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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
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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
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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

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

Joel Robinson

Spacious Group completes Voyage Altona in Altona's beachside precinct

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

Homecorp approved for Budds Beach apartment tower, Lýon Residences

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

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

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

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

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

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

Cameron Kusher

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