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Housing market sentiment improved in the December quarter, with market participants now forecasting a modest 0.4% drop in house prices over 2012 compared with expectations of a 1% annual decline in the September quarter, according to NAB’s Quarterly Australian Residential Property Survey.
The outlook is brightest for New South Wales and Western Australia, with respondents forecasting growth of 0.8% and 0.1% respectively.
However, expectations for WA have dropped significantly since the last survey (the previous forecast was for growth in WA of 1.5%), which respondents attributed to “global uncertainty impacting on buyer confidence”.
According to NAB, the relative strength in NSW market reflects “the underlying lack of housing and associated costly rental market”.
The national average is being be held down by continued price weakness in Victoria (-1.3%), South Australia/Northern Territory (-1.2%) and Queensland (-1%).
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The market is forecast to perform more strongly in 2013, with the NAB survey forecasting national house prices increasing by 1.2% by December 2013, compared with the previous quarterly forecast of 0.5% growth for the same time period.
By 2013, Western Australia is forecast to be the strongest market, with house price growth of 3.2% while Victoria is expected remain the weakest market with growth of just 0.3%. This is still a marked turnaround from a drop of 2.1% forecast in the previous survey.
Demand for all types of existing property strengthened slightly in the December quarter, while prospects for capital growth continue to be significantly stronger in the more affordable sub- 500,000 market than in the higher end of the market.
However, inner-city housing remains the only property type where demand is considered to be marginally “good”, led by strong demand in NSW. Demand for all other property types was categorised as “fair”.
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First-home buyers’ share of existing property rose slightly to 20% (up from 18% in the third quarter) “suggesting that lower interest rates and improved housing affordability may also be drawing new buyers into this market”.
“First home buyers were seen as being most active in NSW and least active in SA/NT,” says NAB.
The survey found that demand from Australian resident investors for existing property was unchanged at 21%, although investment demand was somewhat stronger in WA and Queensland. “Our survey suggests that these trends will continue over the next year, with a small fall in first-home buyer demand being offset by slightly stronger investment demand,” says NAB.
Overall, the NAB’s Residential Property Index – which is a combination of house price and rental expectations – moved back into positive territory in the December quarter with a reading of +1 point, after negative readings of -14 points in the third quarter and -5 points in the second quarter.
“This turnaround was supported by an improvement in overall market conditions in all states,” says NAB.
NSW (+31 points) and WA (+18 points) were the only markets recording a positive index with Victoria (-22 points) the weakest market, though up from -35 points in the third quarter.
Sentiment also improved in Queensland, though still in negative territory, rising from -40 in the September quarter to -18 in December.
According to NAB, the state is still feeling the impact from last year’s natural disasters.
The quarterly survey, which NAB has been conducting since April 2010, is based on a large external panel of respondents comprised of real estate agents/managers, property developers, owners/investors, asset/fund managers and valuers. 
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lschlesinger-FZcF9M3vE6

Housing market sentiment up in December quarter, with NSW brightest: NAB

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The embattled ASX-listed Cheviot Kirribilly Vineyard Property Group has found a potential buyer for its Tullymore Vineyard in the Clare Valley.
In a statement made to the ASX, Cheviot said it had “granted an exclusive option to a third party to acquire the Tullymore Vineyard”.
The option to buy the 200-hectare vineyard expires in 45 days.
The financial terms and the name of the potential buyer remain confidential.
Should the buyer take up the option it will leave another Clare Valley vineyard, the 251-hectare Kirribilly 1, as the last remaining vineyard in the group still up for sale.
Tullymore and Kirribilly 1 are being marketed by Colliers agents Tim Altschwager and Nick Dean, with the group hoping to sell both by April.
In January, Cheviot completed the sale of its two Angas Creek Vineyards in Gumeracha, in the Adelaide Hills (78 and 65 hectares) for $3.1 million.
In December Cheviot completed the sale of its two Langhorne Creek vineyards in South Australia –Birchmores Vineyard (293 hectares) and Woodstock Road Vineyard (67 hectares) – for $5.7 million.
The group also announced that it had come to an agreement with its financier to continue to proceed with the 2012 vintage of Kirribilly and Tullymore.
Current estimates are for a vintage of 1,900 tonnes, more than one-third higher than the 2011 yield but 10% lower than the long-term average.
Following the sales of the five vineyards, Tidewater Funds Management, the responsible entity of Cheviot Kirribilly Vineyard Property Trust, will begin the process of winding up the trust this month, with the view to completing the process by May.
<a target="_blank" href="https://www.propertyobserver.com.au/rural/sa-vineyards-up-for-sale-as-downturn-puts-the-squeeze-on-wineries/2011071850831">Cheviot Kirribilly was forced to put its 953-hectare vineyard portfolio up for sale by its financiers</a> last year due to an oversupply of grapes, changes in retail conditions, overseas competition and the strong Australian dollar.
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Cheviot finds potential buyer for Clare Valley Tullymore Vineyard

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Melbourne and Brisbane have assumed the “mantelpiece” of Australia’s poorest-performing capital city housing markets, according to RP Data senior research analyst Cameron Kusher.
The December Rismark-RP Data Hedonic house price index shows that Melbourne dwelling values are down 6.1% for the year and the same amount from their end of 2010 peak, while Brisbane values are down 6.8% for the year and 8.7% from their end of 2007 peak.
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Kusher says both markets are now undergoing corrections after extended periods of capital growth.
“Melbourne had a very good run between 2007 and the middle of this year,” Kusher told the Australian Financial Review.
“We are seeing values in Melbourne declining fairly quickly. We expect the market to remain soft over the next 12 months, if not longer.”
Kusher says while the rate of decline in Brisbane has slowed somewhat, “dwelling values have not done much since the end of 2007, when values increased that year by about 35%”.
“Much like Perth did, Brisbane is undergoing a correction,” Kusher says.
Sydney was the strongest housing market in 2011, with values down just 0.3%, and Kusher tips Sydney to continue to be the best-performing market in 2012.
“[In Sydney] there are still problems with getting new supply out of the ground. There is still strong demand, even though population growth has slowed across the board – a lot of people are still moving to Sydney,” Kusher says.
According to Kusher, Perth has undergone something of a turnaround in the last quarter of 2011 and is now no longer performing worse than the Brisbane, as it has during the last four years.
Kusher also provided some insights into the oft-neglected Adelaide market, which saw a 0.1% drop in dwelling values in December and a moderate 2011 decline of 4.4%.
“The Adelaide market is fairly flat… The market tracks fairly closely what is going on in other capital city markets,” he says.
Taking a look at the market as a whole, Kusher says there is unlikely to be much property value growth over 2012.
“There may be some slight growth if we get further interest rate cuts but any growth will be below the rate of inflation,” he says.
“A market like Sydney will continue to plod along quite well comparatively speaking and later in 2012 we will start to see some improvement in the Brisbane market.
“[Overall] the performance of the housing market in 2012 will be slightly superior than 2011.”
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Melbourne's housing price softness to remain in 2012: RP Data

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Aussie entrepreneur Dick Smith has promised to do all he can to devalue the electronics brand that still bears his name if Woolworths sells the business to foreign owners.
Woolworths has said it will close more than 100 stores in the chain and look to offer consumers electronic products through its own stores and discount brand Big W following years of underperformance.
Smith, who is also a "Buy Australian" campaigner, says there will be a “real problem if Woolworths do sell it to a foreign-owned company”.
"I'll rubbish them the whole time. They wouldn't want to pay much,” he told Fairfax media.
As a “proud Australian” Smith is opposed to foreign ownership of Australian brands.
"I would just point out all the time that this is further destruction of Australia,” he says.
Smith says he understands why Woolworths wants to sell
“I think they're doing a sensible thing and they've owned Dick Smith for 30 years and made a fortune out of it, but once the growth is gone, which I think it has in that field, I can understand them selling it."
 
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Dick Smith promises to undermine Woolworths if it sells his brand to foreign owners

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Mortgage lending remains in the doldrums, with the latest RBA figures showing only a 0.4% increase in housing credit provided during December on a seasonally adjusted basis. 
The December result matched the 0.4% increase in housing credit provided in November. 
For the calendar year, mortgage lending is up 5.4% compared with annual growth of 7.2% recorded in December 2010.
This is the lowest growth since records began in 1977. The previous lowest annualised growth for a calendar year was 7.2% recorded in December 1982.
Owner-occupier lending increased by 0.4% in December to be up 5.7% for the year, while loans to property investors increased by 0.3% to be up 4.8% for the year. 
On an annualised basis, mortgage lending declined every month of 2011. 
Economist and former Gillard government advisor Stephen Koukoulas tweeted: “Housing credit growth slumps to new 34 year low (since records were kept dating back to 1977)... the disappointing news continues.” 
Mortgage lending growth in 2011 (monthly and annual growth in %)
 
<table width="223" cellpadding="0" cellspacing="0" border="0"><tbody>
<tr>
<td valign="bottom" nowrap width="101">
 
Jan-2011
</td>
<td valign="bottom" nowrap width="59">
0.6
</td>
<td valign="bottom" nowrap width="63">
7.2
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="101">
Feb-2011
</td>
<td valign="bottom" nowrap width="59">
0.5
</td>
<td valign="bottom" nowrap width="63">
6.9
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="101">
Mar-2011
</td>
<td valign="bottom" nowrap width="59">
0.4
</td>
<td valign="bottom" nowrap width="63">
6.5
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="101">
Apr-2011
</td>
<td valign="bottom" nowrap width="59">
0.4
</td>
<td valign="bottom" nowrap width="63">
6.4
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="101">
May-2011
</td>
<td valign="bottom" nowrap width="59">
0.5
</td>
<td valign="bottom" nowrap width="63">
6.2
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="101">
Jun-2011
</td>
<td valign="bottom" nowrap width="59">
0.4
</td>
<td valign="bottom" nowrap width="63">
6.1
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="101">
Jul-2011
</td>
<td valign="bottom" nowrap width="59">
0.5
</td>
<td valign="bottom" nowrap width="63">
6.0
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="101">
Aug-2011
</td>
<td valign="bottom" nowrap width="59">
0.4
</td>
<td valign="bottom" nowrap width="63">
5.9
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="101">
Sep-2011
</td>
<td valign="bottom" nowrap width="59">
0.5
</td>
<td valign="bottom" nowrap width="63">
5.8
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="101">
Oct-2011
</td>
<td valign="bottom" nowrap width="59">
0.4
</td>
<td valign="bottom" nowrap width="63">
5.7
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="101">
Nov-2011
</td>
<td valign="bottom" nowrap width="59">
0.4
</td>
<td valign="bottom" nowrap width="63">
5.6
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="101">
Dec-2011
</td>
<td valign="bottom" nowrap width="59">
0.4
</td>
<td valign="bottom" nowrap width="63">
5.4
</td>
</tr>
</tbody></table>
Source: RBA
Mortgage lending has not grown by more than 1% per month since June 2007, when it increased by 1.3%.
Since then mortgage lending growth has varied between 0.4% and 0.8% per month.
Business lending rose by 0.3% over December to be up 1.4% for the year while personal credit declined by 0.1% over December to down 1% for the year.
Total credit provided to the private sector by financial intermediaries rose by 0.3% over December 2011 to be up 3.5% for the year.
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Mortgage lending growth fell to 34-year low in 2011: RBA

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Capital city dwelling prices fell 0.2% in December on a seasonally adjusted basis, with Melbourne dwelling values down 0.5% and Perth values down 1.6%, according to the latest RP Data- Rismark Home Value Index.
The small national drop in dwelling values in December follows an upwardly revised 0.4% rise in dwelling values in November (preliminary data showed a 0.1% increase).
Over the 2011 calendar year, capital city dwelling prices are down 3.6% while regional values are down 2.9%.
For the December 2011 quarter Melbourne dwelling prices were down 1.4% while Perth values were down 2.1%, making the WA capital the weakest capital city market.
There are now two reports suggesting Melbourne dwelling prices are continuing to decline, <a href="https://www.propertyobserver.com.au/residential/mixed-messages-in-melbourne-s-data-as-house-prices-increase-slightly-apm/2012012553140" target="_blank">with one suggesting they are increasing</a>.
Sydney housing has been the nation’s best performer, with dwelling values up 0.4% in December and by 0.7% over the quarter.
<img src="/images/stories/rpjan31.gif">
Melbourne has the weakest rental market, with gross rental yields of 4% for houses and 4.3% for units.
Darwin is returning property investors the strongest rental yields – 5.6% for houses and 6% for units.
Rismark director Christopher Joye expects the Melbourne and Perth figures to be cast in “a more positive light” when they are revised in February.
According to Joye, preliminary estimates for December and January can be difficult to interpret due to lower sales volumes and tardiness in some city valuer-generals’ offices in transferring transaction information over the holiday season.
“It just so happens that these cities’ valuer-generals are probably the worst offenders when it comes to the timely transmission of data,” Joye says.
“What makes the Melbourne and Perth numbers especially suspect is that they come on the back of solid seasonally adjusted gains in November, which have been reconfirmed with RP Data-Rismark’s latest index analysis.
Previous house price data has sent out mixed messages about where Melbourne house prices may be heading.
Last week, Australian Property Monitors (APM) surprised most pundits by reporting that Melbourne house prices increased 1.1% over the December 2011 quarter to a median of $538,000, the best result for all capital cities and the first quarterly rise since December 2010.
End-of-year figures put out Residex in mid-January show that <a href="https://www.propertyobserver.com.au/residential/melbourne-leads-nationwide-drop-in-house-prices-in-second-half-of-2011-residex/2012011753062">Melbourne house prices fell sharply in the second half of 2011</a> to be down 3.28% annually having recorded positive annual growth of 1.58% by mid-2011.
According to Residex, Perth house prices declined by 3.76% for the year, having been down 2.21% for the year six months ago.
Raw RP Data- Rismark  results (not taking into account seasonal factors) show capital city dwelling prices down 1.2% over December with Perth values down 1.9% and Melbourne values down 1.7%. According to the Austalian Bureau of Statistics (ABS) seasonally adjusted figures provide a more accurate month-on-month comparison.
"Seasonal adjustment allows for and removes the regular, reoccurring influences that could distort the short term view of what is happening," says the ABS.
 
 
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Dwelling prices down 0.2% in December 2011, with Melbourne and Perth hit hardest: RP Data-Rismark

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Financial adviser and breakfast TV presenter David Koch stands firmly behind his assessment that the Sunshine and Gold coasts are “catastrophes” and says investors should not trust the views of local estate agents and journalists.
Koch has hit back after local newspapers and estate agents told him to do his homework before making such remarks about these markets.
Both the <a target="_blank" href="https://www.propertyobserver.com.au/queensland/sunshine-coast-mayor-slams-kochie-for-catastrophic-warning-to-property-investors/2012012353114">Sunshine Coast mayor and the head of the local real estate institute</a> say Koch is wrong about their market, pointing to a recent turnaround in building approvals and reeling off a string of famous residents as evidence.
Writing on his blog, Kochie.com.au, he acknowledges that he and his wife Libby have “upset Gold Coast and Sunshine Coast real estate agents” but says they has done the necessary research and the numbers stack up.
“The local real estate agents took to the Sunshine Coast Daily and Gold Coast Bulletin to ‘correct us’ with some stern comments about our view… They told me I should do a little more homework before making statements like this,” Koch says.
“Well let me assure you I had already done my homework and have the necessary fodder to back up my statements,” he says He says the following market facts support his view:
“Gold Coast house prices are down 15.1% from their peak in March 2010, falling from $568,000 to $482m500.
“Home units also peaked in March 2010 at $400,000, and have since fallen 15% to $340,000 in the December 2011 quarter
“On the Sunshine Coast house prices are down 13.9 % from their peak in December 2009 falling from $505,000 to $435,000
“Home units peaked in June 2010 at $367,500 and have dropped 16% to $309,000 at December 2011.
“SQM Research (an independent property research firm) is predicting another 7% to 9% across-the-board fall in value in the region in 2012.
Kochie also points out: “In any survey of trustworthiness real estate agents and journalists always appear at the bottom of the list.
“So dear reader you haven’t got much to choose from. But please note that I have no reason whatsoever to be making inaccurate statements. I have no issue with this area, but it’s my job to tell it how it is. And the bottom line is that property investments in these two locations are historically volatile, and right now in pretty bad shape,” he says.
“There are still massive amounts of stock on the market and it’s not going down.”
While he acknowledges that that building approval figures “rattled off” by Coast newspapers are “well and good”, he says the region “is already suffering a major oversupply, and having building approvals is no proof of a healthy market. It just means more supply in a low-demand area. Places are being built, but they’re not being bought.”
“Property is always about demand and supply. If there’s a lot of supply and weak demand then pressure is on prices to fall to attract buyer interest.”
He also includes a chart from SQM Research which shows Gold Coast listings are just as high as back in 2008, “though there has been a slight down trend in recent months.
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Click to enlarge
As far as the Sunshine Coast market is concerned, Kochie says stock levels are “still clearly rising”.
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Kochie sets his sights on estate agents and journalists in Queensland property 'catastrophe' stoush

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Australian banks are more concerned about political interference and regulation than their global counterparts, according to the PricewaterhouseCoopers (PwC)/Centre for the Study of Financial Innovation latest Banking Banana Skins survey. 
The 13 Australian banks that took part in the survey agreed with their global counterparts that macroeconomic risk – the crisis within the global financial system and Europe in particular – is the biggest threat to their operations. 
But Australian banks rated political interference and regulation as far bigger risks than foreign banks, while being less concerned about credit risk and capital availability.
Banking anxieties: Australia vs the world
<table style="width: 470px;" border="0"><tbody>
<tr>
<td>Top Five Global banking risks</td>
<td>Top Five Australian banking risks</td>
</tr>
<tr>
<td>1. Macroeconomic risk</td>
<td>1. Macroeconomic risk</td>
</tr>
<tr>
<td>2. Credit risk</td>
<td>2. Political interference</td>
</tr>
<tr>
<td>3. Liquidity</td>
<td>3. Liquidity</td>
</tr>
<tr>
<td>4. Capital availability</td>
<td>4. Regulation</td>
</tr>
<tr>
<td>5. Political interference</td>
<td>5. Credit risk</td>
</tr>
</tbody></table>
The findings are telling coming just over a week before the RBA meets on February 7 to decide on interest rates and following the December rate cut debacle when some banks took two days before eventually deciding to cut rates in line with the RBA’s 25-basis-point reduction.



After the December rate announcement some banks slammed the government for putting pressure on them to pass on rate cuts in full (in the face of higher funding costs) culminating in <a href="https://www.propertyobserver.com.au/economy/anz-keeps-rates-unchanged-in-first-independent-call/2012011353034">ANZ de-coupling its rate decisions from the RBA</a>, with Bendigo and Adelaide Bank also considering making independent interest rate decisions.



Aside from the political pressure banks have also warned that new capital holding requirements under Basel III as well as a proposal from the International Monetary Fund that they adopt even tougher capital requirements to guard against a collapse in the country's property market would lead to credit rationing and higher interest rates.



One Australian respondent commented as part of the survey: “Excessive / over regulation could reduce lending support from banks, and potentially lead some banks to increase credit risks to offset costs from regulation. Protectionist policies ... stifle banking competition”.



In December last year, then Commonwealth Bank boss Ralph Norris warned that regulator APRA’s hard-line stance on enforcing new global banking rules could result in higher interest rates and a credit squeeze.



According to the PwC, the Australian results reflect “uncertainties in the economic environment and the long journey the Australian banks still have to navigate through ongoing regulatory reforms that are still taking shape”. 



Overall, the global survey of more than 700 banks, regulators and market observers found globally anxiety levels are at their highest levels since they were first collected by the Banking Banana Skins survey 13 years ago. 



PwC says the rise in anxiety levels is not surprising “given the global financial system, and Europe in particular, is skirting on the edge of a fresh crisis”. 



“Certain developed economies are fighting hard to gain momentum amidst painful austerity measures. Regulators, both here and offshore, have responded by unleashing an unprecedented amount of new, often highly complex, regulations. 



However, while Australian banks are better prepared for a global crisis (scoring 3.21 versus 2.96), they are more anxious (3.28 versus 3.15) than their global banking peers.



“What will surprise many is how acute the anxiety is for Australia’s bankers, especially when the relative resilience of the nation’s banks and wider economy are considered,” comments PwC.



“To some extent this no doubt reflects the increasing gloom that bankers – no matter which country they work in – regard the immediate future. On a deeper level, it reflects uncertainties in the economic environment and the long journey the Australian banks still have to navigate through ongoing regulatory reforms that are still taking shape.”



“Despite the higher levels of anxiety, Australian bankers feel more prepared to deal with these risks than overseas counterparts. However, the response in Australia came exclusively from bankers; whereas countries with lower scores had input from observers and regulators who tended to be more sceptical.”

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Australian banks worried about government intervention but not so much borrowers' credit risk: PwC survey

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Asian buyers look set to increase their investments in Melbourne’s upper-middle-class eastern suburbs over the Chinese New Year period.
Popular suburbs include Glen Waverley and Balwyn, with a desire to own prestige property, feng shui alignment and access to better schools among the reasons why Asian buyers have bought homes recently.
The Ray White Glen Waverley office has recently sold a number of homes in the $2 million-plus price bracket to wealthy mainland Chinese buyers.
Director Damian Moore expects almost every property currently up for sale in the suburb to attract some interest from Asian buyers during the festive season.
“Glen Waverley has a very large Asian community with varying financial means.  Therefore we sell homes [to Asian buyers] from $400,000 to $2.5 million,” says Moore.
Moore says most of the suburb’s Asian buyers come from mainland China, Malaysia, Singapore and Indonesia.
“Often the grander the house, the better – financial status at the high end of our market is very important.
“But you can’t beat good old ‘feng shui’ – most buyers will consider direction of the home, adjacent streets, low side/high side, front door opposite back door, staircase facing the front door,” he explains.
About 14 kilometres west of Glen Waverley, the affluent suburb of Balwyn has also experienced an influx of Asian buyers wanting to own property in the Balwyn High School zone bounded by the Eastern Freeway and Whitehorse Road.
According to Tim Heavyside of Fletchers Real Estate, property purchases by aspirational Asian families have increased from an average of 20% of Balwyn home buyers in the zone 10 years ago to about 60% of all purchases currently.
"They may decide rather than invest $25,000 in school fees every year, I'll utilise that in travel and educate my child in life, but they still get the benefit of being at the fourth-best school in the state," he says.
According to Moore, selling to Asian buyers comes with its challenges.
“Most Asian buyers are very hard negotiators – they remain non-emotional about the purchase and must always feel in control,” he says.
Melbourne real estate is not just proving popular with Asian families – Asian companies are also entering the market.
Asian property developers are making major plays in the Melbourne apartment market, with Hong Kong-based Far East Consortium building 2,600 apartments in the billion-dollar Upper West Side project on Lonsdale Street. Investors in the project come from Malaysia, mainland China, Korea and India.
Savills reported late last year that investors and developers from China, Singapore and Malaysia had spent more than $100 million in buying Melbourne development sites in the past 18 months.
Last year Asian developers snapped up a 3,200-square-metre site at 224-250 La Trobe Street for $29.2 million with potential for more than 500 apartments while Singapore construction and property group Chip Eng Seng bought an 8,000-square-metre office building on a 900-square-metre block at 150 Queen Street for $25.5 million, with plans to convert it for residential use. Both deals were negotiated by Savills.
Another residential development site at 420 Spencer Street (2,250-square-metre site with a permit for 368 apartments) has registered interest from Asian buyers including SP Setia and Mammoth Empire Holdings, both from Malaysia, as well as private developers from mainland China.
In total more than half of the 17 properties sold by Savills since March last year with residential development potential were snapped up by Asian buyers.
According to Savills divisional director of CBD sales and investments Nick Peden, Asian developers have bought eight properties, averaging $12.5 million, since March 2010.
"Melbourne offers sustained population growth, inexpensive land compared to home markets, the potential for significant growth, the benefit of freehold title, and its stature as the world's most liveable city," says Peden.
In a recent report on the influx of Asian property developers, CBRE said Melbourne was proving more popular with foreign developers than Sydney due to larger sites being available on the northern edge of the city.
For more on Asian investment in Australian property, download our free eBook<a target="_blank" href="http://propertyobserver.com.au/ebooks/free-ebook-foreign-investment-in-australian-property-markets"> Foreign Investment in Australia's Property Markets</a>.
 
 
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Melbourne’s eastern suburbs popular with Asian buyers

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There is no Australian housing price bubble, says ANZ in its latest assessment of the Australian property sector.
In its January assessment of the property market, the bank argues that gains in house prices over the past 25 years have been driven by increases in household income and lower interest rates.
The bank forecasts house prices will remain on hold or fall slightly in 2012, but will not crash.
“A combination of lower interest rates, falling house prices and rising household incomes has improved Australian house purchase affordability over the past 12 months,” say report authors David Cannington, senior economist at ANZ, and Paul Braddick, head of property research at ANZ. 
“Despite the continued concerns about significant Australian house price overvaluation from some commentators, housing market fundamentals remain supportive,” they say.
<img src="/images/stories/anzjan301.gif">
According to ANZ’s analysis, all the growth in Australian house prices since 1986 can be explained by gains in average household incomes and a structural decline in the cost of borrowing. 
“Cross-country comparisons using partial valuation measures are commonly used to contend the case of overvaluation of Australian house prices. That is, suggesting actual house price growth in Australia has run significantly higher than justified by explained price growth,” says ANZ. 
However, international house prices, rental yields and house price-to-income ratio comparisons compiled by ANZ suggest that Australian house prices have not deviated from international trends.
<img src="/images/stories/anzjan302.gif">
<img src="/images/stories/anzjan303.gif">
ANZ forecasts housing affordability to improve in 2012 following recent improvements due to softening house prices, rising household incomes and lower mortgage rates.
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Among the factors ANZ says will continue to support the housing market is net migration, which is starting to rebound after the recent slowdown and combined with weak housing construction will add to the pressure building within the housing sector.
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“While housing construction continues to weaken under the cloud of negative market sentiment and softening prices, forward indicators suggest the recent slowdown in net overseas migration will continue to reverse,” say Cannington and Braddick. 
“This renewed housing market tightening will add further upward pressure on rents, household size and provide a fundamental support to flagging market activity, especially for the first-home buyer market.” 
However, there will be no marked improvement in new home building in 2012, according to ANZ. 
“Soft house prices, weak housing market sales activity and tight credit conditions have dampened residential developer sentiment. Despite the recent interest rate cuts, weak housing market sentiment will continue to weigh on residential development activity through 2012,” says Cannington and Braddick.
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Strong fundamentals mean there is no Australian housing price bubble: ANZ

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.

[smartcode_project:default project_id=150017 project_image_fid=372547]

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.

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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.

[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.”

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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.”

[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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