Regional rents continued to outpace capital city rents over the fourth quarter of 2021 with regional dwellings rising 2.5% against the 1.6% rise in capital city rents, taking the annual regional rental growth rate to 12.1%.&nbsp;

Over a 10-year period regional house rents have increased 33.2% compared to 24.9% growth across the combined capitals.&nbsp;

The regional unit market has seen rents increase 41.4% in the past decade compared to capital city figures of 14.4%.&nbsp;

[smartcode_project:default project_id=106957 project_image_fid=184863]

Despite worsening affordability, houses continued to outperform unit rents over the December quarter, according to CoreLogic&rsquo;s quarterly Rental Review.

The national rental index increased 1.9% during the December quarter, a repeat of the September quarter.

CoreLogic&rsquo;s research director Tim Lawless said rents were under extraordinary pressure from many factors.

Lawless said the stronger rental conditions across the regional markets is a story involving both demand as well as supply, following a surge in regional population growth through the pandemic, especially across regional Victoria and regional NSW.

[smartcode_project:default project_id=5559 project_image_fid=88243]

&ldquo;While demand has risen we generally haven&rsquo;t seen much of a supply response. Australia&rsquo;s rental market is mostly reliant on private sector investors to provide rental housing,&rdquo; he says.

&ldquo;Investors as a proportion of total mortgage demand moved through record lows in early 2021, highlighting relatively low levels of investment activity across the country and also implying relatively low levels of new rental stock coming onto the market.&nbsp;

&ldquo;Arguably the regions have less elasticity in rental markets, meaning, when demand rises, supply is less responsive than capital cities where investors are generally more active.&rdquo;

Brisbane was the strongest performing rental market amongst the capitals over the quarter, rising 2.3%, followed by Canberra and Hobart, both rising 2.1%.&nbsp;

[smartcode_project:default project_id=102451 project_image_fid=186075]

Despite recording the strongest annual rental growth (15.2%), the Darwin rental market was the worst performing over the quarter, with rents rising 0.6% over the three months to December.

Canberra remains the most expensive capital city rental market, with typical dwellings renting for $651 per week, followed by Sydney ($604p/w), Darwin ($561p/w), Hobart ($521p/w) and Brisbane ($507p/w).&nbsp;

Adelaide remains Australia&rsquo;s most affordable capital with a median dwelling rent of $447 per week, followed by Melbourne at $456 per week.

Each capital city market posted a rise in rents over the December quarter for both houses and units.&nbsp;

Brisbane recorded the strongest quarterly increase in house rents of 2.7%, taking annual growth rates to 10.6%.&nbsp;

[smartcode_project:default project_id=102309 project_image_fid=163974]

Darwin house rents increased 0.6% during the quarter, however its growth in rents during the first half of 2021 resulted in the highest annual house growth figures of any capital at 15.0%.

&quot;As arguably the most COVID-impacted unit market in Australia, Melbourne&rsquo;s rental growth trends shifted in December, as units recorded the strongest rental growth in the country, up 1.6%,&quot; Lawless said.

Melbourne&rsquo;s rents remain 5.5% below the record highs of July 2019, however any recent momentum in unit rental growth could represent a recovery trend, underpinned by affordability constraints.

&ldquo;Brisbane&rsquo;s rental market for houses has shown strength throughout the pandemic as demand outweighed supply, while Melbourne&rsquo;s unit market has been weak through most of the pandemic to date due to low demand against relatively high vacancy rates,&rdquo; Mr Lawless says.

&ldquo;Melbourne&rsquo;s unit market is now benefitting from higher demand as more domestic renters seek out affordable housing options in the unit sector.&nbsp;

&quot;Demand for Melbourne unit rentals is likely to increase more sharply as foreign students and international visitors return.&rdquo;

Across the capital city markets, each city posted a rise in rents over the December quarter for both houses and units

jchancellor-FAypfDUnLy

Apartment rentals soar in regions: CoreLogic

Work is expected to resume later this year on the Nightcliff apartment complex Seabreeze in Darwin.

The project stopped construction in 2016 given the ailing Northern Territory economy and a downturn in the apartment market.

Sunbuild has reportedly lodged a reapplication permit for the site on the corner of Progress and Dick Ward drives.

Sunbuild owner Neil Sunners has begun the process of completing the five-storey, 92-apartment development.

About a third of the project had been completed, the NT News reported.

Sunners said it had taken until now for confidence in the economy to return.

“I believe the time is right in Darwin to get going again, as the economy is stronger than a few years ago and confidence is continuing to grow,” Sunners told the NT News.

He expects it will take about eight months to complete with works likely to begin around August.

The project was first mooted in 2009

Darwin, which is a small town and relies on big oil and mining projects, has seen a weak apartment market.

According to the latest data from real estate firm Raine & Horne, the number of properties hitting the market for sale in Darwin is about 75% higher than the capital city’s historical January average.

Glenn Grantham, at Raine & Horne, noted there had been a surge of vendors releasing their properties for sale in January, "after many recognised last year had been very good for capital growth.” 

In 2021, Darwin’s real estate values increased by almost 15%, its highest annual growth rate in many years.

"Many of the properties for sale are long-term rentals. 

“Given the transient nature of Darwin’s workforce, plenty of tenancy agreements end at this time of year and rather than seeking to find a new tenant, the owners are deciding to put the properties on the market for sale
.
“This decision makes plenty of sense as it is often more straightforward to show a vacant property to buyers than a home with a tenant.”

"Around 85% of buyers in Darwin are currently owner-occupiers seeking to a first home or to upgrade. 

"If there is a lease in place on a property, first home buyers and upgraders will look elsewhere.

“We’ve even seen an increase in off-market sales to tenants.

“These off-market sales not only take the tenant out of the rental market but also take the long-term investment properties out too.”

 “The silver lining is that a smaller pool of rental properties combined with strong tenant demand will push up investment yields in Darwin which is great news for investors.”

Sunbuild stopped construction at the site in 2016 

Seabreeze, Darwin apartment block set for 2022 construction restart

The main measure of inflation in Australia – the Consumer Price Index (CPI) – rose by 1.3 per cent in the December quarter.

It was higher than the industry wide economists' consensus of 1 per cent. 

The annual rate of the CPI rose from 3.0 per cent to 3.5 per cent.

The most significant price rises were for new dwelling purchase by owner-occupiers up, 4.2 per cent.

The new dwelling purchase component of the CPI captures the cost of adding to the housing stock – newly built dwellings and major renovations. It is measured as the price of a new dwelling, excluding the value of the land.

The CPI rise is against the backdrop during 2021 of construction being hit by a shortage of materials with global supply chain disruptions, combined with rising freight costs, along with rising labour costs at a time of high levels of building spurred by government incentives.

"Shortages of building supplies and labour, combined with continued strong demand for new dwellings, contributed to price increases for newly built houses, townhouses and apartments," says the ABS's head of prices statistics Michelle Marquardt.

Automotive fuel was up 6.6 per cent, along with furnishings/household equipment (up 3.6%) and health (up 3.3%).

The capital city weighted increase in rents was 0.1 per cent up for the quarter and 0.4 per cent for the year.
 
Rents fell again in Sydney and Melbourne, the fourth consecutive quarterly fall for Sydney, and the third consecutive quarterly fall for Melbourne.
 
The REIA noted rents across the other capital cities, in line with population trends, continued to rise.

The ‘underlying’ CPI or trimmed mean rose by 1 per cent in the quarter (consensus: +0.7 per cent) with the annual growth rate lifting from 2.1 per cent to a 7½-year high of 2.6 per cent.

It sits in the middle of the Reserve Bank’s 2-3 per cent target range, Craig James the Commsec cheif economist noted.

"Before the release of today’s December quarter figures, the Reserve Bank had expected annual underlying inflation to be now sitting at 2.25 per cent. 

"The RBA also “forecast (underlying inflation) to be around 2¼ per cent for much of the forecast period, increasing to around 2½ per cent by the end of 2023.” 

"The latest data showed underlying inflation at 2.6 per cent in the December quarter – above RBA forecasts.

"Inflation has exceeded Reserve Bank expectations for the past two quarters. 

"And that means there will be greater discussion about when the Reserve Bank may start lifting interest rates. 

"So far, the Reserve Bank has largely ruled out rate hikes until 2024 – or 2023 at the earliest," he noted.

"We will hear a lot more from the Reserve Bank next week. 

"The February Board meeting is held on Tuesday; the Reserve Bank Governor delivers a speech on Wednesday; and the Statement on Monetary Policy is issued on Friday."

James added the Reserve Bank won’t just look at inflation rates when deciding when to lift rates. 

"It will want to see the economy at or near ‘full employment’ (a jobless rate near 4 per cent or below)."

The jobless rate currently stands at a 13-year low of 4.2 per cent.

"The RBA will want to see wage growth near 3 per cent," he added.

The current annual growth rate of wages is 2.2 per cent, but with the job market tightening, there are more anecdotal reports that wages are starting to lift. 

The Commonwealth Bank Group economists believe that the job, wage and price metrics will be in place in the December quarter of the year for the Reserve Bank to start the ‘normalisation’ process of lifting interest rates. 

James says the path to normalisation may begin next week with the possibility that the RBA will end its bond buying program.

The main measure of inflation in Australia – the Consumer Price Index – rose by 1.3 per cent in the December quarter

New dwelling price inflation boosts CPI concerns

Japan&rsquo;s largest property developer Mitsui Fudosan has made its first foray into Australia by investing in Midtown MacPark, Frasers Property&rsquo;s urban renewal project on Sydney&rsquo;s North Shore.

The investment is in the $232 million MAC Residences apartment project, the first phase of the Midtown MacPark master-planned community in the Macquarie Park precinct.

It will have a mix of studio, one-, two- and three-bedroom apartments and penthouses.

Around 91 percent of the 24 storey MAC Residences has been sold from $459,500 to $1,800,000, with sales since late 2020.

[smartcode_project:default project_id=29969 project_image_fid=159035]

It is scheduled for completion in late 2023.

The Bates Smart-designed building is located on Herring Road and Epping Road.

MAC Residences is the first building in the $2.1 billion Midtown MacPark community to be developed in stages over the next 10 to 12 years.

Frasers Property is working with the NSW Government to deliver the $2.1 billion Midtown MacPark masterplanned mixed tenure community, which will integrate 3,300 apartments with a range of community facilities including a proposed school and childcare, a new central park, pocket parks and playgrounds, a community centre, pool and gym.

It will comprise 269 units located 550 metres from from the Macquarie University campus and metro station.

[smartcode_project:default project_id=29969 project_image_fid=159036]

Midtown MacPark will adjoin with Macquarie Exchange, a business park joint venture between Frasers and Winten Property Group.&nbsp;

Mitsui and Frasers partner on an integrated logistics park in Bangkok.

&ldquo;We&rsquo;re pleased to again partner with Mitsui Fudosan on the MAC Residences development at Midtown MacPark, where we&rsquo;re applying our place-making and community development expertise to create Sydney&rsquo;s next great urban neighbourhood,&rdquo; said Mark Gleeson, executive general manager of investment and capital transactions at Frasers Property Australia.

The Sydney venture is Mitsui&rsquo;s first investment after setting up its Australian office in 2019.

It is Mitsui’s first investment after setting up its Australian arm in 2019

Japanese developer invests in Fraser's Midtown MacPark apartment project

The latest REIV data calculated there was far less price escalation in the private treaty market than the red hot auction market.

Apartments sold at auctions during 2021 were up 9.6% to a $772,500 median price across Victoria.

But private treaty sale prices went up just 1% to $606,000, according to data from Real Estate Institute of Victoria’s December quarter report.

The median apartment price in regional Victoria saw 19.6 per cent annual price growth in 2021.

It took the median apartment price to $395,950.

The median house price in regional Victoria has was up 27 per cent reaching a record breaking $565,000 over the year.

“The data reflects the enduring attraction of regional Victoria as a lifestyle choice following two years of COVID-19 restrictions," REIV President Adam Docking said.

Metropolitan Melbourne unit prices jumped 7.1% to $680,000, while houses across the city rose 18.9% to $1,125,000.

The data shows apartments in outer Melbourne, achieved a $615,000 median price with an annual increase of 11.3 per cent.

Middle Melbourne apartments remain the pricier at $765,000 up 8.5% last year.

Apartments in inner Melbourne have experienced 4.8% price growth to a median price of $655,000.

Docking said he expects the market will soon begin to stabilise as some of the listing volume issues are addressed and buyers have more offerings.

But he suggested the impact, if any, of the Omicron surge on the real estate market is yet to be fully understood.

“Major factors influencing the residential real estate market continue to be low interest rates, lifestyle choices as more people work from home and pent-up demand after the series of lockdowns over 2020 and 2021.”


 

The REIV data suggested there was less price escalation in the private treaty market than the red hot auction market

Private treaty apartment market cheaper than redhot Victorian auction market: REIV

Ray White Surfers Paradise Group kicked off the 2022 auction season with 77 residential properties listed for auction at the 30th annual The Event on Sunday.

Around 57 were apartments put up for sale across the near seven hour auction.&nbsp;

&ldquo;This is a day when so many dreams come true for our sellers and buyers,&rdquo; Ray White Surfers Paradise Group auctioneer Andrew Bell said.&nbsp;

By mid-afternoon the preliminary auction clearance rate was 80 per cent of the residential and commercial properties.

But this trailed off with few of the final dozen offerings being sold.

&ldquo;The most satisfying thing for me is that most properties are selling well over their reserves,&quot; Mr Bell said.&nbsp;

&quot;We&rsquo;ve seen some strong bidding from the floor and online but it&#39;s mostly locals in the room bidding.

Mermaid Beach local Rod McIvor snapped up the first property on the order of sale, which was one of the cheapest of sales.

The telco technician secured 4/26 Holland Court, Broadbeach Waters for he and his daughter for $388,000.

The two bedroom ground floor apartment on a lowrise block last sold at $135,000 in 1999. It was offered as a deceased estate.

&ldquo;Honestly I am so happy to have picked up a property so close to everything for under $400,000, that&rsquo;s good buying,&rdquo; Mr McIvo said, who had been looking and saving up for more than six months.

&ldquo;The market is still very competitive. I&#39;ve been to a lot of open homes where there have already been 4-5 offers submitted. I am glad to have found our new home.&rdquo;

The deceased estate was marketed by Ray White Surfers Paradise agent Glen Williams who had four registered bidders.

Chevron Island locals Rhonda and Ron Emmett fought off nine other registered bidders to secure 2541/9 Ferny Ave, Surfers Paradise for $1.625 million, one the of dearest sales.

The 3 bed, 2.5 bathroom apartment on the 54th floor of the Circle on Cavill building last sold in 2018 at $1,225,000, and initially at $1.7 million in 2006.

&ldquo;We were attracted to Circle on Cavill for its facilities as we have already had a unit there up until a month ago when I sold it,&rdquo; Ms Emmett said.&nbsp;

&ldquo;We were only looking at properties that were central and where we could walk to the shops without needing the car. We didn&rsquo;t want any steps either.&rdquo;&nbsp;

Agent Henk Schreurs said the apartment had been sold by Sydney investors. The highest apartment sale was at $2.4m for 1352/23 Ferny Avenue, a 286sqm sub-penthouse in the Chevron Renaissance which sold through agent Jackson Paradise. 

The unsold apartments included a heritage listed apartment in Surfers Paradise.

The 4D 34 Hanlan Street offering saw a $100,000 opening bid with two bidders taking the bidding to $170,000 when it was passed in.

The apartment last sold at $155,000 in 2016.

The partly furnished one bedroom apartment has ocean views from the 4th floor of Kinkabool.

The 53sqm apartment is tenanted at $285 a week until May 2022.

Buyers were given a prospective rent appraisal of $300 to $350 a week.

The body corporate is $68 a week, plus council rates of $41 a week, and water rates of $20 a week.

The total sales figure was around $68m from 101 properties, with over two dozen sold before the auction.

There were 54% of bidders local and 46% interstate with 78% of the buyers being in room. There were over 600 registered bidders.

The lowest sale was a Surfers Paradise apartment at $336,000.

Around 57 apartments were put up for sale across the near seven hour auction. 

Gold Coast apartment auctions get underway in 2022

ANZ has cut rates on its basic variable home loan by 0.20 per cent.
 
The rate cuts are for new customers with deposits of over 20 per cent.

The biggest discount going to borrowers with deposits of 30 per cent or more.
 
The move comes after continued pressure on lenders to cut their lowest variable loans, as competition in the market drives these rates down, despite rising fixed rates.
 
The RateCity.com.au database shows that in the last three months, 65 lenders have cut at least one variable rate.
 
Most cuts have been to lenders’ ‘no frills’ variable loans and for new customers only, it noted.

The exception is Athena, which this week cut its lowest variable rates for new and existing customers.
 
"There are now significantly more variable rates under 2 per cent than fixed, with 72 variable rates under 2 per cent and just 42 fixed,"  RateCity.com.au research director, Sally Tindall, said.

"ANZ was trying to chase down its big four bank competitor Westpac.
 
“Fixed rates might be on the rise, but competition in the variable rate market is still alive and kicking,” she said.
 
“For months Westpac has had the lowest variable rate out of the big four. 

"ANZ has now thrown down the gauntlet in a bid to win new customers, matching Westpac’s lowest variable rate of 2.19 per cent.
 
“Variable rates are following a very different trajectory to fixed rates, at least for now. 

"There are 72 variable rates under 2 per cent, however, for most borrowers there’s a catch. The vast majority of these variable rate cuts are reserved for new customers, so anyone looking for a rock bottom rate will have to consider switching lenders, or at least haggle with their current bank.
 
“The one notable exception is low-cost lender Athena, which cut its variable rates this week, not just for new customers but for existing ones as well. That’s a rare act in the mortgage market, particularly when there’s been no move to the cash rate for over a year.
 
“We expect variable rates will continue to fall over the next couple of months, however, as we get closer to the next cash rate hike, some lenders could move ahead of the RBA, particularly if the cost of funding continues to soar,” she said.
 


The RateCity.com.au database shows that in the last three months, 65 lenders have cut at least one variable rate

Variable home loan rates still being cut for big deposit buyers

The longtime gap between house and unit profitability is narrowing, according to analysis of around 99,000 dwelling resales in the September 2021 quarter.

House resales continued to have a higher chance of nominal gain (95%) than units (86.5%), however the CoreLogic advised the gap had narrowed.

The trend was occuring “as affordability constraints limit growth in the detached house market and gradually deflect demand towards higher density housing options,” Ms Eliza Owen, the research head at CoreLogic advised.

"Profitability of residential real estate continued to be buoyed by low interest rates, and a fall in advertised stock through the period," she said.

Amid the 99,000 resales, some 92.4% recorded a nominal profit-making gain from the previous purchase price, up from 87.5% in the September 2020 quarter.

Hobart was the strongest performing unit market with some 99.5% of resales at a profit, better than the 97.5% for houses.

There was very little difference between the rate of profitability in regional NSW for houses and units, which was 97.7% and 97.1% respectively.

Victoria's regional unit sales saw a 97.4% profit success rate, compared to across Melbourne where sellers secured a profit amid 89.1% of their sales. The report noted this marked a larger increase from the previous quarter of 130 basis points for Melbourne.

Sydney sellers of units saw profits 92.9% of their sales in the September quarter.

Owen also advised the gap between profitability in the regions and capital cities widened through the September quarter. 

The portion of profit-making sales across the capital cities increased 10 basis points to 91.9% in the three months to September, while the rate of profit- making sales in regional Australia increased 90 basis points in the quarter, to 93.1%.

The median nominal gain made on resales nationally was $270,000, while median losses were at $37,000 in CoreLogic's quartery Pain & Gain report.

At the national level, the portion of profit-making sales increased across both houses and units. 

Units accounted for 26.9% of total resales through the period, but represented 59.2% of loss making resales. 

"However, the rate of profitability increased more rapidly in the unit segment," Owen said.

Units had a larger typical decline on loss-making resales at $40,000, compared to $32,000 across houses.

The lowest incidence of profit-making unit sales was across Darwin, where over half of unit resales made a nominal loss (55.8%). 

Perth, Brisbane and the ACT also saw a relatively large divide between profitability in houses and units.

Owen noted some of the key factors that have weighed on unit profitability relative to houses over the past few years included high levels of unit stock being developed relative to detached houses, and negative demand shocks to the investor market, where demand for units tends to be more concentrated. 

"However, in the past year some of these dynamics have shifted slightly. 

"ABS data shows unit construction activity has remained subdued through 2021 when compared with the house segment. 

"Between 2016 and 2020, Australia saw around 1.2 house completions for every unit completion nationally, which increased to 1.4 houses for each unit over the first two quarters of 2021. 

"The boom in house construction activity, which has been in part a response to owner- occupied incentives such as HomeBuilder, may ease the growth and profitability of houses in the next few years as they are completed," she said.

Owen suggested future quarters could see further narrowing between house and unit profitability.

The combined value of profit from resales in the September quarter totalled $27.3 billion, while resale losses totalled $368 million in the same period. 

Around 99,000 dwelling resales were analysed for the September quarter Pain & Gain report

Gap between house and unit profitability narrowing: CoreLogic

First home buyer numbers will likely drop in 2022 as many young Australians find themselves priced out of the hottest property market in decades, according to RateCity.com.au research director, Sally Tindall.

The forecast came after November saw the number of first home buyers rise.
 
After nine months of consecutive falls the number of first home buyer loans increased 1.9 per cent in November according to the ABS lending data.

But is still 28.5 per cent lower than the peak in January 2021.

The number of owner occupier first home buyer loan commitments sat at 11,622 buyers in November, down 17% on a year ago or down 2,442.
 
Owner occupier first home buyer loan commitments accounted for 29% of all owner occupier commitments (excluding refinancing).

“The number of first home buyers rose (in November) as NSW and Victoria came out of lockdown, but with average loan sizes ballooning, this is more likely to be a blip than a trend,” Tindall said.
 
“We expect first home buyer numbers will drop in 2022 as many young Australians find themselves priced out of the hottest property market in decades.
 
“Growth in property prices is starting to slow on the back of fixed rate rises and a crackdown by the regulator, but the opening up of borders this year will increase demand, keeping prices moving north.
 
“One X factor for first home buyers is the upcoming federal election. The government knows it has a housing affordability issue that needs to be addressed.
 
“To date, the government has only tackled this issue with piecemeal schemes. These band-aid measures might help some people into the market, but they do nothing to properly address housing affordability at its core,” she said.

The value of new loan commitments to owner occupied first home buyers rose to reach $5.38 billion in November. 

Canstar Group Executive, Financial Services, Steve Mickenbecker noted first home buyers were borrowing $56,000 or 13.7 percent more over the year.

After nine months of consecutive falls the number of first home buyer loans increased 1.9 per cent in November

2022 election promises could trigger boost in first home buyer activity 

Purchases by NSW owner occupiers came with mortgages sat at around $770,000, according to the latest lending data.

The national average mortgage size for owner-occupiers has reached a record high of $595,568 according to ABS data.
 
Records were broken in every state and territory except WA.
 
The national mortgage was up $92,404, an 18% hike over the year.

The November ABS Lending Indicators, released 14 January, advised the loans were for the purchase of new and existing dwellings. 

The national average mortgage size for owner-occupiers has reached a record high of $595,568 according to new ABS data out today.
 
Records were broken in every state and territory except WA, according to the ABS data in original terms.

Victorian home buyers saw the biggest jump in their mortgages, up 24% or $120,000 to $618,602.
 
Average new owner-occupier mortgage size, November 2021
 
Amount Year-on-year change
National 
$595,568 $92,404 18.4%
NSW
$769,459 $125,112 19.4%
Vic
$618,602 $120,032 24.1%
Qld
$513,649 $73,604 16.7%
WA
$439,578 $22,868 5.5%
SA
$421,801 $38,016 9.9%
ACT
$585,859 $58,434 11.1%
TAS
$445,915 $73,175 19.6%
NT
$433,333 $53,271 14%

"Demand for Aussie housing remains firm, but affordability has decreased because home prices have surged more than wages," Ryan Felsman, senior economist at CommSec noted.

“In November housing stock was high and the country’s two largest states were freshly out of lockdown, so it’s no surprise to see a rise in new lending," RateCity.com.au research director, Sally Tindall, said.

“Growth in property prices is starting to slow on the back of fixed rate rises and a crackdown by the regulator, but the opening up of borders this year will increase demand, keeping prices moving north," she forecast.

The data did not include refinancing, nor renovation loans.

Renovation loans surged by 18 per cent in November to a record $569 million. The value of lending for renovations is up by a massive 115 per cent on a year ago.

Canstar analysis showed Australian mortgage holders refinanced $15.72 billion worth of loans to a new lender in November 2021, down 2.3% from October. 

Lender records were broken in every state and territory except WA, according to the ABS data 

How home loan mortgages rose in 2021 to record levels

For most new apartment buildings, the Owners Corporation starts life with little more than a bank account and the first quarterly strata levies.

At <a href="https://www.apartments.com.au/buildings/9-gay-street-castle-hill-9-gay-street-castle-hill-nsw-2154">9 Gay Street</a> in <a href="https://www.apartments.com.au/developments/castle-hill-nsw-2154">Castle Hill</a>, it starts with around $7 million in reserve.

It's an unusual legacy of what was once one of Sydney's highest-profile apartment remediation projects. When the development, originally known as Skyview and built by disgraced developer Top Place, came under scrutiny by then NSW Building Commissioner David Chandler, an $11 million remediation bond was negotiated to ensure any building defects could be fully rectified.

The building underwent an 18-month remediation program, during which around $4 million of that bond was spent bringing the building up to the standard it should have been in from the outset.

After extensive inspections, all active rectification orders have been lifted. What's more, around $7.2 million remains secured for the Owners Corporation for the next 15 years.

In a twist few would have predicted, what began as a significant concern for purchasers has left the building with something almost unheard of in the apartment market: a multi-million-dollar financial reserve from day one.

[smartcode_project:default project_id=147685 project_image_fid=359136]

<a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a> Executive Chairman Greg Huxley said the structure offers buyers a level of certainty that is difficult to replicate.

"The $11 million bond established for the Skyview Castle Hill development represents exceptional value, providing genuine financial security for purchasers," Huxley said.

"Unlike a standard insurance policy, this bond consists of real funds held in trust for the Owners Corporation, offering a tangible layer of protection and added peace of mind."

The apartments themselves have been designed with a focus on practical, contemporary living. Interiors feature Smeg appliances, stone benchtops, tiled living areas, carpeted bedrooms, 2.7-metre ceilings, floor-to-ceiling glazing, and ducted heating and cooling throughout.

Residents also have access to a range of shared amenities, including two rooftop barbecue areas, a swimming pool, children's playgrounds, secure building access, storage cages, and visitor parking.

The location continues to be one of the project's strongest drawcards. Castle Hill Metro Station sits virtually on the doorstep, providing direct connections across Sydney's expanding Metro network, while Castle Towers offers extensive retail, dining, entertainment, and service amenities within walking distance.

[smartcode_project:default project_id=147685 project_image_fid=359127]

The building, now named after its location at 9 Gay Street, comprises a diverse mix of one-, two-, and three-bedroom apartments starting from just under $600,000.

Equitifund National Sales Director Ben Hamblett said demand in the Hills District continues to be driven by buyers seeking convenience and connectivity.

"Interest from both owner-occupiers and investors in Castle Hill remains exceptionally strong, with buyers consistently prioritising developments in close proximity to the Metro station and Castle Towers Shopping Centre," Hamblett said.

"There is a clear trend in the market, with purchasers seeking convenient access to transport and lifestyle amenities that support a seamless, low-maintenance way of living."

On top of the long-term protection afforded by the remaining $7.2 million bond, Equitifund is offering a limited-time stamp duty rebate on selected apartments.

Eligible purchasers can also secure finance options, including a 3.99 per cent two-year variable rate, loan-to-value ratios of up to 90 per cent, and interest-only lending options through EquitiCredit.

[smartcode_project_cta:default project_id=147685]

Joel Robinson

Why this Castle Hill apartment building starts with a $7 million advantage

For much of the past few years, conversations about Australia's property market have centred on the rapid growth seen in Sydney, Brisbane, Gold Coast, and Perth. <a href="https://www.apartments.com.au/developments/melbourne-vic-3004">Melbourne</a> has followed a different trajectory.

That relative underperformance is now encouraging some buyers to reassess the city, particularly those willing to look beyond short-term market movements and focus on quality property in established locations, along with the long-term growth prospects of a city expected to overtake Sydney as Australia’s most populous.

John Bekiaris, Research &amp; Market Insights at <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Projects by Equitifund</a>, said Melbourne's current position is attracting increasingly sophisticated purchasers.

"Melbourne continues to present one of Australia's strongest long-term investment stories," Bekiaris says.

"While other capital cities have experienced stronger recent growth, that relative underperformance is exactly what's attracting sophisticated counter-cyclical investors."

[smartcode_project:default project_id=1979 project_image_fid=363268]

Equitifund isn't just commenting on Melbourne's property market, it's investing in it.

The Sydney-headquartered capital partner has taken over the remaining apartments at <a href="https://www.apartments.com.au/buildings/victoriana-melbourne-20-queens-road-melbourne-vic-3004">Victoriana</a>, the recently completed glass-encased development opposite Albert Park Lake in Melbourne's tightly held St Kilda Road precinct.

Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> and built by <a href="https://www.apartments.com.au/builders/hickory">Hickory</a>, Victoriana places residents between one of Melbourne's most recognised parklands and the CBD, offering oversized two and three-bedroom apartments aimed at owner-occupiers seeking a genuine alternative to a traditional family home.

The development comprises 232 completed residences alongside a suite of resident amenities, including a 25-metre indoor swimming pool, gymnasium, landscaped entertaining areas, resident lounges, EV charging, secure basement parking and a concierge-style arrival experience.

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The apartments have been designed with owner-occupiers firmly in mind.&nbsp;Open-plan living and dining areas flow onto generous balconies framing views across Albert Park Lake, Fawkner Park, the Royal Botanic Gardens and the Melbourne skyline.

Kitchens feature Gaggenau appliances, stone benchtops and generous preparation space. Bedrooms include built-in robes, while bathrooms feature full-height textured tiling. Hardwood flooring and ducted air conditioning complete residences designed for long-term living.

Rothelowman's architecture takes its cues from the landscape opposite the site. Sweeping horizontal glazing references the movement of Albert Park Lake, while generous balconies and expansive glazing strengthen the connection between the apartments and the surrounding parklands. The result is a building designed to deliver the scale and amenity expected of luxury apartment living, while offering the larger floorplans increasingly sought by owner-occupiers.

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The location is one of Victoriana's defining characteristics. Positioned on Queens Road, residents are directly opposite Albert Park Lake and within easy reach of Fawkner Park, the Royal Botanic Gardens, South Melbourne, St Kilda Road and the CBD. With few comparable development opportunities remaining in the precinct, buyers are increasingly placing value on outlooks that are unlikely to be interrupted by future construction.

Greg Huxley, Founder of Equitifund, believes those qualities become even more valuable over time.

"Premium real estate has always rewarded buyers who take a long-term view," Huxley said.

"Victoriana represents the kind of asset that's increasingly difficult to recreate today, particularly in an established location like Queens Road."

He said rising construction costs are also changing the way buyers assess completed developments.

"When you combine an irreplaceable location with thoughtful architecture and premium finishes, you create something that becomes increasingly difficult to reproduce as construction costs continue to rise."

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According to National Sales Director Ben Hamblett, enquiry has been driven largely by Melbourne downsizers and buyers upgrading from smaller apartments.

"Interest in Victoriana continues to build, with strong buyer focus on the larger owner-occupier residences within the development," Hamblett says.

"Enquiry is increasingly driven by local buyers who recognise the rarity of what's on offer: park-facing apartments in an established neighbourhood where new development opportunities are becoming increasingly scarce. At Victoriana, the view is not just a feature; it's an appreciating asset in its own right."

He said interstate enquiry has also strengthened as buyers reassess Melbourne's position within the national property cycle.

"Melbourne currently stands as the most compelling entry point of any major Australian capital, and discerning buyers are beginning to recognise what those who move early always understand: the best opportunities are taken before the price rise confirms them."

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Why now is the time to buy in Melbourne's premium apartment market

Developers and apartment buyers have a narrowing window of opportunity before Brisbane's Olympic infrastructure pipeline begins competing directly with residential construction, pushing up costs, tightening labour supply and making new projects increasingly difficult to deliver.

While Brisbane's apartment market continues to benefit from strong population growth and limited housing supply, industry research suggests the years leading up to 2027 could prove to be the most important period for developers looking to secure builders and buyers hoping to purchase before the next wave of price increases.

A new Colliers report, Brisbane 2032 Olympic and Paralympic Games: Creating Solutions, highlights the scale of the challenge. While thousands of new homes are planned across South East Queensland, the Brisbane Olympic Athletes Village alone will deliver more than 10,500 beds during the Games before being converted into around 1,750 to 2,000 apartments. Equivalent to almost two years of typical inner-city apartment supply, the project will also absorb a significant share of the construction workforce and building materials.

The broader construction pipeline paints an even clearer picture.

Construction Skills Queensland's Horizon 2032 report forecasts Queensland's annual construction pipeline will average $69 billion over the coming years before peaking at $75 billion in 2027-28. Demand for construction workers is expected to increase by 17 per cent to almost 150,000 people, with the industry facing an annual shortfall of around 19,000 workers that could blow out to as many as 35,000 during the peak construction period.

The Olympic venues, athletes village and supporting infrastructure will account for billions of dollars worth of work across South East Queensland through to 2032, creating intense competition for labour at a time when Australia's residential construction sector is already under pressure.

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Colliers Queensland Residential Director Andrew Scriven said the convergence of these projects is creating a clear window of opportunity for both developers and buyers.

"From 2027 onwards, the market will shift dramatically," Scriven said.

"Labour will increasingly be locked into government-led infrastructure and Olympic projects, which means private residential developments will face higher costs and tighter margins. The developers who move now are the ones most likely to get projects off the ground."

Scriven said the same dynamic would also affect buyers, with fewer apartment projects expected to launch once construction capacity tightens.

"If you're looking to change your lifestyle over the next five years, now is your window of opportunity to buy."

[smartcode_project:default project_id=150713 project_image_fid=373827]

Developers are already positioning themselves ahead of that window.

Following the success of Monarch at Toowong, Consolidated Properties is preparing to launch two new Brisbane apartment projects in the second half of 2026. They include <a href="https://www.apartments.com.au/new-apartments/gloriette-30-bedivere-street-yeerongpilly-qld-4105">Gloriette</a> at Yeerongpilly Green, a 25-storey tower within one of Brisbane's key Olympic precincts, and <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, a recently approved 25-storey riverfront development at 47 Skyring Terrace in Newstead.

Hutchinson Builders will deliver both projects, with early works already underway at Yeerongpilly and Newstead expected to commence later this year.

The timing comes as Brisbane's fundamentals continue to strengthen, with strong interstate migration, population growth and vacancy rates remaining below 1.5 per cent.

Colliers Queensland researcher Pragya Sharma said Greater Brisbane is forecast to require around 40,000 new apartments between 2021 and 2031.

"There's a real mismatch emerging between when housing is needed and when it will be feasible to build," Sharma said.

"As a result, the period leading up to 2027 presents a key window of opportunity for developers to secure approvals, funding and construction capacity, while buyers will have greater choice before supply constraints intensify."

Colliers research outlines a critical pre-2027 window to start residential projects before labour squeeze: now is the time to buy

Developers, buyers on watch in South East Queensland ahead of construction crunch: Colliers

It's taken less than nine months for developer Sherpa Property Group to sell out all 51 apartments in its <a href="https://www.apartments.com.au/new-apartments/flourish-oasis-palm-beach-7-9-sixth-avenue-palm-beach-qld-4221">Flourish Oasis</a> development in <a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a>, over a year before its anticipated completion.

&nbsp;

Located at 7-9 Sixth Avenue, the $67 million development has resonated strongly with both local owner-occupiers and downsizers seeking high-quality apartments within walking distance of the beach, dining precincts and everyday amenities.

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Christie Leet, Founder of <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Group</a>, said the sell-out reflected both the strength of the Palm Beach market and the success of Sherpa's community-first approach to development.

"The sell-out of Oasis is a fantastic outcome and reinforces the strong demand we're seeing for thoughtfully designed apartments in lifestyle locations," Leet said.

"From the outset, our vision was to create a development that genuinely enhanced the Palm Beach community while providing residents with exceptional homes and wellness-focused amenities.

"We've been incredibly encouraged by the level of local support throughout the campaign, 72.5 per cent of buyers are locals, with a significant proportion of purchasers choosing Oasis as their future home rather than an investment."

[smartcode_project:default project_id=151449 project_image_fid=357463]

Construction is now progressing following development approval, with trusted builder LPS Group delivering the project and completion anticipated in Q3 2027.

Oasis forms part of Sherpa Group's successful Flourish collection, which has become recognised for its focus on wellness, community and elevated coastal living.

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Residents will have private access to a rooftop amenity space featuring a pool, gym, sauna, steam room, hot and cold plunge pools, spa and barbecue facilities.

"The success of Oasis demonstrates that buyers continue to prioritise quality, location and lifestyle," Leet said.

"We are proud to have delivered a project that has resonated so strongly with the market and look forward to bringing Oasis to life for our future residents."

Sherpa recently launched <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a>, its third instalment of the Flourish brand in Palm Beach following Flourish Oasis and <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>.

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Sherpa sells out Flourish Oasis in booming Palm Beach

Urban Property Group's <a href="https://www.apartments.com.au/new-apartments/la-vera-macquarie-park-94-talavera-road-macquarie-park-nsw-2113">La Vera</a> is leading the next phase of Macquarie Park's residential evolution, with the new apartment development set to become the first of several new apartment projects in the precinct to complete.

The 169-apartment building has now topped out ahead of its scheduled completion in the third quarter of 2026, as new residential investment continues to reshape one of Sydney's largest employment hubs into a true mixed-use precinct.

[smartcode_project:default project_id=134951 project_image_fid=368645]

Cox Architecture has designed La Vera to capture the best of its unique positioning on Talavera Road, orienting the building towards Lane Cove National Park.&nbsp;The building features a sculpted northern façade with flowing curves inspired by the surrounding landscape, while its city-facing elevation adopts a more structured architectural expression to maximise skyline views.

"The vision for the project was to conceive a building that adopted an organic and curvilinear form to the northern portion that faces the Lane Cove National Park," <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a> Director Felipe Miranda said.

"The residents that reside in the northern portion of the building benefit by having beautifully crafted curved balconies that speak to the natural context and heighten the relationship of their internal living spaces to the external balconies."

[smartcode_project:default project_id=134951 project_image_fid=358802]

La Vera offers a diverse mix of one, two, three, and four-bedroom configurations, with prices currently starting from $740,000. Buyers so far have been a mix of Sydney-based investors,&nbsp;metro commuters, owner-occupiers and downsizers from surrounding North Shore suburbs.

Both investors and owner-occupiers have been drawn to La Vera's proximity to Macquarie University, Macquarie University Hospital, Macquarie Centre and the Sydney Metro, infrastructure that supports both strong rental demand and a convenient lifestyle for residents.

The apartments feature full-height glazing, timber flooring throughout living areas, stone kitchen benchtops, SMEG appliances, floor-to-ceiling bathroom tiling and ducted air conditioning.

Residents will have access to a rooftop recreation level featuring a swimming pool, sauna, barbecue facilities and landscaped relaxation areas, complemented by additional communal space at ground level. Many apartments enjoy uninterrupted views across Lane Cove National Park, reinforcing the project's connection to its natural setting.

[smartcode_project:default project_id=134951 project_image_fid=364551]

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a>, a family-owned developer and builder with nearly four decades of experience, holds a 4.5-star iCIRT rating and was Australia's first developer to introduce 10-Year Latent Defects Insurance (LDI). La Vera is the first apartment development in <a href="https://www.apartments.com.au/developments/macquarie-park-nsw-2113">Macquarie Park</a> approved to offer the additional insurance protection, alongside a five-year warranty on SMEG appliances.

Urban Property Group CEO Patrick Elias said the additional protection reflects changing buyer expectations in the off the plan market.

"Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been. Having LDI is a tool to portray the confidence that we have in our product, and a confidence we want buyers to share," Elias said.

Following completion of the building later this year, buyers will move into their apartments well before Christmas.

[smartcode_project_cta:default project_id=134951]

Jonathan Chancellor

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