<html><body>
<p>The final weekend of October had the clearance rate remain high across all the capital cities, recording above 70 percent for the 14th consecutive week.</p>
<p>There were 2,246 auctions held across the capital cities, with a preliminary auction clearance rate of 77 percent, slightly down decrease over last week’s final clearance rate of 78 percent across 2,680 auctions. </p>
<p>But it was much higher than the corresponding week last year when there was a 61 percent success rate.</p>
<p>Sydney has been the proven spring stayer this year with its auction clearance rate remaining above 80 percent.</p>
<p>Three weeks ago there were four capitals in the picture, but they all dropped off a little. </p>
<p>Prices ranged across the country from $246,500 in Adelaide to $5.65 million in Sydney, with two strong challenges from prestige Brisbane offerings.</p>
<p>The result comes days before the key Melbourne Cup day interest rate decision by the Reserve Bank of Australia. </p>
<p>"The strong clearance rate continues to be supported by exceptionally strong auction market conditions in Sydney where the preliminary clearance rate was recorded at 84.4 percent across almost 1,100 auctions, while the preliminary clearance rate in Melbourne (78.6 percent), Canberra (71.1 percent) and Adelaide (75 percent) also tracked above 70 percent," Kevin Brogan said.</p>
<p>Across Sydney, 1,096 homes were taken to auction this week with a preliminary clearance rate of 84.4 percent across 906 reported results.</p>
<p>Last week, the final clearance rate for the city was 82.6 percent, across 897 auctions.</p>
<p>One year ago, 1,391 Sydney homes were taken to auction and the clearance rate was 60 percent. </p>
<p>Clearance rates ranged fror 94 percent on the Northern Beaches to 67 percent in Parramatta. </p>
<p>The most expensive house sold was a newly built six bedroom Strathfield home (above). </p>
<p>The sale at <a href="https://www.realestate.com.au/property-house-nsw-strathfield-123713270" target="_blank">115 Homebush Road</a> for $5.65 million was $300,000 over reserve through agents Joseph and Sam Georges of Georges Ellis &amp; Co. They said prices were up about 30 per cent in the last year.</p>
<p>The 1120 sq m building block had cost $1.7 million in 2014.</p>
<p>Sydney's Paddington had its own dilapidated terrace story too. </p>
<p>The <a href="https://www.realestate.com.au/property-terrace-nsw-paddington-123733818" target="_blank">45 Iris Street offering</a> sold for $1.19 million - $190,000 more than it was purchased for just eight months ago.</p>
<p>The uninhabitable two bedroom terrace had three bidders with it sold to an investor who will implement the recently obtained development approval.</p>
<p><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%209.29.45%20AM.png" alt=""></p>
<p>The terrace had been the home of the late artist Christina Coombes who had bought it in 1965 for £3200.</p>
<p>The distraction of the Spring Racing Carnival saw Melbourne listings down - and the preliminary clearance rate dipped from 80 percent to 78 per cent, though remaining well above the 65 percent clearance rate for the city one year ago.</p>
<p>Melbourne hosted around 629 auctions, lower than the 1,377 held last week and consistent with the same period last year.</p>
<p>The strongest performer was the North West region with a 91 percent of success rate. </p>
<p>The top sale at Hawthorn was a 1000 sq m offering on the Lisson Grove estate which since the 1870s had been regarded as one Hawthorn's most fashionable avenues given the lovely Victorian homes set in large gardens.</p>
<p>Number 65 was one of four single storey villas built between 1884 and 1886 featuring a symmetrical façade with double bay windows.</p>
<p>"We have five young families bidding" Duane Wolowiec said.  </p>
<p>"There are strict heritage restoration conditions including the need to install slate roofing," he said.</p>
<p>Most buyers thought the restoration would cost at least $1.5 million, he added. Hawthorn's median house price currently sits at a record $1.85 million, according to CoreLogic.</p>
<p>There were 192 Brisbane homes taken to auction this week, with 114 results reported so far. The preliminary clearance rate for the city is 52 percent, up from 50 percent last week and also higher than one year ago, when 48 percent of the 188 properties taken to auction were successful.</p>
<p>Brisbane's top weekend result was $5.3 million in Paddington. </p>
<p><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%209.31.51%20AM.png" alt=""></p>
<p>The tri-level 2009-built contemporary home at <a href="https://www.realestate.com.au/property-house-qld-paddington-123651270" target="_blank">171 Fernberg Rd</a> (above) sold to a Toowong family.</p>
<p>There was also the $5.25 million sale of the former six decade long home of the late Sir John Pidgeon, a respected leader in the construction and property industry. </p>
<p>The home at <a href="https://www.realestate.com.au/property-house-qld-holland+park-123667174" target="_blank">14 Otway St, Holland Park</a> (below) on 5275 sq m was purchased for $5.225 million by a local buyer. </p>
<p><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%209.32.52%20AM.png" alt=""></p>
<p>Sir John passed away in June.</p>
<p>The auction, through Dixon Family Estate Agents, attracted 36 registered buyers, according to the Courier Mail.</p>
<p>The living room fireplace is an authentic George III white marble inlaid chimney piece, the jamb centred with a relief of Diana and her Hound. </p>
<p>Adelaide recorded a clearance rate of 75 percent across 166 auctions this week, up from 71 percent across 100 auctions last week. At the same time last year, 148 homes were taken to auction, with 57 percent recording a successful result.</p>
<p>Adelaide had the nation's cheapest sale at $246,500 in Elizabeth. </p>
<p><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%209.34.07%20AM.png" alt=""></p>
<p>The mid-1960s <a href="https://www.realestate.com.au/property-house-sa-elizabeth-123810514" target="_blank">three bedroom brick home</a> (above) had been listed with $210,000 hopes, having last sold for $92,500 in 2002.</p>
<p>Canberra’s preliminary auction clearance rate of 71 percent this week matched the 71 percent recorded last year. </p>
<p>Perth and Hobart were the capitals with lower clearance rates than one year ago. </p>
</body></html>

jchancellor-FAypfDUnLy

Sydney the proven spring auction stayer

<html><body>
<p>GUEST OBSERVER</p>
<p>Residex has issued its latest non-revised growth in median values chart.</p>
<p>These figures suggest the Australian house market grew 1.63 percent in the September quarter.</p>
<p>Growth was driven almost entirely by a strong surge of 1.63 percent in the month of September, off the back of a slight decline in August. Annual performance of Australian houses was 3.31 percent, as opposed to 7.2 percent in the previous year.</p>
<p>Similarly, the median non-revised unit value across Australia experienced 1.27 percent growth in the September quarter, with 1.17 percent growth in the month of September alone.</p>
<p>Unit values across Australia increased 3.96 percent.</p>
<p><span><strong>Table 1: September 2016 Median Value Index</strong></span><span id="more-4476"></span></p>
<p><a href="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.57.50%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.57.50%20AM.png" alt=""></p>
<p> </p>
<p><em><span>Source: Residex</span></em></p>
<p>While the monthly figures are relatively volatile, annual growth shows a more distinct trend. Graph 1 plots historical annual growth rates for the median Australian house and unit values.</p>
<p><span><strong>Graph 1: Residex Non-Revised Median Values – Historical Growth of Australian Houses and Units</strong></span></p>
<p><a href="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.59.01%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.59.01%20AM.png" alt=""></p>
<p><em><span>Source: Residex</span></em></p>
<p>Graph 1 suggests that the aggregated housing market peaked in 2014, though it has since had a very slow decline relative to past growth cycles. Growth in dwelling markets is likely to have been sustained by the four cash rate cuts that have taken place since the peak of the most recent cycle.</p>
<p>Country NSW houses had the highest value growth in the year to September at 7.41% in capital gains. This figure was down on the previous year’s growth of 9.94%, suggesting that regional NSW is now following the downswing in the Sydney market.</p>
<p>Spillover into the regional NSW market was expected as those who were priced out of Sydney during the recent housing boom (in which the median Sydney dwelling grew 33% between 2013 and 2016) sought more affordable properties in which to live or invest.</p>
<p>Regional areas of NSW also currently provide higher rental yields for investors. Residex median rent estimates remained virtually unchanged in Australian houses and units. The strongest surge in rents was in ACT units and Hobart and Tasmanian houses, while resource market rents continued to decline. The overall subdued growth in rents is likely due to an increase in investor activity, which has potentially increased the stock of rental properties.</p>
<p>Graph 2 displays the annual change in dollar values of rents for the past 10 years, alongside ABS dollar values of loans taken out by investors at each month. From 2013, the uptick in investor lending seemed to have a more dramatic impact on units. The second surge from late 2015 is also likely to dampen rent growth in units.</p>
<p><span><strong>Graph 2: Annual Change in Residex Median Rent vs ABS Dollar Value of Investor Loans</strong></span></p>
<p><a href="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%209.00.06%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%209.00.06%20AM.png" alt=""></p>
<p><em><span>Source: Residex</span></em></p>
<p>Given that most Australian markets follow the Sydney growth cycle at a lag, it is tempting to aggregate our markets and say that Australia as a whole is well into the downswing phase of the growth cycle, and some moderate adjustments may be expected over the course of 2017.</p>
<p>However, Australia’s smaller, resource based markets were thrown into a correction following resource price shocks. They cannot be amassed with the rest of Australia’s housing market movements, and it is increasingly difficult to place them in traditional economic cycles.</p>
<p>The energy commodity price index surmises dramatic movements in what makes up approximately 30% of Australian exports: a 70% decline between June 2014 and January 2016, followed by a 41% recovery between the beginning of 2016 and September.</p>
<p>Graph 3 plots the monthly commodity price index changes against monthly trend capital growth in Perth and Darwin non-revised median values. The commodity price index seems to have a lead lag effect on growth, particularly in Darwin where the dwelling market is small, reducing the severity of declines.</p>
<p><span><strong>Graph 3: Commodity Price Index versus Monthly Trend Growth in Perth and Darwin</strong></span></p>
<p><a href="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%209.01.09%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%209.01.09%20AM.png" alt=""></p>
<p> </p>
<p><em><span>Source: Residex</span></em></p>
<p>Unfortunately, these commodity price increases are not representative of a cyclical recovery in resources, but was more likely the result of severe weather conditions in China which temporarily limited the supply of coal and steel, structural limits to coal supply in Australia, and OPEC negotiations which saw a spike in the price of oil. While this may temporarily restore confidence in resource dwelling markets, Perth and Darwin are still in a correction period.</p>
<p>With 1.3 percent inflation at the September quarter up slightly from the 1% in the previous quarter, the RBA may have room to leave rates on hold. A steady cash rate in the current climate is likely to see a steady fall in growth rates across Australian dwelling markets, with small, niche markets such as Hobart offering promising fundamentals for nearer term growth.</p>
<p><em>Eliza Owen is the market analyst for Onthehouse.com.au. She can be contacted <a href="https://www.onthehouse.com.au/" target="_blank">here.</a></em></p>
</body></html>

Australian house market grew 1.63 percent in September quarter: Eliza Owen

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">GUEST OBSERVER</div>
<div class="column"> </div>
<div class="column">Compared with 20 or 30 years ago, Australians could be regarded as building ‘McMansions’.</div>
<div class="column"> </div>
<div class="column">Still, houses are not continuing to get bigger, having peaked around 4-5 years ago. The same can’t be said for the US. US houses built in 2015 were the biggest on record, and arguably the biggest in the world.<br><br>Unfortunately there is no central reference source for the size of homes across the globe. Still, when we last looked at this issue in 2013, Australia and the US were building the biggest homes in the developed world. And now it seems to be clear that the US has pushed ahead in building even bigger homes while the size of new homes built in Australia have plateaued in recent years.</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.15.10%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.15.10%20AM.png" alt=""></div>
<div class="column"> </div>
<div class="column"> </div>
<div class="column">European homes are far smaller than in the US or Australia, NZ homes are 7 percent smaller than Australia, and latest data suggests that Canadian homes are around 10 percent smaller than in Australia.</div>
<div class="column">
<br>The average new house built in the US last calendar year (latest available) was almost 250 square metres, around 10 per cent bigger than in Australia. The results were actually greeted with some consternation in the US in June when they were released. Particularly the fact that homes are getting bigger, but not lot sizes (“The Shrinking of the American Lawn”).</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.17.09%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"> </div>
<div class="column"><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.17.09%20AM.png" alt=""></div>
<div class="column">
<br>Australian houses are still big, but they don’t seem to be getting bigger on average. Still, the average new house is 10 per cent bigger than 20 years ago and around 30 percent bigger than 30 years ago.</div>
<div class="column">
<br>And this is a point not picked up in discussion of home prices. Not only are homes far bigger than those built in the 1980s and before, but the standard of fit-out today is far superior with quality kitchens, bathrooms, floor coverings and inclusions like air- conditioners.</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.18.29%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.18.29%20AM.png" alt=""></div>
<div class="column">
<br>Australians have also been shifting to smaller apartments. In 2015/16 more than 200,000 homes were built, up 37 percent in the space of three years. But less than 60 percent of homes built were free-standing houses, down from the long-term average of 70 percent.</div>
<div class="column">
<br>Through the latter period of the ‘noughties’, the average apartment was around 140m2. Today it is closer to 130m2.</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.19.46%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.19.46%20AM.png" alt=""></div>
<div class="column">
<br>The shift to smaller apartments may mean that more of them need to be built to house the growing population than if bigger houses were being built instead.</div>
<div class="column"> </div>
<div class="column">In short, when considering issues like under-supply and over-supply, a range of issues need to be considered.</div>
<div class="column">
<br>Five years ago economists were baffled by the failure of home building to lift to the level of assumed underlying demand. However the “apparent paradox” was explained by structural change such as demographics and increased utilisation of Australia’s large homes. Now household size is falling together with the size of homes being built. And if household size falls again to around two people per dwelling, then clearly more homes can be built without over-supply developing. </div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.21.08%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"> </div>
<div class="column"><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.21.08%20AM.png" alt=""></div>
<div class="column"> </div>
<div class="column">What do the figures show?</div>
<div class="column"> </div>
<div class="column">Australia &amp; US home completions</div>
<div class="column"> </div>
<div class="column">CommSec commissioned the Australian Bureau of Statistics to supply data on the average size of new homes built in Australia. The last time that the ABS supplied information on average home size was in November 2013 for the 2012/13 year.</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.32.12%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"> </div>
<div class="column"><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.32.12%20AM.png" alt=""></div>
<div class="column">
<br>The data supplied relates to the average size of new homes built – houses, apartments and the total of all homes. The ABS also indicates the proportion of homes built at the stated “average floor area”.</div>
<div class="column">
<br>The United States Census Bureau provides both median and average estimates of new homes built and also supplies similar floor area data on new homes sold.</div>
<div class="column"> </div>
<div class="column">In 2015/16, the average size of a new house built in Australia was 231 square metres (m2), up from 229.4m2 in 2014/15 but down from the record high of 247.7m2 in 2008/09.</div>
<div class="column"> </div>
<div class="column">In the US, the average size of new single-family houses built in 2015 (latest estimate) was 2,687 square feet or 249.6 square metres. At the recent peak in 2011/12, the average house built in Australia had stood at 244.9m2, just over 5 per cent above the US average of 232.7m2.</div>
<div class="column"> </div>
<div class="column">In 2015/16 the average floor area of a new apartment in Australia (unit, townhouse, villa etc.) was 131.3m2, up from 129.0m2 in 2014/15 but almost 9 percent below the high of 143.7m2 in 2004/05.</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.33.16%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.33.16%20AM.png" alt=""></div>
<div class="column"> </div>
<div class="column">States &amp; territories </div>
<div class="column"> </div>
<div class="column">Victorians are building the biggest houses in Australia. In 2015/16 the average floor area of houses built in Victoria was 241.1m2, ahead of Queensland (237.7m2), NSW (227.4m2) and Western Australia (227.0m2).</div>
<div class="column"> </div>
<div class="column">The smallest new houses built were in the ACT (180.8m2) and Tasmania (188.1m2).</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.34.24%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.34.24%20AM.png" alt=""></div>
<div class="column">In 2015/26 the biggest apartments could be found in the Northern Territory (179.3m2). However, the data may be distorted by the small number of completions in the year (857).</div>
<div class="column"> </div>
<div class="column">Of the states, Victoria built the biggest apartments in 2015/16 with the average floor area at 134.7m2, ahead of NSW (132.4m2) and South Australia (131.0m2).</div>
<div class="column"> </div>
<div class="column">Of all homes built in 2015/16, the average floor area was biggest in Western Australia (205m2), then Victoria (203.3m2). In Western Australia over 76 per cent of homes built were free-standing houses, compared with around 59 per cent in Victoria.</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.35.24%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"> </div>
<div class="column"><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.35.24%20AM.png" alt=""></div>
<div class="column"> </div>
<div class="column">Home size peaks, more apartments, occupancy falls again</div>
<div class="column"> </div>
<div class="column">Since the first Census was conducted in 1911, the number of persons per dwelling has consistently fallen. In 1911 there was an average of 4.5 people in every home. But by 2006 this ratio had almost halved to around 2.4 people in every home. Not only have more homes been built over time but other factors like fewer children and divorces have resulted in smaller families.</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.36.28%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%208.36.28%20AM.png" alt=""></div>
<div class="column"> </div>
<div class="column">And as noted above, homes had been getting bigger until a few years ago. Apart from floor area, another way of looking at home size is the number of bedrooms. In the 2006 Census around one in every 3.5 homes had four or more bedrooms whereas 20 years ago the ratio was one in every six homes.</div>
<div class="column"> </div>
<div class="column">Unfortunately Census figures are only produced every five years. Fortunately demographic estimates are produced each quarter and they provide a guide to current trends in dwelling occupancy.</div>
<div class="column"> </div>
<div class="column">From 2006 to 2013, the number of people per dwelling rose. At face value, the modest increase in average household size may not seem significant. But it was the first increase in household size – and as a consequence, the average number of people in Australian homes – in at least a century.</div>
<div class="column"> </div>
<div class="column">Children were staying home longer with their parents – no doubt the cost of homes and rising rents being key influences. With the ageing population, more generations were choosing to stick together in the one dwelling – a trend that is a consequence of the increased size and quality of homes. New migrants also chose to stay with family or friends. And given the increased preference to attend universities and colleges, Generation Y was forced to share accommodation and save longer to buy a home.</div>
<div class="column"> </div>
<div class="column">But since 2014 the number of people per dwelling has again been falling. Lower interest rates and increased supply of apartments have prompted older couples to down-size. Generation Y began to move out of home and take ownership of accommodation more appropriate to their needs. In part, this explains some of the lift in home building. The question is whether household size continues to fall or whether higher home prices stalls demand, prompting greater co-habitation of dwellings.</div>
<div class="column"> </div>
<div class="column">What is the importance of the economic data?</div>
<div class="column"> </div>
<div class="column">The Australian Bureau of Statistics (ABS) collects data on new home completions. Where the data is made available, estimates of the average flor area of the com homes can be calculated. Changes in the size of homes has implications for builders, developers and retailers of home appliances. If bigger homes are built, this may result in fewer homes being built to absorb increases in population.</div>
<div class="column"> </div>
<div class="column">What are the implications for interest rates and investors?</div>
<div class="column"> </div>
<div class="column">Australians continue to build big homes. But there has been a clear shift in the past few years. Australians are re- assessing their needs. Couples and small families are considering apartments. Down-sizers are also moving closer to the city or sea-changing or tree-changing. There is less need for big 4-5 bedroom homes and it is clear across suburbia that consolidation continues to occur – homes being demolished and replaced with apartments, town houses and villas.</div>
<div class="column"> </div>
<div class="column">While one theme is ‘ageing Australia’, there is also the re-assessment of housing needs by Generation Y and Millennials. Many in Sydney, Melbourne and Brisbane are seeking to live closer to work, cafes, restaurants, shopping and airports and are giving up living space for better proximity to the desirable amenities.</div>
<div class="column"> </div>
<div class="column">Last year Victoria built a record number of homes. Similarly NSW built the greatest number of homes since the Sydney Olympics. But rental vacancy rates haven’t soared, rather gravitated to more balanced outcomes. Clearly investors need to pay greater attention to changes in household size to work out what is going on.</div>
<div class="column"> </div>
<div class="column">At present there is significant discussion about the potential for some housing markets to be over-supplied with new homes. But while home building is at record highs, demand for homes has increased in line with rising population, especially in Sydney and Melbourne. And housing needs have changed. Younger buyers – and indeed some older ‘downsizers’ – are looking to live in smaller homes. And the market is responding. Clearly the issue of over-supply is complicated. But the changes in housing demand and supply have major implications for builders, developers, investors, building material companies, financiers and all levels of Government. </div>
<div class="column"> </div>
<div class="column"><em>Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.</em></div>
<div class="column"> </div>
<div class="column">
<em>Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a></em>
<div class="page" title="Page 2"> </div>
</div>
</div>
</div>
</div></body></html>

Australians continue to build big homes but the shift is on: Craig James

<html><body>
<p>A three-bedroom penthouse, one of two in the boutique Bronte Place development, was sold on its launch on Saturday, for $4 million.</p>
<div>
<p>It was among the $32 million worth of apartments sold in the long-awaited redevelopment on the site of the ­former RSL premises.</p>
</div>
<p>The project is being sold through CBRE by fashion mogul turned property developer Danny Avidan.</p>
<p>The Saturday morning saw 12 of the 21 apartments sold in what was the first major apartment project in Bronte in two decades.</p>
<div id="ad-block-9927527878-2" data-ad-size="4x4" data-device-type="web" data-ad-tar="pos=1" data-google-query-id="CO_mmOXugNACFc82lgodRO4DSw">Sales included a one-bedroom, 30sq m apartment that sold for $1.55 million, according to The Sunday Telegraph. The $4 million sale was a three-bedroom, 135sq m apartment.</div>
<div data-ad-size="4x4" data-device-type="web" data-ad-tar="pos=1" data-google-query-id="CO_mmOXugNACFc82lgodRO4DSw"> </div>
<div data-ad-size="4x4" data-device-type="web" data-ad-tar="pos=1" data-google-query-id="CO_mmOXugNACFc82lgodRO4DSw">Design of the<a href="https://bronteplaceliving.com.au/" target="_blank"> three storey block</a> was by interior architects SJB.</div>
<div class="w_unruly ad-block ad-custom unruly_insert_native_ad_here" data-ad-size="4x4" data-device-type="web" data-ad-tar="pos=1" data-google-query-id="CO_mmOXugNACFc82lgodRO4DSw">
<div>
<div id="attachment_4191">
<p>It took four years to obtain development approval for the project with the former fashion identity Danny Avidan recently emerging as the buyer of the Bronte RSL site located at 109-113 Macpherson Street from the Sydney developer Winston Langley.</p>
</div>
</div>
<div class="entry-content">
<div id="attachment_4190" class="wp-caption aligncenter">
<p class="wp-caption-text"> </p>
</div>
</div>
</div>
</body></html>

Danny Avidan's Bronte Place development secures $1.55m one bedroom sale 

<html><body>
<p>Bulldog Curtis Rona has listed his redundant Elderslie home for rent following his decision to change codes and head back to Perth.</p>
<p>The Kiwi ace spent $739,990 only earlier this year on the brand new home in the Macarthur region through estate agent Anil Agnihotri at Anz Real Estate Marayong.</p>
<p>Set on 519 square metres, <a href="https://www.realestate.com.au/property-house-nsw-elderslie-419547146" target="_blank">the newly built family home</a> has four bedrooms and two bathrooms. LJ Hooker leasing agent Nicole Heron has it for lease at $650 a week from December, which reflects a 4.5% rental yield</p>
<p>The 24 year old, who's off to the Western Force, owns a one bedroom unit in East Perth that cost $399,000 when purchased in 2012.</p>
<p><em>This article first appeared in </em>The Daily Telegraph.</p>
</body></html>

Curtis Rona off to Western Force so Elderslie up for rent

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">GUEST OBSERVER</div>
<div class="column"> </div>
<div class="column">Inflation appears to be making a comeback. That certainly seems the conclusion on global bond markets with Australian 10-year bond yields hitting 2.38 percent – the highest yield in almost six months. The higher bond yields are serving to draw investors away from equities markets, causing the ASX 200 index to fall for the third day.</div>
<div class="column">
<br>There was some justification for the inflation fears in the latest data on producer prices. Manufacturing input costs rose 2.0 percent in the September quarter with domestic costs up 2.2 percent.</div>
<div class="column"> </div>
<div class="column">On top of the 0.9 percent lift in the June quarter, manufacturing input costs are experiencing the biggest gains in five years. The question is how much and how quickly prices flow through to final producer and consumer prices. </div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/10/28/Screen%20Shot%202016-10-28%20at%201.55.59%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2016/10/28/Screen%20Shot%202016-10-28%20at%201.55.59%20PM.png" alt=""></div>
<div class="column">
<br>The saving grace in the September quarter was the fact that the Aussie dollar rose, driving prices of imported goods lower. But if the US economy continues to lift, driving interest rates higher, the Aussie dollar may have a few headwinds to contend with over the next two months.</div>
<div class="column">
<br>What do the figures show?</div>
<div class="column">
<br>Producer prices</div>
<div class="column">
<br>The Producer Price Index (PPI), or final stage prices, rose by 0.3 percent in the September quarter to stand 0.5 percent higher than a year ago. Of final stage prices, domestic good prices rose by 0.5 percent while import good prices fell by 1.2 percent in the quarter.</div>
<div class="column">
<br>The Bureau of Statistics notes that the 0.3 percent lift in final stage prices was “mainly due to rises in the prices received for other agriculture which includes bananas, beans and tomatoes (+8.3 percent), sheep, beef cattle and grain farming; and dairy cattle farming (+11.9 percent) and electricity supply, gas supply and water supply, sewerage and drainage services (+1.7 percent).</div>
<div class="column">
<br>The lift in prices was “partly offset by falls in the prices received for petroleum refining and petroleum fuel manufacturing (-5.5 percent), computer and electronic equipment manufacturing (-1.9 percent) and cigarette and tobacco product manufacturing (-5.0 percent).”</div>
<div class="column">
<br>Prices of intermediate goods rose by 0.6 percent in the quarter to stand 0.2 percent higher over the year. Preliminary stage materials rose by 0.6 percent in the quarter to be up 0.1 percent over the year.</div>
<div class="column">
<br>Manufacturing input prices rose by 2.0 percent in the September quarter while output prices rose 0.9 percent. Domestic input costs rose by 2.2 percent in the September quarter. </div>
<div class="column"> </div>
<div class="column">ABS notes rises in prices paid by manufactures to the Agriculture (+5.1 percent), Metal ore mining (+5.3 percent) and Oil and gas extraction (+4.4 percent) industries drove the rise in the price index of Input to the Manufacturing industries. Products contributing to these rises were cattle &amp; calves, silver ores and crude oil.</div>
<div class="column"> </div>
<div class="column">Rises in prices received by manufactures for outputs of Meat processing (+6.5 percent), Basic non-ferrous metal manufacturing (+4.6 percent), Sugar manufacturing (+16.0 percent), Copper, silver, lead and zinc smelting (+6.4 percent) and Industrial gas manufacturing (+6.8 percent) industries drove the rises in the price index of Output of the Manufacturing industries. Products contributing to these rises were beef and veal, precious metal recovery, sugar and non-refinery LNG. </div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/10/28/Screen%20Shot%202016-10-28%20at%201.57.51%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2016/10/28/Screen%20Shot%202016-10-28%20at%201.57.51%20PM.png" alt=""></div>
<div class="column"> </div>
<div class="column">New home sales</div>
<div class="column"> </div>
<div class="column">Total seasonally-adjusted new home sales (houses and apartments) rose by 2.7 percent in September after a 6.1 percent rise in August. Detached house sales rose by 3.8 percent in September after a 2.9 percent rise in August.</div>
<div class="column"> </div>
<div class="column">Private sector seasonally adjusted multi-unit sales eased by 0.8 percent in September 2016 after rising by some 17.8 percent in August.</div>
<div class="column"> </div>
<div class="column">The Housing Industry Association reported: “In the month of September 2016, detached house sales fell in four out of the five states covered by the report, an exact reversal of the situation in August. During September 2016, the largest fall in sales was recorded in South Australia (-23.0 per cent), followed by Western Australia (-17.2 per cent), New South Wales (-12.9 per cent) and Queensland (-2.6 per cent). Victoria was the only state to record an increase in new home sales over this period with 14.0 per cent growth in sales over the past year.</div>
<div class="column"> </div>
<div class="column">What is the importance of the economic data?</div>
<div class="column">
<br>The producer price figures are important in flagging price pressures at an early stage. If business costs are rising, the risk is that these will be passed on in terms of higher prices of final consumer goods. The Consumer Price Index is regarded as the key gauge of economy-wide inflation.</div>
<div class="column"> </div>
<div class="column">The Housing Industry Association releases data on the sales of new homes each month. The HIA collects the data each month from a sample of Australia's largest 100 home builders. The survey covers around 14 percent of the home building industry.</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/10/28/Screen%20Shot%202016-10-28%20at%201.58.59%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="column"> </div>
<div class="column"><img src="/images/2016/10/28/Screen%20Shot%202016-10-28%20at%201.58.59%20PM.png" alt=""></div>
<div class="column"> </div>
<div class="column">What are the implications for interest rates and investors?</div>
<div class="column"> </div>
<div class="column">Is inflation making a comeback? There are some early signs, especially in agriculture and metal, but it is early days. While cost pressures are emerging, the $64 question is whether businesses will pass through the high costs to consumers.</div>
<div class="column"> </div>
<div class="column">Chances of a rate cut next Tuesday stand at just 4 percent. And those market views have been reinforced by recent data showing a big lift in the terms of trade and higher domestic manufacturing costs.</div>
<div class="column">
<br>The Australian sharemarket is exposed to higher bond yields because a high proportion of investor returns are provided by dividends as opposed to increases in share prices. As a result yield-hungry investors may seek to trim some exposures in the sharemarket, especially utilities and banks, to chase higher yields in fixed asset markets. The historic price-earnings ratio has been holding above long-term averages, suggesting that the market has been relatively dear rather than cheap. The historic PE was 16.65 in September, above the 15.0-15.5 long- term average. <br> <br> <em>Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.</em>
<div class="page" title="Page 2"> </div>
</div>
</div>
</div>
</div></body></html>

4 percent chance of Cup Day rate cut: CommSec's Craig James

<html><body>
<p class="x_MsoNormal">GUEST OBSERVER</p>
<p class="x_MsoNormal">Japanese and Chinese shares up but US shares down slightly and Australian shares having another bad week.</p>
<p class="x_MsoNormal">Bond yields continued to back up as prospects for a December Fed rate hike continue to firm and as stronger UK growth diminished prospects for a further Bank of England easing. Commodity prices were mixed but the $US continued its ascent and the $A fell slightly. </p>
<p class="x_MsoPlainText"><span>Why the recent poor performance from Australian shares? </span></p>
<p class="x_MsoPlainText"><span>While global shares have been range bound over the last few months (with Eurozone and Japanese shares benefitting from falls in their currencies and the US share market down a bit) Australian shares are down 5 percent from their August high. </span></p>
<p class="x_MsoPlainText"><span>This relative underperformance reflects a combination of: concerns about the Fed and the US election that seem to be weighing on most share markets at present; a reversal of the huge bond rally that had helped the higher dividend paying Australian share market and sectors like real estate investment trusts up to mid-year; a soft patch in consumer spending weighing on retailers; and stock specific issues. Of these the turn up in bond yields is perhaps most significant taking a huge toll on defensive high yield sectors like REITs. </span></p>
<p class="x_MsoPlainText"><span>With the Fed on track to hike again in December and the RBA likely to be on hold for now a further back up in bond yields is likely into December. However, while the bond bull market is likely over as global inflation bottoms the back up in yields generally is likely to be gradual as global growth is set to remain constrained, the Fed is likely to remain gradual in raising interest rates and other major central banks including the RBA are likely on hold or skewed to easing further. </span></p>
<p class="x_MsoPlainText"><span>Meanwhile defensive yield sectors are getting very oversold and due for a bounce and cyclical sectors have more upside if as we expect that global and Australian economies continue to see moderate growth. Bottom line – it’s just another correction.  </span></p>
<p class="x_MsoPlainText"><span>Spain moving out of limbo with the focus shifting to Italy. </span></p>
<p class="x_MsoPlainText"><span>The political impasse that has hung over Spain following inconclusive elections in December and June looks likely to be resolved with the Socialist party voting to a abstain from voting in a parliamentary confidence vote that will then see Mariano Rajoy confirmed as PM. However, political risk in Europe has shifted to Italy and Austria. </span></p>
<p class="x_MsoPlainText"><span>Italy will see a referendum on reducing the power of its Senate on December 4 with PM Matteo Renzi seeking to reduce its power in order to proceed with economic reform (something maybe Australia should think about!) and threatening to resign if the referendum is not passed which would then provide a boost to the mostly anti-Euro Five Star Movement. </span></p>
<p class="x_MsoPlainText"><span>On the same day Austria will see a re-run of its presidential election with the far right candidate being anti-Euro. So if these go the wrong way we could see another bout of Eurozone break up fears. Either way I remain of the view that the Eurozone will continue to hang together – mainland Europeans are far more attached to the EU and Eurozone than the UK ever was, much of the recent rise in populists in Europe is really a backlash against austerity than necessarily the Euro (which remains popular). What’s more European shares remain very undervalued.</span></p>
<p class="x_MsoPlainText"><span>Based on history the best outcome for US shares will be a Clinton victory but with the Republicans retaining control of at least the House of Representatives. Since 1927 US total share returns have been strongest at an average 16.7 percent pa when there has been a Democrat president and Republican control of the House, the Senate or both. By contrast the return has only averaged 8.9 percent pa when the Republicans controlled the presidency and Congress. </span></p>
<p class="x_MsoPlainText"><a href="/images/2016/10/28/Screen%20Shot%202016-10-28%20at%201.13.38%20PM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p class="x_MsoPlainText"><img src="/images/2016/10/28/Screen%20Shot%202016-10-28%20at%201.13.38%20PM.png" alt=""></p>
<p class="x_MsoPlainText"><span>Source: Bloomberg, AMP Capital</span></p>
<p class="x_MsoPlainText"><span>A Trump victory would likely trigger an initial bout of “risk off” with shares down (both in the US and globally), bonds rallying and the $US up as investors fret about his economic policies particularly his protectionist trade policies triggering a global trade war. Australian shares and the $A would be particularly vulnerable to this given our high trade exposure. But a Clinton/Democrat clean sweep of the Presidency and Congress would likely also trigger a bout of nervousness in US shares as it would be easier for Clinton to implement less business friendly tax and regulatory policies that would weigh on US health, energy and financial stocks. </span></p>
<p class="x_MsoPlainText"><span>This would likely be more focussed on US shares though with less of an impact on global/Australian shares. A lot could still happen been now and election day but at this stage while Clinton looks to be ahead with a 5.7 point lead across a range of polls and leading in most battleground states (so we are sticking with a 70 percent probability of a Clinton victory), there is no sign of a wave of support going towards the Democrats that will see them win the necessary 30 seats to take the House.</span></p>
<p class="x_MsoPlainText"><a href="/images/2016/10/28/Screen%20Shot%202016-10-28%20at%201.15.13%20PM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p class="x_MsoNormal"><img src="/images/2016/10/28/Screen%20Shot%202016-10-28%20at%201.15.13%20PM.png" alt=""></p>
<p class="x_MsoNormal"><strong><span>Major global economic events and implication</span></strong></p>
<p class="x_MsoPlainText"><span>US data was good. Manufacturing and services conditions PMIs are up solidly, home sales are strong and home prices continue to rise and unemployment claims remain low. Durable goods orders are trending sideways though and consumer confidence fell but this looks to be related to election uncertainty. All consistent with a December rate hike.</span></p>
<p class="x_MsoPlainText"><span>Despite a few high profile misses, the US September quarter profit reporting season is actually looking pretty good…the profit recession looks to have ended. Of the 275 S&amp;P 500 companies to report so far, 78 percent have beat on earnings and 59% have beat on sales. Profits are now expected to be up 4 percent on the June quarter and up 15 percent from their March quarter low. A 4 percent yoy gain in revenue is a key driver. </span></p>
<p class="x_MsoPlainText"><span>Eurozone manufacturing and services conditions PMIs also rose strongly in October pointing to continued moderate growth.</span></p>
<p class="x_MsoPlainText"><span>Japanese data was also solid with strong manufacturing conditions, a rise in small business confidence, an improvement in household spending and solid labour market indicators. Deflation continued in September though with core inflation falling to zero.</span></p>
<p class="x_MsoPlainText"><span>Chinese industrial profits slowed in September to 7.7 percent yoy, but consumer confidence spiked higher in October.</span></p>
<p class="x_MsoNormal"><strong><span>Australian economic events and implications</span></strong></p>
<p class="x_MsoPlainText"><span>Inflation remains very low, but maybe not low enough to trigger another RBA rate cut just yet. While September quarter CPI inflation at 0.7 percent quarter on quarter was a bit higher than expected this was mainly due to prices for fruit &amp; vegetables, electricity, tobacco and property rates while underlying inflation at 0.3 percent qoq was a bit lower than expected with ongoing evidence that deflationary pressures are still working through the economy. </span></p>
<p class="x_MsoPlainText"><span>However, on balance it is probably not enough to trigger an immediate rate cut as inflation is in line with the RBA’s own expectations, economic growth looks to be reasonable and rising commodity prices are set to boost national income. The latter was reflected in the second rise in the goods terms of trade in row in the September quarter with a further rise likely in the December quarter as higher coal and iron ore prices feed through. Meanwhile new home sales rose again in September and remain strong and producer price inflation remains very low.</span></p>
<p class="x_MsoNormal"><strong><span>What to watch over the next week?</span></strong></p>
<p class="x_MsoPlainText"><span>In the US, the Fed (Wednesday) is very unlikely to raise interest rates particularly with a “risky” election just six days later but the post meeting statement is likely to confirm that the Fed is on track to raise rates in mid-December (the market probability is just 17 percent for a November hike and 72% for a December hike).  </span></p>
<p class="x_MsoPlainText"><span>Meanwhile September quarter earnings reports will continue to flow with around 100 S&amp;P 500 companies due to report, the October ISM manufacturing conditions index (Tuesday) is likely to show a further improvement and jobs data (Friday) is expected to show continued solid jobs growth of around 170,000, a slight fall in the unemployment rate to 4.9 percent but continued modest wages growth. Meanwhile, core inflation according to the private consumption deflator (Monday) is likely to have remained unchanged at 1.7 percent yoy in September.</span></p>
<p class="x_MsoPlainText">In the Eurozone, September quarter GDP data (Monday) is expected to show continued moderate GDP growth and expect a further rise in October CPI inflation (Monday) as the fall in oil prices from a year ago drops out but core inflation to remain around 0.8 percent yoy.  </p>
<p class="x_MsoPlainText"><span>Japanese industrial production for September (Monday) is expected to show continued growth and the Bank of Japan (Tuesday) is unlikely to make any changes to monetary policy after the further easing announced a month or so ago.</span></p>
<p class="x_MsoPlainText"><span>Chinese manufacturing conditions PMIs for October (Tuesday) are likely to pause or slow slightly but remain consistent with a stabilisation in growth.</span></p>
<p class="x_MsoPlainText"><span>In Australia, it’s a close call but the RBA is expected to leave interest rates on hold at its monthly Board meeting (Tuesday). September quarter inflation was low on an underlying basis but probably not low enough to trigger another cut just yet as it is in line with the RBA’s own expectations, economic growth in Australia looks reasonable with the worst of the mining investment slump behind us and a rise in commodity prices is starting to boost national income again. As such, the RBA can afford to be patient in waiting for inflation to head back to target and thereby avoid the risk of adding to financial instability (read a further acceleration in Sydney and Melbourne home price gains) with another rate cut for now. </span></p>
<p class="x_MsoPlainText"><span>Overall, we think that the RBA will leave rates on hold at its Melbourne Cup Day meeting, but that with inflation remaining very low, the $A still uncomfortably high and jobs data softening lately its premature to close the door on another rate cut but that’s more likely to be a 2017 story. The Reserve Bank’s Statement on Monetary Policy (Friday) will likely see little change to the RBA’s growth and inflation forecasts.</span></p>
<p class="x_MsoPlainText"><span>On the data front, expect credit growth (Monday) to remain moderate, CoreLogic home price growth (Tuesday) to remain solid, building approvals (Wednesday) to fall 6 percent, the trade deficit (Thursday) to show a further decline as higher coal prices flow through and retail sales (Friday) to grow 0.2 percent in September but just 0.1 percent in the September quarter in real terms.</span></p>
<p class="x_MsoNormal"><strong><span>Outlook for markets</span></strong></p>
<p class="x_MsoPlainText"><span>We remain cautious on shares in the short term as event risk is high for the months ahead including ongoing debate around the Fed and ECB, issues around Eurozone banks, the US election on November 8 and the Italian Senate referendum &amp; Austrian presidential election re-run (both on December 4). Bond yields could also see more upside in the short term. However, after any short term weakness, we anticipate shares to trend higher over the next 6-12 months helped by okay valuations, continuing easy global monetary conditions, moderate economic growth and the shift from falling to rising profits for both the US and Australian share markets. </span></p>
<p class="x_MsoPlainText"><span>Still ultra-low bond yields point to a poor medium term return potential from them, but it’s hard to get too bearish on bonds in a world of fragile growth, spare capacity, low inflation and ongoing shocks.</span></p>
<p class="x_MsoPlainText"><span>Commercial property and infrastructure are likely to continue benefitting from the ongoing search for yield by investors. </span></p>
<p class="x_MsoPlainText"><span>Dwelling price gains are expected to slow, as the heat comes out of Sydney and Melbourne thanks to poor affordability, tougher lending standards and as apartment supply ramps up which is expected to drive 15-20 percent price falls for units in oversupplied areas around 2018.</span></p>
<p class="x_MsoPlainText"><span>Cash and bank deposits offer poor returns. </span></p>
<p class="x_MsoPlainText"><span>The outlook for the $A has become murky. A shift in the interest rate differential in favour of the US as the Fed remains on its path to hike rates should see the long term trend remain down and the $A normally overshoots on the downside after the bursting of commodity price booms and this remains our base case. But against this, the stabilisation and rising trend in some commodity prices and the continued gradual nature of Fed rate hikes suggest ongoing upside risks in the short term. </span></p>
<p class="x_MsoPlainText"><span>The danger is that the latter will threaten the rebalancing of the economy and the best defence against this is for the RBA to revert to a clear easing bias even if it never acts on it.</span></p>
<p class="x_MsoPlainText"><span><em><span><a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a></span> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds.</em></span></p>
</body></html>

A close call but the RBA to leave interest rates on hold: Shane Oliver

<html><body>
<p>Bell Potter has advised McGrath shareholders with an updated chart on auction volumes and clearance rates in Sydney which includes the results for last weekend.</p>
<div class="x_WordSection1">
<p class="x_MsoNormal"><a href="/images/2016/10/27/McGrathListings.png" target="_blank">Click here to enlarge</a></p>
<p class="x_MsoNormal"><img src="/images/2016/10/27/McGrathListings.png" alt=""></p>
<p>"The key take-out is volumes dipped slightly last weekend relative to the weekend before and the clearance rate remained above 80%," broking analyst Chris Savage said.</p>
<p>"There has still yet to be, however, a meaningful uptick in volumes and we are now approaching the end of October (i.e one month of spring to go). </p>
<p>"The good news, however, is that this coming weekend is looking good for Sydney with CoreLogic RP Data saying there are currently 968 auctions scheduled. </p>
<p>"If this is correct, it will be the highest level for the half and easily surpass the previous highs of 863 (24<sup>th</sup> September), 835 (15<sup>th</sup> October) and 820 (22<sup>nd</sup> October). </p>
<p>"Still, it is below the levels achieved last spring when auctions regularly exceeded 1,000 on a weekend. </p>
<p>"We wait and see if the scheduled uptick in volumes this weekend continues into November and if there is is a late uptick in volumes for the spring selling period," he said.</p>
<p>Expansionary McGrath's volumes are up slightly year on year, against the overall market trend of less auction stock.</p>
<p>Property Observer is aware there were 111 auctions between 10 October 2015 and 12 October 2015. There were 95 McGrath auctions between 17 October 2015 and 19 October 2015. There were 111 auctions between 23 October 2015 and 26 October 2015.</p>
<p>Last weekend McGrath had around 127 weekend auction offerings, up on the prior weekend's 115 listings and around 108 on the October 8 weekend.</p>
<p>Property Observer suggests Saturday November 26 will be a bonanza, with many fresh vendors seeking to get a sale on the last Saturday of November. There is quite likely a busy December ahead too.</p>
</div>
</body></html>

Good news on weekend volumes for McGrath but still no meaningful uptick in volumes: Bell Potter

<html><body>
<p><img src="https://counter.theconversation.edu.au/content/66833/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1"></p>
<p>GUEST OBSERVER</p>
<p>Life insurance has stood out as an industry without a code of practice when others such as general insurers have one.</p>
<p>The latest attempt by the Financial Services Council to remedy this may be a last chance for life insurers to reform, before the government forces them to.</p>
<p>The code from the Financial Services Council focuses on the relationship between the insurer and the customer and aims at high standards of consumer service; professional behaviour and industry consistency. It should complement the legislation announced in 2015 to deal the problems of excessive up front premiums, remuneration practices and commissions which were incentives for insurers to churn customers through policies. </p>
<p>The code is also a result of the Trowbridge Report on retail life insurancewhich gave the life insurance industry a final opportunity to shape its future through a co-regulatory approach, rather than being reformed by the government alone. </p>
<p>Hopefully this latest attempt at reform does not go the same way as the earlier 1995 code of practice for the industry, which lapsed in 2001. This covered similar territory to the Financial Services Council code, but made little difference to the way the industry behaved. A positive sign is this new code was developed in consultation with industry, while the last one wasn’t.</p>
<h2>What’s in the code?</h2>
<p>This latest code will again try to address problems with selling practices and the quality of advice, high lapse rates, increases in premiums and their affordability as individuals age, and the redesign and repricing of products. The CommInsure scandal revealed further problems with outdated definitions and problems with making claims. </p>
<p>ASIC can approve these codes of practice for industry but rarely does so. This latest code is yet to be approved as well. </p>
<p>Some sectors have agreed to codes to forestall unwanted legislative change. Other codes establish higher standards of behaviour than required by law. </p>
<p>Codes are legally binding between an enterprise and a customer. This is because when an enterprise agrees to abide by a code it forms a kind of contract on the basis of this promise. </p>
<p>The very first part of the latest code of practice states that the code is binding and commits the entity to the standards in the code. The framework of the code looks at types of business rather than types of product.</p>
<p>One big omission in the code, is that it does not cover superannuation fund trustees or financial advisers, unless they explicitly adopt the code. This means it doesn’t cover a group policy where it is the employer or the superannuation fund trustee who has taken out the policy. As a result many Australians with life insurance within their super funds do not benefit at all from the code. </p>
<p>It does however apply to life products such as death, total and permanent disability, critical illness, disability, funeral, income protection, business expense and consumer credit insurance. But it does not cover products issued by a general insurer or a health insurer. This could create some confusion, for example it means that consumer credit insurance is covered by the code if provided by a life insurer, but not if provided by a general insurer. </p>
<p>Compliance with the code will be monitored by a Life Code Compliance committee. This is similar to the banking codes. The Financial Services Council and the insurers both have obligations to make consumers aware of the code.</p>
<p>Consumers can make a complaint using the code to the insurer, the Financial Ombudsman Service or Superannuation Complaints Tribunal. But if a complainant goes to a court, tribunal or other external dispute resolution body, the code no longer applies. </p>
<p>This code has an interesting take on the issue of designing life insurance products, as discussed in the 2014 Financial Systems Inquiry. It clearly states that when new policies are designed, “we will define suitable customers for the product”. This may stop the sale of products to those who don’t need them. </p>
<p>This is good but it still falls short of an obligation to sell a product that is suitable for the particular person, rather than a product that is generic for a class of targeted people. For example tailoring a policy to suit a person’s particular set of circumstances. </p>
<p>It’s a shame that the code has to set out that there will be rules to prevent sales to someone who is, “unlikely ever to be eligible to claim the benefits under a policy”. This really should be a part of the system already.</p>
<p>The obligation to review and update medical definitions is a good sign. But this applies only to policies that are currently being sold and won’t help those who are tied to policies with older definitions, that are no longer being sold.</p>
<p>The code also doesn’t have an obligation for insurers to disclose the exclusions in the policy, in plain language, to a customer before they sign a contract. This is something that really should be taken up by the industry. </p>
<p>Funeral insurance is the only life insurance product that requires a pre contract key fact sheet for offers. This type of disclosure shortcut is mandatory for home building and contents general insurance. Although there are difficulties inherent in simplification for key fact sheets this should be reconsidered for other life insurance products.</p>
<p>There are provisions for pre-sale disclosure for consumer credit insurance. Insurers are required to offer an alternative form of payment, when there is an offer of an initial loan to pay for insurance. In addition to this, insurers have an obligation to disclose the cost of loan repayments without and with the premiums and the interest payable on them. It may prevent some of the practices revealed in the reports on the problems of add-on insurance.</p>
<p>The code is a step towards a better relationship between the industry and consumers, particularly through the provisions to assist the vulnerable and helping customers make claims. It is not perfect. </p>
<p>The industry should continue to listen and take on board the virtues of the code. It can easily be changed to guide even better standards of conduct and meet newly identified problems.</p>
<p><em><span class="fn author-name">Gail Pearson is p</span>rofessor, Business School, University of Sydney and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/gail-pearson-670" target="_blank">here</a>.</em></p>
</body></html>

New life insurance code riddled with loopholes

<html><body>
<p><img src="https://counter.theconversation.edu.au/content/67796/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1"></p>
<p>GUEST OBSERVER</p>
<p>Scott Morrison is a “once bitten, never shy” sort of guy. Having had a bad experience in the high profile debate over whether to change the GST, which ultimately came to nothing, the Treasurer this week launched into the hot topic of housing affordability.</p>
<p>The question is, can he and the government manage the issue or will it, too, turn on them?</p>
<p>With tax, the then-new Turnbull government put “everything on the table”, only to produce a package limited in scope and reform. Even the centrepiece of that - a company tax reduction over a decade – will have to be pared back to pass the Senate.</p>
<p>The opposite approach is being brought to housing affordability. Morrison wants to confine what’s put on the table to the supply side. Attacking demand would crash the market, he says. So in his Monday speech to the Urban Development Institute of Australia he focused on the need to cut planning regulations to free up land.</p>
<p>But the pressure is strong for a broader discussion.</p>
<p>Morrison’s address had plenty of statistics illustrating the problem. Over the past 20 years the proportion of Australian households owning or paying off their home has fallen from 71% to 67%; the proportion of home owners over 45 with a mortgage has risen significantly.</p>
<p>As Morrison said, “the real pinch point” is breaking into the market. “Across the country, a 20% deposit on the nationwide median home loan is more than 100% of annual household disposable income … well above the 60% levels that were the norm prior to 2000.” The proportion of home loans to first home buyers was 13.4% in August, the lowest since February 2004; this compared with the long term average of 19.4%.</p>
<p>Morrison noted that the housing issue had implications for retirement incomes. If it takes longer to pay off your mortgage, you can save less for later, or perhaps eventually need to use some of your superannuation to clear your house loan. He didn’t observe, but it is also true, that many younger people facing the challenge of getting together a deposit will also have the burden of starting to pay back student debt.</p>
<p>Malcolm Turnbull is said to be very anxious the government search for solutions to the affordability challenge. Expert opinion and common sense indicate this search should be as broad as possible, looking at the demand as well as the supply side.</p>
<p>The government knows this. Before the last election it considered imposing some restraint on negative gearing. But, wanting to sharpen the contrast with Labor, which proposed bold changes to negative gearing and capital gains tax, it did not go ahead.</p>
<p>Thus its attempt to put the affordability issue into the straightjacket labelled supply - with emphasis on regulations that are state and local rather than federal government responsibilities - is very political, when what’s needed is an open-minded quest for the best evidence-based policy.</p>
<p>Already the containment is being resisted.</p>
<p>Last term the government had a parliamentary inquiry underway by the House of Representatives economics committee into home ownership, chaired by Sydney Liberal John Alexander. Alexander was moved to another committee; by the time of the election the inquiry had not reported. Post-election Turnbull, hosing down another problem, had the economics committee divert onto quizzing bank CEOs.</p>
<p>Now Alexander wants the housing inquiry reconstituted under his House committee on infrastructure, transport and cities. That would make a lot of sense - much work was done and shouldn’t be wasted. Alexander wrote to Morrison in September seeking the reference, but hasn’t heard back yet.</p>
<p>This is a nice dilemma for Morrison. Alexander is widely on the record arguing the demand side is important and, what’s more, that investors are making it hard for young first home buyers. The evidence indicated “investors were trampling on the opportunity for people wanting to buy a first home”, he says.</p>
<p>Alexander believes there is a case for tweaking negative gearing - though he does not support Labor’s policy which would have been “catastrophic” - and for looking at capital gains tax provisions. He describes negative gearing as an “incredibly dynamic tool” and likens it to a high-powered car that needs to operate within a speed limit.</p>
<p>He says the policy objective should be a gradual transition “to maximum home ownership” and a reduction in “speculation and opportunism” in the market.</p>
<p>Not only does the government have to decide about the parliamentary inquiry but Morrison has said he will take up the issue of freeing up planning regulations with state treasurers when they meet in December.</p>
<p>This can be seen as pushing the issue onto the states. The perennial debate has also re-opened about how a shake up of state taxes could help.</p>
<p>Morrison faces the risk of perceived failure if the federal government raises expectations then little happens. Even if the states pledged to regulation reform, results would come in the medium term.</p>
<p>The other danger for Morrison and the government is that opening up the housing affordability issue is moving the play onto Labor’s ground. The opposition’s position on negative gearing doesn’t seem to have cost it votes on July 2. It gets the opportunity to run it again, arguing that it has a ready-made policy to respond to the problem the Treasurer has put right at the centre of the political agenda.</p>
<p><em><span class="fn author-name">Michelle Grattan<a href="https://theconversation.com/profiles/michelle-grattan-20316" rel="author"></a> is p</span>rofessorial fellow, University of Canberra and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/michelle-grattan-20316" target="_blank">here</a>.</em></p>
</body></html>

Morrison opens housing affordability debate but can he control it?

<p><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.</p>

<p>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.</p>

<p>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.</p>

<p>Resilience Insurance CEO Corey Nugent has noted that the product addresses something fundamental to the new apartment market.</p>

<p>"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.</p>

<p>"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."</p>

<p>[smartcode_project:default project_id=150499 project_image_fid=370898]</p>

<p>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.</p>

<p>Garden apartments connect directly to private landscaped courtyards, while upper-level homes capture beach views to the east from level four and above.&nbsp;</p>

<p>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.</p>

<p>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.</p>

<p>"It's a place to choose your pace and live gracefully, seaside'," Sander says.</p>

<p>[smartcode_project:default project_id=150499 project_image_fid=370900]</p>

<p>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;</p>

<p>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.</p>

<p>"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;</p>

<p>"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."</p>

<p>[smartcode_project:default project_id=150499 project_image_fid=370897]</p>

<p>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;</p>

<p>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.</p>

<p>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;</p>

<p>"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;</p>

<p>Coco Republic has provided bespoke furniture packages tailored to the project's coastal palette.</p>

<p>[smartcode_project:default project_id=150499 project_image_fid=370899]</p>

<p>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.</p>

<p>Sales at Solis are launching soon through Ray White Projects, with an official event scheduled for 11 June. Enquire for more information.</p>

<p>[smartcode_project_cta:default project_id=150499]</p>


Joel Robinson

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

<p>Investors may soon find themselves with fewer reasons to buy established property and more incentives to look towards the new apartment market.</p>

<p>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.</p>

<p>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.</p>

<p>The challenge for investors is that suitable product is becoming harder to find.</p>

<p>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.</p>

<p>Today, the development pipeline looks very different.</p>

<p>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.</p>

<p>That shift has created a shortage of investor-friendly stock, particularly in well-located projects close to transport, employment hubs and lifestyle amenity.</p>

<p>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.</p>

<p>We've rounded up four new apartment developments where investors can still secure a foothold in the market for around $1 million or less.</p>

<h2 data-end="1140" data-start="844">Flourish Soleira</h2>

<h2>Priced from: $1.07 million</h2>

<p data-end="1140" data-start="844">Popular Palm Beach developer Sherpa is soon to officially launch its newest local apartment development, Flourish Soleira.</p>

<p data-end="1140" data-start="844">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.</p>

<p data-end="1140" data-start="844">&nbsp;</p>

<p data-end="1140" data-start="844">[smartcode_project:default project_id=150017 project_image_fid=370964]</p>

<p data-end="1140" data-start="844">Flourish Soliera will comprise 153 apartments across two buildings, connected by a skybridge, the first ever delivered in the suburb.</p>

<p data-end="1140" data-start="844">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.</p>

<h2><strong>Corallo, Palm Beach</strong></h2>

<p><strong>Priced from: $841,500</strong></p>

<p>Nearby Flourish Soleira is Changfa Group's beachfront-inspired Corallo development. They still have some one-bedroom apartments remaining, priced from $841,500.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=112194 project_image_fid=808]</p>

<p>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.</p>

<h2><strong>Corner House, Stones Corner</strong></h2>

<h2><b>Priced from: $880,000</b></h2>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=149098 project_image_fid=330594]</p>

<p>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.</p>

<p>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.</p>

<p><strong>Parkdrive Apartments, Chermside</strong></p>

<p><strong>Priced from: $749,000</strong></p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=152125 project_image_fid=363782]</p>

<p>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.</p>

<p>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.</p>


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

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=150454 project_image_fid=364156]</p>

<p>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.</p>

<p>“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.</p>

<p>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.</p>

<p>The absence of holiday letting within the building has also resonated strongly with purchasers.</p>

<p>“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.”</p>

<p>[smartcode_project:default project_id=150454 project_image_fid=366491]</p>

<p>The strong demand comes amid broader shifts in the high-end apartment market following the Federal Budget announcements in May.</p>

<p>“We were already seeing strong enquiry from high-net-worth buyers, but that has only accelerated since the policy changes,” Bourke says.</p>

<p>“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.”</p>

<p>[smartcode_project:default project_id=150454 project_image_fid=366486]</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>&nbsp;</p>

<p>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.</p>

<p>[smartcode_project_cta:default project_id=150454]</p>


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

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=139552 project_image_fid=371009]</p>

<p>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.</p>

<p>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.</p>

<p>Pace says the project has been designed to appeal to buyers seeking inner-city convenience without sacrificing space, flexibility, or amenity.</p>

<p>[smartcode_project:default project_id=139552 project_image_fid=371016]</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=139552 project_image_fid=371017]</p>

<p>Landscape architecture studio Acre has introduced a layered rooftop garden designed to soften the urban setting while creating a more communal environment for residents.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=139552 project_image_fid=371025]</p>

<p>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.</p>

<p>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.</p>

<p><sup>*Conditions apply in relation to the deposit match offer.</sup></p>

<p>[smartcode_project_cta:default project_id=139552]</p>


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

<p data-end="181" data-start="0">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.</p>

<p data-end="484" data-start="183">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.</p>

<p data-end="657" data-start="486">Stephen Abolakian, joint managing director alongside Troy, has spent more than two decades in the business, overseeing development, planning, finance, marketing and sales.</p>

<p data-end="806" data-start="659">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.</p>

<p data-end="871" data-start="808">“We know the buyer profile exceptionally well,” Abolakian says.</p>

<p data-end="1097" data-start="873">“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.”</p>

<p data-end="1169" data-start="1099">That buyer has historically been overwhelmingly owner-occupier driven.</p>

<p data-end="1434" data-start="1171">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.</p>

<p data-end="1533" data-start="1436">“Historically, investors have been a much smaller portion of our demand profile,” Abolakian says.</p>

<p data-end="1665" data-start="1535">“We design for owner-occupiers. We don’t design for yield, we design for comfort, amenity, family living and long-term usability.”</p>

<p data-end="1721" data-start="1667">That philosophy extends well beyond apartment layouts.</p>

<p data-end="1966" data-start="1723">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.</p>

<p data-end="2051" data-start="1968">“There was probably a period where having an approved project in market was enough,” he says.</p>

<p data-end="2154" data-start="2053">“There wasn’t as much competition and if you built it, buyers would come. That’s no longer the case.”</p>

<p data-end="2386" data-start="2156">“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.”</p>

<p data-end="2386" data-start="2156">[smartcode_project:default project_id=110379 project_image_fid=311393]</p>

<p data-end="2549" data-start="2388">The shift has forced developers to become more sophisticated in how they approach apartment design, particularly as owner-occupier expectations continue to rise.</p>

<p data-end="2678" data-start="2551">For Hyecorp, that means thinking beyond who the buyer is today and designing for who they may become in five or 10 years' time.</p>

<p data-end="2757" data-start="2680">“People buying now often aren’t moving in for several years,” Abolakian says.</p>

<p data-end="2949" data-start="2759">“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.”</p>

<p data-end="3219" data-start="3163">That thinking also shapes Hyecorp’s approach to amenity, which positions wellness at the forefront.</p>

<p data-end="3219" data-start="3163">[smartcode_project:default project_id=149594 project_image_fid=362634]</p>

<p data-end="3454" data-start="3221">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.</p>

<p data-end="3546" data-start="3456">“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.”</p>

<p data-end="3919" data-start="3669">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.</p>

<p data-end="4005" data-start="3921">“It’s about creating something that feels special without being excessive,” he says.</p>

<p data-end="4112" data-start="4007">“Good gardens, quality apartments, thoughtful amenity. Creating that resort feeling in a metro location.”</p>

<p data-end="4112" data-start="4007"><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" /></p>

<p data-end="4243" data-start="4114">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.</p>

<p data-end="5230" data-start="5149">“We’ve always believed in keeping a lot of the process in-house,” Abolakian says.</p>

<p data-end="5392" data-start="5232">“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.”</p>

<p data-end="5674" data-start="5394">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.</p>

<p data-end="5723" data-start="5676">“There are definitely people waiting,” he says.</p>

<p data-end="5902" data-start="5725">“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.”</p>

<p style="text-align:start">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.</p>

<p style="text-align:start">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.</p>


Jonathan Chancellor

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News