reasons already highlighted as well as the fact that much of the first-home buyer demand was brought forward due to the availability of previous grants and stamp duty concessions.
From an investment perspective it is probably the hunt for yield, or the combination of yield and capital growth prospects, which is driving the increase in investor activity. 
With official interest rates low and yields on most forms of investment quite low, I believe investors are increasingly seeking out higher yielding properties that will hopefully show medium to long term capital growth prospects. 
Although housing is not a liquid asset, investors can get in now and lock in a yield in the hope that rents and values continue to trend higher over the coming years which would subsequently boost their return. 
Whether this is proves to be a good investment strategy will of course be revealed over the coming years.
The current spread between official interest rates and capital city gross rental yields is 152 basis points.  This is close to the largest spread since 1999. 
Units tend to be much more attractive to investors in the housing market and the current spread in 215 basis points which is the largest spread since late 1997. 
Of course these figures are just looking at the spread between the gross yield and don’t factor in the moderate growth in values which has been recorded at 4.0% for houses and 2.4% for units across the combined capital cities over the past year. 
Given this, I don’t think it is any surprise that investor activity has been surging back to the housing market.
<a href="https://blog.rpdata.com/wp-content/uploads/2013/07/Rate-spread-chart.jpg" rel="wp-prettyPhoto[g2221]"><img alt="Rate spread chart" src="https://blog.rpdata.com/wp-content/uploads/2013/07/Rate-spread-chart.jpg" width="570" height="210"></a>
 
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On the upgrader side of the equation, the likely reason this segment of the market are so active is due to a few main factors. 
Firstly mortgage rates are extremely low currently and the likelihood of any short term increases to mortgage rates seems limited so upgraders are taking advantage of these conditions. In fact, if you were to fix in your mortgage for three years you could find a rate beginning with a 4. 
Secondly, growth in home values has been quite modest over recent years, with combined capital city home values increasing by just 12.8% over the past five years.  Of course there are varying performances across individual cities but values have generally risen at a modest pace recently. 
Finally, households have been saving around 10% of their income for the past five years reversing the 30 year trend of declining rates of savings.  The additional savings means that if you were to upgrade and use those savings, the size of your borrowings may be similar or perhaps even lower than the initial loan on the current home.
Overall, despite the fact that upgraders and investors have been so active in the market growth in home values has been quite modest to date. 
Sales activity has lifted from an extremely low base however, the evidence suggests there isn’t a level of speculation in the market to drive values significantly higher. 
This is probably due to the fact that the more emotive first time buyers are playing a relatively small overall part in the market currently whereas the more experienced upgrader and investor market is driving current market activity.
Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au/" rel="nofollow" target="_blank">RP Data</a>.
 
 
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Housing market activity largely driven by upgraders and investors: Cameron Kusher

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Today RP Data released an update to their Buy versus Rent report which provides a suburb by suburb summary about the standard costs associated with servicing a mortgage compared with paying rent.
Before everyone starts pointing out that the analysis doesn’t include the costs associated with a property purchase and ownership (stamp duty, conveyance, rates and taxes are some examples), nor does it include an assumptions around capital growth or decline. 
The purpose of the report is to provide a base level summary about mortgage costs across four different scenarios versus rental costs for a particular product type within a specific suburb.
The four scenarios used for mortgage costs are laid out below together with the number of suburbs where we the typical mortgage payment is likely to be lower than the typical rental payment:
<a href="https://blog.rpdata.com/wp-content/uploads/2013/07/No-of-subs-cheaper-to-buy-than-rent.jpg" rel="wp-prettyPhoto[g2216]"><img alt="No of subs cheaper to buy than rent" src="https://blog.rpdata.com/wp-content/uploads/2013/07/No-of-subs-cheaper-to-buy-than-rent-521x580.jpg" width="470" height="523"></a>
Compared with the same analysis for one year prior the number of suburbs where it is more affordable to pay down a mortgage than rent has increased substantially. 
In June last year there were only 179 suburbs on the list.  The big jump in numbers can be attributed to a few factors.
Firstly, the fact that property values have grown at a slower pace than rental rates. 
Most capital cities are still recording dwelling values which are lower than their previous peaks.  Of course there is also the fact that mortgage rates have moved back to around generational lows which makes the cost of servicing debt much more affordable.
For those who don’t mind paying a little bit more than the typical rental payments within a suburb, the opportunities increase substantially.  If you are willing to pay an extra $50/week on top of the typical rental payment the number of suburbs where paying a mortgage can be more affordable than paying rent rises to 1,761 suburbs.
Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au/" rel="nofollow" target="_blank">RP Data</a>.
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The locations where mortgages make more sense than paying rent: Cameron Kusher

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RP Data's research for April shows a sharp fall in the amount of time Australian residential properties are spending on the market. This is reflective of stronger housing market conditions over the first quarter of the year.
This is a great result, but we need to question whether the current rapid pace of sales can be maintained.
Across most capital cities, the current average time on market is lower than at the same time last year.  In fact, the time on market is lower across each capital city except for Brisbane and Hobart.
Time on market for capital cities:
<ul>
<li>Sydney - 35 days</li>
<li>Melbourne - 38 days</li>
<li>Canberra - 49 days</li>
<li>Brisbane – 72 days</li>
<li>Adelaide – 68 days</li>
<li>Hobart  - 110 days</li>
<li>Darwin and Perth - 52 days </li>
</ul>
Although time on market is at quite low levels it will be interesting to see whether or not these levels can be maintained with lower levels of new stock coming on to the market and the recent successive monthly falls in capital city home values.
On the other hand, sales volumes have been improving from a very low base indicating that if vendors set appropriate prices on their homes, they should be able to attract buyers and sell the home in shorter period of time.
Across the country, the average time on market for all homes is currently recorded at 60 days and at the same time a year ago, the figure sat at a slightly higher 67 days.
The national average time on market for a house is currently 62 days compared to 68 days a year ago. For units it was 61 days a year ago compared to 51 days currently.
Based on the latest time on market results, average time on market was abnormally high over the previous three months.  This performance can be attributed to a spike is seasonal activity where in January, and to a lesser extent February, the housing market was interrupted by a larger proportion of buyers, sellers and facilitators such as real estate agents, conveyances and financiers being  on holidays during the period.
Taking seasonality into account, the surge in selling time was much higher than normal over the early months of 2013. RP Data didn’t see the average selling time fall by as much as normal in March.
It is difficult to decipher exactly what has happened during this period where we saw longer selling time trends occurring in-line with a sustained drop in total listings. Potentially it could be that stock sitting on the market for a long time started to shift.  Because the time on market figure is only calculated across those properties that sell over the month, a higher proportion of older stock selling will bias the results higher.
Across the combined capital cities, homes are currently taking an average of 50 days to sell compared to 60 days at the same time a year ago.  Over the previous three months, the time on market was significantly higher; however, the figure has now returned to similar levels as those in November 2012 (49 days).
Capital city houses are currently taking an average of 53 days to sell and units 44 days compared to 61 days and 56 days respectively a year ago.  Similar to the national results, there was an unusually high average time on market for the first three months of the year.
Looking further into the relationship between the six months change in capital city home values, and the average days on market for capital city homes, we found that when values are rising, the number of days it takes to sell a home is inherently lower.
On the other hand, when values are falling or growth is more moderate, the time on market tends to be higher.  Of course this is a logical relationship but it is interesting to note that the change in direction of value movements actually tends to slightly precede the change in the number of days in market. This is indicative of the slight delay in the market catching up to the prevalent market conditions.
Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au/" rel="nofollow" target="_blank">RP Data</a>.
Note: The time on market figure measures the average difference between the date at which a property is first listed for sale and the contract date.  It is important to note that this metric is only measured across private treaty sales, i.e. it does not include auctions.  When the time on market figure is low it indicates that buyers and sellers are agreeing on a sale price relatively quickly and vice versa.
 
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Faster house sales reflect stronger market conditions over first quarter of 2013: Cameron Kusher

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Consumer sentiment has recorded a significant uplift since late 2011, however if recent weaknesses in the measure continues we are likely to see repercussions for the housing market despite the low interest rate environment.
Based on the May results, consumer sentiment fell by -7.0% over the month following a -5.1% fall in April which now sees the index sitting at 97.6 points; the lowest reading since August 2012 and indicative of higher levels of pessimism than optimism.
While inherently a volatile monthly measure, sentiment based on the index results tends to react to the latest news and worldwide economic events where as an example, it was widely reported that the federal budget announcement was largely responsible for the weakness this month.
Nevertheless, looking at the six month average sentiment figure, it sits at 103.7 points, only slightly more optimistic than pessimistic.
<img src="/images/stories/2013/05/kushermay30one.jpg" width="470" height="238" alt="kushermay30one">
This would tend to suggest that consumer confidence remains fragile and is subsequently likely to be reflected in consumer spending habits.
With the results confirming that consumer sentiment eased over the past two months, RP Data anticipates that these results may foreshadow a slowdown in other sectors of the economy, specifically retail spending and housing.
It is reasonable to say that for any buyers wanting to purchase a home in the near future, they would be seeking to find more confidence in the economy so they are secure with their ability to service debt levels.
We have investigated the annual change in capital city home values against the annual change in the six month rolling average reading for consumer sentiment where ever since the beginning of 2008 there has been a strong correlation between home values and sentiment.
With the monthly consumer sentiment reading falling by -11.7% since March 2013, we would expect the lower sentiment reading to have a dampening effect on dwelling value growth.
<img src="/images/stories/2013/05/kushermay30two.jpg" width="470" height="239" alt="kushermay30two">
 
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According to the rpdata-Rismark Home Value Index results, combined capital city home values fell by -0.5% in April and are down a further -1.1% over the month of May to date.
This suggests that the lower confidence readings may already be at work.
Interestingly, capital city values have been falling despite the fact that clearance rates have been strong throughout 2013 and are currently at their highest levels in three years. Of course, auctions represent just a small proportion of all sales and are more reflective of the premium housing market.
We believe that the auction market is likely responding to the fact that equities markets have recently rallied, premium home values have fallen by a much greater amount than other sectors of the market and mortgage rates are at very low levels on an historic basis.
The consumer sentiment trend in the Westpac &amp; Melbourne Institute Index also shows a strong correlation with housing market activity where the rpdata findings show an annual change in sales volumes in Sydney, Melbourne and Brisbane and the annual change in the six month average consumer sentiment reading.
Once again, there is a reasonable correlation between the two readings. Based on the recent decline in consumer sentiment it can be expected that sales activity may also slow over the coming months.
<img src="/images/stories/2013/05/kushermay30three.jpg" width="470" height="225" alt="kushermay30three">
Of course no one truly knows the future direction of the housing market but if recent trends are anything to go by it will be heavily influenced by consumer sentiment.
The two months of weakness in data could easily be reversed over the coming months however; the volatility in consumer sentiment and global economic uncertainty is making consumers much more cautious.
This fact is highlighted by additional data which shows households are saving around 10% of their income and have done so consistently for the past five years.
Another finding worth noting is the statistics produced by the Reserve Bank (RBA) on credit and debit card debt. On average, the results show that the outstanding balance on credit cards over the 12 months to March 2013 has fallen by an almost record -2.4% over the year.
The total number of credit card transactions has increased 1.7% over the year compared to average annual growth of 5.8% over the past decade.
Conversely, the number of debit card accounts increased by 6.7% over the year compared to the decade average annual growth of 4.2%.
These results show that consumers prefer to use their savings over borrowed money.
There has been clear evidence of weaker housing market conditions over the second quarter of 2013. The housing market is highly seasonal and we anticipated a slowing of conditions over the current period however, it is likely that the magnitude of the slowdown and subsequent value falls has been heightened by falling consumer sentiment.
Should this continue, it is reasonable to anticipate a less active housing market where value growth is lower than when confidence was much more buoyant.
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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Lower consumer sentiment could see housing market repercussions: Cameron Kusher

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Weekly rents have increased by 3.5% over the past year while value growth has been moderate and there has been virtually no change to yields yet investor activity in the housing market is ramping up.
Rental growth over the past 12 months across the combined capital cities has outpaced home value growth however, it has not been significant enough to see any substantial improvement in rental yields over the year. According to rpdata-Rismark data on rental growth between December 1995 and April 2013, rental rates have never fallen on an annual basis.
Over the 12 months to April 2013, capital city rental rates have increased by 3.5% for houses and 3.3% for units; a relatively measured rate of growth but higher than inflation. Across the combined capital cities median weekly rents are recorded at $474/week for houses and $440/week for units.
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Looking at capital city rental rates compared to capital city value growth shows that over the period from April 1997 to April 2013, overall growth in home values has been significantly greater than growth in rents. Rental rates have increased by a total of 82.3% compared to a 218.4% increase in home values over the same period.
Despite the comparatively lower level of value growth for rents, over the past five years rental rates have increased at an average annual rate of 5.0% compared to much more sluggish growth of 2.0% each year for home values. The data would seem to indicate that despite the fact that value growth has been comparatively slow over the past five years, there has still been strong demand for housing which is reflected in the comparatively strong increases in rents.
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The third chart highlights the performance of gross rental yields across the combined capital cities compared to annual growth in combined capital city home values. The second chart showed that between 1997 and 2004, rental growth was significantly lower than value growth, as a result there was a substantial compression of gross rental yields over that period. Between 2004 and 2013, home value growth has generally been much slower than over the previous period and subsequently there has been no further significant movement in gross rental yields.
 
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Gross rental yields have recorded only a minimal change over the past year. House rents have increased from 4.1% to 4.2% over the year to April 2013 while unit yields have remained unchanged at 4.9%.
Recent housing finance data from the Australian Bureau of Statistics (ABS) suggests that investors have been flocking back into the housing market. The headline figures of 2.7% annual growth in capital city home values and gross rental yields of 4.3% would suggest there is little reason for such activity however, when you consider that the official cash rate at April 2013 was just 3%, it appears that investors have been chasing yield and are positioning for long term capital growth, rather than keeping their money in the bank earning very little interest.
The fourth chart highlights why investor activity has likely increased recently with the basis point spread between the cash rate and rental yields at its greatest level since January 2000. The current spread for capital city dwellings is 127 basis points. For houses it is slightly lower at 118 basis points however, for units it is significantly higher at 189 basis points.
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Since the April 2013 rents and yields data was released, official interest rates have been reduced by a further 25 basis points to 2.75% in May. With the return on cash at bank falling further in May it is likely that investors will increasingly look for different ways to obtain a return on investment; clearly at the moment investing in housing is one way to secure a superior return. With lower interest rates and home value growth remaining moderate we would expect that the basis point spread between official interest rates and gross rental yields on houses to increase further over the coming months which would subsequently make investing in housing potentially even more attractive for those investors focused on yield.
Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au/" rel="nofollow" target="_blank">RP Data</a>.
 
 
 
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Why yield investors are returning to Australian residential property markets: Cameron Kusher

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Property taxes remain a staple income earner for the federal and state and local government coffers where, despite a weak property market across Australia during the 2011-2012 financial year period, tax revenue collected by government continued to rise.
Analysis by RP Data on the amount of tax income derived from property to bolster state and local government revenue during the 2011/12 financial year revealed that a whopping $33.515 billion was earned from this source.
<img alt="kushermay10onethumb" src="/images/stories/2013/05/kushermay10onethumb.gif" width="470" height="244">
Over the year, this equated to 46% of all taxation revenue for state and local governments and while down from 47.2% over the 2010/11 financial year, the total amount of property-related taxes rose by 0.9% over the financial year.
Although we saw an increase in tax revenue, it is the smallest annual change in revenue since revenue fell -10.4% over the 2008/09 financial year.
<img alt="kushermay10twothumb" src="/images/stories/2013/05/kushermay10twothumb.gif" width="470" height="367">
Our data shows that the total value of dwelling sales across the country fell by -6.1% over the financial year and despite this, property taxes increased.
To add to this, the combined capital city home values fell by -3.6% over the year and the annual number of home sales across the country was -6.1% lower.
Given these figures, it is clear there was only one way state and local governments could increase their tax revenue, and that was by raising tax rates on property.
Looking at where property taxes are earned by category over the 2011/12 financial year, the results show that the two largest sources of revenue are municipal rates (39.6%) and stamp duties on conveyances (34.8%).
 
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These two categories accounted for almost 75% of all property-related taxes collected. If land tax revenue is then added, these three categories account for 92.6% of all property-related tax revenue.
Over the 2011/12 financial year, municipal rates revenue rose by 6.1% and land tax revenue rose by 1.6%, while stamp duty revenue fell by -4.7%.
While there have been many calls to dump stamp duty and change it to a broad-based land tax, it appears that neither side of politics is seriously considering the change which would most likely be fairly unpopular with voters.
With home values and transactions falling during the 2011-2012 financial year, it is clear that revenue from stamp duty has received the full brunt of the slowdown.
It is interesting to note that stamp duty revenue over the 2011/12 financial year was -18.4% lower than the peak recorded in 2007/08 - clearly highlighting the impact of reduced sales volumes on this important government revenue stream.
<img alt="kushermay10fourthumb" src="/images/stories/2013/05/kushermay10fourthumb.gif" width="470" height="251">
Interestingly, excluding Queensland and Western Australia, stamp duty revenue actually fell across each state over the 2011/12 financial year.
In Queensland, the stamp duty collection rose by 4.7% and in Western Australia it increased by 29%.
(Note: over the year, the number of house and unit sales increased by 4.0% in Queensland and by 10.9% in Western Australia.)
Municipal rates, which rose by 6.1% across every state and territory during the 2011-2012 financial year, are the largest source of taxation revenue for states and local governments.
The revenue derived from rates is increased through either lifting the amount of rates collected or by the developmentof new properties therefore increasing the ratepayer base.
Land tax is recorded as the third largest source of revenue and it increased by 1.6% at a national level over the year.
Land tax rose over the year in each state except for Queensland where it fell by -2.8%.
Property tax is clearly the most important source of revenue for state and local governments across the country and it is therefore important for governments to find ways to grow revenue over time or alternatively, look for other ways to create it.
Since the end of the last financial year, we have seen an increase in sales activity across the national housing market.
As a result, stamp duty revenue is likely to increase over the next financial year however, any increase is unlikely to be significant.
Overall we would expect that at a national level property-related tax revenue will increase over the 2012/13 financial year however, the rate of growth is once again likely to be quite low.
Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au/" rel="nofollow" target="_blank">RP Data</a>.
 
 
 
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Property taxes remain a strong earner for governments: Cameron Kusher

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Home values are typically looked at in unadjusted or nominal terms, however, adjusting for the effects of inflation can provide a useful insight into how the housing market has performed and why home value growth has picked up since the middle of 2012.
While often measured in unadjusted or nominal terms, it’s important to note that home value growth highlights the true change in values however, having an understanding of ‘real’ movement in home values.
This is done by adjusting value changes for the effects of inflation.
Analysing home value changes in real terms allows greater insight into how the housing market has performed relative to the level of inflation in the economy.
The RP Data-Rismark Home Value Index results showed that home values across the combined capital cities rose by 2.8% over the first quarter of 2013 while CPI was measured at just 0.4% which in real terms means that home values increased by a slightly lower 2.4% over the quarter.
As Mr Kusher points out, home value growth was significantly lower over the period of March 1996 to March 2013 when inflation is taken into consideration.
<img alt="kushermay3one" height="246" width="470" src="/images/stories/2013/05/kushermay3one.jpg">
He found that combined capital city home values increased by 241% over the period in nominal terms, but in real terms they have increased by a significantly lower 121%.
Although nominal values have risen over recent years, in real terms, capital city home values are currently at a similar level to what they were in September 2007.
Quarterly capital city house values were -3.3% lower than their September 2010 quarter peak over the first quarter of 2013.
Unit values across the combined capital cities also peaked over the September 2010 quarter and at the end of the first quarter of 2013 they were -0.9% lower.
If the results are adjusted for inflation, each peak was also recorded in September 2010 however, house values are currently -8.9% below their peak and unit values are -6.6% lower.
In nominal terms, all cities and product types have recorded an increase in values since their respective lows, highlighting the pick-up in home value growth since the second quarter of 2012.
When adjusted for inflation the results are quite dramaticallydifferent in some instances.
Sydney, Brisbane, Perth and Hobart had the most notable differences.
<img alt="kushermay3two" height="225" width="470" src="/images/stories/2013/05/kushermay3two.jpg">
When adjusted for inflation, the Sydney market peaked in the first quarter of 2004 and house values remain -8.7% lower than their peak and unit values are -3.4% lower.
 
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In Brisbane, house values peaked in the first quarter of 2008 and are -16.7% below their peak, and unit values peaked in the final quarter of 2009 and are -12.8% lower.
House values in Perth peaked in the third quarter of 2007 and are currently -11.8% lower while unit values peaked in the final quarter of 2009 and are -10.5% lower.
Finally, Hobart house values are currently -17.0% lower than their fourth quarter of the 2007 peak while unit values are -13.8% lower than their second quarter of 2009 peak.
According to Mr Kusher, over recent years, rising costs across the economy have outstripped the increase in home values.
As a result, the relative affordability of home values has shown some subtle improvement over this time.
<img alt="kushermay3three" height="217" width="470" src="/images/stories/2013/05/kushermay3three.jpg">
This would also seem to indicate why there has been an increase in home values over recent months given that in inflation-adjusted terms values are at asimilar level to what they were at the end of the September 2007 quarter.
The fact that ‘real’ home values have remained below their peak for a much longer period of time in Sydney and Perth is a reflection of why these two housing markets have recorded some of the strongest rebounds in home values of all capital cities over recent times.
Looking forward, RP Data analysts have already seen that the rate of home value growth has slowed throughout April.
It’s important to keep in mind that value growth is typically strongest over the first quarter of the year.
Given this, we would expect that increases in home values will continue to track fairly closely to inflation, or perhaps slightly higher based on the low mortgage rates, over the coming year.
Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au/" rel="nofollow" target="_blank">RP Data</a>.
 
 
 
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Analysing home value changes in real terms allows greater insight into housing market performance: 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.

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More than half of residences sold before public sales as McNab announces significant partnership with Queensland Ballet

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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

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