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It astonishes me that we still keep on reading about Australia’s pending housing market crash.  Moody’s is the latest commentator to join the chorus singing for caution on the Australia residential market.
Sadly, most overseas commentators don’t understand the nuances of the Australia property cycle or how mortgages are granted and must be repaid in Australia.
Yet despite forecasting absolute doom about five years ago, our ‘property correction’ actually went sideways since the late 2000s.  And now the residential market is set to recover.
I am quite bullish about the outlook for east coast residential property and in particular in Sydney, Melbourne and south-east Queensland.
I have several reasons for being so.  These include:
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Undersupply of new housing stock, especially in New South Wales and Queensland.
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Declining interest rates in concert with low bank loan to value ratios and our current high saving rate.
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Expanding population.
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Tight vacancy rate.
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Lower Australian dollar.
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Declining stock listed for sale; less private treaty discounting and shorter time on market plus increasing sales volumes.
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Rising confidence – i.e. The Westpac/Melbourne Institutes “good time to buy a dwelling index” which is close to its pre-GFC high.
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Some thoughts:
We currently are saving like there is no tomorrow.  Over 10% of what we earn is now squirreled away, more so when you include the reduction in our level of debt.
But is this really the new normal?
I have suggested such myself, but I am really starting to wonder.  A poor federal Labor government (there is nothing else one could say) and flat house prices might be more responsible for our current malaise than the financial crisis or slower world economic growth.
Surely, assuming a change federally, a realisation that money in the bank now earns very little, and once the penny drops, that house prices are increasing (a broad residential recovery nearly always starts in Sydney), surely Australians will revert to their traditional form of tax free or ATO assisted saving – property.
I cannot see any other major investment path forward.
 
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The ability of SMSFs to borrow to buy property plus the last chance (in their minds) for baby boomers to leverage and make an easier buck before they retire (or re-tread) just adds more fuel to the fire.
Ditto overseas buying in Australia.  Australian property is now close to 20% cheaper than it was six months ago.  Chinese money is looking for an investment home, especially as their home economy declines and restructures.
According to a recent survey by NAB, foreign buyers of new Australian residential property have doubled in the last two years.  Foreign buyers now buy one in every eight new homes sold in Australia, up from about 5% in 2011.
Expats wanting to come home are also on the increase.  Keep in mind that one million Australians live abroad and the previous high Australian dollar (plus HECS payments) has kept them overseas longer than many originally intended.
Plus, we have the new 888 significant investor visas, which allow overseas migrants free reign once approved and if they invest $5 million in an approved security.
This will have a big impact on the top-end of the residential market.  My work with the Brisbane Chinese community suggests that quite a bit of this visa money will be invested in SEQ.
Finally – and these comments are somewhat more speculative than my usual conjectures – as bank deposits (and our savings) start to be withdrawn and placed in more attractive investments, won’t the banks need to continue to build shareowner wealth/returns?
They have quite a bit of room to play with – a very large interest rate margin (currently 3.45% between the cash rate and the standard variable mortgage rate) plus very low loan to value ratios for existing loans (around 50%).
I think that they will start to chase market share, dropping mortgage rates and loosening lending criteria in order to secure more home loans.  More sales will take place as a result.  Prices will rise even faster.
We are surely about to enter another residential upturn.
Property along the east coast – and especially in the three main capitals/plus on the Gold and Sunshine Coasts – will be the big winners.
A baton change must happen from resources/mining to residential construction.
As interest rates (given the federal and state deficits) are the only tool in the shed, they will continue to fall until new residential construction lifts and stays high for some time.
We won’t get any joy this time around from the commercial sector, with office vacancy rates in double figures and the demand for new retail space in decline.  Residential, this cycle, will have to do most of the heavy lifting.
As a result, some are now forecasting that the cash rate could fall another 0.75% to 1.75% within the next 12 months. I think the cash rate will go to 2% by Easter 2014.  Anyone want to place a bet?
Property values are set to rise and they will most likely overinflate (like they usually do – see <a href="https://matusikmissive.com.au/2013/03/19/why-does-property-cycle/">here</a>) as a result.  I think the residential market will enjoy much better times post September 7 and will remain buoyant for about two or three years.  Prices then will then need to correct.
I don’t really know how much they will increase in the next, say, three years, but by as much as 25% isn’t beyond the realm of possibility.
Who really knows how big a future correction will be?  It might be another long fizz like the last five years or a sharp plunge.
The key is to invest and not speculate.
It is pointless saying that things are different this time around.  Property cycles and all of the hallmarks are there to see that a recovery has already begun.  We need a residential recovery.  We need more new housing starts.  The RBA will make sure we get one.
It’s game on!
Michael Matusik is the founder of <a target="_blank" rel="nofollow" href="https://www.matusik.com.au/">Matusik Property Insights</a>, which has helped over 550 new residential projects come to fruition.   Read <a target="_blank" rel="nofollow" href="https://www.matusikmissive.com.au/">Michael’s Blog</a> or follow him on <a target="_blank" rel="nofollow" href="https://www.facebook.com/ThinkMatusik?fref=ts">Facebook</a> and <a target="_blank" rel="nofollow" href="https://www.twitter.com/michaelmatusik">Twitter</a> or connect via <a rel="nofollow" href="https://www.linkedin.com/in/michaelmatusik">LinkedIn</a>.
Picture courtesy of commons/flickr.
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michaelmatusik-49YzLvdmNv

Seven reasons why prices might rise 25% in select Australian east coast cities over next three years: Michael Matusik

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As outlined in <a target="_blank" href="https://www.propertyobserver.com.au/auctions/estimating-construction-costs-on-residential-projects-michael-matusik/2013080763671">my recent post,</a> it is interesting to ponder why ‘construction costs’ is so high on the Missive search button list.  
We know that much more of the ‘new’ housing dollar is being spent on renovations. 
Some estimate that just over half of the money spent on residential construction is now spent renovating rather than on new builds. 
Others estimate that the Australian renovation market has more than doubled in size (dollars spent) since the early 2000s.  
I think there is much more at play here than just economics.  
It’s true that the increase in taxes and charges on new property (GST, infrastructure charges, stamp duties etc.) has had a negative impact on new housing demand. 
This goes some way to explain why new house building is at record lows (in per capita terms), but it doesn’t fully explain the rapid rise in renovations.  
Several things come to mind:  
Increasingly, we feel we have less control over our lives: post 9/11- threat of terrorism;  lack of political leadership;  the internet;  media sensationalism;  our general lack of fortitude – we scare so easily theset days;  no nation building projects.
This list could go on and on.
And so undertaking a renovation is one way of controlling our environment. 
We aren’t confident enough to make a big move and buy something new.  
What defines a home isn’t the property itself, but more often than not, it is defined by the spaces around it.
Housing or the idea of a home, is bound up with a vivid sense of place.  
This seems lost on many of today’s planners, even architects and especially developers. 
If you listen to buyers (including investors), they will describe what surrounds the property and how the building itself interacts with this space, rather than the dwelling itself.  
It’s not just about what the project looks like but how it fits into its immediate surrounds. 
It is much more than just a property’s location or in which suburb it sits.  
There is pride at stake. 
Too few new residential developments evoke a sense of pride.  An owner must be able to say, with a degree of self-importance, that I live here (or own one of these).  
I cannot help but think that too many new developments look pretty crappy and also lack this vital connection between the property itself and the surrounding space.  
Too many lack a sense of place.  
Taking this line of thought further, we all seem to want our own place.  This want for my place is one reason why renovations are replacing new development. <ol></ol>
Renovations can allow us to make space more suited to me.  Whilst renovating often means adding space – a home within a home so to speak – renovations also aim to improve space and this is the point when it comes to new development.  
Potential buyers tell us that it is the carbon copy nature of new development (rather than the amount of it), their lack of input in the final product and the strict rules of its use that stop them from buying something new.  
It seems to me that new development these days plans out all of the non-profitable components.  For example, the best medium-density housing developments incorporate plenty of built-in space where incidental contacts occur naturally.  
Why can’t off-plan buyers – who financially qualify – make changes to certain things like kitchen and bathroom layouts? 
Many more would buy if they could do so.  
Why can’t new projects design in some flexibility, suchas  internal walls that moveor multi-functional spaces?  
We want bespoke, even if is just a tiny bit.  
And whilst a cost burden, many accept body corporate fees, but the rules associated with living under such a system seem antiquated to say the least.  
Yes there are plenty of economic reasons why what I have outlined is difficult to implement,  but these are some of the reasons why new dwelling sales remain low and renovation activity is on the rise.  
The want for my space helps explain why, in many Western societies, houses are expanding while households are generally shrinking.  Children used to share bedrooms a generation ago. 
My grandparents never said I need some space,  but my kids, our parents and my wife and I do.  
Michael Matusik is the founder of <a style="font-size: 14px;" href="https://www.matusik.com.au/" rel="nofollow" target="_blank">Matusik Property Insights</a>, which has helped over 550 new residential projects come to fruition.  Read <a style="font-size: 14px;" href="https://www.matusikmissive.com.au/" rel="nofollow" target="_blank">Michael’s Blog</a> or follow him on <a style="font-size: 14px;" href="https://www.facebook.com/ThinkMatusik?fref=ts" rel="nofollow" target="_blank">Facebook</a> and <a style="font-size: 14px;" href="https://www.twitter.com/michaelmatusik" rel="nofollow" target="_blank">Twitter</a>  or connect via <a href="https://www.linkedin.com/in/michaelmatusik" rel="nofollow">LinkedIn</a>.
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Renovations are more popular than off-the-plan because people have more control over their home

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Do you know what the two most commonly searched themes are on the Matusik Missive site?  
The most frequent is ‘property clock’ and the second, and not that far behind the clock, is ‘construction costs’.  
We have had over 200,000 visits to the new Missive site over the past nine months, with just over 1,300 people using the search button.  
So this week let’s cover construction costs.  
Before we start, we have approached several major construction firms, advisory bodies and the MBA themselves – about covering this topic as a Missive special guest.  
For whatever reason those we contacted either declined or didn’t reply.  So we have had to do this solo.  But given the interest in this topic – and it seems from many who are looking to do a renovation, either for themselves or as an investment – we thought we should give it a stab.  
But be forewarned – we are not builders.  
We have also used extensively the material available for free from RLB or Rider Levett Bucknall and in particular their Riders Digest Australia, Queensland Edition.  You can download this yourself, plus similar for most other Australian capital cities <a href="https://rlb.com/index.php/australia-and-new-zealand/research" target="_blank">here</a>.  
Do you get out Thirsty Thursday?  It is a fun filled read – with just six hyperlinks – designed to help sort out your reading pile.  And it does come out each Thursday.  <a href="https://www.matusik.com.au/" target="_blank">Go here</a> to subscribe.  Album and book reviews are included too!
Total building costs
These figures are based on a rate per net lettable area and include building works and services.  They exclude a range of things including land, professional and legal fees, car parking and the GST.  I have chosen the high end of the cost range.  The house, walk-up and townhouse figures relate to mid-quality product without air-conditioning.  The high rise apartment stock is ‘luxury’ quality with fully ducted air-con.  
Prices are at the March quarter 2013.  
Some of you might want to hit the snooze button about now, as the following is going to be somewhat loaded with stats.  It is the nature of the terrain.  
Houses
A new house costs about $2,300/m² to build in Canberra and Perth.  Costs are higher in Darwin and Melbourne, averaging around $2,600/m².  In Brisbane, they cost about $3,200/m² and close to $3,850/m² in both Sydney and Adelaide.  Why Brisbane and Adelaide are so high is a question worth asking and  I don’t know the answer.  Maybe someone with more smarts than I – so a lot of you – might know why.  
Townhouses
They are cheapest to build in Darwin ($2,300/m²) – again who knows why and the most expensive to erect in Adelaide ($3,200/m²).  The other major capitals all average about the same total building rate at about $2,600/m².  
Walk-up apartments
Darwin is the cheapest location to build new apartments under three storeys in height.  The average Darwin build cost is $2,300/m².  Perth’s costs average $2,800/m².  Brisbane’s, Melbourne’s and Canberra’s come in at around the $3,000/m² mark.  Again, Adelaide and Sydney are the most expensive, averaging $3,200/m².  
High rise apartments
For those buildings less than 20 storeys, the average total building cost is $2,300/m² in Darwin; $2,700/m² in Brisbane; $2,800/m² in Canberra and Melbourne; $2,900/m² in Perth and Sydney and again the highest in Adelaide at $3,600/m².  
For taller apartment structures, the average build cost leaps to $3,500/m² in Brisbane; $4,000/m² in Sydney and Melbourne and over $4,400/m² in Perth.  
Locational spread
Despite the results outlined, Brisbane is the cheapest capital to build something new in Australia.  This statement reflects total building costs across both new residential and other structures such as offices etc.  
Also, if we use Brisbane as the cost base, then building costs are 14% more expensive in Adelaide; 16% more in Canberra; 17% more in Melbourne; 20% more in Sydney; 24% more in Perth and 25% more in Darwin. 
I don’t understand why these figures differ so much when compared to the $/m² results outlined above.  But again, we are just messengers here.  
Queensland differentials
Again, using Brisbane as the cost base, building something new on the Gold and Sunshine Coasts is 5% cheaper than in Brisbane.  It costs 5% more in Cairns; 8% more in Townsville; 14% more in Mackay and 25% more in Gladstone.  
Site works/demolitions
When it comes to cleaning up a house for a major refurbishment and/or removing it entirely, RLB suggest that for a single storey timber house, the renovator should budget between $45/m² and $65/m².  For single and double storey brick homes, this budget range needs to increase by about $10/m².  
Michael Matusik is the founder of <a target="_blank" rel="nofollow" href="https://www.matusik.com.au/">Matusik Property Insights</a>, which has helped over 550 new residential projects come to fruition.  Read <a target="_blank" rel="nofollow" href="https://www.matusikmissive.com.au/">Michael’s Blog</a> or follow him on <a target="_blank" rel="nofollow" href="https://www.facebook.com/ThinkMatusik?fref=ts">Facebook</a> and <a target="_blank" rel="nofollow" href="https://www.twitter.com/michaelmatusik">Twitter</a> or connect via <a rel="nofollow" href="https://www.linkedin.com/in/michaelmatusik">LinkedIn</a>.
 
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Estimating construction costs on residential houses to projects: Michael Matusik

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 Australia’s population increased by close to 400,000 new people last year.  That’s like tacking on another Canberra or Newcastle to the Australian land mass.  

Most of the growth took place on the eastern seaboard, with Perth chipping in with its 83,000. Victoria grew by 100,000 new residents.  Queensland and New South Wales grew by about 90,000 each.  
More births than deaths, made up for about 40% of the increase.  Just under two-thirds of our growth (235,000 last year) now comes from overseas migration.  
I think we handle our population growth quite well. 
We need more, not less of it. 
Our population and economy, for mine, are way too small.  We need to build some serious economies of scale.  
Australia’s vital organs and circulatory system are outside its body.  What I mean by this is that what really matters to us, economically, is some distance from our shores and we have very little influence or control over much of it. We seem to lurch from boom to boom – wheat, wool, coal, iron ore, now gas etc. 
What happens in China/Asia and America’s sphere of influence (in many ways) greatly affects our prosperity.  This will remain such for generations to come.  But we also start to create our own larger markets.  
We are on our way. 
Did you know that Australia’s population has increased by 30% in just 20 years? 
We have added the equivalent of Sydney’s population since the early 1990s.  Queensland’s population has increased by 50%; Western Australia’s and the Northern Territory’s by about 40%.  Half of the growth over this period came from natural increase.  
Big Australia?  Well maybe not, and I don’t want to give Kevin Rudd anymore oxygen.  But sadly there is no conversation, not a pip, regardless of party, about population targets, urban matters and regional planning.  Serious policies (not politics) about such matters are long overdue.  
Our current rate of population growth is up 25% on two years ago.  
The big winner in this overall lift in more bums on seats includes Western Australia, with population growth up 50% (or 28,000 more people each year) on the 2010 trough and Queensland plus Victoria, both with lifts in excess of 30% or more than 23,000 new people per annum. 
Victoria equals population growth.  Well I’ll be damned.  Bloody great place to visit.  But living there?  
Those urban places that saw over 4,000 new heads (above ground) during 2012 include:  
Melbourne (77,000 increase); Perth (65,000); Sydney (62,000); Brisbane (43,000); Adelaide (14,000); Gold Coast (11,000); Canberra (7,000); Sunshine Coast (5,000); Newcastle (5,000) and Townsville (4,000).  
These top ten growth cities hold four-fifths of Australia’s population growth. 
Our eight capital cities combined make up 70% of the country’s population growth and whilst Queensland is the most decentralised state or territory, two-thirds of its population growth takes place between Noosa, Ipswich and the NSW border.  
 
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Not only has there been an increase in the proportion (and number) of overseas migrants as part of the total population mix in recent times, where these migrants come from has changed too.  
Yes, New Zealand (29,000 last year), the Old Dart (12,000) and South Africa (5,000) still add considerably to our long-term permanent inflow, but many new migrants come from elsewhere abroad. 
Just over 35,000 new migrants settled here from China and India last year (17,500 apiece).  A lot also have also come from the Philippines (7,000), Malaysia and Vietnam (4,000 each), Sri Lanka (3,500) and Iraq (2,500).  
Remember these figures are for long-term permanent residents. Our 235,000 overseas increase, whilst a net result (includes incoming and outgoing migrants), does include those arriving on a short-term basis. 
The ABS estimates that about half of our net overseas migration is temporary, whether it is on work or student visas.  
Also changed of late is the level and distribution of interstate migration across the country.  
Queensland is the best case study in this regard.  Twenty years ago two out three new residents in Queensland moved from interstate.  Ten years ago it was close to half.  Five years ago it was a quarter.  Last year it was just one eighth.  
Today half of Queensland’s population growth comes from overseas migration and another third (actually 37%) from natural increase.  
Queensland’s overseas migration profile is very similar to Australia’s overall. 
Half of those who still come to Queensland from interstate originate from New South Wales and especially from western Sydney.  One in four come from Victoria, again mostly from the western flank of Melbourne, 10% come from Perth.  
We are, and it looks like we will remain, quite urbanised.  
Capital cities and a select few major regional centres attract most of the population growth. 
Increasing demand, tempered with limited new housing supply, is a positive for property investors.  If managed well, it is also a bonus for the local residents, as size often brings better services, wider choice and deeper markets.  And yes, sadly, more fast food outlets – but you don’t have to eat there!  
Household size is also increasing. 
We have been writing about such for some time (enter ‘household size’ in the Missive’s search area for a fun evening’s reading) and what this means is less overall new housing demand than has historically been the case.  
The cause of this rise isn’t low affordability, as is often spruiked, but demographics – more babies are being born and more migrants are coming from countries with traditionally larger families.  Also, the Chinese who move here want to have more children than allowed (afforded) in China.  
Limiting new housing demand is the GST on new construction and stamp duties.  Both are forcing many to age in place.  Stamp duties, in particular, hinder local moves.  This is why we are now seeing more money spent in Australia on renovations than new builds.  
The resurgence of the ‘granny-flat’ and ‘man-cave’ or shed is also seeing demand being increasingly satisfied on existing premises rather than on new sites.  
When Kevin McCloud has a TV show about his new shed, you just know it is a popular trend.  
When it comes to actually building new housing and despite the increase in household size, attached product is increasingly popular and the smaller product, therein, is becoming more prevalent.  
A lot of this has to do with price (and the Australian investment model) but also we are importing transience. 
If half of our net overseas intake is coming here on a less than permanent basis and those numbers are rising, surely the need for temporary accommodation or housing that suits a more ‘living out not in’ visitor lifestyle must also be on the rise.  
In a country with as much land as Australia, one might shake one’s head and wonder why.  I still live on acreage.  We haven’t moved that far from our first place. 
Increasingly I feel like the odd man out, but  I don’t think I am alone.
Michael Matusik is the founder of <a style="font-size: 14px;" rel="nofollow" target="_blank" href="https://www.matusik.com.au/">Matusik Property Insights</a>, which has helped over 550 new residential projects come to fruition.  Read <a style="font-size: 14px;" rel="nofollow" target="_blank" href="https://www.matusikmissive.com.au/">Michael’s Blog</a> or follow him on <a style="font-size: 14px;" rel="nofollow" target="_blank" href="https://www.facebook.com/ThinkMatusik?fref=ts">Facebook</a> and <a style="font-size: 14px;" rel="nofollow" target="_blank" href="https://www.twitter.com/michaelmatusik">Twitter</a> or connect via <a rel="nofollow" href="https://www.linkedin.com/in/michaelmatusik">LinkedIn</a>.
Construction photo courtesy of creative commons/flickr.
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We need to think about how we deal with a rapidly expanding population: Michael Matusik

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Another great forward indicator with regard to the future health of the residential market – and in particular new housing construction – is employment growth.  
Now, I used to ‘full-time’ employment growth.  There seems to be a disconnect between working full-time and housing demand.  I think it has more to do with workplace transformation than, say, looser mortgage arrangements.  Today about a third of the Australian workforce are casually employed, with another 30% working part-time.  
Anyway, just as too many column centimetres are devoted to burbles about median prices (and worse still, which index is more incorrect), when it comes to property markets, too much attention is given to unemployment, rather than the creation of jobs.  
A recent analysis of employment figures tells us quite a lot about the possible future direction of the residential market.  
Australia
Overall, 124,000 new jobs were created across Australia over the last 12 months (year-ending May 2013).  Australia, over the past five years, created about 165,000 new jobs every year.  During 2011/12 Australia created 140,000 new jobs.  So things, job-wise, would appear to be slowing down.  
Again, as discussed in recent Missives, interest rates need to fall further.  Given the start of the structural decline in coal; iron ore peaking and our rising population growth, we need to create many more jobs than we currently are.  Creating a long-term policy platform (not politics) to get us back to, at least, our five-year average would be a start.  
New South Wales
Only one state is leaping ahead when it comes to employment growth.  And it is having a large, positive impact on its real estate market.  
And the winner is New South Wales.  
New South Wales created just under 70,000 new jobs last year.
Importantly, NSW’s recent job creation is way ahead of its five year average, suggesting, improving residential market conditions ahead.  
Also rans
Four other states are creating jobs – Western Australia with 15,000 new jobs since May last year, along with Victoria, Queensland and South Australia each coming in with about 13,000 new jobs apiece.  
New job creation has all but stopped now in Canberra and the Northern Territory.  Tasmania is losing jobs (minus 1,300).  
Whilst Victoria’s recent employment growth is encouraging, it is way down on the longer-term trend (50,000 per annum as a five-year average).  The Victorian housing market’s downturn will most likely, assuming it can continue to create new jobs, now take a softer landing that may otherwise have been the case.  
South Australia’s residential market might be the big surprise over the next 12 to 18 months.  My SA chart of job creation shows consistent improvement since the beginning of the year.  Keep in mind, SA saw no new job creation during 2011/12.  Things in SA look like they could change for the better.  
Western Australia; Darwin and Canberra all look like they may be peaking, it terms of residential activity.  Past trends would suggest that WA might even go through a market correction unless job creation moves upwards again.  During 2011/12, WA saw 48,500 new jobs and the state’s five year average is 32,600 full-time new jobs each year.  
But maybe WA, like Queensland, given they are both ‘resource’ states, overshot in recent years, and the amount of new work is correcting back to more normal levels?  
Queensland
The theory strongly suggests that Queensland’s residential markets should be recovering, but until we start seeing a steady increase in work, the Sunshine State’s residential outlook will remain lacklustre.  
Investors need to be very careful about what they buy in Queensland.  Anything off-centre might not perform as spruiked.  Whilst I think Queensland’s tide will rise (and this is not a veiled attempt at humour) and maybe quite quickly during 2014 and beyond, a rising tide, this cycle, may not float all ships.  
Queensland’s new housing market also remains lacklustre.  
See, mining (resources) creates wealth in Australia and new housing construction distributes it (and therefore helps to keep much of this wealth in the country).  The distribution system works in other states/territories but is broken in Queensland.  
For example, Queensland started just 29,000 new dwellings last year (year ending April 2013); whilst Victoria, over the same time period, built 51,000 new homes.  NSW – the traditional basket case when it comes to new housing construction – created 39,000 new dwellings last year.  All three states are growing – in terms of civil population – at about the same rates i.e. 80,000 new permanent residents per annum.  
Queensland now should be creating about 40,000 or 25% more, new dwellings each year.  Queensland must increase its new housing starts, and very quickly, in order to start creating more new jobs.  The coal mining slowdown makes this even more pressing.  
No stamp-duty on new off-plan sales across Queensland is now imperative – not a budgetary choice.    
Michael Matusik is the founder of <a href="https://www.matusik.com.au/" target="_blank">Matusik Property Insights</a>, which has helped over 550 new residential projects come to fruition.  Read <a href="https://www.matusikmissive.com.au/" target="_blank">Michael’s Blog</a> or follow him on <a href="https://www.facebook.com/ThinkMatusik?fref=ts" target="_blank">Facebook</a> and <a target="_blank" href="https://www.twitter.com/michaelmatusik">Twitter</a> or connect via <a href="https://www.linkedin.com/in/michaelmatusik">LinkedIn</a>
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Employment statistics are an important indicator for residential property: Michael Matusik

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Far too much commentary about the residential property these days focuses on price.  Very little is actually said about sales.  When I first started in this game, sales volumes, and especially sales by price range or group, were far more important than median or average prices.
And for mine, nothing much has changed over the last 25 years in terms of what really matters when it comes to measuring a real estate market’s health – and that is, how many sales take place; in what direction are they heading and is there enough <a href="https://matusikmissive.com.au/2013/06/05/what-makes-a-good-investment-2/" target="_blank">market depth</a> i.e. sales volumes when it comes time for me to sell?
Recent data releases by both RP Data (in their Quarterly Review) and by the REIQ (via their Queensland Market Monitor) provide some information about sales volumes.  But most of the conversation is about changing median values, which as I have discussed <a href="https://matusikmissive.com.au/2012/11/28/murarrie/" target="_blank">here</a> and <a href="https://matusikmissive.com.au/2009/09/23/medians-muddy-the-water/" target="_blank">here</a>, more often than not means very little at all.  It shows what sold rather than improvement or otherwise.
To the REIQ’s credit, they dedicate a lot more space to discussing sales volumes than most other recent reports.  I trust this remains the case as the QMM is about to undergo a facelift.  Here’s hoping that the content remains the same.
Importantly, a market’s position can be determined (in part) by sales volume trends.  A recovering market has, among other indicators, improving sales volumes.  A market in upswing has ‘fast’ sales; a downturn market has flat or slightly falling sales volumes and a market in decline/trough has declining sales.
Sales volumes are a great bellwether when it comes to future direction of prices and a market’s characteristics i.e. changing from a buyer’s market to a seller’s market for example.
So what is happening to sales volumes across the country and in the nation’s capitals?
According to RP Data, there were 400,000 house and attached dwelling sales across Australia over the last 12 months.  Overall sales volumes have increased 2 % on the year before.  Yet sales volumes are 11 % lower than the five year average.
When it comes to new property sales, nationally, and according to the HIA, there were 64,000 new house and apartment sales over the last 12 months, which is 13% down on the year before and a massive 28% less than the five year average.  This is why – among other much needed legislative and tax-related changes to new housing – interest rates need to continue falling.
Interestingly, sales volumes (78,000 house and attached dwelling sales) are declining in Sydney – says RPData – with volumes 9% lower than the year before. Volumes are down 12% on the five year average.
The other capitals are as follows:
Melbourne: 72,000 sales; down 1% on last year; down 16% on last five year average.
Brisbane: 39,000 sales; up 10% on last year; down 14% on past five years.
Adelaide: 20,000 sales; little change on last year and also down 14% on last five years.
Perth: 40,000 sales; up 26% on last year; up 11% on past five years.
Hobart: 3,700 sales; now 3% down on last year; down 19% on past five years.
Darwin: 3,000 sales; up 22% on last year and up 2% on past five years.
Canberra: 8,000 sales; down 6% on last year; down 14% on last five years.
This shows me several things:
Firstly, how small some markets actually are – Darwin, Hobart and Canberra spring immediately to mind.  The Sydney market, for example, is 26 times larger than Darwin.
Secondly, it would appear that Brisbane has entered a recovery.  It is a bit more ‘stop-start’ than many of us would like.
Adelaide seems to be stuck in a trough.  Perth and Darwin are well into their upswings; and despite some recent commentary to the contrary, Melbourne and Canberra appear to have peaked.
Thirdly, I don’t know what to make of Sydney’s sales decline.  Maybe RPData’s data is wrong?  Maybe not.  All other indicators suggest that Sydney is in a relatively strong recovery.  The theory is that declining sales volumes mean a slowing market, but life is often far more complex.  In this case, given the weight of other more positive evidence – such as rising clearance rates; fewer properties for sale; a drop in the time it takes to sell and declining private treaty discounting – I will bench Sydney’s sales results as an anomaly, until further evidence surfaces.  But, again, sales volumes are a good bellwether, so I will be watching the Sydney market a little more closely in coming months.
Having now somewhat shot myself in the foot, much more time and energy needs to be spent discussing actual sales volumes.  These are best discussed on an annualised basis and where possible, by product type.
All buyers should also want to know about how many sales actually take place around the price they paid for their property.  For example, if I bought a $425,000 apartment, I would want to know how many sales took place between $400,000 and $500,000 within the local area on average over the past couple of years.
I would also be interested if that market size had increased in recent years, so that I could estimate the resale market’s depth when it comes time to resell in the future.
Investors, especially, should pay little or no attention to median or average prices.  It’s sales volumes that are really important.  All investors need to start with the end in mind – an exit strategy if you will – and the important questions are, “Will someone buy this off me in the future?” and “How many buyers are there?”  This then provides insight as to the time needed to resell and at what price.
Michael Matusik is the founder of <a style="font-size: 14px;" href="https://www.matusik.com.au/" rel="nofollow">Matusik Property Insights</a>, which has helped over 550 new residential projects come to fruition.  Read<a style="font-size: 14px;" href="https://www.matusikmissive.com.au/" rel="nofollow">Michael’s Blog</a> or follow him on <a style="font-size: 14px;" href="https://www.facebook.com/ThinkMatusik?fref=ts" rel="nofollow">Facebook</a> and <a style="font-size: 14px;" href="https://www.twitter.com/michaelmatusik" rel="nofollow" target="_blank">Twitter</a> or connect via<a style="font-size: 14px;" href="https://www.linkedin.com/in/michaelmatusik" rel="nofollow">LinkedIn</a> 
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Residential property commentary needs to focus on sales volumes as well as prices: Michael Matusik

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Confidence is back, baby. But before you get too carried away, it is from a very low base.  
This somewhat surprising lift in confidence is nice and all, but the key question is what people do in the future.  The readings of the confidence entrails suggest more of the same – that is, being very cautious about our investment options.  
Despite eight out of ten people - according to a recent RP Data poll - thinking now is a good time to buy a property, a third of the population believes the wisest place for new savings is still in the bank.  Amazing, really, given that interest rates are at their lowest levels in 53 years.  
Encouragingly, housing is being seen as a more attractive investment with a quarter of the Westpac/Melbourne Institute survey sample now thinking such.  
Also on the positive side, the ‘good time to buy a dwelling’ index continues to rise, being currently at 143.3 (a reading over 100 means the number of optimists outweighs the number of pessimists) and according to RP Data, one in two households think that real estate prices will rise in the next 12 months, with just two out of five thinking that they will remain stable.  Only 9% think they will fall.  
And yet Australians remain very hesitant about buying property.  
Maybe it is the ongoing global economic concerns or our sluggish labour market that is to blame.  A lack of political leadership perhaps?  Or maybe it is something more fundamental, like selling their existing homes in order to move.  The RP Data survey shows that just over a third think it is a good time to sell.  
My reading here – and the Westpac/Melbourne Institute’s ‘good time to buy a dwelling’ index is a reliable lead indicator, outlining the likely direction of the housing market in about six to nine months’ time – is that most buyers will sit on their hands until early next year and then rush in as it becomes obvious that residential property is on the improve.  
"The early bird catches the worm."  
Home loans  
We wrote a phone book about this <a target="_blank" href="https://matusikmissive.com.au/2013/05/21/best-served-annually/">topic</a> only a few weeks back, so I won’t bore you to tears again so soon, suffice to say that:  
<ul>
<li>
Investors are starting to get into the market – being those who like to eat their worms early – with over $8 billion in investment loans last month (April).  This is the highest level in five years.
</li>
</ul>
<ul>
<li>
Other owner-resident buyers are also starting to get active, showing the strongest gain in four years.
</li>
</ul>
<ul>
<li>
First home buyers remain subdued, renting now instead of buying.  They were brought forward in droves during 2009 &amp; 2010, so seeing them ‘rest’ isn’t really all that surprising.
</li>
</ul>
One in five borrowers now takes out a fixed home loan according to the ABS – the highest level in five years.  The average home loan is now $301,800.  
According to the AFG Mortgage Index, the current average loan-to-value ratio is 66% down from over 70% late last year.  
My thoughts here are that it is usually investors who start a housing recovery. So history is repeating itself – which is somewhat comforting in a rapidly changing world.  
What makes for strong residential recovery is when all three buyer segments – investors, second and subsequent owners and first timers – all improve at the same time.  This is what happened in the early to mid- 2000s, for example.  When only one or just two buyer segments improve, then the residential upturn is milder by comparison.  
Right now, we are looking at a mild recovery, when compared to previous cycles.
 
Michael Matusik is the founder of <a href="https://www.matusik.com.au/">Matusik Property Insights</a>, which has helped over 550 new residential projects come to fruition.  Read <a href="https://www.matusikmissive.com.au/">Michael’s Blog</a> or follow him on <a href="https://www.facebook.com/ThinkMatusik?fref=ts">Facebook</a> and <a target="_blank" href="https://www.twitter.com/michaelmatusik">Twitter</a> or connect via <a href="https://www.linkedin.com/in/michaelmatusik">LinkedIn</a> 
 
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Confidence in the property market bounces back from a low base: Michael Matusik

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Here are three of the most common questions I get asked:  
<ol>
<li>
“When will the market recover and how can you tell?”
</li>
<li>
“What’s hot?” Which really translates to “What should I buy?”
</li>
<li>
“What makes a good investment?”
</li>
</ol>
The first two questions were answered <a href="https://matusikmissive.com.au/2013/03/19/why-does-property-cycle/" target="_blank">here</a> and <a href="https://matusikmissive.com.au/2013/05/14/what-should-i-buy/" target="_blank">here</a>.  Today we cover the third one - what makes a good investment?  
As many of you know, it is my opinion that property investors spend far too much time on ‘where’ they should buy and not enough on ‘what’ they should be buying.  And while part of my reply as to what makes a good investment has to do with ‘place’, most of it relates to the actual ‘product’.
When I cover this question in our “Market Outlook and What To Buy” <a href="https://matusik.com.au/projects/book-matusik-today/" target="_blank">presentations</a>,I usually raise my hand and say, “If the property passes my five finger test then, for mine, it is has a great chance to be good investment.”
My five finger test  
Market Depth. How deep is the market you are buying into?  In other words, how many sales take place in the area each year and in particular, how many sell within the price band in which you will be reselling your property?  Median prices provide little guidance to you here.  You need to know the actual sales volumes by price group.   
 
A short cut here is to buy in areas with economic diversity.  One or two horse towns are out – I don’t care how great the yields may be – unless there are many irons in a location’s fire, they usually aren’t good places in which to buy investment property.  Stick to the capitals and major centres.  Why?  Because there will be enough market in the future for you to actually sell to.  Rule 1 is market depth.  
Owner-resident resale appeal. Does what you are buying have owner-resident resale appeal?  Is the general area attracting more owner-residents over time?  Why this is important is that it doubles your resale audience, as there are twice as many owner-resident buyers across Australia than investors.  You should always buy a product that has the potential to resell to an owner-resident.  Small projects; well-sized and well-designed; good aspect; view if possible; and local gentrification are just some of the things to look out for.  
Potential upside. What is the location really like?  It needs to have high amenity – this helps with regard to owner-resident resale appeal plus better tenants – and use <a href="https://www.walkscore.com/" target="_blank">walk score</a> to make initial judgements about a location.  
Also, there must be employment generators in the area and employment numbers need to be growing.  Don’t worry too much about local unemployment; it the number of actual local workers that mean the most to you as an investor.   The ABS Census can help <a href="https://www.censusdata.abs.gov.au/census_services/getproduct/census/2011/communityprofile/3GBRI?opendocument&amp;navpos=230" target="_blank">here</a> and use the working community profiles.  
And thirdly, is there any new infrastructure proposed in the area?  Most councils have such information on their websites.  Pollies love to cut ribbons and open things, so government departments document such things in advance.  The best things that help drive up value include transport initiatives, especially public modes such as railway stations; new offices or retail expansion and major new developments like hospitals, schools and to some degree industrial estates.  
Rental appeal. I used to think this part was bloody obvious; and I am always amazed when I ask an investor (or developer for that matter) to describe who is actually going to rent the property, and all I get is a blank stare.  Sometimes they reply by saying, ‘renters’.  I kid you not.  
You need to understand who and why a certain type of rental demographic will rent your property.  You need to know how many of that rental demographic subset lives in the area.  Your property should appeal to two out of three of the largest rental demographic segments in the local area.  Again the <a href="https://www.censusdata.abs.gov.au/census_services/getproduct/census/2011/communityprofile/3GBRI?opendocument&amp;navpos=230" target="_blank">ABS Census</a> can help; this time look at the community profiles and you will have do to some basic maths.  
For example, does your one-bedroom apartment in New Farm appeal to a single female renter?  Does it also appeal to a young couple in their mid-20s to early 30s?  Does it also appeal to older single males?  Well, if single females rent in the same building then one could say yes…but you get my drift.  
Who will rent your property and why?  And does that rental market segment exist in the area?  These are three important questions.  Getting ticks in the right boxes here means a better investment.  
Finally, could you live in it?  If things went cactus, could you live in this property for a period of time?  This isn’t really a financial safety net; but it usually means that the property has ‘good bones’ and a half decent standard of finish.  This translates, in turn, to better tenants who stay longer.  
A good residential investment needs to pass a simple test.  When I work on a new residential project which is looking for Matusik endorsement, it must pass nine detailed <a href="https://matusik.com.au/projects/what-is-property-picks/" target="_blank">variables</a>.  My five finger investment test is an abridged version of Matusik Property Picks.  It covers all the bases.   
Readers should seek their own professional advice on the subject being discussed.
Michael Matusik is the founder of <a href="https://www.matusik.com.au/" target="_blank">Matusik Property Insights</a>, which has helped over 550 new residential projects come to fruition.  Read <a href="https://www.matusikmissive.com.au/" target="_blank">Michael’s Blog</a> or follow him on <a href="https://www.facebook.com/ThinkMatusik?fref=ts" target="_blank">Facebook</a> and <a href="https://www.twitter.com/michaelmatusik" target="_blank">Twitter</a> or connect via <a href="https://www.linkedin.com/in/michaelmatusik">LinkedIn</a>.
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Five tips for making a good property investment: Michael Matusik

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The RBA will most likely leave the cash rate on hold at 2.75% today. Rates should fall another 0.25% – as discussed as <a target="_blank" href="https://matusikmissive.com.au/2013/05/07/missive-extra-interest-rates/">few weeks back</a> – to make up for the federal ‘fiscal drag’.  
Where Aussie interest rates go from there depends on the direction of the Australian dollar and the amount of new housing construction.  
A high Australian dollar makes it harder for industries like manufacturing, tourism, construction and retail to be competitive.  
Despite the fundamentals for housing being sound – low and falling interest rates, pent-up housing demand, strong and increasing population growth and steady unemployment – new housing starts and new home sales continue to remain weak.  
As a result, the outlook for the Australian economy has lessened, with financial services firm JP Morgan downgrading their earlier forecasts of 3.25% economic growth in 2014, to 2.75% next year.  
This should force the RBA to cut the cash rate below 2.5%.  
At present the non-mining private sector continues to remain on the investment sidelines, and it is very much needed to help fill the void left by the ‘pullback’ in mining investment.  Note ‘pullback’ and not ‘crash’ or ‘collapse’ - but more on that next week.  
I don’t expect any great investment commitments this side of September 14 and for many months after that, to be honest. Confidence should improve post federal election, but by then we will be running into Christmas and besides… things, economically speaking, don’t happen that quickly.  
On a positive note – unless you are a builder - the RBA has little to fear from cost pressures (outside of union action) in the construction sector as building costs fell at their fastest pace in nearly four years during the March quarter.  On an annualised basis, building costs have been growing by just 2%, which is more than half the decade average growth rate.  
New housing construction has a huge multiplier effect across the economy.  It creates lots of jobs.  New housing starts must be stimulated.  Our current political crop doesn’t have the gonads to change the way property is taxed in Australia.  And we don’t have the money in the coffers anymore to take the easy route and cut property taxes such as stamp duties.  
I do note, however, we have a spare $80 million to give Bill Gates.  Now, I am all for having a world without Polio, but surely this type of donation should be coming from the likes of Clive Palmer and other billionaires first.  But I digress.  
The latest Bloomberg survey has 10 out of 21 economists forecasting a cash rate of 2.5% by the end of this year, with Westpac tipping a cash rate of 2.25% and the remainder anticipating no further rate cuts this calendar year.  At the time of writing, only two economists expect a rate cut in June.  
I think the cash rate rate could go as low as 2% by the end of this year.  The baton change from engineering to residential construction is taking much longer than anticipated.  If the Aussie dollar climbs again against the greenback, then all the more reason for a 2% cash rate.  
Given the current state of play the only lever we have to pull is interest rates. I think interest rates should fall today and then again in August – bugger the timing of the election – and then once more in November this year.  
We need to set up 2014 to be a massive year for change down under.
Michael Matusik is the founder of <a href="https://www.matusik.com.au/">Matusik Property Insights</a>, which has helped over 550 new residential projects come to fruition.  Read <a href="https://www.matusikmissive.com.au/">Michael’s Blog</a> or follow him on <a href="https://www.facebook.com/ThinkMatusik?fref=ts">Facebook</a> and <a href="https://www.twitter.com/michaelmatusik" target="_blank">Twitter</a> or connect via <a href="https://www.linkedin.com/in/michaelmatusik">LinkedIn</a>
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Change is needed to drive the Australian economy and we should start with another RBA cash rate cut: Michael Matusik

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Australia has moved from fifth to fourth most overvalued global property market but the overall risk of a housing bubble has subsided, according the very debatable The Economist magazine's 2013 global housing index.  
On a personal income housing affordability measure, <a target="_blank" href="https://www.propertyobserver.com.au/news/australia-moves-up-to-fourth-most-overvalued-housing-market-but-bubble-risk-subsides-the-economist/2013051761451">Australia ranks fourth</a> behind France (34%), the Netherlands (33%) and Canada (32%) while on a rents measure, Australia ranks third behind Hong Kong (81%) and Singapore (57%).  
The Economist calculates that Australian house prices are overvalued 24% (28%per cent last year) against average personal disposable income and 44% (38%per cent last year) against rents.  
What a load of rubbish!  Read <a target="_blank" href="https://matusikmissive.com.au/2011/12/07/house-of-horrors/">here</a> what we wrote about this stuff last time around.  
I believe The Economist has an issue with the Australian property market because we hadn’t experienced a substantial housing bust (or correction) here like most countries in the developed world.
For mine, due to our different lending practices here (full recourse loans etc) and high level of owner-occupier property, we were extremely unlikely to see the massive housing corrections that they experienced abroad, regardless of what Steve Keen believes!  
Also, most economists struggle forecasting things like actual economic growth and interest rates let alone property markets. Generally speaking, economists have a pretty poor understanding of the real dynamics and influences of property markets.  
Some economists (among others) have criticised me of late as being “too close to the market” i.e. that is involved in marketing and some very select selling - and therefore not somehow capable of independent thought or the tenacity the share it. The irony is that it is this very coalface contact with the market that is the most important when it comes to better property analysis.  
And as for an international economist – using a bunch of bland, internet-based, third party data sources – to speculate on Australia’s property markets, please give me a break! It is real estate after all. You must do a site visit. Walk the turf, kick the tyres, eyeball the vendor and quiz (interrogate) the salesperson.  
Australia, also, has a culture built on doing whatever is required to protect the family home – when things get a bit tough overseas they put the keys in an envelope and post them to the bank!  
Finally you cannot make comparisons between property and share markets. They are completely different.  
But maybe The Economist knows what it is doing.  It needs to sell its magazine and online advertising after all.  Well, if it ‘bleeds it leads’ and sadly telling us that our housing is going (again) to ‘hell in a hand basket’ must increase the magazine’s circulation.
Michael Matusik is the founder of <a href="https://www.matusik.com.au/" target="_blank" rel="nofollow">Matusik Property Insights</a>, which has helped over 550 new residential projects come to fruition.  Read <a title="blocked::https://www.matusikmissive.wordpress.com /" href="https://www.matusikmissive.com.au/" target="_blank" rel="nofollow">Michael's blog</a>or follow him on <a href="https://www.twitter.com/michaelmatusik" target="_blank" rel="nofollow">Twitter</a> or connect via <a href="https://www.linkedin.com/in/michaelmatusik" rel="nofollow">LinkedIn</a>.
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The Economist is wrong to argue that Australia's property market is overvalued: Michael Matusik

<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.

A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.

Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360965]

“The apartment floors deliver a collection of homes that embrace controlled outlook via a series of bay windows deliberately framing moments of view,” Rothelowman Director Kim Lowman said.

From outside, those projecting forms contribute to the tower’s faceted profile. Strong horizontal and vertical elements establish its proportions, while the changing position of the sun alters the light, shadow and reflection across the façade throughout the day.

The same attention moves inside the apartments, where the material palette combines warm timber, natural stone, metallic detailing and softer curved forms. Kitchens sit within the main living zone, with stone island benches, integrated joinery and European appliances, before the living areas extend towards the glazing and the outlook.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360981]

Three genuine bedrooms provide room to accommodate family and guests, while two secure car spaces and storage address some of the practical considerations that can become more noticeable when moving from a larger home. Feedback from the display suite has centred on the warmth and restraint of the interiors, with buyers commenting that the residences feel like homes rather than conventional coastal apartments.

A limited collection of half-floor penthouses occupies the upper levels, increasing the scale of the living spaces and adding private balconies and elevated finishes. From this position, the outlook extends between the ocean and hinterland.

Outside the private residences, The Eveleigh separates its shared spaces between the podium and rooftop. The podium is centred on wellness, with subtropical landscaping surrounding a swimming pool and pool terrace, yoga garden, private gymnasium, sauna and hot and cold plunge facilities. Landscaped retreats and pavilions provide additional places to sit away from the main recreation areas.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360966]

Higher in the building, a rooftop pavilion and private dining suite sit alongside resident lounge, barbecue and outdoor dining areas, opening towards panoramic views across the ocean, city and hinterland.

“Buyers are no longer just looking for an apartment, but a lifestyle where they can relax, reset, and enjoy a balanced way of living,” Hirsch &amp; Faigen Director of Sales Matt George said.

Interest to date has come from established owner-occupiers and interstate lifestyle purchasers, including buyers planning a future move to the Gold Coast. Many are coming from larger homes and want to reduce ongoing maintenance without giving up space for family and guests, privacy, two car spaces or the ability to entertain at home.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360969]

Much of that daily life can also take place beyond the building without requiring a drive. Kurrawa Beach and Pratten Park are an easy walk from Surf Parade, while Pacific Fair, Oracle Boulevard, The Oasis, restaurants, cafés, entertainment and public transport are also within walking distance.

The Eveleigh is Hirsch &amp; Faigen's fourth Gold Coast development since entering the market in 2021, following The Hemingway at Palm Beach, The Emerson at Kirra and Yves at Mermaid Beach. Each of the preceding projects sold out before completion.

“Broadbeach had been on our radar throughout our time operating on the Gold Coast,” the developer said. “Following our projects in Palm Beach, Kirra and Mermaid Beach, Broadbeach represented the natural next step for the business.”

The Surf Parade site brought together proximity to the beach, protected coastal outlooks and walkability to dining, shopping and recreation. Hirsch &amp; Faigen also identified the street as an emerging premium residential address, with enough separation from Broadbeach's busier destinations to retain a quieter environment at home.

The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.

[smartcode_project_cta:default project_id=149670]

Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

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

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

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

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

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

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Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

&nbsp;

[smartcode_project_cta:default project_id=152737]

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Michael Matusik

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