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GUEST OBSERVATION
The Reserve Bank of Australia’s (RBA) announcement to hold the cash rate for April at 2.25 percentage points could ease the increase in house and unit values over the next month. A market slowdown would allow greater purchasing power for first time home buyers in unaffordable housing markets.
The number of first time homebuyers taking out home loans has declined as a result of the recent housing boom, which saw more investors enter the market. This is supported by ABS data, which shows that home loans taken out by first time homebuyers have steadily decreased from 18.8% in 2012 to 14.9% in 2015.
Furthermore, according to ABS data, the size of the average home loan increased 1.07% between December 2014 and January 2015, to $346,600.
The decision to hold rates is partly attributable to Australia’s two-tiered housing market. According to <a href="https://Onthehouse.com.au" target="_blank">Onthehouse.com.au</a> data, at February 2015, Sydney experienced quarterly growth of 3.55% for houses, and 2.83% in units. These are down from the January quarter of 4.10% for houses and 3.04% in units, although they still reflect strong investor demand.
Despite Sydney’s strong performance, other markets, including Melbourne and Brisbane, saw contraction in property values at the end of the February quarter.
On the supply side of the housing market, February housing approvals were almost at a five-year high. In NSW, approvals for February 2014 totalled 4,692 dwellings, approximately 2,600 of which were units. Dwelling commencements in NSW, as last recorded in September 2014, were at a high of 14,063, which is a 43% increase in commencements from the previous quarter, and is 49% higher than the five-year average of commencements.
Dwelling commencements also increased in QLD and VIC, but at a lower rate. Nationwide, commencements hit a record high of 54,436, despite migration currently sitting below the five-year average. A further cut in the cash rate could have seen funds misallocated in a market where migrant and first homebuyer demand is in decline.
Overall, despite the benefits to first time homebuyers, the rate hold decision does come within a tricky economic climate for the RBA, where economic indicators have remained virtually unchanged for the previous period.
Some notable indicators include:
<ul>
<li>The unemployment rate decreased from 6.4% in January to 6.3% in February. However, this was coupled with a decrease in the participation rate from 64.7% to 64.6%, suggesting that the unemployment rate fell as people came out of the labour force, rather than finding work.</li>
<li>Annual wage price growth was at a five year low in the quarter ending December 2014, at just 2.5%. The December quarter also saw low inflation, which was last recorded at 1.7%.</li>
<li>Iron ore is currently at a 10 year low, at $US46.7 a tonne. Iron ore is expected to fall further as competitors amplify supply to win greater market share.</li>
<li>Oil prices seem to be stabilising following a significant decline since July 2014. Oil rose marginally in the latest trading session to $US53 per barrel. While the price is stabilising at approximately half the five-year average, Australians may no longer enjoy further discounts in the oil price. </li>
</ul>
Though the above factors call for a further cut in the cash rate, the hold is more about timing than tightening monetary policy. This month will reveal new quarterly inflation figures and employment data, which would allow more insight into the impact of February rate cuts. 
Eliza Owen is a market analyst at <a href="https://Onthehouse.com.au" target="_blank">Onthehouse.com.au</a>.
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The RBA April rate hold will benefit first time home buyers: Eliza Owen

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GUEST OBSERVATION
Based on the latest RBA data on new building approvals, the building of high density housing is almost level with detached housing having grown 36% in the past year alone. This trend is set to continue and investors should think about taking advantage of the upturn.
It’s no surprise there’s been such a trend towards apartment living based on high house prices and a change in our lifestyles, overall.
The change kicked off in 2009, post-GFC when people wanted the stability of property ownership as an investment and being an accessible price point, the demand for units has escalated ever since.
<img src="/images/2015/04/10/pic%20april%2010%20one.gif" alt="">
Since 2009, a lot of buyers, particularly first homebuyers have been priced out of the market, needing an average of $530,000 for the typical Australian quarter acre block, up from $458,400 just 5 years ago.
In Sydney, that number is even steeper, going from $544,000 in 2009 to $781,600 now. Whereas the average apartment price in Sydney is now considerably less at $600,000.
Price aside, the appeal of apartment living has increased in recent years with many apartments located close to the CBD or other employment hubs with close proximity to parks as well as the overall quality of the buildings which has improved.
Councils must now comply to certain standards when it comes to new builds e.g. better privacy, more green space, certain hours of sunlight, etc. and buyers and residents appreciate that.
Take the development at Harold Park just 5kms from the Sydney CBD with 200,000 squares of green space, 70% of apartments in its Eden buildings were sold off the plan in 2013, demonstrating just how popular apartment living has become.
The trend shows no sign of slowing down and suggests that buying apartments as an investment is a lot less riskier than it was 10 years ago.
The demand is increasing and if you’ve invested in a growing area with lots of green space and good transport links, you’re likely to reap the rewards in years to come.
Tips for any new investor:
<ul>
<li>Go for buildings that are located near parklands and good transport links, preferably trains.</li>
<li>If a block is on a main road, go for an apartment with a different aspect which is likely to cut down noise as well.</li>
<li>Check the Strata Report for a full listing of the fees and rates you’ll be up for. Also, ask to see the minutes of the Strata committee meetings which will show up any major issues or structural damage.</li>
<li>If buying in an old building, be aware that your maintenance costs could be higher as things need replacing / upgrading.</li>
<li>A apartment in a smaller more boutique building will have more long term appeal than those in larger complexes</li>
<li>Get a feel for the building and surrounds, is there a lot of noise, what are the amenities like, is it well maintained, etc.</li>
</ul>
Steve Jovcevski is property expert at Mozo.com.au. 
FOR MORE INSIDER INFORMATION ON PROPERTY LOANS, RATES AND MORE: <a href="http://propertyobserver.com.au/forward-planning/tools/ebooks-and-webinars/42368-get-loan-savvy-expert-tips-for-a-first-time-investment-or-refinancing-loan-in-a-free-ebook" target="_blank">A FREE MOZO EBOOK</a>.
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Six tips for first time investors looking to buy sky high: Steve Jovcevski

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Home values across the Wide Bay-Burnett region increased by 0.5% for houses and 3.8% for units over the year to December 2014, according to CoreLogic RP Data.
The Wide-Bay Burnett region includes the Fraser Coast region, Gympie, South Burnett, North Burnett and Bundaberg. 
Over the past three years, capital growth across the region has been somewhat lacklustre with values having only appreciated by 2.7% for houses and 1.2% for units since December 2011.
The number of homes that sold across the region fell -2% over the 12 months to November 2014, however sales volumes are currently 3% higher than the five year average.
On average, homes across the region are taking upwards of three months to sell from when they are first being listed indicating the lack of demand across the market. 
The Wide-Bay Burnett region was named <a href="/news/qld/queenslands-wide-bay-burnett-region-one-of-australias-top-buyers-markets">one of the Australian property markets that most favoured buyers over sellers</a> by the Commonwealth Bank and CoreLogic RP Data in their latest Home Buyer's Index.
Click to open in new window:
<a href="/images/2015/03/16/wide-bay-mar-16-one.jpg" target="_blank"><img src="/images/2015/03/16/wide-bay-mar-16-one.jpg" alt=""></a>
Source: CoreLogic
Photo: Public domain.
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Wide Bay-Burnett home values grow slightly over 2014: CoreLogic RP Data

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At its meeting today, the Board decided to leave the cash rate unchanged at 2.25%.
Moderate growth in the global economy is expected in 2015, with the US economy continuing to strengthen, even as China's growth slows a little from last year's outcome.
Commodity prices have declined over the past year, in some cases sharply. The price of oil in particular is much lower than it was a year ago. These trends appear to reflect a combination of lower growth in demand and, more importantly, significant increases in supply. The much lower levels of energy prices will act to strengthen global output and temporarily to lower CPI inflation rates. Prices for key Australian exports have also been falling and therefore Australia's terms of trade are continuing to decline.
Financial conditions are very accommodative globally, with long-term borrowing rates for several major sovereigns at all-time lows. Financing costs for creditworthy borrowers remain remarkably low.
In Australia the available information suggests that growth is continuing at a below-trend pace, with overall domestic demand growth quite weak as business capital expenditure falls. As a result, the unemployment rate has gradually moved higher over the past year. The economy is likely to be operating with a degree of spare capacity for some time yet. With growth in labour costs subdued, it appears likely that inflation will remain consistent with the target over the next one to two years, even with a lower exchange rate.
Credit is recording moderate growth overall. Growth in lending to investors in housing assets is stronger than to owner-occupiers, though neither appears to be picking up further at present. Lending to businesses, on the other hand, has been strengthening recently. Dwelling prices continue to rise strongly in Sydney, though trends have been more varied in a number of other cities. The Bank is working with other regulators to assess and contain risks that may arise from the housing market. In other asset markets, prices for equities and commercial property have risen, in part as a result of declining long-term interest rates.
The Australian dollar has declined noticeably against a rising US dollar over the past year, though less so against a basket of currencies. Further depreciation seems likely, particularly given the significant declines in key commodity prices. A lower exchange rate is likely to be needed to achieve balanced growth in the economy.
At today's meeting the Board judged that it was appropriate to hold interest rates steady for the time being. Further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target. The Board will continue to assess the case for such action at forthcoming meetings.
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Prices varied, though Sydney strong says RBA Governor Glenn Stevens' April statement

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GUEST OBSERVATION
Ask a parent how far they would go to support the financial aspirations of their children, and chances are they will say: “Yes, if I had the money I would be happy to act as a guarantor for my children to purchase a property.”
Australian capital city house prices <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2015-01-02/home-prices-rise-nearly-8pc-in-2014-boosted-by-strong-december/5996972">rose</a> by 7.9% in 2014, while the number of <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/5609.0Main+Features1Jan%202015?OpenDocument" target="_blank">first home buyer commitments</a> as a percentage of total owner occupied housing finance commitments is near record lows - 14.2% in January 2015, compared to 20.4% in December 2012.
Many family-assisted first-home purchases are not being counted in the first home buyer data collected by the Australian Bureau of Statistics, but it’s likely the growing cost of owning a home is encouraging an increasing number of parents to help out via a guarantee, interest-free loan, initial deposit or simply making a monetary gift to their children. This financial support can change an individual’s decision to buy or rent a house or unit. Parental support can also help first home buyers avoid mortgage insurance charges that can easily exceed A$15,000 for a family home in a desirable suburb.
The risk to parents
Consumer advocates <a href="https://www.smh.com.au/money/borrowing/a-guarantors-key-decisions-20100524-w6om#ixzz3OfBpjcaI" target="_blank">cite “lots of cases"</a> where guarantors have been faced with the prospect of losing their home.
Since 2004 Australian banks have offered specific “family pledge” or “family guarantee” loans, allowing parents to provide both equity support and income support. These products are driving growth in the sector, adding to the risk for parents.
In the current economic climate with rising unemployment and costs of living, parents need to understand the risks of acting as guarantor, and all the legal responsibilities that come with it. The guarantor has a legal responsibility to repay the loan (along with any fees, charges and interest) if the borrower defaults. If the guarantee is tied against assets such as the family home, guarantors may end up losing their home, particularly if the parents’ financial position or health conditions have changed over the years. Often the lenders can sue the guarantor if the loan obligations are not met by the debtor. If parents have concerns, it may be a good idea to contribute towards the deposit so that a guarantee is not required.
It is equally important for parents to be educated with regard to the purpose of the loan, amount of the guarantee, to know in detail if their children have stable incomes, and the kind of loan they are guaranteeing (such as lines of credit or overdraft which have no specific time to maturity).
The risk to the banking sector
Family-pledged loans can be categorised as non-conforming loans, an area where lenders seek to minimise the level of risk as much as possible. The Australian Prudential Regulatory Authority has outlined some <a href="https://www.apra.gov.au/adi/Documents/Draft-PPG-APG223.pdf" target="_blank">guidelines</a> for ADIs with regard to loans including a guarantor relationship (e.g. from a parent of the borrower) to cover shortfalls in minimum deposit requirements. APRA acknowledges these loans carry a high risk and ADIs should carefully assess the guarantor’s income, credit worthiness, enforceability of potential claims and the value of any collateral pledged by the guarantor. APRA also emphasises that as a risk management strategy a prudent ADI should establish portfolio limits within its risk appetite for such lending. Such limits can be stress tested.
Since the 1997 Wallis Inquiry, <a href="https://www.rba.gov.au/publications/submissions/fin-sys-inquiry-201403/pdf/fin-sys-inquiry-201403.pdf" target="_blank">household leverage has almost doubled</a>. This has been accompanied by a significant increase in house prices relative to income over the past decade. Australian home prices are <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2014-09-14/bis-figures-confirm-australian-housing-overvalued-emerging-mark/5740808">50% higher than usual</a> relative to rents, and around 40% higher than usual when compared to incomes. The Bank of International Settlements has already warned that a price correction may be coming.
The <a href="https://fsi.gov.au" target="_blank">Financial System Inquiry</a> is seeking measures to ease the effects of the housing market on the economy along with ways that these measures can be implemented.
Inadequate bank supervision and poorly underwritten home mortgages led to the financial crisis. Easing credit constraints, delivering innovative products (along with fee generating activities) without considering the associated risks, and a lack of internal and external monitoring and supervision, can increase non-performing loans and threaten the financial system and its stability.
Mamiza Haq is lecturer in finance at The University of Queensland.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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The problems of relying on the bank of mum and dad: Mamiza Haq

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The number of homes transacting across the Latrobe-Gippsland region has fallen over the 12 months to November 2014, down 7% compared to November 2013, according to recent CoreLogic RP Date research.
Despite the fact that less properties have transacted over the year, property values across the region continue to climb, up 5.1% for houses and 5.5% for units over the year to December 2014.
Latrobe-Gippsland homes are taking a long time to sell currently, 118 days for houses and 122 days for units, however it is noted that this is an improvement when compared to the same time last year when homes were taking 121 days and 130 days to sell for houses and units respectively. 
Click to open in new window:
<a href="/images/2015/03/16/latrobe-mar-16-one.jpg" target="_blank"><img src="/images/2015/03/16/latrobe-mar-16-one.jpg" alt=""></a>
Source: CoreLogic RP Data
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House transactions decline in Latrobe-Gippsland region: CoreLogic RP Data

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GUEST OBSERVATION
Reverse mortgages are a way to release the equity in a home, which is an important component of wealth for many Australians.
Such mortgages have been proposed by the <a href="https://fsi.gov.au/">Financial System Inquiry</a> as a way to support the dissipation of wealth by retirees and boost the efficiency of Australia’s financial system.
The following chart shows the stark increase in mortgage lending by Australian banks since the global financial crisis (GFC). <a href="https://theconversation.com/australian-banks-are-too-exposed-to-mortgages-but-what-if-the-world-was-flat-31000" target="_blank">Australian banks hold approximately $1.3 trillion in mortgages.</a>
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/76264/area14mp/image-20150327-16112-131rvgy.jpg"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/76264/width668/image-20150327-16112-131rvgy.jpg" alt=""></a>
Mortgage loans provided by Australian banks (Authorised deposit-taking Institutions) Australian Prudential Regulation Authority
Reverse mortgages have matched this growth in relative terms but remain at the margin, with a total exposure of A$2.9 billion (see the line at the bottom of the chart), far below standard mortgages and higher risk loans such as interest-only and low-documentation loans. Despite this growth in volume, the number of lenders has shrunk over time. According to the Financial System Inquiry, more than 15 lenders existed before the GFC but just five remain today.
Why are mortgages so popular and reverse mortgages not so, despite an ageing population with many billions of home equity waiting to be released?
How reverse mortgages work
A reverse mortgage allows homeowners to access a lump sum or an annuity, using their home as collateral. The benefit of reverse mortgages is that borrowers often continue to live in the property until they die. The decision to sell a house is often an emotional one and can be avoided with this product because the loan may be repaid from the sale of the house after death.
Reverse mortgages may also be used to fund outgoings or, in aged care, accommodation bonds that are typically in the hundreds of thousands of dollars.
Alternatives exist: Australians who wish to access home equity often prefer to sell the home and buy or rent a smaller one. This decision may trigger costs such as capital taxes and other fees but may also have merits, as retirees move into a home of the space and standard they require. Free cash may then be converted into annuities, funding a monthly income for instance.
How does a reverse mortgage differ from a standard mortgage?
In a reverse mortgage, the loan amount increases over time, up to a limit, as the borrower draws on the line of credit. The loan amount grows further as interest is added to the outstanding sum. As borrowers often have limited other assets and income with which to repay the loan, and if they enjoy a long life, the loan amount can quickly compound to unexpected levels.
To protect consumers (covered by the National Consumer Credit Protection Act), legal and financial advice via standardised calculators must be provided to customers for these products. In addition, banks provide a “no negative equity” guarantee, which means the loan amount cannot exceed the property’s value.
Finally, interest rates are generally higher than for standard home loan products due to less competition in this sector and higher risks for the lender. In this part of the market lenders tend to provide no more than 50% of a property’s value while standard mortgages tend to be around 80% of value - higher if mortgage insurance is used.
What are the risks for lenders?
The no negative equity guarantee may result in losses if loan amounts exceed property values. Despite generous collateral buffers, this can happen in a number of ways. First, home prices may fall. It is not unreasonable in financial markets to see drops equivalent to prior rises.
In addition, home owners have a right to live in the property and repayment occurs only after death. If a borrower enjoys a long life after taking out a reverse mortgage, or if the loan amount accrues at a higher rate than house prices the lender can be caught by the no-negative-equity guarantee. Longevity risk is very difficult to assess as it requires predicting life expectancy.
Longevity risk is also subject to adverse selection. Unlike in life insurance, it is healthy consumers who are likely to be keen on reverse mortgages.
In addition, the limited number of reverse mortgages makes it difficult for banks to do their risk analysis. Lenders condition the loan amount on the age of borrowers (the older, the larger the possible loan amount).
Borrowers also have prepayment options and may refinance and prepay a reverse mortgage if they find a cheaper lender, exposing the original lender to further risk.
Another aspect is that once the negative equity threshold is reached the borrower has no further financial incentive to maintain the property, which could result in a further depreciation of the property value.
How to promote home equity release
Home equity release is positive for the efficiency of the Australian economy and in line with our concept of retirement. In the US the government provides no-negative-equity guarantees to take some risk off the lenders and support this market.
The Australian government might not be prepared to indemnify the industry for risk. However, the development of such markets could be supported with more general measures.
Firstly, <a href="https://theconversation.com/reverse-mortgages-need-a-rethink-if-theyre-the-new-age-pension-26433" target="_blank">homes may be further recognised in the means test that determines the age pension.</a> Such a measure may better match the needs of the population.
Secondly, a big industry concern is the limited availability of risk transfer solutions, such as derivatives and securitisation structures, which would allow banks to reduce both house price risk and longevity risk, at reasonable cost. It is difficult for banks to hedge or transfer longevity and house price risk. This is something of a catch-22 for the sector - only more equity release may lead to more risk transfer solutions and vice-versa.
Harry Scheule is associate professor, finance, UTS Business School at University of Technology, Sydney.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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Ageing population calls for more reverse mortgages: Harry Scheule

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Household consumption – three-fifths of gross state product – strengthened noticeably in NSW over 2014 (+4.1% year on year) alongside faster growth in household income and dwelling prices.
FIGURE 1. POSITIVE GROWTH OUTLOOK FOR NSW
<img src="/images/2015/03/24/anz-mar-24-one.jpg" alt=""> Source: ABS, ANZ Research
Discretionary spending, which is particularly sensitive to the economic cycle, grew strongly over 2014 (Figure 2). Spending on household goods strengthened in line with the pick-up in dwelling construction. Discretionary spending on services – recreation activities and hotels, cafés, and restaurants – also increased significantly over the year.
FIGURE 2. DISCRETIONARY HOUSEHOLD SPENDING HAS STRENGTHENED
<img src="/images/2015/03/24/anz-mar-24-two.jpg" alt=""> Source: ABS, ANZ Research
Consumer spending growth may be less robust this year as labour market conditions outside of Sydney remain challenging (see below) and house price growth is expected to moderate somewhat – retail sales growth in NSW has slowed considerably over the past six months or so (Figure 3). Nevertheless, strong population growth will provide ongoing support to spending and the lower currency will also direct a larger proportion of spending to local businesses.
FIGURE 3. NSW RETAIL SALES AND SYDNEY DWELLING PRICES
<img src="/images/2015/03/24/anz-mar-24-three.jpg" alt=""> Source: ABS, Core Logic RP Data, ANZ Research
INVESTMENT HAS BEEN WEAK OUTSIDE OF HOUSING
Dwelling investment in NSW has grown significantly over the past couple of years following a prolonged period of very low levels of building despite solid population growth (Figure 4). This has been driven by new housing construction, with renovations activity remaining subdued as it has nationwide. In contrast, business and public investment has been weak.
FIGURE 4. NON-RESIDENTIAL INVESTMENT HAS BEEN WEAK
<img src="/images/2015/03/24/anz-mar-24-four.jpg" alt=""> Source: ABS, ANZ Research
Residential construction is expected to grow further in the near term and then remain at a high level for a prolonged period (Figure 5). This would be very different to the typical boom-bust cycles in the past. This time, activity should continue to be supported by strong population growth, pent up demand, very low interest rates and ongoing house price growth in Sydney. Nevertheless, our analysis suggests that a sizeable net housing deficit will remain in NSW (Figure 6).
FIGURE 5. DWELLING INVESTMENT AND COMMENCEMENTS
<img src="/images/2015/03/24/anz-mar-24-five.jpg" alt=""> Source: ABS, ANZ Research
FIGURE 6. NSW HOUSING MARKET DEMAND AND SUPPLY
<img src="/images/2015/03/24/anz-mar-24-six.jpg" alt=""> Source: ABS, ANZ Research
In contrast to the strength in housing construction, business and public investment has been subdued in NSW. Equipment investment has been weak, like it has been nationwide and despite a substantial amount of non-residential building activity in and around the Sydney CBD, overall underlying non-residential construction in NSW declined by 8.1% year on year in 2014.
Falling mining investment has weighed on overall business investment (Figure 7). In contrast, non-mining capex has improved but the outlook remains very uncertain. Encouragingly, non-residential building approvals have risen to a high level and the pipeline of public engineering construction remains healthy despite the equivalent private pipeline weakening (Figures 8 &amp; 9). Office market fundamentals have begun to improve as well.
FIGURE 7. NSW CAPEX &amp; EXPECTATIONS
<img src="/images/2015/03/24/anz-mar-24-seven.jpg" alt=""> Source: ABS, ANZ Research
FIGURE 8. PRIVATE NON-RESIDENTIAL BUILDING APPROVALS
<img src="/images/2015/03/24/anz-mar-24-eight.jpg" alt=""> Source: ABS, ANZ Research
FIGURE 9. NSW ENGINEERING WORK YET TO BE DONE
<img src="/images/2015/03/24/anz-mar-24-nine.jpg" alt=""> Source: ABS, ANZ Research
This article continues on the next page. Please click below.
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INFRASTRUCTURE SPENDING COULD HANG IN THE BALANCE
The NSW government has proposed a large pipeline of public infrastructure projects in recent years, particularly roads, highways, bridges and rail. Of critical importance is the impact that the upcoming election will have on the Government’s infrastructure plans.
The current pipeline of projects under construction and committed to in the Budget will go ahead under a Labor government. But Labor will not commit to stage 3 of WestConnex, a tunnel designed to link the planned M5 East tunnel at St Peters to the future M4 East tunnel near Rozelle. Moreover, the building of a second harbour rail crossing would not begin until 2022 under Labor (it is slated for construction as early as 2017 under LNP). The Coalition has tied $11.3 billion to urban roads and urban public transport, $4.1 billion for regional transport, and $3.5 billion for social infrastructure projects to the proposed asset sales.
Labor has committed around $10 billion less than the Liberal National Coalition to infrastructure as it is opposed to the ‘poles &amp; wires’ privatisation and has a reluctance to increase debt.
FIGURE 10. NSW MAJOR PROJECTS PIPELINE
<img src="/images/2015/03/24/anz-mar-24-ten.jpg" alt=""> Source: BREE, company reports, Deloitte Access Economics, Infrastructure NSW, state government budget papers, ANZ Research
LABOUR MARKET DATA POINTS TO A DIVERGENT ECONOMY
Labour market conditions have been weak outside of Sydney. While the unemployment rate in Sydney has remained within earshot of 5% for some time, the regional unemployment rate has risen sharply to nearly 8% (Figure 11). This will reflect mining-related weakness in some regions but also the lack of property boom seen in Sydney.
FIGURE 11. LABOUR MARKET CONDITIONS ARE WEAK OUTSIDE OF SYDNEY
<img src="/images/2015/03/24/anz-mar-24-eleven.jpg" alt=""> Source: ABS, ANZ Research
THE HOUSING MARKET
The Sydney housing market is very strong. The median dwelling price has risen 30% since January 2013 and sales activity has picked up strongly. Housing investor activity in NSW has been much more pronounced than in other states (Figure 12). Foreign investment has also been strong. In contrast to the Sydney market, regional NSW house price growth has been more moderate (Figure 13).
While Sydney dwelling prices now look to be around fair value, we see further gains of around 8-10% over 2015 amid low interest rates and as demand continues to outstrip supply.
FIGURE 12. HOUSING INVESTOR ACTIVITY VERY STRONG IN NSW
<img src="/images/2015/03/24/anz-mar-24-twelve.jpg" alt=""> Source: ABS, ANZ Research
FIGURE 13. HOUSE PRICE GROWTH MUCH SLOWER OUTSIDE OF SYDNEY
<img src="/images/2015/03/24/anz-mar-24-thirteen.jpg" alt=""> Source: Core Logic RP Data, ANZ Research
THE BUDGET OUTLOOK – RIDING ON THE PROPERTY MARKET
Unlike other states and territories, NSW does not publish a fiscal outlook during the election campaign, which means it is more difficult to ascertain the most up-to-date fiscal outlook for the state.
However, it is expected the state will deliver strong revenue from residential turnover and rising house prices. Figure 14 shows that residential transfer duty has increased sharply after a brief slow-down in the first half of 2014.
FIGURE 14. NEW SOUTH WALES TRANSFER DUTY
<img src="/images/2015/03/24/anz-mar-24-fourteen.jpg" alt=""> Source: NSW Government, ANZ Research
The outlook for housing turnover and house prices suggests that the NSW Government should benefit from elevated levels of residential transfer duty for some time. An easing policy cycle and strong house price growth will continue to spur existing property turnover and encourage the construction of new housing.
The mid-year review revised up the government’s expectations for residential turnover growth to 12% in 2014-15, driven mainly by higher house prices. Given the recent rate cut by the RBA and the expectation for a further cut next month, we would not be surprised if annual growth in residential transfer duty for 2014-15 exceeds this forecast.
The cyclical nature of the government’s own-source taxation revenue means that it needs stable funding to execute long-term infrastructure upgrades. Asset recycling is one way to go about this.
Neither party’s fiscal plans imply deterioration to the AAA stable outlook from both major rating agencies.
NSW SEMI GOVERNMENT BONDS
The aftermath of the Queensland state election saw a significant repricing in the level of Semi government bonds to both the ACGB curve and the swap curve. Queensland Treasury Corporation (QTC) bonds widened by around 20bp in the 10 year part of the curve. NSWTC issues also seem to be affected by this dynamic. Investors have been concerned with the shifting sands of the Australian electorate and this has been reflected in the level of Semi government spreads. It has clearly been a negative for NSWTC, as the first state to face an election since the Queensland poll in late January.
As Figure 15 shows, the spread of NSWTC bonds to the ACGB curve is at the widest point since the Queensland election. This surprises us to an extent for a number of reasons. Firstly, the NSWTC credit rating is stable at AAA. In the case of Queensland, market expectations had priced bonds to reflect the probability that the LNP would be elected. Furthermore, one ratings agency continues to hold a negative outlook on Queensland’s rating.
NSWTC bonds have also come under pressure due to investor preference for the debt of the Supranational borrowing entities from Europe. These borrowers, such as Germany’s KfW and Rentenbank, as well as the European Investment bank (EIB), have seen a strong performance in recent months after the ECB announced they would be bought as part of the ECB’s QE program.
Domestic investors have been better overall sellers of Semi government bonds to buy the Supranational bonds given the yield pick-up and the potential for outperformance of these names.
We believe the underperformance in NSWTC bonds is unwarranted and that the recent widening of spreads would be arrested by a strong mandate for asset sales.
FIGURE 15. WIDENING OF NSWTC BONDS AGAINST THE COMMONWEALTH
<img src="/images/2015/03/24/anz-mar-24-fifteen.jpg" alt=""> Source: Bloomberg, ANZ Research
In the event of a strong election win for the incumbent government, we believe NSWTC bonds should tighten by 8-12bp against the ACGB curve. The borrowing requirements for NSW remain low, with $4.6 billion of term issuance for the FY 2014-15. Moreover, as outlined above, the NSW economy is in a robust position which should be reflected in the spread to other borrowers.
We also see the potential performance of the NSWTC index linked issuance. Much of the issuance of NSWTC’s index linked bond curve comes from electricity assets. In the event of asset sales, the need for this issuance would be reduced and should see the NSWTC index linked curve tighten against both the nominal and the ACGB curve.
FIGURE 16. WIDENING OF NSWTC LINKERS AGAINST THE COMMONWEALTH
<img src="/images/2015/03/24/anz-mar-24-sixteen.jpg" alt=""> Source: Bloomberg, ANZ Research
FIGURE 17. NSWTC INFLATION BREAKEVEN SPREAD
<img src="/images/2015/03/24/anz-mar-24-seventeen.jpg" alt=""> Source: Bloomberg, ANZ Research
Kirk Zammit is an economist with ANZ Research.
Justin Fabo is senior economist with ANZ Research.
Cherelle Murphy is senior economist with ANZ Research.
Martin Whetton is senior rates strategist with ANZ Research.
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Economy is strong, but little investment outside of housing: ANZ Research's NSW scorecard

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GUEST OBSERVATION
Handling your own tenants is much like cutting your own hair – it’s difficult and the end result would be much better off handled by a real professional.
Property managers play a larger role than some might think and often it’s the behind the scenes work that people underestimate. If an owner’s pool of tenants makes managing the kids in Cheaper by the Dozen seem like a breeze, it illustrates the complexities of the details that real estate agents deal with every day.
Renters can become disgruntled when ongoing issues are not dealt with properly and wonder why they can’t just contact their landlord directly. Sometimes, owners managing their own tenancies can be busy with other commitments and are unable to handle issues with the deft hand of a professional or in a timely manner. Often issues escalate into problems if not dealt with quickly; making it crucial the person responsible for managing the property is available full time.
Crucially, property managers are well versed in the legal rights of both the tenant and the owner. This means that both the owner and the tenant are safeguarded in all of their dealings. An agent is more experienced in picking out the ideal tenant that can make consistent payments, meaning less headaches and more time to seek out other investments.
Particularly, locally based agents are more likely to have the time to be devoted to not only the property, but also to the tenant. Local property managers provide a swift response to the inevitable problems that will arise. This is especially important when the owner is interstate or internationally based.
Additionally, your property is not always your only property. Often property owners juggle many places, which makes managing them all role that only a full-time job can handle.
Happy renters mean longer, ongoing relationships and most importantly, renewed leases.  Having a capable real estate agent looking after your investments and tenants effectively manages your properties, keeps your tenants happy, manages any issues before they escalate and most importantly – doesn’t have to bother you with the detail unless crucial.
If you handle your own tenants and they are tangled in a mess of mismanagement, hacking away at the issues can sometimes make the issue worse. Ensuring you have a property manager that has the dexterity and skill to properly handle any upcoming issues protects you and your tenant in the long-term.
Shane Goldfarb is director of <a href="https://www.hodges.com.au/st-kilda-real-estate" target="_blank">Hodges Real Estate St Kilda</a>.
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Why do we need property managers? Shane Goldfarb 

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Then unremitting diet of big-budget "reality" programs might be good for the economics of our three cash-strapped, revenue-challenged main TV networks, but it is not impressing viewers, who have deserted free-to-air TV prime-time viewing at a rate of one in 10 since the official ratings race started in February.
And there is likely more bad news ahead for the free-to-air networks, which have doubled down on reality shows for the year, with the coming of streaming services like Netflix.
According to analysis of Oztam ratings data for the ratings year so far by Fusion Strategy in Sydney, peak live main channel audiences are down 11.51% so far in 2015. And Fusion’s Steve Allen blames the three networks, which he says are “hammering away at each other with reality ... [and that] will diminish audiences further”.
And he will be proven right when Seven’s House Rules starts after Easter, and Nine starts its knock-off, Reno Rumble. It’s an expensive spoiler from Nine, which shows that the network has run out of ideas for new programs.
Oztam data shows that while both Seven and Nine have lost ground for their current headline reality shows (My Kitchen Rules and The Block), Ten’s audience is up dramatically -- but that is more to do with the fact that a year ago Ten started the year with its weakest audience figures in a decade or more. So far this season, MKR has lost 12.6% of its audience this year compared to 2014, with a 14.4% drop in the 16-to-54 demographics. The Block's audience has fallen 33% compared to 2014 and more than 38% in 16-to-54 viewers.
In a note to clients on Friday, Allen wrote:
“A large proportion, but not all the viewers, are happy with Reality TV … we estimate it is about 65%. The rest do not like or enjoy this genre ... [It’s] pretty clearly a reasonable number of viewers are tiring of Reality … yet this is the pattern the Networks have chosen and committed to for pretty much the whole year. Thus we think the outlook for audiences … just as SVOD [subscription video on demand] launches, as another competitive attack … is a little bleak and problematic."
Over the past couple of years the networks have used reality shows to cut programming costs in a very simple way -- by extending the nightly episodes from an hour or 75 minutes to 90 minutes. That means audiences are held longer to a winning format (in Nine’s case though it has amplified the fall in viewer numbers of The Block), enabling the networks to reap more revenue from charging high ad rates for the extra half hour -- more than they could for a new program. That in turn allows the network to cut half an hour of programming costs four or five nights a week, or one sitcom or two hour-long dramas -- and save upwards of $300,000 to $1 million in production and scheduling costs. The cost of the extra half hour for the reality program is marginal -- the vision would have been shot anyway (the shooting ratio for these programs is quite high).
The danger for the networks is that as the year goes on viewers will stop watching the new programs because they are bored, or have seen them before. And as we saw with Australia’s Got Talent on Seven a couple of years ago, and then on Nine, and Big Brother on Ten and Nine, once viewers get bored with a format, they stay away, costing the network huge amounts of wasted production costs and lost ad revenues.
The driver for this approach is the absence of any growth in TV ad revenues in the past five years -- in 2014 ad revenue for the three networks was less than it was in 2009, despite the rise in costs for big-ticket productions and the huge new broadcasting contracts for the AFL (Seven and Foxtel) and the NRL (Nine and Foxtel). Nine and Seven are now gearing up for the new AFL contract, so they will need to save every dollar of costs they can. Ten will talk the talk on how it wants a part of a new broadcasting contract, but unless the tooth fairy appears to drop a couple of hundred million dollars down its balance sheet, it won’t be a player. It has to convince TV advertisers and viewers it will return in 2016.
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Viewers switch off The Block as networks face harsh reality

The residential transformation of St Kilda Road is set to continue into with more new apartment plans for the sought-after boulevard.

Wing Tai Asia has lodged plans for a major residential tower at 464-466 St Kilda Road, replacing the former VACC House with an 18-storey mixed-use development designed around a retained heritage podium and a sculpted contemporary tower.

The proposal, prepared under Victoria’s Significant Residential Development with Affordable Housing pathway, would deliver 325 apartments and ground-floor retail across the prominent 4,653 sqm boulevard site in Melbourne’s St Kilda Road North Precinct.

The project centres on the adaptive reuse of the site’s heritage-listed VACC Building, an eight-storey office designed by Bernard Evans that has occupied the address for decades. Planning documents state the development would involve “carefully dismantling and conserving off-site the original metal fabric of the podium visible from St Kilda Road,” before reinstating it as the defining frontage of the new scheme.

Above the restored podium, Wing Tai is proposing a curvilinear residential tower. The scheme includes 172 one-bedroom apartments, 63 two-bedroom apartments, 66 three-bedroom apartments, and 24 four-bedroom apartments, alongside two ground-floor food and beverage tenancies fronting St Kilda Road.

The tower has been designed with substantial articulation and variable setbacks to minimise perceived bulk and maintain view corridors along the boulevard. Urbis, which prepared the planning report, said the design “has been significantly articulated through a curvilinear design” with “an interplay with materials, façade expression and depth” to create visual separation and visual interest.

The proposal also includes 254 basement car spaces, landscaped pedestrian links connecting St Kilda Road and Queens Lane, and a biophilic landscape strategy featuring canopy trees, raised planters, cascading greenery and a glass oculus pool overlooking the eastern frontage.

Planning documents confirm the $270.1 million development will contribute 3 per cent of project costs to the Social Housing Growth Fund as part of the application process.

Wing Tai acquired the St Kilda Road property in 2018 alongside Abacus Property Group for $95.38 million, before later consolidating ownership of the site. The property previously served as the Victorian Automobile Chamber of Commerce headquarters for around 60 years.

The transformation of the St Kilda Rd boulevard is already beginning to materialise, with a number of high-profile projects recently completed, launched, or approaching launch as developers continue to back the long-term appeal of the precinct.

Among the most notable recent completions is Louise by Samuel Property Group, just off the strip on Queens Lane, the same pocket Hirsch &amp; Faigen recently launched The Queensbury. Mirvac is too on the same street with The Albertine, which is approaching completion.

Dexus recently secured approval for its slice of St Kilda Road, while Gurner also has approved plans for the precinct.

Joel Robinson

Wing Tai unveils 325-apartment St Kilda Road tower on former VACC House site

Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

[smartcode_project:default project_id=112661 project_image_fid=355935]

Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

[smartcode_project:default project_id=112661 project_image_fid=361052]

Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

[smartcode_project:default project_id=112661 project_image_fid=359607]

More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
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[smartcode_project_cta:default project_id=112661]

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