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A more bearish outlook on the economy has seen NAB revise its interest rate expectations to forecast three rate cuts in 2013, taking the cash rate to a new record low of 2.25% by year-end.
The bank had previously forecast just one rate cut in 2013.
It expects the first rate cut in the first quarter of the year (either February or March) and has tentatively penciled in further rate cuts in May and August.
“With the economy continuing to weaken and unemployment set to rise noticeably through 2013 the RBA will need to cut significantly further than previously expected in 2013,” says NAB chief economist Alan Oster.
The bank has downgraded its 2013 GDP forecasts from 2.5% to 2% with unemployment expected to rise to around 5.75% by late 2013.
“That would see, on a no policy change basis, a budget deficit in the $10 billion to $15 billion range for 2012/13," says Oster.
Oster says the weaker activity outlook will also help contain inflation to below 3% (within the RBA target band) “even including the carbon tax impact”.
“Nor do we see the Australian dollar offering much relief to a struggling economy,” he says.
NAB expects the dollar to track lower over the course of the year to reach parity with the US dollar in late 2013. 
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More bearish NAB now expects three interest rate cuts in 2013

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While credit rating agency Fitch is forecasting Australian property prices to <a target="_blank" href="https://www.propertyobserver.com.au/residential/stable-outlook-for-australian-housing-market-but-no-price-gains-in-2013-fitch/2013010958671?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=news">go nowhere in 2013 </a>as the market continues to stabilise, Australian commentators and analysts are more expectant of some gain over the next 12 months.
The strongest outlooks are for Perth and Darwin, both beneficiaries of the mining investment boom, while the prospects for Sydney and Brisbane are also sound.
As for the other capital cities, flat markets are in prospect with analysts particularly bearish about Melbourne and Hobart.
Fairfax-owned Australian Property Monitors (APM) is forecasting prices to rise a modest 3% to 5% over the course of the year, but with quite different outlooks for the major capital cities.
APM is most bullish about Perth, tipping property prices to rise by between 5% and 7% over the year, with a similar outlook for the smaller Darwin market.
There are modest property price gains tipped for Sydney, following a decade of near stagnation, with APM expecting rises of between 3% and 5% ,with similar expectations for Brisbane.
At best, Melbourne and Canberra will experience gains of 3%, says APM, while no change is expected in Adelaide and Hobart.
Both BIS Shrapnel and Hotspotting.com.au’s Terry Ryder are bullish about Perth and Darwin, with Ryder expecting double-digit growth in both these cities. Ryder also expects Sydney and Brisbane to perform strongly.
For both BIS Shrapnel and Ryder, Melbourne, Canberra and Hobart are the clear weak spots.
Property price forecasts for 2013
<table style="width: 470px;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="154" valign="top">
 
</td>
<td width="154" valign="top">
APM
</td>
<td width="154" valign="top">
BIS Shrapnel
</td>
<td width="154" valign="top">
Terry Ryder
</td>
</tr>
<tr>
<td width="154" valign="top">
Sydney
</td>
<td width="154" valign="top">
3% - 5%
</td>
<td width="154" valign="top">
2.7%
</td>
<td width="154" valign="top">
5% - 10%
</td>
</tr>
<tr>
<td width="154" valign="top">
Melbourne
</td>
<td width="154" valign="top">
0%  - 3%
</td>
<td width="154" valign="top">
0.9%
</td>
<td width="154" valign="top">
-5%
</td>
</tr>
<tr>
<td width="154" valign="top">
Perth
</td>
<td width="154" valign="top">
5% - 7%
</td>
<td width="154" valign="top">
6.4%
</td>
<td width="154" valign="top">
10%+
</td>
</tr>
<tr>
<td width="154" valign="top">
Brisbane
</td>
<td width="154" valign="top">
3%  - 5%
</td>
<td width="154" valign="top">
3.9%
</td>
<td width="154" valign="top">
5% - 10%
</td>
</tr>
<tr>
<td width="154" valign="top">
Adelaide
</td>
<td width="154" valign="top">
0%
</td>
<td width="154" valign="top">
1.3%
</td>
<td width="154" valign="top">
0% - 5%
</td>
</tr>
<tr>
<td width="154" valign="top">
Darwin
</td>
<td width="154" valign="top">
5% - 7%
</td>
<td width="154" valign="top">
5.3%
</td>
<td width="154" valign="top">
10%+
</td>
</tr>
<tr>
<td width="154" valign="top">
Hobart
</td>
<td width="154" valign="top">
0%
</td>
<td width="154" valign="top">
-1.1%
</td>
<td width="154" valign="top">
-5%
</td>
</tr>
<tr>
<td width="154" valign="top">
Canberra
</td>
<td width="154" valign="top">
0 – 3%
</td>
<td width="154" valign="top">
-0.8%
</td>
<td width="154" valign="top">
0%
</td>
</tr>
</tbody></table>
APM bases its relatively positive outlook following interest rates being cut to near record lows last year, with chief economist Andrew Wilson expecting prices to build on the modest gains achieved in 2012.
He tips Perth to be the top performer based on record levels of immigration, housing shortages and soaring rents, as well as its exposure to the relative strength of mining sector.
While Ryder is tipping property price growth in excess of 10% for Perth and Darwin, he believes the best opportunities in 2013 will be in regional markets – to find out where, watch the Property Observer webinar: <a target="_blank" href="/news">Regions versus capital cities - where to invest in 2013?</a>


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BIS Shrapnel as part of of forecasts prepared for QBE LMI's 2012 - 2015 Housing Outlook report says affordability in Perth and Brisbane improved substantially in 2011-12 with a "rapidly rising dwelling deficiency is developing".
"In Darwin, meanwhile, median house price growth of 10.7% was registered in 2011-12 – driven by substantial levels of investment in mining and resource capacity leading to significant income and migration growth.
"Falls in vacancy rates are also expected to continue across all three cities, placing upward pressure on both rents and dwelling prices, attracting demand from investors in particular," says BIS Shrapnel.
News Limited national economics editor Jessica Irvine warns those looking to dip into the property market in 2013 must be aware of spruikers claiming “the next boom in property prices is about to get underway”.
Irvine says while spruikers may talk up mortgage rates being low and that affordability has improved, a “more sober look at the Australian property market reveals prices have hit a wall, although remain historically expensive”.
This is the partly the <a target="_blank" href="https://www.propertyobserver.com.au/residential/australian-housing-still-least-affordable-in-the-world-despite-recent-improvements-fitch/2013010958698?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=news">argument made by Fitch</a>, in its forecast of <a target="_blank" href="https://www.propertyobserver.com.au/residential/stable-outlook-for-australian-housing-market-but-no-price-gains-in-2013-fitch/2013010958671?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=news">no movement</a> in Australian house prices in 2013.
Irvine points at that in the boom years from 2003-04 and 2009-10, property prices grew by 50% to 60% in Melbourne, Brisbane and Adelaide and by a “whopping” 10% in Perth.
But now the property boom is “well and truly at an end”.
“Over the past five years, home prices have clocked average annual growth of just 1.9%. You would have been better with your money in the bank,” she says.
Irvine alludes to the fact that the new generation of home buyers need their parents help to acquire their first property while those already on the property ladder are using lower interest rates to pay down debt.
“And so it's hard to see property prices rising much this year, unless something radically new happened to boost people's capacity to borrow,” she says. 
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Australian analysts tip modest property price gains in 2013 led by Perth, depending on who you ask 

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Demand is growing for more affordable small properties and tiny CBD studio apartments, but obtaining financing can be harder, according to Aussie Home Loans founder John Symond.
“For all the affordability that a small apartment provides, however, there is a catch,” says Symond in his latest Aussie blog.
“There are often strict lending rules around studios that prevent those without sizeable deposits from buying in.
“Buyers will typically require a deposit upwards of 20% to buy an apartment with less than 50 square metres in floor area, and lenders mortgage insurance (LMI) is often more expensive as well,” he says.
In August last year Property Observer provided readers with a <a target="_blank" href="https://www.propertyobserver.com.au/residential/top-10-cheapest-studios-apartments-in-the-melbourne-cbd-starting-frrom-%24145000/2012081255753">top 10 list of studio apartments</a> in the Melbourne CBD starting from a 17-square-metre apartment on Flinders Street, which sold to an investor for $145,000 last year.
Property Observer noted <a href="https://www.propertyobserver.com.au/new-south-wales/sydney-cbd-s-10-cheapest-studio-apartments-starting-from-%24255000/2012073155743" target="_blank">Sydney studio apartments were proving tempting to investors and home buyers  </a>given both buying classes were being affected by rising rents across the city. We listed 10 of the cheapest, starting with a studio on Dixon Street in Chinatown at $255,000, with eight of them now sold.
Also last year, we wrote about <a target="_blank" href="/news">pocket-sized inner Sydney listings</a>, including what is believed to be Sydney’s smallest home, a terraced house measuring just 27 square metres built in a former alleyway on Evans Street in Rozelle.
Symond mentions the tiny Bondi Beach flat dubbed the “bolt-house” measuring just 16 square metres, which <a href="https://www.propertyobserver.com.au/new-south-wales/old-fashioned-studio-fails-to-ride-the-bondi-beach-property-wave/2012091156502" target="_blank">Property Observer wrote about October</a>. The property failed to attract a single bid at auction, coming with $270,000 hopes, eventually selling privately for $245,000.
Symond says small properties and tiny studio apartments have become increasingly popular in the last few years “as home buyers seek affordability in cities with escalating property prices”.
“Typically a studio apartment – defined as ‘any unit that does not have a wall separating the bedroom from the living areas / kitchen’ – will require a floor area no less than 40 square metres and have a maximum loan to value ratio of 60%."
Of the 10 cheapest Melbourne CBD apartments, which we wrote about in August last year, two remain up for sale:
<a target="_blank" href="https://www.realestate.com.au/property-studio-vic-melbourne-105215032">210/600 Little Bourke Street</a>
$148,000
Unit 210 at 600 Little Bourke Street is a serviced apartment currently run by Hotel Ibis, which has the contract until 2018. The 25-square-metre apartment has a modest guaranteed income of $650 a month, and agent Lilian Yoon from OzAsia Real Estate is unsure of the outgoings for the property, although she says they would be minimal. The unit, which has no cooking facilities, has been on the market for years.
<a target="_blank" href="https://www.realestate.com.au/property-studio-vic-melbourne-110840411">417B/268 Flinders Street</a>
$165,000
This studio apartment is in the Home @ Flinders building opposite Flinders Street Station and rents for $310 a week. It’s 15 square metres and has outgoings of more than $4000 a year. It includes a kitchenette and a bathroom, and there’s room to walk.
We’ve also tracked down a few more tiny apartments currently up for sale:
<a href="https://www.realestate.com.au/property-studio-vic-melbourne-112356715">1306/268 Flinders Street</a>
<a href="https://www.realestate.com.au/property-studio-vic-melbourne-112356715"></a>$225,000
This studio apartment - in the same building as the previous apartment (417B)- is being sold by Robert Eggers of Dingle Partners - Melbourne. 
<a href="https://www.realestate.com.au/property-apartment-vic-melbourne-111726639" target="_blank">57/546 Flinders Street</a>
$150,000 – $170,000
This apartment is situated across the river from Crown casino, and close to Southern Cross train station. It is currently leased at $240 per week. It is being sold by Dien Tran of Ray White CBD.
Of the 10 Sydney studio apartments we wrote about in August last year, just two remain available for purchase. These are:
$265,000
<a rel="nofollow" href="https://www.realestate.com.au/property-serviced+apartment-nsw-sydney-106659143" target="_blank">318/8 Dixon Street</a>
It’s a 28 square metre studio on level three of the building. The property currently earns $14,502 per year in rent from Quest Apartments, which is set to increase to $15,082 next year. That works out to about $280 a week. Agent David Tsang from Friendly Properties says outgoings would total around $250 a quarter.
$275,000
<a rel="nofollow" href="https://www.realestate.com.au/property-studio-nsw-sydney-107037659" target="_blank">94/8 Dixon Street</a> <a rel="nofollow" target="_blank" href="https://www.realestate.com.au/property-studio-nsw-sydney-107037659"></a>
In the same building again here, but back down to 25 square metres. It’s a similar deal to the cheapest on the list but it earns slightly less rent at $400 a week. Total quarterly outgoings are $1,296. It’s being sold by Alan Cheung from LJ Hooker Chinatown who says the vendor for apartment 124 is just slightly more motivated.
For information on <a target="_blank" href="http://propertyobserver.com.au/ebooks/free-ebook-investing-outside-the-square">out-of-the-box property investments, download our free eBook.</a>
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Demand rising for tiny studio apartments, but mortgage hurdles higher: Aussie John Symond

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Australand’s biggest shareholder, Singapore-based CapitaLand, is considering divesting from the residential property developer, as takeover rumours continue to circulate.
Should CapitaLand go ahead and sell out of Australand it could clear a hurdle allowing larger property development rival Mirvac to make a formal bid for Australand, following a failed $3 billion offer from another listed developer, GPT.
A statement posted by Australand to shareholders on the ASX says that CapitaLand, which owns 59% of Australand, is to “conduct strategic review of its investment in Australand”
Australand says it has appointed Macquarie Capital, Fort Street Advisers and law firm King &amp; Wood Mallesons as advisers to its board with directors to keep securityholders informed of any “material developments as they occur”
The Australian Financial Review said these appointments were to bolster Australand’s defences as it “braces for a potential barrage of buyout proposals”.
In December last year, <a target="_blank" href="https://www.propertyobserver.com.au/australian-capital-territory/australand-rejects-gpt-offer/2012121358470">Australand rejected</a> an unsolicited, non-binding proposal from GPT to acquire much of its core business.
GPT had offered $3 billion for Australand’s entire commercial and industrial business, but not its residential development business.
Following the rejection of the GPT proposal, there was also speculation that Mirvac was considering a proposal to acquire the entire Australand business that would have created a a <a target="_blank" href="/news">$7 billion listed property trust.</a>
On December 18, the Australian Financial Review reported that a bid by Mirvac was being considered by new Mirvac boss Susan Lloyd-Hurwitz, following earlier discussions instigated by former managing director Nick Collishaw.
The AFR article did not name any source for its story, but said the proposal was being considered by Mirvac advisers Citigroup and was at an “early stage”.
Mirvac has not made any official statement about a bid for Australand.
For the Mirvac deal to go through, it would need the backing CapitaLand.
The Australand share price traded up 3¢ to $3.47 yesterday.
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Majority shareholder CapitaLand to review its investment in takeover target Australand 

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Queensland billionaire John van Leishout is poised to buy Homemaker City Fortitude Valley centre for around $100 million from GPT.
The Fortitude Valley Centre measures 38,300 square metres of lettable space and was valued at $100.2 million as of June 30 2012 with 36 tenancies in place.
The centre brought in six-month income of $4.2 million delivering a capitalisation rate of over 9%.
Major tenants are Harvey Norman, Domayne, Nick Scali and Freedom Furniture.
Van Leishout made his fortune from discount furniture store Super Amart in Brisbane's outer suburbs.
The mooted sale, reported by the Australian Financial Review, comes as GPT sells its non-core assets.
Earlier this week GPT sold two other bulky good centres in its Queensland Homemaker City portfolio.
It sold The Homemaker City Jindalee to BB Retail Capital for $50.5 million and the Homemaker City Aspley to a private investor for $41.2 million.
The sales of the centres are being negotiated by Jones Lang LaSalle’s Australian head of retail investments Simon Rooney.
Rooney says bulky good centres represent strong buying opportunities for specialist investment groups following the withdrawal of institutional investors from the sector.
He says over $486.5 million of bulky goods centres sold in 2012, double the value of 2011
GPT’s head of investment management Carmel Hourigan says the sale of the non-core assets would further strengthen the quality of the retail portfolio and support the group’s move towards its target weightings.
“GPT is committed to portfolio weightings of 15% for logistics and business parks, 35% for office and 50% for retail,” says Hourigan.
“While these target weightings can be achieved through organic growth, GPT will also continue to look at strategic investment opportunities.”
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Billionaire John van Leishout to buy Fortitude Valley bulky goods centre for $100 million

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A Springvale agent’s representative has been fined $3,000 and reprimanded after he and his wife bought a property that his employer was selling - without telling the client, his employer or authorities.
Michael Minh Le, who worked for MCDRE Springvale Pty Ltd, failed to get his client’s permission to buy the property.
He also failed to notify the director of Consumer Affairs Victoria, as required by the Estate Agents Act 1980 (the Act).
In its January 4 judgement VCAT found that Le "did not at all times act fairly and honestly" and “continued to act for his principal despite a conflict of interest, by continuing to act for the client and failing to inform his principal that the offer was from his wife”.
Le was fined $3,000 by Consumer Affairs Victoria having previously been reprimanded by VCAT on January 4 2011.
The agency returned its $10,460 commission to the client in December 2011 upon learning of Le’s actions.
The case dates back to March 2011, when the client engaged MCDRE Springvale to auction her property in Union Grove, Springvale.
She told the agency she required settlement within two months of the auction date - 16 April 2011 - as she had already bought another property.
Le supervised the open for inspections and attended the auction, which attracted only one bidder. The property had a reserve price of $570,000 but was passed in at $535,000.
After failing to buy the property at auction, the sole bidder made further offers of $540,000 and $550,000 with differing settlement terms. The client rejected these and the property remained for sale.
Le then gave the agency’s officer in effective control (OIEC) an offer of $523,000, without stating that it came from his wife. The OIEC passed this offer to the client, who accepted it on 29 April 2011 with an 'and/or nominee' clause.
Le and his wife became the registered owners of the property on 20 June 2011.
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Springvale estate agent’s representative fined $3,000 after buying client’s house without permission

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Approvals for private sector houses fell 0.3% in November to 7,518, according the latest ABS building approval figures.
This was the second successive month that approvals for new houses have fallen though October's 1.5% decline was upwardly revised to just a 0.2% fall.
Building approvals for houses fell in all states except WA, which managed a 6.8% rise in November.
Private sector house approvals fell in South Australia (-7.6%), Queensland (-4.9%), New South Wales (-2.2%) and Victoria (-0.2%).
Building approval figures are forward indicators of future construction activity and the November figures indicate little hope of a near-term pick-up for the struggling home building sector, except for those builders operating in WA.
Over the past 12 months to November building approvals for new houses are up just 0.5% despite five cash rate cuts over this period and NSW, Queensland and South Australian state governments incentivising the purchase of new homes by first-home buyers.
Despite little growth in house approvals over this period, CommSec economist Craig James suggested this was in line with "normal" activity.
"There is a lot of hand-wringing about home building, but the figures show activity is basically 'normal'," says James.
"The number of approvals to build new homes is currently in line with the decade average and actually 3% stronger than the 5-year average.
"Like a lot of the Australian data at present, the home building industry is actually operating fairly normally. Data out yesterday showed 'normal' growth of retail spending at large retailers, the jobless rate is low near 5% and broader economic growth is not far away from average or “normal” growth," he says.
Apartment approvals increased by 10.1% over November to 5,552 to be up 36.4% year-on-year.
Across both houses and units, dwellings approved rose 2.9% in November 2012, in seasonally adjusted terms, following a fall of 5.1% in the previous month mainly due to a strong 8.7% rise in Victoria 
"Victoria has been building the most dwellings (about 33% of the national total) for the past few years. So its movements control the national outcomes," says the Commonwealth Bank's Diana Mousina.
The value of total building approved fell 4.1% in November, in seasonally adjusted terms, and has fallen for two months.
The value of residential building rose 2.7% while non-residential building fell 14.4%.
The value of renovation approvals fell 2% in November, leaving it 6% lower for the year. 
"All told, total approvals outcome was in line with expectations, the ongoing weakness in private house approvals remains a concern," says Westpac.
Commenting on the November figures, Peter Jones, Master Builders Australia’s chief economist says the bounce in approvals is welcomed, but the nascent recovery has yet to move out of first gear.
“November’s headline increase in approvals appears to be narrowly based, reliant on an unsustainable spike in inner Melbourne units rather than any broad-based upswing.
“The danger is that the recovery could run out of steam as the impact of previous interest rate cuts appear to have failed in lifting new homebuyer confidence and underpinning a sustained housing recovery.
“Authorities are banking on a strong revival in residential building as the economy loses mining as its key driver. For this to eventuate, the Reserve Bank should cut interest rates at the next board meeting in February,” he says.
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WA the only bright spot as detached house approvals fall 0.3% in November: ABS

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Retail sales rose only 0.1% in November, below expectations, but economists and retail property analysts are reasonably confident of a good year for retailers and retail property landlords in 2013.
Shopping centre owners and retail landlords with a high proportion of service-orientated tenants, such as cafes, restaurants and travel, and entertainment operators should be well placed, and there is also expected to be a continued expansion of overseas retailers into Australia.
In addition, the ABS figures suggest the larger chain stores and supermarkets are continuing to perform well, (though department stores are still struggling).
Michael Bate, Colliers International head of retail, is optimistic about 2013, after the sector underwent what he calls “significant structural change” in 2012 following two decades of outperforming the commercial property sector as a whole.
“While retailers will continue to review their store portfolios with a view to improving performance, most domestic retailers have now completed their network rationalisations and we anticipate some will look at expansion at 2013,” he says.
He says the retail sector will be influenced by the impact of interest rate cuts on household disposable income, the level and intensity of price discounting by retailers and the management of operating costs by both property owners and retailers.
While figures from the all-important Christmas retail period are not yet available, Bate says Colliers expects a modest improvement in retail spending in 2013, with “household incomes to be supported by rate cuts, cushioning the impact of slower wages growth and higher taxes”.
“Retail spending remains below long-term averages in Australia, but the volatility experienced over the past six months has now moderated,” he says.
Nora Farren, Colliers International research director and author of the latest Colliers International retail research and forecast report, says that from an investment perspective, retail assets remain appealing.
“High quality, dominant shopping centres are still performing well despite the slowdown in retail turnover growth.
“They continue to be viewed as a defensive investment class. Retail has also been the beneficiary of capital inflows from overseas investors. The high relative yield spread (due to low bond yields) combined with the global appetite for low-risk investments are supporting this demand. Foreign investors have been active in the retail property sector, with several major sales involving offshore institutional investors,” she says.
She says “experience with convenience” will keep consumers coming back to shopping centres.
“Consumers are spending more on experiences such as travel and at cafes and restaurants. As a result, we are seeing increased focus on entertainment, lifestyle and food precincts in shopping centres, as perceptions change as to what attracts consumers to a centre, and keeps them there for longer,” says Farren.
She also expects the influx of overseas retailers to Australia continue “apace next year”.
“This charge is being led by US brands, but retailers from Europe and increasingly Asia are looking to expand into Australia.
“While the entrance of offshore retailers has some domestic retailers shaking in their boots, the arrival and positive view of our market potential should be a comfort to our industry. Positives can be taken from the renewed interest in retail that these new brands generate.”
 
<hr class="system-pagebreak">
 
However, it is likely to be a continued struggle for many smaller retailers, especially those selling discretionary items that can be bought more cheaply online.
Landlords with retail investment in the mining states appear well-placed, with WA annual retail growth to November standing at 8.6% and Queensland at 4.8% per annum, compared with NSW managing just 2.2% annual retail sales growth and Victoria. 1.2%.
At face value, the November ABS figures were a disappointment, with the market tipping a 0.3% rise in November and earlier rate cuts in May and June totalling 75 basis points appearing to have little impact on consumer spending.
With October's flat outcome left unrevised, the annual pace of retail sales growth moderated further to 2.9%.
Westpac economist Elliot Clarke points out that in trend terms, retail sales are now growing at “an insipid 0.05% per month – a 0.6% annualised rate”.
He also points out that all the growth in retail sales in November was solely due to a 1.2% increase in “takeaway activity” with cafe and restaurant activity falling 0.4%.
“Arguably, this is further evidence of consumers economising, favouring eating at home over eating out. Basic food retailing was flat, possibly due to falling fruit and vegetable prices,” says Clarke.
Department store sales fell for a third successive month by 0.4%, clothing &amp; footwear experienced its fifth consecutive decline (–0.6%)  and household goods retailing declined by a further 0.9%.
Clarke concludes that retail sales growth will again be weak in December and in 2013.
However,  CommSec economist Craig James notes that sales by “larger retailers” rose by 0.5% over November and “soared to record highs”, with larger retailers now accounting for a record 64.8% of all retail trade.
<img src="/images/stories/2013/01/absjan10.gif">
The large retailers segment refers to 500 of the biggest retailers in surveyed by the ABS each month, whose results are not weighted due to their size, unlike the 2,750 'smaller' retail businesses that are weighted.
The ABS does not provide details of which businesses are included in this category, but says the results indicate that some of the larger business chains such as supermarkets are doing well, while others (notably department stores) are struggling.
 
<hr class="system-pagebreak">
 
According to James, this could indicate that larger retailers are continuing to take business from small business, but may also indicate the growing tendency to purchase goods online as the major online businesses are in the large retailer sector.
While the mystery remains as to what impact online sales is having on retailing figures, James says there is “good reason to suspect that retail spending is stronger than the top-level data suggests. In fact, much closer to ‘normal”.
“I think 2013 will be a better year for retailers,” James tells Property Observer.
While there will be further pressure on retailer margins, he says he is “reasonably positively” about 2013 provided there are no major overseas disasters.
Factors in favour of a better year for retailing include low unemployment, improved housing affordability and lower interest rates meaning consumers can be a little more confident, says James.
"Consumers will still continue to look for bargains and compare store prices with what is available online."
He says service-orientated retailers (cafes, restaurants, travel and entertainment providers) should continue to do well.
ANZ economists Riki Polygenis and Justin Fabo also note the better performance of larger retailers  "trending higher in contrast to the broadly flat profile for small retailers’ sales over the past 18 months"
They say that recent weakness in retail sales appears "heavily concentrated among smaller retailers, with sales well down from their peak in June".
"These retailers tend to have less flexibility to maintain sales via discounting, marketing and other strategies and a higher share of their sales are likely to be discretionary,says Polygenis and Fabo.
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Better year expected for retail property sector despite 'insipid' November ABS sales result

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Greater financial incentives are being offered to first-home buyers in Victoria following the raising of the stamp duty discount for homes priced under $600,000 from 20% to 30%.
The higher discount kicked in on January 1, 2013, and applies to both existing homes and new homes, delivering first-home buyers additional savings starting from $600 to a maximum of just over $3,000 on a house price at $600,000.
First-home buyers can work out their stamp duty savings using this table provided the <a href="https://www.sro.vic.gov.au/sro/sronav.nsf/LinkView/C88211C9E07486F0CA2578B70001025018E490D796850F8ECA2575C1008187C7" target="_blank">Victorian government’s State Revenue Office.</a>
Maximum stamp duty savings are now over $9,000. Combined with the existing first-home owners' grant of $7,000 there is nearly $16,000 in savings for those first-home buyers who are willing to venture into the property market in 2013.
The stamp duty discount will rise to 40% on January 1, 2014, and to 50% on September 1, 2014.
To qualify for the stamp duty discount, first-home buyers must also qualify for the $7,000 first-home owners’ grant.
All added up it means Victorian first-home buyers purchasing an existing home receive the highest amount of financial support from their state government.
South Australia, NSW and Queensland all offer higher total incentives and savings, but these are restricted to buying or building a new home.
This is what the other states are offering first-home buyers in 2013:
NSW
A first-home buyer who purchases a $550,000 new home will get $35,240 in assistance.
This includes a $15,000 grant for first-home owners who purchase or build a new home valued at up to $650,000. The grant is available until December 31, 2013, reducing to $10,000 from January 1, 2014.
Non-first-home buyers who buy a new home are eligible for $5,000 whether the new home is off the plan or newly built with a value up to $650,000, The $5,000 grant is also available to buyers of vacant land that is intended to be the site of a new home valued up to $450,000.
First-home owners are also eligible for a maximum stamp duty saving of $20,240 for homes up to a value of $550,000, with duty concessions for new homes valued between $550,000 and $650,000. The transfer duty exemption cap on vacant land is $350,000, with duty concessions for vacant land valued between $350,000 and $450,000.
Queensland
A $15,000 first-home owner construction grant (FHOCG) is available. The FHOCG applies to new property bought or built at a value under $750,000.
First-home buyers also pay no duty on purchases up to $500,000, with a phasing-out rebate applicable for values up to $600,000.
For non-first-home buyers, the Queensland government offers a concessional stamp duty rate of 1% up to a value of $350,000, with stamp duty charged at normal rates for the remaining value of the home purchase. The buyer must occupy the home for a period of 12 months – an applicant may lose the concession if he sells or leases part or all of the home before moving in or within a year of moving in.
 
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South Australia
South Australian first-home buyers have the chance to secure $23,500 from the state government, provided they build a new home.
The $23,500 handout comprises a doubled first-home owner grant of $15,000 for contracts entered into on or after October 15 and up to a value of $575,000, plus a further $8,500 housing construction grant (HCG). The housing construction grant replaces the $8,000 first-home bonus grant.
The HCG is available to all builders of new homes for properties valued up to $400,000, phasing out for properties valued up to $450,000 where contracts are entered into between October 15, 2012, and June 30, 2013, inclusive.
Concessions could rise to $39,830 if first-tome buyers buy an apartment off the plan in the Adelaide CBD under $400,000, where a stamp duty concession of $16,330 applies.
This part of a new stamp duty concession scheme available on the transfer of a new CBD apartment or a "substantially refurbished apartment" for a contract entered into from May 31, 2012, to June 30, 2014, capped at stamp duty payable on a $500,000 apartment of $21,330.
An example where a $39,830 saving would be available to a first-home buyer is <a target="_blank" href="https://www.realestate.com.au/project-aria+on+gouger-sa-adelaide-600000551">Aria on Gouger Street </a>being developed by Brock Urban Projects, where two-bedroom apartments are priced from $335,750.
Up until June 30 2014, South Australian first-home buyers of established homes are entitled to a $5,000 grant. From July 1, 2014, no first-home owner grant is available to purchasers of established homes.
 
WA
A $7,000 first-home owner grant remains in place for a newly constructed or established home. It does not apply to vacant land purchased to build a new home. The total value of the home must not exceed $750,000 if the property is located south of the 26th parallel of South Latitude, or $1 million if located north of the 26th parallel of South Latitude. First-home buyers eligible for the $7,000 grant pay no stamp duty on homes valued up to $500,000 and up to $300,000 for vacant land.
ACT
A $7,000 first-home owner grant remains in place for both existing and new homes where the price of the property or construction of the home does not exceed $750,000.
Tasmania
A $7,000 first-home owner grant remains in place for both existing and new homes, with no cap on the value.
Tasmanian first-home buyers buying or  building a new home (including off-the-plan) are eligible for an additional $8,000 under the First Home Builder Boost Scheme, which applies from January 1 2013 to June 30 2014 if the qualify for the first-home owner grant.
Northern Territory
A $7,000 first-home owner grant remains in place for both existing and new homes where the price of the property or construction of the home does not exceed $750,000.
The NT government also offers first-home owners stamp duty concession of up to $26,730 (the duty owed on the first $540,000 value of a property).
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Victorian government offers bigger carrot to first-home buyers: Government housing incentives in 2013

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Cash rate cuts made by the RBA, around 80% of which have been passed on by lenders, have not stimulated buyers' appetites for new residential property, according to Brett Draffen, chief executive of development at Mirvac.
In an interview with Australian Financial Review TV, Draffen highlighted the muted impact that interest rate cuts have had to date on activity and prices in the property market – a point made by other property market analysts, including Laing+Simmons general manager <a href="/news">Leanne Pilkington</a>, following the December rate cut.
Draffen says the interest rate reductions have not made a “meaningful change” at Mirvac sales offices and the level of transactions they are doing.
“They are positive initiatives but we are still in that overarching observation of a lack of confidence," he says.
Draffen says he is more optimistic about that benefits of rate cuts starting to flow through in 2013 into transaction activity but Mirvac is yet to see it at this stage.
In December, following the RBA cutting the cash rate by 25 basis points to 3%, Pilkington said the Reserve Bank  "no longer has the relevance or power to stimulate housing market activity as the banks are either not passing on the cuts, or passing on only a fraction of them".
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Rate cuts having no 'meaningful' impact on residential development sales: Mirvac

<a href="https://www.apartments.com.au/developers/consolidated-properties">Consolidated Properties Group</a> (CPG) is approaching the launch of its latest Brisbane riverfront development, Castile, on the dress circle Skyring Terrace in Newstead.

VIP buyers are now being engaged, with a full public sales launch coming later this year.

Positioned as the final opportunity to secure a new absolute riverfront residence on the East bank of Newstead, Teneriffe or New Farm, Castile at 47 Skyring Terrace has been designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> as a timeless addition to the Brisbane skyline.&nbsp;

[smartcode_project:default project_id=150489 project_image_fid=371113]

The name Castile draws on themes of permanence, sophistication and legacy, reflecting a broader vision centred on enduring architecture and timelessness in the rarest of riverfront positions.&nbsp;

CPG Chairman and CEO Don O’Rorke said the project had been envisioned as a future Brisbane icon.&nbsp;

“With 47 metres of direct river frontage and never to be built out views, 47 Skyring Terrace is the definitive address on the Brisbane River,” O’Rorke said.&nbsp;

[smartcode_project:default project_id=150489 project_image_fid=371114]

“Rather than following trend-based apartment design, Castile draws inspiration from Brisbane’s great heritage buildings, reinterpreting classical architecture into a contemporary riverfront landmark designed to stand proudly for the next 100 years,” he said.&nbsp;

The approved development will comprise 227 apartments across a 25-storey tower alongside a boutique six-storey riverfront building of just 12 residences.&nbsp;

Construction is scheduled to commence in September 2026.

[smartcode_project_cta:default project_id=150489]

Joel Robinson

CPG unveils Castile Newstead ahead of upcoming sales launch

Australia’s online shopping habits have shifted dramatically over the last decade. As eCommerce volumes surged, so too did the frustrations that came with traditional parcel delivery: missed deliveries, long Post Office queues, parcel theft and the challenge of being home during business hours.

Australia Post’s Parcel Lockers emerged as one of the more practical responses to that changing consumer behaviour.

What started as a relatively niche delivery option has evolved into a nationwide network of more than 1,400 self-service Parcel Lockers positioned at train stations, shopping centres, supermarkets and Post Offices across the country. The system allows Australians to send, collect and return parcels 24 hours a day, fundamentally changing how many people interact with deliveries.

The appeal is relatively straightforward: flexibility.

Instead of waiting at home for a delivery driver or rushing to a Post Office before closing time, users can direct eligible parcels to a Parcel Locker location of their choice. Once the parcel arrives, Australia Post sends a notification with a collection code or QR access through the AusPost app, allowing customers to retrieve their package at any time within the collection window.

For apartment residents in particular, the system has become increasingly valuable.

Higher-density living has created logistical challenges around deliveries, especially in buildings without concierge services or secure parcel rooms. Missed deliveries are common, while parcel theft has become an increasing concern as online shopping volumes continue to rise.

Australia Post itself has repeatedly highlighted the growing issue of “porch pirates” during peak shopping periods, encouraging customers to use Parcel Lockers as a safer alternative to unattended home deliveries.

That security aspect is one of the key reasons the Australia Post Parcel Locker network has grown so rapidly.

Parcel Lockers are positioned as secure, monitored collection points that reduce the risk of theft while also improving delivery efficiency for Australia Post. Instead of multiple redelivery attempts, parcels can be consolidated into a single secure destination.

The Parcel Lockers themselves are free to use through a MyPost account and support a range of parcel sizes up to 16 kilograms and dimensions of approximately 35 x 44 x 61 centimetres.

Beyond receiving parcels, the system has increasingly become integrated into the broader eCommerce ecosystem.

Customers can now use Parcel Lockers to return online purchases, while retailers have embraced the model as a way to improve delivery success rates and reduce friction in the shopping process. Australia Post has actively expanded partnerships with major retailers and promoted Parcel Lockers as part of a broader out-of-home strategy.

The timing of that expansion aligns with broader changes in Australian shopping behaviour.

The acceleration of online retail during and after the pandemic placed enormous pressure on delivery infrastructure. Parcel volumes reached record highs, particularly during Black Friday and Christmas periods, with Australia Post delivering more than 100 million parcels during peak festive seasons.

That growth forced logistics providers to rethink the “last mile” of delivery, widely regarded as the most expensive and operationally difficult stage of the process.

Parcel Locker systems have increasingly been viewed as part of the long-term solution.

The concept itself is not unique to Australia. Parcel Locker networks have become common globally, particularly across Europe and Asia, where dense urban environments and apartment living create similar logistical challenges. But Australia’s geography and suburban sprawl made adoption slower initially.

Now, however, the convenience factor is driving mainstream usage.

For commuters, Parcel Lockers near train stations allow parcels to be collected on the way home from work. For apartment dwellers, they remove the uncertainty around access and missed deliveries.

The rise of the AusPost app has also streamlined the experience, centralising notifications, tracking and Parcel Locker access into a single platform. Australia Post has increasingly pushed customers toward app-based delivery management, partly as a way to combat phishing scams and fake delivery notifications, which have become more sophisticated in recent years.

The Parcel Locker model is also beginning to influence property development itself.

Parcel management has become a growing consideration in apartment building design, particularly as online shopping becomes embedded in everyday life. Many new residential developments are now incorporating dedicated parcel rooms or Parcel Locker systems into foyers and communal spaces.

For developers, parcel management is increasingly viewed as part of the broader resident amenity offering, alongside gyms, wellness spaces and communal work areas.

That reflects a wider evolution in how residential buildings are designed.

Apartment buyers are placing greater emphasis on convenience, security and operational functionality, particularly in higher-density urban environments. Parcel delivery, once considered a minor operational detail, has become an increasingly important part of that equation.

Australia Post’s Parcel Locker network sits at the centre of that behavioural shift.

What began as a simple alternative delivery option has evolved into a key piece of infrastructure supporting Australia’s growing eCommerce economy and changing urban lifestyles.

And as online shopping continues to expand, the role of Parcel Lockers is likely to become even more embedded in how Australians live, shop and receive goods.

How Australia Post Parcel Lockers changed parcel delivery convenience in Australia

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;

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;

Larry Schlesinger

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