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GUSET OBSERVER
With property prices typically viewed as the crux of the affordability problem, and little able to be done on this score, new ideas are needed to open the door to first home buyers - and targeting up-front costs is the place to start. 
While much has been written about the huge burden of stamp duty, particularly in NSW, Ms Pilkington nominates mortgage insurance as an area that could also be addressed to give first home buyers a more realistic chance of entering the market. 
Enabling first home buyers to negatively gear a percentage of their mortgage – even just a small one – is another opportunity to address affordability.
A 10 percent deposit on a Sydney property is a significant amount of money but when you factor in mortgage insurance, legal costs and initial home insurance, on top of the exorbitant cost of stamp duty, it’s no surprise so many first home buyers are disheartened. 
The various up-front costs mean the numbers fail to add up for many first home buyers. It’s at this point the excitement dissipates and stress takes over, and many looking to enter the market simply bow out, assuming they’ll never have enough. 
That’s why it’s at this point we need to help first buyers navigate a successful purchase.
Mortgage insurance is an important safeguard but questions the methodology of paying an up-front one-off lump sum. 
Most insurance policies are paid annually on an as-needed basis. There is no reason this couldn’t be applied to mortgage insurance too. 
One Laing+Simmons franchisee was recently working with a customer who had to pay over $8,000 in mortgage insurance up-front as they only had a 10 percent deposit. The property subsequently rose in value by 10% over the next six months, meaning their equity was now 20% and they therefore had no further need for mortgage insurance. 
Yet they had already incurred the cost - a cost that could, and should, be avoided.
The number of times an insurance company has to pay out on mortgage insurance is not in line with the amount they charge. 
Aside from a fairer approach to mortgage insurance, Ms Pilkington says Governments could also explore how negative gearing could help first home buyers. 
Under certain conditions, perhaps we could enable first home buyers to access negative gearing on the home they live in, even if it was only for a small percentage of their mortgage. 
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For example, first home buyers might negative gear a percentage of their loan for a fixed period of time which would lower repayments and, like any property negatively geared, the Government could claim some sort of capital gains tax when they sell. 
Any options to improve the tax effectiveness for home ownership to support first home buyers could be considered.
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Leanne Pilkington is managing director, Laing+Simmons and can be contacted <a href="https://www.lsre.com.au/home" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

New angles on the affordability issue: Leanne Pilkington

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GUEST OBSERVER
The RBA kept its cash rate steady at 1.50 percent, as expected.
 Although underlying inflation is running at 1.5 percent y-o-y, which is below the RBA's 2-3 percent target band, the central bank noted that 'the September quarter inflation data were broadly as expected' and that 'inflation is expected to pick up gradually over the next two years'. 
It's clear that although inflation is still below target the RBA is making use of the 'flexible' and 'medium-term' nature of the inflation targeting regime.
 In short, the RBA decision-makers are not 'inflation nutters'. They backed this up with (lack of) action. Overall, the statement was little changed from last month. Somewhat surprisingly, there was no specific reference to the recent sharp rise in coal prices. We expect the RBA to be on hold at 1.50 percent in coming quarters. 
Facts 
The RBA held its cash rate steady at 1.50 percent, as expected by 22 of 28 economists in the Bloomberg survey, including HSBC. Just prior to the decision the market was pricing a 5 percent chance of a 25bp cut. 
Implications 
The RBA made use of the 'flexible' nature of its inflation targeting regime by choosing not to cut the cash rate, even though underlying inflation remains clearly below the bottom edge of its 2-3 percent target band (in both q-o-q and y-o-y terms). 
Harking back to a famous comment by former Bank of England Governor, Mervyn King, in 1997; there are no 'inflation nutters' here. RBA Governor Phil Lowe recently repeated this view at a parliamentary testimony and today the RBA backed it up with (lack of) action. 
The accompanying statement was very similar to last month, with only a few small tweaks to the text. On the exchange rate, they repeated that 'an appreciating exchange rate could complicate' the rebalancing of growth. 
On the housing market, the statement re-iterated that 'the rate of increase in housing prices is also lower than it was a year ago', but also acknowledged that 'prices in some markets have been rising briskly over the past few months'. 
Somewhat surprisingly, there was no specific reference to the recent sharp rise in coal prices. Keep in mind that coking coal prices are up 210 percent since May and thermal coal prices are 116 percent higher (iron ore prices are also up 63 percent since January). 
To the extent that these price rises are sustained, this has the capacity to change the Australian growth story significantly, in our view. In not mentioning coal prices today, the RBA appears to be taking a (characteristically) cautious approach to not shifting the narrative until it is completely sure that the story has changed. 
We will be looking out for more on commodity prices and the likely impact on growth and inflation in the RBA's detailed quarterly official statement due out on Friday 4 November. 
<a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">PAUL BLOXHAM</a> IS CHIEF ECONOMIST (AUSTRALIA AND NEW ZEALAND) FOR HSBC. 
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No 'inflation nutters' here: HSBC's Paul Bloxham

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Another apartment development site in Thistlethwaite Street, Fishermans Bend, has sold, this time for $7,525,000.
The 1237 square metre parcel was not offered with a permit, but instead an architectural concept plan for an eight-level complex with 84 flats, many capitalising on city and Port Phillip Bay views.
Colliers International's marketed 37-47 Thistlethwaite Street, currently a two-storey building with a lettable area of 1749 square metres.
The sale comes after the same agents sold a 1194 square metre block next door, at 15-35 Thistlethwaite Street, for more than $8 million.
The vendor of that site, Circa Property Group, offered the block with a permit for an eight-level, 83-unit complex.
It exchanged to an Asia-based builder.
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Fishermans Bend development site sold

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RBA Governor Philip Lowe's November 2016 RBA statement.
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At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.
The global economy is continuing to grow, at a lower than average pace. Labour market conditions in the advanced economies have improved over the past year, but growth in global industrial production and trade remains subdued. Economic conditions in China have steadied recently, supported by growth in infrastructure and property construction, although medium-term risks to growth remain. Inflation remains below most central banks' targets.
Commodity prices have risen over recent months, following the very substantial declines over the past few years. The higher commodity prices have supported a rise in Australia's terms of trade, although they remain much lower than they have been in recent years.
Financial markets are functioning effectively. Funding costs for high-quality borrowers remain low and, globally, monetary policy remains remarkably accommodative. Government bond yields have risen, but are still low by historical standards.
In Australia, the economy is growing at a moderate rate. The large decline in mining investment is being offset by growth in other areas, including residential construction, public demand and exports. Household consumption has been growing at a reasonable pace, but appears to have slowed a little recently. Measures of household and business sentiment remain above average.
Labour market indicators continue to be somewhat mixed. The unemployment rate has declined this year, although there is considerable variation in employment growth across the country. Part-time employment has been growing strongly, but employment growth overall has slowed. The forward-looking indicators point to continued expansion in employment in the near term.
Inflation remains quite low. The September quarter inflation data were broadly as expected, with underlying inflation continuing to run at around 1½ per cent. Subdued growth in labour costs and very low cost pressures elsewhere in the world mean that inflation is expected to remain low for some time.
Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 has been helping the traded sector. Financial institutions are in a position to lend for worthwhile purposes. These factors are assisting the economy to make the necessary adjustments, though an appreciating exchange rate could complicate this.
The Bank's forecasts for output growth and inflation are little changed from those of three months ago. Over the next year, the economy is forecast to grow at close to its potential rate, before gradually strengthening. Inflation is expected to pick up gradually over the next two years.
In the housing market, supervisory measures have strengthened lending standards and some lenders are taking a more cautious attitude to lending in certain segments. Turnover in the housing market and growth in lending for housing have slowed over the past year. The rate of increase in housing prices is also lower than it was a year ago, although prices in some markets have been rising briskly over the past few months. Considerable supply of apartments is scheduled to come on stream over the next couple of years, particularly in the eastern capital cities. Growth in rents is the slowest for some decades.
Taking account of the available information, and having eased monetary policy at its May and August meetings, the Board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.
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Rental growth slowest in decades: RBA Governor Philip Lowe's Cup Day November 2016 statement

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GUEST OBSERVER
The housing market is certainly patchy across the nation, however it was encouraging to see some of the resource states seeing a decent lift in prices over October.
In addition prices fell in just two of the eight capital cities. Policymakers would be encouraged about more balanced home price growth across the nation but it would take a few more months to feel comfortable, and they would need to see a lift in regional house prices. Annual growth in home prices across regional centres was just 1.1 percent over the past 12 months.
What is clear is that prices are still rising in the strong markets of Sydney and Melbourne. In fact annual growth in Sydney home prices remains just shy of 11 percent and growth remains close to 10 percent in Melbourne.
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Still, given the amount of new homes being built at present in Sydney and Melbourne, national home prices may slow over the coming year.
The latest home price data doesn’t stand in the way of the Reserve Bank cutting rates over the next couple of months. The Reserve Bank has regularly noted that housing supply will lift over coming years as work is completed on the bevy of new homes – especially apartments. On balance inflation will be more of a deciding factor when it comes to debating the merits of another rate cut.
The latest Australian manufacturing data is encouraging, suggesting that the current levels of interest rates and the Australian dollar are working in favour of domestic producers. No doubt the sector is also benefitting from the stronger demand now that Brexit and the Federal Election are out of the way. 
What do the figures show?
Home prices
The CoreLogic Home Value Index of capital city home prices rose by 0.5 percent in October and was up 7.5 percent over the year.
In regional Australia, house prices rose by 0.9 percent in September and were just 1.1 percent higher than a year ago. (regional prices cover just houses and data is up to the end of September).
In capital cities, house prices rose by 0.5 percent in October while apartment prices rose by 0.6 percent. House prices were up 7.7 percent on a year ago and apartments were up by 6.3 percent.
The average Australian capital city house price (median price based on settled sales over quarter) was $615,000 and the average unit price was $520,000.
Dwelling prices rose in six of the eight capital cities in October: Darwin (up 2.2 percent) followed by Melbourne, Perth and Brisbane (all up 0.8 percent); Sydney (up 0.6 percent); and Canberra (up 0.4 percent). Prices fell most in Adelaide (down 2.4 percent), followed by Hobart (down 2.1 percent).
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Home prices were higher than a year ago in six of the eight capital cities. Prices rose most in Sydney (up 10.6 percent); followed by Melbourne (up 9.1 percent), Canberra (up 7.9 percent); Hobart (up 5.0 percent); Brisbane (up 4.1 percent) and Adelaide (up 2.5 percent). Prices fell in Darwin (down 3.8 percent) and Perth (down by 3.7 percent).
Total returns on capital city dwellings in the year to October rose by 11.2 percent with houses up 11.3 percent on a year earlier and units up 10.9 percent.
Performance of Manufacturing
The Performance of Manufacturing index rose by 1.1 points to 50.9 in October. A reading above 50.0 indicates that the sector is expanding. The index had been above 50 for 13 months up until August 2016 – the longest period of expansion since September 2006.
AIG notes “The rise was driven by stronger growth in exports, sales and new orders, which highlights the growing importance of exports to manufacturers and suggests further growth ahead.”
What is the importance of the economic data?
The CoreLogic Hedonic Australian Home Value Index is based on Australia’s biggest property database. Unlike the ABS Index, which excludes terraces, semi-detached homes and apartments, the CoreLogic Hedonic Index includes all properties. Home prices are an important driver of wealth and spending.
The Australian Industry Group compiles the Performance of Manufacturing Index (PMI) each month. The Australian PMI is the Australian equivalent of the US ISM manufacturing gauge. The PMI is one of the timeliest economic indicators released in Australia. The PMI is useful not just in showing how the manufacturing sector is performing but in providing some sense about where it is heading. The key ‘forward looking’ components are orders and employment.
What are the implications for interest rates and investors?
Latest data shows that the Australian economy remains in good shape.  
The transition from manufacturing to services in China is proceeding well. The manufacturing sector is tracking sideways while the services sector is taking up the slack and expanding nicely. A case of so far, so good. 
Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a> </div>
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Resource states seeing healthier home prices: CommSec's Savanth Sebastian

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GUEST OBSERVER
The Q3 NAB SME Survey suggests a loss of momentum in SME business conditions and confidence but this is against the exceptionally strong results in Q2.
Overall, conditions and confidence remain above their long-term averages which suggest relatively solid levels of underlying activity.
A further narrowing in the gap between conditions experienced by SMEs and larger businesses as indicated by the NAB Quarterly Business Survey suggests that the pace of growth is now more consistent across small and large businesses.
The NAB SME Survey is the leading business survey of small businesses in Australia, and complements the comprehensive Quarterly NAB Business Survey.
It offers a rich repertoire of insights into factors affecting smaller firms’ conditions by state, industry and size, as well as an assessment of their outlook for investment and output.
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However, the base of industries which reported positive conditions shrank in the quarter and this warrants close monitoring for signs of further weakening in the near future. The sustained weakness in retail conditions is of particular concern as it has the potential to affect other affiliated industries such as wholesale and transport.
Meanwhile, we continue to witness strong conditions in tertiary services such as health, business and financial services.
SME business confidence eased marginally in the quarter to +5, but continues to exceed its long-term average of +2.
The fall in SME confidence was in spite of the RBA’s 25bps cut to the cash rate in August, perhaps a reflection of the absence of a sustained depreciation in the AUD despite the rate cut.
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In Q3, business conditions were mixed by state. NSW, Victoria and WA reported relatively stable conditions, SA improved but was still lacklustre, while Queensland deteriorated sharply. The readings for Queensland in particular have been volatile recently so we will need additional information to determine the underlying trend for the state,” said Mr Oster.
NSW and Victoria continue to outperform in terms of conditions, while WA remains the weakest.
The ongoing mining downturn continues to weigh on WA conditions, while the recent improvements in commodity prices have done little to assuage the pessimism of SMEs from the state, with WA continuing to be the least confident state as well. Apart from WA, SA was the only other state to report negative confidence. Meanwhile, NSW, Victoria and Queensland tied in the top spot for confidence at +7 index points.
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SME forward orders rose by 1 point to +4 index points in Q3, which is notably above the long-term average of -1 index points and consistent with the result for general businesses as reported in the QBS.
The generally positive readings for forward orders since late 2013 are broadly in line with a moderate recovery in real economic activity.
By industry, the quarterly movements were mixed. Apart from manufacturing, retail and transport, all other industries reported positive forward orders.
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Forward orders for finance (up 16 points to +17) and health services (up 9 points to +16) jumped by the most in the quarter to record the strongest results, pointing to the continuing outperformance of services sectors.
Forward orders for manufacturing fell the most (down 8 points to -1). Meanwhile, transport and retail, both at -3, were the weakest in the quarter.
This is consistent with the lacklustre conditions and confidence experienced by the retail sector at the moment.
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The SME stock index improved marginally to +5 index points, to be above the long-term average of +2 index points and that of larger businesses indicated by the QBS (at +2).
The improvement was largely driven by business services and health, both rising by 6 points to +13 and 0 respectively.
The stock index for business services was also the highest in the quarter, followed closely by wholesale (down 6 points to +11). The relatively high stock levels reported by the wholesale sector is consistent with a higher capacity utilisation rate and resilient forward orders in the quarter.
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That said, the sharp deterioration in the conditions of larger wholesale businesses as indicated by the QBS could signal an imminent weakening of wholesale SMEs in coming quarters.
Meanwhile, stocks for manufacturing (down by 11 points to +3) and property services (down 9 points to -7) fell by the most in the quarter, with the latter the weakest across industries.
The two consecutive quarterly falls for property services are consistent with a lower transaction volume in the housing market recently.
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The non-seasonally adjusted cash flow index was the strongest in Q3 for financial services (at +24), followed by business services (at +22) and the weakest for transport (-9) and retail (-8).
Overall, SME price indicators point to relatively contained price pressures.
Growth in input costs (purchase costs, overheads and labour costs) have generally eased over the last two years and have contributed to improved margins readings.
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That said, final price growth appears to have lost some momentum in recent quarters – probably indicative of strong downstream competition – and is consistent with a subdued inflation outlook.
Business conditions for SMEs eased by 2 points to +5 index points in Q3, but remain slightly above the long-run average of +4.
Encouragingly, low-tier SMEs continued to report positive business conditions after recording the first positive reading in two years in Q2 to be around its long-term average.
SME conditions are now only marginally below those of general businesses indicated by the NAB Quarterly Business Survey (QBS), but this mostly reflects a notable fall in the conditions of the latter. SME business confidence also eased in the quarter to +5 (from +6 in Q2), but remains above the long-term average of +2.
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Two of the three components that make up SME business conditions fell, with trading conditions (down 5 points to +11) and profitability (down 2 points to +4) both retreating from their recent peaks but continuing to stay above their long-term averages.
Despite a sustained period where trading and profitability conditions exceed their historical average, the employment index was in negative territory for the eight consecutive quarter at -1, which was unchanged from the quarter before.
The lack of momentum in SME employment conditions are seemingly at odds with the relatively more robust reports by general businesses in the QBS, where the employment index has been tracking above long-term average levels since H2 of 2015.
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This possibly reflects the weaker financial capacity of SMEs to hire new employees or a greater difficulty for them to find suitable labour compared to their larger counterparts.
In Q3, business conditions were mixed by state. NSW, Victoria and WA reported relatively stable conditions, SA improved but was still lacklustre, while Queensland deteriorated sharply. The business conditions index for Queensland gave up all its the gains, dropping by 10 points from Q2 to be back at +1 again.
The eastern non-mining states of NSW and Victoria continue to outperform at +13 and +10 respectively, while WA remains the weakest of all states at -14. Despite the sharp fall in conditions, Qld was the only state which reported improved confidence in the quarter (up 2 points to +7) to tie with NSW and Victoria in having the strongest confidence.
Meanwhile, stronger commodity prices in the quarter had done very little to bolster confidence of SMEs in WA, which reported a decline in confidence (down 5 points to - 6) in the quarter to be the weakest of all states.
Most SME industry sectors reported weaker conditions in the quarter, with services sectors continuing to outperform more traditional sectors in general. Similar to Q2, health, finance and business services occupied the top three spots, while transport (at -7) replaced construction (at +2) as the weakest sector, followed by retail (at - 4).
The wholesale sector managed to hold onto its recent gains in conditions to be at +8 index points, a sign that perhaps some of the earlier upstream cost pressures had ameliorated. However, weak growth in wholesale final price suggests that competitive pressures downstream are elevated.
Business confidence by industry paints a more positive picture overall, with more sectors reporting an improvement rather than a decline in the quarter. Apart from property and retail, all other industries recorded positive confidence.
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Somewhat surprisingly, confidence of the property sector suffered the sharpest decline in the quarter to be the weakest across industries, even though dwelling prices continue to grow strongly in major markets of Sydney and Melbourne, and more recently, ACT.
Compared to the larger businesses in the QBS, SME business conditions outperform general businesses in finance, wholesale and property, but are significantly weaker in transport.
Analysis by firm size shows that low-tier SME firms continue to report weaker conditions and confidence compared to their larger counterparts, although the fact that their conditions and confidence indices are positive remains encouraging.
Alan Oster is group chief economist, National Australia Bank, and can be contacted <a href="https://business.nab.com.au/author/alan-oster/" target="_blank">here</a>.
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Property confidence dips as SME business conditions remain upbeat overall: Alan Oster

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Housing affordability is not a new problem, and as the Federal Treasurer Scott Morrison pointed out, it has actually never been easy to buy a home, especially in our major metropolitan areas.
Housing affordability will be an important policy focus of the Turnbull Government. And to try to get it right, the Federal Treasurer gave a 4400 word speech last week to outline some of the issues.
"As we move forward it is important to properly diagnose the problems we are trying to solve," he said. 
He noted when combining both outright ownership and those paying off a mortgage, the proportion of Australian households that own their own home has fallen from 71 per cent to 67 per cent over the past two decades, so there is a certainly a trend there.
He did stress the increase in Australian house prices has largely been driven by fundamental determinants.  
"Australia's housing markets may be expensive, but in aggregate they are substantively sound, reflecting the natural tension between the forces of supply and demand," he said.
I took five nuggets from the speech which are concerning, but which highlight the complexity of it all.
1) Between June 2010 and June 2015, the time taken for a dual income couple to save for a 20 per cent deposit in Sydney increased from 5.8 years to 7.9 years. In Melbourne it increased from 5.3 years to 5.8 years. However, outside NSW and Victoria, the change in the number of years to save for a deposit actually fell, showing the impacts are not even across the country. 
2) Home ownership rates are falling across all age groups, not just young Australians. Between 2002 and 2014, Australian home ownership among 25-34 year olds declined from 38 per cent to 29 per cent while for 35 to 44 year olds it fell from 63 per cent to 52 per cent.
3) When we look at the change in home ownership by state, the largest falls over the last twenty years have been in Queensland and Victoria, rather than NSW.
4) The percentage of purchasing households aged under 44 that are dual income has risen from just over 50 per cent in 1981 to more than 80 per cent in 2011, while the proportion of single income households fell from around 50 per cent to less than 20 per cent over the same period.  
5) The proportion of home owners aged over 45 with a mortgage has increased significantly over the past 20 years. It's taking longer to be free of the mortgage with the trend having the potential to undermine retirement incomes.
Morrison noted the challenge of not being able to access secure housing has flow on effects to many other policy areas. It impacts health, work force participation, social cohesion, welfare dependency, family formation and household consumption to name a few.
Morrison concluded that of all the determinants of house prices in Australia, whether cyclical or structural, "the most important factor behind rising prices has been the long running impediments to the supply side of the market."
Some argue with that conclusion seeking him to look at the impact of overseas migration which was not addressed, although he did note between 2005 and 2010, Australia had the highest average rate of overall population growth in the OECD, except for Israel.  
As there is no single housing market in Australia, there will however never be a single solution.
This article was first published in the Saturday Daily Telegraph.
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Five concerning housing affordability issues

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The 2GB broadcaster Ray Hadley has sold his little-used Toowoon Bay weekender on the Central Coast.
An offer came out of the blue for the beachfront property through McLachlan Partners agent Bruce McLachlan.
The home had four bedrooms, four bathrooms and also a gas heated plunge pool with cabana.
Its expansive ship-like terraces overlook what's been regularly voted NSW's cleanest patrolled beach.
It was bought for $3.5 million five years ago after its design by locals, EDH Architects.
McLachlan had it listed previously with a $3.5 million plus asking price when Hadley and his former wife, Suzanne were in the throws of separating.
Hadley has told mates he intends to keep his Hills district acreage.
Having won 99 consecutive ratings, he doesn't intend slowing down, but will be spending a bit more time on the Gold Coast.
He's bought back in with a highrise two bedder apartment purchase at Main Beach.
Between his Rugby League commentary on Channel 9 and also broadcasting periodically from Brisbane on 4BC, he's set to enjoy some downtime at the increasingly popular Tedder Avenue strip.
He'll no doubt be bumping into fellow Sydneysiders who've increasingly fancied Main Beach for their property forays in South East Queensland.
Business executive Katie Page is nearing completion of her development of the eight storey beachfront tower called M3565.
Mr Apartments himself, Harry Triguboff has owned at Main Beach since 1990.
One of the most recent entrants is Seven Boss Ryan Stokes, who paid $1.2 million in the prized Silverpoint building.
This article was first published in the Saturday Daily Telegraph.
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Little-used Toowoon Bay weekender sold by Ray Hadley

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The CoreLogic October Home Value Index results released today show that capital city dwelling values have reached new record highs in October, with values rising across six of the eight capitals.
CoreLogic research director Tim Lawless said the pace of growth has reduced when compared with previous months, with October dwelling values rising by 0.5 percent, compared with a 1 percent lift in September and 1.1 percent rise in August.
The latest monthly housing market data takes the quarterly change in national capital city dwelling values to 2.7 percent and 7.5 percent higher over the past twelve months.
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Apart from Adelaide (-1.3%) and Perth (-1.5%), every capital city recorded a rise in dwelling values over the past three months, with the Canberra housing market recording the largest increase in values after a 5.6% quarterly rise.
Lawless noted the strong conditions across the Canberra market are largely related to rising house values, with unit values increasing at less than half the pace of detached housing.
Sydney continued as the stand out based on annual capital gains, recording the largest year-on-year increase; dwelling values are now 10.6 percent higher over the past 12 months.
Detached houses (+10.9 percent) are showing only a slightly higher rate of capital gain compared with units (+9.1 percent) across Sydney, highlighting the healthier supply/demand dynamic that exists across the Sydney region for higher density housing.
“This also points to higher demand for Sydney units considering how expensive Sydney houses have become," Lawless said.
"Units generally provide a more affordable option for home ownership and investment for many buyers.”
Lawless noted most other markets, detached housing is generally outperforming the unit sector as concerns around the high number of units available for sale in the market dent buyer confidence, coupled with lending policies for unit stock becoming tighter.
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<img src="/images/2016/11/01/Changes%20in%20dwelling%20values.jpg" alt="">
According to Mr Lawless, the divergence in performance between houses and units is most clearly evident in Melbourne and Brisbane.
The annual rate of capital gains in Melbourne remains strong at 9.1 percent, however there is a substantial difference in growth rates between houses and units, with house values up 9.6 percent compared with a 5.2 percent increase in unit values over the past year.
Brisbane’s housing market has shown a larger capital gain spread, with house values up 4.7 percent compared with a 1.4 percent fall in unit values over the year.
“The weaker performance of unit values across the Brisbane market may be partially attributed to supply concerns, as unit supply levels across key regions of Brisbane’s inner city show the potential for a significantly larger relative increase in existing stock levels when compared with Melbourne and Sydney.”
<a href="/images/2016/11/01/Annual%20changes%20in%20dwelling%20values.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/11/01/Annual%20changes%20in%20dwelling%20values.jpg" alt="">
The CoreLogic Settlement Risk report is currently tracking approximately 49,000 units that have been approved for construction across the broad Brisbane metro region.
Mr Lawless said while it’s unlikely that all projects will proceed through to commencement, based on the approval numbers across Brisbane, we could see an uplift in existing unit stock which is in excess of 25 percent over the next two years.
Comparatively, in Sydney and Melbourne, the approved unit pipeline is higher at approximately 96,000 over the next 24 months, however the potential stock uplift is much less significant, at 13 percent and 16 percent respectively relative to existing unit stock levels.
According to CoreLogic, another sign of market strength can be seen in auction results.
Auction clearance rates, which are one of the most timely measures of the fit between buyer and seller expectations, have been tracking in the mid to high 70 percent range across the combined capital city markets, with the largest auction markets of Melbourne and Sydney general showing a higher rate of clearance.
Over the past two months, clearance rates across Sydney have dipped below 80 percent only once.
A year ago auction clearance rates were consistently trending around the mid 60 percent range, albeit on volumes that were about 20 percent higher.
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<img src="/images/2016/11/01/Gross%20rental%20yields.jpg" alt="">
Lawless said the strong housing market growth results are continuing to occur on a back drop of low stock levels and low transactional activity.
The latest national listing estimates from CoreLogic show total listing numbers remain 2.6 percent lower than a year ago, with the most substantial drop in listing numbers over the year recorded in Hobart, where there are almost one third fewer homes listed for sale.
Canberra stock levels are 15 percent lower than a year ago and listing numbers in Sydney remain subdued, tracking 9.6 percent lower than last year.
Mr Lawless said low stock levels tend to create a higher level of urgency in the housing market as buyers compete with each other and vendors are less willing to negotiate on prices. This may be one reason why transaction numbers have reduced over the year.
The CoreLogic turnover estimates have recently levelled after trending lower since April 2015, however settled dwelling sales over the three months ending October 31 remain 13.9 percent lower than the same three month period in 2015.
These estimates do not include off-the-plan sales, which, according to Mr Lawless, implies there is likely to be a level of upwards revision in the numbers as the record number of off the plan units move through to settlement.
While dwelling values have broadly risen during October, rental yields in Sydney and Melbourne remain depressed, with gross yields are at record lows.
The typical Sydney and Melbourne house is now providing a gross rental return of just 2.8 percent.
Taking into consideration holdings costs, expenses and vacancy, the net rental yield for houses is likely to be closer to 2 percent in these markets.
Markets where value growth hasn’t been as strong are seeing healthier yield profiles, with Hobart demonstrating the highest gross rental yields of any capital city.
<a href="/images/2016/11/01/Monthly%20settled%20dwelling%20sales.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/11/01/Monthly%20settled%20dwelling%20sales.jpg" alt="">
Lawless high values, low yields and a mature growth cycle haven’t been enough to deter investors from the market. Housing credit data released by the RBA earlier this week provides some insight into increased demand from the investor segment. Over March 2016, investor housing credit grew by just 0.29 percent and this has consistently increased to 0.62 percent over September. At the same time, credit growth for owner occupier housing has slowed. After peaking at 0.79 percent growth in November 2015, owner occupier housing credit growth slowed to 0.49 percent.”
“While home values are still rising, the rate of growth is slower than it was 12 months ago, however, annual growth remains somewhat heightened, particularly considering this growth phase has now been running for almost four and a half years.
“With ongoing strong value growth and high clearance rates in Sydney and Melbourne, as well debate around affordability gathering some momentum, there is likely to be further caution by the Reserve Bank around future interest rate cuts, which, if it were to occur, may provide additional stimulus for housing markets around Australia."
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Sydney dwelling prices running at 10.6 percent annual growth: CoreLogic 

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Total private credit posted another solid result in September, led by expansion in the housing sector. Of note is the pickup in investor credit, where growth has been accelerating over the past six months. 
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<img src="/images/2016/11/01/Screen%20Shot%202016-11-01%20at%209.29.21%20AM.png" alt="">
Combined with strength in other indicators, this suggests the housing market remains in good shape.
Housing credit expanded a steady 0.5 percent m/m in September, in line with the trend so far this year. Investor credit rose a solid 0.6% reflecting the recent strength in investor finance approvals after last year’s regulatory-induced slowdown.
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This is the strongest growth for the segment since August 2015, and provides further evidence (along with the recent pickup in house prices and auction results) that sentiment in the housing market remains positive.
<a href="/images/2016/11/01/Screen%20Shot%202016-11-01%20at%209.32.09%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/11/01/Screen%20Shot%202016-11-01%20at%209.32.09%20AM.png" alt="">
Business credit posted a mild increase in September, but growth continues to slow. This is in line with the ongoing slowdown in new finance approvals (Figure 2), and is likely to remain the case in coming months. Meanwhile, personal credit contracted for the 10th month in succession, and now sits 1.3 percent lower than a year ago.
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<img src="/images/2016/11/01/Screen%20Shot%202016-11-01%20at%209.33.34%20AM.png" alt="">
Although consumer confidence sits at elevated levels and household consumption is still ticking along, individuals appear cautious of taking on new (non-housing related) debt. 
Felicity Emmett co-head of Australian economics, ANZ Research and can be contacted <a href="https://www.anz.com/corporate/research/" target="_blank">here</a>.
Daniel Gradwell is economist, ANZ and can be contacted <a href="https://www.anz.com/corporate/research/" target="_blank">here</a>.
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Australian housing credit still rising, led by investors: ANZ

<a href="https://www.apartments.com.au/developers/skymark-group">Skymark</a>'s boutique Cronulla development Solis has secured a 10-year Latent Defects Insurance policy through Resilience Insurance, providing buyers of the 16-residence building on Ewos Parade with structural and waterproofing protection that extends a decade beyond the building's completion.

Currently under construction and due for completion in late 2027, <a href="https://www.apartments.com.au/new-apartments/solis-cronulla-8-ewos-parade-cronulla-nsw-2230">Solis</a> is one of a small number of new developments in the Sutherland Shire to carry Resilience LDI coverage, a distinction that carries increasing weight as buyer confidence in the off-the-plan sector continues to be shaped by how developers stand behind their product.

Latent Defects Insurance, which entered the Australian market in 2022 when Resilience Insurance was approved to offer the cover, protects buyers against major structural or waterproofing defects for ten years post-completion. Unlike traditional statutory warranties, it operates as a first-resort policy, if a covered defect arises, the insurer responds directly, without the buyer needing to pursue the builder or developer through a lengthy claims process.

Resilience Insurance CEO Corey Nugent has noted that the product addresses something fundamental to the new apartment market.

"The overarching feedback from prospective buyers in the new development space is that they want more confidence and assurances around the quality of the build," Nugent says.

"Resilience Insurance Latent Defects Insurance not only gives them complete peace of mind for 10 years, but it shows the developer they are buying from is standing by their product."

[smartcode_project:default project_id=150499 project_image_fid=370898]

For Solis, the Resilience LDI policy adds a meaningful layer of accountability to an already considered project. The development comprises nine two-bedroom and seven three-bedroom residences, including one dual-level three-bedroom apartment, across a five-storey building on Ewos Parade, positioned between Shelly Beach and South Cronulla.

Garden apartments connect directly to private landscaped courtyards, while upper-level homes capture beach views to the east from level four and above.&nbsp;

All 16 residences include at least one balcony or courtyard, and select apartments on the upper floors feature bar areas and secondary flexible living spaces.

Hiba Sander, Managing Director of Skymark, says Solis offers a rare balance, nestled between the quiet beauty of secluded beaches and the lively charm of South Cronulla's esplanade.

"It's a place to choose your pace and live gracefully, seaside'," Sander says.

[smartcode_project:default project_id=150499 project_image_fid=370900]

The architecture, designed by <a href="https://www.apartments.com.au/architects/ida-design-group">IDA Design Group</a>'s Michael Trinh, draws from the natural erosion patterns of <a href="https://www.apartments.com.au/developments/cronulla-nsw-2230">Cronulla</a>'s sandstone headlands, translating the organic forms of the coastline into soft curves, pavilion-style massing, and a material palette chosen for longevity in a salt-tinged environment.&nbsp;

Textured natural stone, soft renders, and timber-look battens reference the tones of the surrounding cliffs, while the building has been oriented to maximise natural light and passive ventilation, with primary living spaces facing north and east to capture morning sun and sea breezes.

"At Solis, our aim was to create architecture that feels quietly confident, grounded in natural materials like stone and timber, and elevated by light and landscape," Trinh says.&nbsp;

"The buildings are designed to sit gently within their coastal surrounds, with expansive glazing and abundant greenery creating a seamless dialogue between inside and out."

[smartcode_project:default project_id=150499 project_image_fid=370897]

Interiors by <a href="https://www.apartments.com.au/architects/hot-black">Hot Black</a> carry the same material language through to every room. Kitchens feature integrated Gaggenau appliances, sculpted stone benchtops, and Lo &amp; Co joinery, while bathrooms feature natural stone, timber, and brushed metal finishes.&nbsp;

Hot Black Founder and Design Director Sophie Safrin describes the intent as one of considered restraint: "At Solis, every detail has been thoughtfully considered to create a timeless coastal retreat, calm, refined, and effortlessly liveable. From natural finishes to seamless indoor-outdoor flow, Solis offers a quiet elegance that's deeply connected to its surroundings.

The landscape, designed by Julian Brady of <a href="https://www.apartments.com.au/landscape-architect/sitedesignstudios">Site Design Studios</a>, treats green space as an integral part of the resident experience rather than an afterthought.&nbsp;

"Gentle curves and layered native plantings mirror the ebb and flow of the ocean," Julian Brady says, "creating a serene connection between architecture and place."&nbsp;

Coco Republic has provided bespoke furniture packages tailored to the project's coastal palette.

[smartcode_project:default project_id=150499 project_image_fid=370899]

Skymark has an established track record in the Sutherland Shire, with a portfolio spanning Cronulla, Woolooware and Burraneer that includes Isla, Sylva, Bask, Shells, Sula and Mist. Securing LDI on Solis reflects a broader shift in how the developer is positioning its buildings to buyers, at a time when Resilience Insurance expects the policy to become mandatory in New South Wales by 2028.

Sales at Solis are launching soon through Ray White Projects, with an official event scheduled for 11 June. Enquire for more information.

[smartcode_project_cta:default project_id=150499]

Joel Robinson

Skymark takes out 10-year Resilience Insurance LDI at Solis Cronulla

Investors may soon find themselves with fewer reasons to buy established property and more incentives to look towards the new apartment market.

Proposed changes to negative gearing and capital gains tax concessions would see new and off-the-plan apartments retain access to the tax benefits, while established properties would miss out, creating a clear advantage for buyers purchasing newly built housing.

The policy direction aligns with what many developers have been saying for several years. Australia needs more housing supply, and governments are increasingly looking for ways to encourage investment into new stock rather than existing homes.

The challenge for investors is that suitable product is becoming harder to find.

For much of the last decade, one-bedroom apartments were the cornerstone of investor demand. They offered a lower entry price, strong rental appeal, and were a common feature across most apartment developments.

Today, the development pipeline looks very different.

Across both New South Wales and South East Queensland, developers are increasingly targeting owner-occupiers and downsizers, delivering larger two, three and four-bedroom apartments in response to changing buyer preferences. While one-bedroom apartments still exist, they now form a much smaller portion of many new projects.

That shift has created a shortage of investor-friendly stock, particularly in well-located projects close to transport, employment hubs and lifestyle amenity.

At the same time, rising apartment prices have pushed many new developments beyond the reach of traditional investors. On the Gold Coast and across South East Queensland, it's becoming increasingly difficult to find new apartments priced around the $1 million mark, particularly those offering strong rental fundamentals and long-term growth prospects.

We've rounded up four new apartment developments where investors can still secure a foothold in the market for around $1 million or less.

<h2 data-end="1140" data-start="844">Flourish Soleira</h2>

<h2>Priced from: $1.07 million</h2>

Popular Palm Beach developer Sherpa is soon to officially launch its newest local apartment development, Flourish Soleira.

The one-bedroom apartments in the building were only offered to first home buyers rather than investors, and all of those have been snapped up. The two-bedroom apartments will start from $1.07 million, and the three-bedrooms, still a good investment given the popularity of Palm Beach for owner-occupiers, starting at $2,045,000.

&nbsp;

[smartcode_project:default project_id=150017 project_image_fid=370964]

Flourish Soliera will comprise 153 apartments across two buildings, connected by a skybridge, the first ever delivered in the suburb.

True to Sherpa's booming Flourish brand of apartment projects, Flourish Soleira will have extensive rooftop amenity across both buildings including a&nbsp;wellness centre with gym, work from home, yoga, pilates, a&nbsp;heated pool, private dining rooms, pizza oven and barbecues, basketball court, and golf simulator.

<h2>Corallo, Palm Beach</h2>

Priced from: $841,500

Nearby Flourish Soleira is Changfa Group's beachfront-inspired Corallo development. They still have some one-bedroom apartments remaining, priced from $841,500.

The 105-apartment project on Palm Beach Avenue is otherwise dominated by larger two and three-bedroom residences, many of which are aimed at owner-occupiers and downsizers.

[smartcode_project:default project_id=112194 project_image_fid=808]

For investors, the appeal lies in Palm Beach's continued transformation from a laid-back beachside suburb into one of the Gold Coast's most sought-after residential markets. Residents at Corallo will be within walking distance of Palm Beach's surf beaches, the recreational amenity of Tallebudgera Creek, and the increasingly popular collection of cafes, restaurants and boutique retailers along the suburb's central dining precinct.

<h2>Corner House, Stones Corner</h2>

<h2>Priced from: $880,000</h2>

One of only two Brisbane apartment developments to make the list with prices under $1 million is DeMartini Fletcher's Corner House development in Stones Corner.

One-bedroom apartments start from $880,000 within the 88-apartment development, providing investors with exposure to one of Brisbane's most established inner-south locations.

[smartcode_project:default project_id=149098 project_image_fid=330594]

Stones Corner has long been supported by strong tenant demand due to its proximity to major employment and education destinations. The suburb sits less than five kilometres from Brisbane's CBD and is within easy reach of the Princess Alexandra Hospital, Greenslopes Private Hospital, Queensland Children's Hospital and several university campuses.

The project's location within a walkable urban village environment, surrounded by retail, dining and public transport infrastructure, continues to attract both professionals and healthcare workers seeking accommodation close to work.

Parkdrive Apartments, Chermside

Priced from: $749,000

The most affordable apartments across Brisbane's new and off the plan market are in Chermside where developer AusDev is selling one-bedroom apartments from $749,000, and two-beds from $929,000, at its recently launched Parkdrive development.

The development is strategically positioned in one of Brisbane's largest employment and retail precincts, placing residents within easy walking distance of Westfield Chermside, The Prince Charles Hospital, St Vincent's Private Hospital Northside and the suburb's major bus interchange.

[smartcode_project:default project_id=152125 project_image_fid=363782]

Already under construction and scheduled for completion in early 2028, Parkdrive benefits from Chermside's ongoing evolution into Brisbane's northern metropolitan centre. The suburb continues to attract significant public and private investment, supporting population growth and underpinning long-term rental demand.

For investors focused on yield and tenant depth, the combination of healthcare, retail and transport infrastructure within close proximity provides a strong foundation for occupancy and rental performance.

Investors to turn to new apartments after Federal Government changes spark hunt for Queensland's best $1 million apartments

A mix of Gold Coast locals, fly-in, fly-out purchasers from Sydney and Melbourne, and Brisbane-based families has driven early sales success at Broadbeach's newest apartment tower, Lumara.

The 26-level project, a joint venture between builder-developer 5Point Projects and Bourke Projects, comprises just 37 luxury residences and is attracting a buyer profile that is looking for exclusivity, above the most amenity-rich suburb on the Gold Coast.

[smartcode_project:default project_id=150454 project_image_fid=364156]

Jamie Bourke, Director of Bourke Projects, says every buyer secured so far intends to use Lumara as a lock-up-and-leave residence, combining holiday use with the ability to work remotely when required.

“The size of the apartments, both half- and full-floor options, and the different zones within the floorplans, lends itself perfectly to dedicated home office setups and multi-generational family holidays,” Bourke says.

That flexibility has become a key drawcard for affluent buyers seeking a second residence on the Gold Coast without sacrificing the ability to conduct business away from their primary home base.

The absence of holiday letting within the building has also resonated strongly with purchasers.

“This type of buyer doesn't need to generate holiday rental income,” Bourke says. “They're paying for exclusivity, privacy and certainty around who their neighbours are.”

[smartcode_project:default project_id=150454 project_image_fid=366491]

The strong demand comes amid broader shifts in the high-end apartment market following the Federal Budget announcements in May.

“We were already seeing strong enquiry from high-net-worth buyers, but that has only accelerated since the policy changes,” Bourke says.

“A lot of those buyers are looking to place more capital into premium lifestyle assets rather than investment-grade stock that has been targeted by the Federal Government.”

[smartcode_project:default project_id=150454 project_image_fid=366486]

Designed by Cottee Parker, Lumara adopts a slender, sculpted form with an emphasis on natural materials suited to its beachfront setting. The architectural approach draws on coastal influences, with a palette of stone, timber and concrete selected for durability and the ability to weather over time.

Apartments are limited to three and four-bedroom configurations, with a maximum of two residences per floor through the mid-levels and a selection of full-floor and dual-level homes in the upper levels. All apartments are oriented to the north to maximise natural light, cross-ventilation and views across the ocean, city skyline and hinterland.

A two-level amenity offering is positioned high within the building on levels 20 and 21, conceived as a sky wellness retreat. Facilities include a magnesium pool, spa, sauna and steam rooms, alongside more social spaces such as a private dining room, resident lounge, workspaces and outdoor barbecue areas integrated with landscaped greenery.

The uppermost levels are reserved for larger-format residences, including several full-floor homes and a dual-level penthouse with its own private wellness features and recreational spaces.

&nbsp;

To give buyers confidence, 5Point and Bourke commenced construction ahead of the apartments launching to the market, a sure-fire way to prove they mean business, and the building will be delivered. They are targeting a 2028 completion date.

[smartcode_project_cta:default project_id=150454]

Locals, interstate holiday makers, drive early sales at Lumara, Broadbeach's newest luxury apartment tower

Often when it comes to purchasing property, the biggest barrier to entry is the deposit. Buyers of established homes typically aim for a 20 per cent deposit to avoid the added cost of Lenders Mortgage Insurance, while most property transactions require around a 10 per cent deposit when contracts are exchanged.

The off-the-plan market works differently, with buyers typically paying a deposit during construction and settling the balance upon completion. As completion approaches at <a href="https://www.apartments.com.au/new-apartments/fabbrica-fitzroy-369-gore-street-fitzroy-vic-3065">Fabbrica Fitzroy</a>, developer <a href="https://www.apartments.com.au/developers/pace-development-group">Pace</a> is making it easier for buyers to secure a residence through a deposit-matching incentive. Purchasers need only contribute a five per cent deposit*, with Pace matching the remaining five per cent.

The offer comes as Pace unveils a completed display apartment and townhouse, now available for inspection by appointment ahead of the project's Spring completion.

[smartcode_project:default project_id=139552 project_image_fid=371009]

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/winwood-mckenzie-architecture">Winwood Mckenzie</a> and landscaping by <a href="https://www.apartments.com.au/landscape-architect/acre">Acre</a>, Fabbrica draws on Fitzroy’s industrial and manufacturing history, incorporating references to the former Argyle Shirt Factory and Life Savers Confectionery Company that once occupied the site.

The development comprises 85 residences, spanning low-maintenance apartments through to larger-format townhouses with private street access and double lock-up garages, a relatively uncommon offering in Fitzroy’s higher-density apartment market.

Pace says the project has been designed to appeal to buyers seeking inner-city convenience without sacrificing space, flexibility, or amenity.

[smartcode_project:default project_id=139552 project_image_fid=371016]

Inside the residences, Winwood Mckenzie has focused on adaptable layouts and integrated detailing, with features including custom joinery, and concealed storage solutions. The material palette leans into warm, tactile finishes intended to complement the building’s industrial architectural language.

Fabbrica’s rooftop amenity is a key part of the project offering. Spanning around 800 sqm, the communal rooftop includes a private dining room, communal kitchen, lounge spaces, work-from-home zones, and outdoor dining areas overlooking the Melbourne CBD skyline.

[smartcode_project:default project_id=139552 project_image_fid=371017]

Landscape architecture studio Acre has introduced a layered rooftop garden designed to soften the urban setting while creating a more communal environment for residents.

The Fitzroy location also positions residents within walking distance of Brunswick Street, Smith Street, parks, cafés, galleries, and public transport, while remaining only minutes from Melbourne’s CBD. The project has an enviable Walk Score of 96.

[smartcode_project:default project_id=139552 project_image_fid=371025]

Pace, which is also delivering the project as builder, has developed more than 100 projects across Melbourne over the past three decades. The vertically integrated approach has become increasingly common among developers seeking greater control over construction delivery amid broader market pressures affecting the apartment sector.

The strikingly contemporary Gore Street development is now around 70 per cent complete, with purchasers expected to move into their new homes in Spring 2026. A limited number of residences remain available under the current deposit match offer.

*Conditions apply in relation to the deposit match offer.

[smartcode_project_cta:default project_id=139552]

Pace offers five per cent deposit match at Fabbrica Fitzroy ahead of Spring completion

Sydney developer Hyecorp's roots on the Lower North Shore stretch back three generations, and that deep understanding of the market continues to shape where and how it develops today.

From high-rise towers to boutique apartment projects, the family-run developer has built its reputation by focusing on a part of Sydney it knows intimately. Founded by Michael Abolakian in the early 1990s, Hyecorp is now led by his sons Stephen, Troy and Patrick.

Stephen Abolakian, joint managing director alongside Troy, has spent more than two decades in the business, overseeing development, planning, finance, marketing and sales.

Abolakian says the developer's disciplined focus on where it chooses to operate has been, and continues to be, one of Hyecorp's greatest strengths.

“We know the buyer profile exceptionally well,” Abolakian says.

“The demographics between places like Willoughby, Chatswood, St Leonards and Roseville are very similar. There are nuances between suburbs and projects, but culturally and from a buyer perspective, there’s a strong overlap.”

That buyer has historically been overwhelmingly owner-occupier driven.

Unlike many Sydney apartment developers that have traditionally relied heavily on investor demand, Hyecorp’s projects have typically attracted downsizers, upsizers, rightsizers and family owner-occupiers seeking long-term homes rather than short-term investments.

“Historically, investors have been a much smaller portion of our demand profile,” Abolakian says.

“We design for owner-occupiers. We don’t design for yield, we design for comfort, amenity, family living and long-term usability.”

That philosophy extends well beyond apartment layouts.

From landscaping and communal gardens to shared amenities and circulation spaces, Hyecorp’s developments are designed around how people actually live, something Abolakian believes has become increasingly important in Sydney’s apartment market.

“There was probably a period where having an approved project in market was enough,” he says.

“There wasn’t as much competition and if you built it, buyers would come. That’s no longer the case.”

“There’s more supply in the pipeline now, particularly with TOD precincts and low and mid-rise reforms opening up opportunities across Sydney. Buyers have more choice, so if you get the product wrong, they’ll simply go elsewhere.”

[smartcode_project:default project_id=110379 project_image_fid=311393]

The shift has forced developers to become more sophisticated in how they approach apartment design, particularly as owner-occupier expectations continue to rise.

For Hyecorp, that means thinking beyond who the buyer is today and designing for who they may become in five or 10 years' time.

“People buying now often aren’t moving in for several years,” Abolakian says.

“You might have a young couple buying today, but by the time they move in they may have children, older children, or changing lifestyle needs. You’ve got to think about how families evolve.”

That thinking also shapes Hyecorp’s approach to amenity, which positions wellness at the forefront.

[smartcode_project:default project_id=149594 project_image_fid=362634]

While resort-style facilities have become increasingly common marketing tools across Sydney apartment developments, Abolakian says the challenge is ensuring amenities are genuinely usable and appropriate for the scale of the project.

“If amenities are done right, they can materially improve the living experience,” he says, adding however that if you&nbsp;overdo it or get it wrong, you can end up with facilities nobody uses that simply create ongoing strata costs.”

That balance is something Hyecorp is aiming to strike with projects like Roseville Avenue, one of the group's upcoming Lower North Shore developments, which Abolakian describes as bringing a resort-style living experience into a metropolitan setting.

“It’s about creating something that feels special without being excessive,” he says.

“Good gardens, quality apartments, thoughtful amenity. Creating that resort feeling in a metro location.”

<img alt="Hyecorp" data-entity-type="file" data-entity-uuid="13c4c0f3-b1b7-44cf-9344-0b3d1d07797a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-02%20at%2012.14.57%E2%80%AFPM.png?VersionId=9OLWjyj2bYkDV35F78WJnyMSPfc2bJ2z" />

The focus on owner-occupier product comes as Sydney’s apartment market continues to navigate a difficult development environment.&nbsp;For Hyecorp, maintaining an in-house operating model across construction, sales, marketing and development management has become increasingly important in navigating that environment.

“We’ve always believed in keeping a lot of the process in-house,” Abolakian says.

“It creates efficiencies, but it also creates quality control. You can make faster decisions and ensure the end product stays aligned with the original vision.”

Despite the challenges, Abolakian believes demand for quality owner-occupier apartments across Sydney remains strong beneath the surface, particularly across established Lower North Shore suburbs where downsizers continue to seek new housing options close to existing communities.

“There are definitely people waiting,” he says.

“Once some of the broader uncertainty settles, whether that’s the global environment or some of the local economic noise, I think the right projects will perform very strongly.”

Hyecorp currently has three residential developments on the market across Sydney’s Lower North Shore.&nbsp;Audrey, St Leonards, positioned opposite Newlands Park, is nearing completion and preparing to welcome its first residents, with the project now almost sold out.

Hyecorp has also recently launched&nbsp;<a href="https://www.apartments.com.au/new-apartments/celine-chatswood-37-archer-street-chatswood-nsw-2067">Celine Chatswood</a>, an architectural tower, while continuing to deliver&nbsp;<a href="https://www.apartments.com.au/new-apartments/juliet-roseville-64-pacific-highway-roseville-nsw-2069">Juliet Roseville</a>, a more boutique scale of development with just 34 apartments.

Jonathan Chancellor

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