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EXPERT OBSERVER
The CoreLogic home value index, covering the eight major capital cities, posted a robust 0.7% gain in November following a 0.2% rise in October and five consecutive monthly declines. The November rise was across all major capital cities. Prices are still 2.1% below their pre-COVID peak and 3.5% below the peak in late 2017.
The detail shows a broad-based strengthening in the November month. Notably the reopening in Melbourne has finally seen prices turn in the one major market still recording declines a month ago – the 0.7%mth gain surprisingly firm given turnover was still low. Other markets consolidated on previous gains with Adelaide and Perth, the smaller capital cities and regional areas leading the way.
Turnover nationally largely consolidated on its Q3 'pop'. The detail continues to show stark differences, activity in Melbourne only just moving off the extreme lows seen during lockdown but activity across other capital city markets still holding well above pre-COVID levels (and well above new listings suggesting these markets are likely to be very tight in coming months).
Sydney recorded a 0.4% gain to be up 0.3% on a 3mth basis. Units remain a notable weak spot, with prices in this segment down 0.7% in the November month and 1.8% on a 3mth basis, declines accelerating slightly, particularly at the top end of the market. Houses at the lower end of the market have seen the most promising gains.
Melbourne's 0.7% gain was across all segments and building types although prices have generally been firmer for lower priced parts of the market. Despite an apparent large overhang of stock in the inner city, unit prices also posted a solid rise in the month – perhaps a caution that some of the gain may be running off expectations rather than conditions on the ground.
Other markets remain markedly firmer. Prices rose 0.6% in Brisbane, 1.3% in Adelaide, and 1.1% in Perth. The smaller capital city markets also recorded strong gains – Hobart up 1.4% and both Canberra and Darwin up 1.9%. All of these cities except Perth now have prices above their pre-COVID peaks.
The housing market is now moving clear of COVID disruptions with recoveries at different stages across different jurisdictions but gaining momentum everywhere. While there will still be some weak areas, particularly in the Sydney and Melbourne unit markets, the resurgence in activity, the associated lift in market sentiment and more promising outlook for a vaccine remedy to emerge next year suggests broader momentum will remain well supported in 2021. We have recently marked up our price forecasts with a 4% gain now expected in 2021 and a 10% rise in 2022, essentially bringing forward our forecast for a 15% surge that was previously expected to begin in mid-2021.
MATTHEW HASSAN is a Senior economist at Westpac
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Australian dwelling prices lift: Matthew Hassan

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EXPERT OBSERVER
Dwelling approvals came in below expectations with a 1.6% drop, weaker than both the consensus view of 0.0% and Westpac's view of a 2% gain. The fall comes after dwelling approvals surged in July by 12% from an 8yr low in June. Approvals are still tracking at subdued levels overall, with monthly approvals still down 14.6% vs December 2019.
The July result represented a catch-up, as approvals delayed by the initial nation wide lock-down were eventually processed by city councils. This raised the risk of an unwinding leading into August results.
Westpac's forecast noted uncertainty over varied COVID effects, with Victoria moving into a 'second wave' lockdown but other states continuing to re-open. Additionally, we saw support for approvals from the Federal government's HomeBuilder scheme – a stimulus programme that provides $25k grants to eligible owner-occupiers buying a new home (or renovating an existing home). The HIA reported a sharp jump in new home sales through June - August (+60% for the three months combined compared to the three months to May).
Private detached house approvals were supported by the scheme, posting a 4.8% increase which marked a 12.4% improvement on year.
The 11.1% fall in private unit approvals led the decline in August, with 'high rise' approvals down 11%, and 'low rise' unit approvals down 12%. This fall partially offset a 23% rise in July, with significant month-on-month volatility expected due to the bundling of unit approvals.
Across the states, NSW approvals continued a volatile trend, posting a decrease of 14.2% in August after approval delays contributed to a 32% increase in July. Tas (-26.2%) and SA (-4.8%) also declined. Gains were particularly strong in WA (+33.8%) and QLD (+8.1%), though broadly across the states approvals compared to a year ago.
As we expected, the impacts of the Vic lockdown beginning early August were not reflected in this release. The state posted a moderate increase of 1.8% due to the time lag, though impacts will surely be seen in coming months.
The value of alterations and additions to residential buildings reported a strong result of a 7% increase, the highest level recorded since April 2016. This segment is seeing support as the 'work from home' trend continues, and workers change their discretionary spending habits.
Large public projects in QLD and NT boosted the value of non residential building approvals by 40.7% in August. However, big double-digit swings in recent months continue to make discerning an underlying trend difficult.
In the near-term, there is the potential for another round of weakness - albeit concentrated in Victoria (which accounts for 35% of national approvals), which has been hit by the second lock-down. Other headwinds will challenge housing approvals into 2021, notable is the sharp slowing of population growth as net overseas migration plummets due to the closure of our international border.
MATTHEW HASSAN is a Senior economist at Westpac
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Dwelling approvals face weakness: Matthew Hassan

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EXPERT OBSERVER
Dwelling approvals showed a further weakening in June broadly in line with Westpac’s forecasts but weaker than the consensus view. Total dwelling approvals fell 4.9% to be down nearly 20% over the last two months, touching an eight year low.
The detail showed weakness in the month was more broadly based than May’s unit driven fall. Private sector unit approvals declined 5.3%mth to be down 23.4%qtr for Q2 as a whole (our estimates suggesting 'high rise' down 27.8%qtr and 'low rise' down a much milder 6.2%qtr).
Private sector detached house approvals posted a similar sized 5.7% decline in the June month but were more resilient for the quarter as a whole, down just 2.6%qtr. On a monthly basis, all segments are down materially on a year ago.
All states recorded declines, although they were more pronounced in NSW (–14.8%), WA (–11.7%) and Qld (–10.9%), and more muted in SA (–4.6%) and Vic (–0.2%). All states have seen double digit declines over May-June.
The value of renovation approvals posted a relatively strong 11.4% surge in June. This may be an early sign that relaxing restrictions in May-June are seeing some improvement, given renovations are likely to have shorter lags between application and approval. However, it should be noted that the gain is coming after some large falls with June approvals still below their March level and the value still down 9%qtr for Q2 as a whole. The segment is likely also benefitting from expenditure switching as COVID restrictions limit discretionary spending in other areas.
The value of non res. building approvals also rebounded, rising 17.8%mth, but was also coming from a weak starting point, approvals still 6.6% below their March level and down a whopping 18.1%qtr for Q2 as a whole.
For dwellings, the pull back continues to track broadly in line with Westpac's forecast. We expect approvals to come in at 145k for the full calendar year, roughly in line with the annualised pace in the June month and implying further weakness over the second half of the year. Note that approvals are likely to understate weakness in building as work on many existing projects will be delayed and some approved projects will be shelved or slower to commence.
Against this, the Federal government's HomeBuilder scheme, which provides $25k grants to eligible owner-occupiers buying a new home (or renovating an existing home), will give some support in months to come. With COVID-19 disruptions becoming more uneven geographically, state approval numbers are also likely to see a widening divergence in the second half of the year, Qld, WA and SA well placed to rebound and respond to stimulus measures, NSW seeing a slower reopening and Vic still contending with a large 'second wave' outbreak.
MATTHEW HASSAN is a Senior economist at Westpac
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Dwelling approvals hit eight year low: Matthew Hassan

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EXPERT OBSERVATON
Housing finance approvals came in better than expected for April but are showing clearer signs of a turn lower. The total value of new loans fell 4.8% in the month, a weak result but better than expected given disruptions from COVID-19 – we had been looking for a 10% pull back.
The detail showed similar sized declines across the value of owner occupier and investor approvals (–5% and –4.2% respectively) and in the number of owner occupier approvals (–4.4%mth). The latter is now down on a year ago but loans in value terms remain higher (reflecting the rebound in prices over the last year).
The ABS reported that housing loan approvals largely reflected applications submitted prior to COVID restrictions being introduced in March.
Results were very uneven by state, perhaps reflecting variations in lags between application and approval. Qld and WA saw much sharper pull backs (–22% and –24% respectively) compared to the milder decline in SA (–4.1%) and NSW (–2.4%), and a 4.5% gain in Vic that looks particularly out of step.
The lending figures also include non housing loans which are worth a mention. In particular, a steep fall in personal loan approvals (–24.8%) is more clearly directly related to COVID impacts. The detail here shows a slump in vehicle loans in line with the abrupt drop in sales and a very sharp decline in travel-related loans. Note that these loans have much shorter processing times than housing loans.
Overall, the housing finance data is yet to fully reflect the Coronavirus disruptions that hit the market through April-May. Many of these may have resulted in borrowers that had secured loans being unable to transact – as auctions and open homes were cancelled, and as properties were withdrawn. As such housing finance approvals may miss some of the extent of the disruption. However, the shock will clearly impact the flow of new applications. This may be taking longer to move through the pipeline, but a sharp drop off still looks likely in the months ahead.
Matthew Hassan is a senior economist with Westpac.
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A clearer but mild turn for housing finance: Matthew Hassan

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EXPERT OBSERVER 
Housing finance came in softer than expected in Feb, the total value of approvals recording a 1.7% decline in the month against expectations of a modest further rise.
The detail was soft across most segments and is despite both price gains and turnover still holding up reasonably well in the month which pre-dated any meaningful impacts from the Coronavirus outbreak.
The detail on owner occuper loans suggests slower volumes were the main driver of the soft result with the number of loans to this segment down 2% but the value down only 1.7%.
The number of approvals is still up 4.9% since the low point in May while the total value is up 22.6% (the difference implying a large rise in average loan sizes consistent with both rising prices and the stronger rebound in activity in higher priced markets such as Sydney and Melbourne).
<a href="https://www.propertyobserver.com.au/images/2020/4/14/housing%20finance%201.png" target="_blank">Click here </a>to enlarge: 
<img src="https://www.urban.com.au/images/2020/4/14/housing%20finance%201.png" alt="">
Investor activity continues to be more subdued. The value of investor loans saw a slightly bigger decline in the months, down 1.9% with the value of approval up 6.3%yr compared to double digit growth for owner occupier loans.
Construction-related loans bucked the wider monthly decline, posting a 1.9% rise, likely supported at the margin but post-bushfire rebuilding activity.
Loans for the purchase of newly built dwellings fell sharply, down 8.9%mth, but were coming off very strong gains over the previous three months and are still up 29%yr (the ABS has identified some data quality concerns with this measure that are likely to see revisions in future relases).
<a href="https://www.propertyobserver.com.au/images/2020/4/14/housing%20finance%202.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/4/14/housing%20finance%202.jpg" alt="">
On a combined basis, the total value of loans was up 1.7%mth and 13.1%yr.
By state, weakness was concentrated in NSW (total value of loans –7.1%mth), SA (–7.2%mth) and, to a lesser extent, Vic (–2.1%mth).
Other states recorded gains, Qld +4.1%mth and WA+5.5%mth.
Overall, while the starting point is a touch softer than expected the main story is still the likely severe decline as coronavirus effects impact in coming months.
<a href="https://www.propertyobserver.com.au/images/2020/4/14/housing%20finance%203.jpg" target="_blank">Click here</a> to enlarge:
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/4/14/housing%20finance%203.jpg" alt="">
Auction markets have already registered an abrupt slowdown as physical auctions have been banned outright (around half of auctions have been withdrawn prior, the remaining sales going via pre auction sales or online auction).
 
This segment only account for about 15% of all property sales, and the industry may do more to adapt to the situation in coming months.
Nevertheless, health concerns, social distancing restrictions and a deep economic shock will heavily impact the wider property market in coming months.
<div>
MATTHEW HASSAN is a Senior Economist for Westpac
 
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Housing finance slips ahead of shutdown: Westpac's Matthew Hassan

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EXPERT OBSERVER
The January housing finance report showed another robust broad-based gain, the total value of housing loan approvals surging 4.6%mth, above the consensus forecast of a 3%mth rise.
The upturn continues to be across both volumes and values – the number of owner occupier loans up 3.1%mth and up 11% from their low last May. The value of owner occupier loans is up 28% over the same period implying a sizeable 17% rise in average loan values.
Gains in the owner occupier segment have been across both upgraders and first home buyers, the latter showing a slightly stronger 20% in the number of approvals since May.
Investor activity also picked up but continues to show a more restrained upturn, particularly compared to previous cycles. The value of loans to investors rose 3.6%mth and is now up 22% from its May low but still 37% below its 2017 peak.
On a combined basis, the total value of loans was up 4.6%mth and 23%yr.
NSW and Vic continue to lead the resurgence, the total value of loans in NSW up +7%mth, +30%yr; and in Vic up 5.3%mth, 27%yr. The value of loans dipped 2% in Qld but is still up a solid 17%yr. WA and SA have seen more moderate 10% gains over the year.
Construction-related finance approvals showed a more convincing gain in Jan, loans for the purchase of newly built dwellings (including 'off the plan' purchases) posting a very strong 13.4% and construction loans up 4.2%. Overall, the picture continues to point to a clear turning point in non high rise building activity. The lift in purchases of newly built dwellings will also help high rise developers clear unsold stock but is less likely to drive a lift in new projects.
The finance figures confirm that the housing market was carrying strong momentum heading into early 2020. Auction markets suggest this has continued into February and early March. However, the worsening coronavirus shock will likely be a major disruption to activity in coming months.
MATTHEW HASSAN is a Senior Economist for Westpac
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Housing finance resurgence continues in 2020: Matthew Hassan

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EXPERT OBSERVER
The Reserve Bank has released its quarterly Statement on Monetary Policy (SMP). The report rounds out a full week for RBA communication that has also included the Governor’s decision statement following the Board’s February policy meeting, a speech on “the year ahead” and this morning’s semi-annual testimony to Parliament. The key themes throughout have been: a surprisingly confident outlook, notwithstanding a weaker recent performance and near term outlook due to bushfires and the emerging coronavirus shock; relatedly, a more positive view on the housing outlook, most notably around construction; a continued preparedness to cut rates further, particularly if labour markets were to weaken; but with a little more weight in the ‘balance of risks’ assessment being placed on the potential for further rate cuts to drive a renewed increase in household debt.
The SMP provides the fullest account of the RBA’s assessment and risks to the outlook. The central message here is that despite some downward adjustments to near term estimates: “…the medium-term outlook for the Australian economy is broadly unchanged from three months ago.” The bank’s point forecasts have GDP growth of 2% for 2019, 2.7% for 2020 and 3% 2020 (December quarter on December quarter growth rates). That compares to 2.3%, 2.8% and 3.1% in the previous SMP released in November. The medium term ‘central case’ view is of a gradual return to ‘around trend’ this year and rising slightly above trend in 2021. Similarly, the unemployment rate is expected to hold in the 5-5¼% range near term before gradually declining heading into 2021.
As we noted when these new forecasts were first revealed in the Governor’s statement following the Board meeting on Tuesday (see here), it is surprising that the RBA has retained its ‘around trend’ growth forecast for 2020 given the weaker momentum apparent in the September quarter national accounts; developing questions around the global economy; and the softer tone from a range of labour market lead indicators. Westpac’s forecast is considerably more downbeat, with growth now expected to come in at 1.9% this year, factoring in the impact of bushfires (more here) and a preliminary assessment of the impact from the coronavirus (more here). That in turn is expected to see the unemployment rate track higher, drawing a further easing response from the RBA with 25bp cuts forecast in April and August followed by quantitative easing measures.
Note that the RBA’s latest forecasts do include preliminary assessments of the impact of both bushfire and the coronavirus, although the high degree of uncertainty around the latter is stressed. It’s more detailed forecasts show a material downgrade to the first half of 2020 with annual growth of 1.9%yr over the year to June compared to a 2.6%yr forecast back in November. As the largely unchanged calendar year forecasts imply, this is largely offset by a rebound in the second half.
Key to the RBA’s more positive outlook are signs that last year’s policy easing is working to generate a lift in momentum – especially in the housing sector – and a view that this will continue as the ‘long and variable lags’ flow through to other sectors, consumer demand in particular. From the SMP: “The transmission of monetary policy is evident in established housing markets … It is too soon to see any response to this in household spending, but over time the drag on consumption growth from the earlier decline in housing prices and activity should wane.”
The global backdrop is also seen as more positive than a few months ago although here the messaging has been a little uneven. The emphasis in the Governor’s decision statement and speech was that “global growth is expected to be a little stronger this year and next than it was last year”. That jars slightly with the SMP commentary, which notes that “overall growth in Australia’s major trading partners is expected to be a little lower in 2020” – the difference possibly reflecting some late changes to allow for the emerging coronavirus shock.
On the bank’s more detailed forecasts, the 2020 outlook for business investment has been upgraded to 9.3% from 6.2% in November. The text suggests that this is around mining investment, “Growth (in mining investment) is expected to pick up noticeably over 2020 and 2021 as work commences on a number of sustaining and expansionary projects.” The RBA acknowledges that non-mining business investment was (1) weaker than expected in the September quarter, led by equipment spending; and (2) “the capex survey indicates equipment investment is likely to be weaker than previously expected over the remainder of 2019/20”. This had led to “the forecast for non-mining investment has been lowered over the next few quarters” Beyond that, “from late 2020, non-mining business investment growth is expected to increase modestly, in line with the broader pick-up in private demand”.
On household income, it is striking that real household disposable income growth for Dec 2020 has been downgraded to 1.4% from 2.3% previously. The figure for Dec 2019 is as before at 1.6%. The downgrade to consumer spending for Dec 2020 is more modest, 2.4% to 2.0% - suggesting in our minds downside risks given this weak income outlook. In the Overview of the Statement, consumption growth is expected to recover gradually, with “the low level of interest rates, a somewhat faster rate of income growth than in recent years and the recovery in household wealth are all expected to contribute to this turnaround”. The mix implies a significant decline in the household savings rate over the year.
On housing, “the trough in dwelling construction is expected to occur in the second half of 2020, before a recovery in residential construction gets underway through 2021”. The forecast profile for home building activity has been upgraded a little: with the Dec 2019 figure, to -9.8% from -11.3%; the Dec 2020 figure, to -1.9% from -2.6%; while for Dec 2021 the figure is unchanged at 9.2%.
Around the assessment of policy, the Bank clearly remains open to further policy easing. The board again considering the case for additional easing in February with the main concern being: “… the only gradual nature of the progress [towards the inflation target and full employment]” and “ongoing uncertainties” (i.e. around household balance sheet adjustments and from the near terms shocks from bushfires and the coronavirus). More specifically, the Bank is prepared to ease further “if the unemployment rate were to be moving materially higher and there was no further progress being made towards the inflation target.”
However, there has been a notable shift in the way the Board is assessing the case for further easing, which came more to the fore in the Governor’s speech, Parliamentary testimony and in the SMP than in Tuesday’s decision statement. Whereas back in late November the RBA Governor indicated that he was not particularly worried about the resurgence in house prices, the February SMP now explicitly notes that in considering the case for further policy easing “… a balance needs to be struck between the benefits of lower interest rates and the risks associated with having interest rates at very low levels.”, namely that lower rates could “encourage more borrowing by households eager to buy residential property at a time when housing debt is already quite high and there is already a strong upswing in housing prices in place. … [which] could increase the risk of problems down the track.”
Conclusion
Westpac continues to expect that a combination of a more moderate growth outlook and a deterioration in the labour market will require a further policy response. However, the RBA’s surprisingly confident forecasts and uncertainty around what the bank views as temporary shocks impacting near term casts doubt over how they will respond. The case for further policy accommodation will become clear to the RBA as its overly-optimistic expectations are not met. Currently we have April pencilled in for the next cut but recognise that the Governor may need more time to be convinced that further action will be required.
MATTHEW HASSAN is a Senior Economist for Westpac
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RBA's surprisingly confident view despite weaker recent performance: Westpac's Matthew Hassan

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EXPERT OBSERVER
Dwelling approvals posted a much smaller than expected 0.2% dip in Dec, following a sharp 10.9% jump in November. The Consensus had been looking for a 5% pull back. Annual growth lifted to 2.7%yr, the first positive since June 2018, albeit with monthly comparisons flattered by base effects. Measured on a quarterly basis, Q4 saw a 6.1%qtr rise but approvals still down 8.3%yr.
As noted in our preview, the previous month's gain was heavily concentrated in NSW, which posted a 50%+ rise, approvals ex NSW down 0.9%. We attributed much of this to a delayed effect associated with regulatory changes rolled out in October with December expected to see the spike reverse.
<img src="https://www.urban.com.au/images/2020/2/4/Dwelling%20Approvals%20CL%20JAN.JPG" alt="">
The December detail confirmed this with a sharp reversal in NSW (–30%mth) but the impact was negated by an even sharper high-rise-driven spike in Vic (+34%mth). Our initial take is that this is again largely a temporary effect relating to the lumpy high rise project pipeline. That said, Vic is showing a decent lift in non high rise approvals as well that may be an early sign that the wider market upturn is starting to flow through to non high rise segments.
Outside of NSW and Vic, approvals across the rest of Australia fell 3.6%mth on a combined basis and are tracking a much weaker profile. For the December month, approvals fell 5.7% in Qld, slumped 20% in SA but rose 5.4% in WA.
The segment breakdown nationally showed an estimated 11% pull back in high rise approvals which followed a 40% jump in Nov. 'Low-mid' rise approvals surged strongly, up an estimated 19% in the month and 22%yr. Private house approvals dipped 0.1%mth to be down 7.1%yr. On a combined basis, non high rise approvals were up 4.1%mth but still down 0.8%yr.
Renovation approvals continued to fall sharply into year end, the total value of approvals down further 1.8% in December to be down 5.5% for Q4 as a whole – the fastest pace of decline since 2016.
Non residential building approvals pared back some of their recent weakness, jumping 35% in the month but still down 17.5% for Q4 as a whole – the segment can be extremely volatile month to month but has moved into a fairly clear downtrend since August.
Overall the December update shows a complex mix with one off factors likely again exaggerating strength but some hints of firming elsewhere. As always, housing-related data should be treated with extra caution through the December-January period as seasonality can amplify volatility. On balance we continue to expect approvals to show a muted and slow response to rate cuts with a gradual lift in non high rise approvals coming through more strongly by mid-2020 (overlaid with a slightly boost from bushfire-related rebuilding) but high rise holding broadly flat. While the monthly profile for total approvals may be shaping into a sharper turning point the detail suggests the underlying cycle is turning more slowly. Either way, its likely to be a few more months before we get a clear read.
MATTHEW HASSAN is a Senior economist at Westpac
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Have dwelling approvals reached a turning point? Matthew Hassan

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EXPERT OBSERVER
The recovery in Australian dwelling prices that began in mid-2019 has carried into early 2020, albeit with some moderation in monthly gains from the very strong finish to 2019.
The CoreLogic home value index, covering the eight major capital cities, rose 0.9% in Jan, a touch down on the 1.2% gain in December month and the very strong 2.0% gain in Nov. Annual price growth lifted to 5.2%yr.
Prices nationally have now recovered over two thirds of their 2017-19 correction but are still 3% below their 2017 peak. At the current pace of monthly gains, they should regain that level by mid 2020.
Several factors contributed to the turnaround in 2019 including: reduced uncertainty around housing-related tax policy following the Federal election; 75bps in official rate cuts from the RBA; and some easing in regulatory guidelines around loan serviceability assessments.
All capital cities and regional areas within states recorded gains in Jan with more evidence of price gains starting to show through outside the Sydney and Melbourne markets that have led the cycle.
<img src="https://www.urban.com.au/images/2020/2/4/Dwelling%20Prices%20CL%20JAN.JPG" alt="">
Sydney recorded a 1.1% rise taking annual growth to 7.9%yr. Prices are up 11.2% from their May 2019 low but still 5.4% below their peak in mid-2017. Houses and top and middle tier properties continue to outpace units and lower tier properties although all tiers and segments have seen a moderation in prices gains month to month.
Melbourne recorded a 1.2% rise with prices up 8.2%yr and just 1.2% below their 2017 peak.
Brisbane dwelling prices posted a solid 0.5% rise lifting annual growth to 1.1%yr, a modest pace but with the quarterly pulse in price growth running the strongest in five years.
Across the other capital city markets: Perth posted a 0.1% gain in Dec, essentially holding flat in recent months; Adelaide prices rose 0.2%, annual growth ticking up into slightly positive (+0.4%yr); Hobart recorded a robust 0.9%mth gain to be up 3.1%yr; Canberra recorded a 0.3%mth gain to be up 3.1%yr; and even Darwin posted a slight 0.1%mth gain despite prices still being down materially on a year ago (–8.1%yr).
Note that seasonal fluctuations do affect prices through the Christmas-New Year period, with gains in December and January typically a touch softer than in Nov.
That said, the moderation from the very strong November rise is consistent with our view that gains will moderate as prices in the key Sydney and Melbourne markets start to near previous peaks and affordability constraints re-emerge.
MATTHEW HASSAN is a Senior Economist at Westpac
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Australian dwelling price lift carries into 2020: Matthew Hassan

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EXPERT OBSERVATION 
Dwelling approvals were much weaker than expected in Oct, recording an 8.1% pull back from September's 7.2% gain.
The Consensus had been looking for a milder 1% fall. The fall takes total monthly approvals back near their July cycle low, down 23.6%yr.
The detail was particularly disappointing – rather than a high-rise driven result, weakness in the month was more evenly spread across all dwelling types, detached houses down 11%, mid-low rise unit approvals down an estimated 4.7% and high rise approvals down an estimated 14%.
The renewed weakness in non high rise segments is despite tentative signs of stabilisation in recent months and firmer reads on construction-related finance approvals. These segments are also expected to be more responsive to recent interest rate cuts and the pick up in house prices.
The state detail showed weakness was concentrated in NSW and Qld with other states posting solid gains.
NSW was particularly weak with total dwelling approvals down 16%mth to a 7yr low. Qld approvals fell 10% in the month but look to be chopping around a steadier underlying trend. Vic posted a 5.7% rise but also looks to be stable in trend terms. WA approvals rose 11.5%, off a very weak Sep, and SA rose 14.7% with an uptrend in place.
The total value of renovation approvals declined 2.6%, mostly reversing a 3% gain in Sep month, and still tracking a slight trend decline.
The total value of non res building approvals rose 4.2% but was coming off a very choppy Aug-Sep. Approvals are up strongly on a 3mth basis but tracking about flat in monthly trend terms.
Overall the Oct dwelling approvals report highlights the weak outlook for new dwelling construction. High rise segments look susceptible to further declines and non high rise is still softening despite rate cuts and the improved tone to markets since mid year.
Falling dwelling investment is set to be a continued drag through 2020 – we expect new dwelling investment to be down 11.5% for the full calendar year 2019 and is forecast to fall a further 8% in 2020.
The weakness stands in stark contrast to the rebound coming through in prices (see <a href="https://www.propertyobserver.com.au/https://westpaciq.westpac.com.au/Article/41356">here</a> for more detail on the latest price data) but reflects the long lags on high rise projects and the specific issues facing this particular segment that are likely to preclude a rebound in high rise activity. Price gains are also expected to moderate as we head into 2020 as supply starts to lift and as affordability strains re-emerge. 
Read full report: <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/December/er20191202BullDwellApprovOct.pdf" target="_blank">'Australian dwelling approvals October' (PDF 319kb)</a>
Matthew Hassan is a Senior Economist at Westpac.
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Australian dwelling approvals weaken: Matthew Hassan

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

Joel Robinson

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

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

Sammut secures approval for debut Brisbane apartment development in Toowong

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

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

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

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

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

Matthew Hassan

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