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The UBS Global Real Estate Bubble Index, designed to track the risk of housing bubbles in global financial centres, places Sydney as fifth riskiest.
Toronto tops the index in 2017, but all sub-indicators "point unequivocally" to elevated risk in the Sydney housing market.
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Sydney’s housing market has been overheating since the city became a target for Chinese investors several years ago, the index again noted.
"Low interest rates, rising wealth and exuberant expectations also buoyed local demand. 
"So valuations soared and pushed the market into bubble risk zone," it concluded. 
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Since 1980 the average real annual price rise in Sydney has been 3.5 percent, the highest among all select cities. 
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"Real prices again shot up 12 percent in the last four quarters and are now 60 percent higher than in 2012.
"Incomes increased by a meagre 2 percent in infation-adjusted terms. Tax breaks and interest-only loans are whitewashing the worsening affordability for the time being." 
According to the UBS Global Real Estate Bubble Index, the bubble risk in select world cities has increased significantly over the last five years.
 Real house prices of those metropolises within the bubble-risk zone have climbed by almost 50% on average since 2011.
 In the other financial centres prices had only risen by roughly 15%. 
"This gap is grossly out of proportion to the differences in local economic growth and inflation rates," the report noted.
<a href="https://www.propertyobserver.com.au/images/2017/09/29/UBSchart.jpg" target="_blank">Click here to enlarge</a>
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Bubble risk seems greatest in Toronto. 
Stockholm, Munich, Vancouver, Sydney, London and Hong Kong all remain in risk territory, with Amsterdam joining this group after falling into 'overvalued' territory last year. 
Valuations are stretched in Paris, San Francisco, Los Angeles, Zurich, Frankfurt, Tokyo and Geneva as well. 
In contrast, property markets in Boston, Singapore, New York and Milan seem fairly valued, while Chicago remains undervalued, just as it was last year.
Sydney ranked fourth most riskiest in the 2016 report which also advised “Sydney’s housing market had been overheating since the city became a target for Chinese investors several years ago."
The latest report noted in Munich, Toronto, Amsterdam, Sydney and Hong Kong, prices rose more than 10% in the last year alone.
"Annual price-increase rates of 10 percent correspond to a doubling of house prices every seven years, which is not sustainable.
"Never-the-less, the fear of missing out on further appreciation predominates among home buyers.
"After all, the price increases appear rational, for three reasons," it suggested. First, financing conditions in many cities are now more attractive than ever before, it noted. Second, the global increase in wealthy households seemingly creates constant demand for the most attractive residential areas. Third, building activity cannot keep pace with this demand.
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"Expectations tend to be prone to exaggerations in boom phases," the annual report advised.
It suggested the optimistic projections of the trends "created ever-greater price fantasies."
However, should sentiment change or interest rates increase, a correction is practically inevitable. 
"In the past, rising interest rates almost always triggered a crash in housing markets. 
"In addition, the dependence of prices on international ows of capital represents an incalculable risk. 
"Plus, once demand fell, even the low growth in supply would no longer provide an anchor," it concluded.
Vastly overvalued housing markets have historically been associated with a significantly heightened probability of correction and greater downside than housing markets whose prices developed more in line with the local economy, UBS advised.
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Chinese buyers ensure Sydney remains a risky housing bubble: UBS global bubble index

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GUEST OBSERVER
Any downturn in the construction industry could trigger job losses to a range of sectors that support the building industry, such as planning, project management, real estate and property services. This threat reveals the risk of relying on building and construction to sustain the economy. 
Since before the global financial crisis, urban economies across the world have relied increasingly on the construction of housing, especially high rise urban apartments, to maintain economic activity. 
Construction has boomed in Australia, especially in Melbourne and Sydney. Migration from overseas and interstate, as well as international student numbers, have so far maintained sufficient demand for city apartments and suburban houses to keep the building boom going.
Nationally the number of jobs in construction has increased from 927,000 in May 2007 to 1,110,400 in May 2017, an increase of 183,400 jobs. Even now, the federal government expects that construction employment will increase by 10.9% in the five years to 2022. 
But this view is at odds with new data. A recent report by advisory firm BIS Oxford predicts that new dwellings construction will fall by 31%, from 230,000 to 160,000 dwellings in Australia, in the next three years. This prediction foreshadows a dramatic decline in construction employment. 
The other jobs construction creates
Construction activity creates employment across the economy. There are jobs in industries that provide input building materials – such as local quarries and forests, sawmills, concrete products manufacturers, steel makers and glass, plastic and metal products manufacturers. There are also jobs created for people working in import firms bringing in materials that might not be made locally, as well as for people who work to store materials and transport them from ports and factories to building sites. Construction generates jobs for people involved in the design and planning of buildings, also those involved in the financing and contracting of construction projects. 
Once the buildings exist, construction creates more jobs in marketing the properties, building inspections, buyers agents, mortgage brokers, real estate agents and the like. After the sale, more jobs are sustained in interior designer, selling furnishings and fittings and appliances, and providing internet connections and utilities. 
The wages earned and taxes paid by these workers then create jobs in other services industries. This includes everything from dentists and personal trainers to bank tellers and public servants. New populations create new demand for supermarkets and schools and hospitals that employ more people. 
The secondary circuit of capital
Following the ideas of French urban theorist Henri Lefebvre, geographer David Harvey famously explained a process called the “second circuit of capital” where building replaces manufacturing as the driver of growth. This secondary circuit soaks up the excess capital sloshing around the world that can’t be invested profitably in the primary circuit of (manufacturing) production. Buildings are built for the purpose of generating profits for developers and investors. 
In places like Melbourne, the secondary circuit has created so many jobs in construction and related industries, that these have become the key drivers of growth. All these jobs are at risk when construction activity stalls. 
David Harvey’s crucial insight was that once economies rely on construction to drive employment, then the entire economy becomes like a giant Ponzi scheme. The only way that employment in a host city can be maintained is to keep building more buildings. 
Harvey argues the principle purpose of building is to generate profit, which means that the building will stop if there are insufficient numbers of buyers, or insufficient buyers willing to pay a price that will generate profit.
If the developers can elect to build elsewhere, in places where returns are higher, the local construction-led system can collapse like a house of cards. The resulting crisis would not be confined to the construction sector but would resonate through all the activities contributing to building or benefiting from the taxes and charges generated by building. 
That pretty much means everybody. Once the cards fall over, not only do employment opportunities decline, but so do property values, as prices adjust to the new reality. 
Some economists recommend creating new infrastructure projects to provide work, to keep the construction sector and material suppliers in business. But they rarely consider the second order effects as the downturn in construction filters through the economy. Most economists would argue that dealing with these secondary effects is best left to market forces. 
This means that as the downturn filters through the economy, jobs will be lost quietly across a range of sectors. The sectors most obviously vulnerable in the event of a downturn in residential building activity will be those that rely on discretionary building-related spending – such as furniture and effects retailing, wholesaling and manufacturing. The impacts on affected households will be no less devastating than for direct building jobs.
<a href="https://theconversation.com/profiles/sally-weller-116519" target="_blank">Sally Weller</a> is Visiting Fellow, Australian Catholic University and author for <a href="https://theconversation.com/au" target="_blank">The Conversation</a>.
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The hollow promise of construction-led jobs and growth

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The proportion of residential mortgages more than 30 days in arrears is increasing with the national delinquency rate at the highest rate in five years.
But delinquencies have been in decline in New South Wales given good economic and labor market conditions.
Eight of the 10 regions with the lowest mortgage delinquencies in Australia were in Sydney, where housing market and economic conditions have combined to be highly supportive for borrowers.
Sydney's Eastern Suburbs headed the list followed by North Sydney and Hornsby, City and Inner South, Ryde, the Northern Beaches, Baulkham Hills and Hawkesbury, the inner west and inner South West.
Mortgage borrowers in these best-performing regions are most likely to be employed in professional services industries, Moody's Investor Services noted.
"These occupations tend to pay higher wages and are more stable than mining and construction-related employment."
Moody's also noted rising Sydney house prices had supported mortgage performance, giving borrowers at risk of or already in arrears the easier option to sell quickly for a good price to repay their loans.
However, as house prices continue rising without a corresponding increase in incomes, housing affordability decreases and the risk of delinquencies and defaults rises.
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Moody's forecast continued weaker conditions in outlier states reliant on the mining industry, with high underemployment, and less favourable housing markets and income dynamics.
Six of the 10 worst regions across Australia — the Western Australia outback, Queensland outback, Mackay, Western Australia wheat belt, Mandurah and Fitzroy — have been among the worst performing regions in the country for the last four years.
The NSW state economy grew 3.8 percent over the year to March 2017, well above the national average of 1.6 percent.
NSW also has the lowest unemployment rate in the country since June 2015.
Although NSW's large and diverse economy shields us, we are sensitive to a slowdown in the housing market.
Our high household leverage poses a downside risk.
The large differential between house price and wage growth — particularly in Sydney where house prices have increased the most — means that households have had to take on more debt to fund home purchases.
While house prices in Australia have increased by an average of 30 percent over the three years to July 2017, average weekly earnings have increased just 4.99 percent.
Higher debt levels make households more vulnerable to economic or housing market shocks, Alena Chen, the Moody's VP senior analyst said.
She noted households had accumulated record levels of mortgage-related debt in the past few years.
But it should be noted the price growth ensure the proportion of people who have very high exposure to a fall in house prices – those with loan to valuation ratios above 90% – has also been declining over time.
The basic picture is one of prudent households, rather than a community of people gambling on house price rises, Rodney Maddock, Adjunct Professor of Economics, Monash University recently noted.
Retaining well paid jobs will be crucial to Sydney home owners.
This article first appeared in the Saturday Daily Telegraph.
 
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Sydney jobs ensure it escapes the Moody's mortgage stress 

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GUEST OBSERVER
Australia’s economy increased 0.8% in the June quarter, according to seasonally adjusted, chain volume measures released Wednesday. 
This brings annual GDP growth to 1.8% at the end of June. 
The results reinforce Australia as ‘the lucky country’, as we enter the 104th consecutive quarter without recession.
But aggregate growth figures mask one of the longest declines in private sector, gross capital formation in Australia’s history. Gross capital formation refers to spending on fixed assets and inventories such as land improvements, buildings, machines and equipment.  
In 2012, a demand shock from China drastically reduced the value of Australian commodity exports. The decline of the mining sector bled into secondary and tertiary sectors of the economy, and by 2014, annual growth in private sector capital formation was negative. It has remained negative since. 
Graph 1 shows the rolling annual growth rate of different economic components. This is not the first time private sector capital formation has fallen in value against household and government expenditure – 2001 saw one of the largest private sector contractions at -11%. However, we are currently in the longest period of private capital formation decline on record, with the rolling annual growth rate declining 13 quarters in a row.
<a href="https://www.propertyobserver.com.au/images/2017/09/27/Screen%20Shot%202017-09-27%20at%208.45.03%20AM.png" target="_blank">Click to enlarge</a>
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Some of the largest declines in the latest GDP figures were seen in non-residential construction. In the June quarter, privately funded investment in the construction of engineering projects, commercial buildings and other non-residential builds contracted -7.7% in the quarter, contributing -0.4% to total GDP growth. 
Graph 2 shows that nationally, even as private residential building has soared, this has not offset overall losses in private sector capital formation. As the dwelling construction boom eases, recovery in private capital formation may be even slower. 
<a href="https://www.propertyobserver.com.au/images/2017/09/27/Screen%20Shot%202017-09-27%20at%208.45.03%20AM.png" target="_blank"> Click to enlarge</a>
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The good news is that is that Graph 1 also shows that private investment appears to have reached a trough of -5% annual growth in December 2016. The upturn has been driven by competitive agricultural products, investment in intellectual property products and machinery and equipment investment. 
So how has Australia remained the lucky country in a climate of low private investment? The main growth driver is household expenditure, which rose 0.7% in the quarter. The trouble with aggregate indicators in household expenditure is that it does not always reveal the squeeze on household funds. The household savings ratio has sunk to its lowest level since 2008 at 4.6%. This suggests that households are using their savings to keep up with rising costs of living, which is one of the only explanations for increased consumption in a period of low wage growth. 
Government expenditure is also working to offset economic decline. In particular, the state governments of New South Wales and Victoria – enabled through high property tax revenue and asset sales - are rapidly increasing expenditure. The latest GDP figures suggest that state and local government expenditure increased 25.5% in the June quarter. 
The main projects being funded are large scale transport infrastructure and school and hospital upgrades. These have the benefit of offsetting job losses in the private sector, while improving commute times and learning facilities to increase economic capacity in the long term. According to Cordell construction data, government funded projects accounted for 44% of the value of construction work commencing across Australia last year. 
Much like the mining boom, the enormous east-coast housing boom and asset sales are likely once-in-a-life-time events. Another economic shock, such as accelerated house price declines, could see limited government funding for continued infrastructure investment. For Australia’s luck to continue, private sector investment needs to make a recovery before the public sector runs short on revenue.
Eliza Owen is Commerical Property Research Analyst with ‎CoreLogic and can be contacted <a href="https://www.corelogic.com.au/" target="_blank">here</a>.
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Household and government spending mask the weakness in our private sector: Eliza Owen

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GUEST OBSERVER
A lot of faith is vested in cities to tackle climate change, and with good reason. A day after the June 1 declaration that the US would exit the Paris Agreement, 82 American “climate mayors” committed to upholding the accord.
By August 4, when the US gave formal notice of its withdrawal, there were 372 “climate mayors” representing 67 million Americans. 
In Australia, too, national intransigence has led to greater expectations of local actions. The Climate Council’s July report declares that deep cuts in cities’ greenhouse gas emissions can achieve 70% of Australia’s Paris goals. 
The report notes that a majority of Australian cities have adopted climate policies. Many are committed to 100% renewable energy or zero emissions. One of the report’s authors argues that, even without national leadership, Australian cities can “just get on with the job of implementing climate policies”.
Many European cities have ambitious emission-reduction targets. Copenhagen plans to be the world’s first carbon-neutral capital by 2025. Stockholm aims to be fossil-fuel-free by 2040. 
So, at first glance, cities do appear to be leading the way. 
A word of caution
We support local decarbonisation and the desire for cities to be progressive actors. Yet there are ample grounds to be dubious about cities’ ability to deliver on their commitments. 
Sam Brooks, former director of the District of Columbia’s Energy Division, has laid out sobering evidence on the reality of climate action in US cities. 
Brooks supports stronger local action rather than “press releases” and “mindless cheerleading”. He shows that most emission cuts in US cities can be attributed to state and federal initiatives such as renewable portfolio standards or national fuel-efficiency rules. 
<a href="https://www.propertyobserver.com.au/images/2017/09/26/Screen%20Shot%202017-09-26%20at%2011.13.49%20AM.png" target="_blank">Click to enlarge</a>
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America’s narrative of climate-friendly cities relies heavily on California’s leadership to make it credible.
By May 2015, California had built the Under2 Coalition of cities, states and countries committed to keeping the global temperature increase below 2°C. California Governor Jerry Brown was prepared for the June 1 White House announcement, quickly detailing why it was “insane”. Days later Brown signed a deal between China and his state to collaborate on cutting emissions. 
California’s activism sets a benchmark. But Brooks details how New York, Boston, Washington DC and other “frequently lauded cities” often do not use the powers they have. 
No US city reports its electricity consumption more than annually. Many do not report it at all. Poor monitoring is a key reason they have not cut consumption, in spite of enormous scope for efficiency. 
Cities have not added much to national trends
It isn’t just American cities falling short, as Benjamin Barber’s new book, Cool Cities makes clear. 
Like Brooks, Barber championed urban action against global warming (he died in April 2017). Yet he looked past the hype to point out shortcomings in the mitigation measures of such exemplary cities as London and Oslo.
London’s stated goal is to cut emissions by 60% by 2040. It seems likely to fail, with blame falling on rapid population growth and inadequate policies in the building sector. 
Oslo is committed to a 100% cut in emissions by 2050. But its emissions have risen from 1.2 million tonnes in 1991 to 1.4 million tonnes in 2014. One complication is that oil and gas production comprise 22% of the Norwegian economy. The nation’s emissions are up 4.2% since 1990.
Even the progress of climate superstar cities such as Copenhagen, Stockholm and Berlin is, on close examination, subject to important caveats.
Copenhagen makes much of having cut emissions 21% by 2011 from 2005 levels. Yet the city admits that 63% of its goal of becoming carbon-neutral relies on buying carbon offsets for its emissions. 
National policy is a crucial context for urban action. For instance, Copenhagen has benefited greatly from a 27% fall in Denmark’s emissions between 1990 and 2015. Unfortunately, Danish emissions are expected to increase after 2020 without new policies.
Stockholm has cut emissions by around 37% between 1990 and 2015. This is mainly a result of changes to building heating – transport emissions have barely changed. 
As in Copenhagen, Stockholm’s achievements rely greatly on a national target – net-zero emissions by 2045 – backed by a robust policy framework.
As for Berlin, its goal is an 85% cut in emissions by 2050, compared to 1990. By 2013 the city had cut emissions by about one-third. Yet most recent data indicate that emissions have begun to rise slightly. Berlin is at risk of achieving only half of its mid-term goal of a 40% cut by 2020. 
Berlin is not responsible for a national policy that remains lax on coal and unduly favours automobiles, the source of 18% of German emissions. But civic leaders in Berlin could do more to nudge a car-centred culture towards sustainability.
What must cities do?
The urgency of real action is clear from the IEA’s 2016 report on sustainable urban energy systems. It warns that business as usual in cities could mean emissions increase by 50% by 2050. 
The IEA notes that 90% of the growth in primary energy demand is in non-OECD countries. At the same time, climate science tells us deep emissions cuts must begin by 2020. We have to accelerate decarbonisation, which means demanding greater ambition and transparency from cities. The following steps need to be taken:
Every city should have accurate, timely and transparent data on their performance across a range of indicators. These include emissions, electricity consumption, energy efficiency and renewable energy availability.
We need more robust comparative frameworks to make sense of the data. The 2014 Global Protocol for Community-Scale Greenhouse Gas Emission Inventories was a valuable start, but has to be expanded.
Cities should be more global when calculating their emissions. At present, they tally up emissions from their own territory and production, leaving out emissions from consumption of traded goods and (often) aviation. The differences can be significant. Were Copenhagen’s emissions measured on a consumption basis, the total would be four to five times higher.
Cities need to differentiate between emission cuts resulting directly from their own actions and those derived from state or national programs. We need to see what cities themselves are doing.
Cities too often advocate climate neutrality rather than zero emissions. The more a city relies on credits for offsets elsewhere, the greater the risk of failing to cut actual emissions within the city. 
There should be less cheerleading all around. City mayors need to lobby their state and federal counterparts to ensure co-ordinated action at all levels. And citizens must throw out mayors - not to mention regional and national leaders - who don’t accept the urgency of climate mitigation.
Sadly, many cities are dangerously complacent about the need for speed in decarbonisation. No press release can obscure the fact that time is not on our side.
<a href="https://theconversation.com/profiles/brendan-f-d-barrett-179124" target="_blank">Brendan F.D. Barrett</a> is Senior Lecturer, Program Manager, Masters of International Urban and Environmental Management, RMIT University.
<a href="https://theconversation.com/profiles/andrew-dewit-112433" target="_blank">Andrew DeWit</a> is Professor, School of Policy Studies, Rikkyo University.
Both are authors for <a href="https://theconversation.com/au" target="_blank">The Conversation</a>.
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This is why we cannot rely on cities alone to tackle climate change

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GUEST OBSERVER
At face value, Australia’s housing market appears to be broadly in balance.
However, we find that this headline result masks the fact that some people are increasingly unable to form new households, primarily due to affordability constraints. As a consequence, we believe a significant level of latent demand for housing still exists in Australia, which will underpin prices and require construction to remain elevated.
Following the release of 2016 Census data, we reviewed our analysis of Australia’s housing balance.
We found the net 780,000 dwellings built over the five years to 2016 has technically been enough to absorb the increase in demand.
This has decreased the shortage of dwellings nationwide.
This is only partially a good news story, however. Since 2011, the headship ratio (propensity of people to form new households) has steadily fallen, with the younger age cohorts the worst affected.
The relative unaffordability of housing, especially in the Sydney and Melbourne markets, means that people are waiting until later in life to form new households, and this artificially lowers demand for housing.
If the headship ratio had not dropped, Australia’s housing shortage would be 117,000 dwellings – much more significant than the 21,000 currently reported.
There are three implications from this finding:
The solid level of underlying demand is likely to provide support to house prices.
Australia’s strong population growth means that construction activity should remain around elevated levels.
There is little to suggest that the affordability picture for potential first-home buyers is going to improve in a meaningful way.  
HOUSING CONSTRUCTION BOOMING, BUT NOT ENOUGH BY ITSELF
<a href="https://www.propertyobserver.com.au/images/2017/09/26/Screen%20Shot%202017-09-26%20at%209.10.28%20AM.png" target="_blank">Click to enlarge</a>
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The five years to 2016 saw Australia’s stock of housing expand strongly, with the net addition (after allowing for demolitions) of 780,000 dwellings since 2011.
The majority of this came from the construction of units and apartments, which now account for a record 27% of Australia’s total housing stock.
 This strong increase in supply was necessary, given the rapid population growth in recent years. Until the end of 2012, this was centred in Queensland and Western Australia as the mining boom was in full swing. New South Wales and Victoria have since taken the population-growth baton, with Victoria’s population increase of 2.4% in 2016 the fastest since at least the early 1980s.  
Rapid population growth is not new – it has been persistent over much of the past decade. Over the 20 years to 2005, Australia’s population growth was relatively stable around 218,000 people each year. Since then, it has accelerated rapidly, reaching a peak increase of 460,000 people in the year to December 2008.
While that rate of growth has not been sustained, an increase of 360,000 people in 2016 is still well above historical levels.  
We can see in Figure 2 that housing construction initially failed to keep up with this sustained increase in population growth.
Indeed, the delayed supply response was quite remarkable. It resulted in a significant shortage of dwellings across most of the country.
<a href="https://www.propertyobserver.com.au/images/2017/09/26/Screen%20Shot%202017-09-26%20at%209.11.36%20AM.png" target="_blank">Click to enlarge</a>
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Although dwelling construction has certainly picked up in recent years, it is largely just playing catch up after a decade of not building enough housing. 
 The increase in construction since 2013 has helped prevent an even worse shortage of housing.
But changing household formation rates has also been a key factor in shaping our apparent transition toward an apparent housing surplus.
We find that Australians are forming new households later in life mostly because younger people are being ‘priced out’ of the housing market. 
 AUSTRALIANS ARE WAITING LONGER TO FORM NEW HOUSEHOLDS  
The 2016 Census shows that the ‘headship ratio’1 continued to fall for the younger age cohorts.
This implies that people are forming new households later in life, which lowers the indicated demand for housing.
This trend is a significant factor behind our estimate that the housing market is broadly balanced.
 Historical data show that falling headship ratios are not a new phenomenon; the national average has been declining since 2001.
But the pace of change has picked up in the past five years, driven by the key ‘household formation’ age group of 20-34 year olds.       
     Figure 3 shows that the headship ratio for the 20–34 age group has been steadily falling since 2001, and the decline accelerated over the most recent Census period.
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In particular, New South Wales has seen a significant decline and now has the lowest household formation rate of the country.
This means that younger people across the country, but especially in New South Wales, are waiting until later in life to create their own households.
 LATER HOUSEHOLD FORMATION LOWERS INDICATED DEMAND FOR HOUSING  
The implication of falling headship ratios is that on average, there are more people living in each dwelling.
In turn, this means that the implied demand for dwellings is less. We can quantify the impact of falling headship ratios by running the same analysis, but keeping the headship ratios constant at their 2011 levels.
See Figure 4.
 We found that if headship ratios were sustained at their 2011 levels, the added demand for dwellings would imply a much larger shortage at the national level.
In 2017, the shortage would be 117,000 dwellings, compared to the actual result of just 21,000.
The same is true at the state level, where New South Wales and Victoria would have a shortage of 40,000 (instead of 7,000) and 48,000 (instead of 10,000) dwellings respectively. 
<a href="https://www.propertyobserver.com.au/images/2017/09/26/Screen%20Shot%202017-09-26%20at%209.13.48%20AM.png" target="_blank"> Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/09/26/Screen%20Shot%202017-09-26%20at%209.13.48%20AM.png" alt="">
WORSENING AFFORDABILITY DELAYS PEOPLE FORMING HOUSEHOLDS  
Given the above analysis, it is important to assess why headship ratios have been falling amongst younger people.
We believe worsening housing affordability is the principal cause.  Recent research by the Reserve Bank of Australia supports this view.
It suggests that the ‘generation rent’ phenomenon - where fewer potential first-home buyers (FHBs) enter the housing market - “is a reflection of higher housing prices rather than a shift in preferences.”2 The RBA found that higher house prices have pushed potential FHBs out of the market.
On the other hand, demographic characteristics, such as education or employment status were not found to have changed the probability of someone becoming a FHB between 2008 and 2014. So, much of the delay in forming households (and falling implied demand for housing) is, in a sense, involuntary.
 The affordability issue has several root causes.
Clearly the strong house price growth in recent years does not help.
But that has been compounded by a fall in wages growth to the slowest rate on record, and lower returns on savings due to falling interest rates.
As a result, the time taken to save a deposit for an average dwelling in Australia has been increasing for the past five years.
 The story is different across the country. Sydney and Melbourne have experienced the worst of the affordability difficulties, in line with their exceptionally strong house price growth in recent years.
For an average income earner in Sydney, the time taken to save a 20% deposit for an average dwelling price is now sitting at over 10 years.
Melbourne is not much better, at 9 years (Figure 5). And this assumes that prices do not grow faster than incomes over that saving period. 
<a href="https://www.propertyobserver.com.au/images/2017/09/26/Screen%20Shot%202017-09-26%20at%209.14.57%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/09/26/Screen%20Shot%202017-09-26%20at%209.14.57%20AM.png" alt="">
 WHAT DOES THIS ALL MEAN?  
In isolation, the housing market balance has little direct impact on price movements.
The housing balance is a long-term, structural measure, whereas prices can move quickly in response to many factors, including sentiment, policy, interest rates and incomes.
The added complication of worsening affordability and falling headship ratios make interpreting the housing balance more difficult.
Our analysis does however provide useful guidance on the outlook for prices, construction, and affordability.
 This strong latent demand (FHBs currently priced out of the market) is likely to provide support to prices.
Any dip in prices may well activate the pool of potential entrants, resulting in additional demand and thereby sustaining prices.
We noted in a recent housing market update that it is hard to see house prices falling (in the absence of sharp interest rates increases), and this research supports that view.
 Australia’s strong population growth needs ongoing supply. We expect dwelling investment will slowly decline over the next two years as the current backlog of construction (primarily of high-rise apartments) clears, but the fundamentals are in place for construction activity to remain historically high over the longer term.  Finally, the outlook for FHBs is not encouraging.
<a href="https://www.propertyobserver.com.au/images/2017/09/26/Screen%20Shot%202017-09-26%20at%209.16.04%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/09/26/Screen%20Shot%202017-09-26%20at%209.16.04%20AM.png" alt="">
The probability of strong population growth and the presence of many potential FHBs mean the market is likely to remain extremely competitive. We have previously noted3 that stamp duty incentives are great for a lucky few, but such measures do little to address the underlying issues.
<a href="https://www.propertyobserver.com.au/images/2017/09/26/Screen%20Shot%202017-09-26%20at%209.17.17%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/09/26/Screen%20Shot%202017-09-26%20at%209.17.17%20AM.png" alt="">
It is difficult to envisage Australia’s supply-side response suddenly boosting the availability of affordable housing, so it looks like home ownership will remain a challenge for 20–34 year olds.  
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Daniel Gradwell is Senior Economist, ANZ and can be contacted <a href="https://www.anz.com/corporate/research/" target="_blank">here</a>.
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Australia's housing affordability is distorting demand figures: Daniel Gradwell

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The McGrath Group has lost its veteran Surfers Paradise agent John Natoli who has told clients he intends to pursue his passion for underwater photography.
"Mr Natoli has left McGrath to pursue other interests and we greatly appreciate his contribution to the company over the years," the agency told Property Observer.
Asked to nominate stars remaining within the agency, the McGrath spokesperson declined.
"We are confident in the strength of our brand and the quality of our sales team on the Gold Coast and look forward to a successful Spring selling season."
Widely respected as one of the Gold Coast’s foremost authorities on prestige property, John Natoli has a very successful career, the last seven years at McGrath, much of it with conjunctional partnerships with James Ledgerwood, who departed the group for The Agency earlier this year.
He has been REIQ Gold Coast Salesperson of the Year. It came two years into his career.
John has been selling high-end residential real estate since 1993, specialising in Mermaid Beach, Broadbeach Waters, Surfers Paradise, Isle of Capri and surrounding suburbs.
John sold beachfront and riverfront property as well as luxury penthouses and sub-penthouses.
He has set a large number of property records including the highest price for beachfront land in Surfers Paradise in 2003 for $17.5 million and highest beachfront house sale on Main Beach in 2004 for $13.45 million.
In 2004 when at PRD he sold a two-storey beach shack on 963sqm of prime Main Beach beachfront for a whopping $13 million, which worked out to be $13,500 a sqm.
It made the three owners a profit of $11.3 million in just six years."Underwater photography is now an ever-consuming passion," he blogged several years ago.
He started around 2003, diving weekly mainly at <a href="https://www.julianrocks.net/Shop2/hooked_on_web_book.pdf" target="_blank">Julian Rocks, Byron Bay</a>.
"I love getting upto the Great Barrier Reef into warmer waters and better visibility at least once per year."
His favourite marine life - sharks, mantas and anemone fish - were taken using a Nikon D70 in an Ikelite Housing w/single 125 Strobe. 
He hasn't ruled out a return to property sales, The Gold Coast Bulletin advised.
McGrath Surfers Paradise is headed by Craig Caughlan whose Sutherland Shire-based family has been involved in property development since the 1970s.
In his late 30s, he started his real estate sales career at McGrath in Sydney under the tutelage of Matt Lahood before taking up selling at Penrith with another agency.
He has been at the McGrath Surfers Paradise office since January last year.
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Shark loving estate agent John Natoli calls time at McGrath Surfers Paradise

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GUEST OBSERVER
As a nation, Australians are fascinated with residential real estate.
Today, you cannot open a newspaper, turn on the radio, watch television, or even have a chat with a friend without the subject of residential real estate coming up. 
Of course, when you consider that real estate is the nation’s number one asset class, this is hardly surprising. 
Everyone has an opinion when it comes to real estate. Most recently, we have heard a number of people argue that lenders and mortgage brokers are encouraging borrowers to take out loans they cannot afford, putting them in housing stress. 
I don’t want to contribute further opinion to this topic. Instead, I want to lay down some facts and figures that will hopefully go a long way to painting the true story. 
Residential real estate, like any commodity, is driven by a few key fundamentals, including supply and demand, the cost of credit, employment and access to credit. 
Access to credit, or the amount of money an individual can borrow, will determine what they can and will pay for a property. In recent times, there has been a lot of discussion about the high debt levels in Australia and the purported inappropriate lending practices undertaken by Australia’s lenders and mortgage brokers. 
While we do have high levels of debt in Australia, data from CoreLogic shows the proportion of income needed to service current household debt is actually lower now than it was in 2011. 
In 2011, the proportion of household income required to service an 80% LVR mortgage across the combined capital cities was 43.92%. By 2016, that percentage had dropped to 35.02% thanks, in part, to historically low interest rates.  
So while property is certainly expensive and the level of household debt is high, it would seem many Australians are actually in a better position now than they were five years ago.  
Moreover, lending practices are constantly improving. Borrowers aren’t being forced into higher loans, they are simply choosing to borrow more in order to purchase their desired asset. 
The banking industry is highly regulated and both brokers and lenders are more scrupulous than ever.
20 years ago, a home loan application was a single sheet of paper and the level of data that was collected by a lender was scant. 
Only 10 years ago, approximately 50% of all home loan applications in Australia required borrowers to certify their income and their asset position. These loans, commonly referred to as low-doc or no-doc loans, were very popular within Australia. 
When you contrast these lending practices with what we have today, it is fair to say things have come a long way. 
Today, new legislation requires brokers and lenders to forensically examine a borrower’s assets and liability situation. They are also required to verify a borrower’s employment through documentation as well as telephone checks and discussions with employers. At the end of the day, nobody - lender or mortgage broker - wants a consumer to be in a situation where they access credit they can't afford. 
At Mortgage Choice, the vast majority of our customers are more than nine months in front of their mortgage repayments. They are overpaying their mortgage in a bid to quickly and efficiently reduce their level of debt. 
 Looking ahead, brokers and lenders will continue to do the right thing by their customers, helping them into loans they can afford and helping them to get their foot onto the property ladder.   
I believe property prices will continue to rise across most markets. However, the rate of growth may be more moderate than what we have seen in the past. I do not think mortgage holders are at risk of losing their property. I believe Australia’s lenders and mortgage brokers do all they can to ensure borrowers are in the right product for their needs and long will this tradition continue.
John Flavell is chief executive officer <a href="https://www.mortgagechoice.com.au/" target="_blank">Mortgage Choice</a>.
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The industry has never been healthier: John Flavell

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GUEST OBSERVER
Since the 19th century, Australian drovers have moved their livestock along networks of stock routes.
Often following traditional Indigenous pathways, these corridors and stepping-stones of remnant vegetation cross the heavily cleared wheat and sheep belt in central New South Wales.
The publicly owned Travelling Stock Reserve network of New South Wales is now under government review, which could see the ownership of much of this crown land move into private hands.
But in a study published today in the Australian Journal of Botany we suggest that privatising stock routes may endanger vital woodlands and put vulnerable species at risk.
The review will establish how individual reserves are currently being used. Although originally established for graziers, the patches of bush in the network are now more likely to be used for recreation, cultural tourism, biodiversity conservation, apiary and drought-relief grazing.
This shift away from simply moving livestock has put pressure on the government to seek “value” in the network.
The review will consider proposals from individuals and organisations to buy or acquire long-term leases for particular reserves.
It is likely that most proposals to purchase travelling stock reserves would come from existing agricultural operations.
Travelling stock reserves across New South Wales represent some of the most intact examples of now-endangered temperate grassy woodland ecosystems.
Our research found that changing the status or use of these reserves could seriously impact these endangered woodlands.
They criss-cross highly developed agricultural landscapes, which contain very limited amounts of remnant vegetation (areas where the bush is relatively untouched).
Travelling stock reserves are therefore crucially important patches of habitat and resources for native plants and animals.
This isn’t the first time a change in ownership of travelling stock reserves has been flagged.
Over the last century, as modern transport meant the reserves were used less and less for traditional droving, pressure to release these areas for conventional agriculture has increased.
To understand what a change in land tenure might mean to the conservation values of these woodlands, we spent five years monitoring vegetation in stock reserves in comparison to remnant woodlands on private farmland.
We found that travelling stock reserves contained a higher number of native plant species, more native shrubs, and less exotic plants than woodland remnants on private land.
The higher vegetation quality in travelling stock reserves was maintained over the five years, which included both the peak of Australia’s record-breaking Millennium Drought and the heavy rainfall that followed, referred to as the “Big Wet”.
The take-home message was that remnant woodland on public land was typically in better nick than in private hands.
Importantly, other studies have found that this high-quality vegetation is critical for many threatened and vulnerable native animals.
For example, eastern yellow robins and black-chinned honeyeaters occur more frequently in places with more shrubs growing below the canopy.
The contrast we saw between woodlands in travelling stock reserves and private land reflects the different ways they’re typically managed.
Travelling stock reserves have a history of periodic low-intensity grazing, mostly by cattle, with long rest periods.
Woodland on active farms tend to be more intensively grazed, by sheep and cattle, often without any strategic rest periods.
The uncertain future of travelling stock reserves casts doubt on the state of biodiversity across New South Wales.
The current review of travelling stock reserves is considering each reserve in isolation.
It flies in the face of the belief of many managers, practitioners and researchers that the true value of these reserves is in the integrity of the entire network – that the whole is greater than the sum of its parts.
Travelling stock reserves protect threatened species, allow the movement of wildlife, are seed sources for habitat restoration efforts, and support the ecosystem of adjacent agricultural land.
These benefits depend on the quality of the remnant vegetation, which is determined by the grazing regime imposed by who owns and manages the land.
Of course, not all travelling stock reserves are in good condition.
Some are subject to high-intensity livestock grazing (for example, under longer-term grazing leases) coupled with a lack of funding to manage and enhance natural values.
Changing the land tenure status of travelling stock reserves risks increasing grazing pressure, which our study suggests would reduce ecosystem quality and decrease their conservation value.
The travelling stock routes are important parts of our ecosystem, our national heritage, and our landscape.
They can best be preserved by remaining as public land, so the entire network can be managed sustainably.
This requires adequate funding for the Local Land Services, so they can appropriately manage pest animals, weeds, erosion and illegal firewood harvesting and rubbish dumping.
Travelling stock reserves are more than just The Long Paddock – they are important public land, whose ecological value has been maintained under public control. They should continue to be managed for the public good.
Luke S. O'Loughlin is a research fellow at the Australian National University and can be contacted <a href="https://theconversation.com/profiles/luke-s-oloughlin-183211" target="_blank">here</a>.
Damian Michael is an ecologist at the Australian National University and can be contacted <a href="https://theconversation.com/profiles/damian-michael-409368" target="_blank">here</a>.
David Lindenmayer is a professor for The Fenner School of Environment and Society at the Australian National University and can be contacted <a href="https://theconversation.com/profiles/david-lindenmayer-4848" target="_blank">here</a>.
Thea O'Loughlin is an ecologist and adjunct researcher at Charles Stuart University and can be contacted <a href="https://theconversation.com/profiles/thea-oloughlin-407914" target="_blank">here</a>.
All are authors at The Conversation.
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Review of historic stock routes may put rare stretches of native plants and animals at risk

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The inner west Rozelle, Sydney weatherboard cottage - with the identifying bright yellow front door of former Wiggle Sam Moran - was sold at weekend auction.
<a href="https://www.realestate.com.au/property-house-nsw-rozelle-126290238" target="_blank">The cottage </a>secured $1,835,000 when offered by Moran and his American-born wife Lynn Stuckey who paid $955,000 in 2011.
Moran, who departed the Wiggles in 2011, now fronts the preschool show, Play it with Sam.
While three buyers had registered, there were only two active competitors.
It was declared on the market at $1,835,000.
The investor buyer told the Sunday Telegraph he hopes to get $950 to $1000 a week in rent.
The national weekend auction clearance rate sat at around 70.7 percent, according to CoreLogic, which noted it had been was the busiest since the end of May.
Auction volumes have increased to a total of 2,759 homes taken to auction.
Some 2,226 initial results reported to CoreLogic, the weekend sales returned a preliminary clearance rate of 70.7 per cent, up from last week’s final clearance rate of 66.7 per cent across 2,510 auctions.
Melbourne was host to the most auctions in a bumper pre-grand final weekend offering.
With 1,359 auctions scheduled, there was a preliminary clearance rate of 73.9 per cent from the 1,140 reported results.
Last weekend Melbourne had 1,265 auctions with a final clearance rate of 71.4 percent. 
At the same time last year, Melbourne’s clearance rate was 77.2 per cent across 1,103 auctions.
The North West region recorded the strongest clearance rate of 85.4 per cent across 101 auctions.
Melbourne's top sale was a <a href="https://www.propertyobserver.com.au/50&amp;52%20Boorool%20Rd%20KEW%20EAST" target="_blank">townhouse development site</a> at Kew that fetched $4.36 million.
Permits had been approved for the four townhouses on the 1430 sqm Boorool Road offering which sold at $16 million in 2015.
In Toorak, <a href="https://www.realestate.com.au/sold/property-house-vic-toorak-126261594" target="_blank">$3.72 million was paid for 112 St Georges Road</a>, one of six residences built on the site of former Prime Minister Harold Holt’s home.
The Herald Sun reported auction was slow going at first, but the buyer was the fourth and final bidder.
The four-bedroom house shares a communal pool, jetty on the Yarra River and a large garden with the five neighbours.
A four bedroom penthouse St Kilda apartment that sold for $3.61 million was Melbourne’s most expensive weekend apartment residential acquisition.
Located at <a href="https://www.realestate.com.au/property-apartment-vic-st+kilda-126255338" target="_blank">18/21 Marine Parade</a>, the property with bay views comes with an alfresco terrace for entertainment.
It had sold at $1.56 million in 2001.
A one bedroom Burnswick unit sold for $250,000 was Melbourne’s cheapest weekend auction sale.
Located at <a href="https://www.realestate.com.au/sold/property-unit-vic-brunswick-126134498" target="_blank">14/6 Garnet Street</a>, the property last sold in 1983 for $21,000.
Sydney’s preliminary auction clearance rate was 71.5 per cent across 1,014 auctions this week, after last week saw the final clearance rate slip below 65 per cent for the first time this year to 64.2 per cent.
"The current clearance rate across Sydney is significantly lower than this time last year when 80.4 per cent of the 946 auctions held were successful," Kevin Brogan, CoreLogic's auction analyst said.
Strong results however were recorded across the Northern Beaches (84.7 per cent), Central Coast (84.6 per cent) and Ryde (84.6 per cent).
A two bedroom Bankstown unit sold for $461,000 was Sydney’s cheapest weekend auction sale.
Located at <a href="https://www.realestate.com.au/property-unit-nsw-bankstown-126280498" target="_blank">10/48 Reynolds Avenue</a>, the unrenovated property last sold in 1996 for $155,000.
Sydney's top sale was a Balgowlah Heights house that fetched $4.1 million pre-auction.
Located at <a href="https://www.realestate.com.au/sold/property-house-nsw-balgowlah+heights-126266314" target="_blank">3 Tabalum Road</a>, the four bedroom house on 568 sqm came with views over Middle Harbour.
It last sold in 2008 for $2.1 million.
"Sydney’s auction market survived its September super Saturday, recording a solid clearance rate for sellers despite the usual flood of pre-holiday listings," Domain economist Dr Andrew Wilson noted. 
"The number of properties reported sold before auction continues to climb with motivated sellers keen to secure a sale from a dwindling pool of buyers," he added.
Some 168 Sydney homes were reported sold before auction at the weekend which was well ahead of the 148 reported the previous weekend and significantly higher than the 109 reported mid-August.  
Across Brisbane the preliminary clearance rate was 51.5 per cent this weekend after 99 auctions were reported to CoreLogic.
A five bedroom Ascot house sold for $2.4 million making it Brisbane’s most expensive weekend auction sale.
Located at <a href="https://www.realestate.com.au/property-house-qld-ascot-126284338" target="_blank">111 Alexandra Road</a>, the 1920s home last sold in 2003 for $1.9 million.
The offering with a tennis court was offered through Vanessa Harte of Ray White who told The Courier Mail five bidders registered for the auction of the 1022 sqm property.
There were 122 Adelaide auctions compared to 100 last week and 131 at the same time last year.
The cities preliminary clearance rate this week was 60.6 per cent, down from 68.2 per cent last week and lower than one year ago (78.2 per cent).
A four bedroom Bedford Park house sold for $420,000 was Adelaide’s cheapest weekend auction sale.
Located at <a href="https://www.realestate.com.au/sold/property-house-sa-bedford+park-126342402" target="_blank">16 Franklin Avenue</a>, the three bedroom, one bathroom home on 1000 sam was offered with the potential to create an extra one or two additional bedrooms.
In Canberra, 69.2 per cent of the 78 reported auction results for Canberra were sold this week, down from 71.9 per cent last week and higher than last year (68.4 per cent).
A two bedroom Holt house sold for $290,000 making it Canberra’s cheapest weekend auction sale.
Located at <a href="https://www.realestate.com.au/sold/property-house-act-holt-126317694" target="_blank">19 Goddard Crescent</a>, the property was in original condition but featured new carpet in the lounge and bedrooms.
Perth’s clearance rate of 36 per cent across 25 auction results is similar to last week, when 33 auctions were held and a clearance rate of 35.7 per cent was recorded.
Over the same week last year, the Perth clearance rate was a lower 29.5 per cent, and 50 auctions were held.
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Former Wiggle Sam Moran sells Rozelle cottage

<a href="https://www.apartments.com.au/developers/consolidated-properties">Consolidated Properties Group</a> (CPG) is approaching the launch of its latest Brisbane riverfront development, Castile, on the dress circle Skyring Terrace in Newstead.

VIP buyers are now being engaged, with a full public sales launch coming later this year.

Positioned as the final opportunity to secure a new absolute riverfront residence on the East bank of Newstead, Teneriffe or New Farm, Castile at 47 Skyring Terrace has been designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> as a timeless addition to the Brisbane skyline.&nbsp;

[smartcode_project:default project_id=150489 project_image_fid=371113]

The name Castile draws on themes of permanence, sophistication and legacy, reflecting a broader vision centred on enduring architecture and timelessness in the rarest of riverfront positions.&nbsp;

CPG Chairman and CEO Don O’Rorke said the project had been envisioned as a future Brisbane icon.&nbsp;

“With 47 metres of direct river frontage and never to be built out views, 47 Skyring Terrace is the definitive address on the Brisbane River,” O’Rorke said.&nbsp;

[smartcode_project:default project_id=150489 project_image_fid=371114]

“Rather than following trend-based apartment design, Castile draws inspiration from Brisbane’s great heritage buildings, reinterpreting classical architecture into a contemporary riverfront landmark designed to stand proudly for the next 100 years,” he said.&nbsp;

The approved development will comprise 227 apartments across a 25-storey tower alongside a boutique six-storey riverfront building of just 12 residences.&nbsp;

Construction is scheduled to commence in September 2026.

[smartcode_project_cta:default project_id=150489]

Joel Robinson

CPG unveils Castile Newstead ahead of upcoming sales launch

Australia’s online shopping habits have shifted dramatically over the last decade. As eCommerce volumes surged, so too did the frustrations that came with traditional parcel delivery: missed deliveries, long Post Office queues, parcel theft and the challenge of being home during business hours.

Australia Post’s Parcel Lockers emerged as one of the more practical responses to that changing consumer behaviour.

What started as a relatively niche delivery option has evolved into a nationwide network of more than 1,400 self-service Parcel Lockers positioned at train stations, shopping centres, supermarkets and Post Offices across the country. The system allows Australians to send, collect and return parcels 24 hours a day, fundamentally changing how many people interact with deliveries.

The appeal is relatively straightforward: flexibility.

Instead of waiting at home for a delivery driver or rushing to a Post Office before closing time, users can direct eligible parcels to a Parcel Locker location of their choice. Once the parcel arrives, Australia Post sends a notification with a collection code or QR access through the AusPost app, allowing customers to retrieve their package at any time within the collection window.

For apartment residents in particular, the system has become increasingly valuable.

Higher-density living has created logistical challenges around deliveries, especially in buildings without concierge services or secure parcel rooms. Missed deliveries are common, while parcel theft has become an increasing concern as online shopping volumes continue to rise.

Australia Post itself has repeatedly highlighted the growing issue of “porch pirates” during peak shopping periods, encouraging customers to use Parcel Lockers as a safer alternative to unattended home deliveries.

That security aspect is one of the key reasons the Australia Post Parcel Locker network has grown so rapidly.

Parcel Lockers are positioned as secure, monitored collection points that reduce the risk of theft while also improving delivery efficiency for Australia Post. Instead of multiple redelivery attempts, parcels can be consolidated into a single secure destination.

The Parcel Lockers themselves are free to use through a MyPost account and support a range of parcel sizes up to 16 kilograms and dimensions of approximately 35 x 44 x 61 centimetres.

Beyond receiving parcels, the system has increasingly become integrated into the broader eCommerce ecosystem.

Customers can now use Parcel Lockers to return online purchases, while retailers have embraced the model as a way to improve delivery success rates and reduce friction in the shopping process. Australia Post has actively expanded partnerships with major retailers and promoted Parcel Lockers as part of a broader out-of-home strategy.

The timing of that expansion aligns with broader changes in Australian shopping behaviour.

The acceleration of online retail during and after the pandemic placed enormous pressure on delivery infrastructure. Parcel volumes reached record highs, particularly during Black Friday and Christmas periods, with Australia Post delivering more than 100 million parcels during peak festive seasons.

That growth forced logistics providers to rethink the “last mile” of delivery, widely regarded as the most expensive and operationally difficult stage of the process.

Parcel Locker systems have increasingly been viewed as part of the long-term solution.

The concept itself is not unique to Australia. Parcel Locker networks have become common globally, particularly across Europe and Asia, where dense urban environments and apartment living create similar logistical challenges. But Australia’s geography and suburban sprawl made adoption slower initially.

Now, however, the convenience factor is driving mainstream usage.

For commuters, Parcel Lockers near train stations allow parcels to be collected on the way home from work. For apartment dwellers, they remove the uncertainty around access and missed deliveries.

The rise of the AusPost app has also streamlined the experience, centralising notifications, tracking and Parcel Locker access into a single platform. Australia Post has increasingly pushed customers toward app-based delivery management, partly as a way to combat phishing scams and fake delivery notifications, which have become more sophisticated in recent years.

The Parcel Locker model is also beginning to influence property development itself.

Parcel management has become a growing consideration in apartment building design, particularly as online shopping becomes embedded in everyday life. Many new residential developments are now incorporating dedicated parcel rooms or Parcel Locker systems into foyers and communal spaces.

For developers, parcel management is increasingly viewed as part of the broader resident amenity offering, alongside gyms, wellness spaces and communal work areas.

That reflects a wider evolution in how residential buildings are designed.

Apartment buyers are placing greater emphasis on convenience, security and operational functionality, particularly in higher-density urban environments. Parcel delivery, once considered a minor operational detail, has become an increasingly important part of that equation.

Australia Post’s Parcel Locker network sits at the centre of that behavioural shift.

What began as a simple alternative delivery option has evolved into a key piece of infrastructure supporting Australia’s growing eCommerce economy and changing urban lifestyles.

And as online shopping continues to expand, the role of Parcel Lockers is likely to become even more embedded in how Australians live, shop and receive goods.

How Australia Post Parcel Lockers changed parcel delivery convenience in Australia

Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Jonathan Chancellor

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