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The “wide gulf” that exists between prices and rents suggests that housing in Australia is overvalued, argues Deakin University researcher and housing bubble proponent Philip Soos.
Soos points to RP Data’s most recent Buy vs Rent, which he says shows that unless you’re willing to buy in remote or unattractive locations, it’s cheaper to rent then own property.
The RP Data report found that out of 5,230 suburbs, there are 388 suburbs that are cheaper to buy than rent based on a standard principle and interest home loan. This rises to 1,031 suburbs if borrowers are willing to pay an extra $50 a week in mortgage repayments.
While a more realistic study would factor in costs such as "maintenance, council rates, water and sewerage, land tax, body corporate levies, stamp duty, and legal and conveyancing fees"  Soos says it does provide some evidence to suggest a "confirmation of overvaluation in the residential real estate sector, that is, the market price of property is significantly greater than future rents capitalised”
As further evidence of this claim, he points to the rising <a target="_blank" href="https://www.businessspectator.com.au/bs.nsf/0bd6ea4d7e0e401eca257300000473fc/dbccae23bff9983eca257b03007e58e6/bodyrich/0.1218!OpenElement&amp;FieldElemFormat=gif">ratio of real house prices to rents</a> which have increased by 64% from trough to peak (1997-2007) with some moderation recently due to falling housing prices and rising rents in the last two years.
Currently the ratio is about 160% (house prices to rents) and Soos says it serves as one of many indicators to determine possible overvaluation in the real estate sector.
“It comprises a valuable metric and thus should not be ignored,” he says.
According to Soos, this divergence between house prices and rents suggests “confirmation of overvaluation in the residential real estate sector, that is, the market price of property is significantly greater than future rents capitalised”.
Furthermore, he says it indicates the Australian property market is not operating in an efficient manner.
“Conventional economic theory stipulates that, in an efficient property market, the all-in risk and tax-adjusted cost of purchasing a property should equal the cost of renting it,” writes Soos in a column for Business Spectator.
“If buying is dearer than renting, then supposedly rational individuals will change their preference by selling, taking the profit, and renting, driving down housing prices until the cost of buying equals the cost of renting,” he says.
Soos says what is driving up the difference between house prices and rents is “debt-financed speculation”.
While rents are determined by wages and what tenants can afford to pay, capital values are driven by banks willingness to provide finance to home owners and investors “limited only by lending regulations (if banks choose to observe them) and borrowers’ ability to service the mortgage repayments”.
 
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Disconnect between rents and house prices suggests housing is overvalued: Philip Soos

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The Real Estate Institute of the ACT  (REIACT) president Michael Kumm has played down concerns about the impact of public sector job cuts on the Canberra property market.
Kunn, a 34 year veteran of the Canberra real estate market, expects that whoever wins power on September 14 will shrink the size of the civil service, but says this will be more than compensated by the large numbers of servants due to retire in the next five years.
“Around 20% of those working in the public service are due to retire over the next five years," he tells Property Observer.
“The Liberals are talking about a 12% reduction in the public service - and through natural attrition - meaning they will have to hire an additional 8% to make up the shortfall.
“The reality is that it’s not as bad as people think.”
Another positive factor he says is that whereas in years past, those that retired from the public sector would move out of Canberra, now those that retire are choosing to stay in the federal capital.
Kumm has been involved in selling Canberra real estate through more than a dozen federal elections and says that John Howard’s election win in 1996 and subsequent culling of public sector jobs, had the biggest impact on the property market over these years.
“House prices went back to 1992 prices and only started recovering when we got the Sydney Olympics and money was being thrown everywhere.
“Then between 2000 and 2010 Canberra property prices boomed; there was double digit growth every year.”
Since 2010 prices have been trending downwards.
However, according to Kumm, the public servants that John Howard sacked in 1996 that had the last laugh, using their redundancy packages to pay off their mortgages before later returning to the public service as consultants and earning bigger salaries.
This year, he says its “business as usual” for the property market.
“This year it’s very price competitive, there is plenty of interest around, and things are looking pretty good.”
Property analysts expect the <a href="https://www.propertyobserver.com.au/australian-capital-territory/canberra-property-market-likely-to-tread-water-in-election-year-but-not-without-uncertainty/2013020159081" target="_blank">Canberra housing market to tread water in the election year.</a>
 
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Concerns over public sector job losses on Canberra property market overplayed: REIACT president

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The surprise announcement by prime minister Julia Gillard this week of a September 14 federal election, setting the scene for a seven-month election campaign, has thrown the spotlight on the Canberra property market more than in previous election years.
Before the announcement, real estate agents were talking about a two- or three-month lull in property transactions, but they now face a much longer period of uncertainty with the prospect that should Tony Abbott triumph, more public servant jobs will go and spending will be reined in.
Answering questions at the National Press Club yesterday, Abbott promised there would not be Max "the Axe” Moore-Wilton style bloodletting, but did hint that jobs would go while a Budget surplus may also be back on the agenda.
Should Labor be re-elected, its abandoning of its budget surplus promise is expected to have less of an impact on the public sector job market, which augers better prospects for the Canberra housing market, heavily dependent on well-paid public servants being able to afford what is the second most expensive capital city housing market after Sydney.
Around one in four residents in Canberra are directly employed by the civil service according to census 2011 and many more in industries that service the public sector.
Certainly anybody working in the Department of Climate Change and Energy Efficiency won’t be signing any new off-the-plan contracts or applying for home loans between now and September.
Paul Powderly, ACT state chief executive at Colliers, says the concern, once the election was called this week, was that there would also be an early caretaker period announced – a period when departments can no longer lobby for fresh funding – but this won’t kick in until August.
While rhetoric from politicians about saving money and cutting jobs will be a factor, Powderly says the residential market is already supported by an overall improvement in confidence about the housing market and low interest rates.
“Prices are down and rates are at an all-time low, so people think they should get on the property wagon,” he says.
“We are seeing increased inquiry and activity at the moment, and while there will now be some caution from buyers we don’t expect a massive drop-off in activity.”
Powderly expects  a fair bit of activity in residential markets post-election, but does not expect the market to really take off again until the end of the year or early next year.
On the commercial front, he says people won’t be rushing into new commercial leases, but that things will pick up after the election.
Australian Property Monitors (APM) senior economist Andrew Wilson is also fairly optimistic about the prospects for the Canberra housing market and does not expect the election to have a significant effect, though he does have some concerns.
But he remains confident of his expectation that Canberra house prices will reach record levels in 2013 - currently just 1% off previous peaks.
APM recorded a 0.7% rise in Canberra house price over 2012, with a strong finish to the year as prices rose 2.1% over the December quarter to a median of $566,000. Unit prices rose 3.8% over the December quarter to finish the year almost where they began at $415,000.
RP Data figures released to the end of January suggest this good finish spilled into the first month of 2013 with Canberra house prices up 1.4% and units up 2.5%
Wilson tells Property Observer the fundamentals of the Canberra housing market remain sound.
“There is an underlying shortage of accommodation which keeps demand ticking over, there are low rates and always stiff competition for property, “he says.
The concern though is unemployment, which trended upwards last year and has risen to around 4%
“We need to keep an eye of public service employment, levels, which can be a dampener on activity."
In this regard, a Labor win would be better news for the Canberra property market.
Wilson says Labor no longer being wedded to a budget surplus means that monetary and fiscal policy can start working the same direction.
However, a Liberal victory and a tightening of the public purse could spell further job cuts and do to Canberra what fiscal consolidation in Queensland (and thousands of public servant job cuts) have done to the Brisbane housing market.
“The Liberals are still talking about a budget surplus, which could play on the minds of voters,” says Wilson.
One market that may be impacted by the election is the new apartment market, which according to Colliers International is already plateauing and heading towards a situation of oversupply.
Houses predominate in Canberra, accounting for about three-quarters of the housing stock, but the apartment market is on the rise.
According to the census 2011, just under a quarter of dwellings (23%) in Canberra are apartments or townhouses, this compares with about 18% of dwellings five years ago.
Apartment projects require a certain level of pre-sales to receive financing so those that have achieved enough off-the-plan sales up to now will go ahead but others will likely be placed on hold until after the election.
Ariel Pollard, director of research at Colliers International, says there are seven projects comprising 673 apartments which are yet to commence.
“They are 44% sold and will be under threat of not going ahead if pre-sales for these projects are not met and further developments are taken to market”, she says.
But projects that have been completed or under construction are selling well with 91% and 86% sales rate respectively.
Despite a slowdown in the market, Colliers International says about 559 apartments were sold in the past six months with 76% located in the inner North.
The inner north comprises 14 suburbs and spans an area from the northern foreshores of Lake Burley Griffin, around to the ridges of Black Mountain, Mount Ainslie and Mount Majura.
The total number of apartments in the inner north increased 6% to 1,972 over the final six months of 2012.
Canberra photo by Michael Renner courtesy of <a target="_blank" href="https://www.flickr.com/">Flickr</a>.
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Canberra property market likely to tread water in election year, but not without uncertainty

<html><body>Leading Sydney estate agent ?John McGrath<a href="https://www.facebook.com/public/John-McGrath" target="_blank"> has listed on his Facebook page</a> the 10 reasons why he believes the residential market will be 5% to 10% higher by the end of 2013.   1. The Australian share market is recovering quickly, and this will generate (and replenish) great wealth for many Australians.  2. China is on the surge with an 8% anticipated growth rate this year (and beyond), and we will benefit more than any other country.  3. We have record low interest rates, with existing and new borrowers reaping the benefits making property more affordable. 4. We have a nationwide housing shortage and will for some time, so demand will outstrip supply in an improving sellers market. 5. Cash and term deposits are becoming far less attractive, and many people will see the time is right to switch from cash into growth assets.  6. Rents will continue to climb in the face of the housing shortage providing investors increasing yields over the next few years.  7. Self-managed super funds (SMSF) investing directly in residential property is the biggest change I’ve seen in the last 12 months 8. Luxury homes are back by 20%-40% in value and will provide great buying for the recovering professional market buyers (read <a href="/news">Palm Beach</a> weekenders are about to become mega popular again!).  9. Most experts are tipping a landslide change in federal government, which will give great confidence to the business community. 10. As all the above happens in our connected community we’ll see a surge of confidence and FOMO (fear of missing out), which will stimulate continued investment over the next three- to five-year cycle.</body></html>

The 10 reasons why Australian property prices will rise 5% to 10% in 2013: John McGrath

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The majority of borrowers (55%) expect the RBA to leave the cash rate unchanged at 3% at its monetary policy meeting on Tuesday (February 5).
But demonstrating perhaps confusion among homeowners about the future direction of interest rates, a large proportion (44%) expects the RBA to lower rates to record lows.
These were the findings of an online survey of 452 respondents carried out by mortgage broker Loan Market, who asked the question ‘What action do you think the RBA is going to take at its February meeting?’
Loan Market survey results:
<ul>
<li>Lower rates 25 bps                            35%</li>
<li>Lower rates 50 bps                             9%</li>
<li>Raise rates 25 bps                              1%</li>
<li>Leave rates unchanged                     55%</li>
</ul>
Nearly one in ten borrowers are hopeful of an unlikely 50 basis point rate cut, which would take the cash rate to an all-time record low of 2.5%
“It’s very likely the RBA will apply the same wait-and-see approach, it demonstrated throughout 2012 at its meeting next week,” says Loan spokesman Paul Smith
“Most economic indicators are within targeted ranges and it appears home owners aren’t convinced the RBA has enough evidence to lower interest rates,”
“The December rate cut certainly did help inject some confidence into areas of the economy and help spending and consumption over the holiday period. But like most interest rate movements, it takes time to assess the full impact as more data becomes available,” he says.
Smith says that these results could indicate that households do not expect the economy to grow on the heels of RBA rate cuts alone.
“Households have seen four rate cuts in the past year yet housing finance remains flat and sentiment remains quite cautious. If the government is looking to promote confidence in the economy it should look to ease concerns about the two-speed economy or home building,” he says.
 
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Majority of borrowers expect rates to remain on hold this week: survey

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Brisbane was the top performing mainland property market over January with property values up 2% to a median of $432,250, according to RP Data-Rismark.
Brisbane house values lifted 1.8% to a median of $450,000 and unit values rose 4.4% to a median of $350,500 - welcome news for Brisbane apartment investors.
Nationally, dwelling values across the eight capital cites gained 1.2% over the month to a median of $480,000 following a small drop in values in December (-0.3%) and no change in November. 
The result means that property values are now 1.8% up on annual basis. 
Since bottoming out in May last year, property values are up now up 3.1%. 
RP Data research director, Tim Lawless, says housing market conditions have started the year on a strong footing. 
“These strong January results are likely to have seen some upwards seasonal bias, however the housing market has been on a clear recovery trend since June last year. 
“Capital gains aren't likely to remain this high over the coming months, however we are likely to see the recovery trend continue through 2013.” 
“Despite the improving market conditions in January, dwelling values across the combined capital cities remain 4.6% below their 2010 peak. 
“The latest housing market data adds weight to the argument that interest rates may be at the bottom of the cycle. The Reserve Bank will be watching the performance of the housing market closely, and the positive trend in housing values will dampen calls for further interest rate cuts,” he says. 
Apart from Darwin, where the market corrected by 2.2% over January to a median of $525,000 (and is still up 8.7% year-on-year, all capital city markets recorded gains over the month. 
The other strong performing markets were Sydney, which posted gains of 1.8% to a median of $576,500 and Perth, where prices rose 1.7% to a median of $480,000.
Melbourne was the poorest performing market with prices up just 0.2% with RP Data saying that conditions remain “relatively subdued”. 
Melbourne is the only capital city housing market where values are still down year-on-year – having fallen 0.4% over the past 12 months. 
Among the smaller capital city markets, there was some good news for Hobart investors and homeowners with values up 4.5% over January and 5.3% over the quarter a median of $315,000. 
Hobart still remains the most affordable capital city market well ahead of Adelaide, where house prices rose 0.4% to $381,750. 
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Brisbane, Perth and Sydney lead 1.2% gain in property values in January: RP Data

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Mortgages lending remained at record lows over December while the major banks increased their market dominance over non-bank lenders, according to the latest RBA figures.
Housing credit advanced by banks and non-banks increased by 0.3% over December, following an increase of 0.4% over November.
Over the year to December, housing credit rose by 4.5% the slowest annual pace of mortgage lending growth for RBA data going back to 1976.
The slow growth suggests it’s not just a case of borrowers paying down their mortgages and other debts but that banks and non-banks are reluctant to lend.
“If growth in lending is strong then it suggests that credit from financial institutions is freely available, underlying demand for assets such as cars and houses is firm and that the price of credit (interest rates) is attractive,” says Savanth Sebastian, economist at CommSec.
Sebastian says little growth in property prices is one of the factors holding back borrowers from taking on fresh debt.
"The main factor underpinning the conservative approach to lending is weak growth in asset prices, especially property. Clearly you are likely to be less willing to take on a large debt load if the price in the underlying asset is barely growing, or in some cases, going backwards," Sebastian says.
Total credit provided to the private sector by financial intermediaries rose by 0.4% over December 2012, after remaining unchanged over November. Over the year to December, total credit rose by 3.6%.
Other personal credit (credit cards, personal loans) increased by 0.2% over December to be up just 0.3% over 2012 while business credit increased by 0.7% over December to be up 2.8% for the year.
Commonwealth Bank economist Diana Mousina said the figures indicate household borrowing restraint, low business appetite for debt; and deposit growth stronger than credit growth.
“The trend of sluggish credit growth reflects competing factors. Household and business balance sheets are in relatively good health and the household savings ratio is around 11%. Under normal circumstances strong balance sheets and low interest rates create a favourable environment for credit growth. However, business and consumer sentiment are subdued due to uncertainty about the outlook. This acts as a drag on credit growth,” she says.
The figures also show that non-bank lenders continue to lose ground to the banking sector.
Banks added $9.4 billion to their collective mortgage books over December, which now stand at $1, 771.5 billion ($1.77 trillion) while non-bank loan books shrunk by $2.8 billion to $151.3 billion.
Proportionally, banks have 92% of the lending market and non-banks 8%.
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Mortgage growth remains at record lows as non-banks lose market share: RBA

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The release of December data from Residex appears to confirm that Melbourne house prices probably went nowhere in 2012.
Residex reports a 1.5% rebound in Melbourne house prices in the final quarter of the year, but with house prices still down 1.4% over the year with a median value $566,000.
Unit prices dropped 1.4% over the quarter to end the year down 4.3%, with a median price of $427,000.
The Residex figures means that two data providers – Residex and RP Data – have Melbourne house prices down over 2012, while two – the Real Estate Institute of Victoria (REIV) and Australian Property Monitors (APM) have them up.
Melbourne houses
<table cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td colspan="4" width="491" valign="top">
House price changes
</td>
</tr>
<tr>
<td width="133" valign="top">
 
</td>
<td width="114" valign="top">
Quarter
</td>
<td width="134" valign="top">
2012
</td>
<td width="110" valign="top">
Median
</td>
</tr>
<tr>
<td width="133" valign="top">
RP Data
</td>
<td width="114" valign="top">
-1.5%
</td>
<td width="134" valign="top">
-2.9%
</td>
<td width="110" valign="top">
$550,000
</td>
</tr>
<tr>
<td width="133" valign="top">
APM
</td>
<td width="114" valign="top">
+2.4%
</td>
<td width="134" valign="top">
+0.5%
</td>
<td width="110" valign="top">
$526,000
</td>
</tr>
<tr>
<td width="133" valign="top">
REIV
</td>
<td width="114" valign="top">
+7.8%
</td>
<td width="134" valign="top">
+4.7%*
</td>
<td width="110" valign="top">
$555,000
</td>
</tr>
<tr>
<td width="133" valign="top">
Residex
</td>
<td width="114" valign="top">
+1.54%
</td>
<td width="134" valign="top">
-1.41%
</td>
<td width="110" valign="top">
$566,000
</td>
</tr>
</tbody></table>
Melbourne units
<table cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td colspan="4" width="491" valign="top">
Unit price changes
</td>
</tr>
<tr>
<td width="133" valign="top">
 
</td>
<td width="114" valign="top">
Quarter
</td>
<td width="134" valign="top">
2012
</td>
<td width="110" valign="top">
Median
</td>
</tr>
<tr>
<td width="133" valign="top">
RP Data
</td>
<td width="114" valign="top">
-2.7%
</td>
<td width="134" valign="top">
-2.5%
</td>
<td width="110" valign="top">
$435,000
</td>
</tr>
<tr>
<td width="133" valign="top">
APM
</td>
<td width="114" valign="top">
+1%
</td>
<td width="134" valign="top">
+2.2%
</td>
<td width="110" valign="top">
$391,000
</td>
</tr>
<tr>
<td width="133" valign="top">
REIV
</td>
<td width="114" valign="top">
+4.2%
</td>
<td width="134" valign="top">
+1.3%*
</td>
<td width="110" valign="top">
$456,000
</td>
</tr>
<tr>
<td width="133" valign="top">
Residex
</td>
<td width="114" valign="top">
-1.37%
</td>
<td width="134" valign="top">
-4.28%
</td>
<td width="110" valign="top">
$427,000
</td>
</tr>
</tbody></table>
*The REIV figures compare December quarter 2012 figures with December 2011 quarter figures. APM and RP Data are annual changes over 2012.
Averaging out the four property data providers indicates, as suggested by <a href="https://www.propertyobserver.com.au/victoria/melbourne-residential-property-market-on-the-mend-property-observer-navigates-the-muddling-median-maze/2013013059037">Property Observer before publication of the Residex figures</a>, that property prices in Melbourne hardly moved in 2012.
The average house price change for Melbourne is 0.2% over 2012 while units fell 0.8%.
Residex had Sydney as the top-performing detached house market over 2012 (up 4.91%) with Perth the strongest performing unit market up 10.89%.
Residex chief executive John Edwards says that overall, 2012 was a better year for Australian property than the previous 12-month period.
“Additionally, the past few weeks will have helped consumers gain higher levels of optimism as there has been positive news surrounding the US economy and little negative news out of Europe. Lifted confidence should flow into higher levels of housing market activity,” says Edwards.
“On the other hand, the floods currently being experienced in Northern NSW and Queensland will be having a dampening influence on these markets. Some slowing in the economy will drive unemployment, which will also have some moderating impacts. However, we shouldn’t get too carried away with moderate increases in unemployment as we are coming off all but full employment.
“On an Australia wide basis, capital growth in the house and land market achieved its best performance in the last 18 months. Weekly rentals also increased, with rentals for houses and land maintaining real value while units outperformed inflation by about 3%. Rental increases are good news and much needed as the sector’s capital value is either stagnant or just maintaining real value. This should be expected to continue,” he says.
<a target="_blank" href="https://blog.residex.com.au/wp-content/uploads/2013/01/Australian-Property-Market-Statistics-December-12.jpg">The full set of Residex results can be found here.</a>
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Melbourne houses and units end year in the red: Residex

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Sydney house and unit prices rebounded in the final quarter of 2012 to finish the year at record highs, according to full year figures from Australian Property Monitors (APM). 
Sydney house prices rose by 2% over the quarter to be up 3.4% for the year with the median price rising to a record $656,415, the first time the median price has been above $650,000 and are now $10,000 above their previous peaks.
Canterbury-Bankstown was the top performing region with the median house price increasing 11.5%, however prices did fall on the lower north shore by -0.4%.

Sydney unit prices gained 2.3% over the quarter to be up 5.6% for the year and also posted a record median price of $475,314.
The rises for the quarter were based on upwardly revised September quarter figures. 
APM revised the Sydney’s median house price for the September quarter from $641,890 to $643,578, while the median unit price was revised from $458,562 to $464,572. 
Australian Property Monitors senior economist Dr Andrew Wilson says Sydney again “illustrated the resilience of its housing market”. 
Wilson says the Sydney market revival is being driven from the middle upwards rather than from the top down with changes to first-home buyer grants in 2012 bringing forward demand while change-up buyers also become active.
“We are seeing a lot of activity in the middle price section of the Sydney market between $500,000 and $900,000, and that’s what is pushing up those median house prices to record levels," he said in an interview on AFR TV.
Wilsons says the prestige market in Sydney, which has to date been the ‘weak link” in the market, may also start to grow in 2013.
<img alt="apmjan31" src="/images/stories/2013/01/apmjan31.jpg" width="470" height="294">
Nationally, house prices rose by 1.9% over the quarter to finish the year in positive territory – up 2.1% to a median of $542,299. 
Unit prices increased by 1.6% over the quarter to be up 2.4% for the year with a median price of $417,123. 
September quarter figures were also revised. 
The median house price was revised downward from $533,480 to $532,274, while unit prices were upwardly revised from $406,415 to $410,508. 
All capital cities recording house price gains over the quarter – the first time this has happened since March 2010. 
“I think it is no coincidence that we have historically low interest rates and we are just starting to see a consistent rise in confidence in housing markets," says Wilson.
But he tempered this by saying capital cities and sub-markets are still performing at different levels. 
“We are still seeing the fractured type of outcome."
Sydney is the only capital city market where house prices are above their previous peaks, but APM expects that based on current trends, Perth, Canberra and Darwin will achieve record house prices in 2013. 
Wilson says the property market rebounded “as expected in 2012” on the back of the “general improvement in affordability and confidence” due to record low interest rates fuelling increasing buyer activity. 
Excluding the volatile Darwin market, Perth was the top-performing capital city market over the year, with house prices up 6% over the quarter and unit prices up 6.1% to medians of $560,780 and $365,132 respectively.
Perth’s September median house price was upwardly revised from $537,237 to $547,160, and its median unit price upwardly revised from $348,293 to $352,961. 
Wilson says the Perth price rises are being driven by around 1,500 people arriving each week in Perth and by a tightening rental market and rising rents, pushing more people into the house-buying market. 
Melbourne house prices gained 2.5% over the quarter to end the year just in positive territory – up 0.5% to a median of $526,281 with units up 1% for the quarter but still down for the year at -2.2% and a median of $390,651. 
Brisbane house prices increased by just 0.3% to be down 0.5% for the year (median of $433,302) but Wilson said this small quarterly gain was significant “as it signalled a revival in activity after a lengthy period of price falls”.
Of some concern to investors would be the Brisbane unit market – the epicentre of dozens of new apartment projects – where prices fell 2.7% over the quarter to be down 3.2% for the year, making it the worst performing house or unit market for the year. 
Adelaide continues to remain the most affordable mainland capitals with as median house price of $432,309.   “Looking ahead in 2013 activity will depend on the direction of local economies as it is no coincidence that the better performing housing markets in 2012 reflected better performing economies - particularly in regard to unemployment levels,” says Wilson.
“With a rising share market and an improving international outlook, the general economic landscape and prospects remain optimistic which is unequivocal good news for Australia’s recovering housing markets,” he says.
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'Resilient' Sydney house and unit prices reach record highs in 2012: APM

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Investigations into the collapse of mortgage lender Wickham Securities by administrators PPB Advisory have uncovered what appears to be a bogus $10.8 million cashflow statement.
The cashflow statement is one of a number of apparent discrepancies and irregularities uncovered by PPB Advisory, which is also still waiting to receive a copy of the company’s books and records from Wickham auditor Brian Kingston.
A January 29 creditors' report issued by PPB Advisory says that Sandhurst Nominees, the trustee representing <a href="/news">Wickham Securities noteholders</a>, requested a cashflow forecast following concerns about the company’s cashflow position last year.
Wickham Securities sent an email to Sandhurst Nominees on November 30 disclosing cashflow forecasts to February 2013 along with a bank confirmation statement “apparently” issued by the Bank of Queensland and fund manager DDH Graham Limited showing a bank balance of $10,779,835.
PPB Advisory subsequently contacted the Bank of Queensland following its appointment to stop all debit transactions and was referred to DDH Graham Limited, which advised that the “statement dated November 30 which you have forwarded to me from the same named account showing a balance of $10,779,835.47 as of 30 November 2012 has not been generated by DDH Graham Limited”.
The PPB Advisory creditors' report says it has “not yet established who provided this document, however that amount was not available in the company’s bank accounts”.
As enquiries continue, no claim has been made in the creditors' report of any wrongdoing by DDH Graham Limited or Bank of Queensland.
PPB Advisory has also noted redemptions totalling $395,000 were paid between December 1 and December 20 from – just before Wickham Securities was placed in administration on December 21.
It says these redemptions are being investigated further.
The creditors' report also reveals that the administrators have yet to receive the company’s books and records from auditor Brian P. Kingston, who signed off on the June 30 annual accounts issued on September 12 last year, which he said were a fair and true view of the financial position of the company.
Wickham Securities should have provided the company's books and records to PPB Advisory by January 4.
In addition to not yet sending the books and records, Kingston has also not sent the administrators company data he says he has on his laptop, telling PPB Advisory his laptop  is being repaired.
PPB Advisory says it will be investigating the audit opinion provided by Kingston to see if it complies with auditing standards.
Other apparent irregularities included in the January 29 creditors report include:
<ul>
<li>Doubtful debt provisions of $625,000 for 2010, 2011 and 2012 that are not consistent with loan balances as of June 30 for each year;</li>
<li>Directors of the company have not complied with their statutory obligation to assist the administrators with their tasks;</li>
<li>Many Wickham borrowers are already subject to debt recovery efforts from the first mortgagee, but no records is provided in the company ledger to show the amounts owing; and</li>
<li>The administrators have found funds totalling $37,419 in five separate bank accounts that  have been transferred into the administration bank account.</li>
</ul>
The creditors' report confirms that ASIC has commenced action against Wickham Securities founder Bradley Sherwin, his wife Deborah Sherwin and eight related companies seeking orders to freeze bank accounts and appoint receivers.
The eight related businesses, which include Sherwin Financial Planners Pty Ltd, were all placed in administration on January 24, with administrators from the firm of Taylor &amp; Woodings appointed.
According to the Brisbane Times, Sherwin Financial Planners was once a major sponsor of the Brothers Junior Rugby League Club, with Sherwin offered $3,300 in spotter fees for any client it referred.
The Australian Financial Review recently reported that former high-profile NRL agent Jim Banaghan once promoted Sherwin's services, but that none of his clients chose to invest in the products he offered.
A Wickham Securities creditors' meeting has been scheduled for February 6, where creditors will vote on the fate of the company. 
</body></html>

Administrators find $10.8 million black hole in Wickham Securities 

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

Joel Robinson

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

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

Sammut secures approval for debut Brisbane apartment development in Toowong

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

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

Larry Schlesinger

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