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WBP Property Group chief executive Greville Pabst says property valuers make easy scapegoats in a soft property market but says the vast majority do a good job and are only “interpreting the market”.
Pabst says it is very easy to blame someone when your home is valued less than what you believe it is worth because people form emotional attachments but says valuers “do not set the market”.
“Valuers are the obvious people to blame,” he tells Property Observer.
“But property values have fallen – we are only the messengers.”
Pabst says good valuers base their valuations on a plethora of historical sales data (sales on the same street, the street behind, in the suburb, etc) and by taking into account the features and characteristics of the individual property.
“Our job is to compare apples with apples and then discount for the bruises,” he says.
Pabst says valuations often come in under buyers' expectations with house-and-land packages bought on the fringes of the city as well as off-the-plan apartments, when contracts are exchanged sometimes two years ahead of settlement.
“You might have bought off the plan 18 months ago. It’s a package. You are buying the land, which has been discounted to reduce the stamp duty while the building costs have been maximised so the buyer can take advantage of the maximum rate of depreciation. Plus there is the developer’s profit and risk factored into the price, the marketing cost and in some cases elevated commissions.
“All this is factored into the price, but that is not the real value.
“Price is what you pay – value is what your get.”
 
<hr class="system-pagebreak">
 
He comments follow criticisms of the service provided by property valuers from <a href="https://www.propertyobserver.com.au/residential/property-valuations-a-waste-of-time-and-money-terry-ryder/2012110557626" target="_blank">Property Observer commentator Terry Ryder</a> concerning how valuers determine their valuations and how – in Ryder’s experience – the valuations can be easily changed.
Pabst says buyers should keep in mind that valuations are legally binding documents that can be challenged. 
He does acknowledge that valuers who act on behalf of banks and mortgage insurers are  “conservative beasts” but says they are not in the business of employing “rogue valuers”.
He adds that valuers also have a duty to protect the banks’ interest and ensure that should a bank be forced to sell a property as mortgagee-in-possession they get their money back.
“The whole banking system has changed. Capital is scarce. There are far tighter controls and banks have become far more selective and more focused on managing their risk.
“They are the ones, after all, who are stumping up the money.”
“Banks lend money based on our advice. We act as the ears and eyes of the bank,” he says.
He also questions why so many buyers rely on the word of the estate agent, who is acting on behalf of the vendor.
“From the minute you walk in the door the agent is using every tactic they can to sell you the property.”
He says in most cases valuations  are done because of a statutory requirement: for the purposes of getting a loan, or  if a house has to be sold due to divorce or a business partnership being dissolved.
But he says buyer should consider using a valuer before they purchase to ascertain the true value and he says he is amazed that so many do not get any objective advice before making such a significant purchase.
“You wouldn’t make other investments without first seeking advice, so why not with property?”
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lschlesinger-FZcF9M3vE6

Property valuers just messengers in softer market: Greville Pabst

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Nine months after a tile fell from its façade forcing the closure of retail stores, a protective barrier remains around ISPT’s façade-damaged 447 Collins Street office tower.
The future of the 20-storey Godfrey &amp; Spowers-designed office building, built in 1965, remains uncertain with ISPT committed to repairing the façade but also seeking to redevelop the building.
It remains tenanted in part by Suncorp, which also owns the naming rights to the building on the corner of Collins Street and William Street in the Melbourne CBD. 
However, <a target="_blank" href="https://www.propertyobserver.com.au/office/tenants-yet-to-get-compensation-guidance-after-emergency-closure-of-collins-street-office-building/2012020953323">pedestrian access remains blocked, with barriers erected on three of the four sides.</a>
Daryl Browning, chief executive officer of ISPT, tells Property Observer the building will remain tenanted by Suncorp until mid-2013.
“Some works will be undertaken on the facade over the next six months as agreed with Melbourne City Council,” says Browning.
A spokesperson for Melbourne City Council confirmed that ISPT have applied for a building permit “for the installation of a system that will secure the panels and enable the public protection to be removed”.
“The first stage of the permit will address the western side of the building.  A second stage permit will then be required for the remainder of the building
“The documentation is currently being assessed for compliance with the relevant regulations, codes and standards.  Barriers and traffic management installed to protect the public will remain in place until the works are complete,” says the spokesperson.
Part of the façade has been removed entirely, exposing the grey concrete behind it, while the other parts of the facade are held in place by a steel framework.
The building forms part of ISPT’s Core fund, one of the Australia’s largest unlisted property funds, with a valuation as of September 30 of $6.8 billion.
According to the 2012 ISPT annual report, the building is one of a number that are earmarked for future development.
The report does not provide any information or update regarding the damage to the façade, which forced Melbourne City Council to issue an emergency order and the protective barriers installed.
ISPT has approval to build a Buchan Group-designed 11-storey office block and a two-storey restaurant on the site, with permit due to expire in December 2015.
However, the building was recommended for heritage protection in July 2011 by Melbourne City Council.
The collection of shops at the Collins Street-facing side of the building were forced to close when the tile fell. Two shops on the William Street side of the building – a furniture store and barber – continue to operate.
The ground floor foyer and large plaza forecourt – a popular lunchtime eating spot – have also been closed since the two-metre-by-one-metre marble panel fell into the plaza on January 30.
ISPT bought 447 Collins Street for $81 million from AXA in November 2004.
Browning told Property Observer in February the weather could have affected the adhesive.
“Just as windows can break, adhesions or fixings can be affected by weather, extreme weather. There could be some breakdown in the metal or the adhesive. It unfortunately does happen,” he said.
Tenants affected by the closure of their shops must apply to ISPT for compensation, Browning said in late March.
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Suncorp to remain short-term tenants of ISPT’s façade-damaged Melbourne CBD office building

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Foreign and domestic institutional investors have “dominated” the purchase of prime Sydney industrial assets over the past six months to October, according to the latest report from Colliers International.
GPT, GIC of Singapore, Goodman, Charter Hall, Dexus and Aviva all purchased assets over this  period.
“Secure, long-term leases and competitive yields that prime grade assets offer have driven risk-averse institutional buyers back into the market,” notes Colliers International.
At the same, “consolidation and cost-reduction strategies has seen tenants seek out quality facilities that assist the performance of their businesses”.
Institutional investor acquisitions over the past six months have included Goodman’s acquisition of 105-111 Vanessa Street, <a target="_blank" href="/news">Kingsgrove</a>, measuring 33,200 square metres, the only prime-grade investment sale to take place to date in 2012 within the south Sydney industrial market. The $48.5 million sale reflected a capital value of $1,960 per square metre, making it the biggest industrial purchase over the past six months. GIC of Singapore secured the second biggest purchase of this period, paying $28 million ($1,325 per square metre per annum) for 94-106 Lenore Lane in <a target="_blank" href="/news">Erskine Park</a> on yield of 8.15%. The 21,000-square-metre facility was leased to DB Schenker, one of the world’s leading integrated logistics services providers, in April on a seven-year lease. The vendor was Dexus.
The report notes strong ongoing demand for prime-grade facilities “tightening availability”, with prime-grade rents having increased by as much as 5% in some markets over the past six months.
There is currently around 232,200 square metres of industrial space under construction across Sydney, with only 6,000 square metres more than halfway through the construction process.
Despite the success of a number of speculative developments over the past 12 months, there are a limited number of speculative projects due for completion over the remainder of 2012.
However, there is a strong pipeline of projects planned for the next development phase with 219,500 square metres of projects having already received development approval and 181,000 square metres being tendered for construction.
The most expensive industrial market to rent in Sydney is the northern market (in an arc from <a target="_blank" href="/news">North Sydney</a> to <a target="_blank" href="/news">Hornsby</a>), where prime net face rents range from $160 to $190 per square metre per annum, with prime yields ranging from 8% to 8.75% and secondary yields ranging from 9.5% to 11%.
Click to enlarge
<a rel="shadowbox" href="/images/stories/2012/11/colliersnov14.gif" title="Click to enlarge"><img src="/images/stories/2012/11/colliersnov14thumb.gif"></a>
However, Colliers International notes that stock, on or off market for sale, does not meet institutional investor requirement of a prime asset with a long weighted average lease expiry (WALE).
As a result of the market bottoming out, a number of opportunistic buyers look to acquire secondary grade assets at yields higher than 10%.
These sales include 114-120 Old Pittwater Road, <a target="_blank" href="/news">Brookvale</a>, a secondary-grade asset was purchased by Primewest for $40.5 million, representing a market yield of 10.53%.
“These buyers are looking to take on the leasing risk, re-lease, reposition and sell the asset within a three to five year time frame," notes Colliers International.
The largest industrial pre-commitment over the past six months was Super Retail Group agreeing to lease a 45,000-square-metre prime-grade facility at Lenore Drive, Erskine Park with a lease term of 15 years.
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Local and foreign institutional investors swoop for prime Sydney industrial assets

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The common perception of first-home buyers as 20-somethings may need to be reconsidered, with a new survey showing a declining trend in first-home buyers aged 29 and under and a rising proportion of buyers aged 40 and over.
A Mortgage Choice online survey of 1,000 Australians who plan to buy their first home in the next two years found that the greatest proportion of first-home buyers (41%) are aged between 30 and 39, compared with 39% aged 18 to 29.
The proportion of prospective first-home buyers aged 40 and over was 20%, or one in five.
These results build on earlier online polls that show a trend of first-home buyers choosing to purchase when they are older and a marked decline in younger buyers.
The Mortgage Choice 2011 recent first-home owner survey found that the majority of first-home buyers (55%) were aged between 18 and 29, this itself a fall from a 2010 survey when 63% of respondents were in this age bracket.
The 2011 survey also found that 34% of recent first-home buyers were aged between 30 and 39, and only 11% were aged 40 and over.
Mortgage Choice spokesperson Belinda Williamson says the results of the survey show that “more first-home buyers are saving for longer and purchasing later in life, perhaps when they are in a better financial position”.
Other findings of the 2012 survey tie in with the shift towards older first-home buyers, with the average period to save for a deposit increasing from 1.8 years in the 2011 survey to two years in 2012.
It also found that job security concerns have increased notably since 2011, with 18% of 2012 respondents claiming it to be their biggest concern, compared with 11% last year.
Conversely, fewer buyers are concerned about rising house prices (22% this year compared with 31% in 2011) and even fewer are concerned about the impact of interest rates on their ability to purchase their first home (8% this year compared with 14% in 2011).
“While many of the economic indicators such as rate cuts, lower house prices and improved affordability might suggest now is a good time to buy, people are still nervous about their ability to sustain employment,” says Williamson.
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First-home buyers increasingly ageing into their 30s and one in five even aged 40 and over: Mortgage Choice 

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Consumer confidence soared to its highest level in more than a year-and-a-half in November but a cash rate cut is still likely on December 4, says Westpac chief economist Bill Evans.
The Westpac Melbourne Institute Index of Consumer Sentiment increased by 5.2% in November from 99.2 in October to 104.3 in November - its highest level since April 2011 when the cash rate was 4.75%.
The sub-index measuring whether now is a good time to purchase a dwelling remained unchanged, but at its highest reading since September 2009 of 139.8 (the index average is 122.5) following a jump of 9.6% last month.
Evans says despite no change over November to this sub-index, it is “still clearly signalling a boost to confidence around the housing market”.
“Even those folks who hold a mortgage increased their overall confidence reading by 2.9% despite the likely disappointment from the Reserve Bank’s decision,” says Evans.
Respondents were surveyed between November 5 and November 11 so “largely captured the impact on confidence impact on confidence of the Reserve Bank’s decision”.
However the index is up just 0.9% on a year ago following the first 25 basis point cut from the Reserve Bank on November 2 last year.
<img src="/images/stories/2012/11/sentimentnov14.gif">
“In effect, the subsequent 125 basis points of rate cuts have only really now been successful in holding the index at that level which we reached in November last year,” says Evans.
He says the best policy for the RBA would be to cut the cash rate again on December 4.
“With private rates still comfortably above those levels of recent easing cycles it would be unfortunate if the RBA becomes over optimistic to the first sign that its policies are gaining traction.
“The Australian economy is facing uncertainty around the mining sector and with contractionary fiscal policy and a punishingly high Australian dollar, we need further rate cuts to help build on these early signs that lower rates are having an impact on households’ confidence," says Evans.
All components of the index increased in November with the biggest sub-index rise being for “family finances vs a year ago”, which lifted 11% to 91.8 above the historical average of 90 indicating an improved level of financial comfort among households.
However, confidence fell sharply by 5.2% in Western Australia, “the dominant resources state” and also fell by 8.7%, in South Australia “where ongoing disappointment around the cancellation of the Olympic Dam project may be a factor”.
“In contrast to this, confidence surged 14.2% in New South Wales where mining activity is less significant and, arguably, prospects are brightest for the property market,” says Evans.
According to Evans, the more likely explanation for the strong uplift in November is that “households are becoming more comfortable with the global outlook and are finally responding to the series of rate cuts”.
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Consumer confidence soars to highest level since April 2011 but December rate cut still likely: Westpac

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Sydney’s Pitt Street mall has dropped from fourth to fifth place in the latest list of the world’s most valuable retail destinations, according to analysis by Cushman &amp; Wakefield.
The 2012 report has found that rents on Pitt Street mall have remained unchanged at US$952 per square foot over the past year, with the location suffering from not having enough landmark building on the strip to attract higher rents.
In local currency, rent on Pitt Street mall are around $10,000 per square metre, more than double the $5,000 per square metre on nearby, but far less fashionable George Street.
The report says it is more expensive to rent space on Brisbane’s Queens Street mall ($5,000 per square metre) than on Bourke Street in Melbourne ($4,500 per square metre).
The world’s 10 most expensive retail locations in each country (2012)
<table border="0" cellspacing="0" cellpadding="0" style="width: 470px;"><tbody>
<tr>
<td width="47" valign="top">
Rank 2012
</td>
<td width="47" valign="top">
Rank 2011
</td>
<td width="104" valign="top">
Country
</td>
<td width="76" valign="top">
City
</td>
<td width="142" valign="top">
Street
</td>
<td width="66" valign="top">
US$/sq ft/year
</td>
<td width="100" valign="top">
% change
local measure
</td>
</tr>
<tr>
<td width="47" valign="bottom">
1
</td>
<td width="47" valign="bottom">
2
</td>
<td width="104" valign="bottom">
Hong Kong (China)
</td>
<td width="76" valign="bottom">
Hong Kong
</td>
<td width="142" valign="bottom">
Causeway Bay
</td>
<td width="66" valign="bottom">
2,630
</td>
<td width="100" valign="bottom">
34.9
</td>
</tr>
<tr>
<td width="47" valign="bottom">
2
</td>
<td width="47" valign="bottom">
1
</td>
<td width="104" valign="bottom">
USA
</td>
<td width="76" valign="bottom">
New York
</td>
<td width="142" valign="bottom">
Fifth Avenue
</td>
<td width="66" valign="bottom">
2,500
</td>
<td width="100" valign="bottom">
11.1
</td>
</tr>
<tr>
<td width="47" valign="bottom">
3
</td>
<td width="47" valign="bottom">
5
</td>
<td width="104" valign="bottom">
France
</td>
<td width="76" valign="bottom">
Paris
</td>
<td width="142" valign="bottom">
Avenue des Champs-Élysées
</td>
<td width="66" valign="bottom">
1,129
</td>
<td width="100" valign="bottom">
30.0
</td>
</tr>
<tr>
<td width="47" valign="bottom">
4
</td>
<td width="47" valign="bottom">
3
</td>
<td width="104" valign="bottom">
Japan
</td>
<td width="76" valign="bottom">
Tokyo
</td>
<td width="142" valign="bottom">
Ginza
</td>
<td width="66" valign="bottom">
1,057
</td>
<td width="100" valign="bottom">
0.0
</td>
</tr>
<tr>
<td width="47" valign="bottom">
5
</td>
<td width="47" valign="bottom">
4
</td>
<td width="104" valign="bottom">
Australia
</td>
<td width="76" valign="bottom">
Sydney
</td>
<td width="142" valign="bottom">
Pitt Street Mall
</td>
<td width="66" valign="bottom">
952
</td>
<td width="100" valign="bottom">
0.0
</td>
</tr>
<tr>
<td width="47" valign="bottom">
6
</td>
<td width="47" valign="bottom">
6
</td>
<td width="104" valign="bottom">
UK
</td>
<td width="76" valign="bottom">
London
</td>
<td width="142" valign="bottom">
New Bond Street
</td>
<td width="66" valign="bottom">
936
</td>
<td width="100" valign="bottom">
3.1
</td>
</tr>
<tr>
<td width="47" valign="bottom">
7
</td>
<td width="47" valign="bottom">
8
</td>
<td width="104" valign="bottom">
Switzerland
</td>
<td width="76" valign="bottom">
Zurich
</td>
<td width="142" valign="bottom">
Bahnhofstrasse
</td>
<td width="66" valign="bottom">
854
</td>
<td width="100" valign="bottom">
8.7
</td>
</tr>
<tr>
<td width="47" valign="bottom">
8
</td>
<td width="47" valign="bottom">
7
</td>
<td width="104" valign="bottom">
Italy
</td>
<td width="76" valign="bottom">
Milan
</td>
<td width="142" valign="bottom">
Via Montenapoleone
</td>
<td width="66" valign="bottom">
825
</td>
<td width="100" valign="bottom">
2.9
</td>
</tr>
<tr>
<td width="47" valign="bottom">
9
</td>
<td width="47" valign="bottom">
9
</td>
<td width="104" valign="bottom">
South Korea
</td>
<td width="76" valign="bottom">
Seoul
</td>
<td width="142" valign="bottom">
Myeongdong
</td>
<td width="66" valign="bottom">
686
</td>
<td width="100" valign="bottom">
16.0
</td>
</tr>
<tr>
<td width="47" valign="bottom">
10
</td>
<td width="47" valign="bottom">
10
</td>
<td width="104" valign="bottom">
Germany
</td>
<td width="76" valign="bottom">
Munich
</td>
<td width="142" valign="bottom">
Kaufingerstraße
</td>
<td width="66" valign="bottom">
495
</td>
<td width="100" valign="bottom">
6.1
</td>
</tr>
</tbody></table>
Source: Cushman &amp; Wakefield 
 
The report notes that luxury retailers in Australia are largely located in Sydney along Pitt Street mall, Westfield Sydney Shopping Centre, George Street and Martin Place.
“There is, however, a noticeable disparity between the rents paid by luxury and mass-market retailers. Luxury brands are attracted by properties which stand out – for example a landmark building or location.
“Despite a number being located on Pitt Street, they are often situated a block away from the main strip, allowing them to build their own identity and also pay more moderate rents,” says Cushman &amp; Wakefield.
Hong Kong’s Causeway Bay has replaced New York’s Fifth Avenue as the most expensive retail location for the first time in 11 years.
Causeway Bay retail property values have increased 35% over the past year, while Fifth Avenue values have managed only 11.1% growth.
Of the 326 prime locations in 62 countries surveyed for the report, a total of 147 had rent rises. 
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Sydney’s Pitt Street mall drops to fifth most valuable retail strip: Cushman & Wakefield

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The median price of Melbourne has fallen for the seventh straight quarter and is now well below $200,000 once rebates and incentives are factored in, according to the September quarter Melbourne Growth Area Land Report by Oliver Hume.
It is also the second consecutive quarter that the median land price has fallen below $200,000, with Oliver Hume estimating that $30,000 has been sliced off the median price since the market peaked in December 2010.
Measured across 139 projects, Oliver Hume says the gross median land price over the September quarter was $208,750, or $195,750 after deducting incentives and rebates.
The difference in the two median values exactly matches the $13,000 grant that was withdrawn by the state government on June 30, which was for first-home buyers buying or building new homes up to a value of $600,000.
The report says it may be time to question “what would be the physiological effect on the retail market if rebates and incentives were removed”, adding that “many key stakeholders believe that such an action would reinstall much needed buyer confidence”.
Last month, <a target="_blank" href="https://www.propertyobserver.com.au/land/price-melbourne-land-at-its-true-value-and-buyers-will-come-australand/2012102357384">Rob Pradolin, Australand general manager for residential in Victoria</a>, told Property Observer, developers needed to acknowledge that the “market price of [Melbourne] land has changed” and a “re-adjustment in Melbourne land prices” had taken place.
Click to enlarge
<a href="/images/stories/2012/11/humenov14.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/11/humenov14thumb.gif"></a>
The report notes that when rebates and incentives are factored in the fall in first-home buyer median land budgets post the September 2010 peak  has been far more dramatic, falling $48,000, or around 25% to $186,000 – a land price level last experienced in the September quarter 2009.
“Current first-home-buyer land expenditure is thus largely in line with the short-term median – which could be interpreted as a stabilising market," says Oliver Hume.
“Or more importantly, as a key leading indicator that land prices are around where they should be in a balanced market."
The report also found that the rate of supply has adjusted to meet the softer market conditions with just 180 lots added to the current pipeline over the quarter, pushing up total retail supply to around 3,700 lots or just under seven months of supply at current sales rates.
The municipality of Hume continued to record the strongest project sales rate, around eight sales per project per month, followed by Casey, with six sales per project per month in the year to date.
Only two new communities were launched over the quarter in Casey and Hume, which will comprise 589 lots when fully developed and a median land price across the two new projects of $214,950.
This brings the year-to-date count to 19 projects, or around 5,421 lots.
In terms of the 139 projects, Wyndham contains 24% of all projects, followed by Whittlesea and Casey, with 22% and 17% respectively.
The most affordable suburbs are in the Shire of Melton ($164,000), most notable in and around Melton township. <a target="_blank" href="/news">Werribee South</a> ($609,000), <a target="_blank" href="/news">Bundoora </a>($466,250) and <a target="_blank" href="/news">Narre Warren North</a> ($395,000) are the three most expensive suburban land markets
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Median price of Melbourne land falls to $195,750 once rebates excluded: Oliver Hume

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BIS Shrapnel is forecasting the metropolitan Melbourne office market to weaken significantly over the next 12 months, with the vacancy rate reaching 10.6% by the end of 2013.
It forecasts a metropolitan-wide negative net absorption rate of around 130,000 square metres over 2012-13, the worst annual rate of net absorption in the post-GFC period and worse than in the 2002–2003 slowdown.
Net office absorption is the amount of space leased minus the amount of space vacated over a given time frame.
The metropolitan office market incorporates the city fringe (<a href="/news">Port Melbourne</a>, <a href="/news">Richmond</a>, <a href="/news">Collingwood </a>and <a href="/news">East Melbourne</a>) and suburban office markets extending in a 20-kilometre radius around the city.
In its first half of 2012 report, Colliers calculated the Melbourne metropolitan office vacancy rate at 6.2%, with the highest vacancy rate of 7.7% in the outer east (<a href="/news">Box Hill</a>, <a href="/news">Mt Waverley</a>, <a href="/news">Mulgrave </a>and <a href="/news">Burwood</a>) and the lowest in the city fringe (5.5%)
<img src="/images/stories/2012/11/bisnov14.gif">
According to BIS Shrapnel, the implications for landlords and tenants are clear, with an “extremely tough two years” ahead for the Melbourne office market.
“It’s already a tenant’s market and conditions for tenants will become even brighter over the next two years," says Maria Lee, senior project manager at BIS Shrapnel and author of the Melbourne Commercial Property Prospects 2012 to 2022.
“Tenants will be well placed to delay leasing negotiations to take advantage of greater leasing incentives and lower rents. Meanwhile, landlords should focus on leasing strategy to preserve cashflows and property values through the downturn.”
The report notes that the CBD and <a href="/news">Docklands</a> will be somewhat insulated by the fact that several tenants are centralising from the suburbs. BIS Shrapnel forecasts negative net absorption of 50,000 square metres over 2012–13 before the market turns  positive in the following year.
 
<hr class="system-pagebreak">
 
According to Lee, there is a common misconception that the current softness in Melbourne’s office leasing market is due to nationwide lack of business confidence and slow growth outside the mining sector with the expectation that Melbourne will return to business as usual once this is over.
However, she says local conditions are the bigger problem.
According to Lee, the weakness in the Victorian economy will dramatically impact office-based employment in Melbourne over the next two years.
Victoria weak economy is the result of a number of different factors.
BIS Shrapnel expect dwelling building activity to decline over the next two years, compounding the existing weakness in the building industry, which is under pressure from falling non-dwelling building.
The research firm also expects the high Australian dollar is taking its toll on manufacturing, tourism and education services, as well as on the financial services sector which is looking to offshore operations.
And it says that significant cuts to public spending have only just begun, and will get deeper over the next two or three years, providing a significant and prolonged drag on the economy.
“The stand-alone office workforce is expected to be hit particularly hard; indeed, we can already see it coming through in the data. We expect the stand-alone office workforce to contract this financial year” says Lee.
Apart from the economic factors, changes to the way businesses use office space are also impacting on demand for office space.
BIS Shrapnel highlights another negative influence on the demand for office space: falling workspace ratios – the amount of occupied office space per worker, a trend in recent years and one that is expected to continue
“This will compound the impact of a contracting workforce, leading to negative net absorption in 2012-13,” says Lee.
"Many operating in the market today will remember what it felt like to be operating in a market where the mood was depressed. That’s what we are set to return to,” Lee says.
Picture of Melbourne courtesy of <a target="_blank" href="https://www.flickr.com/">Flickr</a>.
 
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Weak local economy to push suburban Melbourne office vacancy rate to 10.6% by December 2013: BIS Shrapnel

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Sydney houses priced under $1 million are at six o’clock on the property clock and at the bottom of the property cycle, according to Greville Pabst, CEO of property valuers and consultants WBP Property Group.
However, Pabst does not expect to see an improvement in Sydney house prices in the short term, with the prestige market still favouring buyers.
He also places the unit market at the bottom of the bottom of the property cycle, but with better prospects for price growth.
<img src="/images/stories/2012/11/clock-generic.jpg">
<ul>
<li>At 12 o’clock the market is at its peak (demand exceeds supply)</li>
<li>At 3 o’clock the downswing has set in (an evenly supplied market)</li>
<li>By 6 o’clock it has bottomed out (an oversupplied market)</li>
<li>At 9 o’clock the market is rebounding (supply tightening)</li>
</ul>
Looking at the prospects for the detached Sydney housing market, Pabst says there may be increased activity within the market place assisted by the lower interest rate climate with potential for further reductions.
“I can’t see sustained increases in prices however until overseas market volatility subsides and confidence returns. We are going to bounce along however overall trend will be flat,” he says. Pabst says the prestige market could have further to fall, "depending on where you are in Sydney".
“Northern beaches, for example, remains a buyers’ market and discounting is still significant. These markets may be a five on the property clock.”
Pabst says Sydney units remain at six o’clock, but “we may see some price growth due to higher price new units being sold off-the-plan depending on when they settle.
“Unit prices otherwise won’t see significant change,” he says. 
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Sydney houses under $1 million and units at bottom of cycle, but prestige market still favours buyers: WBP

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There is likely to be no dramatic rebound in new dwelling investment in the next few years despite a build-up demand through population growth and other factors such as low interest rates, according to Jonathan Kearns, head of economic analysis at the RBA.
Kearns says there is likely to be a "relatively moderate" pick-up in the rate of dwelling investment in the medium term, with high prices holding back young adults from moving out of parents' homes.
This modest, medium-term outlook will be keenly considered by the RBA board given it noted in its monetary policy statement that “private residential building approvals, dwelling prices and auction clearance rates have all increased” in recent months indicating signs of a “prospective improvement”.
Delivering a speech today in Sydney on the outlook for dwelling investment Kearns said the high cost of housing relative to incomes was a factor holding back the demand for new housing, despite strong population growth.
“If housing was less expensive, then young adults may decide to move out of their parents' home earlier, people may decide to live by themselves rather than in a group household, and more people may decide to have a holiday home,” says Kearns.
In particular he placed the blame on the last boom in house prices in the late 1990s and early 2000s
“The sharp increase in house prices from 1999 to 2003 is likely to have had a dampening effect on household formation rates, and so the demand for housing," he said.
Kearns presented the following graph to show how new dwelling investment has declined over the past decade.
<img src="/images/stories/2012/11/rbanov13.gif">
But Kearns also noted supply-side issues preventing a strong recovery including the supply of land.
“The ownership of undeveloped land has also been highlighted as an issue in some circumstances.
“Where the ownership of land on the city fringe is dispersed, say through many ‘hobby farms’, or equivalently in the inner city where existing blocks could be used for infill, it can be difficult for developers to negotiate the purchase of sufficient land to make development economically viable.
“Proposed developments can also attract opposition from nearby existing residents. These objections can take many forms including increased congestion, a change in the character of the area, environmental issues or reduced value of their own homes,” he said.
Overall though he says the information on the strength of demand related to demographic factors, and the tightness in the rental market, "suggest that the rate of new construction has been lower than might have been expected".
 
<hr class="system-pagebreak">
 
Kearns highlighted a number of demographic and economic factors that suggest there was “sufficient demand for housing in the economy that an increase in supply could easily be absorbed”.
These include strong population growth, a relatively low rate of dwelling construction and relatively tight conditions in the rental market suggest combined with lower interest rates and relatively strong income growth.
“That said, some factors suggest that the recovery may be relatively modest, including that households have not shown an inclination to take on debt at the same rate they did in the 1990s and early 2000s, and that the ratio of prices to income is high relative to its history, suggesting that it is unlikely that a large increase in prices is in prospect."
He also highlighted that determining under-supply and over-supply of housing in any one year is difficult to calculate.
“Often analysts calculate a concept of ‘underlying demand’, which is said to be the demand for new housing there would have been in the absence of significant changes in price growth … but … it isn't really possible to distinguish what part of the levelling off in average household size is the result of demographic preferences, and how much is due to the cost of housing
“Depending on what assumptions are made about this, some basic calculations can suggest that, since 2005, new construction and ‘underlying demand’ have been somewhere between being broadly in balance to there being a shortfall of up to 50,000 dwellings per year,” he said.
Overall, he said, “it looks likely that dwelling investment will pick up at a relatively moderate rate in the medium term".
“How quickly and how strongly of course remain important questions for understanding the impact on the overall economy,” he says.
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Only modest pick-up likely for residential building in next few years with high prices a factor: RBA

<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.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360965]

“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.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360981]

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.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360966]

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.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360969]

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.

[smartcode_project_cta:default project_id=149670]

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.

[smartcode_project:default project_id=152737 project_image_fid=377679]

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.

[smartcode_project:default project_id=152737 project_image_fid=377675]

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.

[smartcode_project:default project_id=152737 project_image_fid=377685]

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.

[smartcode_project:default project_id=152737 project_image_fid=377680]

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.

&nbsp;

[smartcode_project_cta:default project_id=152737]

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Larry Schlesinger

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