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Children, grab your notebooks and gather around, I am going to tell you a story.
There were once two identical buildings – building A and building B.  They sat side by side and remember they were exactly the same.
They each had 50 nice little apartments in them.
Both building A and B started selling at the same time.  The apartments in both buildings sold for exactly the same price and attracted the same exact rent once completed.  They were both promoted as being affordable and were aimed at key workers.
Now children, a key worker is a local resident such as a nurse, school teacher, bus driver, police officer or firefighter, for example, and reflecting today’s society, baristas are included also.
Nearly all of the apartments in both buildings sold to investors.  Both projects each employed 200 people during their construction.
But this is where their similarities stopped.
And the moral to this story, like all good tales, comes at its end.  So best we listen carefully.
Building A was sold locally.  The developer built an expensive display suite and advertised in the traditional way via print advertising.  He staffed the display with a receptionist and several salespeople who all drew a wage and got paid the standard industry commission.  Only government rebates applied, such as the first-home buyers’ boost.
Building A took three and half years to sell, with the first tenants moving in a full five years after the first sale was made.
All of the apartments settled without much of a hiccup, with most of the buyers’ bank settlement valuations coming in within 5% of the purchase price.  And for the older (read smarter) children in the class, there was very little resale price or rental growth across the market between the first sale and settlement.
The developer, given the project took so long to sell, ended up spending close to 20% of his gross realisation (kids, ask one of your parents when you get home what GR is) on promotion and commissions.  He made very little profit – and the stress from such an arduous haul almost killed him – and he vowed never to do another property development again.
Building B was a completely different kettle of fish.  It sold out in under six months and was ready for tenants to move in within 18 months of the first sale.  The developer spent less than 10% of GR on promotion, sales commissions and rebates.
The 200 people employed during its construction all got paid and are now off working on another building job, making good money and helping house even more key workers.
But this developer, too, will not be doing another project any time soon.  Why?  Because only 35 out of the 50 little apartments have actually settled.  So the developer has made no profit and might have to sell her house to make ends meet. 
Now, in order to sell these apartments quickly, the developer offered a higher sales commission, targeted interstate and overseas buyers (as there are lots more of them than local buyers) and also offered to pay buyers’ stamp duties if they bought before construction started.
You see, children, these buildings were located in a backward state where electioneering, not sense, prevails.  In this dark place, full stamp duties are charged on presales and even things like 27c¹ still exist.
In order to make her marketing budget stretch, the developer of building B didn’t build a display suite, nor directly employ anyone, she was smart and promoted her project digitally and used the expertise of others to help make sales.
For building B it was a fight from the get-go with regards to buyer settlement valuations.  The same valuers were employed as in the case of building A.  They even used the same “comparable” resales to bench market value.
But because a higher commission rate was paid, sales weren’t made to yokels (oops, I meant to say locals) and rebates were offered, the apartments in building B were apparently worth much less, despite them attracting the same rent.
As a result, the buyers in building B had to find more money in order to settle.  Most did, some begrudgingly (and who could blame them), while several just couldn’t afford to do so.  Hence, 15 apartments have yet to settle.
So children, what is the moral to this story?
No, Jane – buying in Building A isn’t the answer I am looking for.  And no, Jimmy – we cannot get rid of valuers.
In fact children, there are two main messages here:
Firstly, an investment dwelling’s worth should be determined by income – that means rent – just like it does for offices, shops and factories.  It shouldn’t be determined by a “comparable” resale.
Secondly, how and where the developer spends his or her money on a project shouldn’t affect the market’s (nor valuers’) perception of value.
Now everyone get out your notebooks and write down these two things:
An investment’s value shouldn’t be determined by what a buyer once paid but by its income.
The distribution of costs has no bearing on the end value of a product.
¹ According to clause 27c, all agents in Queensland are required to list how much they charge for commissions.  Valuers on instructions from the mortgage insurers and banks are deducting the amount the agent is paid in excess of the standard Queensland sale fee of 2.5%.  The 27c is a product of the Gold Coast fly-in and fly-out marketing of 25-plus years ago.  It only applies to Queensland.
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>.
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A tale of two Queensland buildings: An investment property's worth should be determined by income

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Several readers made contact with us after <a target="_blank" href="https://www.propertyobserver.com.au/residential/reducing-stamp-duty-not-boosting-building-the-key-to-solving-housing-crisis-michael-matusik/2011110852260?source=flicker3">yesterday’s story</a>, asking if we knew about the actual distribution of the Building Boost applications across the state.
We have had a hell of a time getting such information out of the government, with more than the usual amount of stonewalling.  Queensland Labor is next releasing information about the Building Boost in late November.
Methinks – and assuming a successful 2018 Gold Coast Commonwealth Games bid (which, by the way, will be announced at 8am this Saturday) – that we might be going to the state polls much sooner than we think.  Several glossy new documents – well, revamped ones, really – have been released in recent weeks, including Queensland government’s 20-year Infrastructure Plan (again!).  But more on this later.
My money is on Anna Bligh calling an election this weekend.  If so, we will be voting this side of Christmas.
The table below outlines the distribution of the Queensland Building Boost applications as at October 7 – the latest figures available.  Remember, as at October 26 (again, the latest total stats available) 1,113 state-wide applications had been made, of which 379 have been approved.  Now, again, maybe buyers are waiting in the wings and we will see an enormous rush towards January.  I do hope so.  But the stats to date don’t hold that much promise.
<img src="/images/stories/matusiknov10.gif">
Now, let’s draw some attention to the latest version of the state’s 20-year Infrastructure Plan.  It would really help matters (or at least humour us) if the Queensland State Government would at least acknowledge the property industry’s existence.  According to the 20-year Infrastructure Plan, the four key industries behind Queensland’s economic growth are:
<ul>
<li>agriculture</li>
<li>tourism</li>
<li>manufacturing</li>
<li>mining</li>
</ul>
No mention of the property or construction industries.  None at all.  How ironic that this ignorance is highlighted in a document that largely requires the construction industry to implement it.  So, in the lead up to a state election – whenever it is – here are some pertinent facts.
<ol>
<li>The property industry is the largest private sector contributor to the Queensland economy</li>
<li>It generates $31 billion of Queensland’s GSP – 13% or one and half times mining’s 8.4%</li>
<li>It employs directly 280,000 – the state’s largest direct employer</li>
<li>With indirect jobs – 585,000 or 30% total employment in Queensland</li>
<li>It is the single largest contributor to state taxes – $3.8 billion or one-third of total state tax revenue</li>
<li>In addition, local governments across Queensland collect over $4 billion in rates and charges each year</li>
</ol>
Sorry if I sound short-changed right now and, frankly, more than a little pissed off!
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>.
 
 
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The number of Queensland building boost applications broken down by region

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For those who think that building grants or first-home buyer boosts are the answer to our undersupply of housing, you had best think again.  We are already halfway through the six-month Queensland “building blitz”, in which Queensland Labor was going to help facilitate up to 14,000 new housing starts across the state with its $10,000 Building Boost.
As at October 26, only 1,113 building boost applications have been received by the Queensland government and just 379  (yes 379) boosts have been approved – $3.8 million worth of support, costing an estimated $660,000 to advertise and promote the campaign.
Now, to be fair, the take-up is on the rise, but whether or not it is a hockey-stick style graph is debatable.   To quote Queensland Treasurer Andrew Fraser from Hansard on the 27th of last month – “I can advise the House that as of yesterday the number of applications is now 1,113.  In fact, the number approved is 379, but I want to make this point: as at 30 September, just a few weeks ago, it was 569.  In the week after that it jumped to 698.  In the week after that it jumped to 843 and in the week after that it jumped to 992.  So we do see the hockey stick approach to the graph at the moment.”
Yet, despite such reassurances, the 1,000-odd boost applications represent just a 4% increase on last year’s building approval across the state – which was just 27,500 starts – a 10-year low.  The real result – being 379 approvals – is a measly 1.3% lift in new dwelling activity.
Now maybe there are many more buyers waiting in the wings.  I hope so, but maybe, as we suggested, a 2% reduction in the asking price of a new property just doesn’t cut it.
The increase – as outlined by Fraser above – appears to be steady at around 150 new applications by per week.  So by the end of January – and assuming interest doesn’t sag during the Christmas holidays (a big ask!) – a total 3,000 applications would have been received.  Not a great result, given the 14,000 target, if you ask me.
Now we have some in the development industry calling for the boost to be extended.   Well, I will let Albert Einstein reply on my behalf.  “The definition of stupidity is doing the same thing over and over again and expecting different results.”
Assuming that the $140 million set aside by the Queensland government for this six-month blitz isn’t used up (which is extremely unlikely), and also assuming that Queensland Labor really wants to help the new housing industry, how best should they spend this “windfall”?
The answer is simple – remove stamp duty from off-the-plan transactions.  The impact – as shown in both Victoria and more recently New South Wales – should be immediate and very positive.
We have just completed work on this for the Property Council of Australia; and while we are embargoed from releasing the key findings for the time being, we can say that removing stamp duty from off-the-plan sales is likely to increase new housing starts across the state by between 10% and 15% per annum.  Yes, every year!
There is also local evidence that paying a buyer’s stamp duty works much better than the boost.  Some of the larger developers – who are supportive of the $10,000 handout – have been making sales because they have used this government largesse as cover as they offer – often quietly – to pay a buyer’s stamp duty.
Queensland needs a competitive advantage.  Our main competition is New South Wales and Victoria.  Dropping stamp duty for off-the-plan purchasers gets us back to a more level playing field.
It is a step in the right direction.
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>.
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Reducing stamp duty, not boosting building, the key to solving housing crisis: Michael Matusik

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There is little doubt that a fall in interest rates would have a positive impact on new housing starts.  But despite calls from the development industry for rates to drop today, there really isn’t any real need to build more new dwellings at present.
While our market was undersupplied in 2009 – we only built enough new homes for 330,000 people but needed to build for 465,000 people – we have been oversupplying the market since then.  Last financial year, we built enough homes for 400,000 people but really only needed to house 310,000.
We consistently overbuilt during the first half of the noughties.  Many of these new dwellings were secondary homes – used for holidays and the like – or were built as speculative investments, where the promise of capital growth outweighed the need for a rental return.
The recent drop in population growth has caused the underlying demand for housing to drop by a third across Australia since 2009.  Queensland and Victoria have experienced even greater falls.
As a result, we now have considerable spare capacity in our housing market.  This explains why new dwelling sales continue to slide across the country.
In addition, we no longer need to build as many new homes as we once did.  Social and demographic changes – children living at home longer; increasing longevity (coupled with diminishing superannuation balances); an increase in the birth rate (baby bonus impact) and more migrants from countries with traditionally large families – have lifted our household size, resulting in fewer new dwellings per capita.
This financial year will be a slow year for new housing starts. Just 135,000 new dwellings are expected to be built over the next 12 months.  This is 15% fewer than last year.  This level of new supply would comfortably cater for the expected increase of around 325,000 in the Australian population next year.  This forecast also assumes stable interest rates for the next six to 12 months.
Forward estimates are for, on average, between 150,000 and 160,000 new housing starts each year over much of the next decade.
While a drop in interest rates would temporarily boost new housing starts, the only real reason why housing starts would need to rise across Australia would be to cater for higher levels of population growth.
When looking at the wider picture, the Australian economy is not suffering from a lack of demand.  Whilst we do have a three-speed economy, the overriding problem – apart from declining productivity (which is a serious issue and a topic for a separate missive) – is that we are still recovering from the enormous hit in the first quarter from the floods in Queensland, NSW, Victoria and Tasmania and Cyclone Yasi.
These combined to hit confidence levels, and cut production of coal, iron ore, copper and other minerals as well as many rural products.  This pushed the economy into the red in the March quarter, but as the national accounts showed, consumption grew by around 3% in the year to June.  Current projections are for a 3.4% increase this financial year.  According to the ABS we are close to full employment.  This is not a recession.
Nor is inflation tamed.  Far from it.  The third-quarter inflation figure is at odds with the longer-term trend and might actually be wrong.  This combined with our low labour productivity, union pressure on wages, rising global inflation driven by both developing countries and the West’s politically driven agenda of low interest rates and printing money plus the large resource spending about to start across the country means that we are facing higher inflation in the years to come.
Rates should have fallen earlier this year, immediately after the floods and cyclone.  But now the best course of action, I think, is to keep them steady and to do so for as long as we can.  A cut in our official interest rate later today could spook the horses.  Often a scared horse bolts, but sometimes they hide deeper in the corral.  We just might conserve ourselves into a recession.
It is quintessentially Australian, to be on a day off – as that is exactly what Melbourne Cup Day is – and still expect interest rates to fall.
Be careful what you wish for.  It just might come true.
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>.
 
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Be careful what you wish for on interest rates: Michael Matusik

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There are three things that drive me – I like to be a lonely voice; I enjoy being a stick in the mud (and grumpy about it); and I am always more interested in what people do than what they say.

This somewhat self-centred introduction is an attempt to explain why I keep banging on about the need to change our urban planning policies in this country.  We need to accept the fact that most don’t want to live in little air-conditioned boxes in the sky.  I am not against high-density development – God knows my business has helped many of them come to fruition; it is just that the argument for anything else is losing its voice.

So, here I am again, shouting out for the detached, the semi-attached and townhouses.

A few years back, the United Nations announced, with much fanfare, an invisible yet momentous milestone – for the first time in history more than half of the world’s human population was now living in urban areas.

This trend helped spark the “triumph of the urban”, and the extolling of the virtues of high-density city living over almost all other dwelling forms.  But such supposed triumph is fraught with ironies, the biggest of which is that rather than a simple rush of people from the hinterland into the high-density city centre – and within almost every urban area (Australia included) in the world – the most significant movement of the population has been outward, from dense city centres into peripheral suburban areas, and beyond them into small, dispersed settlements.

The official geographic boundaries, such as those used by the ABS, cloud these trends, and hence they don’t get the analysis and airplay they deserve.

Our analysis, which we do every second or third year (as it is a very time-consuming exercise), shows that more than half of the new urban development across Australia takes place on the fringe.  This is up from 45% 10 years ago.  Inner city expansion is steady at around 15%, with redevelopment of our middle-ring suburbs falling behind.

Most Australians want to live in a dwelling with a close nexus to the ground.  It is who we are – and most migrating to our shores want the same.  The increase in household size suggests the demand for larger homes will increase and high land costs will force more development outwards.

The urban triumphant like to advocate that detached housing is bad for the environment and the denser living arrangements have less environmental impact.  Yet independent research suggest otherwise.

Our planning schemes are also failing us and in some cases, badly.  Despite grand plans to have most of us live in very dense urban settings, the SEQ regional plan can, at best, only deliver two-thirds of the housing starts it needs on “infill” sites.  Many municipalities across the south-east are struggling to hit the halfway mark.

Recent headlines announced that the balcony was replacing the backyard as the new Australian dream – poppycock.  When you remove Melbourne’s speculative boom in student-sized inner city apartments from the mix, there has been no real change in the proportion of attached dwellings built across the country in close to 20 years.

The vast majority simply cannot afford to live downtown.

It is time to accept the facts – and observe what people actually do and not what the “latte left” and political élites say the public want – and start really planning the redevelopment of our middle-ring suburbs and the continuation (even acceleration) of development on the city-fringe and beyond.

We might need to offer some serious incentives to help kick-start things across our middle suburbs.  This, importantly, involves giving back credence to zonings – redevelopment should not be allowed to be stopped by local action groups if the land is already designated to hold higher density development.

Ironically, the continuing spread of the population could conceivably result in a more equitable and more sustainable pattern of living.  This would definitely be the case if Australian management would join the rest of the world and treat white-collar workers like adults, allowing them to work wherever they wish, as long as they meet their KPIs.  In addition, smaller-scaled energy systems – renewable or not – surely would consume less than the giant grids needed to maintain massive urban landscapes.

In any case, despite all the planning regulations put in place in cities throughout the western world to control (stop) growth at the edge, the periphery continues, inexorably, to expand.

Get over it.  We have far more important battles to fight.

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>.
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Australians want to move out, not up

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All economic activity is fuelled (and limited) by the availability of three things: land, labour and capital.  The term “demand” can be interchanged with “labour” in some instances.  Without all three components, economic activity does not grow – well, not as fast as it could.
When it comes to new housing in Australia, the availability of land is largely restricted by politics and poor policy and not the actual absence of land.  Hence, serviced land is what is expensive and not the actual dwelling itself.  A recent housing study by the RBA shows that land costs far more where development restrictions are tightest.
Over the last 10 years or so, the cost of vacant serviced suburban land has escalated by over 230%, and the price of urban redevelopment sites has increased even faster.
More new houses would be built across the country if the current jihad on detached homes were dropped; we simplified our planning schemes; stopped all the nonsense compliance and shut down troublesome state government departments.  The Queensland Department of Environment and Resource Management (known in the industry as DNO or the Department of NO), for example, springs to mind.  We want our bureaucracy “on tap”, not “on top”.
Such action would improve the supply of land, thereby reducing its cost and making new homes more affordable.  The demand for new homes would subsequently rise.
Too simple?  Well, in fact no.  This is exactly what needs to happen on the supply-side of the equation.  The trouble is this takes political will – and even if such will were to emerge (the sooner Queensland goes to the polls the better), it will take time to implement.  And many of us just cannot continue to hang on for that long.
It is also painfully obvious that the new housing industry is being penalised by the lack of adequate finance.  While this situation is unlikely to improve dramatically until global funds free up – something that largely depends on an economic recovery in United States – there are certain things on the finance or capital side that could be done to help boost sales.
One solution would be to include overseas sales in off-the-plan, pre-construction financial prerequisites.   For some reason, bankers think that the only “real” sale is a local one.  But, as is blatantly obvious to local retailers these days, the internet has changed the way we buy (and sell) products, and real estate is no different.  An internet inquiry (with certain caveats) is as good as a walk-in these days.
The finance industry is doing its developer clients a major disservice by not treating overseas off-the-plan sales with the same weight as a local transaction.
Now, I would understand the reluctance to accept an overseas sale if they had a track record of not settling; reselling quickly or for major losses – effectively dumping the stock if their finances got a bit dicey.  But all the evidence is to the contrary.
Overseas buyers, especially given current market conditions, are more likely to settle than Australians, yet the banks continue to discount any overseas buyer for pre-construction finance purposes.  Nowhere does this speak more loudly than on the Gold Coast.  We understand that the settlement rate is 100% for overseas buyers across the likes of The Oracle and Nirvana.  Pity the same cannot be said about local sales.
Our recent study of apartment sales across the Brisbane CBD found that close to one-quarter (23%) of the off-the-plan buyers were from overseas.  Overseas interest now equals sales from interstate (a 26% share of the new Brisbane CBD apartment market).  Overseas buyers now make up a substantial and growing market segment.  To ignore this trend is foolhardy, indeed.
It would also be great if overseas buyers were allowed permanent residency if they bought a new dwelling in Australia.  Certain caveats would apply such as the cost of the dwelling (maybe over $500,000); the length of the initial PR status (suggest five years, owners can reapply in due course) and a limitation (maybe denial) to accessing our welfare system.  Such as change would dramatically increase demand for new property in Australia.
Allowing overseas owners of all property, regardless if it is new or established, to resell their Australian assets overseas and not just to a local (Australian) buyer would also do wonders.
Many across the world view Australia as a safe haven.  We should be capitalising on this.  Yet, when you go to an Asian property expo, watch which exhibits make the most sales. They are nearly always those that offer buyers PR (with caveats) and the right to resell anywhere.  Will someone for the federal government please take note!
We need to fix the new housing industry from the ground up (pun intended) – major changes need to be made to correct the high cost for producing serviced land.  This will take political will and time.   In the meantime, much more can be done to ease up capital and get more new developments off the ground.
Many of us like a fair fight, but we are growing tired of having to fight with both arms and now legs tied behind our backs.
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>.
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Overseas buyers must be encouraged to help our housing market

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I have had the pleasure of spending three and a half weeks walking through central Italy.  Many have asked me since my return about what is happening over here in relation to the European Union (EU) and the euro.
The European condition (outside of Germany and maybe the Nordic block) can best be summed up in nine words – “the ruins proclaim that the city was once prosperous.”
For mine, we are witnessing the dying gasps of the EU and the euro as we know it.  The world-renowned American economist Milton Friedman said that the EU wouldn’t make it past its first recession – it looks like he was right.  And this is not a trivial event.
In short, European countries are just too diverse to create a long-lasting currency zone.  Languages, cultures and mindsets are very different across its membership.  Most locals I spoke to during our trip identify themselves via their city or region first and foremost, then country but never as a “European”.
While the thrusts behind the creation of the EU are numerous, it isn’t a military alliance (such affairs are linked to NATO) but an economic one.  The idea was that free-trade, regulated by a central bureaucracy, would unite greater Europe, suppressing nationalism and creating prosperity without surrendering what it means to be French or Italian.  The common currency – the euro – is the ultimate expression of this hope.  But in the end, Germans are Germans and Greeks are Greeks.
And “united” does not mean “even”, and Europe’s wealth is not evenly spread.  There is deep-seated resentment between countries and even regions across Europe, which, as history shows, can be suppressed when times are good but resurface when things go custard.  This is especially the case when the controlling identities (Germany and to some degree, France) play by the rules while many others don’t.  For example, it is estimated that 10% of all employment across Italy is “off the books” and in some southern European states the black market accounts for close to half of the country’s trade.
I witnessed such first hand, with the official numbers suggesting recession, but many Italian streets indicating a much stronger real economy.  Most cafes and restaurants ask for payment in cash, while the Italian police wait outside asking customers to see receipts, in some half-baked effort to slow down black-market trade.  It is little wonder that the German and French public don’t want to continue to bail out their neighbours.  As a result, the level of distrust is growing; resentment is on the rise and so too are the local calls for nationalism.
An important sidebar here is that the formation of the EU removed the once-strong legal barriers to migration between European countries. For example, in the last 10 years alone, close to 4 million new migrants have moved into Italy – many from poorer European countries – adding to the growing unrest.
Major action and political leadership is needed and now, but I cannot see the current crop doing anything much about it.
Even if the political elite muscled up, the EU restricts any sensible economic response.  Most economic policy makers would like to achieve three goals – open up their markets to international capital; use monetary policy to help even out their economy; and maintain a stable currency.  Ironically, you cannot achieve all three at once, but you need two working at the same time to prosper.
The US has chosen the first two options; China the second and third.  The troubled EU countries have no monetary choice, cannot influence their currency and also now have very limited fiscal options available to attract foreign capital.  Something has to give. and the public will demand that their governments use all the economic tools available to a sovereign country.
I expect the unrest to increase and spread across Europe.
There will be winners and losers there, with Germany and the emerging Russia and Turkey getting the upper hand, while the “PIIGS” are somewhat doomed, economically.  Europe will, of course, remain a large economy, and it will still consume goods and services; and the best case scenario for the region is little or no real economic growth over the next, say, five years.
The most likely outlook, however, is that the “European” economy will shrink. Major capital/bond listings are likely to be required, which will cause inflation to rise and maybe to hyper levels, resulting in higher global interest rates.
The Bank of England’s decision last week to pump £75 billion ($A 119 billion) of newly created money into the UK economy won’t be the last quantitative easing we will see.  QE typically raises the price of the assets bought, which lowers their yield or economic return.  In short, such action can be very inflationary whilst reducing an investment’s return and underlying value.
England’s latest move clearly illustrates that the political elite will continue to dribble out economic assistance in the hope that prosperity will return, instead of fixing Europe’s economic problems.  On the one hand who could blame them as there is really little to hold the EU together except for the promise of prosperity?  In the meantime, the European public are accumulating grievances, with some remembering how to hate.
I will not go into the history behind the last two world wars and I am not suggesting WWIII, but there are some common elements emerging, and armed conflict in Europe isn’t out of the question.
This bluster aside, we had a fantastic time, visiting close to 20 Tuscan towns and cities and walking about 350 kilometres from Orvieto to the sea.  The food and wine was so good that I, despite the exercise, put on weight!
Oh and by the way, if you want to visit Europe, I would maybe do it sooner rather than later.
Also, whilst the RBA’s present monetary policy stance is mildly restrictive, I don’t expect rates to fall on Melbourne Cup; to do so would suggest that the world’s economy is indeed going pear shaped, and as we argued in a previous missive such action might be counter-productive.  Interest rates here are likely to remain steady for some time.  But they will rise in the future and maybe more than many think.
We have been advising snapshot subscribers that they need to be able to comfortably service a mortgage 1% higher than today’s rates.  Also buyers need to hold a residential asset for at least five years in order to see any worthwhile capital appreciation.  But if Europe’s economy takes a turn for the worse then our suggested 1% buffer needs to be lifted to 2%, maybe 3% and any half-decent asset growth will take much longer.
It might be time to prioritise achieving the return of your capital, not the return on your capital.
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>.
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The end of the euro is nigh, and it will affect Australia's markets

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As we look to what's ahead for 2012, Property Observer is republishing some of our most noteworthy stories of 2011.
 
Who’d have thought – one little word, five little letters, and so much power – the power of green.  Put the word “green” into a search engine and you’ll get a bucket load of topics in return – green loans, green guides, green rebates, green grants, green energy, green cars…green, green, green.  So what does this all mean?  Is it real, or are we dealing with a whole load of spin that begets greenwashing?
There are many products on the market claiming to be green and some of those can be tested, but when it comes to property, for example, there is no real measure or standard.  This means that anyone can call their house “green”, “eco-friendly”, “sustainable”, or whatever environmental catch-word comes to mind, as we do not yet have a legal definition as to what makes a green house.  There is the six-star energy minimum that many new buildings must adhere to, but does that make a property green?  Add a water tank, a pool cover and a few solar panels – is that green?  The reality seems to be that green more often means money for those purveyors of the colour rather than savings for those who buy into it.
A widely touted study by environmental marketing company TerraChoice has found that 95% of green-marketed products use misleading claims, while only 5% of the 5,300 products examined were free from some form of greenwashing.  The number of green claims is increasing by leaps and bounds, with 73% more green-identified products on the market today than a year ago.
Unfortunately, many home buyers don’t want to pay for the privilege of buying a green dwelling.   This is especially the case for investors.  Many like the idea – either out of some misguided guilt or erroneous desire to do something good for the environment – but they think that the developer or the government should pay for their “green”.  The most optimistic studies show that the average buyer will pay up to $15,000 more for a new green dwelling, which, and here’s the rub, will pay back that premium in terms of reduced energy and water costs within two to three years of purchase.  Impossible.
And to add further salt to the wound, these buyers are prepared to pay about 2% more for a green residence, yet the true cost of all the green goodies is closer between 5% and 8%.  Another nail in the housing affordability coffin.
As Christopher Zinn, of consumer advocacy group Choice, says:  “Wherever you see the words ‘eco’ or ‘green’ or ‘natural’, you need to get out a very accurate ruler.  It could mean anything and nothing.”
For mine, it may be time to bring in some new colours in response to most “greenwash” claims – “blackball” and “redline” come to mind.  Better still, Senator Barnaby Joyce summed it up earlier this year when he quipped: “If you really want to piss someone off right now, mention climate change.”
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>.
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Green claims making investors see red

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As we look to what's ahead for 2012, Property Observer is republishing some of our most noteworthy stories of 2011.
 
Sadly, both parties, initially led by the Liberal Party and quickly followed by Labor under Julia Gillard, have opted for Little Australia.  For generations, both political parties have done the right thing by Australia on population.  They have strongly supported high immigration despite great reluctance from voters for it.  Big Australia makes sense.

Cutting migration means higher interest rates in the short term and higher taxes in the long-term as our population ages.  As for house prices, well, don’t expect them to grow much, if at all.  House price devaluation is a more likely outcome if we adopt Little Australia.

A smaller population growth means lower productivity.  In order to maintain our standard of living – assuming lower migration – we will have to work longer (and smarter) plus raise taxes.  Working smarter is a noble aim, but it takes a long-term view; real short-term pain; and genuine investment in education and infrastructure.  Think the East’s commitment to such, not the West’s.  I don’t want to sound like a cynic, but I don’t think Aussies are up for this challenge.  Every time I get behind a “Sustainable Australia” or “Australia is Full” sticker on an RV, I just chuckle and mutter “hypocrite”.  My wife and children, I must add, are getting pretty sick of it.

But the economic argument isn’t the only rationale for maintaining high immigration.  There’s a strong moral case too.  Nearly all Australians are the children or descendants of immigrants.  A deep cut in immigration is inter-generational opportunism on our part, in effect denying to future immigrants and their children the advantages that we ourselves have enjoyed.  I also don’t think the world will allow it.

And as for the environmental squabble, well, let me say that if America and Canada can do it, then we can too.  Yes, we have a more sensitive environment than the Americas, but long-term planning plus a regional approach will overcome most issues.  Did you know that only a handful of US cities are bigger than Sydney, Melbourne or Brisbane?  Most of their population lives in regional centres, many of which are under 500,000 people.  We now need to do the same.

On that note, Ken Henry gave the best contribution to the population debate so far, when he said that the first step around regional population imbalances was to address the range of areas where economic growth is being constrained, often at a local level.  Henry correctly nominated water in addition to the more frequently nominated areas of infrastructure.  But it also applies to housing, where approval processes are an important constraint on the market responding to growing demand.  Throwing money at the problem, vis-à-vis Labor’s $225 million quick fix pledge to 15 regional cities, is a Band-Aid solution to much deeper wounds.  Regional Australia needs major surgery, not ointment and a gauze wrapping.

The Little Australia advocates want to preserve Australia in amber, to prevent it from ever-changing.  Why?  Because change is threatening.  We need leadership now, not spin.  Many of us are hungry for it.  My mate Bernard Salt summed it up well in The Australian when he lamented our incredibly sparse population and the low-quality debate to which our leaders are subjecting the nation.

The cowardly retreat from immigration by both major parties is a policy disaster of the first order.  And it’s one for which future generations of Australians will pay.

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>.
Photograph by Phillip Capper
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Cutting immigration will hurt not just housing, but the entire economy

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Unfortunately, this missive has nothing to do with the state of the residential market.  It remains “dead, buried and cremated”.  This was originally written over a year ago.  The Brisbane market, at least, is in a better position now.
Back in Black, one of the best “comeback” albums of all time is 30 years old.  Thirty years!  There is nothing, apart from seeing your kid’s baby photos, that reminds you more of how old you are than the significant anniversary of a favourite record.
I was in year 11 when this gem came out – a bundle of bluster, testosterone, zits and bad dance moves (some things never change) and can still remember the excitement when first hearing that ominous introduction to Hell’s Bells, the opening track.  It was a competition in our neighbourhood, in western Sydney, to see who could play You Shook Me All Night Long the loudest.  I even went into hock and bought a fancy new graphic equaliser to enhance the sound.  Those were the days.
I went to see AC/DC the following year, supported by The Angels and Rose Tattoo, and last year went to see them again, with my eldest teenage daughter, at ANZ stadium.  I would have gone twice had I been able to get tickets.  It rained during Thunderstruck during the first concert, after all.
It then comes as little surprise to find out that Back in Black is on high rotation in my car or whenever I am at home by myself.  Julia, my wife, likes Foreigner, which goes some way to explaining why she married me.  No taste at all.
Back in Black is an album of power, asserting class values and music’s ability to invigorate attitudes that some might not find palatable.  It is sexist and selfish, but it’s also ironic and piss-taking.  It was, and still remains, wild colonial convict music; in a word – Australian.
It is the first album I would grab in a house fire or take to a deserted island.
Assuming one could actually play music on a deserted island, what record would you grab first?  Better still, next time the conversation starts tanking at a barbecue or dinner party ask your friends to name their top 10 albums.  No compilations or live CDS are allowed, just original works.
Heck, work is (was, that is) so slow at present; why not jot down your list right now.  I bet you will want to revisit it within the hour.  I did mine – see below – several days ago, and am still not happy with it – there is no Bob Dylan, Neil Young, Eagles, Cold Chisel, Steve Earle, John Mellencamp, Rolling Stones, The Who, Joe Walsh, Cowboy Junkies and only one album from Tom Waits.  It is much harder than you think.
<ol>
<li>
Back in Black, AC/DC</li>
<li>
Born To Run, Bruce Springsteen</li>
<li>
Mule Variations, Tom Waits</li>
<li>
LA Woman, The Doors</li>
<li>
I, Flathead, Ry Cooder</li>
<li>
Wish You Were Here, Pink Floyd</li>
<li>
Late For The Sky, Jackson Browne</li>
<li>
Some Days You Eat The Bear…, Ian Matthews</li>
<li>
Beneath This Gruff Stuff, John Hiatt</li>
</ol>
10.  Cosmo’s Factory, Creedence Clearwater Revival
Remember, rock ‘n’ roll ain’t noise pollution.
PS  This year, statistically at least, I reached my half-life.  I now have fewer days in front of the horse than riding in the back of my cart to paraphrase another favourite artist, John Mellencamp.  Also April, our eldest daughter turned 18 a few months ago, and she is “out and at them” down in the apple isle, and her sister – Savannah – who at just 16, is on a 12-month exchange in Finland.  Proud yes!  But sometimes you just feel old –  well, older at least. 
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>.
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Back in Black: Welcome to your half-life

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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