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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

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

Joel Robinson

CPG unveils Castile Newstead ahead of upcoming sales launch

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

How Australia Post Parcel Lockers changed parcel delivery convenience in Australia

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

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

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

Sammut secures approval for debut Brisbane apartment development in Toowong

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

Larry Schlesinger

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