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Prime office rental growth in the Melbourne CBD is forecast to outpace all other CBD markets in the country over the next 12 months, according to research from Savills.
The Savills May Melbourne CBD Office Report shows that the available prime office space fell from 41 to 39 floors from March to April while the availability of premium-grade office space has fallen dramatically. From December 2009 to December 2010 the prime grade vacancies have fell from 8.7% to 5.8%.
Claire Cupitt, associate director of research of Savills, told Property Observer a lack of new supply would continue to push up rents.
“The CBD market has experienced double-digit growth over the last two years, and this is set to continue until 2012,” Cupitt says, after which rental growth will ease off.
No new major office projects are expected to be completed until 2012, when five projects ranging between 12,000 square metres and 37,000 square metres are due to be completed.
The biggest of these is the 735 Collins Street Stage 1 development in Docklands, which will have a net letable area of 38,000 square metres and will be tenanted by the Australian Tax Office. The second stage of the project, 23,000 square metres, is due for completion in 2013 and will be tenanted by financial services group Marsh Mercer.
In 2013, the biggest project due to be completed is the 63,000-square-metre NAB building at 720 Bourke Street, also in the Docklands area.
<img src="/images/stories/savillsjune9.jpg"> The report says “appetite for Premium and Grade A assets continues to strengthen, with institutions and foreign investors admiring the strong fundamentals of the Melbourne CBD office market”.
Thirty-two commercial office sales with a total value of $1.24 billion were completed in the year to March 2011.
In March 2011, diversified property group Challenger paid $81 million for 27-floor A-grade office at 31 Queen Street, with a yield of 8.17%. 
In December 2010 superannuation fund Sunsuper paid $108 million for the 17-floor 330 Collins Street office building, with a yield of 8%.
The largest leasing deal recently completed was the 18,700-square-metre lease at 661 Bourke Street, signed with the Department of Defence.
Market yields in the Melbourne CBD as at March 2011 are estimated to range between 7.25% and 8% for A grade buildings, and between 8.5% and 9.5% for secondary grade buildings.
In total Savills has identified more than 50 development sites within the Melbourne CBD, with the potential for 1 million square metres of office space.
The last major Melbourne CBD office construction phase ended with the onset of the GFC. It added 465,000 square metres to the CBD, 528,000 square metres to the CBD fringe markets of Southbank and Docklands, and approximately 20,000 square metres to the St Kilda Road precinct – a total of 1.013 million square metres. 
According to Savills, the Melbourne CBD office market contains 3.602 million square metres of lettable space. Of this, more than half (about 2 million square metres) is of premium and A grade quality, 953,068 square metres of grade B quality and the balance (642,407 square metres) grades C and D.
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lschlesinger-FZcF9M3vE6

Double-digit rental growth predicted for Melbourne office market

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Australian homebuyers are among the most indebted in the world, but are also the fastest at paying off their debts, according to the inaugural Genworth International Mortgage Trends Report.
More than a third (39%) of the 1,000 Australian surveyed use more than half their income to pay down debt.
But despite being heavily geared, Australians are managing their repayments, with 45% of respondents overpaying their mortgages in the last year, a significantly higher figure than the global average of 26% and the second highest proportion of the eight countries surveyed by Genworth.
Australian homebuyers are among the most indebted in the world, but are also the fastest at paying off their debts, according to the inaugural Genworth International Mortgage Trends Report.
More than a third (39%) of the 1,000 Australian surveyed use more than half their income to pay down debt.
<table cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td valign="top" width="102">
 
</td>
<td valign="top" width="94">
Australia
</td>
<td valign="top" width="70">
US
</td>
<td valign="top" width="88">
UK
</td>
<td valign="top" width="88">
Canada
</td>
<td valign="top" width="88">
Global
</td>
</tr>
<tr>
<td valign="top" width="102">
Cash rate
</td>
<td valign="top" width="94">
4.75%
</td>
<td valign="top" width="70">
0%
</td>
<td valign="top" width="88">
0.5%
</td>
<td valign="top" width="88">
1%
</td>
<td valign="top" width="88">
2.4%
</td>
</tr>
<tr>
<td valign="top" width="102">
Mean % income (after tax) spent servicing all debts
</td>
<td valign="top" width="94">
45%
</td>
<td valign="top" width="70">
49%
</td>
<td valign="top" width="88">
39%
</td>
<td valign="top" width="88">
45%
</td>
<td valign="top" width="88">
38%
</td>
</tr>
<tr>
<td valign="top" width="102">
% comfortable borrowing more than 80% of home value
</td>
<td valign="top" width="94">
35%
</td>
<td valign="top" width="70">
26%
</td>
<td valign="top" width="88">
22%
</td>
<td valign="top" width="88">
28%
</td>
<td valign="top" width="88">
20%
</td>
</tr>
<tr>
<td valign="top" width="102">
% who had trouble repaying mortgage
</td>
<td valign="top" width="94">
21%
</td>
<td valign="top" width="70">
21%
</td>
<td valign="top" width="88">
18%
</td>
<td valign="top" width="88">
21%
</td>
<td valign="top" width="88">
22%
</td>
</tr>
<tr>
<td valign="top" width="102">
% overpaid mortgage
</td>
<td valign="top" width="94">
45%
</td>
<td valign="top" width="70">
28%
</td>
<td valign="top" width="88">
24%
</td>
<td valign="top" width="88">
19%
</td>
<td valign="top" width="88">
26%
</td>
</tr>
<tr>
<td valign="top" width="102">
% believe now is a good time to buy a home
</td>
<td valign="top" width="94">
42%
</td>
<td valign="top" width="70">
62%
</td>
<td valign="top" width="88">
48%
</td>
<td valign="top" width="88">
47%
</td>
<td valign="top" width="88">
42%
</td>
</tr>
<tr>
<td valign="top" width="102">
% are positive about the state of economy
</td>
<td valign="top" width="94">
37%
</td>
<td valign="top" width="70">
25%
</td>
<td valign="top" width="88">
13%
</td>
<td valign="top" width="88">
38%
</td>
<td valign="top" width="88">
30%
</td>
</tr>
</tbody></table>
Source: Genworth International Mortgage Trends Report.
The survey indicates Australians are comfortable with repaying large mortgages.
One in three Australians are comfortable borrowing more than 80% of their home’s value, the highest proportion of any country surveyed, compared with one in five in the US, the UK, Canada and Ireland.
“Whether for financial or cultural reasons, Australians are the most relaxed about being highly leveraged,” Genworth Australia CEO Ellie Comerford says.
First-home buyer sentiment in the survey is in line with the recent REIA/Deposit Power Housing Affordability report, which found that just 15.4% of the “dwelling finance” market in the March 2011 quarter is made up of this sector of the market. 
High property prices and high interest rates are the two biggest factors inhibiting Australians from buying property.
However, Australians have more confidence in their local housing market than all of the other countries surveyed except Mexico. About 50% of Australian respondents listed an unstable housing market as a reason for not buying property right now, compared with more than 70% of Americans and the more than 60% of British respondents.
A third of Australians are positive about the state of the economy (37%), compared with just a quarter of Americans and just 13% of British home owners and potential home owners.
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Aussie home buyers deeply in debt, but paying it off fast

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A property fund that will invest in US residential property has attracted in excess of $60 million from investors ahead of it closing on June 10.
Dixons Advisory’s US Masters Residential Property Fund is the first Australian-listed property trust with a primary strategy of investing directly in United States residential property.
At the end of May, Dixons had raised $43 million with Alex MacLachlan, its head of fund management, saying the strong Australia dollar was helping things along.
A spokesperson for the company told Property Observer there has been a wide mix of investors, including self-managed super funds and private investors.The fund manager has comfortably exceeded the minimum offer size of $30 million but has not yet reached of the maximum sought, $80 million (50 million units at $1.60 each).In the fund prospectus, it says US Masters will target properties that provide an un-geared net rental yield greater than 8%. 
The fund will look to buy properties in the New York metropolitan area, often referred to as the Tri-State Area. This is made up of the populated areas of New Jersey, New York and Connecticut, all within “typical commuting distance of Manhattan”. The combined population of the region is around 19 million, one of the most populous in the US.
Its initial focus will be in Hudson County, New Jersey.
The prospectus provides examples of the type of properties it will look to acquire in Jersey City, Hudson County. These include two three-bedroom units 5.4kms from Manhattan valued at US$275,000 (A$258,000) with a net rental yield of 7.8% per annum and two one-bedroom apartments valued at $160,000 with a yield of 9.7% per annum.
Dixons has established an office in New York, which will be staffed by two residential property experts and a fund chief financial officer.The fund is due to start trading on the ASX on June 29.
Other funds investing in US property that have launched this year include one managed by Equiti Capital, which is investing in apartments. 
According to the National Association of Realtors in Washington, Australians spent almost $600 million investing in US property last year.
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US property fund draws $60 million from Aussie investors

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Property developers in Niseko, the Japanese ski village discovered by cashed-up Australians in the mid-1990s, are confident it will retain its appeal as a lifestyle destination as they battle the fall-out from the March 2011 earthquake and tsunami.
 Up until the GFC, Niseko, encompassing six ski slopes on Hokkaido's northern island, attracted a wave of property investment from wealthy Australians.
 Many were spurred on by now departed property developers like Colin Hackworth and Roger Donazzan (husband of former Qantas chairwoman Margaret Jackson), who bought Niseko’s Hanazono ski field in 2003.
 Although Niseko is more than 600kms away from the site of the tsunami and nuclear disaster, concerns over radiation and general fears about travelling to Japan have kept visitors and investors away. The tsunami affected the latter part of the ski season, which traditionally runs from November to May.
 Developers like Niseko Property director Peter Murphy say Australians are by and large holding onto their properties.
 “There are a few people who want to get out, but there is currently no liquidity in the market, as there are no buyers,” he told Property Observer from Niseko.
 Murphy is advising people not to reduce their selling prices and expects things to get better in the next six to 12 months.
 Julian Bailey, from Hokkaido Tracks Resort Properties, says many Australians would love to sell, but are being put off by the strong Australian dollar (offsetting any appreciation in properties bought pre-GFC) and a lack of buyers.
 As Australians don’t qualify for Japanese loans, they have had to buy their properties for cash, and most are unwilling to take the cash hit.
 “Niseko is a cash market. Sellers are struggling to achieve prices comparable to what they paid in 2006. Rather than sell, they are hanging on. There are not many people out there wanting to buy in Japan at the moment,” Bailey says.
 For new Australian investors, besides the hefty cash investment, health, safety and travel concerns remain inhibiting.
 In 2003, a three-bedroom apartment in the desirable Hirafu upper village sold for about 32 million yen, an investment of $420,000 at the time. At the current exchange rates, this equates to $368,000, before taking into account any possible price depreciation as a result of the GFC.
 Searches by Property Observer found modern three-bedroom apartments in the upper Hirafu village on the market for 41 million yen ($470,000), two-beds for 32 million yen ($368,000) and a studio for 24 million yen ($275,000).
 Niseko Property has received the green light for two investment projects. But Murphy says the company anticipates it will have trouble selling the stock over next winter. “We need a village full of people. Then people will feel comfortable about investing,” he says.
 Bailey says he has no concern about the fundamental desire for property in Niseko, but admits it is now a much tougher market to get into because of the cash requirement. “People who were our bread and butter five years are finding it a much tough prospect. And returns are not as good as they were, given the increase in supply.”
 But as he points out that buying in Niseko is much more a lifestyle choice than an investment decision. “It’s like any aspirational life-enhancing investment, a weekend home, a boat or a sports car.”
 Bailey is betting on Niseko, “based on a decade or more of ownership”, believing that the “destination's growth as a brand and its simple geographical location will underwrite property value.
 “The alternative for would-be investors appears to be trying to read or second-guess debt-driven property markets elsewhere, which have proven to be unpredictable even for the most skilled of analysts,” he says.
 GFC recovery, Asian invasion
 Before the March 2011 disaster, Niseko had battled through the GFC. Prices had fallen by about 20%, but the village was on the rebound, driven by a wave of cashed-up Western expats living in Asia who were discovering the region.
 According to both Murphy and Baily, expats living in Hong Kong, Singapore, Malaysia and to a lesser extent, Indonesia have all pumped money into Niseko, buying up properties as both summer and winter holiday retreats.
 Hokkaido Tracks sells property off the plan. Most recently the company sold six units as part of a seven-unit development. Two have been bought by UK residents based in Shanghai, three by Australians residing in Hong Kong and Malaysia and one by a French expat living in Hong Kong.
 “There is still one available. By our standards this is a bad situation. In the past we sold everything,” Bailey says.
 As this sale demonstrates, Australians are still a big part of the market, but the next wave is coming from Asia.
 “There are lots of very wealth Asian developers with lots of experience coming into the area. They have significant development plans, and an evolution is happening here. We are going from smaller, entrepreneurial Aussie investors to much bigger Asian-led resort construction,” Bailey says.
 Australians first ventured into the valley in 1995, but it was only around 2003 – sparked primarily by Hackworth and Donazzan – that they started buying houses and apartments. 
In September 2007, Hackworth and Donazzan sold their business, Nihon Harmony, to Hong Kong tycoon Richard Lee's Pacific Century Premium Developments.
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Aussie investors not turning Japanese anymore

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{yoogallery src=[images/stories/AlexPerry]}
Name: Alex Perry
Company/organisation: Alex Perry Residential Position: Creative director City of residence: Sydney No. of years in the industry: 20 years in the fashion and design industry
A household name in fashion, Alex Perry's garments have graced the likes of Jennifer Lopez, Miranda Kerr and Natalie Portman. He has now turned his creative eye to a new medium, building design, with the launch this year of Alex Perry Residential. Brisbane entertainment precinct Fortitude Valley will be the site of the first of nine residential ventures, and construction is due to begin next year. The building, in partnership with Chrome Property Group, will be located at 959 Anne Street, with apartments priced from $350,000 to $970,00. Nine Alex Perry Residential buildings will roll out across Australia through to 2021, with a Sydney apartment development to follow Brisbane.
What sparked your initial interest in property/building design?
My family used to go visiting friends and relatives a lot when I was a child. I used to sit in their houses and re-design the rooms in my head. When you’ve got an opinion on fashion it’s not a big stretch to evolve that skill into other areas of design.
What was the first property you bought?
My marital home in Sydney
So far, who or what has been your biggest influence in your life or career?
Beautiful cities are my ultimate inspiration. I love Paris, Athens, Barcelona and New York. The culture of a city is created by a combination of the architecture, the food, the fashion, the art, the geography, the history and the attitude of the people. When I visit a city I immerse myself into all of these elements.
If you had a $500,000 to invest in property right now, where would you invest it?
Alex Perry Residential in Fortitude Valley. A one-bedroom apartment starts from $350,000.
How do you think Brisbane rates in terms of style and creativity compared with Melbourne and Sydney? 
When I think of Brisbane I think "eternal summer", both in terms of the weather and the style of the city, which is fresh, vital, positive and exuberant.
What buildings in Australia (or overseas) do you consider icons of great building design?
The Acropolis (Athens)
The Élysée Palace (Paris)
The Sydney Opera House
What are some of the biggest mistakes people make when designing their home or apartment?
They follow trends that date too quickly.
How does designing an apartment building differ to designing clothes? Are there many similarities?
Good design, whether it’s for the home or the body, is about the classics. Start with a neutral palette in a classical silhouette made from the best materials you can afford. Once you have the basic structure in place, you can overlay with accessories and fun items that can be updated and evolved.
What are you reading at the moment?
The works of author David Sedaris
What are you listening to at the moment?
DJ Sveta creates iPods for me of my favourite re-mixes of music from the 1980s and 1990s.
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Alex Perry: Inspired by beauty

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Industrial rents in Melbourne have risen 1.8% in the first quarter of 2011 and 6.6% for the year, the fastest rental growth in Australia and the Pacific region, according to the latest CBRE MarketView report.
<img src="/images/stories/cbrejune8.jpg">
Melbourne was also home to the Asia Pacific region’s largest leasing deal of the quarter – Coles pre-let of 70,000 sqm of accommodation in Truganina, 21kms west of the Melbourne.
According to the report, the consolidation of distribution operations is particularly evident in the Melbourne’s west sub-region, where affordable land, attractive rents and excellent transport links to the Port of Melbourne have attracted development and cost-conscious occupiers.
The west sub-region comprises seven local government areas of Brimbank, Hobsons Bay, Maribyrnong, Melbourne, Melton, Moonee Valley and Wyndham. 
According to a Melbourne industrial market report released by Knight Frank in March, rents are cheapest in the west, at $69 per square metre, and most expensive in the city fringe, at $125 per square metre. On average, a square metre of prime industrial space in Melbourne costs $74, making it cheaper than Sydney, Brisbane and Perth, all of which feature on the top 10 most expensive industrial rental markets.
The CBRE report ranks Sydney the seventh most expensive location to rent industrial space, at $113 per square metre, with Perth eighth at $113.217 sqm and Brisbane ninth at $109.67 per square metre.
The most expensive industrial rents are to be found in Tokyo (US$22.15 per square foot), followed by London (US$20.04) and Singapore (U$14.04).
<table border="0" cellspacing="0" cellpadding="0" width="87%"><tbody>
<tr>
<td width="15%" valign="bottom">
MARKETS
</td>
<td width="15%" valign="bottom">
COUNTRY/STATE
</td>
<td width="11%" valign="bottom">
REGION
</td>
<td width="10%" valign="bottom">
CURRENCY
</td>
<td width="14%" valign="bottom">
2011 Q1 LOCAL MARKET MEASUREMENT
</td>
<td width="12%" valign="bottom">
2011 Q1 <country-region><place>US</place></country-region> $ PSF EQUIVALENT
</td>
<td width="10%" valign="bottom">
CURRENT RANKING
</td>
<td width="10%" valign="bottom">
PREVIOUS POSITION
</td>
</tr>
<tr>
<td width="15%" nowrap valign="top">
<city><place>Tokyo</place></city>
</td>
<td width="15%" nowrap valign="top">
<country-region><place>Japan</place></country-region>
</td>
<td width="11%" nowrap valign="top">
<place>Asia</place>
</td>
<td width="10%" nowrap valign="top">
JPY
</td>
<td width="14%" nowrap valign="top">
154.02
</td>
<td width="12%" nowrap valign="top">
22.15
</td>
<td width="10%" nowrap valign="top">
1
</td>
<td width="10%" nowrap valign="top">
1
</td>
</tr>
<tr>
<td width="15%" nowrap valign="top">
<city><place>London</place></city>
</td>
<td width="15%" nowrap valign="top">
<country-region><place>UK</place></country-region>
</td>
<td width="11%" nowrap valign="top">
EMEA
</td>
<td width="10%" nowrap valign="top">
<country-region><place>UK</place></country-region>
</td>
<td width="14%" nowrap valign="top">
14.15
</td>
<td width="12%" nowrap valign="top">
20.04
</td>
<td width="10%" nowrap valign="top">
2
</td>
<td width="10%" nowrap valign="top">
2
</td>
</tr>
<tr>
<td width="15%" nowrap valign="top">
<country-region><place>Singapore</place></country-region>
</td>
<td width="15%" nowrap valign="top">
<country-region><place>Singapore</place></country-region>
</td>
<td width="11%" nowrap valign="top">
<place>Asia</place>
</td>
<td width="10%" nowrap valign="top">
USD $
</td>
<td width="14%" nowrap valign="top">
14.04
</td>
<td width="12%" nowrap valign="top">
14.04
</td>
<td width="10%" nowrap valign="top">
3
</td>
<td width="10%" nowrap valign="top">
4
</td>
</tr>
<tr>
<td width="15%" nowrap valign="top">
Sao Paulo/Campinas
</td>
<td width="15%" nowrap valign="top">
<country-region><place>Brazil</place></country-region>
</td>
<td width="11%" nowrap valign="top">
<place>Latin America</place>
</td>
<td width="10%" nowrap valign="top">
USD $
</td>
<td width="14%" nowrap valign="top">
12.88
</td>
<td width="12%" nowrap valign="top">
12.88
</td>
<td width="10%" nowrap valign="top">
4
</td>
<td width="10%" nowrap valign="top">
3
</td>
</tr>
<tr>
<td width="15%" nowrap valign="top">
<city><place>Paris</place></city>
</td>
<td width="15%" nowrap valign="top">
<country-region><place>France</place></country-region>
</td>
<td width="11%" nowrap valign="top">
EMEA
</td>
<td width="10%" nowrap valign="top">
Euro
</td>
<td width="14%" nowrap valign="top">
8.36
</td>
<td width="12%" nowrap valign="top">
11.84
</td>
<td width="10%" nowrap valign="top">
5
</td>
<td width="10%" nowrap valign="top">
6
</td>
</tr>
<tr>
<td width="15%" nowrap valign="top">
<city><place>Amsterdam</place></city> (Schiphol)
</td>
<td width="15%" nowrap valign="top">
<country-region><place>Netherlands</place></country-region>
</td>
<td width="11%" nowrap valign="top">
EMEA
</td>
<td width="10%" nowrap valign="top">
Euro
</td>
<td width="14%" nowrap valign="top">
8.35
</td>
<td width="12%" nowrap valign="top">
11.83
</td>
<td width="10%" nowrap valign="top">
6
</td>
<td width="10%" nowrap valign="top">
5
</td>
</tr>
<tr>
<td width="15%" nowrap valign="top">
<city><place>Sydney</place></city>
</td>
<td width="15%" nowrap valign="top">
<country-region><place>Australia</place></country-region>
</td>
<td width="11%" nowrap valign="top">
Pacific
</td>
<td width="10%" nowrap valign="top">
AUD $
</td>
<td width="14%" nowrap valign="top">
113.27
</td>
<td width="12%" nowrap valign="top">
10.87
</td>
<td width="10%" nowrap valign="top">
7
</td>
<td width="10%" nowrap valign="top">
7
</td>
</tr>
<tr>
<td width="15%" nowrap valign="top">
<city><place>Perth</place></city>
</td>
<td width="15%" nowrap valign="top">
<country-region><place>Australia</place></country-region>
</td>
<td width="11%" nowrap valign="top">
Pacific
</td>
<td width="10%" nowrap valign="top">
AUD $
</td>
<td width="14%" nowrap valign="top">
109.85
</td>
<td width="12%" nowrap valign="top">
10.54
</td>
<td width="10%" nowrap valign="top">
8
</td>
<td width="10%" nowrap valign="top">
9
</td>
</tr>
<tr>
<td width="15%" nowrap valign="top">
<city><place>Brisbane</place></city>
</td>
<td width="15%" nowrap valign="top">
<country-region><place>Australia</place></country-region>
</td>
<td width="11%" nowrap valign="top">
Pacific
</td>
<td width="10%" nowrap valign="top">
AUD $
</td>
<td width="14%" nowrap valign="top">
109.67
</td>
<td width="12%" nowrap valign="top">
10.52
</td>
<td width="10%" nowrap valign="top">
9
</td>
<td width="10%" nowrap valign="top">
10
</td>
</tr>
<tr>
<td width="15%" nowrap valign="top">
<place>Hong Kong</place>
</td>
<td width="15%" nowrap valign="top">
<country-region><place>China</place></country-region>
</td>
<td width="11%" nowrap valign="top">
<place>Asia</place>
</td>
<td width="10%" nowrap valign="top">
USD $
</td>
<td width="14%" nowrap valign="top">
9.93
</td>
<td width="12%" nowrap valign="top">
9.93
</td>
<td width="10%" nowrap valign="top">
10
</td>
<td width="10%" nowrap valign="top">
11
</td>
</tr>
</tbody></table>
According to CBRE’s Global Industrial Rent Index, rental growth has been better than anticipated, with the index rising 1.3% over the March 2011 quarter – the largest quarterly growth since the second quarter of 2007. In the year to March 2011, industrial rents grew by 2.1%.
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Melbourne leads industrial rental growth in Pacific region

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The ACT has exhibited the biggest increase in owner-occupier housing finance commitments, increasing 8.8% in April on a seasonally adjusted basis, according to the latest ABS figures. This follows a 5.2% contraction in March.
The second biggest mortgage growth spurt occurred in Queensland with commitments up 6.2% (after falling 2.6% in March) an indication of post-flood recovery.
This is followed by increases in Victoria and Western Australia of 4.1%, with NSW up 2.7% and Tasmania up 2.3%.
Mortgage commitments have fallen in the Northern Territory (1.3%) and South Australia (1.2%).
On a nationwide basis, the number of owner occupier commitments increased by 4.8% to 47,347 following falls of 6.3% in January, 4.8% in February and 1.1% in March. 
Financing for new housing has risen 9.4% and 5.1% for the purchase of existing housing.
Westpac economist Julene Lee downplayed the latest figures saying “other indicators suggest that the housing sector remains subdued”. 
“We are inclined to put this result down to a modest give back and an Easter effect. It seems that a much later than usual Easter resulted in more activity in April ahead of the holiday disruption,” Lee says.
“We are not expecting another strong national rise in May - although we do expect a further post flood recovery in Queensland.
Finance for the construction of new dwellings – the lead indicator of dwelling approvals – remains flat, up just 0.4% with investor finance down 1.6%.
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ACT leads mortgage growth figures

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The Housing Industry Association has added its voice of opposition to the Gillard Government’s proposed carbon tax, estimating it will add $6,000 to the cost of a building a home.
HIA’s estimate is based on a $20 per tonne carbon emissions price, but the organisation acknowledges the $6,000 estimate would be lower due to yet-to-be-confirmed compensation measures, which are expected to lower the additional cost by less than 15%.
The HIA believes the carbon tax will have a “significant negative impact” on new housing and Australian jobs.
“It is inevitable that jobs in Australia’s residential building sector and building product manufacturing sector will be lost under a carbon tax,” HIA executive Graham Wolfe says.
Although the government has not yet put a price on carbon, the HIA expects Australian manufacturing will be burdened twice: directly, from the tax, and indirectly, in the form of higher electricity, gas and fuel prices.
“Details on the Government’s compensation arrangements for emissions-intensive, ‘trade-exposed’ operations are at best sketchy, while compensation measures for the tens of thousands of small, medium and larger ‘trade exposed’ manufacturers have to date been off the agenda,” he says.
</body></html>

Carbon tax to add $6,000 to new home costs: HIA

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The Northern Territory is the only state or territory to record an increase in first home buyers in the March quarter, bucking a nationwide trend.
ACT had the biggest drop in this sector of the market, and South Australia first-home buyer numbers fell to a 20-year low.
In the Northern Territory the number of new loans to first-home buyers increased during the quarter, up 8.9% to 159 loans. These borrowers make up 23.5% of the market, according to the Real Estate Institute of Australia Deposit Power Housing Affordability Report.
At the other end of the scale, ACT recorded the largest decrease in the number of new loans to first-home buyers, down 25.5% to 324. First-home buyers still comprise 25.9% of the market in Australian Capital Territory.
State-by-state analysis
In New South Wales, the number of loans to first-home buyers continues to be higher than all other states and territories, despite a decrease of 14.6% to 6,097 from the previous quarter. Over the year, the number of loans to first-home buyers decreased 13%.
In Victoria, the total number of loans issued to first-home buyers decreased 21.1%, down from 7,005 in the previous quarter to 5,526, the second-largest decrease of any state or territory during the quarter.
In Queensland, first-home buyer numbers dropped 16.1% to 3,636 during the March quarter. Compared with the same quarter of 2010, housing loans allocated to first-home buyers decreased 17.6%
In South Australia the number of loans to first-home buyers declined 14.8% to 1,269, the lowest quarterly level since September 1991. Compared with the same quarter of 2010, housing loans to first-home buyers decreased 22.6% in SA.
In Western Australia the number of housing loans to first-home buyers declined 10.2% to 2,920. Over the twelve months to March 2011 the number of loans to first home buyers declined 18.3%.
The number of new loans to first-home buyers decreased by 8.3% in Tasmania, bringing the total number of new loans from 374 in the December 2010 quarter to 343 in the March 2011 quarter. Over the 12 months to March, the number of new loans to first-home buyers decreased 23.1%. 
 
<hr class="system-pagebreak">
 
Nationwide, the number of first-home buyers participating in the mortgage market plummeted to the lowest level in 17, years according to the latest Real Estate Institute of Australia Deposit Power Housing Affordability Report.
 First-home buyers comprised just 15.4% of the “dwelling finance” market in the March 2011 quarter, compared with 15.6% in the December 2010 quarter, the latest report says. This is well below the long-term average of 20%.
The number of new finance commitments to first-home buyers fell to 16.1% for the quarter to 20,274, and the number of loans to first home buyers declined over the year, down 20.6%.
Affordability
ACT remains the most affordable state or territory, according to the report, with the proportion of income required to meet loan repayments increasing to 18.6%, 15.6 percentage points below the national average of 34.2%. NSW remains the least affordable, with the proportion of income required to meet loan repayments decreasing to 37.2%.Victoria is the second least affordable state (27.8%).
Affordability in Queensland improved during the quarter, with the proportion of income required to meet loan repayments decreased 0.5% to 32.9%.
During the March 2011 quarter, the total number of new finance commitments (excluding refinancing) decreased 16.5% to 90,157 – the lowest quarterly level in 12 years. All states and territories recorded declines in the total number of new finance commitments, both over the quarter and the year.
The latest finding about first-home buyer reluctance comes despite a report by Canstar Cannex saying conditions are easing for this sector of the market.
The financial data provider expects first-home buyers to be the likely beneficiaries of a flat housing market combined with an easing of deposit requirements by a significant number of lenders.
“In the last 12 months we’ve seen at least 25 lenders ease their deposit requirements and increase their LVRs (loan-to-valuation ratios) to assist borrowers getting into the market for the first time,” Canstar Cannex financial analyst Mitchell Watson says.
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First-home buyer numbers down nationwide, except in NT

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A moderate rise in property prices, increased investor interest and a possible increase in rents close to transport hubs are the medium-term expectations for Seaford, South Australia, where a new railway extension that will link the suburb directly to the city is under construction.
The $291.2 million Seaford railway extension, announced in the May 2009 Federal Budget, is due to be completed in 2013. It will add 5.7 kilometres of track joining the current end-of-line stop, Noarlunga, to the Seaford District Centre with a stop in between at Seaford Meadows. Park-and-ride facilities will be available at both new stations, and 372 daily buses will service the Seaford District Centre.
In addition to the extension, a project is currently underway to electrify (from diesel) and re-sleeper the existing Adelaide-to-Noarlunga line, which, according to a spokesperson for the project, will result in quieter, more environmentally friendly trains.
Construction of the extension is due to be completed in August 2012. The project will then be handed over to the government for testing. Passenger services are due to begin running in 2013.
About 36kms from the Adelaide CBD, Seaford is a middle-class neighbourhood where many commute to the city or surrounding economic hubs for work. The new train line will mean an express journey from Seaford to Adelaide will take 35 minutes, 50 minutes on a normal service.
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/seafordlarge.jpg"><img src="/images/stories/seafordsmall.jpg"></a>
Photograph courtesy of the Department fro Transport, Energy and Infrastructure.
Values holding steady
To date the announcement and commencement of the project have not had a great impact on Seaford property values – depending on which statistics you believe.
Statistics gathered by WBP Property Group reveal that house prices in the postal code have followed the trend of the greater metro area, which is flat at present.
Median house prices for Seaford (postcode 5169)
<table cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td valign="top" width="225">
Mid 2009
</td>
<td valign="top" width="208">
$325,000
</td>
</tr>
<tr>
<td valign="top" width="225">
Mid 2010
</td>
<td valign="top" width="208">
$345,000
</td>
</tr>
<tr>
<td valign="top" width="225">
Mid 2011
</td>
<td valign="top" width="208">
$335,000
</td>
</tr>
</tbody></table>
Source: WBP Property Group
Bart Quinn, state manager for SA of WBP, says the outer Adelaide suburbs are particularly flat, “with agents reporting price falls of up to 10% in some suburbs”.
“This project will add to the overall amenity of the Seaford area, however, I expect prices will remain flat over the short to medium term,” he tells Property Observer.
A similar story is told by figures obtained from the Real Estate institute of South Australia:
Median house prices for Seaford
<table cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td valign="top" width="205">
 
</td>
<td valign="top" width="205">
No of sales
</td>
<td valign="top" width="205">
Median price
</td>
</tr>
<tr>
<td valign="top" width="205">
First Quarter, 2010
</td>
<td valign="top" width="205">
20
</td>
<td valign="top" width="205">
$321,000
</td>
</tr>
<tr>
<td valign="top" width="205">
First Quarter, 2011
</td>
<td valign="top" width="205">
17
</td>
<td valign="top" width="205">
$335,000
</td>
</tr>
</tbody></table>
Source: REISA
REISA reported 0.49% growth in Adelaide house prices in the first quarter of 2011, taking the median house price to $410,000. Over the 12 months to March 2011 house prices increased by 1.23%. Statewide, house prices increased by a modest 0.14% during the first three months of the year and 2.99% during the 12 months to March 2011, with the median state house price at $379,000.
However, RP Data statistics paint a different picture, suggesting the project is already having an impact on house prices.
Median sale prices for Seaford houses
<table cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td valign="top" width="205">
Month
</td>
<td valign="top" width="205">
Median price
</td>
</tr>
<tr>
<td valign="top" width="205">
Jan 2010
</td>
<td valign="top" width="205">
$311,500
</td>
</tr>
<tr>
<td valign="top" width="205">
Dec 2010
</td>
<td valign="top" width="205">
$338,750
</td>
</tr>
<tr>
<td valign="top" width="205">
Jan 2011
</td>
<td valign="top" width="205">
$338,750
</td>
</tr>
<tr>
<td valign="top" width="205">
Feb 2011
</td>
<td valign="top" width="205">
$337,000
</td>
</tr>
<tr>
<td valign="top" width="205">
March 2011
</td>
<td valign="top" width="205">
$350,000
</td>
</tr>
<tr>
<td valign="top" width="205">
April 2011
</td>
<td valign="top" width="205">
$350,000
</td>
</tr>
</tbody></table>
Source: RP Data
According to RP Data, the median price of a house in Seaford hovered around the $300,000 mark up until the end of 2009.
During 2010, when construction of the railway line extension began, house prices started to rise steadily, and by the end of the year the median price was more than 10% higher, at $339,000. Prices have jumped again in the first few months of 2011, with RP Data putting the median price at the end of April at $350,000. Average weekly rent is $180. According to RP Data, Adelaide house prices grew by 2% in the 12 months to January 2011.
A search across realestate.com.au shows just 33 houses for sale in Seaford, ranging from $299,000 for a two-bedroom, one-bathroom house to $399,000 for a three-bedroom, two-bathroom property, marketed by the agent as an investment property.
Investor opportunity
Quinn says recent reports from local agents indicate an increase in investor enquiry about the Seaford area.
“Experience shows that interstate investors often demonstrate greater interest in new infrastructure project than local residents. This is probably because local residents are unlikely to sell an existing home simply to take advantage of new infrastructure development in a nearby area,” he says.
As a result, he does not expect a dramatic increase in buyer activity, and says the extension is not likely to greatly impact values in Seaford and Seaford Meadows.
However, investors looking to leverage off the railway extension may find good opportunities if they pick up properties for a good price close to the two proposed stations.
Quinn says rental costs for these properties might increase over the long term. Greg Nybo, president of the Real Estate Institute of South Australia, says Seaford will benefit from the transport infrastructure and applauds the railway project currently underway.
“Anything from transport point of view is a good thing. The southern suburbs are ever expanding. As the population goes up, there is a greater need for improved transport services,” he says.
He says people in the community are excitedly awaiting the arrival of the train: “With fuel costs rising, they are looking for an economical manner to get to work.”
As for house prices, he says all major infrastructure projects help, as they make an area more attractive, but as with all property, it’s about supply and demand.
Agents optimistic
Agents operating in the area expect the project to make Seaford more attractive and bring in buyers 
Kerri Cook, property management and selling principle at Ray White Seaford, says there is strong interest in land around Seaford Meadows and also interest in nearby Aldinger Beach.
“We are quite excited about the development. Prospective buyers are being more proactive with properties coming up in the area,” she says.
“I expect more people will look to move south. Previously it has been considered too far. A journey into the city on public transport would take about an hour. The train will cut this down to about 35 minutes.”
Sentiments from Andrew Koukourou, principal at Century21 South Coast, reflect the available data: “The market is fairly flat, but there is lot of talk. I come across people all time who are talking about it in a positive light.
Koukourou expects the new line will have a positive impact on prices: “Once it is launched, the train line will be electric, efficient and quite an economical method of transport.”
But Quinn warns investors to tread cautiously: “Selecting real estate on the basis of proposed infrastructure development is speculative and can be risky.”
</body></html>

Seaford market flat, but price increases likely down the track

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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