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The perception that the Australian housing market is in a “serious bubble” means US investors are wary of funding residential mortgage-backed securities (RMBS) issued by the major banks, according to Peter Dorrian, head of global wealth management at the Australian arm of investment firm Pimco.
According to Dorrian there is “quite a wide difference” of opinion between Australian investors’ perceptions of Australian banks and overseas investors’ opinion of them.
“I have a US colleague with me at the moment and he says Australia has the most overvalued housing market in the world and that is has a serious bubble,” Dorrian told Business Spectator, while stressing that this was not necessarily Pimco’s view.
“There is a view that the big four banks are so tightly levered into the domestic property market that if there was to be a more severe correction of the Australian property market it would have an impact on their balance sheets,” he says.
This is despite the average loan-to-valuation ratio on RMBS portfolios being around the 50% mark, meaning it would require a significant fall in house prices to have a severe impact on the banks’ balance sheets.
“But its perception that counts at the moment,” Dorrian says.
His comments come as Australia’s sixth biggest mortgage lender, ING Direct, raised $800 million in the first deal of the year for the Australian RMBS market but limited interest from overseas investors.
“Investors were primarily local,” David Breen, head of corporate affairs at ING Direct told Property Observer with insurance companies, fund managers and superannuation funds among those that invested in this issuance.
The ING Direct issue was priced at 145 points over the one month bank bill swap rate (BBSW) – the benchmark rate at which banks will lend to each other.
RMBS, where mortgages are bundled together and sold to institutional investors, was a very cheap form of wholesale funding in the decade prior to the GFC, accounting for 23% of all bank mortgage funding at its peak.
However the market collapsed in the two years following the sub-prime crisis in the US, falling 41% from $204 billion to $120 billion as overseas investors’ appetite for the product shrank. 
It has since recovered some ground, but is now a much more expensive form of funding, with little appeal for foreign investors.
<img src="/images/stories/rmbs.gif">
Aside from investor wariness because of housing concerns, Dorrian says Australian banks are also facing a lot of competition from other international banks for wholesale funding.
 
 
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lschlesinger-FZcF9M3vE6

Perception of Australian housing price bubble keeping US RMBS investors away: Pimco

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There is little for the housing market to cheer about following the release of weak February lending figures from the RBA and only a small improvement in new home sales as recorded by the HIA - JELD-WEN New Home Sales report.
Housing credit increased by 0.4% during February, following an increase of 0.5% during January to be up 5.3% for the year, the weakest annual growth in RBA records going back 34 years.
During February, new home sales increased by 3% but still remained at their lowest levels in 11 years, according to research by CommSec.
Detached house sales rose by 2.2% while more volatile multi-unit sales jumped by 10.5% to a combined estimated 4,000 sales for the month. However, this is well below the more than 7,000 sales recording in February 2011 and the 8,000 sales in February 2010.
Western Australia was the strongest-performing detached new home sales market in February recording a seasonally adjusted 12.8% increase followed by New South Wales (5.3%), Queensland (3.5%). Detached house sales dropped by 7.4% in Victoria.
For the three months to February 2012 new home sales have fallen by 5.6% to be 16.8% lower than the three month period to February last year with detached sales down 17%. Multi-unit sales are up 5.4% over the February quarter but down 15% for the quarter year-on-year.
Victoria’s new housing market has felt the brunt of the slump with an 18.3% drop over the February 2012 quarter with Queensland also faring poorly with new home sales down 11.3%.
Figures compiled by CommSec based on the latest APRA monthly banking statistics show that bank housing, personal and business loans rose by 5.7% over the year to February, the slowest annual pace in four months and below the long-term trend rate of 13% while bank deposits with Australian residents grew by 9.3% over the year to February, the fastest growth in five months but below longer-term trends.
“The Reserve Bank must remain alert to the trends and keep a rate cut on the table at next week’s board meeting,” James says.
HIA chief economist Dr Harley Dale says any bounce in new home sales in February was encouraging after an awful start to 2012.
“Furthermore, it was the continued decline in Victoria from previous record highs which pulled new home sales down in February, while there was improvement everywhere else.”
“Looking beyond just one month, however, there is much work to be done to see new home sales volumes back at healthy levels across the country,” he says.
Dale says there is evidence of the beginning of a recovery in Western Australia while the prospect of policy reform in New South Wales and Queensland increases the likelihood of a lift in new home sales volumes in these states through 2012-13.
“Obviously further interest rate cuts wouldn’t go astray in helping perpetuate this recovery,” he adds.
Click to enlarge
<a href="/images/stories/hiamarch30.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/hiamarch30thumb.gif"></a>
CommSec economist Savanth Sebastian says the latest new housing and mortgage figures indicate that Australian consumers and home-buyers remain “super-cautious and that mood is continuing to constrain activity for retailers and housing-dependent businesses”.
“While the Reserve Bank doesn’t seem in a rush to cut rates, the ongoing downturn in the residential building market certainly keeps another rate cut on the table – especially given that even housing credit is growing at the weakest levels in 34 years,” he says.
“A sustained lack of new building can have serious ramifications for affordable housing. Already vacancy rates across the country are low and given the ongoing lift in migration further building will be required to alleviate the pickup in demand. No doubt the lack of new housing construction will be closely assessed by policymakers.”
Total credit provided to the private sector by financial intermediaries rose by 0.4% over February 2012, to be up 3.5% for the year with business credit increasing by 0.4% (up 1.2% for the year) and personal credit up 0.3% (down 1.1% for the year).
Savanth says private sector credit data tends to be a good forward-looking indicator on activity, with an increase in borrowings usually following by an increase in spending in the next few months.
“In that context the lack of significant growth in business credit is disappointing. At present businesses are cashed up and content to use existing cash facilities and that trend is unlikely to change anytime soon.
“Overall the Reserve Bank seems comfortable with the current position of the domestic economy. Effectively policymakers have been depressing parts of the economy (like housing and the household sector) to ensure that there is enough spare capacity for the growth in business investment and the mining sector,” he says.
“The key for the Reserve Bank is to ensure that inflation remains in check as the recovery gains traction. As such CommSec does not expect the Reserve Bank to cut interest rates until at least May,” he says.
 
 
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New home sales up 3% as mortgage growth flat lines: HIA and RBA

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Listed Hong Kong property developer Sun Hung Kai Properties Limited (SKHP) will continue to operate as normal following the arrest of joint chairmen and brothers Thomas and Raymond Kwok on bribery charges by Hong Kong’s anti-corruption watchdog.
According to Bloomberg, SKHP is the second-biggest property company in the world by value and was worth HK$290 billion ($36 billion) with assets of HK$442 billion ($55 billion) as of December 2011.
SKHP specialises in developing residential projects, offices and shopping centres and employs more than 35,000 people.
Forbes magazine lists the Kwok family as the third-richest in Hong Kong, with combined wealth of US$15.4 billion ($14.8 billion).
Thomas and Raymond took over the running of the company from another brother, Walter Kwok, in 2008 after ousting him in a boardroom battle.
<img src="/images/stories/hktower.jpg">
Among the company’s most prized assets is the 108-storey International Commerce Centre in Kowloon (pictured above), the fourth-tallest building in the world, which it jointly developed and owns with the MTR Corporation Limited.
Shares in SKHP were suspended at 9.51am Hong Kong time yesterday (12.51 AEST) at the request of the company following the arrest of the two Kwok brothers by Hong Kong’s Independent Commission against Corruption (ICAC) in connection with an “investigation into suspected offences allegedly committed under the Prevention of Bribery Ordinance”.
SKHP has requested that the share resume trading at 9am Hong Kong time today.
Shares were down 15% in early trading from HK$111.10 to HK$94.
“The company wishes to clarify that the abovementioned arrests have not affected and will not affect the normal business and operations of the group,” says SKHP in a statement on its website.
“Subject to undertakings being provided to abstain from voting in respect of any matter relating to the allegations, the board has resolved that it is in the best interests of the company for Messrs Thomas and Raymond Kwok to continue to undertake and discharge their duties to the group including their duties as joint chairmen and managing directors of the company.
“Such resolution was unanimously passed by the 10 directors who participated in a board meeting of the company today.
“Messrs Thomas and Raymond Kwok did not participate in that board meeting.
“The executive committee continues to be responsible for the day-to-day management and operation of the company as usual.”
SKHP has re-constituted a special committee made up of three executives – Mike Wong Chik-wing, (executive director), Michael Wong Yick-kam (non-executive director) and Professor Richard Wong Yue-chim (independent non-executive director) to “handle all matters which may arise from and relate to the investigation”.
The special committee was originally set up on March 19 following the arrest of executive director and board member Thomas Chan Kui-yuen under suspicion of similar offences alleged against Thomas and Raymond Kwok.
Separately, SKHP’s current chief executive Donald Tsang is being investigated by ICAC for allegedly accepting trips on the yachts and planes of tycoons.
SHKP has been listed on the Hong Kong Stock Exchange since 1972.
Bloomberg lists US mall owner the Simon Property Group as the world’s biggest property company by market value worth US$44.3 billion ($41.6 billion).
Image courtesy of Sun Hung Kai Properties Limited
 
 
 
 
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Hong Kong property giant SKHP to operate as normal following arrest of joint chairmen

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The inner suburbs of Melbourne and Sydney will ring out with auctioneers’ cries this weekend in what will be the first super Saturday auctions weekend in both cities for 2012. 
The REIV calculates there will be about 1,000 auctions in Melbourne over the weekend, the first 1,000-plus auctions weekend since the December 12, 2010 weekend, when there were 1,235 auctions held with a clearance rate of 57%. 
There have only been 21 weekends of more than 1,000 auctions since October 2003, according to REIV records, with the biggest being the March 15, 2008 weekend, when there were 1,351 auctions and a clearance rate of 67%. 
REIV spokesperson Robert Larocca says this weekend will provide buyers with “the greatest choice on a single weekend since the middle of December 2010”. 
“The highest number of auctions this weekend is in Prahran with 21, followed by 17 in Brighton, Camberwell, Essendon, Kew and Northcote. 
“On the eve of this weekend the year to date clearance rate is 62%. The last five weekends have returned clearance rates between 58% and 61%, which indicates very consistent demand despite the fluctuations on volume,” he says. 
This weekend last year there were 808 Melbourne auctions, with a clearance rate of 60%. 
Last weekend 778 auctions were held with a clearance rate of 59%. 
There are 702 auctions scheduled in Sydney during the weekend, the highest number since the November 27, 2010 weekend (779 auctions) and 23% more than the 431 auctions recorded last weekend, according to Australian Property Monitors (APM). 
According to APM, Sydney has recorded 15 weekends with more than 600 auctions scheduled dating back to September 2009. 
“It is a super Saturday. It’s the biggest since late 2010,” says APM research analyst Clinton McNabb. 
“It is up 8.7% on the equivalent weekend last year (that is the one prior to the Easter weekend).  This was the April 16, 2011 weekend, with 646 auctions,” he says.
In Sydney the busiest suburbs will be Strathfield in the inner west and Coogee in the eastern beaches, which each have 11 auctions scheduled, followed by Maroubra and Paddington with 10 each. 
Auction activity will come to a virtual standstill over the April 7 Easter weekend, with just 40 auctions scheduled in Melbourne and 23 scheduled in Sydney.
 
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Melbourne and Sydney inner-city suburbs the focus of super Saturday auctions weekend

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A Queensland Supreme Court judge has ruled that Gold Coast property developer Rod Lambert must close down his website, which Ray White claims was damaging its brand.
An application to have the website shut down was submitted by Ray White on March 21 and a ruling issued by Chief Justice Paul de Jersey on March 27.
The ruling applies until the trial of the matter is heard or an earlier order is made by the court.
A search on Google shows that the website is no longer available.
<img src="/images/stories/donttrust.jpg">
The court order restrains Lambert, “his servants or agents” from “maintaining or causing to maintain the internet domain www.dontrustraywhite.com or an internet domain or website with the same or similar name”.
The judge has also ruled that Lambert must not distribute or publish any “leaflets, flyers, newsletters or any other similar publications” that promote the website or any similar website.
In previous online postings, Lambert made allegations of misconduct against Gold Coast prestige sales agent Michael Kollosche, who was previously contracted to the Ray White Broadbeach. Lambert accused Ray White of not taking appropriate action against Kollosche.
In this matter, the judge ruled that Lambert must not publish statements that allege that Ray White will not respond in an appropriate manner to “allegations that Mr Michael Kollosche has engaged in fraudulent conduct”.
The injunction does not prevent Lambert from “making formal complaint or giving a statement to the police or statutory bodies with powers relating to the regulation of the real estate industry”.
A spokesperson for Ray White says it could take up to 12 months for the trial to be heard.
Ray White is seeking to have the website permanently shut down.
 
 
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Court compels Rod Lambert to shut down anti-Ray White website

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Mortgage broking groups Mortgage Choice and Loan Market Group are calling on the Reserve Bank to cut interest rates next month to help encourage more first-home buyers back into the market. 
Mortgage Choice CEO Michael Russell says a rate cut is needed to stimulate the non-mining sector. 
“We’re already witnessing the extremes of a two-speed economy, evidenced in slowing demand for property and a struggling retail sector,” Russell told Property Observer. 
Russell also believes that if the government remains committed to the first-home owners’ grant, then it should look to “make it more equitable by indexing it to the median house price and backdating it to its first anniversary, July 2001”.
However, Bendigo and Adelaide Bank chairman Robert Johanson is opposed to the government intervening in the housing market and calls the grants <a href="https://www.propertyobserver.com.au/residential/federal-government-must-decide-if-housing-industry-warrants-a-handout-in-may-budget/2012032053937">“bad policy”, which unnaturally drive up the cost of housing.</a>
"The government were just giving people money to get into new houses, which transferred the value to the sellers. It just puts costs up," Johanson says.
"I think it's a waste and a distraction," he says.
BIS Shrapnel senior manager Angie Zigomanis says first-home buyer incentives bring forward demand and consequently result in a drop off further on – as has been the case in Victoria. Loan Market recorded a 20% drop in the number enquiries from first-home buyers nationwide during March. 
The fall was greater in New South Wales and Victoria with activity in those states down 25% and 23% respectively in March compared to February. Only Queensland bucked the trend with a 3% rise. 
Percentage change in first-home buyer enquiry March 2012 compared to February 2012 
<table cellpadding="0" cellspacing="0" border="1" style="width: 300px;"><tbody>
<tr>
<td valign="top" width="308">
National
</td>
<td valign="top" width="308">
-20%
</td>
</tr>
<tr>
<td valign="top" width="308">
NSW
</td>
<td valign="top" width="308">
-25%
</td>
</tr>
<tr>
<td valign="top" width="308">
VIC
</td>
<td valign="top" width="308">
-23%
</td>
</tr>
<tr>
<td valign="top" width="308">
QLD
</td>
<td valign="top" width="308">
+3%
</td>
</tr>
<tr>
<td valign="top" width="308">
SA
</td>
<td valign="top" width="308">
-8%
</td>
</tr>
<tr>
<td valign="top" width="308">
WA
</td>
<td valign="top" width="308">
-12%
</td>
</tr>
<tr>
<td valign="top" width="308">
TAS
</td>
<td valign="top" width="308">
unchanged
</td>
</tr>
<tr>
<td valign="top" width="308">
NT
</td>
<td valign="top" width="308">
unchanged
</td>
</tr>
</tbody></table>
Source: Loan Market Group
 
Loan Market corporate spokesman Paul Smith says the decision by the RBA to leave rates on hold and the major banks lifting their variable rates in February has deterred first-time buyers. 
“There had been a revival in the first-home buyer sector late last year and early this year on the back of the RBA twice cutting the cash rate in November and December, 2011,” he says. 
“But the combination of official rates staying on hold and the banks raising rates independently of the RBA has caused some confusion in the marketplace as some buyers are unsure exactly where home loan interest rates are headed.”
Smith says many sectors of the economy would welcome an interest rate cut next week. 
A Loan Market consumer survey has found more than 70% of respondents expect the RBA to cut the official rate in March. 
“Although some progress has been made in the European debt crisis, and many economic indicators are within target, there remain stalled sectors that would benefit from an April rate cut by the RBA,” Smith says. 
“The RBA has noted that the banks no longer face the cost of funding pressures that caused them to lift their home loan rates independently of the central bank. 
“So if we get a cut in the cash rate on Tuesday consumers will be hoping their lenders follow suit and pass on the reduction in full,” says Smith.
 
 
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Mortgage brokers call for rate cut and first-home owners’ grant changes

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A proposal by the federal government to vastly expand the areas around major airports that could face residential housing construction restrictions due to aircraft noise will put $33.5 billion of new housing projects at risk, according to property development lobby group Urban Taskforce Australia (UTA).
The $33.5 billion figure (which comprises 134,000 new dwellings) applies across Brisbane, Melbourne, Perth, Sydney and Canberra and was calculated by property research and advisory firm MacroPlanDimasi.
MacroPlanDimasi also estimates that values of houses in newly designated high-noise zones could fall by 5%.
The new proposals are outlined in a draft document, <a target="_blank" href="https://www.infrastructure.gov.au/aviation/environmental/nasf/files/Draft_National_Airports_Safeguarding_Framework_Combined.pdf">Principles for a National Airports Safeguarding Framework</a>, released by the National Airports Safeguarding Advisory Group on March 21. The proposal is not accompanied by any shift in established flight paths.
The proposals are aimed at minimising residential development near airports and “improving safety outcomes by ensuring aviation requirements are recognised in land use planning decisions”.
It calls for improvements made to the current Australian noise exposure forecast (ANEF) system, which has guided development around airports for the past 30 years.
The report notes that while the populations with the highest aircraft noise exposure often live within the 20 ANEF contour (an area defined as having high noise pollution and where there are currently planning restrictions), “the majority of noise complaints that are received are now coming from residents living outside the 20 ANEF contour”.
“ANEF zones do not capture all noise-affected areas, and experience has shown that the ANEF contours are not necessarily an indicator of the full spread of noise complaints.
“Just as aircraft noise does not suddenly stop at the 20 ANEF level, there is no hard and fast line where aircraft noise suddenly changes from being acceptable to being unacceptable… Aircraft noise impacts follow a continuum and clearly, noise impacts close to, but outside an identified threshold will be almost indistinguishable to the impacts on the ‘the other side of the line’,” the draft document says.
{yoogallery src=[images/stories/march29airports]}
It calls for a “complementary suite of noise measures in conjunction with the ANEF system”, including four new noise controls and provides maps showing a vastly expanded areas around 10 major airports affected by aircraft noise that could potentially face planning restrictions.
The UTA says research carried out on its behalf by acoustic engineers Wilkinson Murray shows that 1,000 square kilometres of planned development around for housing in the proposal.
“This will impact on many proposed developments as well as the value of existing properties,” says the UTA. The UTA also expressed concern at the three week exhibition period explaining the proposals, which has now passed, calling it a “far too short a period to genuinely engage in public consultation”.
It also notes reports prepared by MacroPlanDimasi (on the property and financial implications of the draft framework), CBRE (on the planning and property implications of the draft framework), Wilkinson Murray (on acoustic issues around the draft framework) and Gadens lawyers (on legal implications of the draft framework all expressed considerable concern about the draft framework.
The proposals have also been criticised by Sam Haddad, director-general of the NSW Department of Planning, who in a letter to the UTA said he doubted there was “sufficient evidence that the existing ANEF system needed to be changed”.
Haddad says the NSW government will not support the draft measures and will not be agreeing to any changes in planning policy.
Consultations on the draft framework have now closed but it has yet to be endorsed by federal, state and territory governments.
It is next expected to be considered by the Standing Council on Transport and Infrastructure (SCOTI) and subject to SCOTI endorsement, each jurisdiction would then consider implementation through its own mechanisms and may undertake further consultation processes.
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Proposed airport noise restrictions puts $33.5 billion worth of new housing at risk: Urban Taskforce

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The Australian housing market is at a point where it will either decline slowly or collapse swiftly due to the drive among households to reduce their debts and increase their savings, says property bear Steve Keen.
Keen, professor of economics and finance at the University of Western Sydney, says the current drive by households to reduce their debt has been a precursor to a collapse in house prices in both the US and Japan, though at different rates of decline.
“Far from preventing a house price collapse, deleveraging is what causes one,” he says.
Keen provided the following graph comparing house prices from their peaks in the US, Japan and Australia and shows Australian housing heading down one of two slopes:
<img width="470" src="/images/stories/keenmarch291.png">
“To me the only question is whether we have as slow a decline as Japan or as fast as the USA's due to deleveraging.
“So far (using ABS data till December) prices have fallen about 9% in real terms since the peak in June 2010. The wildcard for Australian housing is the reaction of mum and dad investors to the decline in house prices, since if they swap sides from buy to sell, the volume of unsold properties could grow substantially and put further pressure on prices,” he says.
His comments follow a panel discussion on the housing market in Melbourne during which RP Data senior research analyst Cameron Kusher said he agreed with Keen that there was too much debt in Australian households.
“The RBA likes the fact that households are deleveraging and putting more money into the bank,” Kusher added.
Keen told Property Observer the remarks were “very interesting”.
“They have skirted around the debt issue for some time,” Keen says.
“My argument starts from the proposition that demand for housing comes from new mortgage debt, so the level of new mortgages is the major factor in setting the level of house prices. Therefore for house prices to rise, new mortgages must be increasing faster than the supply of housing rises.
“That was the case for most of the period from 2003 till 2008, and again under the influence of the first-home vendors’ boost from 2009 till mid-2010. But since then new mortgages have falling, and that drop in monetary demand is the key factor driving prices down.
“Thus far from preventing a house price collapse, deleveraging is what causes one,” he says.
The graph below included in the March RBA chart pack shows clearly how Australian household debt as percentage of disposable income increased from less than 50% in the late 1980s and early 1990s to above 150% as well as the recent downward trend in household deleveraging.
<img width="470" src="/images/stories/keenmarch292.gif">
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Australian housing market still facing Japan- or US-style downturn due to deleveraging: Steve Keen

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Sydney is the 18th most expensive place in the world to buy a luxury home, according to the 2012 Knight Frank and Citi Private Bank’s sixth Wealth Report.
Australia’s biggest city shot up the global rankings from 34th last year despite the report noting that “prime Australian prices have also slipped as affordability becomes an increasing constraint”. 
Sydney also ranks as the 19th fastest-growing city in terms of global importance, though it not among the current 20 most globally important cities, headed by London, New York and Hong Kong, according to the Wealth Report, which surveyed more than 4,000 individuals worth on average more than US$100 million each. 
Sydney also ranked among the top locations for retail property investors, with prime global retail yields edging close to 7%, just below top-ranking Shanghai. 
According to the sixth Wealth Report, a square metre of prime Sydney residential property costs US$22,400, ranking it just below 17th-placed Manhattan at $23,300 per square metre. 
Sydney is more expensive than St Petersburg ($20,200 per square metre) and nearly twice as expensive as Venice ($11,700 per square metre). 
The list is headed by the city state of Monaco, the traditional playground of the ultra-wealthy, where one square metre of residential property costs $58,300.
Click to enlarge
<a href="/images/stories/wealth.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/wealththumb.gif"></a>
“Investors seeking a more conservative strategy have gravitated toward high-quality properties in central business districts in cities such as Beijing, London, Munich, New York, Paris and Sydney,” says Luigi Pigorini, CEO Citi Private Bank Europe, Middle East &amp; Africa. 
“Conversely, for those willing to accept more risk, high-growth markets, such as Asia and Latin America, may be able to generate more attractive returns relative to the US and Europe.
“Investors must remain cautious as global economic growth will continue to influence all property markets, and investors should measure their yield and return expectations taking growth into account,” Pigorini says.
Australia ranked as the seventh richest country in the world on a GPD per capita basis (total GDP divided by population).
Stephen Ellis, executive chairman of Knight Frank Australia, says if China continues to grow and commodity demand remains, there will continue to be a strong growth story for property in Australia.
“We are upbeat on prospects for cities like Perth and Brisbane that have strong links to the mineral and resources industries.
“The stable economy, relatively low debt and attractive yields have attracted many offshore investors to Australia,” he says.
The report notes that offshore investors that poured funds into Australia in 2011 included Memocorp, the Australian arm of Singapore billionaire Tay Tee Peng, who paid $395m for 259 George Street in Sydney, and South African investor Nathan Kirsh, who bought 4 and 14 Martin Place for $153 million.
Chinese, Russian, Middle Eastern, Latin American and those from other growth economies are expected to become most important as prime property buyers over the next five years.
The report found a global swing away from property among centa-millionaires to less risky assets like bonds, gold and cash. 
But it expect further growth in interest in commercial property from high-net-worth individuals, forecasting US$74.1 billion of private transactions globally in 2012 (a 5% year-on-year increase).
The report says there are now 63,000 people worldwide with $100 million or more in assets.
There are now 18,000 centa-millionaires in the region covering south-east Asia, China and Japan. 
This is more than North America, which has 17,000, and Western Europe, with 14,000. 
By 2016, south-east Asia, China and Japan are forecast to extend their lead, with 26,000 centa-millionaires, compared with 21,000 in North America and 15,000 in Western Europe. 
On a country-by-country basis, the US will still dominate in 2016, with 17,100 centa-millionaires, but China will be catching up fast with numbers set to double from current levels to 14,000.
“This year’s Wealth Report contains even more evidence that the world’s wealthy are weathering the economic slowdown better than the wider population, and nowhere is this better reflected than in prime property markets,” says Andrew Shirley, editor of The Wealth Report.
Those markets considered “safe-haven” locations continue to attract private investors looking for both prime residential and commercial property. Political and economic uncertainty across the world is only helping to exacerbate the trend.
“But it is not just property where HNWIs from fast-growing economies are making their mark. The Wealth Report’s Attitudes Survey reveals that they are playing an increasingly important role in the worlds of sport, fine art, wine, and philanthropy.”
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Sydney 18th most expensive housing market in the world, just below Manhattan: Knight Frank Wealth Report

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Meriton boss Harry Triguboff has paid $25 million for a Macquarie Park development site in North Ryde, with plans for a $200 million apartment development.
The site at 88 Talavera Road, across the road from the Macquarie Shopping Centre and close to Macquarie University, was acquired from property developer St Hilliers.
St Hilliers had acquired it in 2007 for $23.5 million and had received development application approval for three A-grade, six-storey office towers covering 32,000 square metres costing $140 million as well as 4,000 square metres of open space.
St Hilliers decided to sell the site after a tenant for 85% of the proposed office development fell through.
It was valued at more than $30 million before the GFC.
Meriton plans to build 330 apartments across four towers, of which one will be a serviced apartment tower.
Triguboff faced competition from Lang Walker and Singapore’s Stamford Group to acquire the site, according to The Australian.
“I have been building in Ryde for 35 years. I have spent more time in Ryde than anywhere else,” said Triguboff following the acquisition.
Triguboff said the good thing about this site was that he could sell the residential apartments and keep the serviced apartments.
This purchase comes soon after his acquisition of a Chatswood development site, his first in the suburb in a decade, from Welles Thomas, a private property management and real estate company based in Chatswood
Triguboff paid $55 million to acquire the 4,323-square-metre site, situated between Thomas Street and Albert Street just off the Pacific Highway.
The site, currently the Thomas Street car park, last sold for $27.5 million in 2007.
It has been acquired from a private Australian company headed by Chinese owners, with the sale negotiated by Andrew Antonas of Matrix Property Group.
Antonas says the car park had been previously owned by Willoughby Council.
The site received DA approval in September 2010 for one 29-storey residential tower and one 21-storey commercial building.
Antonas says Meriton plans to build two 29-storey towers, one featuring around 200 apartments and the other featuring 225 five-star serviced apartments, meaning some work will need to be done “rejigging” the application.
Off-the-plan marketing of the Chatswood project is expected to commence mid-year.
The site, which has DA approval, will be used to build two 29-level towers involving more than 425 apartments, Meriton’s national sales manager says.
Meriton’s target market will range from investors seeking higher yields to owner- occupiers.
Meriton’s recent buy comes nearly a decade after its last project at Chatswood – Leura – a 125- apartment block located at the corner of Brown Street and the Pacific Highway, was completed in 2003.
The new developments will join Meriton’s <a href="https://www.propertyobserver.com.au/developments/harry-triguboff-s-meriton-group-to-build-700-serviced-apartments-next-year-across-australia/2011120752737" target="_blank">portfolio of projects on Sydney’s north shore</a>, including the 300-luxury apartment Alcove development at St Ives.
 
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Harry Triguboff buys St Hilliers North Ryde site with plans to build 330 apartments

The Gold Coast economy has grown by 25 per cent since 2020/21 to surpass $55 billion, but perhaps the more significant story is what sits behind the headline number.

For decades, the Gold Coast has been viewed through the lens of tourism, lifestyle and population growth. The latest State of the City Report suggests that perception is increasingly out of step with reality.

Released by Invest Gold Coast, the report ranks the Gold Coast as Australia's largest non-capital city economy and, perhaps more notably, second nationally behind Sydney for Economic Complexity, a measure that assesses the diversity and sophistication of an economy.

It's a result that places the Gold Coast ahead of Melbourne, Brisbane, Perth and Adelaide, highlighting the extent to which the city's economic base has broadened beyond its traditional industries.

Today, the Gold Coast supports more than 350,000 jobs, is home to over 83,000 businesses and generates $19 billion in annual exports. Manufacturing now accounts for 62 per cent of international export growth, while sectors including health, education, advanced manufacturing, technology and professional services are becoming increasingly important contributors to the local economy.

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Gold Coast Mayor Tom Tate said the report confirmed the city's evolution into one of Australia's most significant economies.

"The Gold Coast economy continues to grow at an incredible pace. This is no surprise to those of us who have watched the evolution up close," Mayor Tate said.

"As one of the most entrepreneurial, investment driven and opportunity focused economies in the country our ambition has been realised and possibilities are endless.

"The Gold Coast has built a reputation as the city that says yes. We say yes to investment, yes to opportunity and yes to people who want to build something.

"It's this mindset helping us drive major growth across health, advanced manufacturing, screen production, marine, technology and the knowledge economy."

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While population growth has been one of the defining stories of the past decade, the report points to a broader economic transformation taking place.

The city's knowledge economy now contributes $7.9 billion annually and supports around 31,000 jobs, while the health and wellbeing sector contributes $5.2 billion and employs more than 42,000 people. Together, the six priority sectors identified in the report account for almost $24 billion in economic output and more than 145,000 jobs.

One of the strongest examples is the Gold Coast Health and Knowledge Precinct at Southport. The 200-hectare precinct now contains more than $5 billion worth of health, education, research and innovation infrastructure and supports over 16,000 jobs.

The report also highlights the growing role of advanced manufacturing, particularly in aerospace, defence and modular construction.

Gold Coast-based Gilmour Space Technologies recently became the first Australian commercial company to attempt an orbital launch, while companies including Modscape and ModnPods are helping establish the Yatala-Stapylton corridor as one of Australia's fastest-growing advanced manufacturing hubs.

The city's entrepreneurial culture is also translating into business growth.

Since 2019/20, the number of businesses operating on the Gold Coast has increased by 22 per cent, while firms employing more than 200 people have grown by 80 per cent. The report suggests the next challenge is converting more local start-ups and medium-sized businesses into nationally significant companies.

Development activity remains another key indicator of confidence.

There are currently more than $23 billion worth of major projects underway across the Gold Coast, supported by a record 75 active cranes, a figure that now exceeds Brisbane and represents a 150 per cent increase since 2016.

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Importantly, the report notes the next phase of investment will need to extend beyond residential development.

While 93 per cent of crane activity is currently tied to housing, Invest Gold Coast argues future investment will increasingly need to focus on cultural, civic, infrastructure and industry-enabling projects that strengthen the city's long-term economic resilience.

Invest Gold Coast Chair Will Hodgman said the city was now benefiting from years of economic diversification.

"What is happening on the Gold Coast is the result of the city's economic base broadening, fuelled by industries with long-term, high-growth potential," Mr Hodgman said.

"This is no longer a secondary Australian economy, the Gold Coast is becoming a globally connected city with deeper capability across health, knowledge and creative industries, advanced manufacturing, technology and exports."

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Looking ahead, the Gold Coast's population is projected to exceed one million residents by 2046.

For a city that was once largely defined by tourism and lifestyle, the latest figures suggest the Gold Coast is becoming something more significant, one of Australia's most diverse and economically sophisticated urban economies, and increasingly one that national and international investors can no longer afford to overlook.

Joel Robinson

75 cranes, $23 billion pipeline and a $55 billion economy: Inside the Gold Coast economic boom

Ron Bakir's Homecorp has sold more than 75 per cent of the apartments in its wellness-driven Florence Residences in Surfers Paradise following its first weekend release.

The <a href="https://www.apartments.com.au/new-apartments/florence-residences-24-monte-carlo-avenue-surfers-paradise-qld-4217">26-storey project on Monte Carlo Avenue</a>, which commenced construction earlier this year, has seen a flurry of buyers secure their slice of the Gold Coast's latest wellbeing-focused offering in one of the nation's most competitive property markets.

Since the pandemic, the Gold Coast's population has grown by more than 11 per cent, a rate approximately four times faster than Sydney's, driven largely by lifestyle changes and interstate migration. While buyer activity has moderated in some markets nationally, demand for newly built dwellings on the Gold Coast continues to gain momentum as purchasers increasingly prioritise lifestyle, amenity, wellbeing, liveability and long-term investment potential.

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Homecorp CEO Ron Bakir says buyers today are looking for more than just a home.

"What we are seeing is a shift in how people define value in property," Bakir says.

"What attracts residents to new developments is a desire for more than just a residence. They are looking for a place that complements their lifestyle, supports their wellbeing and reflects the way they want to live into the future.

"Lifestyle, longevity, proactive health, wellbeing, connection and a sense of community are increasingly shaping purchasing decisions, particularly on the Gold Coast, where these factors continue to be a major drawcard."

[smartcode_project:default project_id=150414 project_image_fid=372744]

Bakir says Homecorp is responding to this shift through an approach that places greater emphasis on design, amenity and experience working together to create places that feel considered, connected and enduring in value.

Inspired by Eastern European design, Florence Residences will comprise 120 apartments alongside a private residents-only wellness club featuring a resort-style rooftop pool, hot and cold plunge pools, a spa retreat, contemporary gymnasium, and a spacious yoga and Pilates studio.

The development will also feature a residents-only lounge with private dining facilities and a rooftop bar, premium outdoor entertaining areas, a hotel-style lobby lounge, generous bike parking, and pet-friendly amenities including a heated dog wash.

[smartcode_project:default project_id=150414 project_image_fid=372742]

A limited number of apartments remain available, with an exclusive collection of four-bedroom sub-penthouses set to be released in the coming months.

Florence is one of the latest additions to Homecorp's expanding multi-billion-dollar property portfolio, which also includes plans for a <a href="https://www.apartments.com.au/news/qld/homecorp-lodges-plans-for-260-million-moroccan-bathhouse-inspired-tower-in-budds-beach">$260 million development in Budds Beach</a> tailored to the growing wellness market.

A development application has been lodged for a 27-storey, 156-residence tower at 8–10 Acacia Avenue and 25–27 Oak Avenue, featuring a residents-only Moroccan spa-inspired sanctuary.

Apartments at Florence Residences are priced from $1,249,000, with construction expected to be completed by late 2027.

[smartcode_project_cta:default project_id=150414]

Buyers rush to Homecorp's Florence Residences as Gold Coast wellness trend gains momentum

The NSW Government has expanded its $1 billion Pre-sale Finance Guarantee program, broadening access for affordable housing providers and smaller residential developments as it seeks to accelerate housing delivery across the state.

The Minns Government says the program has already helped bring forward more than 600 homes across Sydney and regional NSW since launching in September 2025, with similar models now adopted in South Australia and Western Australia.

The latest changes, announced by Treasurer Daniel Mookhey and Minister for Planning and Public Spaces Paul Scully, are designed to improve access to finance for projects that have planning approval but are struggling to secure funding.

Among the key changes is an expansion of support for community housing providers. The program will now support up to 100 per cent affordable housing projects valued at up to $30 million when delivered by not-for-profit providers, while support for larger affordable housing developments will increase for projects worth up to $80 million.

The government says the changes will help accelerate the delivery of housing for low-income workers, older people, people living with disability, and those at risk of homelessness, while reducing reliance on direct grants or subsidised loans to bridge funding gaps.

The eligibility criteria for smaller residential developments have also been broadened. The previous $5 million minimum project value threshold has been removed and replaced with a requirement that projects deliver at least four homes.

Support has also increased for projects delivering fewer than 20 homes, with the guarantee now able to cover up to 75 per cent of dwellings in a development, capped at $30 million per project.

The changes are expected to particularly benefit smaller-scale and regional developments, which often face greater challenges meeting pre-sale requirements imposed by lenders.

Treasurer Daniel Mookhey said the scheme demonstrates how government can use its balance sheet to stimulate housing supply without relying solely on taxpayer-funded grants.

"The Pre-sale Finance Guarantee shows how this Government is using its balance sheet to reduce risk and unlock private investment, enabling new homes to move from design to construction faster," Mookhey said.

"This landmark reform allows us to deliver homes for working families at a lower cost to taxpayers, while also maintaining strong financial discipline."

Planning Minister Paul Scully said the program had already proven effective in bringing stalled projects to market.

"The Pre-sale Finance Guarantee has already proven it can unlock stalled projects and accelerate housing delivery by giving lenders the confidence they need to back good developments," Scully said.

"These changes will allow more affordable housing and smaller developments to access support so more homes can be built faster where communities need them most."

Housing Minister Rose Jackson said the expansion would help community housing providers overcome financing barriers that often delay projects.

"We know community housing providers are ready to build more homes, too often they're held back by barriers to finance," Jackson said.

"Expanding the Pre-sale Finance Guarantee helps remove those barriers so more affordable homes can get off the ground sooner."

The announcement was welcomed by the Property Council of Australia, which has long advocated for measures aimed at improving project feasibility and access to finance.

Property Council NSW Executive Director Katie Stevenson described the expansion as a practical intervention that addresses one of the most immediate constraints on housing delivery.

"This is exactly the kind of practical intervention we need right now, focused on getting projects out of the ground, not just approved," Stevenson said.

"It builds on a model the Property Council has worked closely with government to develop following calls for such a scheme ahead of last year's NSW Budget, so it's great to see it being expanded."

Stevenson said the reforms would help unlock projects that are ready to proceed but have been delayed by financing challenges. However, she noted that broader feasibility issues remain a significant barrier to increasing housing supply.

"The biggest challenge in NSW housing today is delivery. Too many projects have planning approval but are simply not financially viable to proceed under current settings," she said.

Speaking at the Property Council's NSW Housing Summit, Housing Minister Rose Jackson acknowledged that feasibility and financing pressures continue to constrain housing delivery, while reaffirming the government's commitment to work with industry on solutions.

Stevenson said the government's recognition of those challenges was encouraging ahead of next week's state budget.

"It's positive to see the government clearly recognising that feasibility pressures are now a binding constraint on supply," she said.

"With the Budget just days away, the focus must be on backing delivery, making sure projects stack up, finance can flow, and more homes can move from approval to construction."

The expanded Pre-sale Finance Guarantee forms part of the NSW Government's broader housing agenda, which also includes planning reforms, the NSW Housing Pattern Book, and a series of rezonings intended to increase housing capacity across the state.

NSW expands Pre-sale Finance Guarantee to unlock more affordable and regional housing

Design-led developer-builder Lowe Living has unveiled its latest residential development, Jardin House, marking its first foray into Melbourne's blue-chip City of Boroondara.

Located a short walk from Camberwell Junction, <a href="https://www.apartments.com.au/new-apartments/jardin-house-by-lowe-living-camberwell-335-camberwell-road-camberwell-vic-3124">Jardin House</a> has been designed to appeal to affluent local downsizers and established families seeking a low-maintenance alternative to the large homes that have long defined Camberwell and surrounding suburbs.

The project will comprise a collection of two and three-bedroom apartments ranging from 92 sqm to 280 sqm, alongside a limited number of penthouse residences featuring rooftop terraces spanning more than 100 sqm, with optional private pools.

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Lowe Living Co-Founder and Managing Director Tim Lowe said Camberwell represented a natural next step for the developer as it expands into some of Melbourne's most tightly held residential markets.

"Jardin House is an important project for our team as it marks the next evolution of our portfolio into different well-established blue-chip pockets of Melbourne," Lowe said.

"Camberwell, with its incredible walkability, family-led neighbourhood feel and superb access to education and transport, makes it a natural choice for us."

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Designed by Tristan Wong Architects, with interiors by Hecker Guthrie and landscaping by Acre, the development takes inspiration from the Art Deco architecture that remains a defining feature of many of Camberwell's established streets.

A curved facade, arched openings, textured brickwork and sculpted forms reference the suburb's architectural heritage, while extensive landscaping softens the building's presence and creates a strong connection to the surrounding tree-lined streetscape.

The project will be set behind a secure gated entrance, with residents arriving through landscaped gardens designed to create a transition between the public realm and private residences.

Inside, the residences feature natural stone and timber finishes, full-height glazing, Miele appliances and generous open-plan living areas designed for long-term owner occupation.

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While the apartments themselves have been designed to attract discerning owner-occupiers, it is the amenity offering that sets Jardin House apart from many other boutique projects currently launching across Melbourne.

The centrepiece is a 350 sqm private bathhouse curated in partnership with Aurora Spa &amp; Bathhouse founder Lyndall Mitchell.

The wellness precinct includes mineral pools, hydrotherapy experiences, a Himalayan salt room, sauna, steam room, cold plunge pools and dedicated relaxation spaces, creating what Lowe Living describes as a private wellness retreat exclusively for residents.

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The collaboration follows Lowe Living's recent partnership with Aurora at Maison Savoy in Brighton, although Jardin House is the first project to incorporate both indoor and outdoor wellness experiences.

Emma Lowe, Co-Founder and Managing Director of Lowe Living, said wellness was becoming an increasingly important consideration for apartment buyers.

"Collaborating with Lyndall Mitchell from Aurora Spa &amp; Bathhouse for a second time is an intentional nod to creating residences that are more than just homes, but a way to enrich the lives of our residents through wellness and longevity," Lowe said.

The amenity offering is complemented by a Technogym fitness studio, residents' lounge, private dining spaces and concierge services.

The launch comes as developers increasingly target Melbourne's established eastern suburbs, where rising land values, ageing housing stock and growing downsizer demand are creating opportunities for boutique apartment projects.

Lowe said the company expects significant generational wealth transfer across suburbs such as Camberwell in coming years, creating further demand for luxury apartment living.

"Camberwell is a blue-chip suburb where homes regularly transact for multiple millions of dollars," he said.

"The generational change of wealth in these locations expected in the coming years is significant, so we see an opportunity to create exclusive residences that appeal to older families and downsizers in order to meet this demand."

Apartments at Jardin house start from $1,195,000. The project forms part of Lowe Living's near-$1 billion portfolio of new developments across Melbourne.

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Lowe Living launches Jardin House in Camberwell

As <a href="https://www.apartments.com.au/developments/north-sydney-nsw-2060">North Sydney</a> continues its transition from a commercial centre into a more layered residential and lifestyle precinct, a new generation of apartment developments is reshaping expectations around scale, amenity, and long-term liveability.

Improved transport connections through the Victoria Cross Metro, continued investment in dining and public spaces, and a constrained supply of new luxury apartments have sharpened demand for homes that combine proximity to the CBD with the privacy and outlook traditionally associated with harbourside houses.

At 177 Walker Street, <a href="https://www.apartments.com.au/developers/aland">ALAND</a>’s new apartment development <a href="https://www.apartments.com.au/new-apartments/the-walden-north-sydney-177-walker-street-north-sydney-nsw-2060">The Walden</a> enters the market with a distinctly residential approach to high-rise living. The 30-level tower will deliver 161 residences, ranging from one-bedroom apartments through to sub-penthouses and a full-floor penthouse, all oriented to capture uninterrupted views across Sydney Harbour, the Opera House, and out toward the Pacific Ocean.

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Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, the project takes advantage of the site’s natural topography and elevated position above the harbour. Rather than relying on density alone, the architecture focuses on outlook, orientation, and spatial flow, with every apartment occupying a corner position to maximise natural light and cross ventilation.

Rothelowman says the site itself shaped much of the architectural response.

“The site has a long history in terms of its inevitable transformation and when we came in, we took inspiration from the idea of reestablishing a sense of the site’s natural terrain and fall. Our scheme aims to integrate with the terrain and the landscape, using the undulating site to slowly reveal glimpses and views of the harbour. The rotation of the tower off grid means every apartment has a view and is naturally cross ventilated. The building's colour palette is quintessentially Sydney, with bronze and sandstone and a luminescent green colour in the glass, making it very earthy and grounded in its location.”

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Inside the residences, the emphasis moves toward larger-format living typically associated with standalone homes. Kitchens sit at the centre of the apartments, connecting directly to open-plan dining and living areas before extending outward into expansive winter gardens and balconies. Calacatta marble, bespoke joinery, integrated appliances, and custom metal detailing are used throughout, while three distinct interior palettes, Terrace, Opera, and Harbour, allow buyers to personalise the spaces without compromising the architectural consistency of the project.

The larger residences place particular attention on separation between entertaining and private zones. In many apartments, master suites occupy the outer corners of the floorplates, allowing bedrooms to benefit from floor-to-ceiling glazing and harbour outlooks independent of the living spaces. Dressing rooms and ensuites continue the material palette through fluted detailing, freestanding baths, and layered stone finishes.

Rothelowman says the design intent centred on creating homes that feel enduring rather than transient.

“Our philosophy is all about the way people live in these spaces, and we wanted to create homes that reflect the quality of life in this unique Sydney location. The apartments showcase expansive living spaces that are generous, sophisticated, and bold, with the ability to connect with views throughout each apartment.”

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A separate four-storey amenity building known as The Pavilion expands the residential offering beyond the apartments themselves. Positioned alongside the tower, the building consolidates wellness, recreation, and social spaces into a dedicated resident retreat. Facilities include a 20-metre rooftop pool and sundeck, sauna, spa, ice bath, wellness studio, gymnasium, concierge service, wine cellar, residents’ lounge, private dining spaces, and dedicated co-working areas with meeting rooms and boardroom facilities.

The amenity mix reflects the buyer profile emerging in North Sydney, where owner-occupiers and downsizers are increasingly prioritising convenience, apartment scale, and long-term usability over purely investment-driven decisions.

The Walden also represents a significant milestone for ALAND, marking the company’s first major move into Sydney’s inner-city luxury apartment market after more than two decades delivering large-scale residential communities across Greater Sydney. Founder Andrew Hrsto says the Walker Street site stood apart because of both its positioning and its rarity.

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“As a company, we had been searching for a site in one of Sydney’s blue-chip locations, spanning the Eastern Suburbs, the Sydney CBD and the North Shore, and when we had the opportunity to purchase this site, we immediately recognised that it could be something iconic.”

At launch, The Walden recorded more than $103 million in sales, with buyers drawn to the project’s harbour positioning, apartment scale, and proximity to the Metro, which now connects North Sydney to Barangaroo in three minutes and Martin Place in five.

ALAND has commenced construction, and is expecting a completion date in 2028.

[smartcode_project_cta:default project_id=134323]

Larry Schlesinger

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