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Astute property buyers should be looking to buy now rather than wait for the market “herd” to change its outlook, prominent agent John McGrath has argued in his latest blog post.
Quoting investment guru Warren Buffett’s aphorism “Be fearful when others are greedy. Be greedy when others are fearful”, the McGrath Real Estate CEO urges buyers take “the umbrella view” and buy while the rest of the market is holding off.
“If you’re looking to purchase for the long term, which I always recommend, then a 2.1% decline in prices in the March quarter of 2011 is not going to matter in 2021 when property prices may have, once again, doubled,” he wrote on switzer.com.au.
“If you wait for the herd, there’s one thing I can guarantee. When the herd starts buying again, prices will go up, and you’ll be kicking yourself you didn’t grab this current window of opportunity,” he says.
McGrath also argues that current market weakness – 30% more properties available for sale across Australia than at this time last year, according to RP Data – will not prevail.
“I can tell you with confidence that the weakness we are seeing now is not the beginning of a downward stretch. The fundamentals of our property market are still very good, but right now, we have a little uncertainty going on.
“This relates to volatile global economies especially in Europe, uncertainty relating to interest rates, a more conservative approach to debt and recent natural disasters. From a property market perspective, these are circumstances that are temporary and will resolve themselves,” he says.
McGrath concludes by saying that overall, the market is still heading up and that the market fundamentals (strong population growth, a massive undersupply, increasing rents and a stable economy) will keep property prices strong in the long term.
In previous blogs, McGrath has argued that the climate remains positive for investors.
“Property prices are slightly softer and rental yields just keep on rising,” he says ahead of the winter season.
He lists the top 10 municipalities for rental growth over the year to March Quarter 2011 as:
<ul>
<li>Woollahra, Sydney – Houses – 22.2% to $1100 per week </li>
<li>Nedlands, Perth – Houses – 20.4% to $825 per week </li>
<li>Burwood, Sydney – Houses – 19.6% to $550 per week </li>
<li>Sorell, Hobart – Apartments – 18.2% to $260 per week </li>
<li>Claremont, Perth – Houses – 17.2% to $850 per week </li>
<li>Cottesloe, Perth – Houses – 16.7% to $875 per week </li>
<li>East Fremantle, Perth – Houses – 16.4% to $675 per week </li>
<li>Ashfield, Sydney – Houses – 15.6% to $520 per week </li>
<li>North Sydney, Sydney – Houses – 15.3% to $828 per week </li>
<li>Lane Cove, Sydney – Apartments – 15% to $460 per week</li>
</ul>
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lschlesinger-FZcF9M3vE6

Property buyers should avoid the herd, says John McGrath

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Further evidence of the tough trading conditions for the real-estate sector has been revealed in the 75% jump in the number of construction businesses whose risk assessment was downgraded during the March quarter 2011.
One in seven (14%) construction firms was downgraded in the March 2011 quarter, compared with 8% a year ago, according to the latest Dun &amp; Bradstreet Corporate Health Watch report.
Nearly one in 10 (9%) businesses in the category of real estate, finance and insurance suffered a similar fate in the March 2011 quarter. In the March 2010 quarter just 3% of businesses in this category were downgraded into riskier categories.
Dun &amp; Bradstreet is unable to provide a breakdown of these figures.
In absolute terms 20,185 firms out of a total of 229,649 finance, real-estate and insurance companies on the Dun and Bradstreet suffered ratings downgrades, compared with 6,726 (out of 222,792) that experienced deteriorating risk scores in the first three months of 2010.
<a href="/images/stories/dunn.jpg" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/dunnthumb.jpg"></a>
Source: Dun &amp; Bradstreet
The figures come on the back of Real Estate Institute of Australia president David Airey claiming in May that up to 10,000 real-estate agents have quit the industry in the past year, reducing total numbers from 60,000 to 50,000.
Businesses operating in the Northern Territory, Victoria, South Australia and Tasmania recorded the worst deterioration of risk scores over the past 12 months, with the Northern Territory the country’s most precarious commercial market during the March quarter 2011, according to Dun &amp; Bradstreet.
Downgrades in Western Australian rose only minimally since the first quarter of 2010, reflecting the robust outlook for that state.
Professionals CEO David Hobbs, who manages 66 offices in WA and the Northern Territory, calls the market the “toughest it has been in 20 years”.
“There are fewer investors in the market, fewer first-home buyers and difficulties in obtaining financing from lenders,” he tells Property Observer.
He estimates that the number of WA estate agents has decreased from about 11,500 three years ago to about 7,500 now.
In total, more than 145,000 businesses have suffered a risk downgrade in the March quarter 2011. Businesses faced challenges from rising payment terms and a weaker than expected outlook for sales and profits, which put pressure on cash flow.
The risk outlook is not likely to improve in the June quarter, with interim results revealing that more than 62,000 firms were downgraded in April (29,100) and May (32,656).
Dun &amp; Bradstreet CEO Christine Christian says “almost exclusively business failure is a result of poor credit risk and negative cash flow.”
“These factors are the primary cause of insolvency and can occur at any time regardless of the macroeconomic outlook,” she says. “It is a reminder of the need for firms to pay attention to the fundamentals particularly, at times when rapid growth places pressure on a firm’s cash flow.”
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Construction sector, real estate in the doldrums: Dun & Bradstreet

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Perth apartments are good medium- to long-term investment opportunities, according to the Property Observer’s mid-year Property Clock.
Property analysts place the market at 4.30 on the clock, meaning it is not far off the bottom of the market and just behind the Brisbane market, which is still recovering from devastation from floods earlier this year.
The two biggest markets – Sydney and Melbourne – have both passed their peaks and are heading into a decline.
Hotspotting.com.au director Terry Ryder says its “danger time” for investors in the Melbourne unit market, as an oversupply of stock looms.
The outlook is also rather gloomy for Adelaide, where unit prices are cooling and more pain is predicted for investors.
Clocking in at two o’clock on the property clock, Adelaide is further along the property cycle than Sydney or Melbourne, suggesting a recovery in prices could come along sooner.
As for the smaller capital city markets, the situation appears particurlarly bleak in Hobart, which Ryder says has the “weakest prospects”. According to the clock, Hobart’s apartment market is well into a decline, sitting at three o’clock.
Darwin’s market is also heading down, but as it has the highest yields in the country, investors might still be able to find good opportunities. Furthermore, a discounted market might present opportunities for investors before resources projects in the area spark a revival.
Both Terry Ryder and SQM managing director Louis Christopher warn investors to steer well clear of the “basket case” Gold Coast and Sunshine Coast markets.
<img style="display: block; margin-left: auto; margin-right: auto;" src="/images/stories/clock%20generic.jpg">
At 12 o’clock the market is at its peak (demand exceeds supply), at 3 o’clock the downswing has set in (an evenly supplied market0,) and by 6 o’clock it has bottomed out (an oversupplied market). At 9 o’clock the market is rebounding (supply is tightening).
 
<hr class="system-pagebreak">
 
<h1>Perth</h1>
Population: 1,696,065 Median unit price: $401,250 Rental yield: 4.9% Property clock time: 4.30 
<img style="display: block; margin-left: auto; margin-right: auto;" src="/images/stories/June22clocks/clock-perthunits.jpg">
The demographics of the Perth market are all relatively favourable: a balanced but tightening market in terms of rental vacancies, decent demand for new units and steady construction of new apartment blocks.
Brendan Aylmore, WA branch director at valuer WBP, expects an increase in investor demand and a reduction in unit stock levels on the back of increase in rental yields.
A further boost to demand may come from first-home buyers pushed into the unit market due to increasing rents.
“There will be a large amount of office space being taken up in the next 12- to 18-month period with a larger number of new works being moved to the CBD, which should result in further demand for properties from both owner-occupiers and investors,” Aylmore says.
Hotspotting.com.au director Terry Ryder is also bullish on Perth units following three weak years. “Perth’s market is set to recover on the back of the resources boom and government infrastructure spending,” he says.
Not so bullish is SQM managing director Louis Christopher, who warns that Perth is more sensitive to interest rate movements than what many realise. Christopher sees Perth’s unit market at close to the bottom of the market, at five o’clock.
However, “another interest rate rise could set the city back to two o’clock” he says.
<img src="/images/stories/data%20table%20perth.jpg">
 
<hr class="system-pagebreak">
 
<h1>Sydney</h1>
Population: 4,575,532 Median unit price: $466,000 Rental yield: 5.1% Property clock time: 1.30
<img src="/images/stories/June22clocks/clock-sydneyunits.jpg">
At present there is a shortage of available rental units relative to demand, with construction of new apartments and sales continuing at a steady pace.
Demand close to the city remains strong, with Peter Chittenden, Colliers International managing director of residential, saying metropolitan Sydney’s property fundamentals remain sound as demand continues to outpace supply.
WBP New South Wales state manager Chris Lackey says Sydney’s apartment market prices are still at peak levels for new units, “however, activity is predicted to slow this year, which may see a softening in prices”.
“Basic lower-end unit stock is expected to be flat at best. Interest rates and a hit to confidence are the driving factors behind this change,” Lackey says.
While the market has been falling after the surge early in 2010, Hotspotting.com.au’s Terry Ryder says the long-term prospects are solid. “The change of state government will help, if infrastructure promises are kept,” he says.
While the RBA has held firm on interest rates to date, an expected increase in August combined with an ongoing downward swing in housing finance approvals is set to dampen demand, according to Louis Christopher.
“However, the magnitude of the decline will be minimal compared to most other cities. This is one city that really is experiencing a genuine shortage of rental properties,” he says.
<img src="/images/stories/data%20table%20sydney.jpg">
 
<hr class="system-pagebreak">
 
<h1>Darwin</h1>
Population: 127,532 Median unit price: $384,000 Rental yield: 5.7% Property clock time: 1.45
<img src="/images/stories/June22clocks/clock-darwinunits.jpg">
The Darwin unit market is characterised by an over-supply of available property relative to demand, with modest demand for new units and no major uptick in new construction.
Although the market has started to slide downward, investor interest could remain relatively strong due to strong rental returns. Darwin’s gross rental yield for units is 5.7%, alongside 5.6% for houses.
Both Terry Ryder and Louis Christopher are bearish on Darwin apartments.
However, while Ryder says the market is over-supplied, with developers offering incentives to sell product, this could present opportunities for investors to buy at discounts before the resources projects spark recovery.
But Christopher disagrees. “The bubble that is Darwin has popped. It is going to be a steep decline from here, particularly if the RBA lifts rates again.”
<img src="/images/stories/data%20table%20darwin.jpg">
 
<hr class="system-pagebreak">
 
<h1>Melbourne</h1>
Population: 4,077,036 Median unit price: $433,000 Rental yield: 4.1% Property clock time: 1.50 
<img src="/images/stories/June22clocks/clock-melbourneunits.jpg">
Demand for new units is softening as construction of new apartment blocks starts to decline.
Louis Christopher anticipates a 5% decline in the Melbourne market in 2011.
“Stock levels have increased 105% for the past 12 months. Vendors are just now starting to drop their asking prices,” he says.
According to Terry Ryder, it’s “danger time” for investors in the Melbourne inner-city unit market due to the large numbers of new units under construction in the CBD, Docklands and Southbank markets and with more in planning.
“Over-supply looms,” Ryder says.
<img src="/images/stories/data%20table%20melbourne.jpg">
 
<hr class="system-pagebreak">
 
<h1>Adelaide</h1>
Population: 1,203,186 Median unit price: $325,500 Rental yield: 4.6% Property clock time: 2.00  
<img src="/images/stories/June22clocks/clock-adelaideunits.jpg">
There is a shortage of available property relative to demand, though vacancy rates are holding steady as demand for new units remain fair and construction levels remain unchanged.
WBP South Australian state manager Bart Quinn says sales volumes and prices for Adelaide’s unit market have fallen.
“Some large projects requiring off the plan sales have been put on hold due to weak demand and rising building costs. Buyers in the market for established stock are generally cautious and looking for good value,” he says.
Quinn says prices and demand for older-style units and flats in inner-city localities have cooled due to very weak demand from first -home buyers.
Louis Christopher expects “more pain to come” as vendors start cutting their asking prices. “However, there is a chance the magnitude of the declines will be modest,” he says.
Despite its position on the clock, investors can still look to Adelaide for opportunities in what Terry Ryder says is the most affordable mainland capital for units, supported by an underlying strong economy.
<img src="/images/stories/data%20table%20adelaide.jpg">
 
<hr class="system-pagebreak">
 
<h1>Canberra</h1>
Population: 358,222 Median unit price: $420,000 Rental yield: 5.4% Property clock time: 2.20
<img src="/images/stories/June22clocks/clock-canberraunits.jpg">
Currently the Canberra unit market is characterised by a shortage of available property relative to demand, with vacancies tightening as the volume of unit sales declines.
In its Canberra apartment report, Colliers attributes demand for residential property to “the strength of the local economy, employment opportunities, population growth and lifestyle”. The ACT unemployment rate stands at 3.7%, well below the national rate of 4.9%.
Canberra sits between the peak of the market and heading into a downswing.
With its strong fundamentals, analysts expect any declines to be modest in comparison to other markets.
“Any dip in the market is likely to be small. Canberra remains our most reliable city market, buoyed by strong incomes and low unemployment,” Terry Ryder says.
But he warns investors to be wary of the Kingston foreshore precinct, which he says has a recent history of problems.
<img src="/images/stories/data%20table%20canberra.jpg">
 
<hr class="system-pagebreak">
 
<h1>Hobart</h1>
Population: 214,705 Average unit price: $280,000 Rental yield: 5.5% Property clock time: 2.50 
<img src="/images/stories/June22clocks/clock-hobartunits.jpg">
Hobart’s unit market is heading south despite a shortage of available property relative to demand. Vacancy trends remain steady as a decline in construction is matched by a softening in demand for new units.
“Unit stock levels are rising,” Louis Christopher says. “Hobart is another city where the magnitude of the declines may well be modest as income to house prices appears to be fair.”’
The proportion of family income required to meet loan repayments decreased to 34.2%, down from 35.3% in the December quarter 2010, according to the March quarter REIA/Deposit Power Housing Affordability report.
Despite improvements in housing affordability, Terry Ryder remains bullish on the unit market.
“Hobart is the city market with the weakest prospects,” he says, with the state economy, weak population growth and the political situation all “unhelpful” factors.
Ryder expects the market to fall further. Like the housing market, he says the unit market is showing signs of price decline.
<img src="/images/stories/data%20table%20hobart.jpg">
 
<hr class="system-pagebreak">
 
<h1>Brisbane</h1>
Population: 2,043,185 Median unit price: $377,500 Average weekly rent: 5.1% Property clock time: 4.40
<img src="/images/stories/June22clocks/clock-brisbaneunits.jpg">
Brisbane’s unit market position on the property clock is the closest in Australia to bottoming out.
Not surprisingly, it’s in line with its housing market, which sits at 5pm on the <a target="_blank" title="Brisbane clocks in at bottom of market" href="https://www.propertyobserver.com.au/trends/brisbane-clocks-in-near-bottom-of-market/2011060350400">Property Observer housing clock</a>. 
The market is characterised by investor demand underpinning transaction volumes in the inner-Brisbane market, “especially for price-pointed, affordable stock generating strong rental income,” according to the Colliers Brisbane apartment market forecast.
However, in the medium term Colliers says the market might be adversely impacted by rising interest rates and increasing vacancies.
Furthermore, although the inner-Brisbane vacancy rate is currently only 3.1%, a substantial volume of investor stock will be completed in the short term, and is likely to push up vacancies.
Daniel Lewis, WBP’s Queensland state manager, reports that Brisbane has remained well insulated over the past few years from decreases of as much as 30% in apartments values on the Gold Coast and Sunshine Coast.
However, recently units have experienced a slight correction in values.
“Affordable rental accommodation in Brisbane is scarce at present, resulting in strong rental income for units. Further correction in prices may result as the year continues for new stock in the CBD and new or near-new townhouses in the fringe suburbs,” Lewis says.
Louis Christopher describes the Brisbane market as “bleak” and says the bottom of the market is at least 12 months off. “There is over six months of stock on the market, he says.
Both Christopher and Terry Ryder agree on a gloomy outlook for the nearby Sunshine Coast and Gold Coast markets.
“The Gold Coast is a no go zone and the Sunshine Coast is also weak,” Ryder says. “Over-supply will restrict growth for several more years.”
“The Sunshine Coast and Gold Coast are basket-case situations,” Christopher says.
<img src="/images/stories/data%20table%20brisbane.jpg">
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Almost time for Perth units to recover

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Institutional developers are showing interest in residential development sites in suburbs and regional areas close to Canberra.
There is particular interest in the ACT region due to a shortage of available land, strong wages growth, unemployment holding steady and overall good local economic conditions, according to Tim Mutton, associate director of consultancy at Colliers.
In addition, private developers are looking to get into a market that has to date primarily been developed by the ACT Government.
Mutton recently negotiated the sale of a 35-hectare site in Ngunnawal to the Village Building Company for $36.25 million in an auction that attracted beds from 11 local and interstate companies.
The sale comes as the ACT Government’s Land Development Agency has announced it will sell the first sites on the eastern side of the Kingston Foreshore project.
CB Richard Ellis agents Mark Nicholls and Andrew Stewart have been appointed to market the three sites in a precinct known as “The Peninsula” with tenders due to close September 29, 2011.
The three blocks, which have a total area of 9,925 square metres, can accommodate approximately 300 residences. They have a mixed-use zoning, allowing for significant flexibility in relation to any future development.
Mutton says the Ngunnawal site is attractive “due to its size, location and likely position within the market when finally developed”.
Another factor in its appeal is its pricing.
Village chief executive Bob Winnel has suggested two bedroom homes will be priced at about $335,000, and the three-bedroom house-and-land packages will be priced from $365,000 to $400,000.
Mutton says there is strong interest in the ACT in retail blocks priced between $400,000 and $450,000.
“The estate was priced at a point where the market is interested,” he says. Furthermore, according to Mutton, the Ngunnawal block is just big enough to attract interest from large institutional developers.
Approximately 475 dwellings will be built on the Ngunnawal site, situated 18 kilometres from the CBD.
The winning bid came from the Canberra Estate Consortium No 30, a subsidiary of the Village, which has committed to providing 122 two-bedroom houses and a further 102 three-bedroom house-and-land packages.
The development will be completed over the next three years and will comprise townhouses, villas, duplexes, free-standing homes and larger residential lots.
In the next few months 131 blocks of land ranging in size from 420 square metres to 900 square metres and priced from $220,000 to $355,000 will go to market.
The Village is currently developing The Fair at North Watson, 6.6 kilometres from the Canberra CBD. It will comprise 316 homes upon completion.
Other Village developments underway include Nexus on Flemington Road in Gungahlin, where 110 one- and two-bedroom apartments are being sold priced between $299,000 and $374,000.
The Ngunnawal auction was conducted by Colliers International on behalf of the Land Development Agency.
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Housing developers showing interest in ACT: Colliers

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Not many investors may have heard of Tiwi, the small coastal suburb 12 kilometres north of the Darwin CBD with about 3,000 residents.
But its inclusion alongside the more fashionable big-name suburbs of Potts Point, Sydney and Carlton in Melbourne in the St George National Hotspots 2011 report suggests investors cast their nets northwards.
Rod Hass, residential sales manager at Knight Frank in Darwin, calls Tiwi one of the city’s “sleeping giants”.
He says houses on large blocks of about 800 square metres generally sell in a range between $480,000 and $600,000, mostly via private treaty.
“Currently, houses are selling mainly in line with the market, between $450,000 and $550,000,” Hass says.
Tiwi is within walking distance or a short commute from the Casuarina Coastal Reserve and beach, Charles Darwin University the Royal Darwin hospital and the biggest shopping mall in the Northern Territory, the Casuarina Square, which Hass says all adds to the appeal of the suburb.
The suburb is served by good bus services to the city, and the St George report says private vehicle access to the suburb is good via Trower Road. In addition, the smaller population in Darwin lends itself to less public transport, and people primarily use private vehicles to travel around the city.
Hass says growth in Tiwi house prices is being boosted by the new sub-division in the neighbouring suburb of Lyons, where Defence Housing Australia houses are being built.
Hass describes it as an established suburb popular with families and owner-occupiers. 
A buoyant market
Nick Mousellis, realtor at Ray White Darwin, tells Property Observer the Tiwi market is “very buoyant” at the moment.
He recently sold a four-bedroom, two-bathroom house at 52 Tiwi Gardens Road with landscaped gardens, after holding the listing for two months.
After “careful renovations” Mousellis says the property achieved a sale price in excess of the asking price – it was listed at $570,000.
“The owner is an out-of-towner who has bought the property as an investment for now and somewhere to move into when they eventually relocate,” Mousellis says.
According to the St George report, “Tiwi’s houses often have significant renovation potential, both internally and externally, while the large land sizes can allow for extensions of dwellings, construction of pools, or possible subdivision”.
Like Hass, Mousellis also highlights Tiwi’s proximity to local amenities as well as its relaxed feel and affordability.
RP Data currently lists the median price in Tiwi at $526,500. House prices have appreciated by 16.9% over the past 12 months, significantly higher than 0.2% recorded for Darwin over the year to March 2011. 
Tiwi versus Darwin prices
<table cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td valign="top" width="195">
 
</td>
<td valign="top" width="207">
Tiwi 
</td>
<td valign="top" width="215">
Darwin
</td>
</tr>
<tr>
<td valign="top" width="195">
Median house price
</td>
<td valign="top" width="207">
$526,500
</td>
<td valign="top" width="215">
$470,000
</td>
</tr>
<tr>
<td valign="top" width="195">
Median weekly rent
</td>
<td valign="top" width="207">
$490
</td>
<td valign="top" width="215">
$190
</td>
</tr>
<tr>
<td valign="top" width="195">
Yield
</td>
<td valign="top" width="207">
4.8%
</td>
<td valign="top" width="215">
5.6%
</td>
</tr>
<tr>
<td valign="top" width="195">
12 month capital growth
</td>
<td valign="top" width="207">
16.9%
</td>
<td valign="top" width="215">
0.2%
</td>
</tr>
</tbody></table>
Source: RP Data
More than two-thirds (72%) of homes are detached houses, and due to the climate, most have swimming pools.
There is strong investor interest already in Tiwi, with 41.4% of all dwellings rental properties. The percentage of houses that are rentals is 29.3%.
According to RP Data, the median weekly rent has risen to $490, which when combined with the median house price translates into a gross rental yield of 4.8%.
Although the suburb is is adjacent to the ocean, no houses are on the waterfront and according to St George it is “highly unlikely any have a view of the ocean”.
However, as many of the houses offer scope for substantial renovations, extensions or rebuilds, the suburb is well positioned for future median house price growth. 
According to the St George report, houses close to amenities are likely to be the most desirable.
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Hotspot: Darwin's Tiwi a 'sleeping giant'

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A second apartment at The Cove Clovelly boutique apartment project in Sydney’s eastern suburbs has been sold off the plan.
The apartment, a three-bedroom unit located on the ground floor measuring 116 square metres, has been bought for $2.2 million, equating to about $19,000 per square metre. The buyer is an eastern suburbs-based owner-occupier.
This follows an earlier sale of a second-floor 120-square-metre apartment for $2.65 million, equating to around $22,000 per square metre.
Co-agent David Poppleton from RPM Group says there is an undisclosed offer on the 248-square-metre penthouse.
The Cove Clovelly, situated on Donnellan Circuit overlooking Clovelly Beach in Sydney’s eastern shore, features four apartments and two penthouses. Construction has commenced and it is due to be completed in 12 months.
“We expect to sell another two apartments while under construction and the other penthouse on completion,” Poppleton says.
Although there is strong interest in the development, Poppleton says buyers are more cautious.
“People are being very discerning. If you don’t have the right products they will wait,” he says.
The development is being marketed by Poppleton and Peter Coulton of Savills Residential Projects.
It has generated more than 450 registered expressions of interest since being launched in February 2011.
Coulton says interest has mainly been local, but includes potential buyers from Hong Kong and Singapore.
Coulton says the Clovelly market is quite strong because nothing else is being built in the suburb or in the surrounding suburbs of Bronte or Tamarama.
“There is quite a bit of development in Coogee,” he says.
Interest in Clovelly is not reflected in the wider Sydney market, with listed developer Becton reporting that off-the-plan buying for its Divercity apartments has levelled off in 2011.
Becton has submitted plans for the second stage of its Divercity project on Bourke Street in Waterloo featuring 359 apartments.
 “[Buyer pre-sales] are certainly not as strong as they were in 2011,” Becton CEO Matthew Chun has told the Australian Financial Review.
“There is generally more cautious behaviour from the consumer due to natural disasters and continued economic shocks around the world.”
The Cove Clovelly is been developed by Iris Capital and designed by Squillace Nicholas Architects.
The interiors use raw timber and natural stone features to present a modern interpretation of luxury beachside living.
A two-bedroom, two-bathroom apartment in the development is currently being marketed at $2.155 million by Peter Coulton and David Poppleton.
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Clovelly catches two off-the-plan buyers as caution increases

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The outlook for A-REITs, or Australian real estate investment trusts, is modest, reflecting a stabilising property market.
The Australian listed real estate sector is currently trading an average discount to net tangible assets of -3.3%, according to Russell Investments.
News of the modest discount comes as a number of trusts report full-year distributions either in line with or slightly exceeding expectations.
Stockland Group, the third biggest A-REIT, will pay out 11.9¢ per ordinary stapled security for the six months to June 30, just above a forecast of 11.8¢.
Charter Hall, currently awaiting a vote on a management change, will pay a distribution of 16.5¢, compared with expectations of 16¢.
A share price at a substantial discount would indicate that “something was clearly going on”, Martin Lamb, director of Asia-Pacific Real Estate Investment, tells Property Observer.
But, he says, the current modest A-REIT discount suggests the market price is fair and reflects the current state of the property market in general.
“Property prices are stabilising,” Lamb says.
“We see future price appreciation driven by increasing incomes, a rise in occupancies followed by a modest rise in rents.
“The fundamentals of the market remain strong. The outlook for the economy is positive, if not exuberant. We are not anticipating price depreciation.”
Lamb says the current discount is a reflection of investor confidence – “noise has been introduced”.
“Forecasting investor sentiment is difficult. REITs trade in sympathy with the financial stocks. “They can have a negative impact on REIT stocks, but don’t affect the underlying value of the properties held by the REITS,” he says.
Investors generally invest in REITS in expectation of a steady income and are generally not looking to make “deep value” capital appreciation plays, Lamb says.
REITs offer investors returns between 8% and 12%.
The A-REIT market is dominated by Westfield and Stockland, which combined account for more than 50% of its market capitalisation.
 <table border="0" cellpadding="0" cellspacing="0" width="469"><tbody>
<tr>
<td nowrap valign="bottom" width="153">Company</td>
<td valign="bottom" width="94">
 Sector
</td>
<td valign="bottom" width="92">
 Business Type
</td>
<td valign="bottom" width="130">
 Market Capitalisation (US$, million)
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Westfield Group
</td>
<td valign="bottom" width="94">
Retail
</td>
<td valign="bottom" width="92">
Investor
</td>
<td valign="bottom" width="130">
21,295
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Westfield Retail Tst
</td>
<td valign="bottom" width="94">
Retail
</td>
<td valign="bottom" width="92">
Investor
</td>
<td valign="bottom" width="130">
8,424
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Stockland
</td>
<td valign="bottom" width="94">
Diversified
</td>
<td valign="bottom" width="92">
Investor
</td>
<td valign="bottom" width="130">
8,582
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Leighton Holdings
</td>
<td valign="bottom" width="94">
Diversified
</td>
<td valign="bottom" width="92">
Developer
</td>
<td valign="bottom" width="130">
6,866
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
GPT Group
</td>
<td valign="bottom" width="94">
Diversified
</td>
<td valign="bottom" width="92">
Investor
</td>
<td valign="bottom" width="130">
6,075
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
CFS Retail Tst
</td>
<td valign="bottom" width="94">
Retail
</td>
<td valign="bottom" width="92">
Investor
</td>
<td valign="bottom" width="130">
5,538
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Goodman Group
</td>
<td valign="bottom" width="94">
Industrial
</td>
<td valign="bottom" width="92">
Investor
</td>
<td valign="bottom" width="130">
5,334
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Lend Lease Group
</td>
<td valign="bottom" width="94">
Diversified
</td>
<td valign="bottom" width="92">
Developer
</td>
<td valign="bottom" width="130">
5,319
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Mirvac Group
</td>
<td valign="bottom" width="94">
Diversified
</td>
<td valign="bottom" width="92">
Investor
</td>
<td valign="bottom" width="130">
4,621
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Dexus Property Grp
</td>
<td valign="bottom" width="94">
Diversified
</td>
<td valign="bottom" width="92">
Investor
</td>
<td valign="bottom" width="130">
4,568
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Commonwealth Office
</td>
<td valign="bottom" width="94">
Office
</td>
<td valign="bottom" width="92">
Investor
</td>
<td valign="bottom" width="130">
2,463
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Investa Office Fund
</td>
<td valign="bottom" width="94">
Office
</td>
<td valign="bottom" width="92">
Investor
</td>
<td valign="bottom" width="130">
1,882
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Charter Hall Office
</td>
<td valign="bottom" width="94">
Office
</td>
<td valign="bottom" width="92">
Investor
</td>
<td valign="bottom" width="130">
1,875
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Australand Property
</td>
<td valign="bottom" width="94">
Diversified
</td>
<td valign="bottom" width="92">
Developer
</td>
<td valign="bottom" width="130">
1,761
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Charter Hall Retail
</td>
<td valign="bottom" width="94">
Retail
</td>
<td valign="bottom" width="92">
Investor
</td>
<td valign="bottom" width="130">
1,104
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
BWP Trust
</td>
<td valign="bottom" width="94">
Retail
</td>
<td valign="bottom" width="92">
Investor
</td>
<td valign="bottom" width="130">
907
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
FKP Ltd
</td>
<td valign="bottom" width="94">
Diversified
</td>
<td valign="bottom" width="92">
Developer
</td>
<td valign="bottom" width="130">
835
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Charter Hall Group
</td>
<td valign="bottom" width="94">
Diversified
</td>
<td valign="bottom" width="92">
Investor
</td>
<td valign="bottom" width="130">
681
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Challenger DPG
</td>
<td valign="bottom" width="94">
Diversified
</td>
<td valign="bottom" width="92">
Investor
</td>
<td valign="bottom" width="130">
539
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Peet
</td>
<td valign="bottom" width="94">
Residential
</td>
<td valign="bottom" width="92">
Developer
</td>
<td valign="bottom" width="130">
506
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Ardent Leisure Group
</td>
<td valign="bottom" width="94">
Diversified
</td>
<td valign="bottom" width="92">
Investor
</td>
<td valign="bottom" width="130">
433
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Thakral Holdings
</td>
<td valign="bottom" width="94">
Diversified
</td>
<td valign="bottom" width="92">
Investor
</td>
<td valign="bottom" width="130">
382
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153">
Total market cap
</td>
<td valign="bottom" width="94">
 
</td>
<td valign="bottom" width="92">
 
</td>
<td valign="bottom" width="130">
74,702
</td>
</tr>
<tr>
<td nowrap valign="bottom" width="153"></td>
<td valign="bottom" width="94">
 
</td>
<td valign="bottom" width="92">
 
</td>
<td valign="bottom" width="130"></td>
</tr>
</tbody></table>
Source: UBS Global Real Estate Weekly Valuation
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Modest A-REIT performance reflects stabilising property market

<html><body>
Australia’s two-speed economy and the softer housing market are listed among the reasons for keeping interest rates on hold in June, according to the minutes of the June 7 RBA board’s monetary policy meeting.
“While there had been additional evidence of the coming strong pick-up in investment in the resources sector, activity remained quite subdued in some other important parts of the economy, partly reflecting the Board's earlier actions as well as the appreciation of the exchange rate,” the minutes say.
However, although the flow of data over the past month did not add urgency to a change in policy, board members agreed that “further tightening in monetary policy would be necessary at some point”.
Moderate credit growth activity, softening asset prices and slowing employment growth all contributed to the decision for keeping the cash rate at 4.75%.
Weaknesses in the housing market are highlighted, including reduction in average dwelling prices so far in 2011, a slow-down in housing credit growth and falls in loan approvals over the first three months of the year,
In making its decision, the board also took into account softer global activity and the increased prominence of “downside risks to the international economy” over May 2011.
These include weakening global equity markets on the back of debt problems in Greece and renewed concerns about the Euro zone, increased volatility in foreign exchange markets and expectations of other major economies holding back on tightening monetary policy.
As a consequence, “members judged that it would be prudent to leave the stance of policy unchanged, pending further data on international developments and on the strength of domestic demand and inflationary pressures. They therefore considered that the current monetary policy setting was appropriate”.
“While inflation was currently in the bottom half of the target range in underlying terms, this had been partly due to the disinflationary effects of the appreciation of the exchange rate and the earlier moderation in labour costs. If the economy evolved in line with the staff forecasts, GDP growth would be somewhat above trend over the next few years, led by growth in the resources sector. A gradual pick-up in inflation could be expected under this scenario,” the minutes read.
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Two-speed economy and housing slowdown prompted RBA to keep rates on hold

<html><body>
As we look to what's ahead for 2012, Property Observer is republishing some of our most noteworthy stories of 2011.
 
Rents in Australia’s premier shopping street, Sydney’s Pitt Street mall, have risen more than 11% over the past year, with a square metre of retail space now costing $10,000, according to a new global retail report by Colliers.
Sydney premier retail rentals are now nearly double those of nearest rival Melbourne, where rents on Bourke Street Mall have risen by a more modest 5% to $5,500 per square metre of the 12 months to end of March 2011.
The difference in retail rents between the two cities is likely to be felt by European fashion retailer Zara, which has opened two stores in these prime locations.
Although Zara’s rental details are not known, it is renting 1,400 square metres of space in the Westfield Sydney shopping centre on the Pitt Street Mall and 1,700 square metres of space on the Bourke Street Mall.
CB Richard Ellis’s recent global retail outlook ranks Sydney and Melbourne as joint ninth most popular cities for US retailers, with research director Kevin Stanley calling them “sweet spots”
Brisbane’s Queen Street Mall is the third most expensive retail strip in Australia, with rents averaging$4,250 per square metre. Retail rents on Queen Street rose 6.25% over the last 12 months.
In Perth, rents in the Hay Street and Murray Street malls are unchanged for the year at $3,250 per square metres, while retailers in Adelaide’s Rundle Mall are paying $3,000 per square metre, up 1.69% for the year.
Overall, Sydney’s Pitt Street mall has maintained its position as the sixth most expensive retail strip in the world
New York’s Fifth Avenue remains by far the most expensive retail strip in the world, with rents of US$23,888 (A$22,513) per square metre.
Russell Street, Causeway Bay in Hong Kong is a distant second, with rents averaging US$17,767 (A$16,774) per square metre.
Ross Moore, chief economist at Colliers International, says after two successive years of lacklustre growth, the world’s top retail streets have once again regained their vitality.
“This is reflected by a general rise in rents in many of the world’s premier shopping districts. As the lingering effects of the global downturn faded during the latter half of 2010, rising demand for the world’s most prime retail real estate was evident in many countries as many new retailers sought to establish a foothold in the world’s most prestigious avenues,” he says.
</body></html>

Pitt Street Mall retail rents up 11% in a year

<html><body>
Mazda will lease 20,000 square metres of warehouse space in Somerton, 21 kilometres north of the Melbourne CBD in the biggest industrial deal of the year to date.
The $70-per-square-metre deal was negotiated by Savills Australian industrial director Greg Jensz.
Mazda has signed a 10-year lease for the logistics space at the Somerton Logistics Centre located at 880 Cooper Street.
The deal comes as leasing activity picks up in other industrial locations close to the Melbourne CBD driven by demand for logistics and transport space.
In its Melbourne Industrial Market Overview released in March, Knight Frank reports that industrial activity in Melbourne is starting revive on the back of increased demand and limited supply. It has a “relatively positive outlook” for the state.
It expects demand to remain robust in areas that benefit from strong transport links and infrastructure provision, particurlarly the west and south east regions.
Knight Frank directors Andrew MacQueen and Matt Crofts have negotiated more than 40,000 square metres of leasing deals in Melbourne’s western suburbs.
These include a 2,470-square-metre lease for Malec Brothers Transport at Judge Street in Sunshine and Fastline International taking up 7,700 square metres at Goodman Group’s Westlink Distribution centre in Laverton North, the Australian Financial Review reports.
</body></html>

Mazda signs biggest industrial lease of the year to date

Eddy Haddad's <a href="https://www.apartments.com.au/developers/level-33">Level 33</a> is levelling up its approved Wollongong development, as the coastal city south of Sydney continues to prove popular in the high-density development space.

Level 33, a longtime developer in the Wollongong area, has gone through the NSW Government's Housing Delivery Authority to upsize its approved two-tower development on the corner of Crown Street and Gladstone Avenue, just 100 metres from Wollongong Station.

The developer currently has approval for 252 apartments across two buildings rising to 19 storeys. It is now seeking approval for 33 and 38-storey towers that would deliver 467 apartments, including 67 affordable homes.

Designed by <a href="https://www.apartments.com.au/architects/bka-architecture">BKA Architecture</a>, the development would comprise apartments above a three-level podium with around 1,100 sqm of retail space, along with basement parking for 448 vehicles.

According to the Urban Design Report by BKA, the proposal has the capacity to "reinforce the precinct's identity by strengthening links between health, education, and transport services, while also contributing to Wollongong's ongoing evolution as a key regional centre."

Wollongong is somewhat in vogue. Between Level 33 and Urban Property Group, the two developers have several thousand apartments planned across the city.

Level 33 is currently delivering Easterly Wollongong, one of its most boutique projects to date with just 21 high-end apartments, as well as Atchison &amp; Kenny, a 329-apartment development due for completion later this year. The developer also plans to redevelop the 13,088 sqm WIN Grand megasite into a new $500 million precinct with nearly 600 apartments and has more than 900 apartments planned for the former Bunnings Warehouse site at the intersection of Gipps and Flinders streets.

Urban Property Group is also playing a major role in the city's transformation. Its five-tower Keira Place precinct will deliver more than 800 homes, and it has recently lodged plans for a further 300 apartments near Wollongong Station.

Joel Robinson

First look: Level 33 upsizes Wollongong apartment towers

Just a week after filing plans for the final stage of its major Keira Place masterplan, <a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has unveiled another significant housing proposal in Wollongong, this time targeting a prominent site opposite North Wollongong Station.

The developer has lodged a State Significant Development Application for a 38-storey mixed-use tower at <a href="https://www.apartments.com.au/new-apartments/4-4a-flinders-street-north-wollongong-nsw-2500">4-4A Flinders Street</a>, around one kilometre north of the <a href="https://www.apartments.com.au/new-apartments/keira-place-wollongong-120-122-smith-street-wollongong-nsw-2500">Keira Place precinct</a> currently taking shape on the edge of the CBD.

<img alt="First look: Urban Property Group plans 38-storey North Wollongong tower as Keira Place expansion gathers pace" data-entity-type="file" data-entity-uuid="2b6428f1-6405-4038-8476-897de440e90d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/flinders%20podium.png?VersionId=QLqEvK0OuCEwRC47oHNftrw2B1YqaHF8" />

Designed by Studio.SC, the proposal comprises a 38-storey mixed-use development containing 303 apartments, including 45 affordable housing units, alongside 174 co-living residences. The scheme also includes ground-floor retail space, extensive landscaping and public domain improvements.

Studio.SC noted in the proposal it "outlines a vision for a landmark transit-oriented mixed-use development centred around North Wollongong Station, designed to support the city’s future growth while responding to the NSW Government’s housing and planning reforms."

The architecture firm said the proposal responds to the opportunities and constraints shaping future growth within the 400-metre catchment of the station and represents "a coordinated and future-focused approach to urban intensification, contributing to the long-term evolution of North Wollongong as a connected, walkable and high-density station precinct."

The site occupies a strategic corner bounded by Flinders Street, Station Street, Stafford Street and the Princes Highway, directly opposite North Wollongong Station.

<img alt="First look: Urban Property Group plans 38-storey North Wollongong tower as Keira Place expansion gathers pace" data-entity-type="file" data-entity-uuid="7863adad-1f71-4022-b850-f44b252738fd" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/flinders%20podium%20a.png?VersionId=WsU7av0g8_8R2tGHWxgHeFSlhu7yeY1V" />

The proposal follows Urban Property Group's recent submission for the second and final stage of Keira Place, which would deliver a further three buildings comprising 657 homes opposite Beaton Park. It builds on the first stage, which features 150 apartments across two towers and recently commenced construction.

Urban Property Group CEO Patrick Elias said breaking ground on the first stage marked a significant milestone for Wollongong and reflected the developer's long-term commitment to regional cities.

"Today's groundbreaking is about turning approvals into homes and moving quickly to deliver much-needed housing in Wollongong's city centre," Elias said.

"Keira Place will provide a diverse mix of homes close to jobs, transport and services, while setting a high benchmark for quality, durability and consumer protection."

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/urban-property-group-unveils-trio-of-towers-for-next-stage-of-new-wollongong-precinct-keira-place">Urban Property Group unveils trio of towers for next stage of new Wollongong precinct, Keira Place</a>

First look: Urban Property Group plans next major Wollongong tower

<a href="https://www.apartments.com.au/developers/arada">Arada</a> has wasted little time expanding its ambitions in Campsie, lodging plans for a second major project in the rapidly transforming town centre just months after unveiling its three-tower One Campsie proposal on Beamish Street.

The UAE-backed developer has now taken aim at one of the suburb’s most strategically positioned sites, filing a State Significant Development Application for a <a href="https://www.apartments.com.au/new-apartments/10-north-parade-campsie-nsw-2194">33-storey mixed-use tower</a> at 10 London Street and 43 North Parade, directly opposite the future Campsie Metro Station. The proposal is currently on public exhibition and represents another significant vote of confidence in Campsie's emergence as one of Sydney’s key transit-oriented growth centres.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, the development would deliver 156 apartments above a podium containing retail and commercial space, creating a new residential and commercial gateway to the town centre. The scheme also includes a four-level above-ground parking podium and a dedicated residential amenity floor featuring wellness and recreation facilities. At least 10 per cent of the apartments would be allocated as affordable housing for a period of 10 years.

The proposal occupies a 1,631 sqm site bounded by London Street, North Parade and Dispensary Lane, immediately adjoining the future Metro station precinct and just metres from Beamish Street’s retail and dining strip. According to the Urban Design Report, the project seeks to deliver "a great place that prioritises human-scaled experience and provides spatial improvements to the area."

<img alt="First look: Arada doubles down in Campsie with 33-storey Metro-front tower plans" data-entity-type="file" data-entity-uuid="175a8324-015b-4856-abe3-ce6f23199fa7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/podium%20campsie.png?VersionId=742UGwXFhFBX4GEl6wX4PYIWREAgn6il" />

Woods Bagot describes the tower as a key marker within Campsie's next phase of growth.

"Located directly opposite the new Campsie Metro Station on North Parade, 10 London Street is a thoughtfully composed 33-storey mixed-use tower that contributes to the ongoing transformation of the town centre," the Architectural Design Report states. The report says the project is intended to provide "high-quality homes within a vibrant, connected urban environment, while helping define Campsie's future skyline."

A strong emphasis has been placed on the public realm. The ground floor incorporates over 500 sqm of retail space and active frontages along both London Street and North Parade, while the podium is wrapped by extensive landscaped planting intended to soften the building's scale and strengthen the pedestrian experience. The development would also widen surrounding footpaths and improve connections between the Metro station and the broader town centre.

Above the podium, residents would have access to more than 1,400 sqm of communal amenities, including a pool, gym and landscaped recreation spaces. A distinctive green-wall treatment extending across four podium levels forms a major architectural feature, helping differentiate the project within the emerging high-density precinct.

The tower's design is closely tied to the broader Campsie Town Centre Master Plan and the arrival of Sydney Metro. The Urban Design Report notes the proposal "directly supports the Campsie Town Centre Master Plan by delivering new homes in a location explicitly identified for growth, improved accessibility, and high-quality urban renewal." It adds that the project contributes to the master plan's vision for a strengthened town centre supported by thousands of new homes around the future Metro station.

<img alt="First look: Arada doubles down in Campsie with 33-storey Metro-front tower plans" data-entity-type="file" data-entity-uuid="bfd17654-253e-489a-bade-6278d63db412" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/base%20campsie.png?VersionId=3roJPMQGs36dazpkhvpvbDDP73Ld.Ica" />

The application follows Arada's recently lodged One Campsie project at 124–142 Beamish Street and 16–18 Ninth Avenue, where the developer is seeking approval for 346 apartments across three towers rising 24, 32 and 39 storeys. Together, the two proposals would cement Arada as one of the most influential developers shaping Campsie's future urban form.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-arada-files-for-trio-of-apartment-towers-in-campsie-town-centre">First Look: Arada files for trio of apartment towers in Campsie town centre</a>

Arada entered the Australian market in 2024 and has rapidly assembled a significant development pipeline across Sydney. Alongside its Campsie holdings, the developer is soon to launch <a href="https://www.apartments.com.au/new-apartments/wattle-green-2-fishburn-crescent-castle-hill-nsw-2154">Wattle Green</a> in Castle Hill, and has expanded its local operations following its acquisition of construction firm Roberts &amp; Co.

Located around 14 kilometres south-west of the Sydney CBD, the site sits at the centre of one of Sydney's fastest-changing middle-ring precincts. The Metro conversion of Campsie Station, combined with Canterbury-Bankstown Council's master planning framework, is driving significant residential intensification around Beamish Street and North Parade, with thousands of new homes expected over coming decades.

First look: Arada doubles down in Campsie with 33-storey Metro-front tower plans

For the first time in a long time, Australia's inflation story is starting to look more like a landing than a fight.

The latest Consumer Price Index figures from the Australian Bureau of Statistics showed annual inflation eased to four per cent in May, down from 4.2 per cent in April. On the surface, that might not seem like a major move. Inflation remains above the Reserve Bank's target range and some categories continue to record stubborn price growth.

But the significance of this result lies less in where inflation sits today and more in what it means for where interest rates are likely heading next.

The biggest takeaway is that inflation continues to move in the right direction.

Markets had been bracing for another sticky result after a period where progress appeared to stall. Instead, headline inflation came in softer than expected, helped by falling fuel prices and easing transport costs. Annual transport inflation halved from 6.6 per cent in April to 3.3 per cent in May, while automotive fuel prices fell 11.9 per cent during the month following lower oil prices and the impact of reduced fuel excise measures.

While petrol prices don't solve Australia's affordability challenges, they are one of the most visible and immediate costs for consumers. Falling fuel costs feed through the economy quickly, helping ease pressure on household budgets and business operating expenses.

The ABS data also showed headline inflation is now sitting at its lowest annual level in several months, reinforcing the broader trend that price growth is gradually moderating.

That trend is important because it aligns with what many economists and lenders have been saying for the last month.

Prior to this week's inflation data, ANZ, NAB and Commonwealth Bank had all shifted their forecasts, now believing the Reserve Bank had likely reached the peak of the interest rate cycle. Following the May inflation release, ANZ reaffirmed that view.

In its latest economic update, ANZ said it expects quarterly trimmed mean inflation to come in at 3.7 per cent for the June quarter, slightly below the Reserve Bank's forecast of 3.8 per cent. Importantly, the bank said that outcome, when combined with slowing economic activity, "supports our view that the cash rate has peaked".

The Reserve Bank has spent the better part of three years attempting to bring inflation under control through higher interest rates. If Australia's major banks are correct and rates have now peaked, the conversation shifts from how much higher rates could go to when they might begin coming down.

Westpac's caution comes from underlying inflation. The trimmed mean, the measure most closely watched by the Reserve Bank, increased from 3.4 per cent to 3.6 per cent annually. Housing inflation remains elevated at 6.5 per cent, reflecting ongoing increases in rents, electricity costs and new dwelling construction.

Electricity prices remain particularly problematic, rising 21.1 per cent over the past year following the removal of government rebates.

Housing construction costs are also showing signs of renewed pressure. ANZ noted new dwelling costs rose 0.9 per cent in May and are now running at an annualised pace of 8.6 per cent over the past three months. Builders continue to face higher labour, fuel and material costs, a reminder that inflationary pressures have not completely disappeared.

Housing affordability has deteriorated largely because of higher interest rates rather than higher property prices alone. Even modest reductions in mortgage rates would improve borrowing capacity, increase buyer confidence and reduce repayment pressure on existing homeowners.

While August is far from a certainty, the latest inflation result has strengthened the view that the next move in rates is more likely to be down than up. For borrowers, buyers and the development sector, that alone represents a significant shift from the conversation that dominated much of the past two years.

The inflation result the property market was waiting for

Commercial property group FiveX is doubling down on its move into the residential space.

The group, founded by Joshua and Marko Berger more than five decades ago, has followed up its plans for a 39-storey tower on North Sydney's Alfred Street with a proposed 61-storey tower in Chatswood.

The new tower at <a href="https://www.apartments.com.au/new-apartments/815-pacific-highway-chatswood-nsw-2067">815 Pacific Highway</a>, which would be one of the tallest proposed in Chatswood in recent years, will comprise 490 apartments, 76 of which will be dedicated affordable housing and managed by Evolve Housing for a minimum of 15 years.

The project will replace the long-standing Panorama Building, originally known as the BMA Tower, a 14-storey office building completed in 1972 and designed by Hungarian-born architect Hugo Stossel. At the time of its completion, the building was the tallest structure in Chatswood and became a local landmark due to its distinctive curved form and external glass lift.

<img alt="FiveX" data-entity-type="file" data-entity-uuid="956bd299-3864-47a0-8ea6-162b5524c5d8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-24%20at%201.02.03%E2%80%AFPM.png?VersionId=EWx7teUr7RcYrI9mgRytwppwt5AdUDtb" />

fjcstudio is behind the designs. Its Architectural Design Report argues the ageing commercial building no longer reflects Chatswood's role as one of Sydney's key strategic centres and that the site is ideally positioned to support significantly higher residential density.

"The site is located at the heart of Chatswood, within the TOD accelerated rezoning area that supports higher density development around the new Metro station," the report states.

"The site's role within a walkable 400-metre radius catchment is where housing, employment, retail and community uses are encouraged to cluster in support of transit-oriented living."

<img alt="fjc" data-entity-type="file" data-entity-uuid="8d198f5e-cc71-4175-9357-be6ec7207473" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-24%20at%201.18.27%E2%80%AFPM.png?VersionId=5WUFc3IYBPvhQMBUYLCsjJhzdcVeYodE" />

The proposal has undergone two rounds of review by the NSW State Design Review Panel, with the design evolving through an extensive assessment process focused on design excellence, public realm outcomes, residential amenity and the integration of affordable housing.

fjcstudio says the residential component provides a diverse mix of apartment typologies, supporting a broad demographic and contributing to housing supply in a highly accessible location close to major transport, employment and retail infrastructure.

The application follows FiveX's plans for a 39-storey tower at <a href="https://www.apartments.com.au/new-apartments/275-alfred-street-north-north-sydney-nsw-2060">275 Alfred Street</a>, which it <a href="https://www.apartments.com.au/new-apartments/275-alfred-street-north-north-sydney-nsw-2060">submitted through the same NSW Government pathway</a> in December. That's for 184 apartments.

Recent activity in Chatswood includes Hyecorp launching its Archer Street project, Celine, and Develotek securing approval for a 34-storey tower.

Larry Schlesinger

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