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Housing construction is set to remain under pressure for the first few months of 2012, but might start picking up again in late 2012, according to the latest Business Outlook report from Deloitte Access Economics.
The consulting group is forecasting private dwelling investment to increase by a modest 3.5% in 2012 (compared with 1.4% drop in 2011) but then accelerate to 12.7% in 2013 before returning to moderate growth of 3.3% in 2013.
“The pace of housing construction is going nowhere in a hurry. Indeed, that trend has been evident in leading indicators such as approvals and loans for a while now,” the report says.
According to Deloitte Access Economics, growth in housing construction is being curtailed by the mortgage rate increases of late 2010, current housing price trends (high but falling) and “lingering difficulties for developers seeking finance for high-rise apartment blocks”.
“That’s why the latest data (September quarter dwelling unit commencements) show new housing starts falling further, and why there’s no surprise in the increasing anecdotal reports of home builders laying off staff. 
“And given that today’s housing starts are the result of decisions made some months ago – when concerns were at their greatest, and there was still a good chance of further interest rate hikes – there’s no immediate upturn in sight,” the report says. 
However, there are signs of a revival driven by a rise in lending commitments for housing, now at a four-year high, as well as successive rate cuts, which have “whetted appetites”. 
Furthermore, the report says that while the gap between demand for housing and its supply “does not imply a surge in construction tomorrow, it does add important upward pressure”.
Examining the wider economic environment, the sub-title of the report “Eurogeddon” makes it clear what will be the tipping point for 2012.
“Europe is the key to global growth: its mismanaged crisis means the euro could falter and banks could go bust, sending shockwaves around the world,” the report says.
“Yet it‘s marginally more likely the eurozone muddles through, with sticky tape holding the euro together and ECB funding to banks keeping the market wolf from the sovereign debt door,” it says.
Deloitte Access Economics is forecasting the eurozone to fall into recession in 2012 with negative growth of 0.4% followed by marginal growth of 1.8%, 2.3% and 1.9% over the next three years.
In contrast, Australia’s economic outlook is far healthier, with the economy forecast to expand by 3.6% in 2012, 3.5% in 2013 and 3.4% in 2014.
The report identifies two possible paths for the Australian economy over the next few years depending on what happens globally:
“If the world muddles through, then Australia will grow faster than you think it will: surging resource construction will underwrite a lot of growth, as will a further rebound in coal output from the early 2011 floods. That will combine with better news in retail and home building (thanks to Reserve Bank rate cuts) to keep growth relatively rapid in 2012, though it may lose some steam in 2013 as the rebound in coal output runs its course. Moreover, that acceleration in growth would occur despite well-publicised negatives: the hit to consumer and business confidence from the horror headlines in Europe, the winding back of federal government stimulus, and continuing pain for many firms from the Australian dollars stellar strength. 
“However, if Europe blows, Australia’s outlook tanks” and “Eurogeddon” becomes a possibility. 
“Resource sector construction would still surge, leaving us among the fastest growing economies in the world. Yet that would be little consolation: growth would still slow and unemployment rise as confidence saps spending by firms and families here at home, the weak world economy cuts commodity prices (and so national income), and money becomes ‘too tight to mention’, as European bank failures would mean a credit crunch even if the RBA cut hard and fast,” says Deloitte Access Economics.
 
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Housing construction could recover in late 2012: Deloitte Access Economics

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<img src="/images/stories/omrad1.gif">
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Source: Property Council of Australia
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Adelaide commercial office market outlook 1990-2015: PCA

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Christopher Kent will replace Philip Lowe as assistant governor (economic) of the Reserve Bank, the central bank has announced.
In his new position Kent will be the chief economic adviser to RBA governor Glen Stevens and the RBA board.
Kent will take up the role when Lowe becomes deputy governor on February 14.
Kent is currently head of payments policy department at the RBA.
He holds a PhD from the Massachusetts Institute of Technology and an honours degree in economics from the Australian National University.
“In his current position he has overseen the bank's work on the Australian payments system and was previously head of economic research department,” says the RBA.
“He has had extensive experience in high-level policy advice and has authored numerous articles on the Australian economy and macroeconomic policy.”
Following Kent's appointment, Tony Richards, currently head of economic analysis, will move to become head of payments policy.
Jonathan Kearns, head of economic research, will move to become head of economic analysis.
The position of head of economic research will be advertised in the near future.
 
 
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Christopher Kent to replace Philip Lowe as RBA assistant governor

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There was a notable pick-up in Queensland building approvals in December, bucking a weaker-than-expected national decline of 1%, according to the latest ABS figures.
Coinciding with improved take-up of the<a target="_blank" href="https://www.propertyobserver.com.au/residential/queensland-government-to-extend-building-boost-until-april/2012011253029"> state’s $10,000 building boost </a>(the scheme has been extended to April), Queensland building approvals increased by 24.6% in December on a seasonally adjusted basis, with Tasmania (15.6%) and Western Australia (6.0%) the other states to record increases.
The weakest state was Victoria (-16.7%) followed by South Australia (-9.1%) and New South Wales (-5.0%).
Approvals for private sector houses rose 0.2% in December, with rises in Western Australia (6.3%) and Queensland (4.7%), while South Australia (-8.3%), New South Wales (-3.7%) and Victoria (-3.4%) fell. The value of total building approved increased 1.9% in December following a decrease of 0.5% in November. The value of residential building increased 1% while non-residential building rose 3.3%.
Westpac says headline approvals “were a touch weaker than expected” but in line with the consensus and its own forecasts once revisions are made.
The bank expects national approvals to be revised up to a 2% rise in the month. “Approvals were down 1% in December, but November's 8.4% bounce was marked up to 10.1% for the month,” the bank says. “The context is important. Approvals were very volatile in the months before November, with sharp falls in Sep (–18.7%mth) and Oct (–10.1%mth).  Despite the upwardly revised November bounce, approvals are still down nearly a quarter on December 2010. “However there are signs that the rate of decline is moderating,” it says.
Predictably, the Housing Industry Association called for more government stimulus following the decline in December.
<img src="/images/stories/hiafeb2.gif"> 
Source: HIA
“Building approvals for both detached houses and ‘other dwellings’ are at very weak levels and now is the time to further lower interest rates and implement fiscal stimulus measures,” says HIA chief economist Harley Dale. 
“Building approvals in late 2011 imply that housing starts will fall to a level below that experienced during the depth of the GFC, which would clearly be a very unhealthy outcome,” Dale says. 
“The new home building sector is a key indicator of the health of the domestic economy and has a significant multiplier effect in terms of output and employment.”
“New housing activity doesn’t need to fall further, that situation can be averted. Such aversion requires further interest rate cuts starting next week, full pass through of those rate cuts by the banks, and government measures to both stimulate new home building activity and reignite action to address the high and inefficient tax base which applies to new housing.” 
 
 
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Queensland building approvals up 25%, but national approvals fall: ABS

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Home owners and investors should not read too much gloom into yesterday’s ABS capital city housing data, according to JP Morgan economist Ben Jarman.
<a href="https://www.propertyobserver.com.au/residential/capital-city-house-price-slide-slows-in-december-quarter-with-melbourne-worst-performer-abs/2012020153211" target="_blank">December quarter ABS figures</a> showed capital city house prices declined by 1% to be down almost 5% for the year.
However, Jarman says it is “unlikely that dwelling prices generally have been as weak as that” because the figures only represent the more expensive detached house market and does not factor in apartments or townhouses.
End-of-year <a href="https://www.propertyobserver.com.au/residential/dwelling-prices-down-0.2-in-december-2011-with-melbourne-and-perth-hit-hardest-rp-data-rismark/2012013153184">RP Data-Rismark figures</a> confirm that capital city unit prices held up far better than houses in 2011 registering a drop of 1.5% while capital city house prices fell by 4.3%.
“Due to its narrow composition, [the ABS] result overstates the weakness of the market, while timing issues also obscure stabilisation in the price data shown toward year-end,” Jarman says.
According to Jarman, the lower end of the price spectrum drove the strength of the housing market over 2009, “while the top end of town has borne a disproportionate share of the weakness through the hangover of mid-2010 through 2011.
“Given that the coverage of the House Price Index is arguably biased towards these more expensive properties (detached houses, which tend to be larger properties, in capital cities), it is therefore likely to overstate the weakness of the broader market,” he says.
Another reason to be optimistic about house prices, Jarman says, is the fact that the ABS data collection process is “biased toward results early in the quarter, meaning it gives a somewhat dated snapshot, and also is prone to substantial revisions (as occurred in yesterday’s estimates for prior quarters).
“If anything, the monthly price data look to have improved around year-end, a natural by-product of the affordability metrics returning to trend after a year of gradual price declines, and the protracted on-hold period from the RBA, which was followed by an explicit 50 basis points of monetary support at year-end.”
Furthermore, he says data on housing finance, credit, and reports from mortgage brokers suggest that, “outside of building activity – which has been and we expect will continue to be very depressed – housing is nearing the end of its glide path”.
“We have characterized the housing market as being in a pretty boring space through 2011: certainly not strong, but similarly not disconcertingly weak. We expect that description to hold true again this year, with prices to move approximately sideways through 2012,” Jarman says.
Also commenting on the ABS housing figures, CBA economist James McIntyre says the bank is not surprised that rate cuts thus far have not resulted in rises in house prices.
“Monetary policy takes time. Gains in real house prices have tended to lag shifts in interest rates by around 9 months. Recent rate cuts could see real house price gains in the late second half of 2012,” McIntyre says.
However, McIntyre warns that “nothing is pre-ordained” and says “a continuation of current weak confidence in the economic, particularly global, backdrop could mute any upward momentum, despite healthy gains in wages, rents and household incomes”.
“On the other hand, weak dwelling comments, combined with a potential pickup in population growth from a turnaround in migrant inflows, are two factors supportive of price gains.
“For now, we are comfortable with the view that easing in policy is likely to see the decline in real house prices abate, rather than spark a new appreciation.”
 
 
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ABS housing figures overly gloomy: JP Morgan

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Demand for fixed-rate mortgages appears to have peaked, with Mortgage Choice recording a drop in the proportion of these loans written in January, the first decline since May 2011.
Mortgage Choice customer data shows fixed-rate products accounted for 21% of all new home loan approvals in January 2012, a fall from 24% in December 2011.
The mortgage broking franchise expects fixed-rate demand to fall further in February, should lenders pass on all or some of an RBA rate cut next week.
The likelihood of banks passing on a full RBA rate cut appears to be growing more remote by the day, with the Australian Bankers Association today putting out a statement attempting to explain how banks source their funding and highlighting that more than 20% of their funds comes from overseas.
“Australia’s banks have to raise an important proportion of their funding from overseas,” says Steven Münchenberg, chief executive of the ABA.
“The deep crisis in Europe means the cost of borrowing money in those international markets has risen to levels last seen during the global financial crisis… Because overseas prices are so high, there is greater demand for funds from depositors and investors in Australia.  This has driven up the price of this money as well.
“While the RBA has been cutting rates, banks have continued to pay high interest rates to depositors, benefitting Australian savers, but adding to the cost of bank funding,” he says.
The number of lenders cutting fixed rates has fallen sharply, with Westpac brands St George and Bank of Melbourne the last big lenders to trim fixed rates, doing so just before Christmas.
Despite the drop, <a target="_blank" href="/news">demand for fixed-rate mortgage</a> still stands well above both the six-month average of 19% and the 12-month average of 16%.
Demand for ongoing discount variable-rate mortgages (where the rate is discounted over the life of the loan in exchange for higher fees) jumped from 41% to 46% in January, an all-time Mortgage Choice high.
<img src="/images/stories/mcfeb2.gif">
“Our latest loan approval figures suggest borrowers taking out new loans at the start of this year were less concerned with locking in their loan’s interest rate than those who took out a new loan in late 2011,” says Mortgage Choice spokeswoman Belinda Williamson. 
“Interest rate cuts and generous discounting on variable rate loans could be the key drivers behind borrowers giving fixed rate loans the cold shoulder. The margin between fixed and variable has narrowed, with most variable rates now sitting only slightly higher than fixed rates,” she adds. 
According to Williamson, if the RBA cuts rates on February 7 and lenders pass on most of this rate cut, “some variable rates could very well fall below fixed rates”. 
“If this occurs, next month’s loan approval data may show a bigger shift towards variable rate loans.” 
Demand for basic variable loans fall slightly to 14% of all approvals in January, from 15% in December while standard variable loan demand dropped marginally to 15% from 16%. 
Line-of-credit loan popularity held steady at 3% and interest in introductory rate loans remained below 1%.
 
 
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Banks talk of withholding RBA cuts while fixed-rate mortgage demand falls

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The Brisbane and Sydney CBDs have recorded the greatest addition of new office stock over the past six months, well above 20-year supply averages, but their outlooks are vastly different, according to Property Council of Australia’s latest office market report.
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Source: PCA
While the Brisbane office market is well placed to benefit from an influx of mining and resource-linked companies seeking office space, Sydney’s vacancy rate could increase above its current six-year high should predictions of about 7,000 banking job cuts this year prove accurate.
Over the six months to December 2011, Sydney vacancy rate increased from 9.3% to 9.6%, bucking a national decline from 9% to 7.9%.
The Sydney CBD office market, which now has nearly 5 million square metres of office space, managed a net absorption rate of just 8,000 square metres over the six-month period, just a fraction of the 20-year historical average of more than 31,000 square metres.
Sydney office vacancy rate
<img style="border-style: initial; border-color: initial;" src="/images/stories/omrsyd2.gif"> 
Source: PCA
In comparison, the Brisbane CBD’s vacancy rate decreased from 7.4% to 6.2%, the lowest since January 2009 despite increasing supply over the six-month period at nearly double the national average.
This was mainly due to Brisbane achieving net absorption of 54,032 square metres over the six-month period, the highest in five years and more than four times the 20-year average. In 2012, an additional 111,000 square metres of office space will enter the Brisbane market in 2012.
Brisbane office vacancy rate
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CBRE executive director of global research and consulting Kevin Stanley described the Sydney result as the “biggest disappointment” in the report, noting “little growth in occupied office space despite Sydney being the largest CBD in the country”.
“While the expansion in occupied space was positive, it was very weak and the vacancy rate has increased slightly to be 9.6%,” Stanley says.
“Concerns about the global economic and financial outlook have led business to be very cautious about committing to more office space in Sydney, where the share of companies in the finance and insurance industries is the highest in Australia (about 25% of all CBD employment).
“With global uncertainty likely to continue through 2012, we don’t expect the Sydney market to expand strongly again in the year ahead.  But we do hold out hope that when the European financial mess is sorted, global confidence will return and Sydney will expand strongly once again. The initiatives of the new state government will also eventually lead to a more active State economy.”
Knight Frank national director for office leasing in NSW Andy Collins says the marginal increase in Sydney’s vacancy rate was to be expected, “given relatively weak tenant demand experienced over the period”.
“Landlords are actively competing for tenants within the 'single-floor market', where effective growth during 2012 will be subdued,” Collins says.
“Vacancy in the premium-grade market segment has jumped markedly, which is probably due to the inclusion of 1 Bligh Street and 85 Castlereagh Street. Despite this, moderate growth in premium-grade effective rental levels can be expected during 2012, as pockets of tenant demand focus on high quality space”.
Like Stanley, Collins believes the Sydney market recovery will be “signalled by stability in the global equities markets and sustained growth in local business confidence”.
Analysts expect the Brisbane market to continue to perform strongly over 2012 should large leasing deals continue to be signed.
David Prosser, state director for office services at CBRE, says Brisbane numbers are consistent with expectations in both the Brisbane CBD and fringe markets.
“In order for Brisbane to sustain a continued improvement in market conditions, it is critical the large leasing deals currently in negotiation at the top end of town are concluded in a timely manner. This will help consolidate the vast improvement in sentiment we experienced in the second half of 2011,” Prosser says.
“Supply and demand is quite simple to evaluate over the next three years, with almost no new supply additions limiting any danger of a major upswing in vacancy.
“Brisbane is a very stable market for the forseeable future and can comfortably withstand a reduction in net absorption should economic conditions substantially worsen or the mining boom fall off a cliff,”
“Some tenants are seeking to renegotiate a renewal early with their current landlords should they have a 2014 lease expiry as it is expected market conditions will significantly favour landlords by this time,” he says.
The overall result – vacancies declining from 9% to 7.9% – was heralded by the Property Council of Australia, which said the Australian office market has “shrugged off gloom about the wider economy recording a decrease in vacancy to its lowest level in three years”
Overall net absorption, the most reliable indicator of business space demand, was 20% higher than the historical norm at around 240,000 square metres
Over the six month period of the survey, supply was less than 200,000 square metres, about one-third below the long-term average
“Despite the global gloom, negative business and consumer sentiment, the halting recovery from natural disasters and a tetchy political environment, the demand for space increased and vacancies fell,” says Property Council chief executive Peter Verwer.
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Boom in office construction leaves Brisbane well placed but Sydney oversupplied: PCA

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With the release of the of ABS December quarter capital city house price indices, property investors now have four sets of data to benchmark the  recent performance of these key markets.
Researchers use different methodologies and data to compile their figures, and <a target="_blank" href="https://www.propertyobserver.com.au/residential/divergent-housing-data-raises-more-questions-than-answers/2012020153216">not surprisingly the results diverge</a>.
As an example, RP-Data Rismark says Melbourne house prices are down 6.8% for the year to a median of $485,000, while Australian Property Monitors says they’re down only 3.1% for the year to a median of $538,000. Different again, Residex puts the Melbourne median at $485,000.
To help investors get the full picture, Property Observer has compiled a roundup of property price research undertaken by RP Data-Rismark, Australian Property Monitors (APM), the ABS and Residex for the eight capital city markets.
<img src="/images/stories/sydney.gif">
The ABS says house prices are down 1% for the December 2011 quarter and down 2.7% for the year to a median of $595,000^.
Residex says house prices decreased by 0.24% in December, are down 1.78% for the quarter and down 2.54% for the year to a median of $656,000.
RP Data-Rismark says house prices increased by 0.5% in December, are up 0.7% for the quarter and down 0.9% for the year to a median of $535,000.
APM says house prices are unchanged for the quarter and down 1.3% for the year to a median of $637,000.
 
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The ABS says house prices are down 1.6% for the quarter and down 6.1% for the year to a median of $500,000^.
Residex says house prices decreased by 0.1% in December to be down 1.01% for the quarter and down 3.28% for the year to a median of $574,000.
RP Data-Rismark says house prices decreased by 0.7% in December, are down 1.8% for the quarter and down 6.8% for the year to a median of $485,000.
APM says house prices are up 1.1% for the quarter and down 3.1% for the year to a median of $538,000.
 
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<img src="/images/stories/brisbane.gif">
The ABS says house prices are down 1.3% for the quarter and down 6.7% for the year to a median of $442,000^.
Residex says house prices decreased by 0.49% in December, are down 2.54% for the quarter and are down 6.7% for the year to a median of $427,500.
RP Data-Rismark says house prices decreased by 0.5% in December, are down 1.1% for the quarter and are down 6.8% for the year to a median of $435,000.
APM says house prices fell 1.2% for the quarter and are down 7.5% for the year to a median of $426,000.
 
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<img src="/images/stories/perth.gif">
The ABS says house prices are up 0.5% for the quarter and down 4.9% for the year to a median of $485,000^.
Residex says house prices decreased by 1.11% in December, are up 0.41% for the quarter and down 3.76% for the year to a median of $469,000.
RP Data-Rismark says house prices decreased by 1.2% in December, are down 1.6% for the quarter and fell 4.3% for the year to a median of $465,000.
APM says house prices are down 1.2% for the quarter and are down 5.2% for the year to a median of $522,000.
 
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<img src="/images/stories/adelaide.gif">
The ABS says house prices are down 1.6% for the quarter and down 6.4% for the year to a median of $395,000^.
Residex says house prices increased by 0.79% in December, fell 0.43% for the quarter and declined 3.17% for the year to a median of $395,500.
RP Data-Rismark says house prices decreased by 0.5% in December, are down 1.5% for the quarter and fell 5.3% for the year to a median of $385,000.
APM says house prices are up 0.5% for the quarter and are down 3.9% for the year to a median of $438,000.
 
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<img src="/images/stories/darwin.gif">
The ABS says house prices are down 1.4% for the quarter and down 5.4% for the year to a median of $500,000^.
Residex says house prices increased by 1.7% in December, are down 1.25% for the quarter and fell 6.11% for the year to a median of $484,500.
RP Data-Rismark says house prices decreased by 0.5% in December, are down 1.6% for the quarter and fell 2.2% for the year to a median of $490,000.
APM says house prices are down 0.5% for the quarter and down 7% for the year to a median of $579,000.
 
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<img src="/images/stories/canberra.gif">
The ABS says house prices are up 0.7% for the quarter and down 2.6% for the year to a median of $540,000^.
Residex says house prices increased by 0.51% in December but are down 1.84% for the quarter and down 2.03% for the year to a median of $526,500.
RP Data-Rismark says house prices decreased by 1.5% in December, are down 1.5% for the quarter and fell 2.5% for the year to a median of $535,000.
APM says house prices are down 0.6% for the quarter and declined 3.5% for the year to a median of $552,000.
 
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<img src="/images/stories/hobart.gif">
The ABS says house prices are up 0.8% for the quarter and down 4% for the year to a median of $330,000^.
Residex says house prices increased by 2.81% in December, are up 1.14% for the quarter and up 0.32% for the year to a median of $389,000.
RP Data-Rismark says house prices decreased by 2.4% in November*, are up 0.4% for the quarter and down 8.7% for the year to a median of $340,000.
APM says house prices are up 0.5% for the quarter and down 5% for the year to a median of $323,000.
*RP Data-Rismark most recent Hobart data 
^ABS median prices are up until June 2011 quarter
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December quarter housing data roundup: Four sets of statistics give divergent outlooks

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Anyone following the slew of property market data that has been released of late could be forgiven for being more than just a little bit confused as to how capital city housing markets have truly performed in the last quarter and over the past year.
This week the <a target="_blank" href="https://www.propertyobserver.com.au/residential/capital-city-house-price-slide-slows-in-december-quarter-with-melbourne-worst-performer-abs/2012020153211">ABS put out its capital house price for the December quarter</a> to round off a quartet of research houses (the others being RP Data-Rismark, Residex and Australian Property Monitors) to provide benchmarks on how our key property markets are performing.
While clearly each uses its own statistical methodologies in determining house price changes and median values, surely no property investor (no matter how savvy) has the time to study complex mathematical formulas and make an assessment as to which figures are the most accurate.
Two analysts looking at the<a href="https://www.propertyobserver.com.au/residential/december-quarter-housing-data-roundup-four-sets-of-statistics-give-divergent-outlooks/2012020153215" target="_blank"> </a><a href="https://www.propertyobserver.com.au/residential/december-quarter-housing-data-roundup-four-sets-of-statistics-give-divergent-outlooks/2012020153215" target="_blank">different data sets</a> could come to quite different and legitimate conclusions about where a particurlar market is heading.
Take, for example, the case of Melbourne house prices.
Looking at the different data sets, one could come to believe that the house prices in the city are rebounding, slowly declining or in rather steep decline.
Australian Property Monitors says Melbourne prices rose 1.1% over the December quarter to be down only 3.1% for the year; Residex says they fell 1% over the quarter and are down 3.28% for the year and RP Data-Rismark says they fell 1.8% for the quarter and are down 6.8% for the year.
The research houses also come to very different conclusions about median house prices.
There’s more than a $100,000 difference between the RP Data-Rismark’s Sydney median house price of $535,000 and APM’s Sydney median house price of $637,000.
Darwin has a median house price is as high as $579,000 (according APM) or as low as $484,500, (according to Residex).
And then there are the revisions, which usually come a month or so after the data is released which can change the picture yet again.
For example, RP Data-Rismark revised November capital city house price growth from 0.1% to 0.4% (a four-fold increase), with economist Christopher Joye expecting Melbourne and Perth figures to improve when fuller house price data is released by tardy state valuer generals.
No doubt, property spruikers will welcome the divergence in data – they can just pick and choose which figures to quote at their next investment seminar and paint a thoroughly convincing picture.
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Divergent housing data raises more questions than answers

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The rate of decline of capital city house prices slowed in the final quarter of 2011, according to December quarter ABS House Price Index.
Preliminary estimates show the price index for established houses for the weighted average of the eight capital cities decreased 1% in the December quarter 2011 following a decline of 1.2% in the September quarter.
Melbourne and Adelaide replaced Brisbane as the weakest capital city housing markets, with both recording a 1.6% drop over the quarter.
<img src="/images/stories/absfeb11.gif">
Source: ABS
For the year (December 2010 to December 2011), capital house prices are down 4.8% led by Brisbane (down 6.7% for the year), Adelaide (6.4%) and Melbourne (6.1%).
Canberra (-2.6%) and Sydney (-2.7%) were the strongest performers over this period.
Perth was the strongest performer of the major capital city markets with a 0.5% increase a strong turnaround from a drop 1.3% recorded in the September quarter.
There were also house price gains in the smaller markets of Hobart (0.8%) and Canberra (0.7%)
Sydney house prices declined by 1% over the quarter.
The pace of house price depreciation in Brisbane slowed from a drop of 2.5% in September to a decline of 1.3% in the December quarter.
<img src="/images/stories/absfeb12.gif">
In the previous September quarter survey, Brisbane was the weakest capital city market (-2.5%), followed by Melbourne (- 1.7%) and Perth (-1.3%). Sydney (-0.2%), and Darwin (-0.4%) were the strongest performers.
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Capital city house price slide slows in December quarter, with Melbourne worst performer: ABS

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."

[smartcode_project:default project_id=149670 project_image_fid=360975]

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.

[smartcode_project:default project_id=112024 project_image_fid=343235]

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."

[smartcode_project:default project_id=108274 project_image_fid=365786]

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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[smartcode_project:default project_id=150414 project_image_fid=372743]

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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[smartcode_project:default project_id=146717 project_image_fid=372212]

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."

[smartcode_project:default project_id=146717 project_image_fid=372227]

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.

[smartcode_project:default project_id=146717 project_image_fid=372225]

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.

[smartcode_project:default project_id=146717 project_image_fid=372222]

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.

[smartcode_project_cta:default project_id=146717]

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.

[smartcode_project:default project_id=134323 project_image_fid=6395]

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.”

[smartcode_project:default project_id=134323 project_image_fid=6399]

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.”

[smartcode_project:default project_id=134323 project_image_fid=353235]

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.

[smartcode_project:default project_id=134323 project_image_fid=6390]

“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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