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GUEST OBSERVER
To modify Benjamin Franklin, it seems that in Australia nothing can be said to be certain, except death, taxes and endless debate about property prices.
Why is it so unaffordable? Are foreigners to blame? Is it a good investment? Is negative gearing the problem? Are property prices about to crash?
Worries about a property crash have been common since early last decade. In 2004, The Economist magazine described Australia as “America’s ugly sister” thanks in part to a “borrowing binge” and soaring property prices which had seen it become “another hotbed of irrational exuberance”. At the same time the OECD estimated Australian house prices were 51.8% overvalued.
Since the GFC, predictions of an imminent property crash have become more common with talk that a property crash will also crash the banks and the economy.
Our view since around 2003 has been that overvaluation and high levels of household debt leave the housing market vulnerable. As such it could be seen as Australia’s Achilles heel. However, in the absence of a trigger it’s been hard to see a property crash as a base case. Not much has really changed.
This note takes a look at the key issues and what it means for investors.
Overvalued, over loved and over indebted
The two basic problems with Australian housing are that it is expensive and household debt is high. Overvaluation is evident in numerous indicators:
According to the 2016 Demographia Housing Affordability Survey the median multiple of house prices in cities over 1 million people to household income is 6.4 times in Australia versus 3.7 in the US and 4.6 in the UK. In Sydney it’s 12.2 times and Melbourne is 9.7 times.
The ratios of house prices to incomes and rents are at the high end of OECD countries and have been since 2003.
Real house prices have been above trend since 2003.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.21.21%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.21.21%20AM.png" alt="">
 
The shift to overvaluation more than a decade ago went hand in hand with a surge in the ratio of household debt to income, which took Australia’s debt to income ratio from the low end of OECD countries to now being around the top.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.25.17%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.25.17%20AM.png" alt="" width="793" height="460">
 
Overvaluation and high household debt are central elements of claims that Australian house prices will crash. These concerns get magnified whenever there is a cyclical surge in prices as we have seen recently in Sydney and Melbourne.
But a crash seems elusive.
However, given the regularity with which crash calls for Australian property have been made over the last decade and their failure to eventuate, it’s clear it’s not as simple as it looks.
First, the main reason for the persistent "overvaluation" of Australian home prices relative to other countries is constrained supply. Until recently Australia had a chronic under supply of over 100,000 dwellings, as can be seen in the next chart that tracks housing completions versus underlying demand.
Completions are at record levels but they are just catching up with the undersupply of prior years.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.27.01%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.27.01%20AM.png" alt="">
 
Secondly, Australia has not seen anything like the deterioration in lending standards other countries saw prior to the GFC. There has been no growth in so-called low doc and sub-prime loans which were central to the US housing crisis. In fact in recent years there has been a decline in low doc loans and a reduction in loans with high loan to valuation ratios. See the next chart. And much of the increase in debt has gone to older, wealthier Australians, who are better able to service their loans.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.28.32%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.28.32%20AM.png" alt="">
 
Third, and related to this, there are no significant signs of mortgage stress. Debt interest payments relative to income are low thanks to low interest rates. See the next chart.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.29.34%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.29.34%20AM.png" alt="">
By contrast in the US prior to the GFC interest rates were starting to rise. Yet in Australia bad debts and arrears are low.
While new loan sizes have increased, Australians seem focussed on cutting their debt once they get it.
Finally, while some seem to think that because property prices in mining towns like Karatha are now crashing this is a sign that other cities will follow. This is non-sensensical. Property prices in mining towns surged thanks to a population influx that flowed from the mining boom. This is now reversing. Perth and Darwin are also being affected by this but to a less degree. By contrast the surge in property prices in cities like Sydney and Melbourne that occurred into early last decade predated the mining boom and their latest gains largely occurred because the end of the mining boom allowed lower interest rates.
The current state of play
Our assessment is that the boom in Sydney and Melbourne is slowing thanks in large part to APRA’s measures to slow lending to property investors. However, house price growth is likely to remain positive this year. Price growth is likely to remain negative in Perth and Darwin as the mining boom continues to unwind. Hobart &amp; Adelaide are likely to see continued moderate property growth, but Brisbane may pick up a bit.
Nationwide price falls are unlikely until the RBA starts to raise interest rates and this is unlikely before 2017. And then in the absence of a recession or rapid interest rate hikes price falls are more likely to be 5-10% as was seen in the 2009 and 2011 down cycles rather than anything worse.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.31.43%20AM.png" target="_blank"> Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.31.43%20AM.png" alt="">
 
What to watch for a property crash?
To see a property crash – say a 20% average fall or more – we probably need to see one or more of the following:
A recession – much higher unemployment could clearly cause debt servicing problems. At this stage a recession looks unlikely though.
A surge in interest rates – but the RBA is not stupid; it knows households are now more sensitive to higher rates.
Property oversupply – this is a risk but would require the current construction boom to continue for several years.
Implications for investors
There are several implications for investors:
While housing has a long term role to play in investment portfolios it is looking somewhat less attractive as a medium term investment. It is expensive, offers very low income (rental) yields compared to all other assets except bank deposits and Government bonds and it’s vulnerable to possible changes to taxation arrangements around property.
There are pockets of value, eg in regional areas. You just have to look for them.
As Australians already have a high exposure to residential property (directly and via bank shares and property trusts), there is a case to maintain a decent exposure to say unhedged global shares because it could provide an offset if it turns out I am wrong and the Australian property market does have a crash.
<a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a> 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.
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jchancellor-FAypfDUnLy

How valid are crash calls for the Australian property market? Shane Oliver

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A drop in the number of home loans taken in January and a big fall in the average loan size taken by first home buyers given falling or easing house prices highlights the prospect of greater home loan affordability in 2016, according to the head of banking business act., Amanda Watt. 
Over the month of January, the value of new home loans taken by property buyers dropped 3.4% to $31.9 billion, according to new data from the Australian Bureau of Statistics (ABS). The value of home loans for owner occupiers dived 4.3% to $20.5 billion in January from December while the value of home loans taken by investors also fell by 1.6% to $11.4 billion as buyers withdrew from the property market. 
Reflecting greater home loan affordability, the average loan size for first home buyers fell by $9,300 to $338,800 between December and January. The average loan size for all owner occupied housing commitments fell by $5,400 to $372,400 for the same period. The overall number of home loans taken by owner occupiers in January plunged 3.9% to 55,786. 
“While January is traditionally a slower month, these are still positive signals. Home buyers will welcome any drop in funds needed to buy their first home or make a property investment and the latest housing finance data highlights that buyers borrowed almost $10,000 less to buy their first home in January,” said Watt. 
“While the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments was unchanged at 15.1%, the good news is that growth in house prices has slowed in some cities while prices have dropped elsewhere, so people are needing to borrow less to buy,” said Watt.  
Fixed-rate loans, as a proportion of all new home loans, rose to 13.6% in January from 12.9% in December, as borrowers took advantage of low fixed rates, which have in some cases fallen below variable home loan rates due to downward pressure on wholesale market interest rates. 
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Positive signals in January lending: act

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The development of Parramatta is on serious turbocharge right, prompting its rating it on John McGrath's top suburb picks in last year’s annual McGrath Report.
He indicated there were two key reasons:
• Commercial and infrastructure activities in and around Parramatta are leaving much of Sydney in their wake with many smart companies choosing to relocate closer to their employees 
• The activation of the river which has for many years been a forgotten waterway
McGrath recent advised he considered Parramatta among Sydney’s next major hot spots for property price rises. 
"When we talk about property hot spots, most people think of small, unknown, undeveloped pockets of a city; or perhaps areas on the outskirts set to benefit from something new, like a road upgrade or new train line.
"We don’t often think about major established centres but Parramatta is different.
"While it’s been Sydney’s second CBD for a long time, it’s now becoming Sydney’s new heart," he blogged on Switzer noting about $8 billion in construction projects are on the way along with further billions in new public infrastructure both in and around Parramatta CBD. 
"We’re talking new commercial centres, luxury residential apartments, recreational spaces, educational facilities, modernised streetscapes and major new transport."
He noted the population was changing in both size and character.
"It’s going from blue collar to white collar with more tertiary-educated locals working in higher paid jobs. 
"All of this will have a major and direct impact on property prices over the next 5-10 years."
He noted the median price for a three bedroom house in Parramatta was around $788,000 and a two bedroom apartment $586,000.
"Compare this to an inner city suburb close to Sydney’s CBD like Surry Hills, where a three bedroom house is $1.616 million and a two bedroom apartment is $950,000.
"Value, value, value!," he said.  
The most exciting development underway is the $2 billion Parramatta Square project, a three hectare site in the middle of the CBD that will comprise several new commercial and civic buildings, apartments, retailers, eateries and recreational facilities.
It will be home to a new University of Western Sydney Campus (completion due early 2017) as well as the Aspire residential tower, which will be the tallest residential building in NSW (completion due late 2019). 
In terms of public transport, Parramatta is being touted as Sydney’s ‘new Central’ with major projects to benefit the area including plans for a light rail network; the WestConnex road project; the North-West Rail Link project; and a new airport at Badgerys Creek. 
Australian and foreign developers are also recognising the enormous scope Parramatta has for new residential and commercial buildings – certainly far greater than the CBD. 
According to RP Data, Parramatta house prices rose by 27.3% in 2015 while Sydney as a whole grew by 11.5%.
"The rise of Parramatta – and its home values, is well underway!"
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Parramatta is on turbocharge to be property hotspot: John McGrath

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GUEST OBSERVER
The Westpac/Melbourne Institute index of consumer confidence fell by 2.2 per cent in March to 99.1. A reading of 100 is the dividing line separating optimism from pessimism.
Wisest place for savings: “Banks” was the wisest place to put new savings according to the survey.
Overall 27.4 per cent believe the wisest place for savings was in “banks”, up 1.2 percentage points over the quarter.
Next highest was “Pay debt” (24.4 per cent – 4-year high, up 6.6 percentage points), which overtook “real estate” (14.7 per cent, down 8.7pp). A total of 7 per cent of respondents were unsure of what to do with additional savings – the highest reading in records going back over 20 years.
Home loans: The number of loans (commitments) for people who are buying or building homes to live in (owner-occupiers) fell from 7-year highs, down by 3.9 per cent in January. Refinancing of home loans fell from record highs, down by 4.4 per cent in January.
The housing finance data has implications for banks, building material suppliers and retailers. The consumer confidence data is important for retailers and consumer-facing businesses.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2010.20.14%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2010.20.14%20AM.png" alt="">
What does it all mean?
The monthly consumer confidence data is now merely useful as a check against the timelier weekly survey. The ANZ-Roy Morgan survey has the same number of survey respondents as the monthly series, has been running over the same number of years and covers the same questions, but is conducted each week. And what is clear from both surveys is that confidence levels seemingly consolidated over the month.
According to the Westpac/Melbourne Institute survey, consumer sentiment eased marginally in the latest result. The Roy Morgan weekly reading indicated similar volatility over the month with consumer sentiment lifting in the past week. The improvement in the global outlook, stronger domestic economic data and the recent strength in the Australian dollar should support confidence levels over the medium-term.
Where is the wisest place to put new savings?
According to the latest survey it’s in the bank, which strengthened its ascendancy in the latest quarter. Interestingly the major loser in the quarter was “real estate”. This was surpassed by “pay debt” as the second best option for additional savings. It was the first time in 3ó years that “paying down debt had surpassed real estate. In fact only 14.7 per cent of respondents believed real estate was the best option for additional savings – the weakest reading in over four years. It is quite a turnaround for “real estate” given that just six months ago it was considered the most attractive savings option with the highest reading in 12 years.
No doubt the run up in house prices, tighter home lending criteria by the banking sector and recent consolidation in the housing sector are prompting more households to focus on alternative asset classes to property. Interestingly the low interest rates on offer and volatility in stock markets has seen a substantial lift in the number of respondents that do not know what to do with additional savings. A total of 7 per cent of respondents claimed not to know what to do with additional savings – the highest reading in records going back over 20 years.
Despite the recent pullback the home loan market remains in good shape. Especially when you consider that loans to home owners eased from a 7-year high. Where the weakness is more paramount is in investor loans which have fallen substantially over the past six months. The value of investor loans is now down almost 15 per cent on a year ago. The result is a positive for the housing sector given over-lending to the sector last year. More prudent lending policies should ensure that the housing sector continues to remain resilient, contrary to the discussion of a substantial downturn.
The Reserve Bank is comfortably on the interest rate sidelines. Refinancing may have eased in the past month from record highs but the low interest environment is likely to prompt more home owners to shop around for the best home loan rates in coming months.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2010.21.18%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2010.21.18%20AM.png" alt="">
What do the figures show?
Housing finance - number
The number of new owner-occupier housing loans (commitments) fell by 3.9 per cent in January after rising by 2.7 per cent in December. Excluding the refinancing of dwellings, the number of loans was down by 3.6 per cent.
Loans by owner-occupiers for the construction of homes  down by 2.8 per cent in January; loans to buy newlyerected dwellings  fell by 3 per cent; and loans for the purchase of established dwellings  (excluding refinancing) fell by 3.8 per cent. The number of refinancing transactions  fell by 4.4 per cent.
Housing finance - value
The value of new housing commitments (owner occupier and investment) fell by 3.4 per cent in January after a 0.1 per cent fall in December. Owner-occupier loans fell by 4.3 per cent while investment loans fell by 1.6 per cent.
The value of loans by owner-occupiers and investors to build new homes  fell by 0.9 per cent in January after falling by 1.2 per cent in December. The value of loans to build new homes stood at $2.77 billion, weakening further from the record high of $2.93 billion in December 2014.
Consumer sentiment:
The Westpac/Melbourne Institute index of consumer confidence fell by 2.2 per cent in March to 99.1 after lifting by 3.9 per cent in February. The confidence index is down 0.4 per cent on a year ago. The current conditions index fell by 7.3 per cent while the expectations index rose by 1.7 per cent.
Three of the five components of the index fell in March:
The estimate of family finances compared with a year ago was down  by 8.2 per cent;
The estimate of family finances over the next year was up  by 0.2 per cent;
Economic conditions over the next 12 months was up  by 8.2 per cent;
Economic conditions over the next 5 years was down by 2.5 per cent;
 The measure on whether it was a good time to buy a major household item was down by 6.6 per cent.
Gender &amp; demographics: Men (index reading of 104.6, up 2.3 per cent) were more optimistic than Women (94.4, down 6 per cent). The sentiment index for young people fell by 17.1 per cent to 99.9 in March. Across the other demographics: 25-44 years (index 103.1, up by 0.4 per cent); 45 years plus (index 96.3, down 0.7 per cent).
Housing outlook: A good time to buy a dwelling? – Index up 5.5 per cent in the quarter and although still down 13.1 per cent on the year.
Wisest place for savings: “Banks” was the wisest place to put new savings according to the survey. Overall 27.4 per cent believe the wisest place for savings was in “banks”, up 1.2 percentage points over the quarter. Next highest was “pay debt” (24.4 per cent, up 6.6pp), followed by “real estate” (14.7 per cent, down 8.7pp), “shares” (7.6 per cent, down 2.3pp), and “dont know” (7 per cent, up 4.1pp) “superannuation” (4.9 per cent, up 0.4pp).
State sentiment levels: NSW (up 1.6 per cent), Victoria (down 5.3 per cent), Queensland (down 2.6 per cent), Western Australia (up 1.2 per cent) and South Australia (down 10.6 per cent).
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2010.22.27%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2010.22.27%20AM.png" alt="">
What is the importance of the economic data?
Housing Finance data is produced monthly by the Bureau of Statistics and shows commitments by lenders, such as banks, to provide finance for housing purposes. The lending figures relate to those looking to buy or build homes to live in as well as those seeking to buy or build homes for investment purposes. Generally people get their finance organised first, so the figures are regarded as a leading indicator on the housing market.
Westpac and the Melbourne Institute release the Index of Consumer Sentiment each month. According to Melbourne Institute: “The survey of consumer sentiment was first undertaken in 1973 and was conducted on a quarterly basis until 1976, a six-weekly basis from 1976 to 1986, and has been conducted monthly ever since.”
Confident consumers may be more inclined to spend, especially on major items.
What are the implications for interest rates and investors?
From a broader sense, confidence levels are OK without being great. Looking forward, a period of calm on share markets and the recent strength in the Australian dollar could be key factors supporting household confidence.
For Aussie consumers, a stronger Aussie dollar means increased purchases on the internet and trips abroad, so the recent strength in the Aussie dollar will support confidence.
The Reserve Bank will be comforted by the more stable conditions in the investor housing market.
CommSec expects no change to interest rate settings for the foreseeable future.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2010.23.38%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2010.23.38%20AM.png" alt="" width="1525" height="500">
Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a>
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“Pay debt” at a four year high: Commsec's Savanth Sebastian

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Property group Lendlease is expected to start construction of a 25,000-square-metre tower in Melbourne, part of a $2 billion mixed-use scheme, after winning planning approval for its first commercial tower.
Planning Minister Richard Wynne has approved the first $200 million 11-level tower at 695 Collins Street, noting the public space created by the design of a sky-park. 
<img src="/images/2016/03/10/News_tower.jpg" alt="">
Lendlease has secured pre-commitment from engineering company Arup, who will take out three floors in the building, to be known as One Melbourne Quarter. 
It is the first of seven commercial and residential buildings planned for the 2.5-hectare site running between Collins and Flinders streets at the edge of the old city grid, linking it to Docklands.
Lendlease calls the project Melbourne Quarter. 
Alongside the Collins Street extension into Docklands, Lendlease will build, in stages, a deck over Wurundjeri Way, to hold different elements of the project together.   
The tower, designed by Denton Corker Marshall will sit next to a $2.5 billion project in Collins Square that property magnate Lang Walker is still building and trying to sell.
The <a href="https://www.lendlease.com/australia/projects/batmans-hill" target="_blank">Batman's Hill development</a> will include more than 110,000 sqm NLA office space, 1,693 apartments and retail space, according to the Lendlease website.
 <img src="/images/2016/03/10/carousel_about_skypark.jpg" alt="">
</div>
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Lendlease to start work on $200 million office tower in Melbourne's Batman's Hill

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The former supermodel Kristy Hinze-Clark and her billionaire Texan husband have sold in Point Piper.
Bought for $7.65 million, it sold earlier this week reportedly for more than $8 million.
Their frequent visits to Sydney over summer have in recent years seen them rent other residences, the Vaucluse trophy home, Villa Igiea, which sold on New Year’s Eve for more than $52 million, and the nearby waterfront mansion on Coolong Road that is now home to Chinese billionaire Richard Liu having sold late last year for $36 million.
Jaime Upton of Sotheby’s International confirmed it had sold but declined to reveal the price.
Their 320 square metre apartment is one of the whole-floor residences within the <a href="/expert-insights/buying/jim-clark-and-kristy-hinze-clark-have-another-shot-at-selling-sienna-point-piper-apartment">Sienna harbourfront block</a> on Wolseley Road.
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Kristy Hinze-Clark and Jim Clark find Point Piper buyer

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Fashion icon Jenny Bannister has sold her St Kilda home for $3.3 million at auction, exactly 27 years to the day after she bought it.
The property sold after Wilson agents Martin Fox and Brad Ward had set a guide of $2 million plus for the Victorian era property. 
Renovated to the designs of renowned Melbourne architect Allan Powell, <a href="https://www.realestate.com.au/property-house-vic-st+kilda-121871158" target="_blank">80 Wellington Street</a> won Belle Magazine's house of the year in 1991.
Set on a 657 sqm corner block, the solid brick, double fronted family home has four bedrooms and two bathrooms.
The two storey extension features a white painted brick creative studio with Juliette balcony which overlooks the Tuscan-style designer emerald green pool and courtyard.
Bannister lived in the home with husband and economist Paul "Mongoose" Belin.
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Fashion icon Jenny Bannister has sold her St Kilda home for $3.3 million

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GUEST OBSERVER
In late 2015, the Greater Sydney Commission was established to oversee metropolitan planning and development in Sydney.
The commission is intended to function as a partnership between state and local governments, with both the power to create overarching planning proposals and the mandate to work with local governments on local planning controls.
NSW Premier Mike Baird has tasked the commission with delivering 680,000 new homes by 2031, with the aim of tackling the city’s unfolding housing affordability crisis.
In December, Lucy Turnbull was announced as the inaugural chief commissioner for the Greater Sydney Commission. In addition to a successful career in commercial law and investment banking, Turnbull has a history in local government – in 2003 she became the first female lord mayor of Sydney – and is the author of the 1999 book Sydney: Biography of a City. Since 2010 she has been the deputy chair of the Coalition of Australian Governments’ City Expert Advisory Panel.
Dallas Rogers spoke with Lucy Turnbull on the establishment of the Greater Sydney Commission, its structure, plans and mandate from the premier, as well as criticism from some urban planning experts that the commission is an undemocratic “top-down” approach to development.
To hear the interview in full, <a href="https://theconversation.com/speaking-with-lucy-turnbull-on-the-greater-sydney-commission-56005?utm_medium=email&amp;utm_campaign=Latest%20from%20The%20Conversation%20for%20March%2010%202016%20-%204476&amp;utm_content=Latest%20from%20The%20Conversation%20for%20March%2010%202016%20-%204476+CID_233775bf67bcd3c3aa2e3c2a6a4a3704&amp;utm_source=campaign_monitor&amp;utm_term=Speaking%20with%20Lucy%20Turnbull%20on%20the%20Greater%20Sydney%20Commission" target="_blank">click here</a>.
Dallas Rogers<a href="https://theconversation.com/profiles/dallas-rogers-5269" rel="author"> </a>is lecturer in Urban Studies, Western Sydney University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/dallas-rogers-5269" target="_blank">here</a>.
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Lucy Turnbull discusses the Greater Sydney Commission

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Bates Smart has been selected to design Walker Corporation’s 90-storey Aspire tower in Parramatta, beating off Fender Katsalidis, DBI Design and PTW Architects.
The decision was made by a panel comprising Parramatta City architect Kim Crestani, NSW government architect Peter Poulet, Barangaroo design director Bob Nation and Barry Mann, a member of Parramatta City’s property and significant assets team.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2016/03/10/016960-aspire-tower.jpg" alt="">
The $700 million tower will be Sydney’s tallest if completed to plan as the centrepiece of the $2 billion redevelopment of ­Parramatta Square, in Sydney’s west.
Bates Smart will be forced to first lodge a 70-storey development application, and only be permitted to request a taller tower once it has agreement from the Civil Aviation Safety Authority.
<img src="https://www.urban.com.au/images/2016/03/10/images.jpeg" alt="">
Walker Corporation is building two adjacent commercial towers designed by Johnson Pilton Walker.
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Aspire tower Parramatta needs aviation authority approvals to go 90 stories

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Cabinet minister Peter Dutton has claimed Labor's negative gearing policy and its plan to cut the capital gains tax discount for investors from 50 percent to 25 percent policy would "cripple the economy".
"I think the economy will come to a shuddering halt and I think the stock market will crash and I think once people realise how dangerous Labor's economic proposal is, I think they'll be happy to see an election … and deal with it," he said.
Mr Dutton also borrowed former prime minister Tony Abbott's description last week to call Labor's negative gearing plans a "housing tax".
"It is becoming pretty clear that this election will be about Labor's taxes and their proposal to whack a tax on housing."
The Australian Financial Review noted Shadow treasurer Chris Bowen said Mr Dutton's statement was reckless and unfounded "unbecoming especially from a cabinet minister".
"After promising new 'economic leadership' and a new kind of politics, Malcolm Turnbull's team, when asked about the upcoming election, go straight to negativity and another party's policy."
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Labor's negative gearing policy will cripple the economy: Peter Dutton

An entity directed by HSN's Rafi Assouline and Rebel Property's Allen Linz has filed plans for an impressive new precinct in Woolloomooloo.

The major mixed-use development would transform a prominent William Street site into a new residential village anchored by affordable housing and a large public park.

The proposal, submitted as a State Significant Development Application, covers 164-172 and 174-194 William Street, a 6,398 sqm site between Forbes Street and Dowling Street on the southern edge of Woolloomooloo.

Designed by fjcstudio in collaboration with Bangawarra, Studio Bright and Tribe Studio Architects, the scheme would deliver 227 apartments across four residential buildings ranging in height up to 18 storeys, alongside retail space, public domain improvements and a new publicly accessible park.

<img alt="Rebel" data-entity-type="file" data-entity-uuid="0eb59b7c-914a-4a5c-b849-3a56749f5e93" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-12%20at%2011.18.51%E2%80%AFAM.png?VersionId=mxM6EEqeoLjrCiTlCzTKTvzpKuh6kSkH" />

It's another design scheme for Rebel, who took <a href="https://www.apartments.com.au/news/nsw/first-look-rebel-property-group-takes-woolloomooloo-precinct-to-nsw-government">concept plans to the NSW Gov late last year</a>.

The latest plans will be a mix of 167 build-to-sell apartments and 60 affordable apartments, with the affordable housing component representing 15 per cent of the project's gross floor area. The apartment mix includes 12 one-bedroom, 53 two-bedroom, 89 three-bedroom apartments and 13 penthouses, while the affordable housing component would comprise 42 one-bedroom and 18 two-bedroom apartments.

<img alt="Rebel" data-entity-type="file" data-entity-uuid="3b3d4553-8a8c-4af5-aa8c-519ffb1e28c6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-12%20at%2011.20.12%E2%80%AFAM.png?VersionId=_Yb6ibN7eDnOtQjCNDK2eviORa4qzgv." />

Rebel Property is seeking to take advantage of the NSW Government's infill affordable housing bonus provisions under the Housing SEPP, which provide additional floor space and height in exchange for the delivery of affordable housing for a minimum of 15 years. The planning pathway allows a 30 per cent increase in floor space ratio and building height where 15 per cent of the development is dedicated to affordable housing.

&nbsp;

At the centre of the development is a 1,356 sqm sunlit public park designed to become a new community gathering space at the gateway to Woolloomooloo. The park would be complemented by a network of pedestrian laneways connecting William Street with the surrounding streets, improving permeability through what is currently a largely impermeable block.

<img alt="Rebel" data-entity-type="file" data-entity-uuid="257af931-a393-4007-8c6d-7219796df58d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-12%20at%2011.20.51%E2%80%AFAM.png?VersionId=KAHy94GrhaReFsWTGDKfy39EDJ8gEEv4" />

The design team says the public domain has been heavily influenced by the site's topography and Aboriginal cultural heritage, drawing on the escarpments, gullies and landscape characteristics that historically defined the area before urbanisation. The landscape design has been developed in partnership with First Nations consultancy Bangawarra.

The project would be delivered across four separate buildings. The William Street East and William Street West buildings, designed by fjcstudio, would contain the majority of the apartments. Melbourne-based Studio Bright has designed the Forbes Street building, while Tribe Studio Architects is responsible for the Dowling Street building.

Rebel had secured approval for the concept plans late last year.

Joel Robinson

First look: HSN, Rebel, advances Woolloomooloo precinct plans

A locally heritage-listed furniture showroom on Water Street is set to become the centrepiece of a new mixed-use residential development as local developer&nbsp;<a href="https://www.apartments.com.au/developers/keylin-group">Keylin</a> seeks approval for <a href="https://www.apartments.com.au/new-apartments/lotus-on-water-street-290-water-street-fortitude-valley-qld-4006">Lotus on Water Street</a>, a 15-storey project on the Fortitude Valley side of Spring Hill.

The proposal spans 290 Water Street and 137-141 Warry Street, combining several properties into a 2,869 sqm site that sits between Fortitude Valley, Spring Hill and the rapidly evolving Victoria Park precinct. Keylin's plans would deliver 132 apartments alongside new retail, hospitality and commercial space, while retaining and repurposing the historic Brunswick Home Furnishers Showroom that fronts Water Street.

Designed by <a href="https://www.apartments.com.au/architects/jackson-teece">Jackson Teece</a>, Lotus on Water Street comprises a 12-storey residential tower rising above a three-storey podium and communal rooftop terrace. The development includes 76 apartments classified as multiple dwellings and a further 56 units proposed as short-term accommodation, designed to be flexibly used as either accommodation or permanent residences. The apartment mix comprises six one-bedroom, 54 two-bedroom and 16 three-bedroom homes.

<img alt="First look: Keylin unveils heritage-led Lotus on Water Street tower in Fortitude Valley" data-entity-type="file" data-entity-uuid="9822bb79-6c49-49c9-95ba-319e8c8d81c3" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/fortitude%20valley%20front.png?VersionId=ioW8zbN4UVebbLetTFuv92t.HkdgfR5e" />

Residents would have access to an extensive rooftop recreation level spanning more than 1,200 sqm of communal open space. Plans include a pool, gym, sauna, infrared sauna, yoga area, library, private dining room, barbecue facilities and landscaped entertainment spaces, making the rooftop the project's largest shared amenity offering.

At street level, the proposal focuses on the adaptive reuse of the heritage buildings along Water Street, where 518 sqm of retail and commercial space is planned across shop, office and food and drink outlet uses. A permeable residential lobby would be positioned between the retained heritage buildings, creating a pedestrian connection between the historic streetscape and the new tower behind.

<img alt="First look: Keylin unveils heritage-led Lotus on Water Street tower in Fortitude Valley" data-entity-type="file" data-entity-uuid="269cf3e0-7d13-48bf-a318-05a00deb5c10" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/fortitude%20valley%20podium.png?VersionId=DLXmTCLsp6GOcLpQ0h.0z7wKCw59EhN_" />

The heritage retention strategy is central to the scheme. The development application notes that the Brunswick Home Furnishers Showroom and adjoining heritage buildings will remain, with only non-significant structures on the site earmarked for removal under a previously issued Heritage Exemption Certificate. Levels one and two of the new podium are recessed behind the heritage façades to maintain their prominence within the streetscape.

Jackson Teece has drawn inspiration from the site's manufacturing history when designing the podium. The planning documents state that the façade incorporates perforated metal screening that references the woven and rattan furniture historically produced on the site. Cascading and climbing plants are integrated throughout the podium to soften the building's presentation and screen parking levels behind. The landscape strategy also informs the project's name, Lotus on Water Street, drawing on the historic Spring Hollow waterholes that once ran through Spring Hill and the blue water lilies associated with Meeanjin, Brisbane's traditional name.

The proposal also incorporates the neighbouring property at 141 Warry Street, currently occupied by a healthcare service. The existing building would remain, with nine dedicated parking spaces allocated within the new development to support its ongoing operation. In total, Lotus on Water Street proposes 117 car spaces, including 110 resident spaces and seven visitor bays, alongside 100 bicycle spaces.

<img alt="First look: Keylin unveils heritage-led Lotus on Water Street tower in Fortitude Valley" data-entity-type="file" data-entity-uuid="70cf07bc-4fd8-4e70-92dd-be8b21c4e4f0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/fortitude%20valley%20site.png?VersionId=txlxrJImM0Sm_vTzHVKh5DDUkyL_CiiA" />

The site sits within the Spring Hill East Precinct of the Spring Hill Neighbourhood Plan and is positioned around 650 metres from both Fortitude Valley Station and Exhibition Station. It is also within walking distance of the King Street precinct, Royal Brisbane and Women's Hospital, Herston Quarter and Victoria Park, which is earmarked to become a major venue precinct ahead of the Brisbane 2032 Olympic and Paralympic Games.

Planning documents describe the location as a key gateway between Spring Hill and Fortitude Valley and highlight the area's increasing importance as new transport infrastructure and Olympic-related investment reshape Brisbane's inner north. The development team argues the project will contribute additional housing supply while activating a section of Water Street that has historically received less investment than other parts of the Valley.

Keylin has become increasingly active across Brisbane and southeast Queensland, assembling sites in strategic inner-city locations. They are currently selling and delivering <a href="https://www.apartments.com.au/new-apartments/oria-spring-hill-447-gregory-terrace-spring-hill-qld-4000">Oria Spring Hill</a>, just over 140 apartments due for completion in 2027.

Keylin plans heritage-led Lotus on Water Street apartment development in Fortitude Valley

Roseville is poised for a wave of new apartment development following the NSW Government's rezoning of land around Roseville Station under its Transport Oriented Development program.

The new planning controls have unlocked significant development potential within walking distance of the station, with a number of sites expected to be amalgamated and redeveloped in the coming years as developers seek to take advantage of the increased density allowances.

One of the more restrained developments in the precinct, and set among the first to be delivered having commenced well before the recent changes, is Hyecorp's Juliet. The boutique apartment project is already well under construction and remains on track to welcome residents by the end of the year, offering a markedly different proposition to many of the larger-scale developments now likely to emerge across the suburb.

[smartcode_project:default project_id=7395 project_image_fid=278194]

<a href="https://www.apartments.com.au/new-apartments/juliet-roseville-64-pacific-highway-roseville-nsw-2069">Juliet</a> will comprise just&nbsp;34 one-, two-, and three-bedroom apartments opposite Roseville Station. For Hyecorp, which has delivered projects across Sydney's Lower North Shore for more than three decades, Roseville presented a rare opportunity to address a growing gap in the market.

"<a href="https://www.apartments.com.au/developments/roseville-nsw-2069">Roseville</a> has long been one of the North Shore's most tightly held and desirable suburbs, offering a unique combination of village charm, established greenery, excellent transport connections, and proximity to some of Sydney's best schools and lifestyle amenities," Hyecorp said.

"We recognised a growing demand from local homeowners seeking to downsize without leaving the community they have built their lives around. The location presented a rare opportunity to create homes that cater specifically to that buyer profile."

[smartcode_project:default project_id=7395 project_image_fid=278196]

The six-level development has been designed by <a href="https://www.apartments.com.au/architects/pbd-architects">PBD Architects</a> as a collection of residences that feel more like homes than apartments. The brief centred generous floorplans, abundant natural light, quality finishes, and strong connections to outdoor space.

PBD Architects drew inspiration from Roseville's established garden suburb character, creating a building that sits comfortably within its surroundings rather than dominating them. The architecture incorporates natural materials, soft forms, layered landscaping, expansive balconies, and generous setbacks to strengthen the connection between residents and the suburb's leafy environment.

"The focus was on designing spacious, house-like residences for discerning owner-occupiers and downsizers who wanted to remain on the North Shore without compromising on comfort, privacy, or design," PBD said.&nbsp;

"Every apartment was to feel considered, timeless, and highly functional."

[smartcode_project:default project_id=7395 project_image_fid=278195]

Inside, residences feature engineered timber flooring, stone kitchen benchtops and splashbacks, integrated Fisher &amp; Paykel appliances, ducted air conditioning, and large outdoor entertaining areas designed to take advantage of district and treetop views.

Residents will also have access to a rooftop barbecue and lounge area, alongside practical amenities including parcel lockers, EV charging capability, bicycle storage, a dog wash bay, and a basement car wash facility.

The majority of purchasers so far have been local owner-occupiers from Roseville, Lindfield, Chatswood, Killara, and the broader Upper North Shore, many of whom are transitioning from larger family homes.

"Buyers are looking for spacious, house-like apartments that allow them to downsize without feeling like they are sacrificing comfort or functionality," Hyecorp noted.

"They value large kitchens, generous living areas, ample storage, quality finishes, secure parking, lift access, and low-maintenance living."

[smartcode_project:default project_id=7395 project_image_fid=278204]

Juliet sits directly opposite Roseville Train Station and within walking distance of Roseville Village, while Chatswood's retail and dining precinct is only minutes away. The development is also surrounded by some of Sydney's most established schools, including Roseville College, Ravenswood, Pymble Ladies' College, and Knox Grammar, as well as nearby parklands and golf courses.

Juliet is currently more than 75 per cent sold ahead of its anticipated completion in late 2026.

[smartcode_project_cta:default project_id=7395]

Juliet to sit quietly amid Roseville apartment boom

Sherpa Property Group has unveiled the third instalment of its Flourish series, securing full approval for the two-tower, $500 million Flourish Soleira development in Palm Beach.

<a href="https://www.apartments.com.au/new-apartments/flourish-soleira-1150-1154-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> will rise from a prominent site in the commercial heart of Palm Beach, the long-time home of Cash Converters and a range of local retailers.

The project will introduce a new retail and dining precinct at ground level, beneath 286 apartments.

[smartcode_project:default project_id=150017 project_image_fid=370959]

“We’re very committed to not only providing affordable residential offerings that are much needed in Palm Beach, but also delivering a vibrant new commercial heart that complements the extraordinary growth of the southern Gold Coast,” Sherpa Property Group founder Christie Leet said.

The development will sit under Sherpa's Flourish brand, which is aimed at providing a pathway into the beachside suburb for locals, first-home buyers and downsizers. In a move designed to assist first-home buyers entering the market, Sherpa has reserved all one and two-bedroom, one-bathroom apartments exclusively for eligible first-home buyers.

[smartcode_project:default project_id=150017 project_image_fid=370964]

“Our vision through Flourish is to create a vibrant retail and lifestyle focal point within the Palm Beach centre zone, delivering thriving communities underpinned by lifestyle-rich locations,” Leet said.

“So far, Flourish has been an incredible success, and we hope to carry this momentum as we progress the next two Flourish projects in Palm Beach.”

[smartcode_project:default project_id=150017 project_image_fid=371430]

Located across 1150-1164 Gold Coast Highway and 3 Sixth Avenue, the development will comprise two towers. The northern tower will deliver 154 apartments, while the southern tower will add a further 132 residences, helping address ongoing demand for new apartments in the tightly held coastal suburb.

Flourish Soleira will also feature the most extensive rooftop amenity offering ever delivered in Palm Beach.

The two towers will be connected by a skybridge, with residents gaining access to a rooftop recreation deck featuring a full-width swimming pool, hot and cold plunge pools, wellness spaces, a gymnasium, private dining facilities, massage treatment rooms, barbecue areas, a basketball court, golf simulator, indoor and outdoor dining spaces, sun lounges and extensive landscaping.

LPS Group is expected to start construction later this year.

Sherpa is already well advanced on construction of its debut Flourish project, Flourish Amargo, located just around the corner from Soleira. Meanwhile, Flourish Oasis, positioned opposite Amargo, recently commenced construction and has nearly sold out its collection of 47 apartments.

[smartcode_project_cta:default project_id=150017]

Sherpa unveils $500m mixed-use Palm Beach precinct, Flourish Soleira

Are mortgage holders set to get a reprieve from the RBA in 2026?

Big Four bank NAB believes so. They are now expecting the next move from the RBA to be a cut, rather than a hike, which they had pencilled in for August. They are unsure of the timing of the cut however, they note in their latest&nbsp;NAB Economics RBA Watch.

NAB Chief Economist, Dr Sally Auld, said recent data suggests the economy has lost momentum and the outlook for rates has shifted, noting that the broader economic backdrop has changed since earlier in the year.

“The next move in the cash rate is likely to be down, but the timing is uncertain," Dr Auld said.

"In February, growth was above trend, the economy was operating above capacity and there was uncertainty over the restrictiveness of rates. None of these conditions exist today,” she outlined.

Dr Auld said recent data pointed to softer momentum across the economy while acknowledging that at the same time, uncertainty remains a key feature of the outlook.

“Both Q1 GDP data and the NAB business survey suggest momentum in the economy has slowed, meaning that growth has likely peaked for the cycle. That said, we are cognisant there is still considerable uncertainty around the outlook, both with respect to activity and inflation.”

Dr Auld said inflation risks and labour market outcomes would be important to watch.

“On the prices side, we are still forecasting above target core inflation through to mid-2027. Margins will compress and weaker labour market outcomes are a risk.”

She said tighter financial conditions are expected to weigh on housing and activity.

“Tighter financial conditions will be reflected in a slowing in house price growth and housing credit growth. In summary, we have greater conviction that the next move in rates is down, but less conviction on the timing.”

Jonathan Chancellor

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