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Every month the Australian Prudential Regulation Authority (APRA) publishes monthly banking statistics which include, among other things, the total value of outstanding loans on the books of Australian banks for owner-occupied housing and investment housing.
This information is published individually for every bank operating in Australia.
As at February 2013, domestic banks had a total of $1.147 trillion in mortgages on their books; at the same time RP Data estimates that the total value of all housing in Australia was around $4.85 trillion.
Over the month, 66.9% of all outstanding mortgage debt was for owner-occupier homes compared to 33.1% for investment homes.
Outstanding loans mortgage debt accounted for 63.1% of all outstanding loans of domestic banks.
The housing finance data published by the Australian Bureau of Statistics (ABS) each month includes the aggregated data published each month by APRA for banks, however, it also includes figures for all authorised deposit-taking institutions (ADIs).
ADIs include banks as well as building societies and credit co-operatives.
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As mentioned, the total amount of outstanding mortgage debt to banks as at February 2013 was $1.147 trillion, to all ADIs it was $1.2 trillion.
The data shows that banks are overwhelmingly the most popular institutions for mortgages in Australia, accounting for 95.8% of all outstanding mortgages.
Of course, the banking sector in Australia is dominated by four major players: ANZ, Commonwealth Bank (CBA), National Australia Bank (NAB) and Westpac.
These four major banks, excluding CBA’s subsidiary BankWest but including Westpac’s subsidiary St George, hold 85.1% of all outstanding mortgage debt by banks operating in Australia and 81.5% of all outstanding mortgage loans to domestic ADIs.
These figures indicate that more than four out of every five mortgages in Australia are to either ANZ, CBA, NAB or Westpac.
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Over the past 12 months, the total value of outstanding mortgage debt to Australian ADI’s has increased by 6.0%.
This data set has been published from March 2002 onwards and this is close to the slowest rate of growth in outstanding mortgage debt on record.
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Across all ADIs, 67.5% of outstanding mortgage debt is for owner occupation purposes compared to 32.5% of mortgage debt being for investment purposes.
What this data indicates is that investment borrowers are slightly more likely to go to a bank for a mortgage than they are to go to a credit union or building society.
Over the 12 months to February 2013, the total value of outstanding mortgage debt to Australian ADIs for owner occupation purposes has increased by 5.5% which is the slowest growth on record, compared to investment mortgage debt growing by 7.1%.
The higher rate of growth in outstanding mortgage debt for investment purposes reflects the broader ABS housing finance data which shows the value of finance commitments for investment purposes rose by 15.4% year-on-year to February 2013 compared to a 5.3% increase in commitments for owner occupation purposes.
The Reserve Bank (RBA) published some information in its recent Financial Stability Review, which supports the notion of slower growth in outstanding mortgages.
In the report the RBA specifically noted:
‘Contributing to the slower pace of credit growth is the fact that many households have been taking advantage of the lower interest rate environment to pay down their debt faster than required. Mortgage buffers – balances in mortgage offset and redraw facilities – are now estimated to be equivalent to around 14 per cent of the outstanding stock of housing loans (see graph below). When interest rates fall, not all borrowers reduce their mortgage payments, resulting in an increase in prepayment rates. The increase in the rate of prepayment as a result of the decline in mortgage lending rates since late 2011 is estimated to have reduced the growth rate of housing credit by around ½ percentage point over 2012. Measured a different way, in aggregate, households’ mortgage buffers are equivalent to around 20 months of scheduled repayments (principal plus interest) at current interest rates. This provides considerable scope for many borrowers to continue to meet their loan repayments even during a temporary spell of unemployment or reduced income. As with housing loans, households have also been paying off credit card debt; net repayments on personal credit and charge cards have been above average in recent years and balances on personal credit cards have also slightly declined since mid-2012.’
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With borrowers paying off their loans quicker and having a greater ‘buffer’ sitting in their offset account it is no surprise growth in outstanding mortgage debt is at historic low levels.
Add into the mix, the fact that households continue to save around 10% of their disposable income and that the household debt to disposable incomes sits at around 150%, having plateaued over the past six year, and it is difficult to see how credit growth will return to previous levels in the foreseeable future.
This is despite the fact that we currently have a low interest rate environment and capital city home values have increased by 2.8% over the first quarter of 2013.
The challenge for the banking sector will, of course, be: how can banks attract new customers to lend to when this air of caution exists surrounding spending and high levels of debt?
The caution and aversion to credit is further highlighted by the fact that the RBA’s credit card statistics for February 2013 show that the average outstanding loan balance on credit cards fell by -2.5% over the year, the greatest year-on-year fall on record for that series.
Regulators will have to continue to ensure that lending practices and policies don’t deteriorate over coming years as banks seek new ways of attracting lending, particularly to the housing sector which accounts for 63.1% of the total value of outstanding loans to the domestic banks.
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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Growth in outstanding mortgage debt at historically low levels: Cameron Kusher

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The first quarter of 10 of the past 17 years has seen the strongest property growth for that year.
The seasonal nature of the market suggests that the 2.8% value growth recorded over the first quarter of 2013 is unlikely to be maintained throughout the remainder of the year.
If the growth rate continues at this level for the remainder of the calendar year, it would represent a rise in capital city dwelling values of 11.2%.
However, if history is anything to go by, this rate is unlikely to continue.
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It’s important to remember that Australia’s national housing market is highly seasonal with values seeing a greater level of quarterly growth over the first and third quarters of the year and with growth typically lower over the second and final quarters.
Between 1996 and 2012, the first quarter recorded the strongest rate of capital appreciation in dwelling values across 10 of the 17 years.
In each instance, and where the first quarter of the year had not recorded the strongest value growth, it was the third quarter which recorded the greatest value growth.
The results highlight the significant impact of seasonality on the change in capital city home values.
Further analysis of the today’s results show that the second quarter of the year recorded the weakest capital growth conditions on four occasions over the period.
On all other occasions, the fourth quarter experienced the lowest growth in values (note over the past two years Q2 and Q4 have recorded identical levels of value growth).
Across the period for which the analysis has been undertaken, the second and fourth quarters never recorded a greater increase in value than that of the first quarter.
 
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The results underscore the high level of seasonality within the housing market and the fact that growth levels over the first quarter of the year won’t necessarily be reflected in performance over the remainder of the year.
Although seasonality does have an impact on the performance of home values, the housing market does not sit in isolation to the rest of the economy.
As we know, economic conditions can, and do change rapidly.
When these come into play, we often see a significant impact on the housing market despite conditions being typically stronger over the first and third quarters and weaker over the second and final quarters.
Mortgage rates, unemployment, housing finance commitments, retail trade and consumer sentiment also play a large part in determining the direction of home values and whether or not consumers are prepared to buy and sell their homes.
In conclusion, although results confirm that capital growth across the housing market experienced a strong start to 2013, we should not expect the same rate of growth to be carried throughout the remainder of the year.
Testament to this is the March 2013 RP Data-Rismark Daily Home Value Index which provides evidence that home values across the five major capital cities fell by -0.1 per cent over the first fifteen days of April despite the strong capital growth conditions experienced recently.
The housing market is likely to continue along a recovery path, however, we anticipate slower capital growth conditions throughout the remainder of 2013 than those which have been recorded over the first quarter of the year.
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Cameron Kusher is senior research analyst at <a rel="nofollow" target="_blank" href="https://www.myrp.com.au/">RP Data</a>.
 
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First quarter usually has the year's strongest residential property market: Cameron Kusher

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Population growth is an important determinant of housing demand – to put it simply, more people generally equates to a larger requirement for new homes.
I'd like to look at the broad national population growth figures, which were recently released by the Australian Bureau of Statistics, and at the September quarter population change data in more detail, focusing on the state-by-state results.

At a national level, population growth is fuelled by two factors: the rate of natural increase (births minus deaths) and overseas migration.  At a state level interstate migration is also a factor in population growth.

On a state-by-state basis <a href="?option=com_googlesearch_cse&amp;q=population" target="_blank">population</a> growth has been strongest in absolute terms within Victoria (94,837), Queensland (91,389), New South Wales (86,033) and Western Australia (81,694).
These four states have accounted for 92.5% of total population growth over the 12 months to September 2012.
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Across the individual states, only Queensland (12,104), Western Australia (11,091), Victoria (1,296) and the Australian Capital Territory (755) have seen a net gain in population from interstate migrants (i.e. more residents arrived over the state/territory border than left for other states/territories).
Over the year to September 2012, the net number of interstate migrants arriving in Queensland was at its highest level since the 12 months to December 2009 and Western Australia’s net interstate migration figure was its highest level on record since the time series began in June 1982.
On the other hand, 18,448 more residents left New South Wales than arrived over the year followed by 2,748 net residents leaving Tasmania, 2,541 net residents left South Australia and 1,509 net residents left the Northern Territory.
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As the above chart shows, the resource states are currently the largest beneficiaries of interstate migrants from other states.
 
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Queensland has always been a significant beneficiary of population growth from other states, particularly New South Wales and Victoria, however, the rise in prominence of Western Australia is a relatively new feature.
This is likely to be a result of the resources sector boom which has occurred in that state over recent years.
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The other side of the equation of course is overseas migration and which states reap the benefits of these new arrivals.
Over the past 12 months, 91.8% of all overseas migrants or 209,403 persons have settled in one of New South Wales (59,432), Victoria (53,996), Western Australia (50,613) and Queensland (45,362).
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As the above graph shows, most overseas migrants to Australia have initially settled in either New South Wales or Victoria and based on this you can assume they tend to settle in Sydney or Melbourne.
Given this, the benefits (and costs) of overseas migration are not being felt right across the country but are mainly concentrated in the major population centres of New South Wales, Victoria , Queensland and Western Australia.

Based on all these figures, outside of New South Wales, those states which tend to lose residents to other states (or see a low inflow) also fail to attract a significant proportion of new arrivals to the country.
This has repercussions for the overall economic performance of these states as they lose many of their young and educated to the larger states which arguably have more abundant education and job opportunities.
On the other hand, a number of these states and territories are also failing to attract overseas migrants.
The reason being that these migrants also tend to be more attracted to the areas with better educational facilities and job prospects.
Perhaps some of the smaller states should be looking at ways that they can better attract new migrants to their state, surely factors such as cheaper housing in states like South Australia and Tasmania could be an attractive lure but there must also be the jobs and wages available to both attract and then keep these new settlers.
It may also help to stem the flow of residents that leave these smaller states.
Cameron Kusher is senior research analyst at <a href="https://www.rpdata.com.au/" rel="nofollow" target="_blank">RP Data</a>.
 
 
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QLD and WA attracting New South Welshmen in droves: RP Data

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The RP Data listings index has started to ease from its seasonal peak over recent weeks.
The index peaked at 308.4 points over the week ending 24 March, which was its highest level since March 2011.
Since that time there has been a clear easing of the index.
The recent strong ramp up in the index foreshadowed an uplift in the number of new properties being brought to market.
Over the two most recent weeks, the first of which included Easter, there has been a sharp decline in pre-listing activity and subsequently a decline in listings.
The big test of market conditions will be whether the additional supply which has recently been added to themarket will be absorbed in a timely manner.
RP Data is currently tracking 286,630 properties available for sale across the country which is 1.2% higher than at the same time last year however, it is -1.0% lowerthan the amount of stock for sale four weeks ago.
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The RP Data Property Index provides a lead indicator for the number of residential dwellings that are being prepared for sale across the Australian housing market. 
RP Data customers account for over 70% of all listings in the Australian property market.
The index, which tracks the flow of metadata across RP Data’s real estate data platform, shows a 75% correlation with the number of new listings about to enter the market.
The RPI was launched in February 2013.
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As winter looms real estate agent activity starts to ease: RP Data

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Mid-range suburbs across Australia’s capital cities are currently attracting the greatest increases in home values, while values across the affordable city suburbs and some of the most expensive suburbs have fallen.
Across the middle-priced capital city suburbs, 60% of these have recorded growth of 1.6% over the year to February 2013, whereas values have fallen by as much as -0.9% and -0.6% across affordable suburbs, and the most expensive suburbs respectively.
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The RP Data-Rismark Home Value Index results for March 2013 out last week confirmed that capital city home values increased by 1.3% over the month, 2.8% over the quarter, and 2.4% over the year.
Overall, home values have now increased by 4.7% since they reached their recent low. Based on available data to February 2013, home values increased in every capital city across the middle-priced suburbs over the 12 months excluding Adelaide where values fell by -0.7%.
It is important to remember that over the 12 months to March 2013, each capital city except Adelaide recorded an increase in home values; Adelaide home values fell by -0.5%.
On the other hand, the most affordable suburbs have recorded the weakest market conditions over the year in Melbourne, Brisbane and Adelaide whereas in Sydney and Perth, the most expensive suburbs have endured the weakest performance.
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At a combined capital city level in February 2013, home values were -6.4% lower than their peak in the most expensive suburbs, -3.4% across the most affordable suburbs and just -1.6% lower across the middle market.
The most expensive suburbs have been noticeably weaker across the more expensive capital cities of Sydney, Melbourne and Perth, with values -3.9%, -11.6% and -10.1% lower than their peak respectively.
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In Brisbane and Adelaide the most affordable suburbs experienced the weakest performance with values -16.3% and -10.0% lower than they were at their peak.
For the Sydney market, home values are now back above their previous peak which is highlighted by the fact that values across the most affordable and the middle-priced suburbs of the city have surpassed their previous peak.
Values across the most affordable Sydney suburbs are 2.8% higher than their previous peak, and the middle priced suburbs are 2.4% higher than they were at their previous peak.
Values across the major capitals remain below their historic highs and will need to see a significant recovery in order to return to the previous highs.
Cameron Kusher is senior research analyst at <a target="_blank" rel="nofollow" href="https://www.rpdata.com.au/">RP Data</a>.
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Home value increases currently driven by middle-priced market

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As someone who travels interstate regularly, one of my major frustrations (as I am sure it is with most passengers) is with airport delays.
Whether it is planes delayed in their take-off or coming home to Brisbane and having to circle over the Gold Coast for 30 minutes before we have clearance to land, it is one of the least enjoyable aspects of travel.
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When you have a look at the growth in flight and passenger numbers over recent years and consider the lack of investment in additional airports or airport expansions it is no surprise why delays are virtually inevitable.
Data published by the Australian Department of Infrastructure and Transport highlights airport passenger figures, which shows why so many of our planes are leaving or arriving so late.
Politically, building new airports is a very sensitive issue, as highlighted by the fact that governments have been trying to agree on a site for a second Sydney airport for many years and we still appear no closer to a solution.
Preliminary data shows that the number of airport movements increased by 4.2% throughout 2012, with 1,429,497 flights over the year and 140,928,756 passengers.
The major capital city airports have seen flight volumes increase by 4.1% over the year and passenger number growth of 4.8%, while the number of flights has increased by 4.6% in non-major capital city airports with passenger growth of 2.7%.
The nation’s three busiest airports are those which service the three largest cities (Sydney, Melbourne and Brisbane).
These three airports accounted for 48.7% of all flights over the year and 61.7% of all passengers. When you include the fourth largest airport, Perth, 55.5% of all flights and 70.7% of all passengers went through these four airports.
Sydney airport alone accounted for 20.9% of all flights and 26.3% of all passengers.
Of course, these four cities service the most populous regions of the country and they account for about 56% of residents, highlighting that the number of flights is in-line with the population, however, there is a disproportionate amount of passenger movements through these four airports.
This is largely due to the fact that these four airports act as the major hubs for international flights and many intra-state connecting flights.
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Over the past 20 years, the number of flights at a national level has increased at an average annual rate of 1.3% and the average annual rate of growth has been a much higher 2.7% over the same period across major capital city airports.
Over the period, flight numbers through Perth have increased at an average annual rate of 4.7% followed by 3.2%pa through Brisbane and 3.1%pa through Melbourne.
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The reason why these airports are seeing so much traffic is because most of the major businesses are located in these cities and these airports also generally act as gateways to the regional areas of the state.
Despite the fact that air travel has surged over recent times, there has been very little investment in airport infrastructure. Outside of the expansion of Avalon Airport in Victoria as a second Melbourne airport there has been minimal action on secondary airports or development of additional runways.
The cost associated with delayed flights to businesses and the negative impact these delays potentially have on Australia’s tourism sector are, I believe, too important to ignore. The statistics show that air travel is continuing to grow, but airport capacities are failing to grow accordingly.
Let me know what you think. How important is it to provide additional major airports and to boost the capacity of our current airports? Is enough being done to cater to our future needs?
Cameron Kusher is senior research analyst at<a target="_blank" rel="nofollow" href="https://www.rpdata.com.au/"> RP Data</a>.
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It's time we invested in more airports: Cameron Kusher

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After showing a consistent upwards trend, the proportion of homes selling at a loss across the country has eased over the final quarter of 2012.  Based on all dwelling sales over the December quarter 2012, 12.5% of all properties sold for less than their initial purchase price compared to 32.1% of homes selling for more than double their original purchase price.  The result highlights that many vendors continue to enjoy a significant profit on the sale of their home, with 45.1% of all home sales over the quarter realising a profit of more than 50% greater than the purchase price.

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As the above graph shows, the instance of homes selling at a loss has eased over recent months, but on an historic basis the trend remains at elevated levels.  On the other hand, the proportion of homes selling for more than double their purchase price is at low levels after trending lower over recent times.  The proportion of homes sold at a loss has eased from an historic high of 13.5% of all sales over the three months to September 2012.  Although 13.5% of properties sold at a loss over the September 2012 quarter, 30.9% of all homes still sold for more than double their initial purchase price.

The important thing to note with this data is that just because a person has sold at a loss it doesn’t necessarily indicate financial strain.  Some vendors are obviously willing to take a loss on the sale of their home if they are re-purchasing at what they perceive to be a lower price.  The most recent housing loan arrears figures published by the Reserve Bank showed that around 0.6% of all loans across the country were past 90 days due.  Nevertheless, there are regions across the country which are of concern because of the high proportion of homes selling at a loss.

Across individual capital city housing markets, the proportion of homes sold at a loss over the December quarter 2012 ranges from 5.3% of homes in Canberra and Darwin to 18.9% in Brisbane.  On the other hand, the instance of homes selling for more than double their initial purchase price was as high as 43.0% in Perth and as little as 26.4% in Sydney.  It is, of course, a concern that almost one in five homes sold in Brisbane over the quarter sold at a loss. However, the majority of homes still showed a profit on sale.  Across the combined capital cities, the instances of loss are much lower than those nationally.  Over the December 2012 quarter, 9.9% of capital city house sales were made at a loss, compared to 33.2% of sales at prices that were greater than double the original purchase price.

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Throughout non-capital city housing markets the instances of loss has been quite varied.  Coastal markets which are associated with tourism and were formerly popular with ‘sea changers’ have typically incurred the greatest proportion of loss-making home sales.  Conversely, regions linked to the mining and resource sector have typically been much less inclined to incur a significant loss on the sale of a home.

Queensland’s Gold Coast, Sunshine Coast and Far North (which includes Cairns) regions have recorded the greatest proportion of homes selling at a loss over the quarter.  These three regions have recorded 39.4%, 34.5% and 33.8% of homes respectively selling at a loss over the quarter.  Most of the other regions which have realised the greatest proportion of sales at a loss are prominent coastal housing markets.

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Regional markets that are linked to the mining and resources sector have generally seen the lowest instances of loss over the quarter.  It is important to note that the turnover of stock in many of these regions is quite low due to limited housing stock across these markets.  The Far West region of New South Wales has recorded no sales at a loss over the quarter while Western Australia’s Pilbara region has only seen 2.3% of all sales at a loss and North Western New South Wales has recorded 4.3% of all home sales at a loss.

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Overall, in certain areas there has been a high proportion of homes sold at a loss over the quarter. However, it is encouraging to see that the instances of loss broadly across the country is falling.  The regions most susceptible to losses are the coastal markets, which were very popular with ‘sea changers’ in the lead up to the financial crisis, as well as being popular locations for holiday homes.  As demand has fallen, vendors have had to significantly drop their prices in order to sell in these regions. This is reflected in the fact that certain markets are seeing a large proportion of homes selling at below their previous purchase price.  The better news is that there is not one region across Australia where the majority of sales are occurring at a price below the previous purchase and subsequently most vendors are realising some form of profit on the sale of their home.
Cameron Kusher is senior research analyst at <a rel="nofollow" href="https://www.myrp.com.au/" target="_blank">RP Data</a>.
Photo by John Nuttall, courtesty of Flickr
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'Sea changers' markets most susceptible to losses: RP Data

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With the release of the RP Data-Rismark Home Value Index results earlier this month, we also received the updated information on median selling prices of homes over the three months to January 2013.  This data revealed that the gap between selling prices of houses and units reached a record high over the first month of year.
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At a national level, median selling prices of houses were 11.4% higher than median selling price of units and across the combined capital cities, the differential was a much larger 19.4%. Five years ago, the differential was 15.6% and 8.3% respectively and a decade ago capital city houses were 1.1% more affordable than units and nationally houses were 5.6% more affordable.
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Across most individual capital cities the difference between selling prices of houses and units is at a record high.  In fact, Adelaide and Hobart are the only cities where the difference is not currently at record highs and they are only 2.6% and 5.0% off the records respectively.  The above chart highlights the differential across the major capital cities over time.  The graph also shows that since the start of the 2000’s the gap between the median price of a house and that of a unit has increased significantly.
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The difference between median selling prices of houses and units is currently quite significant across individual capital cities. In particular, some of the most expensive housing markets nationally such as Sydney, Melbourne, Darwin and Canberra all have a price differential in excess of $100,000. Across the individual capital cities the current differences are:
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<li>Sydney $171,000</li>
<li>Melbourne $103,250</li>
<li>Brisbane $99,500</li>
<li>Adelaide $78,000</li>
<li>Perth $96,000</li>
<li>Hobart $85,750</li>
<li>Darwin $164,000</li>
<li>Canberra $165,000</li>
</ul>
The significant price difference is highlighted by the fact that houses remain a much more popular choice across the nation than units.  The 2011 Census showed that 75.6% of all occupied dwellings were houses.  Although houses remain more popular, for price sensitive purchasers, particularly in major capital cities, units may be the only option for these buyers to enter the market.  With the gap widening between house and unit prices you would expect that unit sales activity would be increasing but this has not been the case over recent years.
Click to enlarge
<a href="/images/stories/2013/02/kusherfeb19.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2013/02/kusherfeb19thumb.gif"></a>
Of those properties sold over the 12 months to November 2012, units accounted for just 29.2% of sales across the combined capital cities and 25.6% at a national level.  As the graph above shows, there has been a strong trend toward fewer unit sales since late 2009.  This trend was probably influenced to some extent by the boos t to the First Home Owners Grant and the subsequent surge in first time buyers, many of whom were looking to purchase detached homes.  It is important to note that this trend may be slightly overstated due to the fact that off-the-plan unit sales are not provided until the property is titled however, there remains a trend toward fewer unit sales over recent years.  This seems to contrast dwelling approvals data which was released earlier this week.
Click to enlarge
<a href="/images/stories/2013/02/kusherfeb20.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2013/02/kusherfeb20thumb.gif"></a>
The annual dwelling approvals data shows that the proportion of units approved for construction has reached an historic high with 40.4% of all approvals over 2012 for units.  Of course the data still shows that the majority of approvals are for houses but it is noteworthy that more than half of all New South Wales approvals and almost half of all Victorian approvals were for units.  Given that in Sydney and Melbourne there is such a large gap between median house and unit prices this may be indicative of developers offering the market a cheaper housing alternative in the form of units. However, given that the number of unit transactions has been falling since 2009, are more units what the marketplace wants?
I believe that most Australian’s still aspire to own their detached home however; the high cost of vacant land coupled with limited new land supply and the concentration of employment opportunities within a few major centres has made owning a detached home out of reach for some.  For others, the only locations in which they can afford to own a detached home is either in a regional market, where there are fewer job opportunities, or on the outskirts of the city where amenity and infrastructure is less abundant than in those areas closer to the city centre.
Higher density units within inner city areas remain popular with investors because of their strong rental demand and subsequent attractive rental returns.  As a result of the more affordable price point of units as opposed to houses and their appeal to investors, I believe we will continue to see more and more units being developed, in particular within inner city areas.  Whether or not it is necessarily the product type that the market aspires to own, is unlikely to matter, given the reality is that for a proportion of the population, units are the only product type that they can afford in the location that they desire (unless they choose to locate within the more affordable detached housing areas on the outskirts of the major cities).
What do you think, are more units what the market wants and are units a viable alternative to the high cost of detached houses?
Cameron Kusher is senior research analyst at <a target="_blank" href="https://blog.rpdata.com/">RP Data</a>.
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Record gap between median house and unit prices may not mean demand for units is rising: Cameron Kusher

<html><body>
It has been another comparatively weak year for the residential housing market, with data to November indicating that capital city home values have fallen by 0.1% over the year.
<h3>What to expect in 2013</h3>
As we enter 2013, Australia’s housing markets are likely to remain relatively flat. However, in some sectors we may see capital gain increases over the coming year.
As per the current status quo, there is likely to be a continued variance in performances from city-to- city and region-to-region. Property markets in Sydney, Brisbane, Perth and Darwin, where home values have corrected more than the other capital cities, may be the markets to watch for improving conditions.
We are already seeing signs of a recovery in these markets, particularly in Perth and Darwin. On the other hand, markets such as in Melbourne, where capital gains have had a strong run, are more likely to see weaker conditions.
The number of properties being advertised for sale across Melbourne has ramped up very quickly; new listings have remained fairly constant. However, the total number of homes available for sale simply hasn’t been absorbed due to a slowing rate of sale.
Due to the high capital gains and a comparatively weak rental market, Melbourne rental yields are also comparatively low. There seems to be a likelihood of further interest rate cuts in the near future by the RBA, especially in light of the revelations of a slowing Chinese economy and a substantial decline in commodity prices and the likelihood of much slower economic growth over the third quarter of 2012.
The rising rental costs and lower interest rates may, in certain areas, result in some renters now looking to enter into home ownership. On the other hand, consumer caution persists and consumers broadly continue to prefer paying down debt and shun new debt, which is likely to restrict any significant improvement borne through lower interest rates.
The big wild card remains the global economy. The likelihood of further economic uncertainty is high, which will continue to dampen consumer confidence and the willingness to spend on high commitment decisions like purchasing a property.
As a result, any significant growth in values across the national housing market would appear to be some way off. The recent improvement in sales transactions will be vital to a sustainable return to value growth across the country. However, it will need to be maintained for a number of months before there is evidence to proclaim a recovery.
Click to enlarge
<a href="/images/stories/2012/12/rpdec13.gif" title="Click to enlarge" rel="shadowbox"><img src="/images/stories/2012/12/rpdec13thumb.gif"></a>
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
<h3>The state of play in 2012</h3>
This year delivered weaker market conditions for the residential housing market, with data to November indicating that capital city home values fell by -0.1% over the year.
<ul>
<li>House values fell by -0.4%</li>
<li>Unit values increased by 1.6%</li>
<li>Over the first 11 months of 2011 capital city home values fell by -3.8%</li>
<li>House values were down -4.0%</li>
<li>Unit values declined by -2.6%</li>
</ul>
<h3>How did 2011 compare with 2012?</h3>
There are a number of reasons for the property market’s lacklustre performance in 2012. These include: growth in housing credit has been extremely limited; low levels of consumer confidence; affordability barriers due to a higher mortgage rate environment.
Although research confirmed that the property market was weak over the past 12 months, there are select areas around the country that have well and truly outperformed others.
The following lists the top performing suburbs around Australia over the 12 months to September 2011. Specifically, the analysis will look at:
<ul>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-2">Highest median sale prices</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-3">Most affordable median sale prices</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-4">Most affordable median sale prices within 10km of the capital city</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-5">Highest indicative gross rental yields</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-6">Highest indicative gross rental yields within 10km of the capital city</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-7">Greatest increase in median selling price over the past 12 months</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-8">Greatest increase in median selling price over the past five years</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-9">Highest median weekly advertised rental rates</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-10">Most affordable median weekly advertised rental rate</a></li>
<li><a href="https://www.propertyobserver.com.au/news/the-property-suburb-winners-and-losers-of-2012-cameron-kusher/2012121958513/Page-11">Highest gross value of sales</a></li>
</ul>
 
<hr class="system-pagebreak">
Highest median value
<img src="/images/stories/2012/12/rpdec18.gif">
<img src="/images/stories/2012/12/rpdec181.gif" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
 
<hr class="system-pagebreak">
Most affordable median value
<img src="/images/stories/2012/12/rpdec182.gif" width="470">
<img src="/images/stories/2012/12/rpdec183.gif" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
 
<hr class="system-pagebreak">
 
Most affordable median sale prices within 10km of the capital city
<img src="/images/stories/2012/12/rpdec184.jpg" width="470">
<img src="/images/stories/2012/12/rpdec185.jpg" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
 
<hr class="system-pagebreak">
<h2> </h2>
<h2>Highest indicative gross rental yields</h2>
<img src="/images/stories/2012/12/rpdec186.jpg" width="470">
<img src="/images/stories/2012/12/rpdec187.jpg" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
<hr class="system-pagebreak">
Highest indicative gross rental yields within 10km of the capital city
<img src="/images/stories/2012/12/rpdec188.jpg" width="470">
<img src="/images/stories/2012/12/rpdec189.jpg" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
 
<hr class="system-pagebreak">
 
Greatest increase in median selling price over the past 12 months
<img src="/images/stories/2012/12/rpdec1810.jpg" width="470">
<img src="/images/stories/2012/12/rpdec1811.jpg" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
 
<hr class="system-pagebreak">
 
Greatest increase in median selling price over the past five years
<img src="/images/stories/2012/12/rpdec1812.jpg" width="470">
<img src="/images/stories/2012/12/rpdec1813.jpg" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
 
<hr class="system-pagebreak">
 
<h2>Highest median weekly advertised rental rates</h2>
<img src="/images/stories/2012/12/rpdec1814.jpg" width="470">
<img src="/images/stories/2012/12/rpdec1815.jpg" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
 
<hr class="system-pagebreak">
 
<h2>Most affordable median weekly advertised rental rate</h2>
<img src="/images/stories/2012/12/rpdec1816.jpg" width="470">
<img src="/images/stories/2012/12/rpdec1817.jpg" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
 
<hr class="system-pagebreak">
 
Highest gross value of sales
<img src="/images/stories/2012/12/rpdec1818.jpg" width="470">
<img src="/images/stories/2012/12/rpdec1819.jpg" width="470">
Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
This article originally appeared on <a href="https://www.smartcompany.com.au/index.php" target="_blank">SmartCompany</a>.
</body></html>

The property suburb winners and losers of 2012: Cameron Kusher

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In its most simplistic form, negative gearing for investment housing allows investors to deduct their losses against their personal taxable income.  These losses may occur when the investor incurs costs such as interest on a home loan as well as maintenance and other small expenses on an investment property. However, it is important to note that negative gearing is not unique to the property asset class; it also applies to businesses and shares in Australia.
The most important thing to realise about asset negative gearing is that it is fundamentally offsetting a loss.  Although you can claim that loss on your tax return, the investor must carry the cost of that loss throughout the year.  Ultimately, when investing, most purchasers would be hoping that rental rates increase over time and result in the asset moving from a loss-making one to an income-producing one.
It is also important to note that between September 1985 and September 1987, negative gearing laws were changed.  The government quarantined negative gearing interest expenses on new transactions.  As a result, investors could only claim interest expenses against rental income, not other income.
Given that negative gearing provides a benefit to investors, we look at the impact these changes had on the investment market over the two-year period.  The first component is the impact the changes had on the rental market.
According to the rental component of CPI data, rents across the capital cities rose by 21.8% over the two years to September 1987 (the period during which negative gearing laws were changed).  The increase in rents was most pronounced over the period in Sydney (26.1%) and Perth (31.1%).  As a comparison, over the two years to September 1985, rental costs rose by a lower 17%.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/12/rpdec17.gif"><img src="/images/stories/2012/12/rpdec17thumb.gif"></a>
The data clearly shows that rental growth was present over this period and it was greater than it was over the two-year period directly preceding it (The above chart shows the period for which the negative gearing rules were changed and are bolded black).  Here you can see that rental growth was well above average, particularly recent averages, but it was not unprecedented, with rents growing by a greater amount on an annual basis in late 1982 and early 1983.
Another important determining factor is the demand from investors over this period.  Unfortunately the Australian Bureau of Statistics does not provide information on the number of loans to investors; rather it provides the total value.  The total value of investment finance commitments in September 1987 was 41.5% higher than in September 1985.  These figures seem to suggest that at that time there was no weakness in demand for investment housing, however, a clearer outcome would be apparent based on the number of loans rather than the value.
The reason why negative gearing was reinstated in September 1987 was that it was proclaimed that rents rose sharply on the back of a fall in housing market investment.  However, it doesn’t look as if investment in the housing market dried up throughout this period. Rents clearly did rise quite sharply throughout, as demonstrated.


<hr class="system-pagebreak">
Many in favour of removing negative gearing from property say that it should occur due to the fact that housing is an unproductive asset class.
My argument is that given that housing provides shelter, if investors don’t purchase these assets, it would then be the responsibility of the government to provide this shelter.  Ultimately, that would mean that anyone that pays taxes would be funding housing for those who can’t afford it themselves.
One of the arguments against negative gearing is that the tax deductions afforded to investors in the housing market reduces government revenue.  However, if investors did not provide shelter to those who can’t provide it to themselves, government revenue would already be reduced due to the fact that this responsibility would fall on the government.
If we look at the recent Australian Bureau of Statistics (ABS) dwelling approvals data, it is interesting to see just how much of the new housing supply is created by the private sector as opposed to the public (government) sector.  According to the ABS dwelling approvals series, which began in July 1983, between July 1983 and October 2012, 4,355,266 dwelling approvals have been given to the private sector compared to just 228,843 to the public sector.  Over the last 29 years (give or take a few months), public housing approvals have accounted for just 5% of all dwelling approvals.  This is less than 8,000 approvals by the public sector each year!
Over the 12 months to October 2012, 145,515 dwellings approvals were granted to the private sector (98.6%) compared with just 2,065 to the public sector (1.4%).
The most recent census data shows us that of those homes occupied, 29.6% are rented (investment properties).  Based on this data, if we assume that without the private sector building homes for investment purposes, the public sector would have to account for 29.6% of all dwelling approvals to cover those in rental accommodation.  Over the past 12 months this would have equated to 43,684 dwelling approvals.  If we also consider that the median home price across Australia as at October 2012 was $386,000, and if the government had to buy the land and build 43,684 homes, this would cost the Government of the day $16,861,900,480 based on the number of approvals and the median home price.
Of course this is a rather simplistic calculation and if the government were to build homes on its own land it would cost less, as that figure includes land and building.  Also, it is unlikely that private investment in residential housing would cease without negative gearing but I would expect that it would fall.
The most recent taxation statistics data shows that over the 2009-10 financial year, $4.81 billion in net rental deductions were claimed by taxpayers.
<img src="/images/stories/2012/12/rpdec172.gif" width="470" height="185" alt="rpdec172">
In order for the government to break even to allowable deductibles from tax returns they would have to be building those 43,684 homes at a cost of $110,100.  Based on the current median home price across the country at $386,000, they would have only been able to build 12,461 homes over the past 12 months or 8.4% of the total building approvals over the past year.  It should be noted that not all new builds are for investment purposes but if we assume that 29.6% are there is a significant shortfall.
When you look at these figures it is obvious why negative gearing is unlikely to be removed.  Whether the removal of negative gearing impacted investment or not, and whether it lead to an increase in rents is a secondary concern relative to how much it would cost the government to supply public housing for the almost 30% of Australians that don’t own their own home.
These figures are not to suggest that if in the case negative gearing was removed, there would be no investors in the market however, the appeal of negative gearing is part of what attracts many investors to the market.  Without negative gearing it is likely that there would be fewer investors and therefore less private developers delivering new homes coupled with a greater need for the public sector to provide housing.  The flow on effect may also be that there would likely be lower demand for housing credit.  Although some proclaim removing negative gearing would cause house prices to fall, I would expect that new housing supply would be even tighter as developer’s struggle to achieve pre-sales for new development, this may in-turn force prices higher than they otherwise would be.
By looking into the figures in more detail, it makes good economic sense for the government to allow housing investors to negatively gear their properties so that the significantly greater cost of providing social housing is not borne by the Government and ultimately the Australian taxpayer.
Cameron Kusher is senior research analyst at <a target="_blank" href="https://www.myrp.com.au">RP Data</a>.
 
 
 
 
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Negative gearing for property investors makes good economic sense: Cameron Kusher

Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

Joel Robinson

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

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<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

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Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

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Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

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More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
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SIERA kicks off construction at Northcliffe tower Exhale

Local Little Bay residents, along with buyers from premium postcodes across Sydney’s affluent Eastern Suburbs, have dominated purchases in developer-builder Urban Property Group’s first Eastern Suburbs apartment development, <a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a>.

The $250 million coastal project, one of the first new developments in the area in several years, has proven particularly popular with downsizers, especially those from Coogee and Bondi. One Double Bay downsizer paid $4.7 million for a four-bedroom penthouse, setting a new local apartment price record in the process.

Buyers have been attracted to the combination of coastal tranquillity, premium design and amenity-rich neighbourhood living. The walkable village setting, along with proximity to three of Sydney’s leading golf courses, New South Wales Golf Club, St Michael’s Golf Club and The Coast Golf Club, has also been a key drawcard.

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Built across two low-rise buildings designed by <a href="https://www.apartments.com.au/architects/hill-thalis-architecture-urban-projects-pty-ltd">Hill Thalis</a> and set along a lush, landscaped green spine, designed by leading landscape architect <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>, ESTE Little Bay offers a collection of one, two, three and four-bedroom residences with interiors by Richards Stanisich.

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> Sales Director, Tom McIvor said the response to ESTE has been "nothing short of extraordinary."

“Buyers have been quick to recognise ESTE as a rare opportunity to invest in a coastal sanctuary that offers both seclusion and connectivity to the heart of Sydney,” McIvor said.

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<a href="https://www.apartments.com.au/project-marketer/srm-residential">SRM Residential</a> Senior Director, <a href="https://www.apartments.com.au/project-marketer/srm-residential">Clayton Ross</a> said the local market has responded incredibly well, driven by ESTE’s exceptional location and the rarity it offers.

“We’ve seen strong interest from a variety of buyer groups, all of whom are drawn to the exclusivity and quality of the build and construction by the 4.5-star iCIRT-rated builder / developer, Urban Property Group. There’s truly nothing else like it along Sydney’s coastline.”

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The project also includes robust buyer protections, including Resilience Insurance’s Latent Defects Insurance, providing 10 years of structural cover, and an independent iCIRT-rating of the developer.

“The iCIRT-rating adds another layer of confidence,” Ross added. “Buyers see it as a safeguard for their investment and their lifestyle.” A highlight of ESTE’s offering is its exclusive wellness amenities, including a heated rooftop infinity pool and outdoor heated spa, a state-of-the-art Technogym fitness centre, and a sauna.

<a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a> is topped out and is on track to complete towards the end of 2026, with residents moving in before Christmas.

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Cameron Kusher

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