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Bank of Queensland (BOQ) has posted the first full financial year Australian bank loss in 20 years, in part, due to its exposure to the declining south-east Queensland commercial property market as well as from operating in a tougher overall credit environment.
It reported a full-year loss of $17.1 million, compared with a net profit of $158.7 million in the previous 12 months.
It reported a 100% increase in its loan impairment expense of $401.0 million, compared with a prior year expense of $200.5 million.
“The increase in impaired assets is a result of a thorough independent review of the bank’s commercial loan portfolio and the continued decline in commercial property prices in Queensland in the first half,” reported the bank in its full-year accounts.
The bank’s $5.1 billion business and agricultural loan book is now in run off “due to impaired property asset realisations”.
BOQ chief executive Stuart Grimshaw, who took on the role in November, said today the bank was seeing stabilisation in the commercial portfolio, with “no new large impaired exposures” in the second half of the year.
The last Australian bank to report a full-year loss was ANZ, which made a $579 million loss two decades ago.
BOQ was profitable in the second half of the year and expects to return to profitability in the current financial year.
Commenting on the results, Grimshaw said the bank continued to operate in a low credit growth environment but was seeing signs of consumers returning to the housing market.
“Consumers are behaving cautiously and paying down their debt. More than 40% of Australian mortgage holders are at least one year ahead of schedule on their repayments.
“Household savings are at levels not seen since the late 80’s, despite falling interest rates.
“We are starting to see some early signs of consumers returning to the housing market, evidenced by auction clearance rates in capital cities improving,” he said.
“Stronger credit and collection processes are now in place and our risk management capability is vastly improved."
BOQ does 60% of its lending in Queensland with 16% in Victoria, 13% in NSW and 8% in WA.
It will look to tap into the bullish WA property market with an increased retail presence and use of mortgage brokers.
The bank expects the WA economy to continue to exhibit strong GDP growth and believes there is “significant opportunity to improve its market share using a multi?channel approach".
BOQ quit the mortgage broker market in 2004 to focus on its owner-managed franchised branches, but has recently returned to using brokers selectively to expand its footprint outside of Queensland.
The bank grew its home loan book by 5.1% over the financial year from $24.15 billion to $25.36 billion and also reported a decrease in the proportion of borrowers more than three months behind on their mortgage repayments from  0.93% in the first half of the year to 0.7% in the second half.
However, it also reported a tightening of net interest margins from 2.01% to 1.98% as well as increasing reliance on more retail deposits  (rising from 56% to 59% of funding). 
The improvement in arrears performance is across all states.
Despite the loss, the BOQ board approved a fully franked final dividend of 26¢ per share, taking the full year dividend to 52¢ per share.
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Exposure to SE Queensland commercial property market causes Bank of Queensland's first bank loss in 20 years

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The Port of Melbourne, Gladstone Port, Port Hedland Port, Darwin Port, the Great Barrier Reef Airport as well as numerous electricity and water infrastructure are among around $220 billion worth of assets state governments might consider selling to shore up its finances.
The sell-off is recommended in a new federal report called Australia's Public Infrastructure – Part of the Answer to Removing Infrastructure Deficit released today by Infrastructure Australia.
It lists what it calls “commercially viable, publicly owned assets” that could be sold to the private sector.
Infrastructure Australia says it has identified that more than $100 billion of commercial infrastructure assets on Australian government balance sheets including airports; roads; water services; ports; freight rail; and electricity generation, transmission and distribution with an “enterprise value range” of between $195 billion and $219 billion.
The most valuable assets are tied to electricity production, with the report listing up to $59 billion worth of “electricity distribution” assets and $48 billion in electricity generation and transmission assets.
Around $11 billion could be generated from the sale of ports and less than $1 billion from airport sales.
Assets that could be sold to private interests include Snowy Hydro; the three NSW energy distributors Ausgrid, Essential Energy and Endeavour Energy; water retailer Sydney Water; and ports in Newcastle, Gladstone, in Western Australia and Tasmania.
“Today, the costs to governments of operating and maintaining these assets often far outweigh the benefits to the community of retaining these assets in government ownership,” says national infrastructure coordinator Michael Deegan.
He says governments around Australia need to explore new methods of financing and developing the infrastructure needed to improve national productivity.
“If we are to build on and sustain the living standards of all Australians, governments need to recognise that they cannot bridge the current funding gap,” he says.
 
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According to the report, many assets in the energy, ports, regional airports and freight rail sectors could be sold relatively quickly and under current policy settings. The report adds that these sectors have the most capacity to provide funding for new economic infrastructure.
The assets are likely to be targeted at super funds because of their steady yields, rather than offshore institutions and sovereign funds, following the recent political stoush over the sale of <a href="https://www.propertyobserver.com.au/rural/cubbie-station-officially-sold/2012101257136" target="_blank">Cubbie Station,</a> with the report acknowledging that "some members of the community have genuine concerns about the private sector owning or controlling infrastructure that has long been in public hands.
“Australia's superannuation industry is also well placed to purchase these assets - providing a real opportunity to achieve all the potential benefits of a sale while maintaining ownership of these assets across a broad cross-section of the community,” says Infrastructure Australia.
The sale of the assets would be used by the governments to fund highways, ports and other infrastructure projects, as taking on fresh debt to do so could put its Moody’s triple-A credit rating at further risk, following recent falls in commodity prices.
Recent successful asset sales that Infrastructure Australia says “have generated real community value include the recent refinancing of the Sydney Desalination Plant, which raised $2.3 billion, $300 million more than the cost of constructing the plant.
“After repaying the debt incurred in building the plant, the net proceeds from the refinancing have been provided to Restart NSW allowing government to fund the building of critical new infrastructure such as roads, hospitals and schools.”
Other successful sales listed in the report include Hobart Airport, which was sold to a consortium of Macquarie Bank and the Tasmanian Retirement Benefits Fund for $350.5 million.
“Press reports suggest the price was above expectations.  The high sale price was reportedly due in part to the potential of the large parcel of 570 hectares of land attached to the airport,” says the report.
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Federal report suggests $220 billion sell-off of ports, airports and infrastructure assets to fund future projects

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The Australian housing market is set to crash like the US housing market crashed following the sub-prime mortgage crisis, US property market doomsayer Jordan Wirsz has claimed in a new blog post. Wirsz caused a stir in the Australian media earlier this year when he forecast Australian house prices to fall 60% over the next five years. Despite being unknown in Australia and with no evidence to back his claims, they were reported on News Limited websites as a warning of a “bloodbath” to hit the Australian property market. Little has been heard from Wirsz since then until his latest blog post, which claims that while that there are “very bullish signs” for the US housing market, the Australia’s property market is heading for a tumble. “I’ve done a lot of research on the Australia real estate market, and in fact see some very significant signs that they are almost exactly where the U.S. market was in 2008… Who knew it could fall so much… Well, I think Australia is in for it in a big way. Stay tuned for more on that topic later. In the meantime, happy real estate hunting,” <a href="https://blog.jordanwirsz.com/why-i-think-the-time-is-now/" target="_blank">writes Wirsz on his blog.</a>
But property investment adviser Margaret Lomas, who has read Wirz's latest blog and sparred with him in the past on Sky News, says she is finding "much more encouraging news [about the Australian housing market] from some fairly reliable sources".
"The September quarter showed some slow, albeit low, growth in many markets, as we carefully creep along, prudently buying, bargaining hard but keeping property values just about where they should be given the world economic outlook.
Lomas suggests listening to the "true experts" like Tim Lawless from RP Data, who "forecasts rising housing prices for the major urban areas of Australia" with the quarterly rate of house price growth over the September quarter forecast to be around 2% – "that's the strongest quarterly change since May 2010".
Wirsz suggests now is the time to buy US real estate and says that US housing investors are “living and dying with every new release of the home-builder data, home price indexes, and all the nonsense that is available to the average person” and should instead take a leaf out of Warren Buffett’s book and watch very little of the news, “if any”.
 
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According to the September Case-Shiller index of 10 major US metropolitan areas and its 20-city index, properties prices rose 1.5% and 1.6% respectively, supporting a fractured recovery in the US housing market. However, some of the states worst-hit by the sub-prime mortgage crisis, such as Cleveland, have only just moved past January 2000 prices. In a Reuters September poll, 35 of 38 economists said the US market was recovering, but the pace of recovery is still painfully slow. US house prices crashed about 35% in the wake of sub-prime mortgage crisis, but falls were greater in California and in south-west mortgage belts like Nevada. According to a Home Builders Research report from June, the median resale price of  home in Las Vegas, Wirsz's home town, was just $120,000 in June, though up 9.1% from a year ago. The average price of a house in Las Vegas was around $350,000 in 2007, according to the National Association of Realtors. Wirsz claims to have achieved over $500 million in sales and advised Fortune 500 CEOs about real estate investments. He describes himself as a “licensed realtor, entrepreneur and businessman based in Las Vegas, Nevada”. “By the age of 25 Jordan founded a private capital lending firm which grew to a size of approximately $150 million under management. The firm financed the developers and construction companies in the booming Las Vegas real estate market,” says his website. 


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Margaret Lomas dismisses US doomster Jordan Wirsz's fresh claim of Australian impending property market crash

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The odds are fairly long on getting a better mortgage deal by taking out a fixed-rate home loans, real estate group First National has tweeted today, quoting an “undisclosed banking source”.
The real estate network's official news channel tweeted:
<a href="https://twitter.com/RealEstateCast" target="_blank"><img src="/images/stories/2012/10/fntweet.jpg"></a>
It comes as banks continue to cut their fixed-rate home loans to entice borrowers to fix their home loan.
Fixed-rate borrowers are better off if interest rates rise over the term of their loan but can be worse if rates fall over the term of their loan.
The federal government ban on exit fees does not apply to fixed-rate home loans.
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Fixed-rate borrowers seldom beat the bank: Tweet of the day

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Creditors of failed mortgage fund manager and non-bank lender Provident Capital have been recommended to vote in favour of winding up the business following the rejection of a bid by former Provident boss Michael O’Sullivan and fellow executive Michael Bersten to regain control of the business.
A meeting of creditors is scheduled to be held on October 24 in Sydney.
Australian Executor Trustees Limited (AETL), which represents Provident Capital debenture holders, rejected a recommendation from O’Sullivan and Bersten that they resume control of Provident under a deed of company arrangement (DOCA), according to a circular to creditors issued by joint administrators Joseph Hayes and Tony McGrath from McGrath Nicol.
Hayes and McGrath represent unsecured creditors of Provident Capital, who are owed around $1.1 million and were appointed by AETL on September 18. These include $430,000 owing in employee entitlements.
“Michael O’Sullivan and Michael Bersten (two of PCL’s directors) have proposed a DOCA for the company,” report Hayes and McGrath in their October 17 circular to creditors.
“The DOCA essentially involves the transfer of debenture holder interests (and the debenture holder loan book) into the high-yield fund (HYF), the retirement of the receivers [PPB Advisory, which represents secured creditors], and the resumption of control of the company’s operations by the directors.”
The administrators note that based on preliminary investigations, they are "unable to form a clear view as to whether the proposed DOCA will generate a superior return for creditors than a liquidation".
They do note though that their preliminary investigations “indicate that there are a number of matters that raise concerns”.
“In order for the DOCA to be implemented, the trustee (in its capacity as secured creditor) is required to vote in favour of it.
“On 12 October 2012, we were advised by the trustee’s lawyers that the trustee does not support the DOCA and will be voting for the company to be wound up at the second meeting of creditors.
“Given the trustee’s position, the DOCA is incapable of implementation and, as the company is insolvent, there are no options other than to place the company into liquidation.
“Our recommendation is that creditors vote for the company to be wound up.”
Receivers and managers at PPB Advisory continue to have “control of the company’s business, assets and loans” and represent the interests of debenture holders.
In August, PPB Advisory told debenture holders it was hopeful of restarting the flow of payments before the end of the year, but that they should not expect a full refund of their investments.
Secured creditors are owed in excess of $200 million.
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Provident Capital likely to be wound up at October 24 meeting of creditors

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The home of one of Melbourne’s oldest butchers will be auctioned on October 26, the first time the premises will be up for sale in 100 years and a rare opportunity for investor to acquire a retail holding on Carlton's Lygon Street retail strip.
Donati’s Fine Meats at 402 Lygon Street in Carlton (pictured bel0w) has pre-auction expectations in excess of $1.5 million and is only the second retail property up for sale in two years on Lygon Street.
<img src="/images/stories/2012/10/donatis.jpg">
The last commercial building to sell on Lygon Street was the 117-square-metre premises of Intrepid Travel at 231 Lygon Street, which sold in July last year for $1.9 million at a yield of around 3.7%.
The shop at 403 Lygon Street has been run as a butchery since the early 1900s. From its inception until 1954 it was run by the great-grandparents of the current business owner, Leo Donati. In 1954 Davide Baccini in partnership with Modesto Bertocchi (who later created Bertocchi Smallgoods) took over the shop, calling it Extra Meat Supply.
This ran until 1972, when Leo Donati took over the premises and changed its name to Donati’s Fine Meats.
Donati’s celebrates its 40th anniversary this year and is famous for its ox-tails, lamb shanks, veal-and-pork meat loaf and rabbits.
Opera-loving owner Leo Donati has recently signed a new five-year lease, with the shop currently returning a net rental return of $66,656 per annum.
A price of $1.5 million would deliver investors a yield of around 4.5%.
The 76-square-metre property is being marketed by Colliers International agents Jeremy Gruzewski and Tom Noonan.
“The term ‘rare opportunity’ is used quite regularly in our line of business, but the incredibly tightly held nature of this Lygon Street precinct makes this just about as rare an opportunity as you can get in this market,” he says.
“In the last two years, there has only been one commercial property sale on Lygon Street. This is an exciting opportunity to be part of a vibrant, popular area that doesn’t come along often.
Gruzewski says the property is in a high-profile location with excellent exposure to passing foot and vehicle traffic.
“This is an opportunity for a purchaser to secure a solid investment with rental upside and a long standing tenant who is keen to stay where they are,” he says.
The property is located on the eastern side of Lygon Street, between Faraday and Elgin streets, approximately two kilometres north of the Melbourne CBD.
The building itself comprises a two-level brick retail building with the ground floor featuring a fully fitted and renovated butcher shop with cool room, storage area and rear access.
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Historic Lygon Street, Carlton, butcher seeking new buyer with juicy $1.5 million-plus hopes

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Conditions remained tough for residential home builders in the June quarter, according to the latest ABS data.
New house commencements fell 0.6%, to $5.63 billion, and new other residential building (apartments) rose 22.1% to $3.37 billion with total residential building work declining for the fifth consecutive quarter by 3.1% compared with the 2.5% decline originally reported in August.
Alterations and additions fell 3.9% to $1.64 billion.
Non-residential work commenced fell 22.1%, to $6.76 billion.
Of the major state housing markets, WA recorded the biggest decline in new residential building work done of 13.2% followed by South Australia (-5.7%), Victoria (-5%) and NSW (-3.4%).
The value of residential work done in Queensland rose 7.4% to $1.8 billion.
In aggregate, commencements of new residential buildings rose 6.8% to $9 billion while total new building starts (residential and non-residential) fell 7.5% to $17.4 billion following rise of 4.1% in March 2012.
A pick-up in new residential building activity in NSW and Queensland is anticipated following the doubling of state grants for first-home buyers buying a new property.
The Housing Industry Association (HIA) said the ABS figures show that  in mid 2012 residential construction activity was even weaker than first reported.
HIA chief economist, Harley Dale, said that a fifth consectutive decline in residential building work done in the June 2012 quarter was steeper than initially thought and confirmed an ten year low for new home building activity.
“Interest rate cuts are helpful in hopefully turning around residential construction from the parlous state evident in mid 2012. However, the efficacy of easier monetary policy is considerably diluted by the historically high and excessive margin between the official cash rate on the one hand and mortgage and business loan rates on the other,” said Harley Dale. “Federal and state governments need to view today’s update on Australia’s residential construction industry as a signal they are failing to adequately invest in and reform new housing supply.
“Today’s update makes a mockery of recent scuttlebutt suggesting negative gearing arrangements need to be diluted or removed," says Dale.
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New home building flat in June quarter: ABS

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Stockland shareholders have been warned that profits will fall further in the next financial year with the Victorian residential market the standout weak spot.
Delivering his final address as managing director before he steps down in February, Matthew Quinn provided an update on residential deposits taken over the first quarter of the 2013 financial year.
Over the three months to September, net deposits taken declined from 1,127 to 1,082, with deposits on Victorian residential developments declining from 289 in the final quarter of the 2012 financial year to just 161 in the first quarter of the 2012-2013 financial year.
A smaller decline in deposits was recorded in NSW (170 to 142), with an improvement noted for Queensland (deposits up from 334 to 386) and Western Australia (334 to 393).
“Our residential business faces a high degree of uncertainty given current buyer caution,” Quinn told shareholders in Sydney today.
“There have been some signs of improvement in the housing market, particularly in Perth and we have recently been bolstered by first-home buyer stimulus targeted at the new housing market in Queensland and NSW.
“The reality, though, is that conditions are very tough in Victoria where the company’s most profitable projects are located.”
Stockland has eight residential community projects on the Melbourne fringes, including Highlands in Craigieburn and Selandra Rise in Clyde North.
Quinn reminded shareholders that at Stockland’s full-year results presentation in August, he said Australia was experiencing “the worst new housing market I had seen in more than 20 years in the industry”.
“This is not only because sales are at a cyclical low, but because this has persisted despite conditions that would normally stimulate activity – low unemployment, low interest rates, undersupply of housing and low rental vacancy rate.”
Quinn says that in every state where Stockland operates housing approvals are tracking well below the long-term average, and nationally the market is 18% below historical averages.
“Housing approvals is a lag indicator and these figures don’t yet reflect the recent downturn in Victoria which we expect to show through sharply in coming months.
“The good news is that population growth remains strong and this cycle will turn, but the question is ‘when’.
“We need to see a trigger for improvement – a sense that the market is moving, so cautious consumers become more concerned about acting too late than acting too soon.
“Interest rates are normally a driver of this, but in this cycle home owners are just paying off their mortgages more quickly rather than taking on more debt. In the long term this is a good thing, but it’s painful while we go through this process.”
 
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Quinn also reminded shareholders that while there is always a big focus on Stockland’s residential business, the majority of its assets are “investment properties where the profits are very predictable from secure, rental backed contracts”.
He said Stockland’s $5 billion shopping centre portfolio continued to perform well in the challenging environment and is expected to achieve 2% to 3% comparable net income growth in the 2013 financial year.
However, overall profit from Stockland's commercial property investments will be lower than last year. 
In addition, while Stockland’s retirement living business continues to see strong demand for products, "settlements are being impacted by the soft residential market conditions, particularly in Victoria".
In his address to shareholders, Stockland chairman Graham Bradley said a “combination of factors including low consumer and business confidence, anxiety about global economic conditions and fear of unemployment” have combined to produce headwinds, which have impacted on Stockland’s profit performance in the 2011-12 financial year. He said these headwinds “will continue to do so in the current 2013 financial year when, I regret to report, we expect our profit to decline further”.
Stockland profits fell 7% to $676 million in the 2012 financial year, with profit from its residential business falling 15%.
Bradley said the Stockland board is confident of delivering improved returns from the 2014 financial year, “as our three major retail developments come on line and as we launch new residential projects”.
He also thanked Quinn and said Stockland had grown significantly under Quinn’s leadership, who also steered the company through the 2008 financial crisis.
Bradley said the search for Stockland’s next managing director was progressing well.
“We look forward to announcing the appointment of our new managing director in due course.
“In terms of day to day operations, we are pleased to have a strong management team in place who will ensure that our business maintains momentum and achieves a smooth leadership transition.”
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Stockland expects further slide in profits in 2012-13 in ‘very tough’ Victorian residential market

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First-home buyers who bought their first homes at the top of the last housing market cycle in 2009, when state government grants were most generous, are now struggling to refinance their loans due to weak equity positions,  according latest Australian Mortgage Industry report prepared by JP Morgan and Digital Finance Analytics.
As interest rates fall and households continue to deleverage, the report says that around 30% of first-time buyers are seeking to refinance their loans, which is "twice the amount, if not more, than other borrowers".
“Secondly, and more worryingly, of those that apply, 15% are being declined – substantially above other categories of borrowers, who are all well below 5%.
“First time buyers bought at the ‘top of the cycle’, with insufficient time between 2009 and now to generate equity in their home, particularly in light of declining house prices relative to the 2009 peak.”
“The end result is that first time buyers not only have a higher proportion of existing loans looking to refinance, but also have a higher proportion of those re-financing applications rejected," says the report.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/10/jpm.gif"><img src="/images/stories/2012/10/jpmthumb.gif"></a>
Many of these buyers took advantage of boosted first-home buyer grants (which tripled to $21,000 for those buying new homes) introduced in the wake of the GFC, which the report says “buoyed housing prices throughout 2009”.


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They also bought with small deposits, with the report highlighting that the proportion of first-h0me buyers who bought with loan-to-value (LVR) ratios of more than 90% was higher than the average for other owner-occupiers groups.
In the interim banks have lifted LVR requirements in line with tougher global banking rules, and first-home buyers have been caught out.
According to JP Morgan, the two main reasons why loan applications are rejected now are an inadequate LVR (34% of rejected applications) or insufficient income (34%).
Over late 2008 and early 2009 the report says there was a surge in the volume of first-time buyers in the six months between the announcement of incentives in November 2008 and the reduction of first-time buyer LVRs by banks in April 2009.
“This simply pulled forward demand and left a substantial equivalent hole over the following year." 
The report also forecasts the current slow pace of mortgage growth to continue, noting that “growth in the average value of each form of owner-occupied approval is now in negative territory” – the first time this has occurred since data became available in the early 1990s.
The report says not only are the volume of approvals weak, but the average value of approvals is declining.
“While this may simplistically be dismissed as a broader indication of stalled house prices, we conclude that a degree of tightness for refinancings is evident – particularly for first-time buyers.
"Housing credit growth has continued to soften since breaking below double-digit growth rates in mid-2008. In fact, the most recent three-month annualised growth rate of 3.6% for housing credit in August 2012 is the lowest level since the RBA started disclosing credit aggregates in 1976.
"Given the current outlook, we expect low rates of credit growth to continue –with risk to the downside – as opposed to watching out for a quick rebound off the back of lower interest rates."
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Some 2009 first-home buyers struggling to refinance mortgages due to declining values: JP Morgan

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Perth house prices are expected to grow by a cumulative 20.4% over the next three years to 2015, according to the latest QBE LMI Housing Outlook report prepared by BIS Shrapnel.
The report anticipates the median Perth house price to rise from $505,000 to $580,000 over the next three years, with strong growth also expected for Brisbane (from $450,000 to $515,000) and Sydney ($660,000 to $750,000).
Sydney house price growth is expected to be modest in 2013, at just 2.7%, but is forecast to pick up in 2014 and 2015.
Darwin house prices are also expected to continue to surge rising to a median of $650,000 – making it the second most expensive housing market after Sydney.
Melbourne house prices will continue to tread water over the next three years, rising by less than 2% annually to 2015, with median house price increasing from $540,000 to $557,000, according to the report.
Modest house price growth is also anticipated for Adelaide, Canberra and Hobart.
 Median house price growth forecasts 2013 – 2015 (major capitals) 
<table style="width: 470px;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="60">
 
</td>
<td valign="top" width="79">
Perth
</td>
<td valign="top" width="76">
Brisbane
</td>
<td valign="top" width="76">
Sydney
</td>
<td valign="top" width="94">
Adelaide
</td>
<td valign="top" width="104">
Melbourne
</td>
</tr>
<tr>
<td valign="top" width="60">
2013
</td>
<td valign="top" width="79">
6.3%
</td>
<td valign="top" width="76">
3.9%
</td>
<td valign="top" width="76">
2.7%
</td>
<td valign="top" width="94">
1.3%
</td>
<td valign="top" width="104">
0.9%
</td>
</tr>
<tr>
<td valign="top" width="60">
2014
</td>
<td valign="top" width="79">
7.9%
</td>
<td valign="top" width="76">
7.8%
</td>
<td valign="top" width="76">
6.1%
</td>
<td valign="top" width="94">
2.5%
</td>
<td valign="top" width="104">
1.5%
</td>
</tr>
<tr>
<td valign="top" width="60">
2015
</td>
<td valign="top" width="79">
6.2%
</td>
<td valign="top" width="76">
6.2%
</td>
<td valign="top" width="76">
7.1%
</td>
<td valign="top" width="94">
2.4%
</td>
<td valign="top" width="104">
1.6%
</td>
</tr>
<tr>
<td valign="top" width="60">
2015 Median
</td>
<td valign="top" width="79">
$580,000
</td>
<td valign="top" width="76">
$515,000
</td>
<td valign="top" width="76">
$750,000
</td>
<td valign="top" width="94">
$580,000
</td>
<td valign="top" width="104">
$557,000
</td>
</tr>
</tbody></table>
Median house price growth forecasts 2013 – 2015 (minor capitals) 
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="64">
 
</td>
<td valign="top" width="76">
Darwin
</td>
<td valign="top" width="76">
Canberra
</td>
<td valign="top" width="76">
Hobart
</td>
</tr>
<tr>
<td valign="top" width="64">
2013
</td>
<td valign="top" width="76">
5.3%
</td>
<td valign="top" width="76">
-0.8%
</td>
<td valign="top" width="76">
-1.1%
</td>
</tr>
<tr>
<td valign="top" width="64">
2014
</td>
<td valign="top" width="76">
5%
</td>
<td valign="top" width="76">
0%
</td>
<td valign="top" width="76">
1.1%
</td>
</tr>
<tr>
<td valign="top" width="64">
2015
</td>
<td valign="top" width="76">
3.2%
</td>
<td valign="top" width="76">
1.4%
</td>
<td valign="top" width="76">
1.4%
</td>
</tr>
<tr>
<td valign="top" width="64">
2015 Median
</td>
<td valign="top" width="76">
$650,000
</td>
<td valign="top" width="76">
$498,000
</td>
<td valign="top" width="76">
$375,000
</td>
</tr>
</tbody></table>
Source: BIS Shrapnel

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The report says the residential market in Perth has stagnated after prices peaked in December 2007, with the median house price reaching $478,000 as a result of deteriorating housing affordability.
“Conditions in Perth are now beginning to turn around and point to a recovery.
“The combination of rising underlying demand and falling completions has seen a substantial deficiency emerge.
“This is being reflected in vacancy rates falling to 1.9% in June 2012, which is well below the balanced market rate of 3%, and underpinning stronger rental growth."
The report also notes that employment growth has also been strong, with the unemployment rate well below 5% while affordability has also improved significantly.”
In addition, “rising investment in new mining and resource projects will lead to further improvement in sentiment”.
The relatively strong outlook for Sydney is based on rental growth continuing to remain solid, “outpacing recent price growth, and driving an improvement in yields”.
“First-home buyer demand — albeit inconsistent due to changes in state government first home buyer incentives — appears to be improving, while the extended period of weak prices together with interest rate reductions over 2011-12 mean that affordability is now at its best level since 2001.
“Given this, the main factor holding back the Sydney market now appears to be confidence. With economic growth forecast to become more broad based outside the resource sector in 2012-13, this should help sentiment,” says the report.
However, in Melbourne “high level of new dwelling construction has coincided with slowing population growth and the market is estimated to have moved from close to balance at June 2011, to a rising underlying surplus of dwellings at June 2012”.
As a result rental vacancy rates have also begun to increase and are expected to continue to rise as most of the investor-purchased apartments work their way through to completion.
The report says there is little in the Melbourne market at the moment to drive demand or price growth, but major price declines are not expected.
Looking at the housing market as a whole, Jenny Boddington, chief executive of QBE LMI, says the affordability of housing is “currently at its best level across most capital cities since the first half of last decade, with the exception of a brief period in 2009 when affordability spiked due to aggressive cuts in interest rates”.
“Notably, affordability is expected to further improve as standard variable interest rates are tipped to fall by another 25 basis points in 2012-13.
“Consequently, we should see increased housing turnover in the market as first home buyer numbers pick up and have a positive effect on upgrader activity, which in turn is predicted to further spur investors return to the market.”
The report also says first-home buyer demand is now trending upwards following depressed activity since 2008-09.
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Perth to lead house price growth over next three years, with Sydney and Brisbane also strong: BIS Shrapnel and QBE

<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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