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The two consecutive monthly rises in building approvals in August and September appears to have been a key factor in the RBA’s decision to keep the cash rate on hold at 3.25% on Melbourne Cup Day.
Building approval figures are seen as a forward indicator of future construction activity.
Today's monetary policy decision statement from RBA governor Glenn Stevens notes that there have been “some signs of ongoing growth [in the economy] though a return to very strong growth in consumption is unlikely.
Stevens goes on to say in the next sentence that while "investment in dwellings has been subdued for some time, over recent months there have been some indications of a prospective improvement".
In contrast, he says “non-residential building investment has remained weak”.
ABS data shows that the number of dwellings approved for construction rose 7.8% to 13,338 in September 2012 in seasonally adjusted terms following a 6.4% rise in August.
These two increases partially reversed a 21.2% decline in dwelling approvals in July.
Over the year to September, approvals for houses are down 1.8%.
However the peak residential building industry body, the Housing Industry Association, said the RBA had got its cash rate call wrong.
“Signs of a new home building recovery are tentative and cracks are already appearing, renovations activity is falling, housing prices are benign, and wider inflationary pressures are in check. Against this backdrop it is disappointing that rates were left on hold today,” says HIA chief economist, Dr Harley Dale.
“Today’s lack of action is inconsistent with the indication that was conveyed to households and businesses by a renewed easing of interest rates in October, which followed a mid-year period of steady rates and mixed messages,” says Dale.
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lschlesinger-FZcF9M3vE6

RBA notes signs of “prospective improvement” in housing investment

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The performance of Australia’s listed property trusts sector (A-REITs) has stacked up well against global peers though domestic investors remain cautious, according to a new global report from Ernst &amp; Young.
The report examined the global returns, performance and outlook of the six major REIT jurisdictions namely Australia, US, UK, Singapore, Japan and France.
Singapore came out on top, with its US$30 billion sector delivering investors a 21.8% average return, ahead of Japan (17.4%), with Australia ranking third alongside the substantially bigger US market, with an average return of 15.6%.
The UK REIT market ranked fifth with a return of 14.8%, and France came last with a return of 11.85%.
<img src="/images/stories/2012/10/eynov7.gif">
The report delivers an overall favourable impression of the A-REIT market and says most Australian listed property trusts are now in a stronger financial position; “however, memories of their steep losses during the global recession and financial crisis still linger”.
“A-REIT management teams are focused on strategies to enhance returns following a two-year period of strengthening balance sheets by restructuring debt and selling assets, especially assets held offshore,” says Ernst &amp; Young Asia Pacific real estate leader Chris Lawton.
“Most Australian REITs are in a stronger financial position today but memories of their losses during the financial crisis still linger and some investors are putting money into unlisted property funds and direct investment that otherwise might have been invested in Australian REITs.
“Most REITs are focused on the Australian market and have gone back to basics by concentrating on clearly defined sectors of the market that complement their core competencies and generate reliable income streams, mainly from rentals,” Lawton says.
The report finds that A-REITs have yet to “win back the full trust of the investor community” and many of their shares continue to trade at discounts to net asset value (NAV) although recent months have seen that price gap continue to close.
“Some investors are putting money into unlisted property funds and direct investment that otherwise might have been invested in A-REITs.”
“Some offshore commentators believe that Australia’s property values are high relative to other global property markets and therefore contribute to the NAV gap.
“But perhaps the primary reason is that investor confidence in A-REITs has been slow to return, and A-REIT share prices slow to recover, after some A-REITs moved beyond the traditional passive income model to take on higher-risk investments, mainly in overseas properties.
“As long as A-REITs’ shares continue to trade at discounts to NAV, any property acquisitions they make will likely dilute their earnings.
According to Ernst &amp; Young, the best-performing REITs globally are “better capitalised, have more financing options, own better-quality assets and have less risk exposure".
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A-REITs match global competitors on annual returns as investor confidence in the sector improves: Ernst & Young

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Capital city house price growth slowed in the September quarter to 0.3%, led by a 1.8% rise in Perth's house price index to a median of $489,000, according to preliminary figures from the ABS.
If past revision history is anything to go by, Perth house prices are likely to be revised upwards in the December quarterly update, which is released in February.
The ABS revised its Perth June quarter result upwards from 0.6% to 1.2%, with Perth house prices now up 4.4% for the year to September.
<img src="/images/stories/2012/10/absnov6.gif">
The preliminary estimate for Perth follows rises in the previous three quarters (+0.5%, +0.9% and +1.2%), with the rise in the September quarter 2012 “driven by clusters with median prices below $700,000”.
Recently released RP Data-Rismark figures (which are not revised) show Perth house prices up 0.9% for the October quarter and up 3.8% year-on-year to a median of $475,000.
The ABS 0.3% rise for to the weighted average of the eight capital cities follows the previously reported June quarter increase of 0.5% being revised upwards to 0.6%.
As a consequence, the through-the-year movement has been revised from an estimated fall of 2.1% to an estimated fall of 1.9%.
Sydney also recorded an increase of 0.3% to $605,000, following falls in the previous two quarters.
Sydney house prices are 1.3% for the first nine months of the year, with the ABS noting that the small September quarter gain was driven by “clusters with median prices at the top and bottom of the range of prices.
“These rises were offset by falls in clusters with median prices between $650,000 and $1 million."
Melbourne’s house price index rose 0.2% to $468,000, the first rise in six quarters, to leave house prices down 2.3% for the year to September.
Brisbane house prices gained 0.4% to $434,000, while Hobart was up 0.2% to $348,000.
These rises was partially offset by falls in Adelaide (-0.6% to $384,000), Canberra (-1.1% to $535,000) and Darwin (-0.5% to $547,000).
The ABS also made revisions to capital city data for both June (first revision) and March (second and final revision) quarters
In June: Sydney (+1.5%, revised from +1.4%), Perth (+1.2%, revised from +0.6%), Adelaide (+0.4%, revised from +0.5%) and Darwin (+2.5%, revised from +5.1%). This was partially offset by falls in Melbourne (-0.2%, revised from -0.4%), Canberra (-1.2%, revised from -1.3%), Brisbane (-0.2%, revised from +0.1%) and Hobart (-1.0%, revised from -0.4%). Final price indexes for the March quarter 2012 show no movement following a revision from a second preliminary estimated fall of 0.1%.
The movement through the year to the March quarter 2012 was revised from a fall of 3.5% to a fall of 3.4%.
In March the following second revisions were made: Perth (+0.9%, revised from +0.7%), Canberra (+0.7%, revised from +0.3%), Melbourne (-1.1%, revised from -1.3%), Adelaide (-0.9%, revised from -1.2%), Hobart (-2.9%, revised from -2.0%).
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Perth the standout as house price growth slows in September quarter: ABS

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The Reserve Bank should leave the cash rate on hold at 3.25% today, says the self-anointed "shadow RBA board", though the decision was far from unanimous, with a rate hold getting a 60% weighting from members.
The board comprises a panel of noted academics and economists and gives its views on the monthly cash rate decision as part of a widely reported exercise by the Australian National University’s Centre for Applied Macroeconomic Analysis.
Among those leaning towards a cash rate cut today is HSBC Australia chief economist Paul Bloxham, who says that while the RBA board could wait for further evidence about the extent to which the current below neutral interest rates are supporting demand in the economy, there is little risk of high inflation, meaning it “may be prudent to cut rates a bit further this month”.
Shadow board member James Morley, professor at the University of New South Wales, disagrees, saying recent cuts in the policy rate mean “monetary policy is loose, with the implicit real interest rate well below its neutral level”.
"Thus, with low inflation and an uptick in the unemployment rate, the current stance is appropriate for the short term, with a slight easing bias in case the employment situation deteriorates further," Morley says.
Also in favour of a rate hold today is Warwick McKibbin, professor of economics at ANU and a former RBA board member under John Howard. He says “no change in interest rates domestically would be prudent especially given ambiguous signals from various government ministers that the fiscal surplus may not be realised this financial year”.
Looking beyond November, the shadow board says the most preferred setting for the cash rate is 25 basis points down to 3% within six months, with only a 30% risk that rates should have to fall lower than that.
However, two shadow board members, ANU professor Bob Gregory and Bank of America chief economist Saul Eslake (formerly chief economist at ANZ), believe rates could be even lower in 12 months, backing a range of 2.5% to 2.75%
The full shadow board is:
<ul>
<li>Shaun Vahey, Professor, RSE, ANU. (non-voting chair)</li>
<li>Paul Bloxham, Chief Economist (Australia &amp; New Zealand), HSBC Bank Australia Ltd</li>
<li>Mark Crosby, Dean of the Global MBA Program, Acting Dean of the Global BBA Program, and Professor of Economics, S P Jain Center of Management in Singapore</li>
<li>Mardi Dungey, Professor, University of Tasmania, CFAP University of Cambridge, CAMA</li>
<li>Saul Eslake, Chief Economist, Bank of America Merrill Lynch Australia</li>
<li>Bob Gregory, Professor Emeritus, RSE, ANU, Professorial Fellow, Centre for Strategic Economic Studies, Victoria University, Adjunct Professor, School of Economics &amp; Finance, Queensland University of Technology</li>
<li>Warwick McKibbin, Professor, RSE, ANU, CAMA</li>
<li>James Morley, Professor, University of New South Wales, CAMA</li>
<li>Jeffrey Sheen, Professor &amp; Head, Department of Economics, Macquarie University,Editor, The Economic Record, CAMA</li>
<li>Mark Thirlwell, Director, International Economy Program, Lowy Institute for International Policy</li>
</ul>
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Keep cash rate on hold on Melbourne Cup Day but easing bias remains: shadow RBA board

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Rents have risen 22% over the past two years in the remote north-west Queensland base metals mining town of Mount Isa, driven by demand for temporary accommodation from mining employees.
PRDnationwide calculates that median rents in <a target="_blank" href="/news">Mount Isa</a> have risen to $550 per week, while house prices in the Mount Isa municipality have experienced “exceptional growth” of 12.4% per annum.
According to Australian Property Monitors, Mount Isa has median house price of $350,000 for the 12 months to August and a regional house price of $330,000.
Mount Isa lies 1,800 kilometres north-west of Brisbane and 900 kilometres west of Townsville.
The urban region of Mount Isa has around 20,500 people, according to the 2011 census, and sits directly below enormous mining operations, with smoke stacks billowing plumes into the sky day and night. Among the mining companies operating in the area is Xstrata, which operates the underground Mount Isa Mines, which extract copper and zinc-lead-silver.
Around 43% of Mount Isa residents rent.
Since June, the Queensland state government has been receiving hourly data updates from Xstrata's 10 air pollution monitoring units after the Department of Environment and Resource noted that air pollution levels in Mount Isa are much higher than other parts of the state.
Recent sales in Mount Isa include <a target="_blank" href="https://www.realestate.com.au/property-house-qld-mount+isa-111332071">this four-bedroom house</a> (below) sold by Brenda Slade of Vivid Realty for $380,000 on October 24.
Photograph of Mount Isa courtesy of <a target="_blank" href="https://www.flickr.com/">Flickr.</a>
<img src="/images/stories/2012/10/seventeenth.jpg">
Four-bedroom houses rent in Mount Isa from around $700 to $850. At the low rental point, this would equate to yield of around 9.5%
 
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According to PRDnationwide, the largely transient miner population has contributed to an annual population growth rate of 3.1% over the past five years, compared with the nation's growth of 1.6% per annum. 
 
Mount Isa is benefiting from significant infrastructure investment with a new gas-fired power station under way and due to be operation from 2014, with Mount Isa and Cairns base hospitals currently being redeveloped at a combined cost of $920 million.
PRDnationwide research director Aaron Maskrey says Mount Isa was established as the first "company town" in Australia, due to the discovery of its mineral resources.
“It has now become the administrative, commercial and industrial centre for the state's large north-western region.


"There are currently approximately six operational mines in the north-west region, producing lead, silver, copper and zinc with a further 62 locations of known mineral deposits.
“The recent overturn from the Queensland state government on uranium mining should allow for an economic boost to the local economy. To date there are approximately 12 known deposits of uranium within the region."
Maskrey says the influence of the local mining industry on the property market has been significant.


In a recent column for Property Observer, <a target="_blank" href="https://www.propertyobserver.com.au/queensland/mount-isa-s-property-investment-potential-has-improved-due-to-the-dirty-business-of-uranium-mining-terry-ryder/2012102457422">Terry Ryder noted</a> that Queensland’s estimated $18 billion worth of uranium resources “mostly lurk in the state’s north-west, “a lot of it not too far from Mount Isa”.


“One of the largest known reserves is just 35 kilometres outside the town,” says Ryder, who calls Mount Isa the “most polluted town in the nation”. 

However, Ryder says that from the “cold perspective of pure bloody-minded investment potential Mount Isa has improved of late”.

“Rents have risen, yields have improved and over the long term it has a good capital growth record (the various suburbs of Mount Isa have long-term growth averages ranging from 11% to 16% per year, according to Australian Property Monitors),” he says.

Ryder says the highly polluted Mount Isa is “about copper, gold, lead, zinc – some of them metals you don’t want to be living near when the processing is going on. And, now it seems, uranium,” he says.

He does not include Mount Isa among his preferred mining town investment options, picking instead mining towns with more diverse economies including <a target="_blank" href="/news">Cloncurry</a> (grazing, tourism and mining) and Galilee basin (four mega projects including Gina Rinehart and Clive Palmer projects) in Queensland and the NSW frontier town of <a target="_blank" href="/news">Broken Hill</a> (agriculture, tourism, creative industries in addition to mining).


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Rents and house prices rise in Mount Isa due to demand from mining employees

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Credit unions, building societies and other mutual institutions offer significant mortgage savings, but the majority of Australians are unaware of these benefits, according to a new survey by The Australia Institute.
Credit unions also have to battle the major banks, which collectively spent $1 billion on advertising in 2011 and have just reported collective annual profits of $23 billion.
In addition, since the GFC, many borrowers have sought the security of having their mortgage with a major financial institution.
The results of the survey come as borrowers await today’s Melbourne Cup cash rate decision by the RBA. Should the RBA cut the cash rate, as is tipped, speculation will then turn to how much will be passed on to borrowers by the major banks and other lenders.
The Australian Institute survey finds that members of mutually owned banks, credit unions and building societies are estimated to save an average of 0.4 percentage points on their mortgage interest rate.
Data from Canstar reported in the survey shows that standard variable interest rates for the mutuals have been consistently lower than those of the big four banks in recent years.
The average standard variable rate (SVR) for mutuals over the period of June 2009 to August 2012 was 6.73%, which is 40 basis points lower than the average SVR of 7.13% from the big four banks.
For an average loan, this generates savings of $76,417 over the life of the loan and reduces the repayment period by three years.
There are 103 financial mutuals in Australia controlling assets worth a combined $83 billion. Australia has the third largest mutual banking sector in the world, after the United States and Canada, with mortgages and retail deposits the staple offering of the sector. The biggest of these is Credit Union Australia (CUA) with $9 billion in assets and 415,000 members, followed by Heritage Bank and Newcaste Permanent.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/10/mutual.gif"><img src="/images/stories/2012/10/mutualthumb.gif"></a>


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However, community awareness of the sector runs far behind community reliance on the sector.
According to The Australia Institute survey, despite the fact that 79% of people are members of a co-op (this includes non-financial institutions like the NRMA, RACV, AustralianSuper and even the Co-op Bookshop) only three in 10 Australians could name a co-operative or mutually owned enterprise, and only 16% of Australians believe that they are a member of one.
Despite their lack of awareness of alternatives, the survey found that the vast majority of Australians believing that privately owned for-profit companies are more interested in shareholder profit than customers (90%), that large shareholders have too much influence (88%) and that corporate executives are overpaid (92%).
“Millions of Australians could spend less on their mortgages, spend more in retirement and save a small fortune when they need to go to the doctor, buy a book or buy some wine. At a time when many people are talking about the rising of cost of living it is surprising that more Australians don't switch to a member-owned alternative,” says Australia Institute executive director Dr Richard Denniss
He says that while many Australians have expressed an alternative to the bigger financial institutions and co-operatives do deliver “high quality products at low prices”, the institute’s report suggests these institutions “have not done a great job of explaining to their members how they do it and why it matters”.
The report says there are opportunities for mutuals to better explain their ownership structure, and its benefits, to their existing customers and better explain the contribution that mutuals and co-ops make to the community.
It also calls on government ministers and government departments to “pay greater attention to the benefits to consumers and communities that flow from co-operatives”.
“They should also do more to overcome the pragmatic or psychological barriers that prevent consumers switching to mutually owned enterprises,” he says.
The Australia Institute is an independent public policy think tank based in Canberra, funded by donations from philanthropic trusts and individuals, memberships and commissioned research
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Big savings from mutual lenders but little customer awareness: Australia Institute report

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The vacancy rate on Rundle Mall, the premier pedestrian street mall in the Adelaide CBD, increased from 6.85% to 10.27% between June and September, with a Darrell Lea store among those stores that are currently standing empty.
A new report from Savills shows that there are 15 out of 146 stores now vacant on Rundle Mall compared with a vacancy street on Rundle Street of 2.88% -  the non-pedestrianised portion of the retail strip extending east - with just three out 104 stores vacant.
This was up from 1.87% in June and also the result of a retailing failure with the Mary Martin Bookshop being placed in liquidation.
Darrell Lea occupied a store at the western end of Rundle mall and closed when all Darrell Lea stores ceased trading on September 9.
The 87-square-metre space at the entrance to the mall is advertised for lease by Michael Tayler of Leedwell Property – the rental sought is not disclosed – with photographs showing the distinctive Darrell Lea signage still in place.
<img src="/images/stories/2012/11/darrelllea.jpg">
The report, compiled by Savills research analyst Hamish Johnston, lists the Darrell Lea closure as the most high-profile vacancy and also notes that number of smaller stores have also become vacant since the last quarter.
Despite the large gap in vacancy rates, Rundle Mall continues to command very high net rents (ranging from $2,000 to $3,700 per square metre) compared with Rundle Street, where rents range from $400 to $1,200 per square metre – a factor that may explain the lower vacancy rate on Rundle Street.
Rundle Mall stretches from Pulteney Street to King William Street and is anchor-tenanted by a 23,300-square-metre David Jones and a 35,000-square-metre Myer store. Rundle Street runs from East Terrace to Pulteney Steet ,with the Savills Report noting that it has "quickly established itself as a major hub for food and fashion in Adelaide" anchored by a two-level Target store, and home to numerous specialty retailers including Sass &amp; Bide, Marcs, Lisa Ho and Metalicus.
 
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The report notes that since September the development of 77-91 Rundle Mall (known as Rundle Place) has been underway and will house the flagship Harris Scarfe store when completed in late 2013. The site will be co-anchored by Coles, along with a mix of other retailers and a 500-seat food court. The new building will also house 11 storeys of office space above the four storeys of retail.
 
According to Johnston, Rundle Mall has a number of challenges to overcome, “not least the current vacancy rate” of more than 10%.
“Longer term the Adelaide City Council’s master plan for Rundle Mall is expected to make the strip a more attractive precinct for shoppers, and help draw people back into the CBD. The City Council is also carrying out streetscape works along Rundle Street, which are designed to improve pedestrian enjoyment of the strip.
“Prime retail in Adelaide has endured a particularly difficult period in recent years. A lack of growth in retail spending and a shift towards online retail has made attracting business to traditional shopping precincts challenging.
“From a national perspective it is anticipated a recent drop in the official cash rate, on the back of rate cuts earlier in the year, will stimulate retail spending in the lead up to the festive season. Longer term the Adelaide City Council’s masterplan for Rundle Mall is expected to make the strip a more attractive precinct for shoppers, and help draw people back into the CBD. The City Council is also carrying out streetscape works along Rundle Street, which are designed to improve pedestrian enjoyment of the strip,” says Johnston.
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Darrell Lea among store closures as Adelaide’s Rundle Mall vacancy rate hits double figures: Savills

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The Reserve Bank board has stalled at the starting gate leaving the cash rate unchanged at 3.25% on Melbourne Cup Day.
This is the first time in seven years that the RBA has not adjusted the cash rate in November.
An increase in September third-quarter inflation, retail sales up a better than expected 0.5% in September and a second consecutive month of rising residential building approvals as well as property values falling marginally in October (down 1% according to RP Data) were factors the RBA would have considered at its monetary policy board meeting.
“Clearly some of the more positive data flows that have arrived lately have caused the RBA to wait and see how the economy is responding the current cash rate setting,” commented RP Data national research director Tim Lawless
“From a housing market perspective, I would have to assume the RBA is reasonably comfortable with the current performance of the market.
“Dwelling values are 2.1% higher than what they were at the end of May this year and there has been a modest uptick in transaction volumes which, suggests that consumers are slowly responding to the previous rate cuts.
“The 25-point rate cut in October is still working its way through the data, so I am sure the RBA will be watching how values pan out in November based on the RP Data-Rismark daily index, which is already showing a small improvement in dwelling values since the start of the month.”
Michelle Hutchison, spokesperson for financial comparison website RateCity.com.au says despite the Reserve Bank keeping the cash rate on hold at 3.25% today, variable borrowers have saved almost $700 in repayments for a $300,000 home loan and $1,346 for a $600,000 mortgage after variable rates fell by 67 basis points on average this year.
“Savers have faced a different outlook, as they’ve experienced a 57-basis-point drop to the average savings account rate this year according to RateCity, which would make a significant difference to those who rely on their returns."
A decision to cut the cash rate – backed by most economists with swap traders less certain – would have seen the official borrowing rate at its lowest setting since September 2009 and for cash rate settings going back to 1990.
Prior to 1990 the RBA did not provide an official cash rate settings, but proxy measures show a setting of 3.02% in January 1964 and a rate of 2.99% in March 1960.
The record low is 2.89% in January 1960.
ANZ will make its independent interest rate call on Friday.
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Steady on: RBA leaves the cash rate at 3.25% on Melbourne Cup Day

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The inner-west suburb of Enmore has topped the list of Sydney suburbs where it could be cheaper to buy than rent, according to latest RP Data Buy vs Rent report.
Enmore is one of 388 towns and suburbs across Australia identified where the monthly mortgage payment is typically lower than the monthly rent, a 63% increase on the previous August survey.
The report though should be seen as theoretical in nature rather than a definitive guide and to show "what impact adjustments to mortgage rates can have on housing affordability in the marketplace”.
In some of the locations highlighted as seemingly making more sense to buy than rent, like-for-like swaps might not be possible due to the savings not being evident for that type of property or there maybe a scarcity of stock at the median value.
For example, the report identifies houses in Melbourne's Docklands as offering a potential monthly savings of nearly $2,200 if a renter chose to buy with a three-year fixed-rate mortgage.
However, houses make up less than 2% of the stock of properties in Docklands, where apartments dominate and those houses that are listed for sale - mostly luxury riverfront townhouses - start at around $1.2 million rising up to $4 million, beyond the price range of most renters.
Another example would be Burswood houses, just a few kilometres from Perth. Potential monthly savings by buying instead of renting are as high as $1,500 but there are only a dozen or so Burswood houses listed for sale on <a href="https://www.realestate.com.au/buy/property-house-in-burswoo/list-1?activeSort=price-asc&amp;source=location-search" target="_blank">realestate.com.au </a>with just one priced around the median value of $668,000.
In the case of Enmore units have a median asking rent of $1,950 ($450 per week) and a median dwelling value of $284,810. It is 5.7 kilometres from the CBD.
Renters capable of raising a 10% deposit ($28,000) and qualifying for a mortgage would be able to save $432 per month on principal and interest mortgage at a discounted rate of 5.9% rising to a maximum savings of $800 per month if they took out a three-year fixed-rate home loan at 5.39%, according to RP Data calculations.
Recent sales in Enmore include this <a href="https://www.realestate.com.au/property-unit-nsw-enmore-110843159" target="_blank">one-bedroom unit on James Street,</a> which sold for $241,000 and would likely rent for around $350 per week ($1,575).  Monthly mortgage repayments on a standard principal and interest loan borrowing 90% of the purchase price would be around $1,300.
Click to enlarge
<a title="Click to enlarge" href="/images/stories/2012/10/rpnov6.gif" rel="shadowbox"><img src="/images/stories/2012/10/rpnov6thumb.gif"></a>
 
<a href="/news">Enmore </a>is one of 41 suburbs in Sydney where it is potentially cheaper to buy than rent, with the remaining 47 suburbs located in regional locations.
Another prominent Sydney inclusion is Rushcutters Bay, just three kilometres from the CBD, where renters can save as much as $673 a month if they choose buy a unit rather than rent. The median price of a unit in <a href="/news">Rushcutters Bay</a> is $330,000 with median rent at $498 per week.
The comparisons in the RP Data report are based on borrowers having a 10% deposit and taking out a loan (in the case of variable) over 30 years. It does not take into consideration what can be considerable stamp duty costs as well as associated buying costs and strata fees, where applicable. Land tax, council rates and utility bills are also not considered.
The analysis also does not take into account the potential capital gains or loss over time.
 Rental data is based on the median weekly advertised rental rate across the suburb over the past 12 months to September 2012.
Critics of the report argue it is too theoretical in nature and reflective enough of what is actually available to be purchased with money spent to rent a comparable property. The WA list is topped by <a href="/news">Ledge Point</a>, a fishing village about 105 kilometres north of Perth where the median house value is $508,000 and where potential savings for renters that choose to buy range from $3,787 to $4,446.
The other regional WA suburb in the top five are all well-known mining hotspots: <a href="/news">Port Hedland</a> houses and units, <a href="/news">South Hedland</a> and <a href="/news">Nicko</a>.
Nationally, the report identifies 388 towns and suburbs across Australia where the monthly mortgage payment is typically lower than the monthly rent, a 63% increase on the previous August survey highlighting the “dramatic impact adjustments to mortgage rates can have on housing affordability in the marketplace”.
Queensland offers the majority of suburbs and towns where it’s cheaper to buy than rent at 147; Greater Brisbane accounts for 42 suburbs, while the remaining 105 can be found in the regional areas of the state. New South Wales has 88 suburbs; 41 are in Sydney while the remaining 47 are in the regional parts of the state
According to RP Data national research director Tim Lawless, the Australian housing market experienced one of its toughest years ever during 2011 and the early months of 2012.
“With capital city dwelling values almost 6% lower than when they peaked and discounted variable mortgage rates 125 basis points lower from their 2011 peak, coupled with fixed mortgage rates more than 210 basis points lower, we may see consumers returning to the property market as they realise that residential property may not cost them that much more to own than rent.
“In some suburbs it may actually be cheaper than renting especially where we are seeing evidence of tight rental markets resulting in rental increases and lower home values. For many buyers now may be a good time to either re-enter the market or buy their first home,” he says.
The report finds that across the capital cities, it is typically apartment-style housing where renting can be more expensive than paying a mortgage as the buy-in price tends to be lower compared with weekly rents, providing a narrower gap between mortgage payments and rental payments.
“If a potential buyer was willing to pay $50 extra to pay of a mortgage in a suburb rather than rent a house or unit, the total number of areas nationally rises from 388 to 1,419, based on making interest and principal payments on a variable interest rate loan,” says Lawless.
Melbourne buyers' agent <a target="_blank" href="https://www.propertyobserver.com.au/residential/room-for-debate-is-it-really-cheaper-to-buy-than-rent-in-some-suburbs/2012110857623">Catherine Cashmore has challenged RP Data's methodology. </a>
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Enmore tops list of inner-Sydney suburbs where it’s cheaper to buy a house rather than rent: RP Data

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Mortgage broker AFG, which accounts for around one in 10 home loans arranged in Australia, bucked the national trend to record its biggest October on record with $3.1 billion in sales.
October volumes are generally lower than those for September, but AFG says October mortgage sales were 14.6% higher than the month before.
The volume was also almost a quarter greater than that for October 2011.
RBA figures have housing credit growth at record lows in <a target="_blank" href="/news">September</a> - one month behind AFG figures.
AFG says refinancing was not the driver for mortgage volumes last month, with the level of refinancing (34.8%) at its lowest level than since September 2009.
Mark Hewitt, general manager of sales and operations at AFG, says: ‘We’re not seeing a surge of confidence sweep across the country, but different categories of borrowers in different states are feeling more comfortable about taking on loans. New South Wales is by far the most popular state for investors, while WA is leading the way for first-home buyers.’
In New South Wales, loans for investors comprised 43.1% of all new loans, compared with 35.1% in Queensland, 33.6% in Victoria, 32.2% in South Australia and 29.9% in Western Australia.
In Western Australia, loans for first home buyers comprised 25.2% of all new loans, compared with 18.3% in Victoria. 15.0% in Queensland, 12.8% in South Australia and 5.7% in New South Wales.
One in five new borrowers chose to fix their loans (20.8%), somewhat lower than last month high of 21.5%.
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AFG bucks national trend with record October mortgage sales

<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.

A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.

Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.

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[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.

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[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.

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[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.

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[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.

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Larry Schlesinger

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