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The resource-dependent CBD office markets of Brisbane and Perth are becoming larger and more relevant investment destinations, with their cumulative value surging from 16% to nearly 26% of the national CBD office market in the past decade, according to research by Jones Lang LaSalle (JLL).
Both capital cities have benefited from demand for office space from companies tied to the mining boom, with JLL calculating that in value terms the two CBD markets have risen from $8.7 billion (16%) in 2001 to $29.3 billion in 2012.
At the same time the Sydney CBD market, which is more dependent on demand for office space from financial services, banking and professional services companies, represents less of the $114 billion national pie.
The market value of Sydney has increased from $27.8 billion in 2001 to $48.3 billion in the middle of 2012, but proportionally Sydney’s share of capital stock by value has declined from 51.2% in 2001 to 42.3% in mid-2012.
In keeping with this shift in investment value towards Brisbane and Perth, JLL believes investors should consider weighting their portfolios to reflect the national market.
Click to enlarge
<a href="/images/stories/2012/09/jllsept27.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/09/jllsept27thumb.gif"></a>
John Talbot, managing director of investments and advisory at JLL, says investors have taken note of the increased scale and depth of the Brisbane and Perth markets and are looking to acquire product to help re-weight their portfolios.
The figures are included in a new JLL report authored by Talbot, which finds that nationally office markets have recorded strong capital value growth in the past decade following a steep drop following the early 1990s recession.


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Jones Lang LaSalle says that between 1994 and 2011, the average growth in capital stock by value was 7.8% per annum and assesses the market value of the six CBD office markets (Sydney, Melbourne, Brisbane, Perth, Adelaide and Canberra) at $114.0 billion in mid-2012.
In 1994 the combined value of CBD office markets was $30.6 billion following a 53% fall in capital values between 1989 and 1993 due to the early 1990s recessions.
The report explores the issue of applying the value-weighted asset allocation strategy used in equity markets, where an investor would invest in a portfolio of stocks weighted by the overall market capitalisation, to a commercial property portfolio.
Under this asset allocation strategy, an investor changes his or her individual stock or sector allocations based on movements of individual stocks relative to the overall market capitalisation.
“This strategy is only one of a number of allocation strategies that can be adopted by a fund manager. However, we think there is a case for using a value-weighted asset allocation strategy for commercial property when you consider the performance of the market over time,” says Andrew Ballantyne, head of capital markets research at JLL.
JLL analysis shows that the share of capital stock by value across Australian CBD office markets has historically shown a close relationship, with each state’s share of economic output.
“Therefore, investors should consider their future weighting to the Perth and Brisbane office markets, as projections are that both state’s share of national output will increase by 2021.  WA is expected to account for 15.6% of Australia’s output in 2021 – 1 percentage point higher than in 2011. Meanwhile, Queensland’s share of national output will rise by 2.8 percentage points to 22% in 2021.
“The value-weighted asset allocation strategy can have some limitations in terms of diversification and while we don’t advocated this strategy being following slavishly, it does provide a useful reference point for investors benchmarking the performance of their portfolio against the market,” says  Ballantyne.
However the report does warn that there are limitations to this investment strategy when applied to commercial property investment.
“Commercial property is an illiquid asset class with high transaction costs.
“Furthermore, the lot size of individual assets ensures that the allocation of even very large portfolios can be significantly impacted by acquisitions or disposals.”
Talbot says investors will be reluctant to make changes to their asset allocations to reflect historical performance.
“Whilst pricing looks attractive across CBD office markets, an investor has to assess the underlying drivers of income in each individual asset and the potential for growth. At the same time, divergent economic growth rates across the states will create opportunities and risks investors as they seek their optimal portfolio weighting," says Talbot.
He concludes by saying that the value-weighted asset allocation strategy should not be followed “slavishly”, but provides a “useful reference point for investors benchmarking the performance of their portfolio against the market”.
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lschlesinger-FZcF9M3vE6

Perth and Brisbane CBD office markets surge in investment value as Sydney falls: Jones Lang LaSalle

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There are some signs of a recovery in the Brisbane property market, but it still remains firmly in a downswing , with investors seeking bargains in the unit market as new apartment projects are completed, says WBP Property Group.
WBP places the Brisbane housing and unit market at five o’clock on the property clock.
<img src="/images/stories/2012/09/clock-generic.jpg">
<ul>
<li>At 12 o’clock the market is at its peak (demand exceeds supply)</li>
<li>At 3 o’clock the downswing has set in (an evenly supplied market)</li>
<li>By 6 o’clock it has bottomed out (an oversupplied market).</li>
<li>At 9 o’clock the market is rebounding (supply tightening)</li>
</ul>
“The housing market within Brisbane is considered to be nearing the bottom with no obvious signs of recovery,” says WBP.
The valuation and advisory firm says that while recent changes in state government legislation, in particular stamp duty concessions, have improved sales activity and enquiry, Brisbane market conditions will remain as they are until the end of the year.
“Potential buyers and investors are keeping an eye on the effects of the mining boom, which continues to fuel growth, and also public sector job cuts announced by the Newman state government.


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WBP says future market factors to watch out for include changes in pricing within the commodities sector and cost cutting within the government.
Looking more closely at the unit market, WBP notes that there are a number of new unit developments in Brisbane that are nearing completion and due to settle.
“Many purchasers who have bought off the plan have seen prices come off from original date of contract. Investors still remain wary as to when the bottom will be and are on the lookout for a bargain buy,” says WBP
“This market trend is due to continue till the end of the year and perhaps into 2013.
“The Queensland government has introduced a $15,000 concession for first-home buyers looking to buy a new property.
“The unit market in the sub $400,000 range still continues to be strong amongst professionals looking for lifestyle, inner-city locations,” it says.
In his property clock assessment, Michael Yardney, director of Metropole Property Investment Strategists, said the Brisbane inner-city apartment market was heading into a downswing<a target="_blank" href="https://www.propertyobserver.com.au/residential/brisbane-units-market-heading-into-downswing-on-property-clock-due-to-too-many-off-the-plan-projects-michael-yardney/2012091656604"> </a>due to the large numbers of off-the-plan projects currently being marketed in the Brisbane CBD and surrounding suburbs.
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Brisbane property market stuck in a downswing as investors seek unit bargains: WBP Property Group

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Australian houses prices are booming following recent RBA cash rate cuts, Rismark economist and Australian Financial Review columnist Christopher Joye has noted today.
Click to enlarge
<a href="/images/stories/2012/09/joyesept26.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/09/joyesept26thumb.gif"></a>
<a target="_blank" href="https://twitter.com/cjoye"><img src="/images/stories/2012/09/joyesept26tweet.jpg"></a>
The chart has RP Data tracking house prices to September 26.
It shows that Sydney dwelling prices are up a "stunning" 3.4% since June 1 while Australia-wide dwelling prices have surged 2.7% in the last four months.
"But the biggest winner is Melbourne," says Joye on his Aussie Macro Moments blog. "Melbourne dwelling prices are up an amazing 3.8% since 1 June. And, yes, I am afraid Steve Keen got it wrong again: Aussie house prices have officially risen in 2012!"
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House prices booming after RBA cash rate cuts, says Christopher Joye: Tweet of the day

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The outlook for property markets closely linked to tourism has brightened, with prices set to rise by between 3% and 6% in 2013, according to SQM Research’s Boom and Bust report.
The extent of the recovery is heavily dependent on the Australian dollar and further rate cuts.
The outlook is also brighter for the beleaguered tourism-dependent Gold Coast and Sunshine Coast property markets with both areas “showing signs of bottoming out”.
Under a base case scenario, property prices in holiday locations are expected to rise by between 3% and 6% – a brighter outlook than Canberra (1% to 4% rise), Hobart (2% to 5%) and Melbourne (2% to 5%) and almost on a par with Brisbane (3% to 7%).
This scenario is based on terms of trade falling and then stabilising, the cash rate being cut by 50 basis points and the Australian dollar hovering at parity to the US dollar.
<a target="_blank" href="https://sqmresearch.com.au/">According to SQM</a>, the best case scenario for holiday locations would be a crash in the terms of trade, a 100-basis-point cut in the cash rate and the Australian dollar falling below 90 US cents.
If this were to occur, SQM forecasts holiday location property markets to rise by between 7% and 13% – outperforming all capital city markets.
In line with these healthier outlooks, SQM says its previous pessimistic opinion of Queensland’s Gold Coast and Sunshine Coast has begun to shift somewhat in recent months.
“Emerging from extended periods of oversupply and severe price corrections, these regions are now looked upon less negatively, and potentially the worst could be over for these localities.
“Nevertheless, there are still risks going forward, one of the main risks being that the Australian dollar could appreciate in value compared to the US dollar, which would have serious additional ramifications for the local economy.”
 
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SQM Research managing director Louis Christopher says while he has been “very bearish” on the Gold Coast and Sunshine Coast, there is now evidence of a pick-up, with stock-on-market levels coming down.
In February this year <a target="_blank" href="https://www.propertyobserver.com.au/hotspots/kochie-s-right-stay-away-from-the-gold-and-sunshine-coasts-sqm-director-louis-christopher/2012020153218">Christopher said he agreed with financial analyst and TV presenter David Koch'</a>s dire assessment of the Gold and Sunshine coast markets, pointing out at the time that three of the top four most discounted homes in Australia are in Queensland. Kochie came under fire from local estate agents and media for his gloomy assessment of the Queensland market last year. <a href="https://www.propertyobserver.com.au/hotspots/kochie-s-right-stay-away-from-the-gold-and-sunshine-coasts-sqm-director-louis-christopher/2012020153218" target="_blank">Kochie refused to back down from his assessment</a> that the Sunshine and Gold coasts are “catastrophes” and says investors should not trust the views of local estate agents and journalists.
Click to enlarge
<a href="/images/stories/2012/09/sqmsept26.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/09/sqmsept26thumb.gif"></a>
Christopher says a falling Australian dollar would help these markets as fewer Aussies would take their holidays overseas, while the weaker dollar would attract more international tourists.
Further rate cuts would also help.
Click to enlarge
<a href="/images/stories/2012/09/sqmsept261.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/09/sqmsept261thumb.gif"></a>
But he warns that these holiday markets are not for the "novice investor", who should stick with properties in the suburbs and avoid holiday apartments.
The report also notes that a “gradual rebalancing away from mining and resources back to tourism and manufacturing would be very beneficial over the long term for this country”.
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SQM Research more positive on Gold Coast and Sunshine Coast property markets

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The procession of mortgage lenders cutting fixed rates has continued, with Suncorp Bank reducing its three-year fixed home loan to 5.48% per annum effective today.
The bank now offers the lowest three-year fixed home loan of both the major banks and the regional banks.
Yesterday <a href="/news">St George cut its three-year fixed home loan to 5.49%</a> under its Advantage Package offering. 
<table cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td valign="top" width="242">
 
</td>
<td valign="top" width="242">
 Three-year fixed
</td>
</tr>
<tr>
<td valign="top" width="242">
1. Suncorp Bank
</td>
<td valign="top" width="242">
5.48%
</td>
</tr>
<tr>
<td valign="top" width="242">
2. Bankwest
</td>
<td valign="top" width="242">
5.54%
</td>
</tr>
<tr>
<td valign="top" width="242">
3. BOQ
</td>
<td valign="top" width="242">
5.55%
</td>
</tr>
<tr>
<td valign="top" width="242">
4. St George
</td>
<td valign="top" width="242">
5.49%
</td>
</tr>
<tr>
<td valign="top" width="242">
5. CBA, Westpac and NAB
</td>
<td valign="top" width="242">
5.74%
</td>
</tr>
<tr>
<td valign="top" width="242">
6. ANZ
</td>
<td valign="top" width="242">
5.79%
</td>
</tr>
<tr>
<td valign="top" width="242">
7. Bendigo
</td>
<td valign="top" width="242">
5.94%
</td>
</tr>
</tbody></table>
“The advantage of the Suncorp Bank three-year fixed-rate is that it can be taken as part of a package or as a standalone rate, unlike other offers that only allow discounted rates as part of a package,” says Suncorp Bank’s  Steven Heavey.
“The benefit of a fixed-rate loan is that you know exactly how much you have to repay each fortnight or month and can budget accordingly. This feature can be especially beneficial for first home owners as they adjust to having a mortgage.
“One disadvantage, however, is the loss of flexibility. For example, you generally can’t make additional repayments on fixed loans.
“If you want to hedge your bets, consider partially fixing your loan and keeping the rest at a variable rate,” he says.
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Suncorp Bank cuts three-year fixed-rate home loan to 5.48%

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Home buyer confidence is at highest level since the GFC, with one in two Australians saying now is a good time to buy, according to the latest Genworth Homebuyer Confidence Index.
The half-yearly index rose 2.2 points to reach 98.4 — its highest level since 2007 and 8 points above its low of 2008.
On a state-by-state basis Victorians registered the most improvement in sentiment with its index rising 7.7 points from a low of 92.3 in March 2012, overtaking New South Wales and Queensland. South Australia saw a 3.3 percentage point increase in the index, the second highest among the states.
Western Australia had the smallest increase in confidence but held on to its lead, with surveyed Western Australian borrowers being the least likely to have experienced, or to expect, difficulty meeting repayments.
Tasmanians are the least confident about buying a house with a sharp drop from the March survey.
<img src="/images/stories/2012/09/genworthsept26.gif">
The improvement in the overall index was driven by a marked rise in the number of people who say now is a good time buy versus six months ago and improvements in housing affordability.
Nearly half (49%) of 2,000 adults surveyed (both existing home owners and those looking at getting onto the property ladder) believe now is a good time to buy a home compared with 39% who said it was a good time to buy in the March 2012 survey - a new high since Genworth started compiling the Index in 2007. 
On this measure Queenslanders are the most positive with 54% of respondents agreeing now is a good time to buy.
Genworth CEO Ellie Comerford tells Property Observer the key message to take home from the survey is that consumer sentiment is moving the right direction.
“In the face of economic background, regional pressure points, cash rates it’s good to see the index increase to its second highest level ever.
She says Tasmania is the only state to buck the trend with its high rate of unemployment relative to other states the key reason.
The September survey also recorded a drop in mortgage stress  with the proportion of surveyed mortgage holders who experienced difficulty meeting repayments in the last year falling from 22% in March 2012 to 18%.
The proportion of borrowers expecting difficulty meeting repayments in the coming year fell from 22% to 19% over the same period.
Alan Shields, managing director of research firm RFi, which compiled the report on behalf of Genworth, says on both measures of repayment history and expectations, the results are at levels not seen in 18 months.
Shields says a drop in interest rates appears to be a key reason for the fall in mortgage stress in the September survey.
“Only one in four respondents who say they are experiencing mortgage stress said interest rates were a problem, compared to half of respondents in the last survey,” says Shields.
He says a rate cut next week – as many economists are now tipping - will have a further positive impact on home buyer sentiment.
The report also found that home buying sentiment remains high among first-home buyers with more than half (54%) of surveyed first-home buyers (FHBs) believing it is a good time to buy a home – a figure which has more than doubled in the last two years.
However, first-home buyer confidence fell marginally (0.5%) from March 2012, to 98.5, remaining just ahead of the national average of 98.4.
The index is compiled based on five measures:
<ul>
<li>The proportion of monthly income used to service debts</li>
<li>The maximum loan-to-value ratio (LVR) borrowers are comfortable in borrowing</li>
<li>Their repayment history over the last 12 months</li>
<li>Their repayment expectations for the next 12 months</li>
<li>Whether they consider now a good time to buy a home.</li>
</ul>
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Victorians lead home buyer confidence to highest level since 2007: Genworth report

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Property prices in mining towns could fall 25% in 2013 if Australia's terms of trade plummet or the eurozone collapses, according to worst-case scenario forecasts from SQM Research.
Even under a best-case scenario (terms of trade falling but stabilising, 50 basis point rate cuts, Australian dollar at parity), SQM Research forecasts a very mixed outlook for mining towns, with expectations ranging from a 5% fall in property prices to a 7% rise in prices.
“In the case of mining towns, it very much depends upon the individual mining town's base resource,” says SQM Research managing director Louis Christopher
If a mining town has 100% exposure to iron ore and iron ore prices fall, property prices in that town could “take a beating” he says.
“Others mining towns, such as those exposed to precious metals, will do OK.”
Large falls in property prices in mining towns are predicated <a href="https://www.propertyobserver.com.au/residential/australian-house-prices-could-rise-7-in-2013-if-eurozone-holds-together-sqm-research/2012092556806" target="_blank">under two different scenarios</a>, according to SQM’s 2012 Boom and Bust Report.
The first scenario is based on a crash in the terms of trade (the ratio of value of a country’s exports to the value of its imports), with the Australian dollar remaining high and the cash rate cut by just 0.2<a target="_blank" href="https://www.sqmresearch.com.au/">5</a> percentage points.
“Concerns are being raised about Australia’s resources sector, which at present is witnessing turmoil. All major mining companies are in the process of cancelling mining projects and reducing prices to remain competitive in the global market,” says SQM Research in its report.
“Falling terms of trade along with Australia’s heavy reliance on its resources sector could lead to a considerable dent on the economy’s progress going forward, and this would have a direct impact on housing as well.”
Under such a scenario SQM Research forecasts property prices in mining towns to fall by between 15% and 25%.
The second scenario – property prices in mining towns falling between 5% and 25% – is predicated on an unorganised European default and/or a eurozone break-up.
SQM Research points out that this is would be wild-card scenario “and despite current fears, an unlikely scenario”.
“However, if the event were to occur, it is possible that offshore financing would dry up and the RBA would quickly and aggressively cut rates. While there would be many forces at play, it is probable that the Australian dollar would fall substantially. However, it would only provide muted assistance to most sectors due to a sharp decline in total demand,” says the Boom and Bust report.
To find out what the mining boom will mean for property investors and where the investment hotspots are likely to be, sign up for <a href="/news">Property Observer’s free webinar with hotspotting.com.au’s Terry Ryder on Tuesday, October 2 at 12.30pm</a>
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Mining towns at risk of property prices crashing 25%: SQM Research

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Capital city property prices are forecast to rise by between 4% and 7% in 2013, with Sydney, Darwin and Perth expected to be the strongest performers under favourable economic factors, according to the 2012 SQM Research Boom and Bust Report. 
Double-digit house price growth is in the upper range of forecasts for Perth (12%) and Darwin (14%), with Sydney just under (9%) under a base-case scenario of terms of trade falling but then stabilising; the cash rate falling by 50 basis points; and the Australian dollar hovering at parity against the US dollar.
Even under an unlikely worst-case "wild card" scenario of a break-up of the eurozone, terms of trade crashing, banks rationing credit and the RBA forced to cut rates by 150 basis, the impact on property prices would be small, with SQM Research forecasting a maximum 3% fall in house prices.
The Perth and Adelaide housing markets would suffer the most pain under such a scenario, with <a target="_blank" href="https://www.sqmresearch.com.au/">SQM Research forecasting</a> as much as a 5% fall in Perth dwelling prices, with 4% maximum falls in Brisbane and Melbourne.

<div align="center">
<table cellpadding="0" cellspacing="0" border="0" style="width: 432px;"><tbody>
<tr>
<td valign="top" width="93">
City
</td>
<td valign="top" width="66">
% change from peak to June 2012
</td>
<td valign="top" width="47">
2012 to date
</td>
<td valign="top" width="57">
2012 Forecast
</td>
<td valign="top" width="85">
2013F Scenario 1 (base case)
TOT falls then stabilises
RBA cuts by 50bp
AUD hovers at parity
</td>
<td valign="top" width="85">
2013F
Worst-case scenario
Euro break-up
Banks ration credit
RBA cuts by 150 basis points
</td>
</tr>
<tr>
<td valign="top" width="93">
Perth
</td>
<td valign="top" width="66">
-5.8% (Mar 2010)
</td>
<td valign="top" width="47">
+1.2%
</td>
<td valign="top" width="57">
+1% to +5%
</td>
<td valign="top" width="85">
+6% to +12%
</td>
<td valign="top" width="85">
-5% to -3%
</td>
</tr>
<tr>
<td valign="top" width="93">
Brisbane
</td>
<td valign="top" width="66">
-6.9% (June 2010)
</td>
<td valign="top" width="47">
Steady
</td>
<td valign="top" width="57">
-1% to +3%
</td>
<td valign="top" width="85">
+3% to +7%
</td>
<td valign="top" width="85">
-4% to -1%
</td>
</tr>
<tr>
<td valign="top" width="93">
Darwin
</td>
<td valign="top" width="66">
New High (June 2012)
</td>
<td valign="top" width="47">
+9.7%
</td>
<td valign="top" width="57">
+7% to +13%
</td>
<td valign="top" width="85">
+6% to +14%
</td>
<td valign="top" width="85">
+2% to +5%
</td>
</tr>
<tr>
<td valign="top" width="93">
Melbourne
</td>
<td valign="top" width="66">
-7.5% (June 2010)
</td>
<td valign="top" width="47">
-1.6%
</td>
<td valign="top" width="57">
-3% to +2%
</td>
<td valign="top" width="85">
+2% to +5%
</td>
<td valign="top" width="85">
-4% to 0%
</td>
</tr>
<tr>
<td valign="top" width="93">
Sydney
</td>
<td valign="top" width="66">
-1.5% (June 2010)
</td>
<td valign="top" width="47">
+2.2%
</td>
<td valign="top" width="57">
+3% to +5%
</td>
<td valign="top" width="85">
+5% to +9%
</td>
<td valign="top" width="85">
-1% to +3%
</td>
</tr>
<tr>
<td valign="top" width="93">
Adelaide
</td>
<td valign="top" width="66">
-5.1% (Dec 2010)
</td>
<td valign="top" width="47">
-0.6%
</td>
<td valign="top" width="57">
-3% to +2%
</td>
<td valign="top" width="85">
+2% to +5%
</td>
<td valign="top" width="85">
-5% to -3%
</td>
</tr>
<tr>
<td valign="top" width="93">
Hobart
</td>
<td valign="top" width="66">
-7.2% (Dec 2010)
</td>
<td valign="top" width="47">
-2.4%
</td>
<td valign="top" width="57">
-5% to 0%
</td>
<td valign="top" width="85">
+2% to +5%
</td>
<td valign="top" width="85">
-2% to +2%
</td>
</tr>
<tr>
<td valign="top" width="93">
Canberra
</td>
<td valign="top" width="66">
-2.8% (Dec 2010)
</td>
<td valign="top" width="47">
-1.0%
</td>
<td valign="top" width="57">
-2% to 0%
</td>
<td valign="top" width="85">
+1% to +4%
</td>
<td valign="top" width="85">
-3% to 0%
</td>
</tr>
<tr>
<td valign="top" width="93">
Capital city Average
</td>
<td valign="top" width="66">
-4.7% (June 2010)
</td>
<td valign="top" width="47">
+0.3%
</td>
<td valign="top" width="57">
0% to +3%
</td>
<td valign="top" width="85">
+4% to +7%
</td>
<td valign="top" width="85">
-3% to 0%
</td>
</tr>
</tbody></table>
</div>
 SQM Research managing director Louis Christopher tells Property Observer that Sydney remains the “blue chip of real estate markets”
“It’s a deep and safe market."
However, he says Sydney is very much a two-speed market, with the outer-ring suburbs expected to outperform but no recovery in sight for the prestige market, which could fall further in 2013.
“Sydney is facing an acute housing shortage predominantly in the lower and middle end of the market. In the past, the city benefited from the booming financial sector, however, the GFC has had a direct impact on the sector and ultimately the housing market in the city,” says the Boom and Bust report.
<hr class="system-pagebreak">
Christopher admits that SQM Research missed the “rapid increase” in the Darwin market and only picked it up recently.
“Darwin is better buffeted than other capital cities from a terms-of-trade decline.
"It is more diverse in its resource base and more exposed to the energy sector via a number of gas projects."
He says Perth could do surprisingly well even under a base-case scenario, especially if interest rates continue to fall.
“Perth residents are still sensitive to rate movements.
“Perth went into a downturn in 2007, before the GFC and the reason was interest rate rises.
“We are now getting the interest rate cuts. All Perth needs employment to hold and there will be a fairly strong recovery. The other ingredients is the strong rental market and falling levels of stock-on-market figures," says Christopher.
Melbourne is forecast to mount a more muted recovery, with prices expected to rise between 2% and 5% in 2013.
Christopher says Melbourne house prices will stop falling shortly but expects no major recovery due to the amount of stock on market and new construction of homes continuing.
“This will put a big cap on price growth.
“Later on prices will stop falling, especially with established, separated houses in inner and middle-ring suburbs as opposed to the outer ring, where there is an excess of new land parcels, too many releases in our opinion, which is causing problems," he says.
The outlook for Brisbane is better than Melbourne, but Christopher says it remains a buyers' market.
The report notes that much of the recovery in Brisbane will be dependent on decisions at a state government level.
“No strong recovery for the housing market is expected in the near future. It is also seen that the Queensland government is striving for a budget surplus, which could lead to a slowed economy in the near future. House prices would be directly impacted by any decisions taken by the state government.”
 
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Australian house prices could rise 7% in 2013 if eurozone holds together: SQM Research

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While it has become cheaper for banks to raise wholesale funding from offshore investors, a desire to seek "more stable funding sources" has caused customer deposits to increase to nearly 50% of banks' funding base, according to the RBA’s September Financial Stability Review.
The review says banks' use of offshore long-term debt has been broadly unchanged since 2007, accounting for a quarter of all liabilities, while there has been an increase in the use of deposits "across all types of banks in Australia, although it has been most pronounced for the regional and other smaller Australian-owned banks, which had previously used securitisation more heavily".
<img src="/images/stories/2012/09/rbasept26.gif">
In terms of offshore funding, the RBA notes pressures in wholesale funding markets have eased since late last year, “allowing the large banks to maintain good access to international bond markets during the past six months”.
“The ongoing difficulties in Europe have been contributing to volatile funding conditions for Australian banks, but in recent quarters wholesale funding pressures have eased from the levels of late last year.
“Offshore investors have focused on the relatively strong position of the Australian banks compared with those in some other countries. The banks have therefore been able to take advantage of periods of more favourable market conditions to issue opportunistically,” says the RBA.


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Australian banks have issued around $50 billion of bonds in the past six months, mostly in unsecured form, says the RBA.
“Banks’ bond spreads have narrowed, and are now comparable to levels in mid-2011, prior to the escalation of the euro area debt problems. This has enabled the banks to issue a larger share of their bonds in unsecured form than they did at the beginning of the year when tensions in global funding markets were high.
“Even so, banks have reduced their relative use of wholesale funding further as growth in deposits has continued to outpace growth in credit."
The report also shows that banks have little exposure to the more volatile eurozone with just 1.6% of their assets based in this market, but says they remain exposed to swings in global financial market sentiment associated with the problems in Europe.
However, according to the RBA, Australian banks should be more resilient to such episodes, given the improvements they have made to their funding, liquidity and capital positions over recent years.
“Around half of the banks’ funding now comes from customer deposits, which is a broadly similar share to a number of other comparable countries’ banking systems."
Overall, the RBA says the Australian banking system has remained in a “relatively strong position”.
Following the GFC, the major banks blamed rising offshore funding costs for interest rate increases outside of the RBA cycle.
But recently the focus has shifted to the rising cost and battle among banks for customer deposits.
ANZ has stopped providing commentary on its independent interest rate decisions, but in July ANZ chief executive Australia Philip Chronican noted that competition in the deposit space was benefiting customers but “also continuing to put pressure on margins”.
Chronican also remarked that offshore funding markets had stabilised “somewhat” but added that the bank continued to “monitor events closely”.
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Offshore funding pressures ease but banks now more reliant on customer deposits for mortgage lending: RBA

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The likelihood of selling your Melbourne home at auction is higher on the eastern side of the city than on the west, according to analysis by the Real Estate Institute of Victoria (REIV).
The map (below) shows suburbs in blue where auction clearance rate have been above the Melbourne-wide clearance rate for 2012 and in orange for those that have been below the Melbourne-wide clearance rate for 2012.
<a href="https://www.reiv.com.au/en/Property-Research/Auction-Map.aspx" target="_blank"><img src="/images/stories/2012/09/reivsept26.jpg"></a>
Source: <a href="https://www.reiv.com.au/en/Property-Research/Auction-Map.aspx" target="_blank">REIV</a>
<a href="https://www.reiv.com.au/Home.aspx" target="_blank"></a>Among the poorest-performing auction markets this year are Docklands (32% clearance rate from 25 auctions), Keilor in the north-west of the city (43% clearance rate from 21 auctions) and Maribynong (41% clearance rate from 75 auctions).
Suburbs that are well in the "blue" include Collingwood (81% clearance rate from 58 auctions), Hawthorn (77% clearance rate from 221 auctions) and Kew (67% clearance rate from 130 auctions).
Bucking the eastern suburbs trend, the outlying western suburb of Sunbury has achieved an auction clearance rate of 78% to date from just 23 auctions.
The data includes auctions held up to September 18, 2012, with the <a href="https://www.reiv.com.au/en/Property-Research/Auction-Map.aspx" target="_blank">REIV </a>pointing out that the majority of residential sales in Melbourne are by private sale.
The map shows the clearance rate in suburbs where they have had 20 or more auctions in 2012.
The REIV publishes auctions results on a weekly basis on Saturday nights after 7pm.
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Melbourne’s eastern suburbs having more auction success: REIV

<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.

A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.

Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.

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[smartcode_project:default project_id=149670 project_image_fid=360965]

“The apartment floors deliver a collection of homes that embrace controlled outlook via a series of bay windows deliberately framing moments of view,” Rothelowman Director Kim Lowman said.

From outside, those projecting forms contribute to the tower’s faceted profile. Strong horizontal and vertical elements establish its proportions, while the changing position of the sun alters the light, shadow and reflection across the façade throughout the day.

The same attention moves inside the apartments, where the material palette combines warm timber, natural stone, metallic detailing and softer curved forms. Kitchens sit within the main living zone, with stone island benches, integrated joinery and European appliances, before the living areas extend towards the glazing and the outlook.

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[smartcode_project:default project_id=149670 project_image_fid=360981]

Three genuine bedrooms provide room to accommodate family and guests, while two secure car spaces and storage address some of the practical considerations that can become more noticeable when moving from a larger home. Feedback from the display suite has centred on the warmth and restraint of the interiors, with buyers commenting that the residences feel like homes rather than conventional coastal apartments.

A limited collection of half-floor penthouses occupies the upper levels, increasing the scale of the living spaces and adding private balconies and elevated finishes. From this position, the outlook extends between the ocean and hinterland.

Outside the private residences, The Eveleigh separates its shared spaces between the podium and rooftop. The podium is centred on wellness, with subtropical landscaping surrounding a swimming pool and pool terrace, yoga garden, private gymnasium, sauna and hot and cold plunge facilities. Landscaped retreats and pavilions provide additional places to sit away from the main recreation areas.

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[smartcode_project:default project_id=149670 project_image_fid=360966]

Higher in the building, a rooftop pavilion and private dining suite sit alongside resident lounge, barbecue and outdoor dining areas, opening towards panoramic views across the ocean, city and hinterland.

“Buyers are no longer just looking for an apartment, but a lifestyle where they can relax, reset, and enjoy a balanced way of living,” Hirsch &amp; Faigen Director of Sales Matt George said.

Interest to date has come from established owner-occupiers and interstate lifestyle purchasers, including buyers planning a future move to the Gold Coast. Many are coming from larger homes and want to reduce ongoing maintenance without giving up space for family and guests, privacy, two car spaces or the ability to entertain at home.

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[smartcode_project:default project_id=149670 project_image_fid=360969]

Much of that daily life can also take place beyond the building without requiring a drive. Kurrawa Beach and Pratten Park are an easy walk from Surf Parade, while Pacific Fair, Oracle Boulevard, The Oasis, restaurants, cafés, entertainment and public transport are also within walking distance.

The Eveleigh is Hirsch &amp; Faigen's fourth Gold Coast development since entering the market in 2021, following The Hemingway at Palm Beach, The Emerson at Kirra and Yves at Mermaid Beach. Each of the preceding projects sold out before completion.

“Broadbeach had been on our radar throughout our time operating on the Gold Coast,” the developer said. “Following our projects in Palm Beach, Kirra and Mermaid Beach, Broadbeach represented the natural next step for the business.”

The Surf Parade site brought together proximity to the beach, protected coastal outlooks and walkability to dining, shopping and recreation. Hirsch &amp; Faigen also identified the street as an emerging premium residential address, with enough separation from Broadbeach's busier destinations to retain a quieter environment at home.

The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.

[smartcode_project_cta:default project_id=149670]

Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

A long-stalled Campbelltown development site is back in play, with new plans for 139 apartments set to supersede a mixed-use scheme approved almost a decade ago but never built.

The new proposal for 28 Cordeaux Street would deliver 116 market and 23 affordable apartments in a part 14-storey building, bringing a substantial new project into a Campbelltown market where new apartment supply remains limited.

Plans have been filed over the 3,092 sqm corner site at Moore-Oxley Street, around 600 metres from Campbelltown Railway Station and the city-centre retail core.

The site already carries a mixed-use residential approval dating to 2016. Doroch Architects has now been engaged on a larger replacement scheme, which is progressing as a State Significant Development Application following a Housing Delivery Authority determination in August 2025.

The apartment mix comprises 39 one-bedroom, 72 two-bedroom and 28 three-bedroom residences. Two-bedroom apartments make up just over half of the project, while three-bedroom homes account for 20 per cent.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="136dd5b9-3791-4da6-9e31-76f533f5b4de" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da2.png?VersionId=LgOSy9nwf5u.MGswBBwaGGxuX8QpHSl_" />

Of the 139 apartments, 23 will be delivered as affordable housing under the in-fill affordable housing provisions of the Housing SEPP. The affordable component represents 15 per cent of the residential gross floor area and will be managed by a registered Community Housing Provider.

Doroch has sought to break the scale of the building into two distinct elements, with a masonry podium of around four storeys establishing the street edge before the residential tower steps back above.

The corner position has shaped that approach. Cordeaux Street faces toward the commercial and civic centre, while Moore-Oxley Street leads into the lower-scale residential neighbourhood to the south, and the design verification report describes the site as "bridging the commercial core to the north and established residential areas to the south."

The podium will be expressed predominantly in face brick, while the upper levels shift to brushed and grooved concrete cladding with darker metal detailing. Recessed sections, deep balcony edges and landscaping break down the upper form, with an approximately 11.8-metre setback to the northern boundary addressing the adjoining St Peters Anglican School.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="c8b3d2d3-c561-4bfc-a5d9-a68c0c10dac1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da1.png?VersionId=AeAEyJU02Gk2k5noUj2StziCvdQ7fW4B" />

Campbelltown has been starved of new residential developments in the last decade.

The only other notable development set to come to market this year is ALAND's Queen Square, a mixed-use precinct on over two hectares that will comprise apartments above a vibrant ground-level retail and hospitality dining precinct.

First look: New 139-apartment plans revive long-stalled Campbelltown city centre site

First Look: Sherlock Construction pitches apartments for low-rise Deception Bay

Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

First look at MAYD's North Kirra mixed-use precinct

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Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

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Larry Schlesinger

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