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“Hysteria” about Australian housing being overvalued is spooking institutional investors from investing in much needed new housing, says Rismark economist Christopher Joye.
Joye says contrary to what’s being said by some in the media, housing in Australia is not overvalued.
Delivering a presentation titled “Australia’s Broken Housing Model” at the recent HIA Housing Summit which highlighted a serious undersupply of new homes to meet population growth, he said current housing valuations could be explained by market fundamentals with “dire predictions never remotely coming to pass”.
Joye pointed out that  peak-to-trough fall in housing values during the GFC were less than 5% and provided the following graph to show historical valuations of property.
<img src="/images/stories/2013/larry_uploads/chris_joye_YBR.jpg" width="470" height="301" alt="chris_joye_YBR">
“Since 2003 house prices have tracked disposable incomes…as an asset-class, housing has been a very safe store of wealth,” said Joye.
He said the housing market had significantly outperformed equities and bonds and the current market cycle should be investment-friendly.
“We should be seeing a surge in new supply,” said Joye, but instead “institutional capital has certainly been ‘spooked’ by housing hysteria”.
Joye highlighted that Australia has a population planning crisis and equally a serious housing/infrastructure crisis.
“Australia needs to build seven million new homes in next 37 years to accommodate 13.7 million extra people by 2050.
“This equates to around 200,000 new homes per year, but since 2000 only 156,000 new dwellings have been approved on average per annum."
To address this chronic undersupply of new homes, Joye focused on property taxes.
“Housing is one of the most heavily taxed sectors of the Australian economy, both in absolute and relative terms,” he said, contributing 12% of total govt tax revenue and 45% of total state/local govt revenue.
New housing, he said adds 1.2% of value to the economy; but accounts for 2.8% of total government tax revenues.
According to Joye, tax reform could drive a 30% to 40% affordability gain.
“We need to work out how to more equitably redistribute the national tax/infrastructure burden,” he says, pointing to guidance in the Henry Review including:
<ul>
<li>Reform (land) taxes that discourage institutional capital</li>
<li>Replace inefficient transaction taxes with immobile taxes</li>
<li>Relax zoning restrictions/allow higher densities</li>
<li>Speed up approval decisions through State govt direction</li>
<li>Overcomes NIMBY (not in my bank yard) conflicts that plague councils</li>
</ul>
Furthermore, he said an obvious savings would be to convert first-home owner grant into an interest-free loan due on sale, which would save  around $1 billion per annum.
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Australian housing is not overvalued but “dire predictions” spooking new housing investors: Christopher Joye

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Borrowers who don’t have a 20% deposit will be forced to pay higher lenders mortgage insurance (LMI) premiums following the two dominant providers – Genworth and QBE LMI – both increasing their premiums in the last 12 months. 
This is despite Australia having among the lowest mortgage default rates in the world. 
Fitch reported that mortgage delinquencies rose from 1.57% in the December 2011 quarter to 1.6% in the first quarter of 2012 – equating to about $35 million worth of loans turning bad. 
LMI is a one-off premium that protects lenders if a borrower defaults on their home loan - if the property sells at a loss, the lender can make a claim against its LMI provider for the shortfall. 
LMI can added thousands of dollars to the cost of buying a home and is particularly an issue for first-home buyers given the 20% deposit requirement. 
Calculations using the Genworth LMI premium estimator show that a first-home buyer borrowing 95% on a house valued at $500,000 (so a $25,000 deposit) would be required to pay an LMI premium of close to $16,000 on a 30 year variable-rate loan. 
A 10% deposit would reduce the premium to just under $8,000. 
A further issue is a lack of portability – if borrowers refinance with a new lenders and they still don’t have a 20% deposit, LMI must be paid again. 
Mortgage broker and director of Investors Choice Mortgages, Jane Slack-Smith, says she would expect LMI premiums to increase if there was an increase in delinquent loans “however it is not something I have seen in my business and not something that I have heard either LMI provider discuss in their updates”. 
Slack-Smith suggests that with interest rates so low, potentially the LMI providers are expecting issues for today’s buyer in the future when rates return to the long term norm of around 7.5% - “a way of hedging the future risk”. 
QBE LMI chief executive Jenny Boddington told Property Observer it increased base premiums on its core LMI products as of July 1 this year.
"We regularly review our pricing to ensure stable and reliable provision of our lenders’ mortgage insurance across the economic cycles,” she says.
Boddington says changes to premiums in recent years have mainly been driven by increased regulatory capital requirements, continuing subdued returns on our investment portfolio and slight increases in claims.
A spokesperson for Genworth confirmed that premiums have increased in the Australian market over the past twelve months.
“As a prudent insurance business, Genworth regularly reviews all elements associated with our product offering.
“This review takes into consideration the current market environment and the costs associated with providing our product and service delivery, including the cost of capital, portfolio performance and changing investment yields.
“Each individual LMI premium is calculated on the basis of a wide range of factors related to the size of the borrower’s deposit, the loan purpose, and the property. As such, pricing changes are based on a detailed analysis of each risk factor.”
Updates sent to brokers by lenders confirm the increases as well as changes to some products and offerings. 
An email sent to mortgage brokers by the Commonwealth Bank’ in June tells them that LMI will increase for “home/investment home loan and line of credit applications created from Sunday 2 June 2013”. 
“We are making these changes in line with pricing changes from our preferred LMI provider, Genworth,” says the Commonwealth Bank’s head of third party banking Kathy Cummings. 
An email sent to brokers by Suncorp says QBE LMI will increase base premium on three of its products - “lmiHOME™, lmiINVEST™ and lmiFIRST HOME™”. 
It’s not all bad news.
The Suncorp note also says QBE has of July 1 extended the eligibility criteria for its lmiFIRST HOME product - a discounted lenders mortgage insurance offering designed for first home buyers - to individuals who are purchasing or building a residential property for owner-occupation and who also qualify for the first-home owners grant and FHB stamp duty concessions.
The move is presumably to take in those FHBs who have qualified for the bigger state grants now available for new home purchases.
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More pain for first-home buyers as Genworth and QBE LMI push up mortgage insurance premiums

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Solid interest remains to lease high quality industrial facilities aligned to major road networks and port infrastructure, says Dexus head of office and industrial, Kevin George.
The assessment of industrial leasing demand was made as the property group released an update on recent leasing activity within the $2.5 billion Dexus-managed industrial portfolio.
“Our leasing activity in recent months has been focused on established markets with existing and new tenants.
“While Australian industrial leasing markets appear to have paused in terms of the strength in demand, solid interest remains for high quality facilities aligned to major road networks and port infrastructure,” says George.
Key recent leasing achievements include a 10 year lease over 10,605 square metres Garigal Road, Belrose, commencing 1 January 2014, considered a "significant result considering the difficult conditions in the Sydney north shore industrial market".
Other recent deals include:
<ul>
<li>At Knoxfield Industrial Estate terms were agreed with Toll Transport to extend its lease over 36,123 square metres until July 2015</li>
<li>At Axxess Corporate Park, Melbourne Australian Postal Corporation exercised its option for a fiveyear extension over 4,354 square metres commencing September 2013. This resulted in a total of 9,911 square metres being leased at this property across 13 transactions over the three months to 30 June 2013</li>
<li>At 10-16 South Street, Rydalmere lease terms were agreed with two tenants totalling 8,360 square metres, including Payless Shoes occupying 5,294 square metres for 10 years, Deluxe Wood occupying 1,498 square metres for 4.4 years and Renz Australia occupying 1,568 square metres for four years. This leasing activity results in the occupancy for this property increasing to 93.1% and a WALE improving to 4.1 years</li>
<li>At Quarry at Greystanes Wilson and Bradley signed a five-year lease over 3,976 square metres at 3 Basalt Road and leveraging on DEXUS’s long-term relationship with the Wesfarmers Group, Bunnings was secured for a one year term over 12,490 square metres at 2-6 Basalt Road. This leasing activity has resulted in 100% occupancy across all competed developments at Quarry at Greystanes, which comprises over 113,000 square metres</li>
<li>At 12 Frederick Street, St Leonards two existing tenants have renewed their leases. Australian Postal Corporation at Unit 9 has extended its term by three years over 1,914 square metres and Metal Manufacturers at Unit C has extended its term for five years across 1,304 square metres</li>
</ul>
“Industrial tenant demand has been driven mainly by logistic providers benefiting from companies outsourcing their supply chains, as well as major retailers as they continue to consolidate their multiple warehouses," says Mark Cuddy, regional general manager of office and industrial. “The recent leasing achievements demonstrate our capabilities to actively manage the industrial portfolio, build on existing tenant relationships and improve occupancy.” 
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“Solid” leasing interest for high quality industrial property: Dexus

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The recovery in the new building sector slipped in the March quarter.
The total number of dwelling units commenced fell 5.5% to 38,702 dwellings in the March quarter following a rise of 4.1% in the December quarter, according to new ABS figures.
Construction of new private sector houses fell 3% to 22,343 commencements while unit commencements fell 9.5% to 14,778 dwellings.
However both are up on the same quarter by 4.6% for houses and 21.3% for units.
On a dollar value basis, the seasonally adjusted estimate of new residential building work done fell 0.6% to $10.275 billion while unit construction work fell 0.1% to $3.769 billion.
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New dwelling commencements fell 5.5% in March quarter: ABS

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The banking sector has hit back at claims by building societies and credit unions that they offer significantly higher variable mortgage rates.
A campaign by the Customer Owned Banking Association claims that the average standard variable rate for customer owned banking institutions is 5.75%, which is 0.42% lower than the major banks.
This, it says, will save home loan customers around $64 a month or $19,220 over the life of a $250,000 loan.
In response, Australians Bankers’ Association (ABA) chief executive Steven Munchenberg said very few people pay the advertised standard variable rate, with most bank customers paying less.
In a blog post, he quoted ABA research showing that when mortgage discounts are factored in, bank customers pay on average a variable rate of 5.59% below the 5.62% offered by building societies and credit unions once their discounts are factored in.
This was based on the ABA analysing the full range of actual advertised rates for 518 variable home loan products offered by banks and others to customers, based on Canstar’s data for June 2013.
“The results suggest there is very little difference between banks and CUBS (credit unions and building societies,” writes Munchenberg.
“Of course, the CUBS draw comparison with just the major banks, but even here, the major banks’ average home loan interest rate, including their sub-brands, is 5.59%, below the average for the CUBS.”
He also points out that the analysis shows that one credit union has the lowest rate on offer, at 4.29% (without naming the institution) but that another unnamed credit union has the highest rate, at 7.45%.
“The message here is a simple one.  There’s no black and white ‘banks bad, credit unions good’.
“There are, however, more than 500 different home loan products from over 100 different lenders.
“If a customer feels they are paying too much, or they want a better deal, they should talk to their bank or get onto one of the comparison websites, like Canstar (www.canstar.com.au), and shop around. 
“You can also negotiate with a lender to see if they’ll offer you a discounted rate.  The best deal might be with a bank, a credit union, a building society or some other lender, but look at the actual rates, not sweeping generalisations,” he says.
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Mortgage wars: Banks claim lower discounted rates than building societies and credit unions 

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The expanding Zarraffa’s Coffee chain has signed a 10 year lease for a new coffee shop at 175 Ferry Road in the recently refurbished Southport Park Village in Southport on the Gold Coast.
Industry sources indicated the rental was approximately $675 square metres gross for the 160 square metre site which includes external seating and a drive through area.
The deal, which includes two, five-year renewal options, was negotiated by CBRE’s retail nanager Kevin Ramsey.
The new store is located on a transport corridor, directly across from The Southport School, at 175 Ferry Road.
Zarraffa’s Coffee founder and CEO, Kenton Campbell selected the area specifically due to its strategic location and accessibility. 
“Site selection is critical to the success of our drive thru operations and we seek to ensure all stores are positioned in accessible locations that enjoy close proximity to both residential areas and major thoroughfares,” he says. 
Zarrafa’s operates an existing Ferry Rd store, opened in 2009 located on the corner of Cotlew Street and Ferry Road. It will continue to operate in tandem with the new site to service commuters and local residents in the vicinity. 
Ramsey says<a href="https://www.realcommercial.com.au/property-retail-qld-southport-500493627" target="_blank"> Southport Park Village’</a>s location - close to a number of schools and exposure to thousands of vehicles has driven significant tenant interest. 
He says negotiations have commenced with a dental clinic, gym and beauty services tenant.
Tenancies at Southport Park Village range in size from 35 square metres to over 250 square metres while rents range from $500 to $675 per square metre for retail and $300 to $400 per square metre for commercial office tenancies.
Zarraffa's has around 50 stores across South East Queensland.
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Zarraffa’s Coffee signs 10 year Gold Coast lease

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Investors with around $400,000 to spend may be able to acquire a Bankstown strata office with the potential to deliver a return in excess of 7%.
The 103 square metre office is in the NAB Building at 410 Chapel Road in the heart of the Bankstown CBD.
It is listed for sale at $399,000 plus GST having previously been advertised at $428,000 in September last year - a discount of around 7%.
It is for sale as vacant possession.
It has been listed for rent at $29,000 per annum net, which equates to a yield of around 7.2%.
Bankstown is around 20 kilometres south west of Sydney and part of the Greater Western Sydney growth corridor.
It is being sold by <a target="_parent" href="https://commercial.net.au/listing/details.aspx?listingID=1974926">Chris Wade of the Commercial Property Group.</a>
It includes a reception area, boardroom, four offices and server room plus self contained kitchen facilities and two basement car spaces with direct lift access.
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Reduced Bankstown office offers 7% plus yield potential

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The Pace Development Group, which is building the Evo apartment project in Parkville, have instructed Gadens Lawyers to act on its behalf, in order to seek further details from Linking Melbourne Authority with respect to how the East West Link may affect the development.
Pace is due meet with Linking Melbourne Authority tomorrow to discuss the impact of the East West Link.
"At this stage we are unable to comment with any certainty given that the East West Link is at a preliminary stage," said a spokesperson for Pace.
To our knowledge, funding has not been provided to complete the delivery of the project and prioritization of this project does not appear to be high in the recently released National Infrastructure Plan (June 2013) prepared by Infrastructure Australia."
An East West Link video shows Evo apartments completely surrounded by highways with Linking Melbourne Authority chief executive Ken Mathers telling The Age the tollway would probably rise to the level of the fifth floor of the development.
<img src="/images/stories/2013/larry_uploads/evo_east_west_link.jpg" width="470" height="211" alt="evo_east_west_link">
At the same time Australand has confirmed that it does not anticipate any unexpected impact on its Jardin Parkville apartment development following the release of plans for stage one of the Melbourne East West Link – the six kilometre roadway and tunnel which will link the Eastern Freeway to CityLink - with a number of construction sites earmarked for the suburb.
An article in the Melbourne Leader published earlier this week, which ran with the headline "Residents and developers look for certainty over East West toll road" included a reference that Australand state manager of residential properties ­Robert Pradolin suggested that "he did not know if the government would acquire Australand property".
<h1></h1>
Australand's publicists were unable to shed any light on the suggestion about possible government acquisition of Australand property when contacted by Property Observer.
There has been no statement issued by Australand, but Robert Pradolin has since contacted Property Observer to confirm that the project will not be impacted in any unexpected way.
<a target="_blank" href="https://www.propertyobserver.com.au/news/monday-july-1-jardin-parkville-the-latest-to-launch-in-the-parkville-master-planned-community/2013062862793">Jardin Parkville at Cade Way </a>is the latest stage of the apartment precinct of the master-planned community within Parkville Garden.
He repeated comments to the Melbourne Leader that the East West link would actually improve transport options.
"It will mean easy access to both northern and southern suburbs."
But, another apartment project that will be seriously impacted is the soon to be completed Evo Apartments featuring 175 apartments over seven levels developed by the Pace Development Group at 107-115 Manningham Street (pictured above).
It is directly across from the Ross Straw Field, which will be occupied for construction of the link and tunnel.
{yoogallery src=[images/stories/2013/07/july1parkville]}
Both developments are being promoted as offering close proximity to Royal Park, part of which will become a freeway connecting City Link from the south to the new tunnel and the Eastern Freeway.
“An Evo lifestyle is having Melbourne’s largest area of open space, Royal Park, beckoning from the front door – where parklands, reserves and tree-lined streets offer the ideal environment for relaxation and rejuvenation,” says the Evo marketing website.
As part of the development of the 18 kilometre cross-city road connection extending across Melbourne from the Eastern Freeway to the Western Ring Road, tunnel boring is expected to begin in Royal Park near the Up?eld railway line, which will also be established as place for the storage of materials and equipment and construction personnel parking.
Ross Straw Field would also be occupied for construction while project maps prepared by Linking Melbourne Authority show that Elliot Avenue, in the heart of Royal Park will provide an “important access point to and from the tunnels”.
“The entry and exit points remain below ground level until they meet with the existing road surface, minimising the footprint on Royal Park,” the project map notes.
While upset residents in established homes caught up in the path of the new tunnel have been promised they will receive compensation for their homes at market value as well as have their stamp duty and legal fees paid, those who bought off the plan in Evo will receive no compensation from the Victorian government for any loss in value or the inconvenience caused by construction works, noise, disruption and any loss of park-promised lifestyle.
Victorian premier Denis Napthine says the state government is committed to delivering the project sustainably, “which will mean protecting and restoring any parkland affected by the project”.
“A lot of work has been undertaken already, including geotechnical drilling, flora and fauna studies and extensive ongoing community consultation to inform the best design for the project,” he says.
The design identifies 118 properties that may be directly affected by surface construction that is required for the project, with these numbers subject to change as the project develops.
This includes 92 residential and 26 commercial properties.
“We recognise that this is a very sensitive process and we have made every effort to contact residents before publicly releasing the detailed design. We will be supporting landowners every step of the way by providing them with advice relating to their individual circumstances,” said Victorian transport minister Terry Mulder.
“Should a property be required for construction of the project, the acquisition and compensation process provides a fair price, based on market value.
“Compensation will also include claims for reasonable costs such as stamp duty, registrations fees and conveyancing costs incurred in purchasing a replacement property, up to the value of the acquired property.”
An earlier version of the story incorrectly suggested that there may have been doubt over Australand's Jardin Parkville apartment development proceeding.
 
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East-West link casts no shadow over Australand's Parkville project progress but Evo buyers caught in the middle

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CBD office vacancy rates continue to rise with the greater availability of space putting pressure on yields.
Jones Lang LaSalle recorded negative net absorption of -191,900 square metres in the June quarter and a rise in the national CBD office market vacancy rate to 10.9%.
The graph below also shows the impact of vacant sub-leased space on the rising vacancy rate.
<img src="/images/stories/2013/larry_uploads/JLL_office_vacancy_rate.jpg" width="470" height="314" alt="JLL_office_vacancy_rate">
Jones Lang LaSalle reports that five of the six CBD office markets are recording double digit vacancy rates as of June 2013.
Brisbane (14.3%), Adelaide (12.7%) and Canberra (11.6%) recorded higher vacancy over the quarter, while Sydney (10.2%) and Melbourne (10.0%) moved above 10% for the first time in the current cycle.
Perth (7.9%) is the only CBD office market now recording vacancy below 10%. 
In line with a rise in vacancies, yields are compressing:
<img src="/images/stories/2013/larry_uploads/JLL_office_vacancy_rate2.jpg" width="470" height="295" alt="JLL_office_vacancy_rate2">
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National CBD office vacancy rates rises to 10.9%: Chart of the week

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Uncertainty has been cast over the RBA cutting the cash rate on August 6 follows publication of the <a target="_blank" href="https://www.propertyobserver.com.au/residential/gradual-improvement-in-housing-conditions-as-dwelling-prices-rise-rba-july-minutes/2013071663333?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=newsplus">minutes of the July monetary policy meeting</a>, despite three of the four big banks pencilling in a 25 basis point cut next month.
The Australian dollar's depreciation, given added weight in the minutes, is expected to push up inflation and assist trade-exposed non-mining sectors making an August rate cut less likely.
Interest rate futures markets have reduced the probability of a rate cut from around 65% to 50% following the publication of the minutes, and in particurlar the final paragraph which mentions a higher inflation outlook following depreciation of the dollar.
But complicating the picture, the Australian dollar has risen strongly since publication of the minutes yesterday and is currently up more than 1 cent to 92.5 US cents.
HSBC chief economist Paul Bloxham says the currency and the RBA's interest rate outlook are “intertwined”.
"Slower than expected rebalancing may see the need for further policy stimulus from the RBA, but further weakness in the Australian dollar could obviate the need for further cuts," Bloxham says.
The major banks have played down, to an extent, the impact of the Australian dollar with Westpac, the Commonwealth Bank and NAB all pencilling in a rate cut next month.
ANZ is tipping November as the next likely movement down to a cash rate of 2.5%.
The Westpac economics team, led by chief economist Bill Evans, believes that the language being used in the minutes “is more about justifying the decision not to move in July despite further deterioration in the real economy rather than specifically providing guidance for future meetings”.
“The minutes show the exchange rate adjustment was a key factor in the decision and tend to confirm our view that the currency decline made July tactically unattractive for a rate move.
“A more downbeat assessment of domestic economic conditions in the July minutes and weak data releases since the meeting suggest the case for further easing to support demand has been strengthened,” says Westpac.
Westpac expects two further rate cuts – one in the December quarter and one in the March quarter - to take the cash rate to an expected terminal point of 2% in the current easing cycle.
Commonwealth Bank economist John Peters notes that the bias towards a rate cut is “somewhat more muted” than earlier in the year following the slide in the Australian dollar, but says that nothing in the minutes “makes us uncomfortable with our view that another RBA cash rate cut of 0.25% is coming most probably in August, after the second quarter CPI is released on July 24”.
NAB made its case for an August rate cut <a target="_blank" href="/news">last week</a> – bringing forward an earlier November decision after the bank's business conditions survey hit a four-year low.
The only outlier is ANZ with economist Justin Fabo highlighting expectations that a lower Australian dollar will stay the RBA’s hand with it appearing “relatively content to wait at least a little longer to gauge the effect of accommodative financial conditions on economic activity.
“Importantly, the RBA appears confident that the Australian dollar depreciation will be sustained and that the currency will fall further over time (but this is expected to be associated with lower terms of trade and weaker mining investment which will drag on growth),” he says.
“The minutes noted that the effect of lower interest rates was “apparent across a range of indicators” – mainly associated with the housing market to date – and that this process had further to run.
“Hence, even a low second quarter core CPI print of 0.3% to 0.4% quarter-on-quarter on 25 July is unlikely to be enough to tip the Bank into easing policy in early August.
“That said, near-term rates decisions are likely to be keenly debated as there appears to be little risk from easing policy modestly further.
“Indeed, it might help nudge the Australian dollar a little lower which would be beneficial in our view and seemingly from the RBA’s view.
“The (unknown) timing of the federal election complicates the outlook for monetary policy as the Bank will want to steer clear of the election (and can do so because it is not clearly “behind the curve” in terms of its policy settings).
“Overall, we maintain the view that the cash rate is still likely to be lowered at least modestly further later this year (we have a 25 basis point cut pencilled in for November)," says Fabo.
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Uncertainty over August rate cut despite NAB, Westpac and Commonwealth Bank confidence

Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

Larry Schlesinger

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