<html><body>
The collapsed construction arm of St Hilliers has resumed work on projects in the ACT and Queensland as administrators seek a buyer for the cash-strapped business.
Construction group Brookfield Multiplex has also been tipped as a possible buyer of St Hilliers Construction, according to a report in The Australian.
Work has resumed at the $30 million Bonner Primary School project, $12 million Airservices headquarters and $10 million Philip social housing complex following a “constructive” meeting with the ACT government earlier in the week.
St Hilliers chairman Tim Casey says work has also resumed at a number of Queensland projects, including housing projects for the Department of Defence, a $14.5 million building extension project at the St Lucia campus of the University of Queensland and a $10 million contract to build modular mining housing for Xstrata in Glenden in the Bowen Basin.
Casey says the $500 million worth of projects undertaken by St Hilliers has now shrunk to about $260 million after it was placed in administration.
Staff numbers at St Hilliers Construction are expected to fall from 360 to 200.
St Hilliers and administrators Trent Hancock and Michael Hird of Moore Stephens Sydney Corporate Recovery Group are also in discussions to reopen an office refurbishment project on Elizabeth Street in the Sydney CBD.
This follows St Hillier announcing that <a href="https://www.propertyobserver.com.au/industry-news/four-st-hilliers-sites-being-built-for-department-of-defence-to-reopen-today/2012052154764">four training facilities</a> – two in Queensland and two in Victoria that are being constructed for the Department of Defence with a combined value of $170 million –would reopen on May 21.
On May 17, St Hilliers announced that four sites had reopened: 153 Clarence Street, Sydney, NSW, a commercial office refurbishment; Chullora Marketplace, Greenacre in Sydney, extension and refurbishment of a retail complex; infrastructure works at Mt Arthur Coal Mine in Muswellbrook; and the mining housing project at Glenden Mine.
Work has also resumed today on a public housing project on Harbour Drive in Coffs Harbour, the Coffs Coast Advocate reports – one of 13 NSW public housing projects that the NSW government has taken over following St Hilliers being placed in administration.
St Hilliers was placed in voluntary administration on May 16 following the collapse of funding for a joint venture project to redevelop the Ararat Prison.
</body></html>

lschlesinger-FZcF9M3vE6

St Hilliers resumes ACT and Queensland projects with Brookfield Multiplex named as possible buyer

<html><body>
Melbourne’s property market remained weak in May, with dwelling values falling 2.7% to a median of $490,000, the biggest monthly fall of all eight capital cities, according to the RP Data-Rismark May Home Value Index.
Melbourne dwelling values are now down 8.4% for the year to May, with houses down 8.8% to $534,000 and units down 5.4% to $440,000 – making it the worst-performing mainland capital city market.
Only Hobart is worse, with a 8.9% fall over the past 12 months.
The Victorian capital led a 1.4% fall in capital city values.
Perth dwelling prices fell 1.7% over April to a median of $460,000 while Sydney dwelling prices were down 1.2% to a median of $555,000.
Brisbane dwelling prices were more resilient down just 0.3% over May to a median of $415,000.
The latest drop brings the cumulative national decline to 2.2% over the first five months of 2012, with overall dwelling values down 5.3% over the past 12 months. 
Much of the weakness is confined to the detached housing market rather than apartments with RP Data research director Tim Lawless pointing out that unit values have been much more resilient to value falls compared to houses. 
Over the past 12 months capital city house prices have fallen 5.8% to $470,000, with units down a more modest 1.5% to $430,000.
“It is clear that the market is becoming increasingly price point driven. Unit values across the combined capitals increased in May and they are up by 1.3% over the first five months of the year. 
“Based on median prices, unit prices are generally around 15% to 20% lower than house prices. Investment yields also tend to be higher and units are often located more strategically compared with their detached counterparts,” says Lawless. 
The slide in May indicates that the housing market has not responded to the interest rate cuts in November and December, notes RP Data-Rismark.
According to Rismark managing director Ben Skilbeck, the housing market is being buffeted by a drop in consumer confidence, with the Westpac Melbourne Institute Index of Consumer Sentiment 6.3% below its long-term average despite an overall “positive economic picture”. 
“Concurrently, new mortgage finance commitments aren’t moving a great deal suggesting we are yet to see heightened buyer activity return to the market,” he says. 
Another hurdle for the property market is the large number of properties currently being advertised for sale, with RP Data estimating there were around 308,500 homes advertised for sale across Australia during May, almost 9% more than at this time last year. 
Regional dwelling values were more resilient, falling 0.2% over April to be down 1.4% year-on-year with a median price of $320,000.
Adelaide was the best-performing capital city over the quarter, with dwelling prices up 1% over the three months to May 31, 2012 to $370,000.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/05/rpjune1.gif"><img src="/images/stories/2012/05/rpjune1thumb.gif"></a>
Brisbane values are down 6% year-on-year, Perth values are down 3.9% and Sydney values are down 3.6% since April last year.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/05/rpjune12.gif"><img src="/images/stories/2012/05/rpjune12rhumb.gif"></a>
Rismark managing director Ben Skilbeck says one positive to take away from the soft housing market is that housing affordability is showing a marked improvement. 
“The combination of interest rate reductions, declining home values and disposable income growth has significantly improved affordability. 
“Since dwelling values peaked in November 2010, they are down by 7.6%, the RBA cash rate has fallen from 4.75% to 3.75% and disposable income per household has increased by over 5%,” he says.
Darwin is offering investors the highest gross rental yields of all capital cities - 6% for houses and 5.9% for units with Melbourne offering the lowest rental yields on houses (3.7%) and sharing the lowest rental yield on units with Adelaide of 4.5%
“Rental yields are higher now compared to a year ago across every capital city. In some cities where rents have increased meaningfully such as Darwin and Perth, gross rental yields have improved by 50 basis points or more,” Lawless says.
</body></html>

Capital city house prices fell 1.4% in May led by big fall in Melbourne: RP Data-Rismark 

<html><body>
The commercial property market is set to rebound strongly over the next five years, says BIS Shrapnel chief economist Frank Gelber, who claims property trusts have got their current asset sell-down strategy all wrong.
Gelber says property trusts should not be selling their assets and buying back shares but holding them and repositioning them for what he says will be “strongly rising” commercial property market over the next five years.
“It makes a lot of sense for investors to come back into property. This is not a market in anything like equilibrium. It's bumping around the bottom of the cycle, struggling to recover,” Gelber writes in The Australian.
“Inadequate investment and low prices have set the scene for strong returns this decade. It's not a quick-return trader's market. This is a market for investors with a medium-term horizon,” he adds.
According to Gelber, now is the time for the commercial property market to set itself up for strong returns over the next three to five years with “returns in both direct and indirect investment groups should reflect that”.
As the graph below shows, BIS Shrapnel places the Brisbane office market on the cusp of a recovery, just behind Sydney, Perth and Melbourne, which are already heading into an upswing. BIS Shrapnel says industrial property and hotels are further along in the property cycle.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/05/bisjun1.gif"><img src="/images/stories/2012/05/bisjun1thumb.gif"></a>
In its March 2012 building industry update, BIS Shrapnel said that while the NSW office marked was currently weak, “the beginning of an upturn as a lack of new supply combined with stronger economic conditions sees the office market tighten considerably from its current level” in 2012-13. 
In the case of Melbourne offices, BIS Shrapnel says the market is already “well placed to begin a pronounced uptrend” due to its low and falling vacancy rate. 
In light of these upbeat forecasts, Gelber says so there is not much point in property trusts “wasting their equity in a vain attempt to raise their share price”.
“New capital raisings will, in any case, have to wait until market sentiment changes. And it will eventually,” says Gelber.
The real problem, he says, is that both retail and institutional investors are sitting on the sidelines and not investing in both listed and unlisted property trusts and the property market in general.
However, he says that once the economy improves, they will have more income to allocate to investment.
“Meanwhile, we need to keep the lines of communication open,” he says.
“The super funds do have the money. But they too are sitting on the sidelines [and] … I suspect they still regard property investment as relatively risky.
“That's not true. Property was risky in the boom that preceded the GFC – over-geared vehicles, overvalued and at risk of becoming oversupplied. But that's not true now,” he says.
 
</body></html>

Commercial property market 'bouncing along the bottom': Frank Gelber

<html><body>
The Macquarie Group has made a big push into the property investor space in 2012, growing its investment mortgages book by 33% during the first four months of the year, according to Property Observer analysis of APRA figures.
The investment bank has written $290 million worth of investment housing loans since January 1 – just behind regional players Bendigo Bank ($309 million), Bank of Queensland ($310 million) and Suncorp ($384 million).
A spokesperson for Macquarie told Property Observer the increase in its investment housing lending  was likely due "to the business continuing to ramp up since returning to the [mortgage] market in 2010.
“We have been continuously broadening our distribution and working on various product developments like the SMSF property loan.
“Our book has also recently returned to growth following a period of run-off – the run-off was of course driven by our time out of new mortgage origination between 2008 and 2010,” she says.
Macquarie launched its SMSF Property Loan on May 30 aimed at giving SMSFs direct exposure to residential investment property assets. 
In addition the bank also offers three tailored investment loans, including a 100% investment loan requiring no upfront capital.
Top 15 property investor lenders since start of the year ($ millions)
 
<table style="width: 379px;" border="1" cellpadding="0" cellspacing="0"><tbody>
<tr>
<td nowrap valign="top" width="143">
Bank
</td>
<td nowrap valign="top" width="96">
31-12-11
</td>
<td nowrap valign="top" width="76">
30-04-12
</td>
<td nowrap valign="top" width="64">
New lending
</td>
</tr>
<tr>
<td nowrap valign="top" width="143">
Westpac
</td>
<td nowrap valign="top" width="96">
$118,380
</td>
<td nowrap valign="top" width="76">
$120,654
</td>
<td nowrap valign="top" width="64">
$2,274
</td>
</tr>
<tr>
<td nowrap valign="top" width="143">
ANZ
</td>
<td nowrap valign="top" width="96">
$44,549
</td>
<td nowrap valign="top" width="76">
$46,243
</td>
<td nowrap valign="top" width="64">
$1,694
</td>
</tr>
<tr>
<td nowrap valign="top" width="143">
Commonwealth Bank
</td>
<td nowrap valign="top" width="96">
$85,928
</td>
<td nowrap valign="top" width="76">
$87,328
</td>
<td nowrap valign="top" width="64">
$1,399
</td>
</tr>
<tr>
<td nowrap valign="top" width="143">
NAB
</td>
<td nowrap valign="top" width="96">
$52,134
</td>
<td nowrap valign="top" width="76">
$52,616
</td>
<td nowrap valign="top" width="64">
$482
</td>
</tr>
<tr>
<td nowrap valign="top" width="143">
Suncorp
</td>
<td nowrap valign="top" width="96">
$8,179
</td>
<td nowrap valign="top" width="76">
$8,563
</td>
<td nowrap valign="top" width="64">
$384
</td>
</tr>
<tr>
<td nowrap valign="top" width="143">
Bank of Queensland
</td>
<td nowrap valign="top" width="96">
$9,672
</td>
<td nowrap valign="top" width="76">
$9,982
</td>
<td nowrap valign="top" width="64">
$310
</td>
</tr>
<tr>
<td nowrap valign="top" width="143">
Bendigo and Adelaide Bank
</td>
<td nowrap valign="top" width="96">
$8,553
</td>
<td nowrap valign="top" width="76">
$8,863
</td>
<td nowrap valign="top" width="64">
$309
</td>
</tr>
<tr>
<td nowrap valign="top" width="143">
Macquarie Bank
</td>
<td nowrap valign="top" width="96">
$876
</td>
<td nowrap valign="top" width="76">
$1,166
</td>
<td nowrap valign="top" width="64">
$290
</td>
</tr>
<tr>
<td nowrap valign="top" width="143">
Citigroup Pty
</td>
<td nowrap valign="top" width="96">
$2,401
</td>
<td nowrap valign="top" width="76">
$2,547
</td>
<td nowrap valign="top" width="64">
$146
</td>
</tr>
<tr>
<td nowrap valign="top" width="143">
BankWest
</td>
<td nowrap valign="top" width="96">
$9,322
</td>
<td nowrap valign="top" width="76">
$9,466
</td>
<td nowrap valign="top" width="64">
$144
</td>
</tr>
<tr>
<td nowrap valign="top" width="143">
Members Equity Bank
</td>
<td nowrap valign="top" width="96">
$1,168
</td>
<td nowrap valign="top" width="76">
$1,280
</td>
<td nowrap valign="top" width="64">
$112
</td>
</tr>
<tr>
<td nowrap valign="top" width="143">
ING Bank
</td>
<td nowrap valign="top" width="96">
$9,469
</td>
<td nowrap valign="top" width="76">
$9,572
</td>
<td nowrap valign="top" width="64">
$103
</td>
</tr>
<tr>
<td nowrap valign="top" width="143">
AMP Bank
</td>
<td nowrap valign="top" width="96">
$2,014
</td>
<td nowrap valign="top" width="76">
$2,094
</td>
<td nowrap valign="top" width="64">
$80
</td>
</tr>
<tr>
<td nowrap valign="top" width="143">
Heritage Bank
</td>
<td nowrap valign="top" width="96">
$1,187
</td>
<td nowrap valign="top" width="76">
$1,238
</td>
<td nowrap valign="top" width="64">
$52
</td>
</tr>
<tr>
<td nowrap valign="top" width="143">
HSBC Bank Australia
</td>
<td nowrap valign="top" width="96">
$3,843
</td>
<td nowrap valign="top" width="76">
$3,894
</td>
<td nowrap valign="top" width="64">
$51
</td>
</tr>
</tbody></table>
 
Source: APRA
Macquarie CEO Nicholas Moore revealed at a February operational briefing that the bank had launched an enhanced mortgages offering to new Australian clients.
The investment bank also has an equity stake and helped launch mortgage aggregator Vow Financial, which has grown to a network of 700 mortgage brokers – a channel for it to distribute its investment loans and other products.
The APRA figures show that Members Equity Bank has also ramped up its investment mortgage lending since January, lending $112 million to property investors translating into 9% growth for its $1.3 billion investment loan book.
In contrast to Macquarie and ME Bank’s pitch to the investor market, NAB has pulled back from this market, growing its investor mortgage book by less than 1% since the start of the year – adding just $482 million to its $53 billion investment loan book.
Westpac has by far the biggest investment loan book of all lenders at $121 billion and also wrote the highest volume of investment loans ($2.3 billion) over the first fourth months of the year.
ANZ has also been a strong player in the investment space, registering the strongest growth of the Big Four over the fourth months of just under 4%. The bank has written $1.7 billion worth of investment loans since the start of the year.
</body></html>

Macquarie increases loans to property investors 33% since January: APRA figures

<html><body>
Property investors are selling themselves short by asking for a lower rent in the hope of securing a longer-term tenant, according to McGrath Estate Agents head of property management Michael Conolly.
Conolly says such a strategy does not usually work and says an experienced property manager is the best way for a property investor to determine what rent to charge tenants.
He says landlords often confused their price expectation with what the local tenant market will bear.
“You might want a certain price for your property based on what you think it’s worth, but the real rental value is based on what the market is willing to pay,” Conolly says.
“We call this ‘market value’, and it’s based on many variables that can change monthly.
“The best way to find out what your property will rent for in today’s market is to talk to an experienced property manager. They are listing and leasing properties daily and have access to data that is not available to people outside the industry,” he explains.
Conolly offers the following strategy for setting the rent: “After seeking advice from a trusted, knowledgeable local expert, always advertise at the maximum rental value at the start of your campaign. You can adjust the asking rent after the first or second round of feedback if you really need to.”
He warns investors against advertising their property at a slightly lower rent to attract a longer-term tenant, saying the strategy sells a property short.
He says due to tight vacancies, most renters will expect regular rental increases and in most cases they’ll continue living in your property when the rent goes up.
“As a general rule, I recommend small, regular increases in rent. Some landlords don't put the rent up for two years and then try and put it up by $50 a week.
“Tenants don't like that. Depending on what the market is doing, I suggest perhaps a $5 to $10 increase in rent every six to 12 months. Just keep the rent ticking over, but not outpacing the market,” he says.
For tips on buying an investment property as your first purchase sign up for next week’s free Property Observer webinar with Michael Matusik: Tips for buying your first property as an investment. The webinar takes place on Tuesday, June 5 at 12.30pm.
</body></html>

Market value, not landlords’ hopes, should determine rent: McGrath

<html><body>
Westpac expects the Reserve Bank to cut the cash rate by 25 basis points next week (June 5) to 3.5% with further rate cuts in July, August and one in the fourth quarter to bring the cash rate to a record low of 2.75%.
Westpac had previously expected the current easing cycle, which began in November last year, to end at 3.25% but now expects a much deeper cycle of rate cuts due to the deteriorating global picture.
Taking into consideration the gap betweeen the cash rate and bank mortgage rates, Westpac chief economist Bill Evans says a move to 2.75% in the official cash rate is likely to see the cash rate somewhere between 100bps and 145bps below neutral (curently asssessed as 4.1% by Westpac) - meaning an average standard variable mortgage rate of between 6.05% and 6.5%.
"In the three previous easing cycles the official cash rate has bottomed out at 150bps (2008/09); 125bps (2001) and 50bps (1996/97) below neutral.In those periods the standard variable mortgage rate bottomed out at 5.8% (2009); 6.05%(2001); and 6.7% (1997).
"The contrast with 2009 is important. Despite the cash rate falling below its GFC trough, we expect the standard variable mortgage rate will bottom out well above the 2009 level," he says.
The cash rate reached a previous low of 3% in April 2009 according to RBA records going back to 1990.
Evans says the two extra rate cuts are based on the banks assessment that “the global environment – read Europe - has deteriorated even further since we revised down our call for the low point from 3.75% to 3.25%.
“In turn this deterioration is expected to have a more severe impact on confidence in Australia than had earlier been expected.
“The stance of policy is currently only mildly expansionary despite the official cash rate being at 3.75%, its lowest level outside the GFC,” says Evans.
Evans says Westpac does not favour a 50 basis point cut scenario in June.
“The decision to cut by 50 basis points in May was mainly driven by direct concerns around the domestic economy.
“To us, there appeared to be an element of catch up with the Bank holding steady in February-April when the domestic case for a cut was strong.
“The decision next week will be built around the impact that the deterioration in global confidence will have on the Australian economy.
“Since the Board meeting in May US 10 year bond rates are down from 1.9% to 1.6% and the Australian equivalent is down from 3.6% to 2.9%.
“However, there are a number of key risk events over the next few weeks (Greek elections on June 17 for example) which will be critical for global confidence.
“We expect a more orderly approach to addressing these issues and thus a more ‘considered’ 25 basis points move.
 “However nobody can be particularly confident in gauging the Bank's meeting-by-meeting strategy for dealing with these issues,” says Evans.
</body></html>

RBA to cut rates by 25 basis points next week and reduce cash rate to 2.75% by year-end: Westpac

<html><body>
Non-bank lenders share of the total lending market declined markedly in April as mortgage lending remained at record low annual growth. 
In percentage terms banks have almost 92% of the total lending market and non-banks just 8%. 
A year ago banks had less than 90% of the total lending market while 11 years ago (April 2001) they had less than 80% of the total market. 
Total mortgages advanced by both banks and non-banks increased by just 0.4% in April following a 0.4% increase in March leaving the annual pace of growth at 5.3%, according to the latest RBA financial aggregates. 
Annual mortgage growth has been at 5.3% since January, the lowest growth since 1977, according to RBA records. 
Despite this very slow pace of growth banks share of the total lending market increased by $12 billion from $1.708 trillion to $1.72 trillion, while non-banks’ total lending fell by from $155 billion to $152 billion – the fifth successive month (since December) that their total aggregate lending has fallen. 
Banks vs non-banks lending books (figures in $ billions)
 
<table border="0" cellspacing="0" cellpadding="0" width="320"><tbody>
<tr>
<td width="76" nowrap valign="bottom">
Month
</td>
<td width="57" nowrap valign="bottom">
Banks
</td>
<td width="88" nowrap valign="bottom">
Non-banks
</td>
<td width="99" nowrap valign="bottom">
Total lending
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Apr-2011
</td>
<td width="57" nowrap valign="bottom">
1608.0
</td>
<td width="88" nowrap valign="bottom">
163.5
</td>
<td width="99" nowrap valign="bottom">
1771.5
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
May-2011
</td>
<td width="57" nowrap valign="bottom">
1614.9
</td>
<td width="88" nowrap valign="bottom">
164.5
</td>
<td width="99" nowrap valign="bottom">
1779.5
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Jun-2011
</td>
<td width="57" nowrap valign="bottom">
1622.4
</td>
<td width="88" nowrap valign="bottom">
163.6
</td>
<td width="99" nowrap valign="bottom">
1786.1
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Jul-2011
</td>
<td width="57" nowrap valign="bottom">
1625.6
</td>
<td width="88" nowrap valign="bottom">
163.7
</td>
<td width="99" nowrap valign="bottom">
1789.4
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Aug-2011
</td>
<td width="57" nowrap valign="bottom">
1638.4
</td>
<td width="88" nowrap valign="bottom">
163.0
</td>
<td width="99" nowrap valign="bottom">
1801.4
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Sep-2011
</td>
<td width="57" nowrap valign="bottom">
1649.8
</td>
<td width="88" nowrap valign="bottom">
161.6
</td>
<td width="99" nowrap valign="bottom">
1811.4
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Oct-2011
</td>
<td width="57" nowrap valign="bottom">
1658.9
</td>
<td width="88" nowrap valign="bottom">
161.0
</td>
<td width="99" nowrap valign="bottom">
1819.8
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Nov-2011
</td>
<td width="57" nowrap valign="bottom">
1670.4
</td>
<td width="88" nowrap valign="bottom">
162.1
</td>
<td width="99" nowrap valign="bottom">
1832.5
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Dec-2011
</td>
<td width="57" nowrap valign="bottom">
1681.5
</td>
<td width="88" nowrap valign="bottom">
156.4
</td>
<td width="99" nowrap valign="bottom">
1837.9
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Jan-2012
</td>
<td width="57" nowrap valign="bottom">
1685.7
</td>
<td width="88" nowrap valign="bottom">
155.7
</td>
<td width="99" nowrap valign="bottom">
1841.4
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Feb-2012
</td>
<td width="57" nowrap valign="bottom">
1696.6
</td>
<td width="88" nowrap valign="bottom">
155.1
</td>
<td width="99" nowrap valign="bottom">
1851.7
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Mar-2012
</td>
<td width="57" nowrap valign="bottom">
1707.6
</td>
<td width="88" nowrap valign="bottom">
155.0
</td>
<td width="99" nowrap valign="bottom">
1862.6
</td>
</tr>
<tr>
<td width="76" nowrap valign="bottom">
Apr-2012
</td>
<td width="57" nowrap valign="bottom">
1719.8
</td>
<td width="88" nowrap valign="bottom">
151.8
</td>
<td width="99" nowrap valign="bottom">
1871.6
</td>
</tr>
</tbody></table>
 
Over April total owner-occupier mortgage lending totalled $839 billion, up $3 billion from $836 billion in March, while loans for investment property purchases totalled $401 billion compared with $399 billion in March.
 
 
 
</body></html>

Non-banks lose ground as record low mortgage growth continues in April: RBA

<html><body>
Building approvals for private sector houses fell 11.1% in April to 6,590 on a seasonally adjusted basis, according to the latest ABS figures.
Unit approvals fell 2.3% over April to 3,656 leaving overall dwellings approvals down 8.7% following a rise of 6% in March.
The value of residential building fell 6.7% while non-residential building fell 2.8%, according to the ABS.
The biggest monthly private sector housing fall was recorded in Western Australia, where the number of approvals fell 36.7%, followed by South Australia (-26.4%) and Queensland (-11.6%).
Private sector house approvals rose in New South Wales (2%) but were flat in Victoria.
For the year to April, private sector housing approvals are down 15.9% while unit approvals are down 33.8%
Dwelling approvals decreased in April in Western Australia (-46.7%), South Australia (-27.8%), New South Wales (-15.3%) and Queensland (-2.7%), but increased in Victoria (13.0%) and Tasmania (9.6%) in seasonally adjusted terms.
The value of total building approved fell 5.4% in April in seasonally adjusted terms, and has fallen for three months.
Westpac suggested the April WA result has been heavily impacted by the introduction of new building approval legislation in Western Australia which appeared to have created a hole in approvals presumably due to a lengthier approval process.
"That will be a temporary hole with normal transmission resuming in coming months," it noted. It also suggested the picture across the other states showed volatile moves mostly associated with a lumpy pipeline of apartment projects.
For private sector houses, NSW showed a 1.9% gain building on a similar rise in March; Vic had a flat result; and Qld posted a particularly sharp 11.6%mth drop, unwinding policy-related strength through late last year and early 2012. But notably, all states are recording trend declines in private sector house approvals although NSW and Vic are showing moderating trend declines. "Overall, the April dwelling approvals report is weak but not quite the disaster the headline moves suggest," Westpac said.
The ex-WA results suggest activity is continuing to gradually stabilise but has not settled just yet, it concluded.
The HIA says the "sharp" fall in building approvals in April sends a "very negative signal regarding the wider domestic economy"
“Building approvals have continued to fall over 2012 to date and imply a recessionary level of new residential construction in 2012,” says HIA chief economist, Harley Dale.
“That’s not a positive, upbeat outcome to report, but it is a fact which can’t be ignored or denied,” says Dale.
“The last three months of building approvals confirm HIA’s message that housing starts are heading towards 130,000. That’s a recessionary level of new home building activity with obvious flow-on consequences for Australia’s manufacturing and retail sectors, and employment market.
“Leading indicators over recent quarters have pointed to this poor result and, worryingly, suggest more to come.
“The situation can be turned around, but it requires action and that action needs to occur now. HIA once again calls on Governments to collectively arrest the looming crisis through tax relief and an injection of investment and funding into the new housing sector. Such an injection will also provide vital impetus tothe broader non-resource economy,” says Dale.
Commenting on the April figures, Master Builders Australia (MBA) says they show that last year’s rate cuts have failed to have any impact on residential building approvals in April.
Building approvals are heading south as home buyer confidence weakens," says Peter Jones, chief economist at the MBA.
“The April data pre-dates the May rate cut but with home buyer confidence at such low levels it would appear rates need to fall further in order to arrest the decline in the market.”
“With the immediate challenge to restore confidence and drive a private sector recovery, the building industry is banking on further rate cuts to help boost confidence.”
“To underpin economic activity and jobs, the Government and the Reserve Bank need to boost the more than eighty per cent of the economy caught in the ‘slow lane’," says Jones.
</body></html>

New home approvals down 11% in April with big drop in WA: ABS

<html><body>
Melbourne’s poorest-quality office stock may become sought after by investors following a new report showing D-grade offices have the lowest vacancy rate of all office types in the city.
The vacancy rate for “inferior quality” D-grade office stock in the city stands at just 2.2%, less than half the vacancy rate of premium-grade stock (5.9%) and well below the 3.5% vacancy rate for high quality A-grade stock, according to the latest City of Melbourne Property Watch report.
Based on current total D-grade office stock of only 121,000 square metres, this equates to around 2,700 square metres of available space to rent.
The least attractive office grade from an investment point of view appears to be C-grade, “average” office stock, which has a vacancy rate of 10% and more than 574,000 square metres of total space.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/05/melboffice.gif"><img src="/images/stories/2012/05/melbofficethumb.gif"></a>
No new D-grade space has been added to the pool in the 12 months to January 2012, while there was 3,300 square metres of C-grade office space added to the market over this period.
Demand for D-grade office space indicates that businesses still want to be based in the city, but cannot afford the rents charged for better-quality office space, the Property Council of Australia Hunter regional director Andrew Fletcher said when reporting on a similar phenomenon in Newcastle.
The tightest office market in the Melbourne CBD is Docklands, which has a vacancy rate of just 0.8%.
C-grade and D-grade offices have “poor air quality, poor lighting, low-grade amenities and have no minimum standards for building, floor space or environmental ratings” reported the Canberra Times in January.
The report says there is 623,000 square metres of premium-grade space, 1.8 million square metres of A-grade space and 931,000 square metres of B-grade space.
Yields for premium-grade office space range from 6.75% to 7.25%; they range from 7.25% to 8% for A-grade and 8.5% to 9.5% for B-grade.
Yields on the sought after St Kilda Road office market range: 8.75% to 9.25% for A-grade and 9% to 10% for B-grade. 
The report does not provide yields for C-grade and D-grade stock.
The Melbourne CBD office market (incorporating Docklands) is the second largest in the country and currently comprises 4.1 million square metres of office space.
Only 41,201 square metres of new supply was introduced to the market over the 12 months to January 2012, well below the annual 10-year average of approximately 135,000 square metres.
Report author Amanda Walker says the Melbourne CBD office market has the second lowest vacancy rate of mainland capital cities and has recently enjoyed moderate growth in rents and capital values.
“The market is currently considered balanced that is demand driven, rather than supply led.
“Offshore demand for Melbourne CBD office investments appears to be strengthening, highlighting the market’s resilience and appeal as a global investment destination,” she says. 
“In a period of global economic uncertainty, the outlook for the Melbourne CBD office market remains positive. Continued stability and anticipated rental growth is likely to continue to be a key attraction for offshore investors.
“Limited forecast growth in white collar employment over the next 12 months, together with a lack of new supply in the first half of 2012 is likely to keep vacancies at similar levels before new stock and backfill supply comes online,” she says.
 
 
 
 
</body></html>

Melbourne’s poorest-quality office stock has tightest vacancy rate: City of Melbourne report

<html><body>
Property development giant Lend Lease has put pressure on Federal Treasurer Wayne Swan to reconsider his federal budget decision to double the withholding tax.
The tax is charged on the distribution paid to foreign investors who buy into managed funds and is set to increase from 7.5% to 15% from July 1.
The withholding tax was as high as 30% under the Howard government, but was cut to just 7.5% by Kevin Rudd in July 2010.
Lend Lease chief executive Steve McCann has called the tax change “sudden, surprising and unhelpful” and says that the largest real estate and infrastructure projects cannot be funded by even the largest super funds.
“Real estate and infrastructure is heavily reliant on offshore institutional capital, especially in the post-GFC era,” he said in an email reported by the Australian Financial Review.
McCann warns that an increase in the tax will cause foreign investors to recalculate their return on investment and reconsider investing in Australia.
The end result will be that Australia’s ability to compete with other countries for offshore capital will suffer, with a flow-on effect for jobs, McCann says.
Lend Lease has $10 billion worth of construction projects on its books, including the massive Barangaroo development.
In its defence, the government claims the new tax rate is a better balance of the needs of Australia to remain an attractive destination for foreign investors while ensuring a fair return.
Treasury is estimating a tax return of $260 million over four year generated from the withholding tax.
Earlier this week, the Property Council of Australia (PCA) failed to convince the federal government to reverse its decision.
PCA chief executive Peter Verwer was in Canberra yesterday attending the Residential Markets Summit hosted by the National Housing Supply Council following a meeting with Wayne Swan.
A spokesperson for the industry body says Verwer would not be commenting any further than the PCA’s post-budget statement.
Verwer was supported by Financial Services Council head John Brodgen, representing the interests of retail and wholesale fund managers and superannuation funds.
On May 8 following the budget statement, the PCA issued a statement calling the withholding tax increase “another extraordinary misstep” by the Gillard government.
“The Rudd government scored a global coup in slashing the withholding tax to 7.5%, [and] the world responded by sending us more of their money to manage,” said the PCA at the time.
Verwer called the move “desperate and cack-handed” and said it would send “an appalling signal to international investors” daring them to try and invest somewhere else.
“This measure shreds Australia’s ambition to become the leading funds management hub for the Asia-Pacific region, and is another example of this government’s inability to sell a good news message and stick to a clear course.”
 
 
 
 
</body></html>

Lend Lease slams 15% withholding tax as Property Council fails to convince Wayne Swan to scrap it

<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.

&nbsp;

[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.

&nbsp;

[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.

&nbsp;

[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.

&nbsp;

[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

<main data-perf-region="main">
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.

&nbsp;

[smartcode_project_cta:default project_id=152737]

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>

Larry Schlesinger

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News