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Fewer than 10% of inner-Brisbane apartments are being snapped up by owner-occupiers, with the market the toughest it has been in 25 years, says property developer David Devine.
Devine’s Metro Property Development, which he founded with Ken Woodley in 2010, has been able to build its position of having the top-selling projects in Brisbane by tapping into the investor market, with its Chelsea apartment project in Bowen Hills now completed, five projects under construction and $600 million worth of projects in the pipeline.
“We left Devine three years ago and came out of there with no baggage. We bought all our development sites post-GFC, so there’s nothing hidden in our closet.
“And the banks have backed us to the hilt,” Devine tells Property Observer.
He says a big challenge for other developers is obtaining financing.
Devine says lenders require that 100% of project debt be covered, meaning developers must sell 65% of apartments in a project off the plan to get funding approval.
“Many of the projects that are being marketed off the plan will not achieve the pre-sales requirement demanded by the banks. There is a lot of competition. Very few projects achieve enough sales.”
Metro has just launched its $450 million multi-stage Central Village development in Fortitude Valley, with the <a target="_blank" href="https://www.propertyobserver.com.au/queensland/cambridge-weekend-sales-by-metro-property-in-fortitude-valley/2012111657909">first stage featuring 163 apartments over 18 storeys </a>managing 73 sales in its first few weeks since launching. 
Another project – Broadway on Ann featuring 200 apartments in Fortitude Valley – is due to come to market next year.
Metro had the top two selling projects over the September quarter, selling 54 apartments in The Plaza in South Brisbane and 44 in in Brooklyn on Brookes in Fortitude Valley – a joint venture between Metro and Indian-based developer Pearls Australasia, according to the most recent Place Advisory report.
Devine says Metro’s ability to offer apartments to investors that qualify for the federal government’s national rental affordability scheme (NRAS) and that appeal to investors acquiring property through their self-managed super funds are key reasons for its success to date.
Metro’s first completed project, the Chelsea in Bowen Hills, had a 20% NRAS allocation while its Madison Heights project has more than 50% of its 308 apartments available as NRAS investments.
“People that have misconceptions about NRAS have not understood it. It is a stimulus package by the federal government where all stakeholders are winners,” he says.
Metro has also tapped into the overseas market, primarily in Asia, with 20% of apartments allocated to this market.
“We’ve done that 20-odd years. Overseas buyers are the most secure of all sales,” he says.
Devine also says Metro’s “broad-based marketing strategies” have helped underwrite sales in a difficult market.
Devine says he has engaged with people who have helped successfully market his developments at Devine Limited and over a career spanning nearly three decades, including more than $1 billion worth of inner-city apartments completed.
“A lot of people who have worked with us over the years, we have engage to sell our property interstate and overseas.
In other words, says, marketing director Ken Woodley: “We’re a marketing company that develops property, not developer that markets properties.”
 
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Metro has a 10-point checklist for each of it developments, which include that development is situated in a location where people will want to live, that it is close to services and transport.
Metro also chooses locations that embrace Brisbane’s café society and theatre-lifestyle.
Metro's major projects
<table style="width: 470px;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="150" valign="bottom">
Project
</td>
<td width="152" valign="bottom">
Location
</td>
<td width="105" valign="bottom">
Yield
</td>
<td width="84" valign="bottom">
End Value
</td>
<td width="123" valign="bottom">
Status
</td>
</tr>
<tr>
<td width="150">
The Chelsea Bowen Hills
</td>
<td width="152">
Hamilton Place, Bowen Hills
</td>
<td width="105">
195 apartments
</td>
<td width="84">
$85 million
</td>
<td width="123">
COMPLETED
</td>
</tr>
<tr>
<td width="150">
Madison Heights
</td>
<td width="152">
Mayne Street, Bowen Hills
</td>
<td width="105">
308 apartments
</td>
<td width="84">
$130 million
</td>
<td width="123">
272 sales completed, under construction
</td>
</tr>
<tr>
<td width="150">
Brooklyn on Brookes
</td>
<td width="152">
Cnr Cnr Brookes &amp; Ann Streets, Fortitude Valley
</td>
<td width="105">
216 apartments
</td>
<td width="84">
$90 million
</td>
<td width="123">
178 sales completed, under construction
</td>
</tr>
<tr>
<td width="150">
Orchard Grove
</td>
<td width="152">
Orchard Rd, Doreen (Melbourne)
</td>
<td width="105">
175-lots
</td>
<td width="84">
$40 million
</td>
<td width="123">
Under construction
</td>
</tr>
<tr>
<td width="150">
Woodlands Edge
</td>
<td width="152">
Wallan (Melbourne)
</td>
<td width="105">
575-lots
</td>
<td width="84">
$200 million
</td>
<td width="123">
Under construction
</td>
</tr>
<tr>
<td width="150">
The Plaza
</td>
<td width="152">
Cnr Russell &amp; Manning Sts, South Brisbane
</td>
<td width="105">
168-apartments
</td>
<td width="84">
$75 million
</td>
<td width="123">
138 sales, under construction
</td>
</tr>
<tr>
<td width="150">
Central Village
</td>
<td width="152">
Cnr Water &amp; Brunswick Sts, Fortitude Valley
</td>
<td width="105">
~1,000 apartments + retail and commercial
</td>
<td width="84">
$450 million
</td>
<td width="123">
Launched November 2012
</td>
</tr>
<tr>
<td width="150">
Broadway on Ann
</td>
<td width="152">
Commercial Rd and 977 Ann Street, Fortitude Valley
</td>
<td width="105">
~200 apartments
</td>
<td width="84">
$105 million
</td>
<td width="123">
Due to be launched 2013
</td>
</tr>
</tbody></table>
According to Ken Woodley, the percentage of local buyers – owner-occupiers and investors – has fallen from around 60% to less than 10%, with the fall-off beginning when the RBA lifted the cash rate by 25 basis points on Melbourne Cup Day 2010 followed by further rate rises which “killed” consumer confidence.
Woodley says another three rate cuts are required to bring variable mortgage rates to around 5.9% to reverse this trend.
“We sold 62% of the 439 apartments in Hamilton Harbour [a Devine Limited project] to local buyers. Now it’s down to 8% or 9% are local buyers.”
Metro currently has $600 million worth of committed projects in the pipeline and is the dominant player in the inner-city market.
But Devine says its aim is not market domination but to deliver an attractive proposition to investors.
He says in current market conditions, Metro can deliver around 600 units a year in Brisbane and a bit more in a booming market.
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lschlesinger-FZcF9M3vE6

NRAS and SMSF investors helping keep inner-Brisbane off-the-plan market afloat: David Devine and Ken Woodley

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Australia’s mutual lending sector – touted as a fifth banking pillar rival of the major banks – appears to have endured a less than productive time over the past 12 months.
The sector earns around three-quarters of its interest income from mortgage lending and has waged a prominent campaign reminding borrowers that mutual lenders act only in the interest of their members and, unlikely the major banks,  are not conflicted when it comes to passing on rate cuts by also having to satisfy shareholder demands for rising profits.
The country’s biggest credit union, CUA, has run an<a href="https://www.youtube.com/watch?v=bjfOv-otGFU&amp;feature=plcp" target="_blank"> advertising campaign </a>urging customers to ditch the major banks with images depicting each of the four banks (NAB, ANZ, CBA and Westpac) as empty suits, with the slogan of the campaign being “Make the big banks invisible”.
In addition, credit unions and building societies compete strongly on low rate mortgage product offerings.
However, the sector does not appear to be gaining any ground on any of the second-tier banks (ING Direct, Bank of Queensland, Macquarie), let alone provide any real competition to the big four, according to the latest APRA figures.
APRA figures for the year to September show that on almost every financial measure, the fortunes of the mutual lending sector have declined: its share of the lending pie has shrunk, returns to shareholders have fallen and profitability has been eroded.
Some of this decline has been structural with total number of credit unions declining from 100 to 92 due to four credit unions converting to banks and three mergers while building society numbers have fallen by one, with the Heritage Building Society converting to a bank.
The effects of these lenders becoming banks and from industry consolidation resulted in credit unions' total housing loans decreased 12.5% to $33.6 billion over the year while building societies' total housing loans decreased 12.7% to $16.2 billion over the year.
These consolidations and ‘defections’ to the banking sector explain to a certain extent the large drop in net profits over the period – though not all of the decline - but also suggest that the industry has lost some of its more profitable operators.
The combined net profits after tax for credit unions fell 21% from $363.6 million in for the year to September 2011 to $286.2 million for the year to September 2012.
Building societies profits slump was even greater, falling 29% from $166 million to $117 million.
Some of this decline can be attributed to Heritage Building Society becoming Heritage Bank and not being included in the results for the sector - Heritage managed a $31 million profit result in its most recent annual report.
Looking at key ratios – return on equity has fallen 0.7% to 0.5% over the course of the year while return on equity has fallen from 8.6% to 6.7%.
Putting this all into perspective, the net profit earned by the banking sector – predominantly the big four banks – for the year to June (September quarter data has not yet been released) was $26 billion with the size of its lending book increasing by 7.5% to $1.33 trillion over the year.
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Latest APRA figures paint sober picture of mutual lending sector 

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Private new residential building activity picked up by 0.9% in the third quarter of 2012, following a run of five quarters of declining activity.
Total residential building activity - including renovations - rose by a more modest 0.6% to $11.2 billion as renovation work done fell by 0.2%
Westpac says the September quarter figures mark a turning point with lower interest rates begin to have an impact. “This is the start of an upswing, although the strength of the cycle remains uncertain,” says Westpac.
CommSec economist Savanth Sebastian says the outlook for the residential sector “looks much brighter”.
“Lower interest rates, strong population growth, healthy employment, and pent up housing demand is starting to see the housing sector shake of the shackles and begin a much needed resurgence, says Sebastian.
However, ANZ was less excited about the improvement in residential building activity, which it said was consistent with the improvement that it has witnessed in residential building approvals – a lead indicator for construction work done.
“Nonetheless, activity within this sector remains subdued and while we are expecting residential construction activity to strengthen further going forward, a number of structural impediments are likely to constrain the prospective upturn."
Private renovation work fell for the fourth consecutive quarter, an indication, says Westpac, "that consumers have been relatively cautious over this time”.
Construction work done in the non-residential construction sector declined by 4.5% quarter-on-quarter.
ANZ says ongoing weakness in non-residential building approvals data suggests that a “cyclical upswing in this sector remains some way off”.
Across all sectors, the volume of construction activity picked up by 1.7% over the September quarter to $51.3 billion to be 6.0% higher than a year ago and in line with market expectations with the mining investment boom once again the major source of growth in construction activity.
Westpac says the main downside surprise from its perspective was a “sharper than anticipated pull-back in public construction”.
The second quarter’s previously reported fall of 0.2% in construction work was revised up to a rise of 0.9%.
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ABS quarterly figures indicate start of residential construction upswing: Westpac

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The residential property market remains challenging, but is also varied with different factors impacting on the performance of different markets, says Bill Conn chairman of developer Becton.
“The residential market has not performed in a uniform way.
“Markets across different geographic regions and price brackets as well as housing stock have each been driven by their own particular fundamentals,” said Conn in his address to the Becton AGM in Sydney today.
Conn also said that accessing funding remained challenging due to constrained capital and credit markets.
“This has particularly affected development funding and funding of the retirement living sector.”
Becton’s two biggest projects are Newleaf in Bonnyrigg and Divercity in Waterloo and Conn said they were both tracking well in terms of sales.
The developer managed to refinance $77.5 million of debt with ANZ and the Oman Investment Fund with Conn thanking its financiers for “working with us to develop a way forward that sees the group stabilise and look to rebuild”.
Becton reported a statutory loss of $17.9 million for the 2012 financial year.
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Varied residential market and raising financing a challenge for developers: Becton chairman

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The liquidator of collapsed building firm Reed Construction has recovered just $6,500 of the more the $1 million it claims it is owed it by the property arm of the Gold Coast Titans rugby league club.
The report prepared Reed Construction liquidator Mark Robinson shows that Reed Construction has lodged a claim for $1,046,000 for money owed on the construction on the Titans' Centre of Excellence at Robina.
Robinson says that under the deed of company arrangement, the Gold Coast Titans property arm is likely to return between 1.86 cents and 17.3 cents for every dollar owed.
The Centre of Excellence was sold to Sydney investor Phil Ward and Gold Coaster Robert Clark in August for an undisclosed sum. Both Clark, the uncle of Titans football manager Scott Clark and Ward were owed $4.8 million by the club through their company Handling Solutions Pty Ltd.
Reed Construction had sought a winding-up order against Gold Coast Titans (Property) Pty Ltd just months before Reed collapsed in July with debts of $182.1?million.
Gold Coast Titans (Property) Pty Ltd was placed in administration in April with creditors voting to return it to the control of management under a deed of company arrangement in mid-May.
It has debts of around $24 million with the Gold Coast Bulletin reporting in May that it had "cash in the bank" totalling $2,193 on May 16 and total assets of $485,000. The liquidators report also details that another rugby league club, Manly Sea Eagles, owes an undisclosed amount to Reed, but says that monies are unlikely to be recovered until at least January 2014.
Reed is also seeking monies for its work done on 470 St Kilda Road, an apartment project called Leopold, designed by architect Fender Katsalidis.
Prior to Robinson’s appointment Reed had successfully won its claim against the developer of the project, but this is currently being appealed in the Victoria Supreme Court.
According to the report, Reed Construction founder Geoff Reed has submitted a proposal to the liquidators to provide $7.4 million to settle an intercompany loan and “all other claims” without any admission of liability in relation to claims that company traded whilst insolvent.
Reed has offered to provide a further $2.4 million for the payment of inter-company loans should Reed Construction be returned to the control of parent company RBG Pty Limited, which owes Reed Construction $114 million.
The proposal is backed by a personal guarantee from Geoff Reed.
In his report Robinson notes a “complex webs of related companies and intercompany loans”.
Nearly 1,500 unsecured creditors are owed $152.6 million – many of them sub-contractors. Robinson says he is currently unable to declare a likely dividend payment for these creditors.
St George Bank is a secured creditor and owed $48.1 million. Former employees are owed $5 million.
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Reed Construction liquidator recovered just $6,500 to date from Gold Coast Titans property arm

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While property values have tread water over the past year, rents have risen by double-digit figures in a number of capital city markets as well as regional areas with ties to the mining industry.
The list of the top 10 best performing rental markets is dominated by markets with ties to the mining boom, which occupy the top six positions.
The top performing rental market is Perth unit rents, which are up 27% for the year to October to a median weekly rent of $470, but not far behind is the WA country unit market, where rents have increased by 25% to $375, some of this likely tied to demand for rental property in mining regions.
Weekly rents for Perth houses are up 20% the year to October to a median of $480.
The big increases in Perth house and unit rents are being driven by a lack of available rental accommodation with residential vacancy figures for October compiled by SQM Research show a Perth vacancy rate of just 0.6%, indicating a market overwhelmingly favouring landlords.
The 10 strongest rental markets
<table cellpadding="0" cellspacing="0" border="1" style="width: 470px;"><tbody>
<tr>
<td width="205" valign="top">
Market
</td>
<td width="205" valign="top">
Median weekly rent
</td>
<td width="205" valign="top">
Year to October 2012 change
</td>
</tr>
<tr>
<td width="205" valign="top">
Perth units
</td>
<td width="205" valign="top">
$470
</td>
<td width="205" valign="top">
27.03%
</td>
</tr>
<tr>
<td width="205" valign="top">
WA country units
</td>
<td width="205" valign="top">
$375
</td>
<td width="205" valign="top">
25%
</td>
</tr>
<tr>
<td width="205" valign="top">
Perth houses
</td>
<td width="205" valign="top">
$480
</td>
<td width="205" valign="top">
20%
</td>
</tr>
<tr>
<td width="205" valign="top">
Darwin units
</td>
<td width="205" valign="top">
$515
</td>
<td width="205" valign="top">
19.77%
</td>
</tr>
<tr>
<td width="205" valign="top">
Northern Territory units
</td>
<td width="205" valign="top">
$495
</td>
<td width="205" valign="top">
19.28%
</td>
</tr>
<tr>
<td width="205" valign="top">
Brisbane houses
</td>
<td width="205" valign="top">
$450
</td>
<td width="205" valign="top">
18.42%
</td>
</tr>
<tr>
<td width="205" valign="top">
Sydney units
</td>
<td width="205" valign="top">
$525
</td>
<td width="205" valign="top">
16.67%
</td>
</tr>
<tr>
<td width="205" valign="top">
Melbourne units
</td>
<td width="205" valign="top">
$415
</td>
<td width="205" valign="top">
15.28%
</td>
</tr>
<tr>
<td width="205" valign="top">
Queensland country units
</td>
<td width="205" valign="top">
$380
</td>
<td width="205" valign="top">
15.15%
</td>
</tr>
<tr>
<td width="205" valign="top">
NSW country units
</td>
<td width="205" valign="top">
$335
</td>
<td width="205" valign="top">
13.56%
</td>
</tr>
</tbody></table>
Source: Residex
The list contains only two detached house markets with the other strongly performing detached housing rental market being Brisbane houses, where weekly rents have risen more than 18%.
Weekly rents for Brisbane unit have risen by only half that of houses (9.72%) which the current surge in new apartment developments in inner Brisbane most likely a factor.
SQM Research figures show the Brisbane vacancy rate easing slightly from 1.5% to 1.6% over October, but still well below the balanced market position of a 3% vacancy rate.
A year ago the Brisbane vacancy rate was 1.8%.
To gain a deeper understanding of the mining town of Gladstone, download Property Observer's free eBook:<a target="_blank" href="http://propertyobserver.com.au/ebooks/free-ebook-gladstone-investment-keys-to-one-of-the-nations-most-talked-about-hotspots"> </a><a target="_blank" href="http://propertyobserver.com.au/ebooks/free-ebook-gladstone-investment-keys-to-one-of-the-nations-most-talked-about-hotspots">Gladstone – Investment keys to one of the nation’s most talked-about hotspots</a>.
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Double-digit rental gains for capital city and mining town landlords: Residex

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Perth detached house values have risen more than 5% over the past three months to October in contrast to an otherwise stagnant national housing market, the latest Residex figures show.

Residex chief executive John Edwards is anticipating a stronger 2013-14, saying increases in both rental and capital growth should be higher "than what has been seen in a number of years".

However, he expects that “the market will again retreat” around 2015.

“Markets like Brisbane, Perth and Darwin are likely to see a continuation of stronger rates of capital growth; however, these areas could see growth that causes corrections of larger magnitudes than other markets in the longer term, as Residex expects the RBA to make further interest rate reductions in an attempt to stimulate non-mining areas of the economy,” says Edwards.

The October figures show that while Perth detached house values registered only a small gain (0.42%) over the month, they are up 7.47% for the year to October to a median value of $500,000.

Sales activity in Perth has also been strong, up nearly 20% for the year with more than 25,000 sales recorded.

National house values have hardly moved over the month (-0.18%), quarter (-0.05%) and year (-0.51%), with the national median detached house value being $429,500, despite a 7.25% rise in the number of sales to 293,000.

The October Residex figures suggest some green shoots of recovery in Sydney, with house values starting to trend up – rising 1.36% for the month, up just over 2% for the quarter, and up 3.14% for the year to October with a median value of $677,500.

Darwin is the only other capital city detached housing market to be in positive territory for the year – up 3% to a median value of $512,000 – though values have come off in the last quarter.

Click to enlarge
<a href="/images/stories/2012/11/residexnov28.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/11/residexnov28thumb.gif"></a>
 
Melbourne house values have been treading water over the past three months, but are still down 3.15% for the year with a median value of $556,500.

Brisbane house values are unchanged for the year at a median value of $432,000, but have risen over the past month (1.1%) and quarter (1.63%) suggesting the market may have bottomed out.

Edwards says Brisbane has been in a relatively long period of correction and "is now clearly indicating that the correction period has passed".
 
<hr class="system-pagebreak">
 
Perth has been the strongest performing unit market over the past year, with values up 13.75% to a median of $431,000, with Darwin (8.77% rise to $420,000) and Sydney (2.96% rise to $500,000) the other capital city unit markets where median values have risen over the year to October.

Nationally, unit values have performed marginally better than houses and are up 2.13% for the year to October with a median value of $403,000.
Click to enlarge
<a href="/images/stories/2012/11/residexnov281.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/11/residexnov281thumb.gif"></a>
Edwards says Perth has been the “standout capital city performer”, adding that it has been “a better year for most Australians as far as the housing market is concerned”.


“Consumer sentiment is improving. The Westpac Melbourne Institute Index of Consumer Sentiment posted a rise of 5.2% from October in November, finally bringing it above the 100 point mark to 104.3.

“At last it seems RBA interest rate reductions may be having an impact. However, I suspect that the reduced negative press about the problems in Europe may also be playing an important role.

“I also have a suspicion that the number could have been even better if the coverage of the potential that the mining boom is coming to an end had not been so prominent in the media,” he added.
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Perth the standout performer while Brisbane bottoms out as house values tread water in October: Residex

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Global serviced office provider Servcorp has expanded its portfolio of leased office space in Australia with new floor leasings in Melbourne, Perth and Parramatta but says the CBD office market remains soft.
Among its latest CBD office floor leasings is a whole floor in the BHP/Brookfield Place skyscraper on Perth’s St Georges Terrace, which along with leasings at 101 Collins Street in Melbourne and a floor in the new Deloitte Eclipse tower in <a href="/news">Parramatta</a>, takes its portfolio of leased office space to 27 floors across Australia and New Zealand.
Servcorp operates 30,000 square metres of leased premium office space, which last year brought in revenue of $54 million.
Serviced office space can be rented from around $260 per week with flexible leases starting from one month.
Servcorp chief operating officer Marcus Moufarrige tells Property Observer that contrary to what might be thought, the serviced office market operates in the same cycle as the overall office market.
“Serviced offices are cyclical, not counter-cyclical. They are a good barometer of what’s happening in the market,” he says.
Moufarrige says Australia got "pretty badly punished from a commercial real estate perspective" and expects a recovery to be about a year off.
"We’ve looked to take advantage by signing some more space in Australia.”
Servcorp targets space in only A-grade and premium office blocks with the emphasis on leasing space in prestigious and recognisable office landmarks.
The new floor in 101 Collins Street – the second floor leased in the building by Servcorp – is located at the Paris end of Collins Street and will be targeted at both emerging and established business organisations, ranging from small businesses to multi-nationals to companies looking for project space or rotating workspace solutions. Other tenants include Macquarie Bank, Cisco and Goldman Sachs.
Globally, it operates in 125 locations in 21 countries, which includes space leased in the Louis Vuitton building on the Champs Elysees in Paris as well as a pre-commitment to lease space in One World Trade Center – Manhattan's Freedom Tower – currently being built on the site of the World Trade Centre.
Servcorp’s biggest market in Australia is Sydney, where it has space in 10 office towers with the remainder distributed between Melbourne, Brisbane and Perth.
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Servcorp builds Australian portfolio with prestige leasings in Melbourne, Perth and Parramatta 

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Property prices are expected to grow by a maximum of 5% over 2013 but could remain flat over the course of the year, according to the findings of the 2013 Deloitte Australian Mortgage Report.
The findings are based on the sentiments of a roundtable discussion of senior executives from the major banks, non-bank lenders, mortgage brokers, mutual lenders and mortgage insurers.
Click to enlarge
<a href="/images/stories/2012/11/deloittenov28.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/11/deloittenov28thumb.gif"></a>
The sentiment from roundtable participants is that consumer confidence is the main reason borrowers are holding back.
In November, the benchmark <a target="_blank" href="https://www.propertyobserver.com.au/trends/consumer-confidence-soars-to-highest-level-since-april-2011-but-december-rate-cut-still-likely-westpac/2012111457828">Westpac-Melbourne Institute consumer confidence index</a> reached its highest level since April 2011, but is still up only 0.9% on a year ago – despite rate cuts totalling 125 basis points over this time frame.
“The sentiment of the roundtable was that despite the combination of interest rate reductions and stronger personal balance sheets, the current flat property prices combined with what was perceived as real systemic issues around consumer confidence, would be likely to keep borrowers sitting on the fence in 2013,” says the Deloitte report.
“However, given that Australia suffers an endemic shortage of housing stock, even in a slower market it is expected that property prices will remain ‘there or thereabouts’ if not achieve a modest level of growth. 
The key trend identified by the roundtable was householders continuing to deleverage their debt as well as investor confidence returning as "disillusionment with equities continues and property yields improve".
Deloitte financial services partner James Hickey says household deleveraging  is currently "mostly ancillary debt – credit cards and personal loans etc. – but it also includes the high end investment property sector.
“As interest rates fall, lenders are seeing borrowers taking the opportunity to reduce their mortgages rather than increase their spending,” he says.
As a consequence of this deleveraging, demand for mortgages is likely to remain at subdued levels, with settlements forecast to grow at around 5% compared with current annualised growth of 4.7%.
While this growth is modest against historical trends, the report notes that unlike other mature international markets like the US and the United Kingdom, “Australia’s mortgage sector has maintained momentum and continues to grow”.
However the days of 10% to 15% annual mortgage growth won’t be returning any time soon, Deloitte says.
The report says lenders will look to retain customers and cross sell them other products rather than “competing aggressively for new customers”.
And due to deposit costs remaining high, there will be further pressure on bank margins making it harder for banks to pass on RBA cash rate reductions in full.
The full list of round-table participants were Mortgage Choice (Michael Russell, chief executive officer), CUA (Tony Taylor, chief financial officer),  HSBC: (Alice del Vecchio, head of mortgages), Deloitte (Louise Denver), Genworth (Paul Caputo, chief risk officer, Pepper Home Loans (Todd Lawler, treasurer), Aussie Group (John McDonald, chief financial officer), AMP Bank: (Robert Slocombe, chief operating officer), Deloitte (Ian Harper, Deloitte Access Economics), Commonwealth Bank: (Clive van Horen, head of mortgages), Westpac Group (Nick Bateup, head of mortgages) and  Firstfolio (David Hancock, chief executive officer).
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Modest growth tipped for mortgage lending in 2013 but investor confidence returning: Deloitte

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Fast-growing 24-hour gym franchise Anytime Fitness says its status as a mini-major and “traffic drawcard” means it can negotiate significant rental incentives of up to 25% for new retail leases.
Anytime Fitness has opened over 200 gyms in Australia since launching locally in 2008 and has added around 100 new franchised premises in the past 12 months, the most recent being on Mount Alexander Road in <a target="_blank" href="/news">Essendon</a>, Melbourne.
It is part of a fast-expanding sector of low-cost 24-hour/seven-day-a-week gyms with premises in malls, retail strips and in bulky goods centres.
While Anytime Fitness does not reveal the commercial terms of its arrangements, based on rents paid in advertised commercial listings, Property Observer estimated franchisees pay net rents of around $300 to $350 per square metre, before factoring in incentives.
Typical space requirements range from 300 square metres to 600 square metres, with a preference for sites 400 square metres or bigger. Sufficient air-conditioning for the space is also a key requirement.
In addition to being in prime and convenient locations, offering great visibility of its signage to passing traffic, the gym group seeks sites close to local supermarkets or other major retailers that are well aligned with the convenience aspect of the model.
Matthew Rodrigues, internal operations manager at Anytime Fitness Australia, tells Property Observer there is “always some room for negotiation with landlords”, but it won’t pay rates outside of market conditions.
He says the gym franchise is classified as a mini-major in most shopping centres, acting as a traffic drawcard and “providing significant and ongoing visitation to the centre”.
“As a result of this, Anytime Fitness requires incentives to allow them to build their membership base and ensure the longevity of the business.
He says incentives include rent free periods, cash contributions or some refurbishment undertaken by the landlord “beyond a warm shell”.
“While they vary across the country, in the most part we are achieving incentives of between 10% and 25% of the initial lease term,” he says.
Rodrigues says that in most instances, once a new territory for a gym is chosen, a territory brief will be sent to the market, announcing Anytime Fitness’ interest in a particular area and its property requirements.
“The territory brief will request property submissions for consideration by the leasing managers.
“Sites will be assessed on their merits, and negotiations will commence on prime or preferred candidates,” he says.
The gym group also has a number of freehold properties within the portfolio and has also partnered with a number of developers on custom-built facilities.
Expansion plans are currently focused on Brisbane, Perth and Melbourne as well as a number of regional centres.
Jetts is another fast-growing gym chain, with more than 150 branches.
Earlier this year established gym group Fitness First put 24 of its 97 Australian gyms up for sale due to debt problems at its UK parent company.
Another gym chain, Virgin Active, has three branches in Sydney and one in the Melbourne CBD, but has not added any new gyms to its network since 2009.
In September, <a href="https://www.propertyobserver.com.au/leisure/ardent-leisure-group-to-buy-fenix-fitness-clubs-for-%24609-million/2012091456576" target="_blank">Ardent Leisure Group agreed to buy Fenix Fitness Clubs for $60.9 million</a> in a move signalling further consolidation in the health and fitness sector.
Anytime Fitness was introduced in Australia in 2008 by brother-and-sister team Justin McDonell and Jacinta McDonell Jiminez.
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Anytime Fitness able to negotiate significant rental incentives as 'mini-major' drawcard  

<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.

A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.

Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.

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“The apartment floors deliver a collection of homes that embrace controlled outlook via a series of bay windows deliberately framing moments of view,” Rothelowman Director Kim Lowman said.

From outside, those projecting forms contribute to the tower’s faceted profile. Strong horizontal and vertical elements establish its proportions, while the changing position of the sun alters the light, shadow and reflection across the façade throughout the day.

The same attention moves inside the apartments, where the material palette combines warm timber, natural stone, metallic detailing and softer curved forms. Kitchens sit within the main living zone, with stone island benches, integrated joinery and European appliances, before the living areas extend towards the glazing and the outlook.

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Three genuine bedrooms provide room to accommodate family and guests, while two secure car spaces and storage address some of the practical considerations that can become more noticeable when moving from a larger home. Feedback from the display suite has centred on the warmth and restraint of the interiors, with buyers commenting that the residences feel like homes rather than conventional coastal apartments.

A limited collection of half-floor penthouses occupies the upper levels, increasing the scale of the living spaces and adding private balconies and elevated finishes. From this position, the outlook extends between the ocean and hinterland.

Outside the private residences, The Eveleigh separates its shared spaces between the podium and rooftop. The podium is centred on wellness, with subtropical landscaping surrounding a swimming pool and pool terrace, yoga garden, private gymnasium, sauna and hot and cold plunge facilities. Landscaped retreats and pavilions provide additional places to sit away from the main recreation areas.

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Higher in the building, a rooftop pavilion and private dining suite sit alongside resident lounge, barbecue and outdoor dining areas, opening towards panoramic views across the ocean, city and hinterland.

“Buyers are no longer just looking for an apartment, but a lifestyle where they can relax, reset, and enjoy a balanced way of living,” Hirsch &amp; Faigen Director of Sales Matt George said.

Interest to date has come from established owner-occupiers and interstate lifestyle purchasers, including buyers planning a future move to the Gold Coast. Many are coming from larger homes and want to reduce ongoing maintenance without giving up space for family and guests, privacy, two car spaces or the ability to entertain at home.

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Much of that daily life can also take place beyond the building without requiring a drive. Kurrawa Beach and Pratten Park are an easy walk from Surf Parade, while Pacific Fair, Oracle Boulevard, The Oasis, restaurants, cafés, entertainment and public transport are also within walking distance.

The Eveleigh is Hirsch &amp; Faigen's fourth Gold Coast development since entering the market in 2021, following The Hemingway at Palm Beach, The Emerson at Kirra and Yves at Mermaid Beach. Each of the preceding projects sold out before completion.

“Broadbeach had been on our radar throughout our time operating on the Gold Coast,” the developer said. “Following our projects in Palm Beach, Kirra and Mermaid Beach, Broadbeach represented the natural next step for the business.”

The Surf Parade site brought together proximity to the beach, protected coastal outlooks and walkability to dining, shopping and recreation. Hirsch &amp; Faigen also identified the street as an emerging premium residential address, with enough separation from Broadbeach's busier destinations to retain a quieter environment at home.

The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.

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Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

A long-stalled Campbelltown development site is back in play, with new plans for 139 apartments set to supersede a mixed-use scheme approved almost a decade ago but never built.

The new proposal for 28 Cordeaux Street would deliver 116 market and 23 affordable apartments in a part 14-storey building, bringing a substantial new project into a Campbelltown market where new apartment supply remains limited.

Plans have been filed over the 3,092 sqm corner site at Moore-Oxley Street, around 600 metres from Campbelltown Railway Station and the city-centre retail core.

The site already carries a mixed-use residential approval dating to 2016. Doroch Architects has now been engaged on a larger replacement scheme, which is progressing as a State Significant Development Application following a Housing Delivery Authority determination in August 2025.

The apartment mix comprises 39 one-bedroom, 72 two-bedroom and 28 three-bedroom residences. Two-bedroom apartments make up just over half of the project, while three-bedroom homes account for 20 per cent.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="136dd5b9-3791-4da6-9e31-76f533f5b4de" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da2.png?VersionId=LgOSy9nwf5u.MGswBBwaGGxuX8QpHSl_" />

Of the 139 apartments, 23 will be delivered as affordable housing under the in-fill affordable housing provisions of the Housing SEPP. The affordable component represents 15 per cent of the residential gross floor area and will be managed by a registered Community Housing Provider.

Doroch has sought to break the scale of the building into two distinct elements, with a masonry podium of around four storeys establishing the street edge before the residential tower steps back above.

The corner position has shaped that approach. Cordeaux Street faces toward the commercial and civic centre, while Moore-Oxley Street leads into the lower-scale residential neighbourhood to the south, and the design verification report describes the site as "bridging the commercial core to the north and established residential areas to the south."

The podium will be expressed predominantly in face brick, while the upper levels shift to brushed and grooved concrete cladding with darker metal detailing. Recessed sections, deep balcony edges and landscaping break down the upper form, with an approximately 11.8-metre setback to the northern boundary addressing the adjoining St Peters Anglican School.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="c8b3d2d3-c561-4bfc-a5d9-a68c0c10dac1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da1.png?VersionId=AeAEyJU02Gk2k5noUj2StziCvdQ7fW4B" />

Campbelltown has been starved of new residential developments in the last decade.

The only other notable development set to come to market this year is ALAND's Queen Square, a mixed-use precinct on over two hectares that will comprise apartments above a vibrant ground-level retail and hospitality dining precinct.

First look: New 139-apartment plans revive long-stalled Campbelltown city centre site

First Look: Sherlock Construction pitches apartments for low-rise Deception Bay

Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

First look at MAYD's North Kirra mixed-use precinct

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Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

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The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

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Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

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Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

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Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

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Larry Schlesinger

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