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The <a href="https://www.propertyobserver.com.au/queensland/mine-closure-expected-to-bring-down-rents-and-prices-in-dysart-queensland-agents/2012041854299">Dysart fracas a week or two ago</a> reinforces my long-standing advice to those foolish enough to ask me: “You shouldn’t buy property – regardless of the current returns – in one-horse towns”.

In fact, I will go further and suggest that buying in any town with fewer than five pillars of economic growth isn’t a wise long-term decision. Why five? That’s so that if one of the pillars gets knocked down, then usually the place can still get by. Think of it like a table with five legs.

The more economically diverse the location is, the better, if you ask me. Capital cities are well-supported by economic multiplicity, and it is better still if they have a nexus with resources including mining, like Brisbane.

But major regional centres are also economically diverse; and again, those with a strong connection to resources offer much sounder investment fundamentals than “fewer-horse” towns. Yes, you might miss out on some extraordinary rental returns and capital growth, but such returns only take place because the investment is high risk. It is called “extraordinary” for a reason.

Give me the more garden-variety residential investment returns any day. I have enough problems sleeping at night as it is.

Townsville is a “10-horse” town, and its economic foundations are evenly spread.  No one industry section holds more than 13% of its employment.  Mackay has eight pillars of growth, and mining isn’t the largest one. Ditto for Toowoomba. Gladstone has six, as does Rockhampton, Bundaberg, Hervey Bay and Cairns. Hervey Bay, Cairns and to some degree Bundaberg have too much exposure to poor-performing industry sectors like tourism, retail and new construction and not enough to the muscle industries, such as health, education, mining, transport, storage and defence.

The Sunshine and Gold coasts – to some degree – are suffering from the same cold.

To find out where we think each regional market is positioned, click <a href="https://matusik.com.au/chartsDetail.php?Next-stop-Brisbane-16">here</a>.

For mine, Brisbane and Townsville are the two markets to watch in Queensland over the next couple of years. My writings about Brisbane are now somewhat old hat.

<a target="_blank" href="/news">Townsville</a>, as well as having 10 economic pillars of support, also holds one of Queensland’s most strategic assets – the Port of Townsville.  Did you know that $2.1 billion worth of goods are shipped through the Port of Townsville every year?  That is two and a half Instagrams – or to us ordinary folks, a thousand million (yep, that’s nine zeros).

The Townsville Airport now supports 95 flights per week and can take any sized aircraft.  Combined with both ports, two rail and freeway networks, Townsville is the hub of north Queensland – the true “CBD of the north” if you ask me.

In addition, there is $1.25 billion worth of infrastructure projects underway, including 30,000 square metres of new office space. Townsville holds more government and defence personal than any other place in Queensland, outside of Brisbane.  About 25,000 tertiary students study at James Cook University or Barrier Reef TAFE and despite cyclones, the high Aussie dollar and the general economic malaise, 850,000 people visited Townsville last year.

And to top it all off, Townsville, outside of the capital cities and their immediate surrounds, is the fastest growing urban area (in terms of actual population) in Australia.

But (and there is nearly always a “but” these days) the locals cannot see the forest for the trees.  And I am finding this to be a common occurrence across the country these days.

Townsville locals will rush off to buy in a nearby “one-horse” town, but won’t give blue-chip assets in their home town the time of day.  Strange, indeed.
Michael Matusik is the director of independent property advisory Matusik Property Insights. Michael is a 25-year veteran in the industry and his firm has helped over 550 new residential developments come to fruition.  Michael has launched a new initiative, called<a href="https://www.matusik.com.au/" target="_blank"> Think Matusik</a>.  Think Matusik brings together expert opinion and select property opportunities.
 
 
 
 
 
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michaelmatusik-49YzLvdmNv

Garden-variety investment returns in places like Townsville are better than extraordinary growth – and risks

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It is often said that the world is in the midst of the biggest economic transition in modern times. In short, the West is in the process of ceding economic power to the East.
The old Group of Seven – Canada, France, Germany, Italy, Japan, the United Kingdom and the United States of America – have a combined firepower of $US34 trillion. The new G7 – China, Hong Kong, India, Korea (south, of course), Malaysia, Singapore and Taiwan –  have a combined GDP worth $US12 trillion (see postscript), but the Asian G7 (AG7) economies have been growing by 16% per annum since the GFC, which is four times faster than the old G7.
Remember, the eighth wonder of the world is the power of compound growth.
The AG7 countries have a massive population base, but very low incomes when compared with the West. The average income per capita across the G7 is $45,000; whilst across the AG7 it is just $4,200. Yes, Asia’s income levels have doubled over the last five years, but they are dwarfed by Western standards.
This world shift is a massive bonus to Australia, most obviously via the demand for mining and agricultural resources. This, in turn, is creating wealth in Australia, although not as evenly spread as many of us would like. The demand for luxury goods is, once again, on the rise.
Did you know that Australians have the fifth (yes, fifth) highest income per capita is the world? In US dollars, every Australian (yes, on average) earned $67,000 last year. The four countries above us in income rankings were Luxembourg ($122,000), Qatar ($98,000), Norway ($97,000) and Switzerland ($85,000).
House prices
According to data house, RP Data, house prices rose by 0.2% during the March quarter. This might not sound like much, but at least the result wasn’t a negative.
Now, while the CommSec super-luxury car sales index is a small one, it does a pretty good job at forecasting the direction of house prices across the country. This index shows that 126 top-end vehicles sold across Australia during March, which is up 22% on this time last year.
Over the last twelve months 1,129 super-luxury vehicles were sold. The record high was during calendar 2007, when 1,606 top-end rides were traded.
There is a close relationship with super-luxury car sales and house prices. The theory is that confidence levels repair first at the top-end of the market and then flow through to other asset markets. The rebound of the CommSec super-luxury car index suggests the housing market may also be poised to recover.
Now, I’m no car buff – just a four-wheel drive kind of guy – but I think Craig James and the boys at CommBank are onto something there.
It is always good, every now and then, to think outside the square. They just need to work on what they call stuff: ”super-lux index” reads heaps better if you ask me.
Struggle Street
I am getting tired of hearing about how more and more Australians are doing it tough. Despite what you might believe, most of us are not on “Struggle Street”. We are confusing what we “want” with what we “need”. I am as guilty as the next person.
Unlike almost anywhere else, Australia has had 20 years of uninterrupted economic growth, and continues at an enviable rate. Real wages have risen by more than 30% since 2005. In addition, we are close to full employment and we can afford to build some of the largest houses in the world.
The super-luxury set hasn’t done this by themselves. Most Australians must be doing well. Even inflation is tamed, and so much so that “cost of living pressures” has replaced “inflation” in public debate.
Now, there are people who are really doing it tough – and something like half a million in Queensland sadly live below the poverty line – but there are 4.6 million people in the state.
Yes, we are more frugal these days, with the average household putting aside 10% of after-tax income for future needs. Companies, too, are retiring debt and building up cash reserves. A decade ago, Australian households on average were not saving. Today, our saving rate is similar to the traditionally thrifty Germans and double that of the US.
So, what does it really tell us when one-third of Australians believe passion is the most important reason for taking a new job, while just 17% nominate a good salary? And in another poll, two-thirds of Australians say they are happy. There is nothing wrong with both sets of replies, but they don’t suggest that we are on Struggle Street – especially when Aussie mums are increasingly hiring “personal assistants” to help them with their day-to-day routines.
We desperately need to change the public debate.  We should be rejecting the nebulous “cost-of-living pressure” spin and change the focus away from “my personal finances” and towards creating world-class infrastructure, smart business incentives and helping those few with genuine difficulties.
 
Postscript
Oh, by the way, a trillion dollars = $1,000,000,000,000.  That’s 12 zeroes to the left of the decimal point. A trillion is a million million dollars.
It is nearly too big to comprehend.
But if you laid five dollar notes end to end, you could make a chain that stretches from earth to the moon and back again 40 times before you ran out of five-buck bills! If we still had one-dollar notes, one trillion dollars would stretch almost from the earth to the sun. Similarly, it would take an F 22 Raptor (a fighter jet) flying at the speed of sound and reeling out a roll of dollar notes behind it 14 years before it reeled out one trillion dollars.
And the super-lux index includes new passenger car sales from 10 marquees – Aston Martin, Bentley, Ferrari, Lamborghini, Maserati, Maybach, Morgan, Porsche and Rolls Royce. Why Jeep isn’t in this set is beyond me!
Michael Matusik is the director of independent property advisory Matusik Property Insights. Michael is a 25-year veteran in the industry and his firm has helped over 550 new residential developments come to fruition.  Michael has launched a new initiative, called<a target="_blank" href="https://www.matusik.com.au/"> Think Matusik</a>.  Think Matusik brings together expert opinion and select property opportunities.
 
 
 
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Most Australians are not on Struggle Street but confuse what they want with what they need: Michael Matusik

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Well, aren’t all those economists just great at getting things right!  Employment rose by 44,000 in March, yet the dismal science predicted a drop in employment, with some economists guessing at job losses as high as 10,000 for March.  Most expected the unemployment rate to increase, and the talk was of a 0.5 percentage point fall in the cash rate next month.
Yet the ABS figures show a healthy mix in new jobs, with part-time jobs rising by 28,000 during March and full-time positions lifting by 16,000.  The jobless rate remained steady at 5.2%.  We even worked more hours in March and also over the last 12 months.
At first glance the latest employment figures are heartening. But the result needs to be put into perspective. The latest March result follows the modest fall in employment in February and a more sizeable fall December. In fact over the past five months employment growth has totalled just 36,400 positions – or around 7,000 jobs a month.  Yet it is still the case that an additional 44,000 workers now have jobs compared with a month ago.
In the current environment people are still more likely to be saving rather than spending. From a business perspective trading conditions will remain difficult, especially given the strength of the Aussie dollar and the mountain of government red (and green) tape. The federal election cannot come fast enough!
The March result suggests that businesses will hold onto current staff rather than adding to their workforce.
The yield curve suggests that the cash rate will drop by 0.25 percentage points in May, giving the banks some cover – i.e. don’t expect mortgage rates to drop much.  For mine – and this isn’t advice – we are at the bottom of the interest rate cycle.  I fixed my investment loans earlier this month for a five-year period.
Oh, and by the way the most jobs over the last 12 months were created in Western Australia (45,000), followed by 23,000 across Queensland.  Close to 23,000 positions were lost across Victoria over the last year.  South Australia lost 2,000 jobs and the was little change in the new jobs created across New South Wales during the 12 months to March 2012.
Three things drive the property cycle – confidence, supply versus demand and full-time job creation.  Perth has a slight oversupply of new stock.  In contrast the Queensland new housing market is <a href="https://www.matusik.com.au/chartsDetail.php?Where-art-thou-supply-15" target="_blank">under-supplied</a>, jobs are being created and the state has a new government, which appears to be making the right moves to restore business and consumer confidence.
Michael Matusik is the director of independent property advisory Matusik Property Insights. Michael is a 25-year veteran in the industry and his firm has helped over 550 new residential developments come to fruition.  Michael has launched a new initiative, called<a href="https://www.matusik.com.au/" target="_blank"> Think Matusik</a>.  Think Matusik brings together expert opinion and select property opportunities.
 
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Employment is up, particularly in Queensland and WA, as economists guess wrong

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Keeping with my past posts around holiday periods today’s memo doesn’t related exactly to residential property but looks through a wider lens.
Below are “20 rules of the road”, so to speak.  I like to collect such stuff and stick them in a folder for future use.  Most of the time, my two daughters have been the only ones to suffer my summations, but now I have a wider audience.
So here goes, 20 rules for a metamodern world.
<ol start="1">
<li>Drink plenty of water, eat breakfast like a king, lunch like a prince and dinner like a beggar.</li>
<li>Live the three Es – Energy, Enthusiasm and Empathy.</li>
<li>Sleep for seven hours; walk every day for 30 minutes – smile when you walk – and sit in silence for 10 minutes twice a day.  Plus, read more books this year than you did last year.</li>
<li>Never let the weeds get higher than the garden.</li>
<li>But find some time to dream more while you are awake.</li>
<li>Only you are in charge of your happiness.</li>
<li>Don’t compare yourself to others; don’t take yourself too seriously – no one else does – and forget your past (or at least make peace with it).</li>
<li>Everything cycles – however good or bad a situation is, it will change.</li>
<li>What people think of you is none of your business and people who don’t want to be in it (whatever “it” is to you) are not important.</li>
<li>Call your family often and spend more time with people over 70 and under 15.</li>
<li>Get rid of anything that isn’t useful, beautiful or joyful.</li>
<li>Live smart – you only have so many hours in your day, your week, your year and in your life.</li>
<li>Work and love are both verbs.  A verb is an “action” or “doing” word.  Love isn’t a feeling.</li>
<li>Build your own portfolio – personal brand, network and experiences.</li>
<li>Find time for a hobby.</li>
<li>Life really is a “hard contact” sport.  You have to get out there and mix it up.  Staying indoors just doesn’t cut it.</li>
<li>Determine why you are here – what is your purpose.  It doesn’t matter what it is, but it needs to be defined in under 10 words or counted off on three fingers.</li>
<li>No matter how you feel, get up, get dressed and show up. “Get behind the mule, every day, and plough” to quote Tom Waits.</li>
<li>Being alive must be much better than being dead.  Waking up every morning is a blessing.</li>
<li>Never give up – rest occasionally, reset if needed – but keep swinging.  To quote Waits again – “always keep a diamond in your mind”.</li>
</ol>
Michael Matusik is the director of independent property advisory Matusik Property Insights. Michael is a 25-year veteran in the industry and his firm has helped over 550 new residential developments come to fruition.  Michael has launched a new initiative, called<a href="https://www.matusik.com.au/" target="_blank"> Think Matusik</a>.  Think Matusik brings together expert opinion and select property opportunities.
 
 
 
 
 
<ol start="1"></ol>
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The 20 rules to live your life by

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The latest statistics from the ABS show that Australia’s resident population reached 22.62 million last year, increasing by 320,800 people over the last 12 months.  This represents an annual growth rate of 1.4%, the lowest since 2006 and lower than the annual average growth rate of 1.8% over the five years to June 2011.
This is one of the reasons why new housing starts have been in the dumps in recent years.  Not enough people are moving to Oz.
All states and territories experienced population growth in 2010-11, with the largest population increases continuing to be in Australia’s three most populous states. Victoria had the greatest growth (up by 84,200 people), followed by New South Wales (82,200) and Queensland (74,800).  This is only the third time in the last 10 years that Queensland has not had the largest growth of all states and territories.
Queensland has been broken for some time.  Business and residents need legitimate reasons – other than the nice weather – to move to the Sunshine State.  The LNP white-wash will hopefully get the ball rolling in this regard.  My two-bob’s worth of how this could best be done, as one would expect, is on its way.  I have been biding my time until after Easter.  Watch this space.
More than 14.5 million people, close to two-thirds of Australia’s population, reside in the eight capital cities, and the combined population of the capital city/urban areas increased by over 224,000 over the last 12 months.
Melbourne recorded the largest growth of all capitals, increasing by 67,000 people, followed by Sydney (60,000), Perth (43,000), and Brisbane (35,000).  Population growth in Melbourne equated to an average increase of close to 1,300 people per week, while the population of Sydney increased by over 1,100 people per week.
When factoring in the Gold and Sunshine coasts plus out west to Toowoomba, south-east Queensland’s population increased by 52,000 people last year or by 1,000 people per week.  Just under 3 million people (2,965,000) now live across the south-east corner of the state.
Many local government areas that had large and/or rapid growth were located on or near the boundaries of capital cities, where more land tends to be available for subdivision and housing development.  In Melbourne, the population of outer-suburban Wyndham increased by 12,200 or 7.8%.  This was both the largest and fastest increase of all Victorian municipalities and the fastest in the country.  Strong growth was also experienced in Whittlesea (up 8,700 people or 5.6%) and Melton (6,000 people or 5.6%).
As the table below shows, Brisbane City Council continues to experience the most growth with its permanent population lifting by 14,000 last year.  The table also provides details as to the fastest-growing municipalities across Queensland.
<table style="width: 470px;" border="0" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="497" colspan="5">
Population growth – top 15 municipalities by number of people
</td>
</tr>
<tr>
<td></td>
<td width="147"></td>
<td width="118"></td>
<td width="165" colspan="2">
Change 2010-2011
</td>
</tr>
<tr>
<td width="214" colspan="2">
Ranking
</td>
<td width="118">
2011
</td>
<td width="99">
no.
</td>
<td width="66">
%
</td>
</tr>
<tr>
<td width="214" colspan="2">
Australia
</td>
<td width="118"></td>
<td width="99"></td>
<td width="66"></td>
</tr>
<tr>
<td>
1
</td>
<td width="147">
Brisbane (Qld)
</td>
<td width="118">
1,079,392
</td>
<td width="99">
14,100
</td>
<td width="66">
1.3%
</td>
</tr>
<tr>
<td>
2
</td>
<td width="147">
Wyndham (Vic)
</td>
<td width="118">
168,552
</td>
<td width="99">
12,230
</td>
<td width="66">
7.8%
</td>
</tr>
<tr>
<td>
3
</td>
<td width="147">
Gold Coast (Qld)
</td>
<td width="118">
536,480
</td>
<td width="99">
9,637
</td>
<td width="66">
1.8%
</td>
</tr>
<tr>
<td>
4
</td>
<td width="147">
Whittlesea (Vic)
</td>
<td width="118">
163,539
</td>
<td width="99">
8,675
</td>
<td width="66">
5.6%
</td>
</tr>
<tr>
<td>
5
</td>
<td width="147">
Moreton Bay (Qld)
</td>
<td width="118">
389,684
</td>
<td width="99">
8,118
</td>
<td width="66">
2.1%
</td>
</tr>
<tr>
<td>
6
</td>
<td width="147">
Wanneroo (WA)
</td>
<td width="118">
156,337
</td>
<td width="99">
6,234
</td>
<td width="66">
4.2%
</td>
</tr>
<tr>
<td>
7
</td>
<td width="147">
Melton (Vic)
</td>
<td width="118">
112,981
</td>
<td width="99">
6,002
</td>
<td width="66">
5.6%
</td>
</tr>
<tr>
<td>
8
</td>
<td width="147">
Casey (Vic)
</td>
<td width="118">
261,198
</td>
<td width="99">
5,947
</td>
<td width="66">
2.3%
</td>
</tr>
<tr>
<td>
9
</td>
<td width="147">
Blacktown (NSW)
</td>
<td width="118">
313,057
</td>
<td width="99">
5,777
</td>
<td width="66">
1.9%
</td>
</tr>
<tr>
<td>
10
</td>
<td width="147">
Logan (Qld)
</td>
<td width="118">
287,472
</td>
<td width="99">
5,325
</td>
<td width="66">
1.9%
</td>
</tr>
<tr>
<td>
11
</td>
<td width="147">
Sunshine Coast (Qld)
</td>
<td width="118">
335,273
</td>
<td width="99">
4,955
</td>
<td width="66">
1.5%
</td>
</tr>
<tr>
<td>
12
</td>
<td width="147">
Ipswich (Qld)
</td>
<td width="118">
172,738
</td>
<td width="99">
4,920
</td>
<td width="66">
2.9%
</td>
</tr>
<tr>
<td>
13
</td>
<td width="147">
Townsville (Qld)
</td>
<td width="118">
189,931
</td>
<td width="99">
4,511
</td>
<td width="66">
2.4%
</td>
</tr>
<tr>
<td>
14
</td>
<td width="147">
Cardinia (Vic)
</td>
<td width="118">
77,536
</td>
<td width="99">
4,335
</td>
<td width="66">
5.9%
</td>
</tr>
<tr>
<td>
15
</td>
<td width="147">
Parramatta (NSW)
</td>
<td width="118">
176,355
</td>
<td width="99">
4,321
</td>
<td width="66">
2.5%
</td>
</tr>
<tr>
<td width="214" colspan="2">
Queensland
</td>
<td width="118"></td>
<td width="99"></td>
<td width="66"></td>
</tr>
<tr>
<td>
1
</td>
<td width="147">
Brisbane
</td>
<td width="118">
1,079,392
</td>
<td width="99">
14,100
</td>
<td width="66">
1.3%
</td>
</tr>
<tr>
<td>
2
</td>
<td width="147">
Gold Coast
</td>
<td width="118">
536,480
</td>
<td width="99">
9,637
</td>
<td width="66">
1.8%
</td>
</tr>
<tr>
<td>
3
</td>
<td width="147">
Moreton Bay
</td>
<td width="118">
389,684
</td>
<td width="99">
8,118
</td>
<td width="66">
2.1%
</td>
</tr>
<tr>
<td>
4
</td>
<td width="147">
Logan
</td>
<td width="118">
287,472
</td>
<td width="99">
5,325
</td>
<td width="66">
1.9%
</td>
</tr>
<tr>
<td>
5
</td>
<td width="147">
Sunshine Coast
</td>
<td width="118">
335,273
</td>
<td width="99">
4,955
</td>
<td width="66">
1.5%
</td>
</tr>
<tr>
<td>
6
</td>
<td width="147">
Ipswich
</td>
<td width="118">
172,738
</td>
<td width="99">
4,920
</td>
<td width="66">
2.9%
</td>
</tr>
<tr>
<td>
7
</td>
<td width="147">
Townsville
</td>
<td width="118">
189,931
</td>
<td width="99">
4,511
</td>
<td width="66">
2.4%
</td>
</tr>
<tr>
<td>
8
</td>
<td width="147">
Cairns
</td>
<td width="118">
170,586
</td>
<td width="99">
2,647
</td>
<td width="66">
1.6%
</td>
</tr>
<tr>
<td>
9
</td>
<td width="147">
Mackay
</td>
<td width="118">
121,072
</td>
<td width="99">
2,452
</td>
<td width="66">
2.1%
</td>
</tr>
<tr>
<td>
10
</td>
<td width="147">
Redland
</td>
<td width="118">
144,936
</td>
<td width="99">
2,380
</td>
<td width="66">
1.7%
</td>
</tr>
<tr>
<td>
11
</td>
<td width="147">
Toowoomba
</td>
<td width="118">
163,936
</td>
<td width="99">
2,180
</td>
<td width="66">
1.3%
</td>
</tr>
<tr>
<td>
12
</td>
<td width="147">
Gladstone
</td>
<td width="118">
62,319
</td>
<td width="99">
2,115
</td>
<td width="66">
3.5%
</td>
</tr>
<tr>
<td>
13
</td>
<td width="147">
Fraser Coast
</td>
<td width="118">
103,358
</td>
<td width="99">
1,468
</td>
<td width="66">
1.4%
</td>
</tr>
<tr>
<td>
14
</td>
<td width="147">
Rockhampton
</td>
<td width="118">
116,722
</td>
<td width="99">
1,412
</td>
<td width="66">
1.2%
</td>
</tr>
<tr>
<td>
15
</td>
<td width="147">
Bundaberg
</td>
<td width="118">
97,762
</td>
<td width="99">
1,007
</td>
<td width="66">
1.0%
</td>
</tr>
<tr>
<td width="497" colspan="5">
Matusik Property Insights, April 2012.
</td>
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<td width="497" colspan="5">
Source: Australian Bureau of Statistics Cat. No. 3218.0.
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</tr>
<tr>
<td width="497" colspan="5">
Estimated resident population as at June 30 each year.
</td>
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The inner-city areas of Sydney, Brisbane and Melbourne had population increases among the largest in Australia, increasing by 3,500; 3,450 and 2,500 people respectively.  Perth was the fastest-growing of all the inner capital city areas, increasing in population from 18,000 to 18,600 people or 3.7%.
Since these stats were released, the number of people settling down under has risen substantially.  Close to 14,000 people are now arriving each month, compared with the lows of 9,500 per month in late 2010.
Our modelling suggests that Australia’s resident population could reach 23 million by late July this year.  Australia’s current population growth rate is around 350,000 per annum.
Michael Matusik is the director of independent property advisory Matusik Property Insights. Michael is a 25-year veteran in the industry and his firm has helped over 550 new residential developments come to fruition.  Michael has launched a new initiative, called<a href="https://www.matusik.com.au/" target="_blank"> Think Matusik</a>.  Think Matusik brings together expert opinion and select property opportunities.
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Slowing population growth part of the reason new housing starts are in the dumps: Michael Matusik

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It might just be a coincidence, but this week is the 13th one of the year and last night I delivered my 13th presentation for 2012.
The first quarter of the year is usually much quieter for such proclamations than later months, so either this year will be full-on speech wise or things are just topsy-turvy. I hope the former, as our bank account can do with the speaker fees!
Last night’s gig was for a Brisbane-based public development company, and while I have left out my recommendations to said business – you will just have to employ us if you want our strategic input – the bulk of my short address might be of interest.
It corrals many of the current themes into 13 paragraphs.
Ohhh…. the synergy is just killing me!
1. 40/60 rule
40% is the cycle.
South-east Queensland went into downturn in early 2008 – exacerbated by Suncorp’s exit, the flood and the Labor government.  Since 2008, property values have fallen by 6%, new starts dropped by a third to 26,000 per annum across Queensland, and sales volumes across the state have halved to 35,000 per year.
Now we have the LNP in State Parliament and for at least two terms, maybe three; an undersupply – statistically speaking – of new housing; $135 billion worth of resource projects underway across Queensland; and $29 billion worth of new infrastructure being built across south-east Queensland. The property clock sits at six o’clock for Brisbane and between four and five o’clock for the Gold and Sunshine coasts. Other Queensland regions sit higher up the cycle, and some of these areas have experienced boom conditions over the last three to five years, e.g. Gladstone, and to a lesser extent, Mackay and Rockhampton.
60% is what you buy.
Last year, 25% of the dwellings bought across Australia were four-bedroom stock; 55% three-bedroom; 15% two-bedroom; and 5% one-bedroom stock.
Close to two-thirds of the new housing starts and sales take place in our capital cities – and there has been little change in a decade. In our capitals themselves, about 60% of the action takes place in the outer suburbs, with the middle-ring getting a quarter of the play and the inner suburbs just 15%. The middle ring’s market share has dropped from 40% since the late 1990s.
A recent ABS survey shows that just 4% of the Australian population moved over the last five years because they wanted a smaller home, compared with around 20% who moved for a larger property. The desire for a smaller home is highest with older Aussies, with 14% moving for such, but in Queensland, this proportion is half the national average.
Nine out of 10 sales are now resales, with new sales dropping from a 30% market share before the GST to 11% today. For mine, new product is too expensive when compared with established stock; is either too tall or small (apartments); or too skinny and too far away (new detached product). In contrast to new built sales, housing refurbishments now take up half the total dollars spent on housing across the country. This spend has doubled over the last decade or so.
2. Outlook
Due to demographics and mild panic (negative press about how far Australian property prices could fall), there is an unprecedented amount of resale stock on the market. It is now starting to drop across Queensland, but this overhang will keep prices keen in coming years.
We anticipate that rents will continue to rise, between 5% and 8% per annum, which in turn will lift some first-home buyer interest and get investors back into the market. Price growth will occur, but this cycle will remain very subdued, lifting nationally by between 2% and 4% per annum. Across parts of Queensland, including Brisbane, this lift could be close to double the national average.
Rental returns will attract investors first and not capital gains, which will be treated as a “bonus”. Investor activity will come from brokers and financial planners, and not via traditional means such as real estate agents or local “walk-ins”.
One in two buyers need to sell something in order to buy. It’s very hard to make new sales to this market without signing “subject to” contracts. One in every seventh buyer is a first-home buyer, and around 40% are investors. The investor component is the only real growth market over the next cycle.
3. End comments
Valuations are and will remain a challenge. Proactive programs need to be put in place to help ensure a better result. Rental evidence should be the basis for new dwelling valuations. Supporting evidence is crucial.
Baby boomers – which make up 25% of the population, but 38% of the households, and hold half the housing wealth in the country – will also shape the next 10 years, placing a drag on house price appreciation. Two-thirds of them live in middle-ring or inner-city suburbs, and in order to have financial retread (many won’t retire but retread, to quote Neil Young), they will facilitate the redevelopment of the middle-ring rather than continue to stop redevelopment via NIMBYism.
The capitals are where the action is, and it gets pretty skinny outside of Sydney, Melbourne, south-east Queensland and Perth – these four cities hold two-thirds of the sales and housing starts across the country. In Queensland, the volumes drop away very quickly outside of Townsville, Mackay, Gladstone/Rockhampton and Cairns.
Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a title="Matusik's Missive" target="_blank" href="https://matusikmissive.wordpress.com/">Matusik's Missive</a>. The Matusik Missive is free, however, reprinting, republication or distribution of any portion of this material, or inclusion on any website, is strictly prohibited without the written permission of Matusik Property Insights and may incur a charge.
 
 
 
 
 
 
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About 40% of property price direction is dependent on the cycle, 60% on what you buy

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“Home price slide hits mortgages”, “Increased number of homes with negative equity”, “Homes with negative equity on the increase”.
Just three headlines– from many – out of last week’s press.
Most articles started with variations of the following two sentences:
“The share of homes with mortgages worth more than the property’s value increased at the end of the last year as the housing market stalled and prices turned lower. The rise suggests an increase in negative equity, where a mortgage can be worth more than the value of a house.”
The Australian Financial Review – which really should know much better – started off by saying, “About one in seven Australian homes bought in the last five years is worth less than its purchase price. This potentially has pushed owners into negative equity.”
The source of this pessimism is data-provider RP Data and its 2011 December Quarter Equity Report. This report states that slower capital growth in the last five years, combined with more recent value falls, had left 16% of households (one in six, not one in seven, by the way AFR) bought in this period below their original price.
The document goes on further to say that:
<ul>
<li>Three out of four households with negative equity bought in the last five years.</li>
</ul>
<ul>
<li>The incidence of negative equity is highest in Queensland (12% or one in eight properties) and Western Australia (8.5% or one in 12 properties). Yet curiously, the Australian average sits at 16% or one in six, according to RPData.  Hmmm.</li>
</ul>
<ul>
<li>Negative equity is worst in north Queensland at 23% (or let’s say one in every fourth home); on the Gold Coast at 19% (or one in every fifth dwelling) and at 15% (or one in every sixth home) on the Sunshine Coast.</li>
</ul>
Yet the data provider states that this analysis does not look at debt levels by owners, only the price paid for properties and their estimated current value.
Now, before I reply to this nonsense, some facts about the Australian housing market.
<ul>
<li>According to RP Data – yes, the same RP Data – Australian dwelling prices, aggregated across the eight capital cities, rose by 8% in total over the last five years. Melbourne’s values rose the most, up 18%, while Brisbane’s fared the worst, falling by 6% since early 2008. Most of this fall was over the last 12 months and due largely to last year’s flood. Dwelling prices across regional Australia, according to our own work, have risen by 29% since the GFC.</li>
</ul>
<ul>
<li>According to AFG, the average loan to value ratio across Australia, as at March this year, is 68%. Yes, that means that most new borrowers have a third share or equity in the dwelling that they are purchasing.</li>
</ul>
<ul>
<li>Over the last five years, the average Aussie household has been saving 10% of its income. This has been done by paying off mortgages ahead of schedule, rather than reducing payments in concert with declines in interest rates.</li>
</ul>
<ul>
<li>Mortgage rates, while they have risen a little bit in recent weeks, have fallen by 2.5% (often more) since the GFC.</li>
</ul>
<ul>
<li>According to the ABS, last year, on average, households in Australia held asset values of $839,000, partially offset by average liabilities of $120,000. After adjusting for CPI, our current net average household wealth of $720,000 is 30% more than in 2004.</li>
</ul>
<ul>
<li>Equity in home ownership is about $300,000 across all Australian households, and accounts for 40% of total household wealth. Owner-residents – remember, these are official statistics and they measure actual debt levels, unlike RP Data’s study – enjoy owning, on average, four-fifths (81%) of their principal place of residence. For investors, the average equity holding is 74%.</li>
</ul>
<ul>
<li>In Queensland, the average equity for owner-occupation is 78% and for investment property is 63%.</li>
</ul>
<ul>
<li>And here is the kicker – for the 25 to 34 age cohort (i.e. first-home buyers), the average equity across Australia is 46% for owner-residents and 51% for those young ones smart enough to buy an investment property. For those aged between 35 and 44, it is 65% for owner-residents and 60% for investors.</li>
</ul>
So, what’s really left to say?
Firstly, journos need to get off their behinds, stop regurgitating the media releases put in front of them and start asking questions. Do you really think that one in every six dwellings out there has negative equity and one in every four on the Gold Coast, for example, owes more on their mortgage than what the property is actually worth? I mean really, come on. And if you are too young to own something, just ask your parents what they think.
On the commute home tonight, just look out the window and ask yourself how it could possibly be true that every sixth household is in major financial stress, what with the new cars in the driveway, the kids going to private schools, the overseas holidays and likely collections of tablets, smartphones and plasma TVs in every home.
While the general coverage of the RP Data report was misleading, it does raise important issues about current loan-to-value ratios. Many first-home buyers and investors borrow 95% plus mortgage insurance, so the loans were virtually 100% of the value of the property. Over the life of a traditional home loan, the reduction of principal is minimal at the beginning of the loan term, so some buyers might owe more than what their properties are worth, if they borrowed 95% plus within the last three to five years.
To <a href="https://matusikmissive.wordpress.com/2010/03/31/the-three-stooges/" target="_blank">argue </a>for higher minimum deposits, for example, might have been a more constructive way to air this data – and something you would expect from the country’s leading financial daily – rather than just scaremongering.
Moreover, as long as those people can afford the repayments, there is little real risk to homeowners.
Finally, too many property-related studies drive while looking in the rear view mirror. Things seen in the rear view mirror always look much larger than they really are.  Few drive looking out of the windscreen. Looking forward, higher rents are finally pushing first-home buyers into the market and also attracting investors. End prices will also, in due course, rise.
To quote a recent blogger in reply to one of the said articles above:
“People with a single live brain cell would understand that if you bought a house and stay there – negative equity has the same relevance to you as an exploding star in the parallel universe.”
I hate to get all cosmic with you, but that about wraps it up.
Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a title="Matusik's Missive" target="_blank" href="https://matusikmissive.wordpress.com/">Matusik's Missive</a>. The Matusik Missive is free, however, reprinting, republication or distribution of any portion of this material, or inclusion on any website, is strictly prohibited without the written permission of Matusik Property Insights and may incur a charge.
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Negative equity talk is nonsense – and besides, it’s irrelevant 

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We all know that the vacancy rate remains tight.  But few realise just how tight it has become.  Of the 1,600 odd postcodes across Australia with rental properties in them, 475 or 30% have a vacancy rate under 1%.  Seven out of 10 postcodes have a vacancy rate under 2%, and nine out of 10 (87%) postcodes have fewer than three out of every 100 rental properties vacant.
The vacancy rate across the whole country – except for Victoria– is tight, with an average vacancy rate of 1.7%.  In Victoria, the vacancy rate is close to 3%.
It has been this way for some time, but I suspect we are reaching some tipping point.
Since 2008 the rental component of CPI has been rising faster than the average inflation rate.  This is the first time this has consistently happened since the ABS separated out a rental housing inflation in the early 1970s.
According to the ABS CPI rental index, weekly rents have been rising by 5.7% per annum across Australia since mid-2008.  Brisbane has enjoyed a 6% annual gain, compared to, say, Melbourne’s 4.8% yearly increase.
Gross rental yields, as a result, have increased across the country, with traditional suburban detached housing approaching 4.5% and attached products (small-lot housing, too) often exceeding 5% these days.
Rental yields across many parts of Queensland – reflecting the state’s undersupply of new housing – now exceed 6% gross.  Hot rental spots in Queensland include Roma, Emerald, Calliope, Gladstone, Toowoomba, Mackay and Brisbane’s inner-western suburbs.  Even the southern part of the Sunshine Coast and northern suburbs of the Gold Coast have seen weekly rents lift higher than the statewide average (6% per annum) in more recent times.
There are 440,000 residential rental properties across Queensland, which is up 7% or by 31,000 investment properties over the past 12 months.  After the GFC, and with it all the scaremongering, too many residential investors tried to sell their investment properties, and to no avail.  The wise among them have now reset their plans and are renting their properties out again; hence the lift in available rental properties.  Yet despite the 31,000 increase in supply, the vacancy rate is falling and rents are rising.
The biggest increase in recent supply has been in those areas – Gladstone, Mackay and around Toowoomba – with the largest increases in weekly rent.
Median weekly rents have risen by 45% over the last 12 months in Gladstone.  They are up about 25% in Emerald; 20% more in Roma; 15% higher in Mackay and up about 10% across Brisbane’s inner west.
While certain geographical areas across Queensland are doing better, rent-wise, the upward trend is consistent across product types, again reflecting the tight overall rental supply.  Weekly rents for one-bedroom apartment stock are up 6% on last year; two-bedroom apartments up 5%; ditto for three-bedder units and three-bedroom detached houses.  Larger houses have enjoyed a 6% lift in weekly rents, and Queensland townhouses are up 4% on last year.
About 40% of Queensland’s rental stock is now apartments; half are detached dwellings and 10% are townhouses.
I have been saying in my market overview presentations that investors should treat capital growth as a bonus.  Income is certainty.  The best residential investments, for mine, will be those with the most secure rental returns.
So how do you get a better rental return?  Of course you should buy well.  Investment property in a key location – supported by infrastructure, close to a growing workforce, designed to be shared (think beds and baths), with adequate storage/parking and is easy to maintain – usually rents out well and enjoys consistent rental growth.
And for those who already own an investment property, the best thing you can do to improve your rental return is try a new property manager.  More on this in a moment.
Rising rents have not yet translated to price growth.  But they will.  Once we get over our collective mopes, investors will start buying again and this, in turn, should lift prices.  We anticipate residential prices to rise by between 2% and 4% per annum across Australia over much of this decade.  Property prices in Queensland, Western Australia and across much of Sydney are likely to lift higher than, and maybe twice as fast as, the Australian average.
Traditional property managers are the main bugbear of investors – the chief complaints by investors being lack of communication, lack of action, lack of rental increases and lazy service.  Most companies that manage residential rentals do so as a side business – “it helps pay the rent” as the saying goes – rather than it being the sole focus.
Wise Realty, which started over a decade ago, is one of the largest family-owned property management agencies in south-east Queensland.  Wise Realty is a stand-alone property management company.  I have known Lionel Morris, a director of Wise Realty, for more years than we wish to remember.  The rents that Wise Realty achieves are some of the highest in the industry and their tenant turnaround is second to none.  Wise now has about a thousand properties under management.
Here are some recent statistics for the first three months of 2012.  These apply to 35 new rental listings taken over by Wise.
<ul>
<li>For detached houses, Wise got an average $100 more per week – up 16% – than the previous rental agreement.  The property remained vacant for just four days.</li>
<li>Wise got $60 more per week (an 11% increase) for their new townhouse listings.  Again, the properties in question leased out in four days. For apartments, the average lift was 14% or $65 more per week.  These remained vacant for just three days.</li>
<li>By way of comparison, the average increase in weekly rents in the same area over the last 12 months was just 5%.  The average time to find a new tenant was 14 days.</li>
</ul>
Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a href="https://matusikmissive.wordpress.com/" target="_blank" title="Matusik's Missive">Matusik's Missive</a>. The Matusik Missive is free, however, reprinting, republication or distribution of any portion of this material, or inclusion on any website, is strictly prohibited without the written permission of Matusik Property Insights and may incur a charge.
Apartment photograph by Alex Proimos, courtesy of <a target="_blank" href="https://www.flickr.com/">Flickr</a>.
 
 
 
 
 
 
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The best investment properties are those with the best rental returns: Michael Matusik

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Welcome to the boom and the gloom.  Australia has everything going for it, being an ultra-safe country and transparent democracy with a mining boom, uninterrupted economic growth, limited levels of private and public debt, a high and rising household savings rate, strong links with Asia and a currency that generally behaves itself.
But the average punter still cannot believe his bad luck.
Poor sentiment can be blamed on political wrangling (to put it mildly), uncertainty about new taxes, and then there is of course Europe, a shaky share market; that scary notion called “structural change” and the bloody RBA, which won’t drop the cash rate.
Whatever the cause, we need to wake up soon. Paradox of Thrift is what economists call it – we will talk and save ourselves into a recession.
More than half of us believe that the wisest place for savings is in the bank or paying off debt.
Encouragingly, real estate is starting to come back into the mix. There are plenty of good reasons to be looking at property – real prices are stagnant; the jobless rate is low; rental markets extremely tight; rents are rising above CPI; interest rates are historically low; and the amount of resale stock on the market is now starting to decline.
This will lead – I hope sooner than later – to a wave of new home buyers entering the market. Investors are likely to lead the charge.
More housing starts
We anticipate that just 135,000 new dwellings will be built across Australia this financial year. This is against the 10-year average of 155,000 new homes built each year. The slowdown is warranted given the drop in overseas migration during 2009 and 2010 and the oversupply of new housing in Victoria, South Australia and to some degree in Western Australia too.
But the <a href="https://matusikmissive.wordpress.com/2012/03/10/weekend-3-3/" target="_blank">recent lift in migration</a> is expected to cause new housing starts to increase in coming years. Our forecast is for 155,000 new starts across Australia during fiscal 2013 and up to 175,000 starts during 2013-14.
Forget what you read in the press this week, our forecast is contrary to many other property commentators out there, as we like to drive looking through the windshield instead of the rear vision mirror.
And Queensland looks set to benefit the most.  Also despite recent reports to the contrary, new housing is undersupplied across much of the state.  At present Queensland has a 16% market share of total residential building across Australia. Our historic average is closer to 25%. We forecast that new housing starts in Queensland could double (up 46%) over the next two to three years, rising to 38,000 new starts during 2014.
With close to $135 billion worth of new resource projects underway across the state, coupled with $29 billion worth of new infrastructure projects being delivered across the south-east corner of the state, the need for new housing is on the increase.
And much of this new supply – close to 70% – will be needed in the triangle between Noosa, Coolangatta and out to Toowoomba.
Health beats mining
When it comes to jobs, the health sector has been the boom sector since the GFC, not mining! Health added close to 235,000 new jobs over the last four years, or 36% of the total jobs created across Australia. By comparison mining employment lifted by just 110,000, accounting for just 17% of the 650,000 jobs created since 2008 Down Under.
Yes, 650,000 jobs have been created in Australia over the last four years. Best maybe to reread item one above.
The ageing population means more workers will be required in health care. Mining might be booming, but the demand for health-related services will be bigger, broader and most likely longer lasting. A miner and nurse/doctor partner household is the way to go!
Mining only accounts for a quarter of million jobs or just over 2% of the workforce.  The health sector is five times the size of the mining in terms of employment.
Oh <a href="https://www.propertyobserver.com.au/queensland/wait-a-minute-kochie-there-are-bright-spots-for-property-investment-on-the-gold-and-sunshine-coasts/2012030653715" target="_blank">Kochie</a>, how could you have got it so wrong?
Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a title="Matusik's Missive" target="_blank" href="https://matusikmissive.wordpress.com/">Matusik's Missive</a>. The Matusik Missive is free, however, reprinting, republication or distribution of any portion of this material, or inclusion on any website, is strictly prohibited without the written permission of Matusik Property Insights and may incur a charge.
 
 
 
 
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Australia is booming, so why are we all so gloomy?

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House prices rose by 0.8% in February and while that might not sound like much, it is the biggest monthly increase in 18 months.  Prices rose in six of our eight capitals and in almost every major regional city, highlighting the underlying strength of Australian residential property.
The future looks bright too, with auction clearance results now hovering around the low 60% mark.  Remember clearance rates over 50% means that prices should continue to grow.  In addition the amount of resale stock on the market continues to fall.  Stock levels have fallen since the beginning of the year.
Underlying demand for new property is also set to improve with a big lift in permanent settlement in Australia.  The number of people settling Down Under hit the highest levels in 3½ years in January.  Close to 14,000 people are now arriving each month, compared with the lows of 9,500 per month in late 2010.  Over the past year 146,500 people moved permanently to Australia.
To quote Craig James of CommSec “Population is power, lifting economic growth and momentum”.
More people means greater demand for homes, cars, household appliances and heaps of other stuff.
It is anticipated that just 135,000 new dwellings will be built across Australia this financial year.  This is against the 10-year average of 155,000 new homes built each year.  The slowdown is warranted given the drop in overseas migration during 2009 and 2010 and the oversupply of new housing in Victoria, South Australia and to some degree in Western Australia too.
But the recent lift in migration is expected to see new housing starts increase in coming years.  Our forecast is for 155,000 new starts across Australia during fiscal 2013 and up to 175,000 starts during 2013/14.
Queensland looks set to benefit the most.  Despite reports to the contrary, new housing is undersupplied across much of the state.   At present Queensland has a 16% market share of total residential building across Australia.  Our historic average is closer to 25%.  We forecast that new housing starts in Queensland could double (up 46%) over the next two to three years, rising to 38,000 new starts during 2014.
With close to $135 billion worth of new resource projects underway across the state, coupled with $29 billion worth of new infrastructure projects being delivered across the south-east corner of the state, the need for new housing is on the increase.  And much of this new supply – close to 70% – will be needed in the triangle between Noosa, Coolangatta and out to Toowoomba.
Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a href="https://matusikmissive.wordpress.com/" target="_blank" title="Matusik's Missive">Matusik's Missive</a>. The Matusik Missive is free, however, reprinting, republication or distribution of any portion of this material, or inclusion on any website, is strictly prohibited without the written permission of Matusik Property Insights and may incur a charge.
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The future of Australian property markets looks bright – especially in Queensland

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]

Michael Matusik

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