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Home values have increased in half of Australia's capital cities over the past year, according to RP Data.
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Housing market recovery to continue, but at a low level: Cameron Kusher

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Although spring is yet to finish, it looks as if the market has performed better this spring than it did throughout spring 2011.
The RP Data-Rismark Daily Home Value Index shows that across the five capital city aggregate index, which encompasses the five major capital cities and includes the Gold Coast, spring selling conditions have been stronger than for the same period last year.  From August last year to November 30, 2011, home values fell by 1.9% according to our index. However, between August 31, 2012, and November 21, 2012, the index has shown that values increased by 0.9%.
Although a 0.9% increase isn’t overly substantial for the typically strong selling season for the market, it is a significant improvement on the 1.9% decline in values throughout the period last year.  It also indicates that the lower interest rate environment is having an impact on the housing market.  Throughout the last “spring selling season”, standard variable mortgage rates were recorded between 7.8% and 7.55%. Throughout spring 2012, standard variable mortgage rates have been recorded at between 6.8% and 6.65%, around 100 basis points lower than last year.
Clearly, with a lower mortgage rate environment, buyers have shown an increased propensity to enter into the market as the cost of servicing the debt has become cheaper. Unfortunately, timely sales activity data is not available as it is for home values, however, in the most recent month for which data is available (August) there has been a noticeable improvement in sales activity.  Sales volumes over August 2012 were still 10% lower than the five-year average, but they were 15% higher than in August 2011. 
Auction clearance rates, which are a key lead indicator of market performance, have also been stronger throughout this spring than they were in 2011.  On a week-to-week basis, capital city auction clearance rates averaged 45.5% throughout spring last year.  So far this spring, auction clearance rates have been recorded at an average of 53.1%.  These clearance rates are still a long way from strong market conditions but do indicate better conditions recently.
Overall the “spring selling season” for 2012 has been better than 2011 but still nowhere near as strong as it has been over recent years.  With values showing low levels of improvement, significantly lower mortgage rates, and ongoing improvement in consumer confidence it looks as if the performance over spring of this year is a good platform for further market improvement throughout early 2012.  Of course, conditions are still likely to be weighed on heavily by domestic and economic conditions, and it is unlikely there will be a significant acceleration in value growth.
However, values should continue to slowly trend higher into 2013 especially if further cuts to mortgage rates are afforded, either by lenders or via cuts to the official cash rate by the Reserve Bank.
Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au" target="_blank">RP Data</a>.
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Spring 2012 market performing  better than spring 2011

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Why is Sydney's housing market so expensive? Sometimes when people try to answer this question, they point out that more expensive property prices are offset by higher wages in Sydney; and this argument is, at least to some extent, true.  Sydney wages are higher, but not to the same extent as property prices compared with other cities.  Based on data released by the Australian Bureau of Statistics last week, the gap between Sydney and Melbourne wages is only around $5,000 (9.2%) per annum, Brisbane is fairly similar, with wages being $5,100 (9.4%) lower per annum.  Perth wages are roughly on par with Sydney’s, showing a $490 (0.9%) difference.  The largest gap between Sydney wages and the other capital cities is apparent in Hobart, where the difference is a more significant $10,500 (19.3%) per annum.
The data released by the ABS is unfortunately quite lagging, being current to June 2010.  To compare apples with apples, we have provided median dwelling prices from June 2010 to highlight what might be described as some inequity of dwelling prices when we compare Sydney incomes with dwelling prices.
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Looking at the differences between average wages and median dwelling prices, the only capital city where the comparison of incomes and dwelling prices is roughly equitable is in Melbourne.  Melbourne dwelling prices and incomes are roughly 9% lower than Sydney’s.  A more up-to-date look at current dwelling prices shows that in October this year, Melbourne’s median dwelling price is now 11% lower than Sydney’s.
Looking at Australia’s third largest city, Brisbane, shows that incomes are 9% lower than Sydney’s, but dwelling prices are 15% lower.  Since June 2010 the gap between Brisbane and Sydney dwelling prices has widened to nearly 25%.
Adelaide dwelling prices are 25% lower than Sydney’s, while wages are tracking 17% lower.  Based on median prices to October 2012, the gap between Sydney dwelling prices and Adelaide’s has widened to 30%.
Average wages/salaries across Perth are only 1% lower than Sydney’s, but median dwelling prices are 7.2% lower.  The October median dwelling price data now shows Perth dwellings to be 13% more affordable than Sydney’s.
The gap between Sydney and Hobart wages and prices is the largest of any city, with Hobart wages averaging 19% lower than Sydney’s, however, dwelling prices were getting close to being 40% lower than Sydney’s back in June 2010.   More recent October data shows the median dwelling price in Hobart to be 43% lower than Sydney’s.
The average wage in Darwin is only 2% lower than Sydney’s, however, median dwelling prices are 10.5% lower.  Darwin is one of the only cities were the gap between median dwelling prices has narrowed since 2010 (a reflection of the recently strong growth conditions in Darwin), with the Darwin median dwelling price recorded at 8.3% lower than Sydney’s median dwelling price in October 2012.
Finally, in Canberra, the average wage/salary is 6% higher than Sydney’s, making Canberra Australia’s highest paid capital city.   While incomes are higher than Sydney’s, dwelling prices were 13% lower than Sydney’s back in June 2010.  Based on the October median price data, Canberra dwellings are now 7.5% more affordable than Sydney’s.
The question still remains, though, why are Sydney prices so much more expensive than other capital cities?  Like any pricing-related question, the answer often comes back to the relationship between demand and supply.  From a demand perspective, Sydney has the largest population of all the capital cities and the second highest level of population growth (based on raw numbers rather than percentage change).  New South Wales also attracts the largest number of overseas migrants.
From a supply perspective, the inefficiencies surrounding land release and development across New South Wales has resulted in an insufficient level of new dwelling construction, creating a housing market which is undersupplied.  The undersupply of housing tends to place some upwards pressure on prices.
Other reasons, apart from the higher incomes argument, likely come down to a handful of other factors.
<ul>
<li>Geographically, development and urban expansion in Sydney is curtailed by the large tracts of national park and the large number of waterways located across the Sydney metro region</li>
<li>Sydney is one of Australia’s most mature housing markets.  The long-established inner city and coastal areas tend to push the overall median prices up.  In fact, the outer-western and northern fringes of the Sydney metro region provide some of the most affordable capital city housing markets across the major capitals.</li>
<li>Another factor is the high cost of vacant land across Sydney, which is much higher than any other capital city.</li>
</ul>
Cameron Kusher is senior research analyst at <a href="https://www.myrp.com.au" target="_blank">RP Data</a>.
 
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Why is Sydney's housing market so expensive?: Cameron Kusher

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With buyers looking for affordable housing alternatives, it would be expected that the number of transactions for units would be increasing. However, that hasn’t been the case in recent times.
Even with a current national median house price of $415,000 nationally and $390,000 for units, it is clear many buyers will have some difficulty entering into home ownership.
Although today’s RP Data analysis shows that at a national level the median unit price is just $25,000 cheaper than the median house price, across the combined capital cities units are $53,000 more affordable.
Across individual capital city markets, the difference in the selling price for houses and units range from $48,000 in Melbourne to $110,000 in Sydney and Canberra. Given the significant difference in the prices of houses and units in Sydney and Canberra, it is no surprise these cities have recorded the greatest proportion of unit sales over the past year of all capital cities at 42.5% and 42.8% respectively.
The analysis also highlights the difference between median house and unit selling prices at a capital city and national level over time. The data confirms that median unit prices were consistently higher than median house prices from mid-1996 to early 2003 at a capital city level, and up until mid-2004 at a national level.
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This result is partly a function of the cost of housing being significantly lower at this time but is also because units were more abundant in inner city areas and attracted premiums because of this convenience.
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Over recent years, the gap between house and unit prices has increased significantly, with the difference reaching as much as $76,000 across the combined capital cities and $35,000 across the nation.
 
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The analysis confirmed that a vast majority of sales across the country are for detached houses as opposed to units. Data in the recently released 2011 census showed that 75.6% of occupied dwellings were for houses which reinforces that they continue to be the dominant housing preference.
RP Data also reported that there has been a decline in the proportion of units sold, both nationally and at a capital city level. This decline can be partially attributed to more off-the-plan unit sales, which do not get included in sales figures until such time as they settle.
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There has also been a decline in the response to available first home buyer grants and stamp duty concessions, coupled with recent falls in home values, this has improved affordability. Unit values have typically recorded lower value declines than that of houses, which may be leading to buyers taking the opportunity to buy houses as opposed to units.
Over the coming years, we would expect that units are likely to grow in popularity. Although unit sales pale in comparison to house sales across the country, as developable land becomes scarce and more expensive to develop, property developers are likely to focus on higher density housing.
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The community at large is also likely to demand more units, particularly in suburbs close to city centres or along transport corridors. This will likely be driven by lifestyle and affordability factors as well as town planning strategies.
Demographic factors are also likely to contribute to greater demand for units with baby boomers looking to downsize from their large family homes into something smaller and more easily maintainable. Also, the ongoing demographic shift to single person households and smaller families is likely to result in further growth in unit demand.
Cameron Kusher is senior research analyst at <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>.
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Units more affordable, but buyers still attracted to detatched houses

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The Australian population is highly centralised with 64.1% of all residents living within a capital city. In fact, 55.6% of Australians live within the four largest capital cities: Sydney (20.5%), Melbourne (18.3%), Brisbane (9.2%) and Perth (7.7%).
Despite a preference for capital city living there are many key regional areas across the country that are home to a significant population. This week we look at the recent performance of the 10 largest regional markets.
Although most Australians call a capital city home, the 10 largest regional housing markets account for 16.2% of the national population and every one of these regions has a greater population than that of Hobart (216,656) and Darwin (128,073).
In fact, the Hunter, Gold Coast, Illawarra and Sunshine Coast regions are respectively the 6th, 7th, 8th and 10th most populous regions of the country. It is also no surprise that all of the most populous regional areas of the country adjoin the coastline and all except for the south-west region in Western Australia are located on the country’s eastern seaboard.
Given that all of these regions are coastal, many have experienced relatively weaker housing market conditions over recent years. There are two main reasons for these conditions: firstly, the downturn in the tourism sector brought on by the higher Australian dollar and the global financial crisis (GFC) and, secondly, the slowdown of migration to these areas, known as ‘sea-change’, which was so prevalent in many of these areas before the GFC.
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Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
Across these regional markets, detached house values have recorded quite a varied performance over the past year. Half of the regions have recorded value falls with the other half recording an increase, the performances have varied from a -5.2% decline in values across the far north region of Queensland (which includes areas such as Cairns, Atherton and Cassowary Coast) to a 7.4% increase in values within the mid-north coast region of New South Wales (which includes major centres such as Coffs Harbor and Port Macquarie).
The five-year average annual change in house and unit values highlights the ongoing weakness in many of these coastal markets since the GFC. Although most regions have still recorded growth over the past five years, only the mid-north coast (6.8%pa) and Barwon (7.4%pa) have recorded average annual growth in excess of 5% pa over the period.
 
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The weakness is further highlighted by the fact that each region has recorded a decline in house values since the market peak. Queensland regions have typically recorded the largest declines, with values down -12.4% from their peak on the Gold Coast and -11.4% in the far north region.
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Regional housing markets are largely dominated by detached houses as opposed to units. As a result, mid-north coast and Wide Bay-Burnett do not have enough unit sales to calculate reliable statistics. Nevertheless, the remaining regions have all seen unit values fall over the past year with the south-west region of WA (which extends from Mandurah south to Manjimup) the one exception, recording a large 12.1% increase in unit values.
The growth (or decline) in unit values over the past five years across these markets has been greater than those for detached houses, highlighting particular weakness in this market. This is due to different factors across certain markets but can broadly be attributed to the downturn in demand for holiday apartments, downturn in the tourism sector of the economy and overbuilding of units in some areas.
The weakness in regional unit markets is further highlighted by the decline in unit values since the market peak. Across each region except for south-west WA the decline in unit values since the market peak has been greater than the decline in detached house values. In particular, there have been large declines in unit values in the Far North of Queensland (-20.3%), New South Wales’ Illawarra (-19.7%) and Gold Coast regions (-16.4%) since the respective market peaks.
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Overall, the major regional markets have largely underperformed their respective capital city housing markets over recent years. With the tourism sector remaining weak, some excess supply in select regions still needing to be absorbed and no sign of a return of the "sea-changers", these markets are broadly expected to continue to underperform over the coming year.
In stating this, values remain below their peak (significantly so in certain regions) and there are some attractive purchasing opportunities when you consider how far values have fallen and for how long they have underperformed in certain regions. Anyone looking to purchase must keep in mind that capital gains over the coming years are likely to be well below those experienced before the GFC and any recovery in values back to their previous peaks is likely to be a slow and gradual process over several years.
Cameron Kusher is senior research analyst at <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>.
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Fewer sea-changers hurt performance of regional coastal property markets: RP Data's Cameron Kusher

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Since the onset of the global financial crisis in 2008, growth in capital city home values has been much more subdued.
Apart from the economic factors, the slowdown in capital gains can also be attributed to the fact that consumers have increased their level of savings and have subsequently reduced their levels of spending (particularly for housing).
Over the five years to August 2012, home values across the combined capital cities increased at an average annual rate of just 2.4%. Over recent years the rate of capital gains in the housing market has been slowing as the cost of purchasing a home has risen.
Breaking down the market performance into five-year increments highlights the recent slowdown in value growth. Between August 1997 and August 2002, capital city home values increased at an average annual rate of 12.0%.
This rate of growth slowed to 8.4%pa between August 2002 and August 2007 and has further slowed to 2.4%pa over the most recent five years. These results clearly show that as housing has become more expensive over time and since the onset of the GFC capital gains have significantly slowed.
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Source: <a href="https://www.myrp.com.au/" target="_blank">RP Data</a>
In every capital city, average annual capital gains in the market have been stronger over the first five years of the past decade than they have been over the most recent five years. In fact, across each city except Sydney, the rate of average annual growth over the past five years has been less than half that of the previous five years. Further highlighting the slowdown is the fact that over the last decade, every city except Sydney recorded average annual capital gains of more than 6%, while over the past five years the best performing capital city, Darwin, has recorded average annual gains of just 4.6% per year. Click to enlarge
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Source: <a target="_blank" href="https://www.myrp.com.au/">RP Data</a>
The rate of inflation has been recorded at an average of 2.8% on an annual basis over the past five years. Given this, growth in home values over the past five years has been below the rate of inflation in Brisbane (0.2%pa), Adelaide (2.4%pa), Perth (-0.9% pa) and Hobart (-0.6%pa); while Sydney values have grown in line with inflation.
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Source: <a target="_blank" href="https://www.myrp.com.au/">RP Data</a>
 
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Across individual capital city housing markets, the table highlights the weaker market conditions prevalent across all capital cities over the past five years. For houses, capital gains have been lower over the most recent five years than the previous five years across each city. For the unit market, Sydney is the only city that has recorded a superior market performance over the past five years compared to the previous five years. Click to enlarge
 
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Source: <a target="_blank" href="https://www.myrp.com.au/">RP Data</a>
Over the past decade, Darwin and Perth have been the standout performers for capital gains for houses, with this trend largely fuelled by exceptional growth between August 2002 and August 2007. For units, Hobart and Darwin have been the standout performers over the decade with the exceptional growth once again fuelled by the performance over the first five years of the decade. Click to enlarge
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Source: <a target="_blank" href="https://www.myrp.com.au/">RP Data</a>
Another important trend which has emerged over the past five years is the superior capital growth performance of units compared to that of houses. Across the combined capital cities, units have recorded average annual growth of 3.6% over the past five years compared to 2.2% growth annually for houses. Across individual capital cities, the unit market performance has outperformed that of detached houses over the past five years in Sydney, Melbourne, Brisbane, Perth and Hobart. This is most likely a response to affordability constraints present in the market and subsequently buyers seeking more affordable alternatives to detached houses.
This data highlights the significant increase in home values over recent years. The much more subdued growth in home values over the past five years is likely to be a better indication of how capital gains are likely to play out over the coming years rather than the exceptional value growth recorded over the first five years of the past decade.
Cameron Kusher is senior research analyst at <a target="_blank" href="https://www,myrp.com.au">RP Data</a>.
This article originally appeared on <a target="_blank" href="https://www.smartcompany.com.au/index.php">SmartCompany</a>.
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Residential property capital growth has stalled in five years since GFC: RP Data's Cameron Kusher

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The most recent data on median home values shows that there are still affordable housing options across our most expensive capital city markets.
Housing affordability has been one of the most significant barriers to entry into home ownership across the country, particularly for first-time buyers. The relatively high cost of housing within the major regions of the country means that some have abandoned hopes of ever owning a home.
Although housing can be expensive in the most populous areas of the cities, the data shows that there are opportunities in most regions to enter into the housing market at relatively affordable prices; you just need to know where to look. Of course, most of these suburbs are going to be located further away from the city centre or buyers will have to purchase higher-density housing product rather than a detached house.
Within the detached housing market, 47.9% of suburbs throughout the combined capital cities have a median house value of less than $500,000 with 27.9% less than $400,000. Across regional markets there are a much higher proportion of suburbs with a median house value below $500,000 (87.4%).
Across the individual capital city markets, 92.1% of suburbs in Hobart have a median house value below $500,000, followed by: Adelaide (63.2%), Brisbane (60.5%) and Melbourne (44.9%). On the other hand, Darwin has far fewer suburbs with a median house value below $500,000 (16.4%) as do: Canberra (24.5%), Sydney (37.0%) and Perth (41.4%).
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Source:<a target="_blank" href="https://www.myrp.com.au/"> RP Data</a>
Despite the fact that all cities except Hobart, Adelaide and Brisbane have a majority of suburbs with a median value above $500,000, there are still quite a large number of suburbs with values below $500,000 throughout most cities.
For those who simply can't afford the price of purchasing a detached house, the unit market offers a significantly greater opportunity to enter into ownership at a more affordable price point.
 
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Across the combined capital cities, 81.2% of suburbs have a median unit value below $500,000 with 27.6% of suburbs below $300,000. Within regional markets of the country, 96% of all suburbs have a median unit value below $500,000 with 68.8% of suburbs having a median unit value below $300,000.
Across each individual capital city market, a majority of suburbs have a median unit value below $500,000. Once again, Hobart has the greatest number of suburbs below this benchmark (100%) followed by: Adelaide (96.5%), Brisbane (94.5%) and Darwin (88.9%). All other capital cities show a majority of suburbs below $500,000. However, Sydney has the lowest proportion (62.1%), followed by Perth (80.5%), Canberra (84.9%) and Melbourne (85.1%).
 
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Source:<a target="_blank" href="https://www.myrp.com.au/"> RP Data</a>
The results indicate that the unit market provides a greater level of opportunity to enter into home ownership at a more affordable price point. Of course, units tend to not be as desirable as houses for many prospective buyers due to a number of factors, including the higher density of the population and the fact that units incur body corporate levies/regulations and, as a result, residents don't necessarily have the same freedoms as with a detached house.
Although units may not be as desirable as a detached house, it is important to note that they are often more abundant in inner city suburbs which have high levels of local amenity. As a result of this, they also enable residents to live in those suburbs in which they desire to live but could simply not afford to own a detached home.  A great example of this is a suburb like Sydney's Mosman; the median house value is out of reach of most purchasers at $2,143,585. However, the median unit value is a much more attainable $593,655 (albeit still quite expensive).
Housing affordability is likely to continue to be an issue for many Australians looking to enter into home ownership despite recent falls to mortgage rates and home values. The alternatives for those looking to enter the market at affordable price points appear fairly clear: outer more affordable suburbs, select regional markets or higher density housing options. Many aspire to owning a home in a highly sought after suburb. However, the reality is that this is an unlikely prospect for most of the population.
Cameron Kusher is senior research analyst at <a target="_blank" href="https://www,myrp.com.au">RP Data</a>.
This article originally appeared on <a href="https://www.smartcompany.com.au/index.php" target="_blank">SmartCompany</a>.
Sydney apartment building image by Brian Yap courtesy of <a target="_blank" href="https://www.flickr.com/">Flickr</a>.
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Affordable housing options even in most expensive capital city markets: RP Data's Cameron Kusher

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According to the recently released National Accounts data for March 2012, mining activity accounted for 7.7% of the country’s Gross Domestic Product (GDP).

Although this may not sound overly significant, the only other items that contributed a greater amount to overall GDP were: financial and insurance services (9.8%), ownership of dwellings (8%) and construction (7.8%). Note that ownership of dwellings is reflective of the value of all dwellings plus other items, including agency fees, repairs and maintenance, loan application fees and other miscellaneous expenses.
Despite the fact that mining accounts for 7.7% of Australia’s economic growth, employment data from May 2012 shows that only 2.4% of Australians are employed in mining. Of course the number is likely higher when you consider services with links to mining. However, it is clear that the size of the workforce is not commensurate with the sectors current importance to economic growth.
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The first chart shows that despite the magnitude of the current mining and resources boom, mining’s overall contribution to GDP has changed very little over the past 25 years.
Based on this figure it is clear that the mining sector is currently a very important component of Australia’s economic growth and intertwined with that is the importance of the housing sector, with ownership of dwellings accounting for 8% of GDP.
Across the housing market a majority of regions detailed have recorded an increase in median selling prices over the past 12 months. In the most extreme example, <a href="/news">median selling prices have risen by 30.7% over the year across the Isaac council area</a>, which takes in much of Queensland’s Bowen Basin. The Whitsunday region, including the towns of Bowen and Port Pirie, is the only region that has recorded a decline in median selling price.
Over the past 10 years all regions except Muswellbrook (9.7% pa) and Kalgoorlie/Boulder (9.6% pa) have recorded average annual growth in median selling price in excess of 10%pa. Once again, Isaac is the standout with median prices increasing at an average annual rate of 32.3%.
Rental rates have also shown robust growth over recent times, highlighting the impact that a lack of new housing supply can have on some of the boom mining towns. Rents have increased over the past year across each region except Port Pirie and have risen by 88.2% across the Isaac council region.
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Across the unit market there is typically a much lower supply of properties in these mining regions than there is for detached houses. While most of the council areas detailed recorded an increase in median house price over the year, median unit prices fell or were unchanged in nine of the 14 regions detailed. Despite the typically sluggish growth in prices over the past year, most have recorded strong increases over the past 10 years, albeit not typically as strong as the growth in house prices.
 
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Unit rental rates have generally recorded quite strong increases over the past 12 months across the regions. This is likely due to the fact that unit rents are typically cheaper than those of detached houses and with many companies becoming more conscious of the costs associated with housing mining employees they are looking for more affordable alternatives such as units.
 
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Overall, many of the major regions linked to the mining and resources sector have recorded increases in both median sales prices and rental rates over the year. With commodity prices seeming to have recently peaked, based on the RBA Commodity Price Index prices are down by 9.8% from their peak. Despite the recent fall, thanks to the surge in commodity prices since early 2009, the index remains 13.2% above the previous September 2008 peak. Whether the fall away in prices is enough to dampen the sector is yet to be seen.
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A number of miners have already flagged that they are going to cut back on spending and some have already announced job losses. With the rate of growth in the Chinese economy slowing to a more sustainable pace it will be important to see what impact these factors have on mining communities over the coming year.
Cameron Kusher is senior research analyst at <a target="_blank" href="https://www.myrp.com.au/">RP Data.</a>
This article originally appeared on <a href="https://www.smartcompany.com.au/index.php" target="_blank">SmartCompany</a>.
Photo of Parker Point loading facility Western Australia courtesy of Rio Tinto.
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Property ownership contributes more to Australia's GDP than mining: Cameron Kusher

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In real estate there is no truer commodity than vacant land.  Houses and units inherently show a qualitative bias; the value of a house or unit is influenced by various factors such as the size of the home, the state of repair, the architecture, the attributes of the home such as number of bedrooms and bathrooms and whether the home has value added components such as a swimming pool or shed.
The value of vacant land, on the other hand, is primarily influenced by geographic context and land area.  Sure there are other factors that can affect land value such as the council zoning and the shape of the land parcel, however compared with a dwelling it is much easier to quantify and compare land values across regions.
A simple way to do this is to use median land prices, however a median land price only shows the typical price for which a block of land sells; this measure takes no account of how big or small the block of land is.  A much better way to measure the value of land is based on a rate per square metre.
To illustrate this point, using the median land price measure shows Sydney to be the most expensive land market in the nation.  Based on sales over the past 12 months, the typical block of land in Sydney sold for $283,500.
Using a rate per square meter measure it is a different story.  On this basis, Perth is the most expensive vacant land market, with the typical vacant block selling at the rate of $555 per square metre.  Sydney is the second most expensive market at $547 per square metre and somewhat surprisingly, Adelaide is the third most expensive at $486 per square metre (despite having the second most affordable median sale price).
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The difference really comes down to the size of the blocks being sold. The median land area for vacant land sales in Adelaide is the smallest of any capital city at just 375 square metres. So, despite being the most affordable mainland capital city based on median prices, on a rate per square metre basis, Adelaide land is actually relatively expensive.
Conversely, the most densely populated capital city, Sydney, still has the third largest median land area across the major capitals at 544 square metres.
From a development perspective, why not reduce the typical land area to maximise the development yield and improve housing affordability? The reason probably comes back to the constraints of council zoning and town planning regulations.
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The small lot sizes in Adelaide may come as a surprise, however the production and development of small lots is likely to become more evident across the other capital cities over time and is partly due to a state government program whereby developers have to include a proportion of affordable housing within most new developments.
Smaller lots and smarter housing design is a fairly straightforward mechanism to combat housing affordability and to improve density around primary working nodes and transport corridors.  The trend towards smaller lots is evident across all of the capital cities but not to the same extent as in Adelaide.  The important part of shrinking lot sizes to make housing more affordable is to ensure that there are enough parks and recreational facilities close by to cater to the needs of those home owners.
Cameron Kusher is senior research analyst at <a target="_blank" href="https://www,myrp.com.au">RP Data</a>.
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Perth nudges out Sydney as the capital with the highest-priced land per square metre

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Westpac and the Melbourne Institute's consumer sentiment index was recorded at 99.1 points for July, which indicates that consumer sentiment is close to the neutral mark where optimism and pessimism are equally weighted (i.e. an index reading of 100).
The consumer sentiment index continues to point to a higher level of pessimism than optimism despite the fact that there has been a significant decline in the standard variable mortgage rate over recent months (the index has remained under the 100 mark since March 2012).
The recent round of interest rate cuts commenced in November 2011 and since that time average mortgage rates have fallen by a total of 95 basis points. In October 2011, the month prior to the first interest rate cut, consumer sentiment was recorded at 97.2 points. Despite 95 basis points worth of interest rate cuts since that time, sentiment is just 1.9% higher. Consumers simply aren’t responding to lower interest rates in the way they have in the past.
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Clearly in the current economic environment of global and domestic uncertainty a lower interest rate environment is not proving to be enough to encourage a higher level of consumer optimism. Although there has been an improvement in all components of the consumer sentiment index over recent months, respondents are particularly pessimistic about family finances over the past year and over the coming year. This result suggests that although lower interest rates should ease financial burdens on families other factors are leading to lower expectations of finances. You could speculate that it is probably related to factors such as the carbon tax, political concerns both domestically and internationally, concerns of a Chinese economic slowdown and ongoing concerns about key European economies.
We also know that unlike conditions prior to the Global Financial Crisis (GFC) the behaviour of consumers has changed significantly. For starters, households are saving a lot more than they were previously. The household savings ratio was in steady decline since the mid-1970s and in 2003/04 households were actually spending more than they were earning (i.e. savings was negative). The household savings ratio has rapidly risen and has been above 8% since December 2008. Private sector thirst for credit, both housing and non-housing has also dried up. Total private sector credit growth was recorded at 4% over the year to May 2012 compared to typical annual growth over the past 20 years of 9.6%. Annual growth in housing credit is currently at a historic low of 5.1% over the year to May 2012 compared to typical annual growth of 13.4% over the past 20 years. Other indicators such as growth in spending on credit cards, housing finance commitments, retail trade and dwelling approvals are also reflective of limited demand from consumers to spend and a renewed focus on saving and debt reduction.
The lacklustre response to the significant easing of variable mortgage rates has repercussions for the housing market. Despite such a significant easing in mortgage rates, capital city home values have fallen by a further -2.2% since October 2011. It is important to note that values did increase by 1% in June and, based on the daily movements in the RP Data-Rismark Home Value Index, have now been trending higher over the past six weeks.
 
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As the graph shows, over recent years consumer sentiment has been an important element of the performance of growth (or declines) in home values and, as a result, a sustained improvement in home values is likely to be dependent on a sustained improvement in consumer sentiment. Click to enlarge
<a rel="shadowbox" href="/images/stories/2012/08/rpaug71.gif" title="Click to enlarge"><img src="/images/stories/2012/08/rpaug71thumb.gif"></a>
Sales transaction data lags our value data. However, volumes have also shown little response to date to a lower mortgage rate environment. As the graph shows, consumer sentiment and sales volumes have recorded quite a strong correlation in recent years. A sustained recovery in consumer sentiment is therefore likely to result in an improvement in residential sales activity. Click to enlarge
<a rel="shadowbox" href="/images/stories/2012/08/rpaug72.gif" title="Click to enlarge"><img src="/images/stories/2012/08/rpaug72thumb.gif"></a>
Overall, cuts to mortgage rates take some time to filter through to the market, but capital city home values have now been increasing over the past six weeks. Sales volumes data which does lag is yet to show signs of a recovery and the amount of stock available for sale is slowly easing. We may well see further improvement in sales activity in the spring, which is typically a busier time for the housing market.
The key ingredient to an improvement in the housing market is likely to be an ongoing and sustained improvement in consumer sentiment, particularly a willingness to spend on high commitment purchases. This is likely to take some time, given the high level of caution being shown by consumers and the ongoing global economic uncertainty.
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Cameron Kusher is senior data analyst at <a target="_blank" href="https://www.rpdata.net.au/">RP Data</a>.
This article originally appeared on <a target="_blank" href="https://www.smartcompany.com.au/index.php">SmartCompany</a> in July.
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Slow rise in consumer sentiment shows interest rate cuts no longer have same influence: 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.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<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.

[smartcode_project:default project_id=112661 project_image_fid=355935]

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.

[smartcode_project:default project_id=112661 project_image_fid=361052]

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.

[smartcode_project:default project_id=112661 project_image_fid=359607]

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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[smartcode_project_cta:default project_id=112661]

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.

[smartcode_project:default project_id=112343 project_image_fid=352689]

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.

[smartcode_project:default project_id=112343 project_image_fid=352687]

<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.”

[smartcode_project:default project_id=112343 project_image_fid=352690]

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.

[smartcode_project_cta:default project_id=112343]

Cameron Kusher

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