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Housing affordability improved by 0.5 percentage points in the first three months of the year with the proportion of income required to meet loan repayments decreasing to 29.9%.
It was the seventh successive quarterly improvement in housing affordability as measured by the Real Estate Institute of Australia (REIA) in partnership with Adelaide Bank.
A year ago, the proportion of income required to meet loan repayments decreasing to 32.7%.
Housing affordability woes peaked at a ratio of family income to average loan repayments of close to 40% in March 2007 just before the start of the Global Financial Crisis when the cash rate hit 7.25%.
<img src="/images/stories/2013/may23abelesauction/REIA_affordabiulity.jpg" width="470" height="290" alt="REIA_affordabiulity">
Source: REIA
Despite the continued incremental improvements in affordability over the past two years, first-home buyers as a proportion of the owner-occupier market dwindled to their lowest level since the June quarter of 2004.
First home buyers made up 14.5% of the owner-occupier market compared with 16.5% in the December quarter 2012, according to REIA figures.
“Affordability has been improving slightly now for seven consecutive quarters, with the proportion of income required at its lowest since the December quarter 2009 and compared to the same time last year, all states and territories saw improvements,” notes REIA president Peter Bushby.
"Investors are returning to the housing market with investment housing representing 36% of total lending in March 2013. Unfortunately this confidence is not shared by first home buyers with numbers plummeting since the First Home Buyer Boost was abolished," he says.
 
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 Click to enlarge
<a href="/images/stories/2013/06/affordabilityjune5one.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2013/06/affordabilityjune5onethumb.gif"></a>
Source: REIA
The REIA blames the decision by state and territory governments in NSW, Queensland, South Australia, Tasmania and <a href="https://www.propertyobserver.com.au/residential/act-lifts-first-home-owner-grant-to-%2412500-but-for-new-homes-only-from-september-1-fhog-fhb/2013060361890" target="_blank">most recently the ACT</a> to axe the $7,000 first home owner grant for the purchase of existing homes for FHB numbers falling sharply.
“The impact of the decisions by the state Governments is clear in the plummeting number of first home buyers. Despite cuts in the official interest rate by the RBA to levels not seen for decades,the proportion of first home buyers decreased to 14.5% in March 2013," said Bushby in a statement earlier this month.
Renting become slightly less affordable in the March quarter - declining from 23.9% of median weekly family income required to meet weekly rent for a three bedroom house to 24.4% - but is still more affordable than a year ago (24.7%).
The largest improvement in housing affordability was recorded in the ACT where the proportion of income needed to meet loan repayments dropped by 1.4 percentage points to 17.3% driven by weekly incomes rising by $10 to $2,992 while average monthly loan repayments fell by $161 to $2,249.
The second biggest improvement in affordability occurred in NSW with ratio of household income to monthly mortgage repayments improved from 36% to 34.5% - a year ago it was 37.8%.
However NSW, with its high median house prices, remains the least affordable state followed by South Australia (an improvement from 31.4% to 30.6%), Victoria (an improvement from 30.6% to 30.2% and Queensland (an improvement from 28.1% to 27.9%).
Western Australia (up from 22% to 22.6%) and Tasmania (up from 25.2% to 25.6%) where the only two state or territory markets where housing affordability worsened over the quarter.
REIA March quarter figures show the number of loans to first-home buyers in NSW fell 40.6% to 2,647.
“When compared to the figure recorded a year ago, that’s a 5 7.0% drop. This is the largest annual decline in the number of first home buyers’ commitments across the country,” says Bushby.
In Queensland, the number of loans to first-home buyers decreased 43.2% to 2,557 and this is the largest quarterly decline across the nation. When compared to the figure recorded last year, it’s a 49.2% drop.
“The proportion of first-home buyers in the number of owner-occupied housing finance commitments is now at 14.2% and remains persistently low compared to the long-run average proportion of 20.1%,” says Bushby.
Victoria recorded a drop in the number of loans to first home buyers over the quarter, down 15.4%  to 6,053 while South Australia recorded the nation’s only increase, up by 1.8%.
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ACT and NSW lead “slight” improvement in housing affordability in March quarter but FHBs stay away: REIA report

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The RBA is likely to leave the cash rate on hold in July but economists are pencilling in a likely 25 basis point rate cut in August provided there is a benign second quarter inflation reading on July 24 and no sign of a significant pick-up in non-mining sectors of the economy. 
Westpac chief economist Bill Evans believes the end game for the RBA in the current easing cycle remains a 2% cash rate with the most likely timing being a 25 basis point rate cut in August followed by another one in the final quarter the year and one in the first quarter of 2013. 
“The Reserve Bank has retained an easing bias, but it is not an urgent one, says Evans, the first major bank economist to correctly tip the RBA to begin its easing cycle in November 2011.
“The path of easing from here will depend on developments in demand; the financial markets (the Australian dollar, as it jointly impacts demand and inflation) and the inflation story itself,” writes Evans in a note following yesterday’s RBA decision. 
Evans says a key piece of information the RBA will assess is the second quarter ABS inflation figure, which will be released on July 24 - between the July 2 and August 6 monetary policy meetings. 
“We have a more downbeat view on global growth next year and our domestic forecasts are also lower than the Bank's. 
“As such we already see a strong case for further monetary policy easing. 
“However, the tone of yesterday's statement implies that the RBA Board is looking for further evidence before acting again, which points to rates being kept on hold in July. 
“However, it is likely to signal at that meeting that the forthcoming inflation print could provide scope for it to support demand further within the context of its target [inflation band of between 2% and 3%],” he says. 
AMP Capital chief economist Shane Oliver, one of just a few economists who expected a cash rate cut yesterday, said the key message from yesterday’s accompanying statement from Glenn Stevens was that interest rates were appropriate for the "time being", but “importantly it also signalled that it retains a bias to cut interest rates again if needed”. 
“Our view remains that the RBA will have to act again on its easing bias,” says Oliver. 
“While the Australian dollar has fallen over the last month at around $US0.97 it hasn't really fallen enough to provide a big stimulus to the economy (it’s just at the low end of the range it’s been in for two years). 
“While the economy has shown tentative signs of responding to lower interest rates, its now crunch time for the Australian economy with peaking mining investment leading to a heightened sense of urgency that other parts of the economy start to pick up more vigorously,” Oliver says. 
“Ultimately this will occur, but its likely to require a lower Australian dollar and a further decline in interest rates to ensure the adjustment back to a more balanced economy is not too painful. 
“As a result we continue to see further interest rates cuts from the RBA, with the next move likely in the next month or so, although the RBA may decide to wait until the August meeting after which it will get a look at the June quarter inflation figures,” he says. 
CommSec chief economist Craig James highlights that the accompanying statement by Glenn Stevens was probably the smallest on record at 348 words. 
“Basically the Reserve Bank believes it has cut rates low enough to boost economic growth,” James says. 
“But if the economy continues to lag and inflation stays low, the Reserve Bank has vowed to cut rates further. 
James highlights the performance of the Australian dollar as one of the key uncertainties in the minds of the RBA. 
“While the Aussie dollar has fallen over the past month, we are still in the dark about the Reserve Bank’s 'comfort level', given the myriad of factors such as commodity prices, the trade accounts, our AAA credit rating and interest rate settings,” he says. 
He also says the RBA will look at the cash rate in relation to variable mortgage rates and how close they are to “normal”. 
“Currently the variable housing rates of major banks are around 6.20%, below the long-term average or “normal” rate of 7.20% but still modestly above the 41-year low of 5.75% recorded in April-May 2009,” says James. 
“Certainly there is more activity in the housing market at present, but the response has been more by investors rather than owner-occupiers. 
“Not only do analysts need to consider the environment, but also the different reaction funds of demographic groups, from Generation Y to baby boomers,” he says. 
James returned to the wording of the May monetary policy decision statement where the RBA said that only “some” of the scope to ease policy had been used, keeping some in reserve. 
“The Reserve Bank has kept the easing bias firmly in place. So we continue to pencil in the risk of another rate cut in August after the inflation data released in late July,” he says.
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RBA retains easing bias and will act on it with August cash rate cut: economists

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Local business owners are snapping up industrial properties below $1 million in Melbourne's bayside suburbs, with recent sales activity and a dwindling amount of space suggesting that investors and developers take a look at the market.
A stock shortage appears to be looming with just 11 properties offering space in excess of 1,000 square metres currently available, according to Colliers International industrial property agent Jamie Stuart.
Of the last five properties he has sold, four have been purchased by owner-occupiers from within the local area. 
“The bayside area is quite a localised owner-occupier market,” Stuart says.
“Businesses within the bayside region of Breaside, Mordialloc, Cheltenham, Moorabbin and the surrounds are bucking the trend and expanding due to increasing confidence in the market and the ability to attract and retain a solid work force in this area.”
Recent sales  include a 1,000 square metre office/warehouse at 1 Endeavour Way in Braeside bought by neighbouring business The Wrapping Paper Company Pty Ltd for $1,105,000; while a 750 square metre from  former engineering facility at 65 Shearson Crescent in Mentone was snapped up for $780,000 by a purchaser who already had premises in the same street. 
Other sales included:
<ul>
<li>A 208-square-metre modern boutique office/warehouse at 9/34 Christensen Street in Cheltenham was purchased by an owner-occupier from Middle Park for $330,000; </li>
<li>A 405-square-metre office with storage at 52 Parkhurst Drive in Knoxfield purchased by a photography company for $465,000; and</li>
<li>A 1,018-square-metre older style office/ warehouse at 15-17 Bond Street in Mordialloc purchased by a neighbour who was looking to expand operations, for $900,000 
</li>
</ul>
“From strong auction results in the last few months, we have buyers who missed out still waiting for opportunities to arise and fulfill their requirement,” he says. 
“We are seeing a real shift of enquiry from leasing to purchase, due to the affordability of cash and a long term desire to own within this dynamic and localised market place.”
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Melbourne bayside warehouses below $1 million are in demand

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The premises of Browns Bakery on Church Street in Brighton have sold to a local investor for a record $3.2 million at auction following a battle between seven bidders.
The final price for the 46a Church Street property represented a yield of just 2.6% with around 150 people in attendance at the on site auction.
It is believed this is the highest amount paid for a single-fronted property in the street, and may be the lowest sale yield achieved this year for a retail shop in Melbourne’s major shopping strips.
The property was offered for sale for the first time in over half a century, under instructions from executors, sold on behalf of the Ireland family who had owned it for around 50 years.
In October last year, the historic Lygon Street premises of <a target="_blank" href="https://www.propertyobserver.com.au/retail/lygon-street-premises-of-donatis-fine-meats-slices-records-with-emotion-driven-%24289-million-auction-sale/2012103057521">Donati’s Fine Meats in Carlton sold for $2.89 million at auction</a>, with a private investor paying nearly $1.4 million above pre-auction expectations for the trophy inner-Melbourne retail asset on a yield of around 2.3%.
The previous highest price paid on the retail strip was 93 Church Street, the premises of Rock Shop Clothing, which sold Mark Talbot for $2.99 million in September 2010 and included a separate first floor apartment.
Fitzroy's agent Mark Talbot handled the marketing campaigns of both properties.
The building stands on a 154 square metre site with total building area area of 179 square metres.
The property is leased to Browns Bakery on a three year deal with a further three-year term, currently returning $86,357 plus outgoings and GST.
Talbot says several shops of a comparable size within the immediate vicinity were currently returning rents circa $120,000 per annum plus outgoings and GST,which helped underpin the value of the offering.
“The recent sale confirms Church Street, Brighton as arguably the best, if not the best, retail strip in Melbourne,” says Talbot.
“To achieve a sale price reflecting a yield of only 2.6% shows that investors are willing to acquire prime property, even if the rent is below market rent.
“Earlier this year we saw the deli that adjoins the iconic Pantry sell for $2.9 million,returning $115,000 per annum, but to achieve $3.2 million for a shop only returning $86,000 demonstrates our ability to achieve a maximum sale result for our client.”
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Investor pays record $3.2 million for Brighton Street bakery premises on 2.6% yield

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Law firms continue to play a major role in taking up prime Sydney CBD office space with law firm DLA Piper signing a lease agreement covering 6,000 square metres of office at Charter Hall's 1 Martin Place office tower.
DLA Piper will occupy five floors in the high-rise tower on a 10-year lease term in one of the largest office leasing deals in the Sydney CBD signed this year.
The 24-level A-grade office building is jointly owned by the No.1 Martin Place Trust and Charter Hall.
Martin Place will serve as the Sydney headquarters for the law firm, which will move in mid-2014.
It currently leases level 38 at 201 Elizabeth Street.
The law firm merged with Phillips Fox in January 2011 to create the largest Australian-based law firm.
Charter Hall joint managing director David Harrison says there has been "significant leasing activity in the Martin Place precinct over the past 18 months as tenants refocus on the considerable benefits of operating out of high quality buildings, located in the heart of the CBD, surrounded by customers and clients".
The lease comes as the most recent Knight Frank Asia-Pacific Law Firm Review found that international law firms are reacting to market opportunities and changing regulatory environments to expand their presence in the Asia Pacific region.
According to the report in the past Sydney law firms "generally clustered around the courts and legal precinct".
"However following legislative changes and a consequent change of focus towards more corporate or commercial law, more firms have moved closer to their clients in the “Core” and into quality Grade-A/Premium grade office buildings.
"The increasing competitive pressure from international firms has manifested in a flight to quality, with the legal sector proving to be the most active sector of the market by transaction volume," says Knight Frank.
Recent law firm lease deals include Corrs Chambers Westgarth leasing 8,000 square metres at 8 Chifley Square from the third quarter of 2013 and law firm Ashurst leasing 14,000 square metres at 5 Martin Place.
<img height="167" width="470" src="/images/stories/2013/law_firms.jpg" alt="law_firms">
<div>Source: Knight Frank</div>
<div></div>
DLA Piper was represented by Michael Kearins, director of Cushman &amp; Wakefield’s occupier services business.
The leasing of No.1 Martin Place is being managed by CBRE’s James Patterson and Jenine Cranston in tandem with Greg Fisher and Mark Semple of DTZ.
“We are in a competitive leasing market at the moment with tenants focussing on high quality," says Patterson.
In the past 18 months, tenant commitments for the Martin Place precinct have exceeded 60,000 square metres of space.
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DLA Piper signs 6,000 square metre Sydney CBD lease amid surge in law firm activity

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The McDonald's premises in Preston had the highest number of enquiries of all 21 NSW properties auctioned by Burgess Rawson last month, with attractive tax depreciation allowances a key factor driving investor interest.
The <a target="_blank" href="https://www.commercialrealestate.com.au/property/2010402539/for-sale/nsw/prestons/retail">two-year old premises are leased</a> to McDonald’s Australia for 20 years with 18 years still to run.
The premises (pictured below) were advertised as being "built in 2011 with attractive depreciation allowances".
{yoogallery src=[images/stories/2013/05/may15mcdonalds]}
They featured the latest McDonald's design as well as a drive-thru facility.
Burgess Rawson director Dean Venturato highlighted the fact that the premises were only two years old and that such assets “hardly ever come up”.
He told Property Observer investors would have taken the tax depreciation benefits into account when bidding for the property.
<a target="_blank" href="https://www.propertyobserver.com.au/retail/mcdonalds-australia-beats-private-investors-to-buy-its-own-preston-fast-food-premises/2013051561366">McDonald’s Australia was the winning bidder</a> buying back its own premises and fending off competition from private investors.
It paid $6.45 million for the premises on a 2,621 square metre site reflecting a yield of 5.65% on net income of $365,000 plus GST.
Two other NSW properties that sold as part of the same portfolio auction highlighted their tax depreciation allowances.
A First Choice Liquor outlet in Erina on the Central Coast sold for $4.5 million on a yield of 7.67%. It previously sold for $3.575 million in March 2007.
Leased by First Choice Liquor until 2017 with renewal option to 2037, it features a “modern building with depreciation allowances” on a 2,934 square metre site.
Childcare premises in West Hoxton, leased for 10 years to the Montessori Childcare group with a further 10 year renewal option sold for $1.63 million on a yield of 6.35%.
The free-standing building premises, built in 2008 offered "excellent tax depreciation" allowances were bought by Montessori Childcare.
Under Australian tax law, if you own commercial real estate or commercial property that is rented or used for income-producing purposes you are entitled to claim the depreciation of that property against your taxable income, explains quantity surveyor Washington Brown on its website.
“There are two types of depreciation allowances available: depreciation on Plant and Equipment, and depreciation on Capital Allowances.
“In order to maximise the tax savings on your investment property you'll need a professionally prepared tax depreciation report or tax depreciation schedule, the firm says.
According to <a href="https://www.propertyobserver.com.au/commercial/what-depreciation-commercial-property-investors-can-claim/2012041054202">Property Observer commercial property writer Chris Lang</a>, tax depreciation claims, can significantly enhance the overall return on your investment.
He says investors should seek professional advice to ensure they are claiming their full entitlement — and thereby, leave nothing on the table.
Lang says another vital step investors to need to consider when they acquire a commercial property is knowing how to correctly structure of the contract of sale in order to maximise your depreciation claim for commercial property.
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Burgers, fries and tax depreciation benefits drive sale of McDonald’s premises

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The RBA needs to drastically cut interest rates to weaken the Australian dollar and help non-mining sectors of the economy recover, says economist and property bear Steve Keen. 
He also says more efforts need to be made to reduce debt levels in Australia and other countries, warning the global financial crisis never ended and would continue - on and off- for the next 20 years.
Keen says the RBA should have cut the cash rate yesterday at its June meeting as part of a process of reducing the cash rate by 150 basis points over the coming year. 
This would leave Australia with a cash rate of 1.25% more in line with monetary policy settings of its first-world counterparts like the US (0.25%) UK (0.5%) and Canada (1%). 
“We've run a high interest rate policy when the rest of the OECD has been at zero for four years,” Keen tells Property Observer. 
“That I believe is the main reason our dollar has stayed so high, crucifying manufacturing in the process. 
“I'm saying the RBA should surrender to the other central banks and run the same level,” he says.
Keen, contends that the “GFC has never ended”. 
“It was caused by excessive private debt globally, and ours has remained high (though lower than the US). 
However, he points out that the US has reduced its national debt by a sixth relative to GDP in the last four years while Australian household debt to income <a target="_blank" href="https://www.rba.gov.au/chart-pack/household-sector">remains elevated at around 150% compared with around 50% in the early 1990s. </a>
“This crisis will roll on-again, off-again for two decades, unless we directly reduce private debt by write offs and the like, and there's no sign of that being considered by governments,” he says. 
Keen made these comments from Venice while currently on a global lecture tour. 
He will next fly to Boston to present a specialist seminar on money at Harvard Law School.
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RBA needs to cut cash rate to 1.25% as GFC still lingers: Steve Keen

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The cash rate remains unchanged at 2.75% following today's RBA monetary policy board meeting.
This was in line with the expectations of most economists with 24 out of 25 economists polled by Bloomberg last week tipping no change in June.
<a href="/news">AMP Capital Investors chief economist Shane Oliver </a>was the only economist to forecast a rate cut out of the 25 polled, though he said it would be "another close call".
Separately to the Bloomberg poll, property bear Steve Keen said the RBA should have cut the cash rate today.
Commenting on today’s decision, RP Data research director Tim Lawless says, the recent fall in housing values over both April and May isn’t likely to have played a large role in the RBA’s decision.
<a href="/news">Dwelling values fell 1.2% in May</a> and 0.5% in April to be up 1.1% over the first five months of the year, according to RP Data-Rismark.
“In fact, the RBA was probably heartened that the strong value growth recorded over the first quarter of the year has now slowed to a more sustainable pace," says Lawless.
“Dwelling values remain 1.1% higher since the start of 2013 and are 2.9% higher over the year.
“Looking specifically at the housing market, most other indicators continue to paint a reasonably strong picture of the market.
“Auction clearance rates remain around the 70% (higher in Sydney), the number of advertised properties has fallen markedly since the start of the year, homes are selling in a fewer number of days and vendors are discounting their prices by less.  Importantly there has also been a consistent rise in buyer activity suggesting that buyer demand is continuing to improve thanks to the lower interest rate environment and the fact that the housing market is back in recovery mode,” he says.
LJ Hooker deputy chair L Janusz Hooker says the decision to keep rates on hold today "is a sign of a stronger economic forecast". 
"Better than expected capital investment outlook, a weaker Australian dollar and increase in building approvals has put further cuts on hold for the current time," he says.
"The Australian residential property market is clearly in recovery in many metropolitan areas such as Sydney, Perth and Melbourne which in time will buoy the broader market nationwide."
Alex Parsons, CEO of financial comparison website RateCity.com.au says last month’s rate cut by the Reserve Bank spurred most lenders to follow, by passing on the full 0.25 percentage points.
“We haven’t seen this many lenders follow the cash rate cut in full over the previous six rate cuts. For example, the last three rate cuts in December, October and June 2012, the majority of lenders passed on 0.20 of the Reserve Bank’s 0.25 percentage points.
“In May 2012, when the Reserve Bank dropped the cash rate by 0.50 percentage points, most lenders cut their variable rates by about 0.30 percentage points. This shows that pressure for funding has eased compared to last year and lenders can afford to pass on the full rate cuts to their variable home loan customers,” he says.
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RBA leaves cash rate on hold at 2.75%

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The predominating view among the self-appointed ‘shadow RBA board’ was for the RBA to leave the cash rate on hold today.
However, the latest survey of shadow board members cash rate forecasts reveals considerable uncertainty about where interest rates may be heading over the next six to 12 months.
Unlike other economist surveys, the shadow board – comprising the views of industry and academic economists under the banner of the Centre for Applied Macroeconomic Analysis at Australian National University (ANU) and released on <a target="_blank" href="https://theconversation.com/au">The Conversation</a> – does not provide actual forecasts.
Instead members attach weightings to various interest rate settings.
The latest survey find the likelihood of interest falling over the next six months slightly higher than them rising with almost equal weighting attached to cash rates of 2.5% and 2.75%, with smaller weightings to 3% and 2.25%
Over the 12 month forecast, a cash rate of 2.5% receives the highest weighting, but with also strong leanings towards cash rates of 2.25%, 2.75%, 3% and 3.25%.
“Overall, compared to previous months, there has been a small shift in favour of lower interest rates at the six-month and 12-month horizon, reflecting concerns about muted consumption, weaker global demand, falling commodity prices and tighter fiscal policy following a likely change of government later this year,” writes Timo Henckel, research fellow at the Centre for Applied Macroeconomic Analysis at Australian National University (ANU).
Shadow board member Saul Eslake, chief economist at Bank of America Merrill Lynch Australia, says the decline in the exchange rate since the last Board meeting “reduces the pressure on the RBA to implement a second successive rate cut, while the data flow over the past month hasn’t presented any compelling rationale for a further rate cut”.
“The currency may not fall a lot further, while the economy is likely to remain sluggish and the incoming government will probably seek to tighten fiscal policy more than is currently planned,” he adds.
Shadow board member Mark Crosby, associate professor at Melbourne Business School argues similarly that “recent weakness in the Australian dollar would suggest a pause in rate cuts”.
“International data signals are mixed and market reactions complicating policy making.
“Weakness in US GDP interpreted as reducing the likelihood of an earlier end to quantitative easing (QE) and thus strengthening asset markets being a case in point. One would suggest that in some QE countries asset price bubbles are becoming a serious issue – though the Fed has of course ignored these dangers in the past,” he says.
The shadow board comprises nine members:
<ul>
<li>Shaun Vahey, Professor, RSE, ANU. (non-voting chair)</li>
<li>Paul Bloxham, Chief Economist (Australia &amp; New Zealand), HSBC Bank Australia Ltd</li>
<li>Mark Crosby, Dean of the Global MBA Program, Acting Dean of the Global BBA Program, and Professor of Economics, S P Jain Center of Management in Singapore</li>
<li>Mardi Dungey, Professor, University of Tasmania, CFAP University of Cambridge, CAMA</li>
<li>Saul Eslake, Chief Economist, Bank of America Merrill Lynch Australia</li>
<li>Bob Gregory, Professor Emeritus, RSE, ANU, Professorial Fellow, Centre for Strategic Economic Studies, Victoria University, Adjunct Professor, School of Economics &amp; Finance, Queensland University of Technology</li>
<li>Warwick McKibbin, Professor, RSE, ANU, CAMA</li>
<li>James Morley, Professor, University of New South Wales, CAMA</li>
<li>Jeffrey Sheen, Professor &amp; Head, Department of Economics, Macquarie University,Editor, The Economic Record, CAMA</li>
<li>Mark Thirlwell, Director, International Economy Program, Lowy Institute for International Policy</li>
</ul>
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No cut in the cash rate today amid cloudy outlook: shadow RBA board

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A continued fall in the Australian dollar could discourage Asian developers from buying up development sites and undertaking new apartment projects, property consultants MacroPlan Dimasi have warned.
The argument is counter-intuitive to the traditional notion that a weaker Australian dollar makes it cheaper for foreign investors to buy Australian real estate.
However, according to MacroPlan chief economist Jason Anderson there could be a hiatus in purchases from Asian developers if there is a “gradual deprecation” of the dollar because they will face the prospect of owning an asset that is declining in US dollar value terms.
“This outcome would lead to delays in project commencements and lead to a leg down in apartment building,” writes Anderson in MacroPlan’s latest e-newsletter, reports The Australian Financial Review.
However, he also acknowledged that a weak dollar would benefit Asian investors who have bought Australian apartments off-the-plan and are yet to settle their purchases, reducing the risk of defaults.
The Australian dollar peaked at $1.11 against the greenback in July 2011 and remained mainly above parity until the recent fall in early May sparked by the cash rate falling to a 53-year-low of 2.75%.
It fell to below 96 cents this week but is currently trading up at around 97.5 cents ahead of today's cash rate announcement.
Property consultants Charter Keck Cramer estimate that offshore developers will account for around 39% (4,700 apartments) of new apartments being developed in Melbourne’s central City region over the next three years.
This compares with offshore developers accounting for just 8% of new apartments between 2000 and 2012.
Asian developers have been spurred into developing new apartment projects in Australia on the back of surges in Asian students coming to Australia combined with more restrictive lending practices in their home countries and low Australian interest rates.
<a target="_blank" href="/news">Recent research by Jones Lang LaSalle</a> suggested the Australian dollar is less of a factor than some believe in encouraging offshore investors to buy Australia’s commercial property.
Jones Lang LaSalle found that funds poured into Australian commercial real estate when the Australian dollar was well above parity against the US dollar in 2012, rather than discourage investors.
This suggests that the opposite could happen if the Australian dollar falls – or perhaps that the Australian currency is less of a factor in commercial real estate as it may be in residential investment.
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Falling Australian dollar could discourage Asian apartment developers: MacroPlan Dimasi

<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.

A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.

Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360965]

“The apartment floors deliver a collection of homes that embrace controlled outlook via a series of bay windows deliberately framing moments of view,” Rothelowman Director Kim Lowman said.

From outside, those projecting forms contribute to the tower’s faceted profile. Strong horizontal and vertical elements establish its proportions, while the changing position of the sun alters the light, shadow and reflection across the façade throughout the day.

The same attention moves inside the apartments, where the material palette combines warm timber, natural stone, metallic detailing and softer curved forms. Kitchens sit within the main living zone, with stone island benches, integrated joinery and European appliances, before the living areas extend towards the glazing and the outlook.

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Three genuine bedrooms provide room to accommodate family and guests, while two secure car spaces and storage address some of the practical considerations that can become more noticeable when moving from a larger home. Feedback from the display suite has centred on the warmth and restraint of the interiors, with buyers commenting that the residences feel like homes rather than conventional coastal apartments.

A limited collection of half-floor penthouses occupies the upper levels, increasing the scale of the living spaces and adding private balconies and elevated finishes. From this position, the outlook extends between the ocean and hinterland.

Outside the private residences, The Eveleigh separates its shared spaces between the podium and rooftop. The podium is centred on wellness, with subtropical landscaping surrounding a swimming pool and pool terrace, yoga garden, private gymnasium, sauna and hot and cold plunge facilities. Landscaped retreats and pavilions provide additional places to sit away from the main recreation areas.

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Higher in the building, a rooftop pavilion and private dining suite sit alongside resident lounge, barbecue and outdoor dining areas, opening towards panoramic views across the ocean, city and hinterland.

“Buyers are no longer just looking for an apartment, but a lifestyle where they can relax, reset, and enjoy a balanced way of living,” Hirsch &amp; Faigen Director of Sales Matt George said.

Interest to date has come from established owner-occupiers and interstate lifestyle purchasers, including buyers planning a future move to the Gold Coast. Many are coming from larger homes and want to reduce ongoing maintenance without giving up space for family and guests, privacy, two car spaces or the ability to entertain at home.

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Much of that daily life can also take place beyond the building without requiring a drive. Kurrawa Beach and Pratten Park are an easy walk from Surf Parade, while Pacific Fair, Oracle Boulevard, The Oasis, restaurants, cafés, entertainment and public transport are also within walking distance.

The Eveleigh is Hirsch &amp; Faigen's fourth Gold Coast development since entering the market in 2021, following The Hemingway at Palm Beach, The Emerson at Kirra and Yves at Mermaid Beach. Each of the preceding projects sold out before completion.

“Broadbeach had been on our radar throughout our time operating on the Gold Coast,” the developer said. “Following our projects in Palm Beach, Kirra and Mermaid Beach, Broadbeach represented the natural next step for the business.”

The Surf Parade site brought together proximity to the beach, protected coastal outlooks and walkability to dining, shopping and recreation. Hirsch &amp; Faigen also identified the street as an emerging premium residential address, with enough separation from Broadbeach's busier destinations to retain a quieter environment at home.

The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.

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Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

A long-stalled Campbelltown development site is back in play, with new plans for 139 apartments set to supersede a mixed-use scheme approved almost a decade ago but never built.

The new proposal for 28 Cordeaux Street would deliver 116 market and 23 affordable apartments in a part 14-storey building, bringing a substantial new project into a Campbelltown market where new apartment supply remains limited.

Plans have been filed over the 3,092 sqm corner site at Moore-Oxley Street, around 600 metres from Campbelltown Railway Station and the city-centre retail core.

The site already carries a mixed-use residential approval dating to 2016. Doroch Architects has now been engaged on a larger replacement scheme, which is progressing as a State Significant Development Application following a Housing Delivery Authority determination in August 2025.

The apartment mix comprises 39 one-bedroom, 72 two-bedroom and 28 three-bedroom residences. Two-bedroom apartments make up just over half of the project, while three-bedroom homes account for 20 per cent.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="136dd5b9-3791-4da6-9e31-76f533f5b4de" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da2.png?VersionId=LgOSy9nwf5u.MGswBBwaGGxuX8QpHSl_" />

Of the 139 apartments, 23 will be delivered as affordable housing under the in-fill affordable housing provisions of the Housing SEPP. The affordable component represents 15 per cent of the residential gross floor area and will be managed by a registered Community Housing Provider.

Doroch has sought to break the scale of the building into two distinct elements, with a masonry podium of around four storeys establishing the street edge before the residential tower steps back above.

The corner position has shaped that approach. Cordeaux Street faces toward the commercial and civic centre, while Moore-Oxley Street leads into the lower-scale residential neighbourhood to the south, and the design verification report describes the site as "bridging the commercial core to the north and established residential areas to the south."

The podium will be expressed predominantly in face brick, while the upper levels shift to brushed and grooved concrete cladding with darker metal detailing. Recessed sections, deep balcony edges and landscaping break down the upper form, with an approximately 11.8-metre setback to the northern boundary addressing the adjoining St Peters Anglican School.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="c8b3d2d3-c561-4bfc-a5d9-a68c0c10dac1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da1.png?VersionId=AeAEyJU02Gk2k5noUj2StziCvdQ7fW4B" />

Campbelltown has been starved of new residential developments in the last decade.

The only other notable development set to come to market this year is ALAND's Queen Square, a mixed-use precinct on over two hectares that will comprise apartments above a vibrant ground-level retail and hospitality dining precinct.

First look: New 139-apartment plans revive long-stalled Campbelltown city centre site

First Look: Sherlock Construction pitches apartments for low-rise Deception Bay

Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

First look at MAYD's North Kirra mixed-use precinct

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Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

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The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

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Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

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Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

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Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

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Larry Schlesinger

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