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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

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Deicorp’s emerging mid-city precinct, <a href="https://www.apartments.com.au/new-apartments/melrose-central-melrose-park-33-hope-street-melrose-park-nsw-2114">Melrose Central</a>, will become the go-to precinct within the wider Melrose Park community, and at its heart, a first-of-its-kind culinary precinct that brings the buzz of Asia’s most iconic food streets to life.

Spanning more than 4,700 sqm, Melrose Central street food precinct is inspired by the energy and vibrant flavours of street-food neighbourhoods from Hong Kong and Tokyo to Seoul and Singapore.

This new destination will be over three times the size of existing offerings like Burwood Chinatown or Westfield Chatswood’s Hawker Lane, positioning Melrose Central as a must-visit dining hub for all of Sydney.

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Designed by Anthony Ho of Basalt Studio, this street food concept blurs the lines between culinary theatre, art, and entertainment, offering an immersive experience. Neon-lit laneways thread between open kitchens and live grill stations, while murals, interactive displays, and light installations will bring the precinct to life, trading until late, a first for the area.

“We’ve imagined our street food concept as a graduated evolution of everything people love about Burwood Chinatown, East Village and Regent Place, elevated by the immersive artistry creating a city-style dining offer,” said Bilinda Turner, Head of Retail at Deicorp.

“By curating the very best tenants from across Australia, we’re creating a fit-for-purpose town centre for 2025 and beyond. It’s something that people truly haven’t seen before."

[smartcode_project:default project_id=134220 project_image_fid=352610]

Melrose Central is far more than a food precinct. Spanning 30,000 sqm across four levels, the shopping centre will be home to approximately 100 retailers, providing a total lifestyle offering from morning until late evening.

Fresh food offerings span a brand new Coles Supermarket, Local Grocer, Korean Supermarket, Bakery and boutique fresh food, as well as a Dan Murphy's, while health needs are covered from a pharmacy, medical centre and allied health. Fitness and wellbeing take centre stage from a dedicated wellbeing hub that includes pilates, recovery, Infrared saunas and a gym, to name a few.

Variety stores will feature throughout, as well as personal care offerings from nail salons to hairdressers, as well as a dedicated early-learning centre on level 1.

[smartcode_project:default project_id=134220 project_image_fid=289888]

Situated above the retail precinct will be 495 Turner Studio-designed apartments that open onto 6,000 sqm of lush podium gardens and rooftop terraces.

Located just six kilometres east of Parramatta’s CBD and 15km from Sydney CBD, Melrose Central forms the retail and lifestyle heart of Melrose Park, an urban-renewal precinct that is set to deliver more than 11,000 homes, 22,000 new residents, and 50,000 sqm of park and open space.

A dedicated stop on Parramatta Light Rail Stage 2 will arrive at the precinct’s Hope Street entrance, and the forthcoming Parramatta Gateway Bridge will link directly to Sydney Olympic Park and Wentworth Point.&nbsp;

Supported by a 10-minute drive, this growing catchment of 200,000 people, which is projected to grow to 279,000 by 2026, and an average household income above the Greater Sydney average, Melrose Central embodies Deicorp’s vision for transport-oriented, community-focused placemaking.&nbsp;

Melrose Central street food precinct and the wider Melrose Central retail town centre are both slated to open in mid-2026.

[smartcode_project_cta:default project_id=134220]

Joel Robinson

Melrose Central: First-of-its-kind culinary precinct coming to Sydney’s West

<a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> has unveiled the fifth and final stage of its $1 billion Norwest community, The Orchards.

The final stage, <a href="https://www.apartments.com.au/new-apartments/zeste-at-the-orchards-norwest-104-fairway-drive-norwest-nsw-2153">Zeste</a>, will deliver 209 apartments across two distinctive buildings, Essence and Eden. The 135 apartments in Essence will be the first to be released to the market, which will bring to an end the decade-long vision to create a&nbsp;neighbourhood defined by design excellence, sustainability, and community engagement.

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David Lee, Sales Manager at Sekisui House Australia said, Zeste's oversized living spaces and diverse apartment mix, which includes the introduction of&nbsp;Breezeway Sky Homes for the first time, deliver a unique lifestyle offering.

Early purchasers will benefit from exclusive VIP pricing as well as the choice of one premium upgrade, which Lee says is a "thank you" for their commitment to the project.

[smartcode_project:default project_id=150510 project_image_fid=351876]

Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, Zeste embodies Sekisui House’s global design philosophy of creating harmony between people, homes and nature. Principal Ben Pomroy explained that Zeste is about living within the landscape.

“With two large courtyards, the lagoon pool precinct for the wider community and a central courtyard with pavilion exclusively for Zeste residents, the architecture frames an experience of living in a park," Pomroy said.

“Over 50 per cent of the site is landscaped, ensuring a deep connection to nature at every stage of daily life. The buildings are designed as a collection of smaller, finer-grain forms, with over 85% of apartments enjoying dual aspects.

“The focus on natural ventilation, generous layouts and communal interaction creates a residential environment that is both sustainable and socially connected.”

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Natalie Shalala, a member of Rothelowman’s interiors team said they reimagined the former site’s Orchard homestead with a contemporary twist. &nbsp;

“The design draws on the nostalgia of the past orchard – timber floors, the warmth of a fireplace, the rituals of the homestead and reinvents them for modern apartment living,"&nbsp;Shalala said.

“We have created two tonal palettes, one with pale honey undertones and another with a soft blush inspired by nectar. A highlight feature is the cathedral glass light box, a bespoke design element that re-interprets the classic lantern. It is both beautiful and functional, tying kitchen and bathroom spaces together in a way that feels entirely unique."

Shalala said the&nbsp;day-to-day liveability has been carefully considered, with abundant storage solutions, butler’s pantries, bike storage and joinery designed to simplify routines and enhance comfort.

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[smartcode_project:default project_id=150510 project_image_fid=352090]

Apartments in Zeste start from $715,000 for one-bedrooms and extend through to expansive three-bedroom Sky Homes priced from $2.25 million. Floorplans range from 59 sqm to 144sqm.

The mix in Essence comprises 41 one-bedroom, seven one-bedroom + Max space, 39 two-bedroom, 40 two-bedroom Breezeway Sky Homes (24 of which include additional Max spaces), and eight three-bedroom residences.&nbsp;

Max spaces are integrated into select residences, offering a flexible room that can be tailored to individual needs, ideal as a home office, children’s play area, or additional storage.

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Zeste continues Sekisui House Australia’s partnership with Altogether Group, providing sustainable water, power and data services to residents. Passive design strategies include cross-ventilation, deep landscaping and water features that encourage evaporative cooling, aligning with The Orchards long-term environmental goals.&nbsp;

Construction is set to commence on the Zeste buildings in early 2026, with completion anticipated in late 2027 to early 2028.&nbsp;

More than 850 apartments have been sold across the masterplan, contributing to The Orchards community of 1,300 apartments when complete.

[smartcode_project_cta:default project_id=150510]

Sekisui House Australia launches Zeste, the final stage of its $1 billion Norwest masterplan

A significant addition to the Bella Vista Station Precinct is in the pipeline, with <a href="https://www.apartments.com.au/developers/landen-property">Landen</a> formally lodging a State Significant Development Application for a <a href="https://www.apartments.com.au/new-apartments/40-memorial-avenue-bella-vista-40-memorial-avenue-nsw-2153">new apartment community on Memorial Avenue</a>.

Positioned beside the Elizabeth Macarthur Creek corridor, the project is among the first major transit-oriented residential proposals within the Metro precinct.

The masterplan, designed by&nbsp;<a href="https://www.apartments.com.au/architects/turner-studio">Turner Architects</a>,&nbsp;outlines a four-stage delivery, comprising four buildings between four and fifteen storeys, and includes a mix of one-, two-, and three-bedroom apartments, alongside a limited selection of four-bedroom penthouses and terraces.

The project places a strong emphasis on housing diversity and liveability, with apartment sizes ranging from 50 to 180 sqm. The first stage will deliver 213 dwellings, followed by 231 in the second stage. Construction is expected to commence in 2026, pending approvals.

<img alt="Bella Vista Apartments" data-entity-type="file" data-entity-uuid="bb3d84b1-d2df-4e26-915a-31b27faf9b1a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/View02_01-scaled.jpg?VersionId=Gb0AUtZ3VXsLxrqUaw_AwT_vcBwQ_FJu" />

As the first transit-oriented development (TOD) in the precinct, Landen’s Bella Vista community has been designed to align closely with the surrounding Metro infrastructure. The proposal integrates new pedestrian and cycling paths, a new bridge over Elizabeth Macarthur Creek, and direct access to Bella Vista Metro Station.

Lush communal amenities are also central to the design. 'The Grove' and the 'Garden Link' will create landscaped community areas that reflect the area's agricultural heritage and provide direct access to the creekside.&nbsp;

The ‘Garden Patio’ is conceived as a multi-use indoor-outdoor facility offering a gym, study nooks, and communal lounge spaces.&nbsp;Rooftop terraces across the buildings will offer views to the Blue Mountains and Parramatta skyline.

<img alt="Bella Vista Apartments" data-entity-type="file" data-entity-uuid="778da409-d5cf-4e7d-9ba9-0c36990bf0b4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/landen-bella-property-image.jpg?VersionId=ukPpmVcHF71xRc7U3MUT5rtGwOsntMMz" />

Landen’s Head of Property, Shane Harding, said the proposal highlights the developer’s precinct-scale ambition.

“As the first TOD proposal in Bella Vista, it highlights Landen’s ability to pioneer precinct-scale projects, integrate housing with infrastructure, and deliver outcomes that align with government priorities,” Harding told the Daily Telegraph.

The project arrives at a time of rapid growth in Western Sydney, with Bella Vista alone forecast to more than double in population by 2046. The development’s location, between the Bella Vista and Kellyville Metro stations, positions it as a connected lifestyle hub for families, professionals and downsizers seeking access to transport, schools, and employment centres.

Pending approval, the development is slated for completion in 2028.

Landen plans 444-apartment community in Bella Vista Metro zone

Developer <a href="https://www.apartments.com.au/developers/equicentia">Equicentia</a>, together with joint venture partners Wingala Capital and Monark Property Partners, has become the first in Manly to secure Resilience Insurance’s Latent Defects Insurance.

The trio has recently launched <a href="https://www.apartments.com.au/new-apartments/de-ville-manly-11-victoria-parade-manly-nsw-2095">De Ville</a>, a new luxury project on a long-dormant yet prime site at 9–11 Victoria Parade, positioned between East Esplanade and South Steyne.

<img alt="De Ville" data-entity-type="file" data-entity-uuid="b2639bb1-d72c-4f28-b4dc-33190655e147" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-10-12%20at%209.38.37%E2%80%AFAM.png?VersionId=orUAk2m2tTKAAasLvZg0IaGQyDaZcKYI" />

The site was originally earmarked for a 26-apartment scheme, but following its $25 million acquisition of the near-1,200 sqm parcel, the development team opted for a more refined approach, reducing the yield to just 12 two- and three-bedroom residences across a six-level building.

Among them will be three full-floor penthouses boasting panoramic views across Manly Beach, North Harbour, and the city skyline. The apartments will sit above four ground-floor retail and commercial tenancies, designed to help activate Victoria Parade, an area long defined by its beachside character and interwar brick architecture.

<img alt="De Ville" data-entity-type="file" data-entity-uuid="d6922f4a-21fb-4a07-8e40-241d594c2538" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/int3.jpg?VersionId=7U1Qw79_YT3bOZKr7.H03JHOFm3QVYlE" />

Designed by <a href="https://www.apartments.com.au/architects/platform-architects">Platform Architects</a>, De Ville’s sculpted form takes cues from the ebb and flow of Manly’s dual waterfronts, the ocean to one side and the harbour to the other.&nbsp;

The architecture’s soft curvature and rhythmic vertical brickwork reflect the natural patterns of the tide, while a refined palette of Lohas brick, sandy render and glass detailing allows the building to harmonise with its coastal context.&nbsp; Cascading greenery and deep balconies bring texture and shadow to the facade, reinforcing the building’s connection to nature and the street.

Buyers have a choice of two different colour palettes, Taj Mahal and Brescia Green, each layering soft tones and organic finishes to capture the coastal light.

<img alt="De Ville" data-entity-type="file" data-entity-uuid="be78b114-88ed-4d33-a4ef-50e14d2f9064" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/int6a.jpg?VersionId=hBrZPvs1L2LwThSatcNMXTg0tltfEn4a" />

De Ville is the first development in Manly to fully protect its buyers with 10-year Latent Defects Insurance offered by Resilience Insurance.

The policy covers buyers for 10-years post-completion of the building, a first-resort cover again&nbsp;major structural or waterproofing defects.&nbsp;

Unlike traditional statutory warranties, which often require complex and lengthy claims processes, LDI ensures that if a covered defect arises, the insurer responds immediately - without the need to prove fault or pursue the builder or developer.

This new model of protection has been gaining traction among forward-thinking developers and financiers alike. For buyers, it offers tangible assurance of quality and accountability; for lenders and insurers, it reflects a measurable reduction in long-term risk.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/what-is-latent-defects-insurance-and-is-it-bringing-confidence-to-the-off-the-plan-apartment-market">What is Latent Defects Insurance and is it bringing confidence to the off the plan apartment market?</a>

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Equicentia launches Manly's first new development with 10-year Latent Defects Insurance

The redevelopment of Double Bay's&nbsp;InterContinental Hotel has cleared its final hurdle, with the&nbsp;NSW Government’s Sydney Eastern City Planning Panel giving the $1 billion redevelopment the green light.

Sydney developers Eduard Litver of <a href="https://www.apartments.com.au/developers/capitel-group">Capitel Group</a> and Allen Linz of <a href="https://www.apartments.com.au/developers/rebel-property-group">Rebel Property Group</a>&nbsp;lead the consortium behind the project that will create a new&nbsp;mixed-use lifestyle destination on Cross Street, in the heart of the rapidly revitalising Double Bay village.

Lodged in November 2024, the DA was approved in under 12 months, marking a major milestone for one of Sydney’s most significant and historically rich village precincts.

The approval enables the demolition of the existing six-storey hotel and the construction of a new eight-storey <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>-designed landmark building featuring high-end retail and dining, boutique accommodation, commercial offices, a wellness centre, a limited collection of luxury residences along with public domain improvements.

<img alt="33 Cross Street, Double Bay" data-entity-type="file" data-entity-uuid="3b0ca753-2941-4e77-a6ac-5701087ac4e5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/courtyard_intercontinental_double_bay_3D_render_by_VV.jpg?VersionId=18DBOpXgtpob.oZfYSeLgjSCQEgmaCpg" />

Rebel Property Group Managing Director Allen Linz said the approval was the culmination of a collaborative and constructive planning process.

“We welcome Woollahra Municipal Council’s decision and thank them for its constructive and professional approach,” Linz said.

“This approval marks a major milestone for Double Bay and reflects a shared commitment to see the village continue to evolve. We look forward to contributing something that will enrich the community and strengthen its appeal as Sydney’s premier harbourside destination.”

Capitel Group Managing Director Eduard Litver said the project would make a lasting contribution to Double Bay’s future.

“This site has long been part of Double Bay’s identity, and this approval allows it to play an even greater role in the community’s future,” Litver said.

“The project will deliver new retail and hospitality spaces that support local life and business, contributing to the ongoing vitality of the village.”

Having led the project team on behalf of the owner consortium throughout the planning and approval process, Metis Group Director Arian Galanis said the focus now turns to delivery.

“With the project now green lighted, our focus turns to delivery,” Galanis said.

“We’re working closely with the design and consultant teams to bring the vision for 33 Cross Street to life. We’re excited to deliver a project of enduring quality that will stand as a benchmark for mixed-use, lifestyle-led development in Sydney.”

Matthew Hassan

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