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Builders surveyed by Master Builders Australia expect overall residential and commercial construction activ­ity to be lower over the next six months, <a href="https://www.propertyobserver.com.au/residential/new-housing-outlook-bleak-for-2012-hia/2012010852981" target="_blank">in line with a bleak forecast released earlier by the Housing Industry Association</a>.
In MBA’s December quarter survey, builder sentiment sits below the neutral or satisfactory 50 mark with both residential and non-residential sectors experiencing poor conditions despite some recent stabilisation following the November rate cut. 
Sentiment is particularly poor for residential construction with the index for current conditions falling again in the December quarter to 36.3 close to levels reached during the GFC. The index picked up in the December quarter but remains at a level indicating that builders expect residential building conditions to decline over the next six months. 
In the non-residential sector, the index measuring cur­rent conditions registered 38.1 in the December quarter, down on the previous reading and well below the satisfactory level. Non-residential builders face the prospect of falling activity levels with the conclusion of government stimulus programs. 
Sentiment is clearly being influenced by declining profit levels with overall industry profitability also sitting below the 50 mark, not far from lows reached during the GFC.
<img src="/images/stories/mbajan10.gif">
Source: Master Builders Australia
“Builder sentiment remains gloomy, not helped by disappointing sales and display centre traffic/enquiries. Builders are not seeing any pick up in private sector demand to replace government economic stimulus programs,” MBA reports. 
As a consequence of a drop in activity and profits, builders surveyed by MBA say that they may need to reduce levels of employees and subcontractors in the period ahead. 
In line with <a href="https://www.propertyobserver.com.au/residential/new-home-sales-rise-6.8-in-november-as-interest-rates-decline-but-experts-warn-still-more-work-to-do-in-2012/2012010952984" target="_blank">figures from the HIA showing new home sales rose by 6.8% in November</a>, the December MBA survey, which took into account the November rate cut, does reveal “some early signs of improvement in a number of the indicators, an early indi­cation of a possible turnaround in sentiment related to the November rate cut”, but overall the picture is downbeat. 
Responding the December quarter survey results, MBA chief economist Peter Jones says the RBA should consider further rate cuts to make sure a private sector recovery is able to gain momentum.
“Builder sentiment remains gloomy with the latest survey revealing poor profitability as well as disappointing sales and display centre traffic/enquiries,” Jones says.
“The building industry is struggling, with little evidence of the pick-up in private sector demand needed to fill the gap left as government economic stimulus programs end.”
“The building and construction industry has lost the cushioning effect of government stimulus programs whilst the credit squeeze and other regulatory constraints continue to affect business operating conditions,” Jones says.
“The national survey confirms how weak conditions have become, with the December quarter revealing significant excess capacity in the industry as well as evidence that builders are experiencing very little difficulty finding labour resources.”
“The latest readings do not auger well for activity in the building and construction industry over the next six months and with profits under pressure it is little surprise that builders are indicating they may reduce levels of employees and subcontractors in the period ahead,” he says.
 
 
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Builders gloomy about year ahead: MBA

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The stranglehold the major banks have had on mortgage lending since the onset of the GFC appears to be loosening, with AFG reporting that second-tier lenders accounted for nearly a quarter of all loans arranged by its mortgage brokers in December.
AFG’s December Mortgage Index shows that non-major bank share of mortgages jumped from an average share of 19.1% over the past 12 months to 24.39% in the last month of 2011.
This is the first time since the third quarter of 2007 – when the sub-prime mortgage crisis began brewing – that major lenders have not written close to 80% of more of AFG’s mortgage lending business.
December 2011 was also the biggest increase in the second-tier’s share of the mortgage market over the past 12 months and significant since AFG brokers write around one in ten mortgages in Australia.
According to November banking statistics from APRA, ING remains the biggest non-major bank lender (excluding brands owned by the major banks) with a loan book of just over $37 billion, followed by Suncorp ($29 billion), Bendigo and Adelaide Bank ($21.6 billion) and Bank of Queensland ($21.3 billion).
Non-major lenders were particurlarly popular with those refinancing, with their share of this sector rising from 21.0% to 28.8% during the month – an increase of 37%.
<img src="/images/stories/buyertype.gif">
 Source: AFG
In the past, both the refinancing and investment home loan markets have been tightly held by the majors, with first-home buyers showing the greatest willingness to try non-majors. But the December figures reveal a significant change, with non-major market share rising among refinancers to around the same level as among first-home buyers, 28%.
AFG’s inaugural first Competition Index revealed that non-major lenders are competing strongly in niche markets, with Suncorp writing an impressive 14.9% of all first-home buyer loans in October, nearly double that of NAB (7.7%) and higher than ANZ (12.5%).
Suncorp’s share of the first-home buyer market was almost triple its overall market share of 5.1% captured in October, up from just 3.1% in November 2010.
AFG general manager of sales and operations Mark Hewitt says the company is being careful not to read too much into any one month’s set of figures, but says “there’s no question that the market is becoming increasingly competitive and that non-majors did particularly well last month”. 
“This trend will help keep rates competitive as we move into 2012. If the expected rate reductions come through over the next quarter, we could see a very different lending environment, supporting the recovery of property markets across Australia,” he says. 
AFG brokers also wrote an increasing number of fixed-rate loans in December, with the proportion of fixed rate mortgages rising from 17.2% to 19.2% – but below the 24% fixed-rate market share achieved Mortgage Choice franchisees. 
In line with seasonal falls, mortgage sales volumes declined month on month by 26% in December, which together with January are quieter months for the industry. 
But sales volumes were up by 5.4% nationally compared with December 2010, with the strongest growth (comparing December 2011 with December 2010) occurring in South Australia (44.8%), followed NSW (up 15.6%) and Queensland (7.7%).  Mortgage lending in Western Australia contracted by 3.9% and in Victoria by 8.9%.
 
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Major banks' mortgage dominance loosening as smaller lenders get a look-in: AFG

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There is likely to be little respite for residential builders in 2012, with the Housing Industry Association forecasting further declines in new housing starts – possibly to levels last seen in the wake of the GFC.
The bleak outlook comes despite a<a href="https://www.propertyobserver.com.au/residential/new-home-sales-rise-6.8-in-november-as-interest-rates-decline-but-experts-warn-still-more-work-to-do-in-2012/2012010952984"> 6.8% i</a><a href="https://www.propertyobserver.com.au/residential/new-home-sales-rise-6.8-in-november-as-interest-rates-decline-but-experts-warn-still-more-work-to-do-in-2012/2012010952984">ncrease in new home sales in November</a> driven by interest rate cuts - and likely to offer only a short term respite.


In its January 2012 note on new housing conditions, the industry body expects housing starts to decline by 10.4% for the 2011-12 financial year (ending June 2012) to a level of 141,159, before recovering by 5.6% to a level of 149,007 in 2012-13. 



Detached house starts are forecast to fall by 6.6% to 90,488 in 2011-12 before growing by 5.6% in 2012-13 to 95,535. 



Starts for “other dwellings” are forecast to drop by 16.4% in 2011-12 to 50,671 before increasing by 5.5% to a level of 53,472 in 2012-13.
<img src="/images/stories/hiajan9.gif">
Source: HIA
 
These forecasts follow a September 2011 quarter where seasonally adjusted housing starts fell by 6.8% to 35,672, the lowest level in two years. On annualised basis, housing starts were running at an annualised level of just under 142,690 in September 2011, a level only 4,000 above the 138,690 dwelling starts recorded in 2009. 
On the back of these forecasts and recent performance, the HIA paints a bleak picture and renews its call for the government to implement short-term stimulus measures. 
“Since the release of the Spring edition of the HIA’s National Outlook at the end of September 2011 and the summer edition released on December 19 2011, residential land sales appeared to have bottomed at a woefully low level, as did new home sales volumes, while local government building approvals experienced accelerated weakness, which took them back toward GFC levels,” the HIA says. 
“New housing finance had, encouragingly, tracked sideways for some months, but remained 2.5% down on the equivalent levels in 2010.” 
“This is not an auspicious start for the new home building sector amidst the heightened weakness and uncertainty that the European debacle has assumed since mid-2011.” 
According to the HIA, what is needed is “direct, short-term stimulus to new home building within an over-arching, renewed focus on structural reform to reduce the disproportionately high, inefficient and inequitable cost base of new homes throughout Australia”. 
“Housing is shelter, it is a necessity of life. Australia doesn't provide enough of it, in an affordable fashion, for renters or owners. 
“So, kill three birds with one stone. Stimulate the new home sector to ensure the short term provision of a larger amount of a necessity good. Create a positive multiplier impact to the wider domestic economy during a time of fragility and uncertainty. Engender a medium/long term level of new home building more commensurate with the requirements of Australia's population which will create efficiency gains and inter-generational equity improvements in the Australian economy. It seems so simple. 
“Nothing is simple, of course, but neither should the housing policies Australia so desperately needs be as difficult to enact as recent inertia implies they are.” 
According to the most recent ABS figures, building approvals slumped by 10.7% nationwide in October led by a 19.5% drop in building approvals in Queensland.
There were also big falls in approvals in Victoria (18%), Tasmania (12.9%) a modest decline in South Australia (3.3%) and flat growth NSW (0.4%) and the ACT (0%). The only state to register an increase was Western Australia, where approvals were up 2.1%.
 
 
  
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New housing outlook bleak for 2012: HIA

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Sydney has ranked as the seventh most attractive city for offshore investors to buy commercial real estate, according to a survey carried out by the US-based Association of Foreign Investors in Real Estate (AFIRE).
Australia’s biggest city ranked above Asian rivals Hong Kong, Shanghai and Singapore and just behind Paris and San Francisco in the annual survey, which is based on votes cast by  the 200 investment groups that comprise AFIRE membership (from 21 countries).
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Globally, New York remains the top city for foreign investors to buy real estate, with London second and Washington DC third.
The biggest jump was Sao Paulo, Brazil, which improved from 26th place to fourth in the space of a year.
Australia’s global property credentials were also reinforced in the survey, with the country ranking as the fourth best for capital appreciation and also fourth in the rankings of the best places to buy a stable and secure investment.
The survey also reveals the diminishing appeal of UK real estate for offshore buyers and the growing attractiveness of Brazil (in line with the performance of its largest city, Sao Paolo) as a place for capital appreciation.
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China ranked as the second best emerging market behind Brazil followed by Turkey, India and Vietnam.
“Cross-border investors still regard North America and Europe as being the most stable and secure markets,” says Barbara Knoflach, chief executive of SEB Asset Management and AFIRE’s newly elected chairwoman.
“But with foreign investors having a diminished confidence in the recovery, interest is broadening and emerging markets are attracting more notice.”
 
 
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Sydney seventh best city for commercial property investment: Survey

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Meriton boss Harry Triguboff has kicked off 2012 by demanding that the banks pass on future rate cuts quickly. 
Triguboff describes  the argument banks put forward by the major banks (following the December rate cut delay debacle) that they may not be able to pass on future rate cuts in full as “nonsense”. 
“Our interest rates have dropped, not risen. So the banks are better off again when they borrow,” Triguboff writes on Business Spectator. 
His attack follows a promise made last year that he would find out why “our famous banks” aren't passing on all of the RBA rate cuts (after NAB passing on only 20 out of the 25 basis points in November’s rate cut). 
"I don't completely understand why at the moment, but I will find out the answers and then we will see what I do,” he said at the time. 
According to Triguboff banks are shooting themselves in the foot by being slow to pass on rate cuts. 
“The banks should reduce interest rates quicker than the Reserve Bank, not drag the chain,” he says. 
“Being slow in reducing rates is bad for the banks themselves. There are many people who owe more than their properties are worth and they will only be able to service their loans comfortably and pay them back when the market starts rising again and repayments drop. 
“People then will not be able to waste money on high interest and still spend money on other items,” he says. 
“And that is why the economy requires the banks to borrow overseas. For some unknown reason our 10-year government bonds are 3.74% and America’s are 2.01%, Japan’s are 0.97%, Britain’s are 2.04% and Germany’s are 1.94%. Are the American and British economies so much better?” 
The Meriton boss (and <country-region><place>Australia</place></country-region>’s seventh-richest man) also questioned the offshore buying habits of Australian banks and says they would be “wise to borrow in currencies with cheaper interest rates. And that would allow them to charge less”. 
Triguboff also continues where he (and other property developers) left off last year by again criticising the role local councils play in hampering property developers. 
“One of the reasons that people overseas say our housing is overpriced is because of the high repayments which are caused by inefficient councils and high interest rates. 
“Our councils are still under the delusion that people are against apartments. How come people flock to our apartments and are disinterested in outer cottages? 
“This trend towards inner city apartments is worldwide. And it won’t change in a hurry. So councils must make codes which are economically feasible. And they must give certainty of floor space and speedy processing. 
“This trend has already begun, but unfortunately it is uneven. 
“Even though <state><place>Queensland</place></state> has more efficient councils, the Chinese don’t buy there. In <city>Sydney</city>, we are only now awakening slowly, so developers run to <state><place>Queensland</place></state>, where they get approvals. <state>Queensland</state> will have too many units approved, and <state>Queensland</state> does not have the demand of <city><place>Sydney</place></city>. So by being slow in <city>Sydney</city> we will create a glut in the <place><placename>Sunshine</placename><placetype>State</placetype></place>.”
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Harry Triguboff calls on banks to pass on rate cuts swiftly and in full

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The November and December interest rate cuts did nothing to dampen borrower enthusiasm for fixed-rate mortgages, which surged to nearly a quarter (24%) of all mortgages approved by Mortgage Choice brokers in December. 
The December figure is 3% higher than fixed-rate loan approvals recorded in November and the seventh consecutive month (since June 2011) that fixed rates have grown in popularity. 
Demand for fixed-rate mortgages is now at a three-and-a-half-year high, with customer demand for variable rate loans falling from 79% to 76% over the month. 
Demand for fixed-rate mortgages is also well above both the 12-month average (15%) and the six-month average (18%). 
The growing appetite for fixed-rate loans comes despite the pace of fixed-rate cuts dropping off ahead of the Christmas break and mortgage market analysts forecasting demand for the products to fall as the RBA enters a rate loosening phase. 
Westpac brands the Bank of Melbourne and St George cut their fixed rate mortgages on December 22.
<img src="/images/stories/mcjan6.gif">
Source: Mortgage Choice
According to Mortgage Choice spokeswoman Belinda Williamson cheap rates and the repayment certainty are two factors that may convince borrowers to choose a fixed-rate product. 
“Consecutive cash rate cuts in November and December 2011 have not swayed Australian borrowers’ desire for fixed-rate loans,” she says. 
“It is possible borrowers’ need for certainty around their home loan repayments, coupled with the affordability of fixed-rate loans, are the driving forces behind demand for this loan type. 
“During December fixed rates were significantly lower than variable rates, in some cases the difference was one percentage point or more.” 
According to Mortgage Choice data, demand for ongoing discount mortgages – where the rate is discounted over the life of loan – dropped from 44% to 41%, but this type of mortgage still remains the most popular product offering and its popularity remains above a 12-month average of 35% of all mortgages.
 
 
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A quarter of borrowers now choosing fixed-rate loans: Mortgage Choice

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The government could bring back the first-home owner’s boost scheme as early as this year to help stimulate the property market and win 2013 election votes, according to Aussie Home Loans founder John Symond.
Symond says it is generally true that “in any run-up to an election the government throws money around”.
“Probably my cynical self says six to 12 months ahead of the next election, it would not surprise me that the government might stimulate housing by helping first-home buyers and they may possibly introduce a bonus or a boost to the first-home owner’s grant,” he says.
The earliest date for the next federal election is August 3, 2013 (unless the government calls an early election) and an election must be held by November 30, 2013, meaning if Symond’s prediction proves accurate the boost to the first-home owner’s scheme could return in the latter half of the year.
The original scheme ran from October 2008 to December 2009 with the aim of “cushion[ing] the Australian economy from the worst impacts” of the GFC.
Up until September 30, 2009, it provided first-time buyers with an extra $7,000 to purchase an existing home and $14,000 if they purchased a newly constructed home or built a new home. The scheme operated in tandem with the $7,000 on offer as part of the first-home owner’s grant, which is still in effect.
Between October 2009 and December 2009, the first-home owner’s booost was halved, with $3,500 available for the purchase of established homes and $7,000 for the purchase of new homes.
Symond says while no one can be certain of the boost returning, he tips that “come federal election time there might be some handout for first-home buyers”.
Regardless of that, he says the market is looking good for first-home buyers, with “all the ducks lining up – lower price values, lower interest rates, makes it easier to save and easier to get into home ownership”.
“The environment for first home owners going forward is looking pretty good,” Symond says.
Symond plans to grow broker numbers by 25% in 2012 to more than 1,000 after posting strong 2011 results with profits soaring to $52 million.
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First-home owner's boost could return this year: John Symond

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Less than a month remains for Queenslanders to take advantage of the state government’s $10,000 handout for those buying or building a new home.
Home buyers and investors wanting to take advantage of the incentive need to have entered into a contract to purchase or build a new home by January 31 – although they have until May 31 to submit their application to the Queensland Office of State Revenue.
The Building Boost was launched by the Queensland government on August 1 with the aim of the “igniting” new home construction in the state following the January 2010 floods but has to date failed to generate much momentum, with less than 10% of the $140 million allocated to the scheme taken up by buyers.
At the start of December, Stockland CEO Matthew Quinn highlighted the poor take-up of the grant, with just 1,200 applications lodged, equating to $12 million in handouts.
However, Stockland Residential CEO Mark Hunter says the Building Boost is driving enquiries “if you have right product”. The boost helped push up new home sales by 16% in the first two months of the scheme (August and September), albeit off a low base.
Stockland has heavily promoted the Building Boost in its new community developments in <state><place>Queensland</place></state> and has been lobbying the government to extend the scheme beyond January 31.
A spokesperson for the company told Property Observer: “Queenslanders needed this boost and they need it extended. It is getting people into homes faster and creating construction jobs across the state. We’ve responded with some great offers like those at <place><placename>North</placename><placetype>Lakes</placetype></place>, where house-and-land packages are starting at just $268,000.
“Like many others in the industry, we’re urging the Queensland Treasurer to consider an extension beyond January 31.”
However with no indication that the scheme will be extended, Master Builders Australia is urging buyers to act soon to take advantage of the $10,00o incentive.
“To get to a stage where a firm price contract can be prepared, there is a lot that has to happen, and this process can take a number of weeks,” says Master Builders executive director Graham Cuthbert.
Cuthbert says home buyers should have been talking to builders before Christmas.
“To date, the boost has not had a significant impact on the building industry and, while there are several issues at play, we believe many people are leaving things to the new year, with the mistaken belief that starting the process early in January will give them time to get a contract signed by the deadline,” he says.
“Consumer confidence is certainly another issue that is impacting the number of applications for the boost, and we have recently learnt of an emerging problem that is seeing low valuations causing some new home contracts to crash,” he says.
According to official ABS figures for October, the sunshine state recorded a 19.5% drop in building approvals for the month, leading a 10.7% nationwide slump.
The state recorded a strong improvement in building approvals in the first month of scheme with the total number of dwelling unit approvals rising from 1,900 in July to more than 2,800 in August. However these numbers slumped to just under 2,300 in September and to just over 1,800 in October due to a combination of high interest rates and poor consumer confidence.
Putting those figures into perspective, dwelling finance approvals just for first-home buyers in <state><place>Queensland</place></state> reached their peak of 4,000 in March 2009 following the introduction of the far more successful First Home Owners Boost in October 2008.
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Less than a month remains for Queensland's underused Building Boost scheme

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Property developer Stockland has continued last year’s trend of developers offering incentives to entice new home buyers. 
The developer is also tapping into concerns over the impact of the carbon tax on energy bills in 2012 by offering buyers of land and selected house-and-land packages a $6,000 Visa Energy Card to help pay their energy bills for up to three years. 
The “Power to Move” campaign runs from January 7 to February 19. The eight NSW Stockland residential communities participating in the offer are Waterside at <placename>Penrith</placename><placetype>Lakes</placetype>; Glenmore Ridge in Western Sydney; Darcy’s Peak and McKeachie’s Run in the Maitland and Hunter region; <placename>Murrays</placename><placetype>Beach</placetype> in <placetype>Lake</placetype><placename>Macquarie</placename>; McCauley’s Beach and the newly launched Brooks Reach in the Illawarra and Bayswood on the <place><placename>NSW</placename><placename>South</placename><placetype>Coast</placetype></place>. 
Last year developers attempted to entice new buyers with <a href="https://www.propertyobserver.com.au/land/buying-a-house-and-land-package-10-key-dates-to-keep-in-mind/2011112352508" target="_blank">offers of furniture vouchers, free luxury carpets and appliances and discounted lots</a> to name just a few. 
<a target="_blank" href="https://www.propertyobserver.com.au/residential/home-building-still-in-the-doldrums-but-renos-picking-up-abs/2011112352503">Master Builders Australia</a> is pleading for government intervention to kick-start new home building, as new home sales numbers dwindle.
Matthew Mears, Stockland’s general manager for residential development in NSW, says the offer recognises the burden of the household energy bill. 
“The great thing is that buyers into our residential communities will benefit with Stockland paying their energy bills for up to three years. With a sensible approach to energy consumption, the opportunity exists to stretch that bonus even further,” he says. 
In addition to the $6,000 bonus, buyers will also receive bonus energy-efficient builder upgrades including solar or gas hot water, an energy-saving dishwasher and energy-efficient lighting that will help reduce energy bills further. 
Stockland is also promoting the idea that buying a new home is more cost-efficient than owning an older established home. 
Stockland compared the living costs of a three-bedroom and a four-bedroom home built in 2011 with houses of the same configurations built in 1981. 
It found new homes generated more cost savings from reduced heating and cooling costs, etter use of natural light and savings from built-in energy-efficient appliances. 
According to Stockland research, running a newly built four-bedroom, two-bathroom home with a two-car garage versus a comparable house 30 years older results in a savings of $2,197 in New South Wales, $1,749 in Western Australia and $1,574 in Victoria. 
“The figures show that across the country, new homes clearly offer lower ongoing running costs, when compared to homes from 30 years ago,” says Ben Allen, general manager of sustainable communities for Stockland.
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Stockland seeking to power up new home market by paying buyers' energy bills

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<city><place>Melbourne</place></city> inner-city apartments priced under $750,000 are forecast to be the city’s best-performing asset class in 2012, according to CBRE.
“Well-located properties with good access to public transport and amenities continue to be the most resilient in the current conditions. Properties in the sub-$750,000 price bracket continue to perform well with demand levels remaining quite resilient,” says CBRE director of residential valuations Jarrod Frazer.
According to realestate.com.au, there are about 1,600 inner-city apartments for sale under $750,000.
Among the new inner-city developments, Lend Lease is selling one-bedroom apartments for about $465,000 in its <a href="https://www.propertyobserver.com.au/developments/lend-lease-sells-over-100-units-in-convesso-concavo-docklands-development-in-a-month/2011120552677" target="_blank">Convesso Concavo project in Docklands</a> while two-bedroom apartments in Pan Urban’s Lacrosse project (also in Docklands) are priced around the $530,000 mark.
For advice on investing off the plan, <a href="http://propertyobserver.com.au/ebooks/free-ebook-10-tips-for-investing-off-the-plan" target="_blank">download our free eBook</a>.
Outside of the CBD, the unit market is expected to continue to perform in line with the overall subdued <city><place>Melbourne</place></city> residential market.
<img src="/images/stories/cbrejan5.gif">
In its November update, RP Data-Rismark calculated that <city><place>Melbourne</place></city> unit prices increased 3.1% in November to help ease an overall decline during which unit prices fell 3.3% over the past 12 months.
In comparison <city><place>Melbourne</place></city> house prices continued to slide, falling by 0.4% in November to be down 6.3% year on year.
Even if prices don’t appreciate in 2012, Melbourne investors can still expect some level of return in the form of rising rents due to a low overall vacancy rate of just 2.2% (well below market equilibrium of 3%), with rental yields hovering around 4.5%.
“Residential vacancy rates, although increasing slightly, are still relatively low at 2.2%.  This has driven rental growth with yields for investors continuing to see some upward pressure,” says CBRE.
According to RP Data-Rismark, <city><place>Melbourne</place></city> units are returning median yields of 4.3% while houses are returning 3.7% – the lowest across all capital cities.
Reilly says a prolonged period of low vacancy could result in renewed interest from investors as upward pressure is placed on rents.
“The market remains soft across all sectors, with the current low levels of demand ensuring negotiating strength is clearly in favour of buyers.  As has been the case recently, strong selling features are crucial to completing sales, with proximity to public transport, schools and employment very important.  Properties that lack these key features are seeing selling times extended,” he says.
Investors might need to venture outside of <city>Melbourne</city> into country <state><place>Victoria</place></state> for better investment prospects.
According to Residex, country <state><place>Victoria</place></state> unit values recorded increases of 3.5% over the 12 months to the September quarter 2011 to reach a median of $260,000.
The average rent for units also increased by 15.2% over the year, which drove strong yield growth to 5.3% and a median asking rent $265 per week for rural and regional <state><place>Victoria</place></state> property.
Overall though CBRE global research and consulting manager Sam Reilly expects residential market conditions in <state><place>Victoria</place></state> to remain subdued in the short term until a sustained period of economic stability and improved buyer confidence returns.
“The level of available stock remains low as vendors avoid taking properties to market where possible. While demand has eased the lack of quality stock entering the market is also affecting sales volume,” he says.
According to CBRE, the prestige sector is under most pressure at present, with longer selling periods and adjusted prices now becoming evident in most areas with prestige real estate valued at more than $2 million.  In order to make a sale, vendors must meet the market.
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Inner-Melbourne units under $750,000 best prospects for investors: CBRE

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