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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/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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