<html><body>
May 2015 marks a new era in Australian real estate. The rolling out of a variety of measures by banks to tighten credit policy on loans for investment properties will cause unintended and harmful consequences. From higher interest rates, to bigger deposits, and tougher loan serviceability assessments, we have already seen a number of banks bow to the pressure applied by Australia's banking regulator, APRA.
While I can't say that some form of change came as a great surprise I must say that I am bemused. It highlights just how out of touch regulators are with the real world and the distinct lack of initiative and lateral thinking that people in high places have.
APRA's concern directly relates to the two consecutive years of 15% price growth in Sydney's property market. In addition to being worried about the general sustainability of Sydney's market, the concern ~ understandably so ~ is the size of Sydney investor's debt (the median property value is about to tip $1 million; that’s a lot of coin to put down on a single asset).
Propertyology has publicly expressed concern about Sydney's market for a year or so. In our article titled <a href="https://mail.privatemedia.com.au/owa/redir.aspx?SURL=TmOKAgIe3oZ2VdJTROX84_z_q1nl0_QOLLtsovUkaDsi-YYWxWbSCGgAdAB0AHAAOgAvAC8AdwB3AHcALgBwAHIAbwBwAGUAcgB0AHkAbwBsAG8AZwB5AC4AYwBvAG0ALgBhAHUALwB3AHAALQBjAG8AbgB0AGUAbgB0AC8AdQBwAGwAbwBhAGQAcwAvADIAMAAxADQALwAwADQALwAyADAAMQA1AC0AMAAyAF8AUAByAG8AcABlAHIAdAB5AG8AbABvAGcAeQBfAFMAeQBkAG4AZQB5AE8AdQB0AGwAbwBvAGsALgBwAGQAZgA.&amp;URL=http%3a%2f%2fwww.propertyology.com.au%2fwp-content%2fuploads%2f2014%2f04%2f2015-02_Propertyology_SydneyOutlook.pdf" target="_blank">House-Of-Cards</a> we warned that intervention by APRA was a distinct possibility. Now it has happened.
But Propertyology's bemusement is due to the broad brush implementation of changes to credit policy.
Here's an important message which I (again) want to give to the 20% of Australia's population who reside in Greater-Sydney - that includes a majority of this country's regulators, policy writers, CEO's, and  commentators. WE DO NOT HAVE A PROPERTY BOOM IN AUSTRALIA. Did you read that? Understand what it means?
Property markets in locations where the other 80% of Australians live are performing perfectly normal. Of the other capital cities, Melbourne and Brisbane are currently the strongest (a typical property has grown 5-8% over the last year). Right now, properties in Perth and Darwin are starting to lose value. Adelaide, Hobart and Canberra have grown by 1-5%. What boom?
Applying tighter credit policies across 100% of the market in attempt to address a concern in 20% of the market is akin to a doctor prescribing antibiotics to an entire classroom because one kid has a chest infection.
Propertyology would argue that there has never been a safer, more viable time to invest in Australian real estate over the last decade than right now (ex-Sydney)!
World economies in general are in a recovery phase. Markets are less volatile now than at any time over the last ten years. The Australian investor's household budget is supported by the lowest interest rates we've seen in our lifetimes. Population growth remains strong. Economic development potential for Australia in the Asian Century is incredibly exciting.
When not prescribed properly, antibiotics can cause harmful side effects. One example is state and local government budgets where the <a href="https://mail.privatemedia.com.au/owa/redir.aspx?SURL=2XH9AEyRtmYccatq2LmX4LBHiXlNoF0CD2tf_Xv59G8i-YYWxWbSCGgAdAB0AHAAOgAvAC8AdwB3AHcALgBwAHIAbwBwAGUAcgB0AHkAbwBiAHMAZQByAHYAZQByAC4AYwBvAG0ALgBhAHUALwBjAGEAbQBlAHIAbwBuAC0AawB1AHMAaABlAHIALwA0ADIAOAAyADIALQB5AHQAYwAtAG0AYQB5AC0AMgAwAC0AbwBiAHMAZQByAHYAZQByAC0AcAByAG8AcABlAHIAdAB5AC0AcgBlAGwAYQB0AGUAZAAtAHQAYQB4AC0AcgBlAHYAZQBuAHUAZQAtAHMAdQByAHAAYQBzAHMAZQBzAC0ANAAwAC0AYgBpAGwAbABpAG8AbgAtAGMAYQBtAGUAcgBvAG4ALQBrAHUAcwBoAGUAcgAuAGgAdABtAGwAIwAuAFYAVwBFAG4AXwBLAEYASQB6AGIAMAAuAHQAdwBpAHQAdABlAHIA&amp;URL=http%3a%2f%2fwww.propertyobserver.com.au%2fcameron-kusher%2f42822-ytc-may-20-observer-property-related-tax-revenue-surpasses-40-billion-cameron-kusher%23.VWEn_KFIzb0.twitter" target="_blank">wide range of taxes on property transactions contributed 48.7%</a> of total combined revenue in 2013/14.
And then there’s the unsustainable reliance that Australians have on taxpayer-funded pensions (we are forking out $400 million per day, and growing). Encouraging people to invest during their 45 years in the workforce is the logical solution to living a comfortable lifestyle when they exit the workforce.
What is it with those who carry on as if 'investment' is a dirty word?
Legislators are right to be concerned about Sydney and the future household budgets of those who have invested there. But markets tend to have a way of smoothing themselves out soon enough. Antibiotics weren't needed when Brisbane property values grew 30%+ in 2003.
If intervention is considered necessary now those people in their ivory towers would have been wiser to cap loan-to-value ratios just on Sydney property. But, then again, the words 'legislator' and 'common sense' never go together.
Notwithstanding the lazy credit policy changes, property market fundamentals remain unchanged. Many markets across Australia are entering the recovery and upswing stages of the cycle. Propertyology is actively buying properties in a variety of regional locations across the country and a couple of pockets within capital cities.
Right now is one of the best periods for property investors for some years. But, you'll need to have a strategy to deal with the unwanted side-effects of the recklessly prescribed antibiotics.
 
<a name="_GoBack" href=""></a>Simon Pressley is Managing Director of Propertyology, a REIA Hall Of Fame Inductee, property market analyst, accredited property investment adviser, and Buyer’s Agent. <a href="https://mail.privatemedia.com.au/owa/redir.aspx?SURL=rC2QG79lYWrMWvVdgzlx1bfCD77gHA38Bdx1AxmR8cgi-YYWxWbSCGgAdAB0AHAAOgAvAC8AdwB3AHcALgBwAHIAbwBwAGUAcgB0AHkAbwBsAG8AZwB5AC4AYwBvAG0ALgBhAHUALwBtAG8AcgBlAC0AdABoAGEAbgAtAGEALQBiAHUAeQBlAHIAcwAtAGEAZwBlAG4AdAAvAA..&amp;URL=http%3a%2f%2fwww.propertyology.com.au%2fmore-than-a-buyers-agent%2f" target="_blank">Propertyology works exclusively with property investors</a> to purchase properties in strategically chosen locations all over Australia.
</body></html>

spressley-sBoeMhannA

What is it with those who carry on as if 'investment' is a dirty word? Simon Pressley

<html><body>
An unprecedented level of major projects in the pipeline has the potential to produce significant growth in Queensland property markets. Although, there are some unanswered questions with a new government coming to office.
According to our research, there are thirty seven major infrastructure projects with a combined project value of a staggering $123 billion. If they were all to proceed they would create 142,900 new direct jobs.
There’s been a lot of hype over the last couple of years about the end of the mining construction boom and very little else coming through Australia’s infrastructure pipeline. What has been unfolding behind the scenes in Queensland is quite exciting although few people realise it. I doubt whether any state at any time in Australia’s history has ever had such a big pipeline of projects.
Throughout 2014 there were a lot of approvals of major projects along with various new proposals. Queensland’s jobs growth trend began to show green shoots. By the back end of 2014, Propertyology had become quite bullish in regards to property market outlooks throughout parts of the state.
We place a heavy emphasis on job growth potential with our property market forecasting. Wherever there is a new job there is demand for accommodation.
<img src="/images/2015/05/25/QLD_Projects_Map1.jpg" alt="">
Official statistics from Australian Bureau of Statistics (ABS) shows that Queensland created a total of 11,048 new jobs over the entire last three full calendar years. This puts the 142,900 job potential from Queensland’s project pipeline in to perspective.
Jobs growth has been the biggest driver of Sydney’s remarkable property boom over the last two years. The evidence is in the ABS data.
Australia created an additional 134,408 jobs in 2014. 52,975 of these were in Sydney.
We flag Brisbane, Gold Coast, Toowoomba, and Cairns as property markets with very promising outlooks. 
 
<img src="/images/2015/05/25/QLD_Projects_Stats.jpg" alt="">
The Abbott Point expansion at Bowen and rail infrastructure must be built in order to open up the biggest coal province in the world, Galilee Basin. High rollers such as Indian billionaires Adani and GVK, Gina Rinehart, Clive Palmer, and Chinese miner Macmines collectively have projects in the pipeline worth $53 billion.
Over the last two years, the city of Mackay has struggled under falling coal prices and property over-supply. But Mackay was placed back on Propertyology’s radar due to the potential 31,500 direct jobs which would be created if the Galilee Basin was officially opened up. Brisbane will benefit from the thousands of CBD administration new jobs that will be created. To a lesser extent, Townsville’s property market would also benefit through the supply of goods and services at the coal face and at Abbott Point.
During the January state election campaign, the Queensland Labor government made it known that they were opposed to expanding port facilities, even though, under former Premier Anna Bligh, Labor had initially approved the port expansion before the Newman government scaled it back to a more sustainable size. Earlier this month, Labor flagged a new proposal for the port dredging.
The new government has officially scrapped the $5.2 billion BaT Brisbane transport infrastructure project and raised questions over the proposed Queens Wharf project – comparable in size and quality to the new Barangaroo precinct in Sydney and the Crown Casino precinct in Melbourne.
Propertyology is still investing in Brisbane however we now place a couple of other locations ahead of Brisbane. The 18,000 extra jobs from the BaT project would have been very positive for Brisbane so too would have been the Herston medical precinct proposed by the Newman government. We had also factored in 10,000 new jobs from Queens Wharf but we just don’t know what will happen there now.
The Gold Coast property market has been described by Propertyology as having potential to be the best performing market in Australia over the next two years. When the Gold Coast Mayor first made mention that the proposed $7.5 billion ASF Resort project had potential for as many as 35,000 new (direct and indirect) jobs our ears certainly pricked up. Since being elected in to office, the new state government has scrapped the project. There’s already a lot of job creating infrastructure projects under way on the Gold Coast. And our outlook for the Australian tourism industry is off the Richter scale.  
Despite several major projects being declared ‘dead’ or doubtful’ over recent months, the job creation potential from within the long list of ‘likely to proceed’ projects is still very exciting. 
Queensland property markets have suffered over recent times from low confidence after the infamous 2011 floods, falling coal prices, and cut backs in the public sector. Pre-GFC, Queensland had previously created around 60,000 new jobs each year however there was actually a net loss of jobs in 2012 and 2013.
 
<img src="/images/2015/05/25/QLD_Projects_JobsTrend-2.jpg" alt="">
Simon Pressley is Managing Director of <a href="https://www.propertyology.com.au" target="_blank">Propertyology</a>, REIA Hall of Fame Inductee, property market analyst, accredited property investment adviser, and Buyer’s Agent. Propertyology works exclusively with property investors to purchase properties in strategically chosen locations all over Australia.
</body></html>

Queensland's unprecedented infrastructure pipeline: Simon Pressley

<html><body>
Analysing trends of the number of properties advertised for rent is the single most useful metric for property investors to make informed property management decisions. Propertyology has just completed an analysis of rental market trends across Australia and there are some interesting trends developing.
<table style="width: 507px; height: 244px;" cellspacing="0" cellpadding="0"><tbody><tr>
<td>
<div>
Biggest Increase In Rental Stock (last 12 months)
<ul>
<li>
<a href="https://www.propertyology.com.au/wp-content/uploads/2014/04/2015-03_Propertyology_SuratBasin.pdf" target="_blank">Roma</a> QLD (311% more)</li>
<li>
<a href="https://www.propertyology.com.au/wp-content/uploads/2014/04/2015.03_Propertyology_ArmidaleNSW.pdf" target="_blank">Armidale</a> NSW (81% more)</li>
<li>
<a href="https://www.propertyology.com.au/darwin/" target="_blank">Darwin</a> NT (79% more)</li>
<li>Whyalla SA (39% more)</li>
<li>Newcastle NSW (34% more)</li>
<li>Karratha WA (32% more)</li>
<li>Perth WA (31% more)</li>
<li>Mackay QLD (25% more)</li>
</ul>
 
Biggest Decrease In Rental Stock (last 12 months)
<ul>
<li>Canberra ACT (31% less)</li>
<li>Port Macquarie NSW (30% less)</li>
<li>Muswellbrook NSW (26% less)</li>
<li>Orange NSW (22% less)</li>
<li>Gold Coast QLD (21% less)</li>
</ul>
</div>
</td>
</tr></tbody></table>
The most common method for reporting the state of a rental market is vacancy rates. Data houses such as SQM Research do this by calculating the number of properties advertised for rent as a percentage of all rental properties within that given market. For example, if a specific location had one thousand properties which make up the total rental pool and twenty five of those owners were looking for a tenant the vacancy rate would be 2.5%.
A 3% vacancy rate is considered to be a ‘normal’ market. In my experience, pressure starts to build on rental prices when vacancy rates fall below 2%.
While the vacancy rate of a particular location at a particular time is useful information I find it even more meaningful to understand the rental trends which have been forming leading up to that point in time – is the available number of properties increasing or decreasing?
Imagine yourself receiving that friendly reminder from your property manager that a lease on one of your investment properties is getting close to expiry - the tenant has stated that they will not be renewing, and your property manager now needs your instructions on what rental price to advertise your property for. Propertyology is often asked by our clients to provide input in scenarios just like this.
The most appropriate response in this situation would be different if the property was in the south-west Queensland town of Roma compared to the Nation’s capital, Canberra. Research conducted by Propertyology confirms that Roma has experienced the biggest increase in the number of properties advertised for rent over the last 12 months (from 42 to 173). Canberra has experienced the biggest decrease (from 1,056 properties to 737).
When rental trends show a significant increase in volumes of properties available the most appropriate response by the landlord is often to set the rent below the rest of your competition. 80% of something is more than 100% of nothing; rents don’t always go up. And, unless there is a pending economic shift which gives hope for a reversal of this trend in the short term it might also be appropriate to seek a 12 month term as opposed to the traditional six months.
Conversely, there is more scope to increase rents when there is a limited number of properties for tenants to choose from. And, if the trend appears to be that the number of properties available is likely to decline it might be appropriate to stick with a short-term lease.  Port Macquarie in New South Wales (from 171 properties to 119), Muswellbrook in Hunter Valley (from 226 to 167), and Gold Coast (from 2,665 to 2,125) have also seen a significant reduction in the number of properties advertised for rent.
As forecast by Propertyology quite some time ago, Darwin (79% more rentals) and Perth (31% increase on an already high base) have significantly more properties available for rent today compared to 12 months ago.
Factors which influence the number of properties advertised for rent include:
<ul>
<li>The level of supply of new properties recently built;</li>
<li>Seasonal factors such as school holiday periods, peak tourism periods, Christmas / New Year, agriculture seasons;</li>
<li>Commencement and completion of large employment contracts; and</li>
<li>Commodity price peaks and troughs.</li>
</ul>
Large volumes of properties purchased by investors (as opposed to owner-occupiers) within a short period of time will also result in more stock available in a defined rental pool. A good example of this is Sydney where it has been reported that as high as 70% of home loan approvals during 2014 were to investors (30 – 45% is ‘normal’). Logic would suggest that pressure on rents will start to ease in Sydney.
Astute property investors will also analyse rental trends as part of their broader research in determining where to invest (although there are far more important considerations than this).  
Property is an asset class which requires investors to hold for the long-term. Over the years of holding a property there will invariably be periods when there are large volumes of properties available for rent and other periods when the rental market is tight. The astute landlord will understand the economic drivers which influence demand for their market, the supply pipeline, and current rental trends.
Simon Pressley is Managing Director of Propertyology, a REIA Hall Of Fame Inductee, property market analyst, accredited property investment adviser, and Buyer’s Agent. Contact Simon <a href="https://www.propertyology.com.au/contact-us/" target="_blank">here.</a>
</body></html>

Watching rental market vacancy rate trends key for investment success: Propertyology's Simon Pressley

<html><body>
GUEST OBSERVATION
Depending on the time of the purchase, an investor would have experienced capital growth three times that of capital cities or lost over $300,000. It’s all in the timing!
While the property market of Queensland’s capital city is currently performing strongly, falling commodity prices has been the primary cause for property markets in traditional mining towns to experience double digit declines in value. The biggest pain has been felt in the central Queensland shire of Isaac, which consists of Moranbah and Dysart.
A typical house was worth $580,000 in December 2012 and has since declined in value to $237,500 over the next two years (a decline of 36% per annum). At the peak of the market in 2012, houses were rented for $1,350 per week. Today that same property would be rented for $320 per week.
Emerald median values have declined by an average of 15.3% per annum over the last two years. Rental vacancy rates in Emerald are currently over 8% so rents have fallen from $700 per week (2012) to $270 per week.
The regional hub of Mackay provides a majority of goods and services to the coal face. In addition to a 33% reduction in coal prices over the last two years, Mackay has built more properties than demand required. Median property values have declined by an average of 3.0% per annum over the last two years. Rents have fallen from $500 per week to $380 per week.
In the far north west of the state, Mount Isa median values have remained unchanged. Mount Isa has a diverse range of minerals which it mines whereas central Queensland is predominantly coal. Meanwhile, Brisbane median property values have increased by an average of 6.6% per annum over the last two years.
<img src="/images/2015/04/07/MiningTowns_Qld.jpg" alt="">
In spite of Queensland’s recent mining town doldrums, the fact of the matter is that these markets have (significantly) outperformed Brisbane over the long-term. Astute investors would be aware that property is a long-term asset class.
Over the fourteen years since the turn of the century, which includes the recent downturn, Moranbah’s median property value has grown by an average of 14.8% per annum compared to Brisbane’s 7.8%. Emerald (10.9% per annum), Mount Isa (8.5%) and Mackay (8.5%) have also performed better than the state’s capital city.
It wasn’t that long ago when the likes of Brisbane, Gold Coast, and Sunshine Coast were having downturns of their own and the mining towns were setting record highs.
Investing in these locations is not for the faint-hearted. ‘Timing’ is significantly more important when investing in locations where specific industries have such a significant impact on demand for housing. Often, the smart decision is to do the opposite to what the masses are doing. In the words of the world’s most famous investor, Warren Buffet: “The time to be fearful is when everyone else is greedy. The time to be greedy is when everyone else is fearful."
A sophisticated property investor who purchased in Moranbah in late 2004 would have paid $150,000 for a 3-bedroom house. Even with the recent downturn, the current value of $237,500 still represents 4.7% average annual growth over the last ten years, which is only slightly below Brisbane’s 5%.
An investor who did purchase in Moranbah in 2004 and sold at the market peak of $580,000 in late 2012 would have made a massive 18.4% average annual growth over those eight years. That’s roughly three times better than what anyone could have achieved in any capital city. Let me spell it out for you. A $15,000 deposit (10%) paid on a Moranbah property in 2004 would have become $430,000 equity over eight years. Extraordinary!
On sheer numbers alone, one could argue a very good case that now is a good time to buy in Moranbah. An investor could pick the best property of the litter with no real competition, pay only $240,000, and rent it out for $320 per week. That 7.2% rental yield is far superior to anything that any capital will offer.
Our research suggests that an upswing in coal-related locations is on the horizon. Lower labour costs and the Australian dollar has improved the viability for mining giants such as BHP and Rio Tinto.
There are multiple new mining projects in the approval pipeline throughout Queensland and the Hunter Valley. The untapped Galilee Basin is the biggest coal province in the world. Our research has calculated five large mines with combined project values of $53 billion having potential for up to 31,500 new jobs if they all proceed. Emerald, Mackay and Brisbane will be the biggest beneficiaries.
At the peak of the mining construction boom two years ago, for every one job at the coal face in central Queensland there were nine management and administration jobs in Brisbane’s CBD.
Emerald
<ul>
<li>Median value increased by 10.9% per annum over the last 14 years, significantly more than Greater-Brisbane’s 7.8% per annum</li>
<li>22% decline during 2014 calendar year</li>
<li>Median rents have declined from $700 per week in September 2012 to $270 per week now</li>
<li>Vacancy rates currently 8.2%</li>
<li>Median value of a 3-bedroom house today is $319,500 and it would rent for $320 per week (5.2%)</li>
</ul>
<img src="/images/2015/04/07/Emerald_PropertyMarket_1990-2014.jpg" alt="">
Mackay
<ul>
<li>Median house value declined 5.8% during 2014</li>
<li>Median value increased by 8.5% per annum over the last 14 years, significantly more than Greater-Brisbane’s 7.8% per annum</li>
<li>50% fewer properties sold last year compared to its 2012 peak</li>
<li>Median rents have declined from $500 per week to $380 per week over last two years</li>
<li>An overzealous construction industry has contributed as much to the current subdued market as the falling coal prices</li>
</ul>
<img src="/images/2015/04/07/MtIsa_PropertyMarket_1990-2014.jpg" alt="">
Mount Isa
<ul>
<li>Median value increased by 8.5% per annum over the last 14 years, significantly more than Greater-Brisbane’s 7.8% per annum</li>
<li>Median rents have declined from $540 per week in September 2012 to $500 per week now</li>
<li>Vacancy rates currently 3.5%</li>
<li>Diverse range of commodities in the region, whereas central Queensland is predominantly coal and gas</li>
<li>Median value of a 3-bedroom house today is $319,500 and it would rent for $320 per week (5.2%)</li>
</ul>
<img src="/images/2015/04/07/MtIsa_PropertyMarket_1990-2014.jpg" alt="">
Moranbah
<ul>
<li>Median value increased by 14.8% per annum over the last 14 years, significantly more than Greater-Brisbane’s 7.8% per annum</li>
<li>Someone who purchased at the peak in late 2012 would have paid $580,000 for a house and received $1,350 per week rent. That property today would be worth $237,500 and be rented for $320 per week</li>
</ul>
<img src="/images/2015/04/07/Moranbah_PropertyMarket_1990-2014.jpg" alt="">
Brisbane
<ul>
<li>Greater-Brisbane’s median property value has increased 7.8% per annum over the last 15 years</li>
<li>Median house rents have increased from $430 per week in September 2012 to $450 per week now</li>
</ul>
<img src="/images/2015/04/07/Brisbane_PropertyMarket_1990-2014.jpg" alt="">
Simon Pressley is managing director of Propertyology, a REIA Hall Of fame Inductee, property market analyst, accredited property investment adviser, and Buyer’s Agent. 
<a href="https://www.propertyology.com.au/more-than-a-buyers-agent/" target="_blank">Propertyology works exclusively with property investors</a> to purchase properties in strategically chosen locations all over Australia.
Photo of Mount Isa <a class="mw-mmv-license" href="https://www.propertyobserver.com.au/https://creativecommons.org/licenses/by-sa/2.5" target="_blank" style="font-size: 12.1599998474121px; line-height: 1.3em;">CC BY-SA 2.5</a>.
</body></html>

Mining towns outperform capital city - but timing is critical: Simon Pressley

<html><body>
GUEST OBSERVATION
The Australian Bureau of Statistics has just released its annual update on regional population growth. The combined growth of Australia’s capital cities of 1.9% for the year ending 30 June 2014 is above the national growth rate of 1.6%. I’ve analysed the data of Australia’s 550 local government authorities to find the population hotspots.
<img src="/images/2015/04/07/Aust_PopulationGrowth_2013-14.JPG" alt="">
At a greater capital city level, Perth continues its status as Australia’s fastest growing city with a growth rate of 2.2%. Perth recently became Australia’s fourth city with a population in excess of 2 million people.
Melbourne and Darwin both had growth rates of 2.2%, ahead of Sydney (1.8%) and Brisbane (1.7%). Canberra (1.2%), Adelaide (1.0%) and Hobart (0.6%) continue their trend of being Australia’s slowest growing capital cities.
Of more interest is some of the data at local government level. The fastest growing population in Australia last year was the shire of Serpentine-Jarrahdale, at the southern urban footprint of Perth. With a population of 22,698 its rate of growth for the year was 6.2% - more than three times the national average.
The south-west Sydney shire of Camden was a close second with a growth rate for the year of 6.1%.
Casting our eyes across the nation revealed these other population hotspots:
<ul>
<li>The regional standout was Busselton, in the far south of Western Australia with a growth rate 3.7%, followed closely by the central Queensland industrial powerhouse of Gladstone with 3.5%; 
</li>
<li>The famous Western Australia wine region of Augusta-Margaret River experienced a 3.4% population growth (twice the Australian average) while the gas city of Karratha in the state’s north grew by 2.9% over the year; 
</li>
<li>While South Australia’s total population growth was only 1%, regional towns Gawler (2.8%) and Mount Barker (2.1%) produced surprising results; 
</li>
<li>A thirst for higher density living in Sydney drove population growth in Botany Bay (3.4%), Canada Bay (3.0%), Strathfield and Parramatta (both 2.9%); 
</li>
<li>Regional New South Wales towns of Yass Valley (2.3%) and Maitland (2.2%) were well above the national average; 
</li>
<li>Victoria’s population growth numbers is consistent with its urban sprawl strategy. Wyndham (outer-south-west 5.6%), Whittlesea (outer-north 4.4%), Melton (outer-west 4.0%), and Cardinia (south-east 3.6%) all produced big numbers. 
</li>
<li>The historic goldfields town of Ballarat with a population of 100,000 produced 1.7% growth; 
</li>
<li>In Queensland, Somerset (3.0%), Scenic Rim / Beaudesert (2.9%), and Ipswich (2.8%) were strong. The population of Australia’s single biggest local government, Brisbane City Council, grew by 1.5%</li>
</ul>
Simon Pressley is managing director of Propertyology, a REIA Hall Of fame Inductee, property market analyst, accredited property investment adviser, and buyer’s agent.
 <a href="https://www.propertyology.com.au/more-than-a-buyers-agent/" target="_blank">Propertyology works exclusively with property investors</a> to purchase properties in strategically chosen locations all over Australia.
</body></html>

Australia's population hotspots: Simon Pressley

<html><body>
GUEST OBSERVATION
Psst... Got a second? I’d like to let you know of an exciting property market location which is the second biggest regional city in its state, is the principle service centre for a region which is in close proximity to large and very valuable reserves of natural resources, it has critical deep sea port infrastructure in place, one of the highest rental yields in the country, its historical return on investment is close to double that of the capital city average, and a property entry price of $300,000. 
Every single word in the above opening paragraph is true, although – intentionally – the name of the location isn’t mentioned. If I said it was a bayside suburb in a capital city the odds are that this would instantly become Australia’s biggest hotspot. Now that I reveal that it is the South Australian regional city of Whyalla many people reading this will suddenly become uncomfortable.
I can think of no better example to illustrate how emotionally-based perceptions, as opposed to solid research and logic, get in the way of property investors standing to make the most of their hard-earned money.
From my desktop, I can hear people shouting: “But Simon, Whyalla is a mining town! Regional locations are high risk compared to capital cities.”
Whyalla is actually a steel manufacturing town (18% of jobs are in metal manufacturing). It services inland mines (lots of them). Whyalla is a seaport located on the east coast of the Eyre Peninsula. Tourism is a small secondary industry.
<img src="/images/2015/03/26/MedianValues_Capitals_5yrs-15yrs.jpg" alt="">
Mining giant, BHP established Whyalla in 1901 to facilitate the transport of iron ore from mines in the state’s north, via sea, to processing plants. A blast furnace was constructed in the 1940's and Whyalla's reputation as the 'steel city' grew.
Through the 1940s, 1950s and 1960s, Whyalla's population expanded rapidly and governments began planning for a 100,000 population. Shipbuilding had become the main industry until international competition forced its closure in 1978. The steel plant has evolved through peaks and troughs under BHP, then One Steel, and now Arrium. The one constant has been its status the biggest employer.
A mineral exploration boom unfolded throughout the last decade resulting in increased population. In 2000, an educated property investor would have paid a mere $80,500 for a house in Whyalla. An outer-suburbs capital city house back then would have cost $100,000 more than that. Over the next fifteen years Whyalla produced solid growth (an average of 9.5% per annum). The capital city average over the same fifteen year period was considerably less (7.3% per annum) and included three to four years of negative growth.
Do you want to re-evaluate that earlier comment about “risk”? Perhaps, you might be starting to see my point about “perception” and lost opportunity.
<img src="/images/2015/03/26/Whyalla_PropertyMarket.jpg" alt="">
The infrastructure in Whyalla is well established; as one should expect of a century old city with 22,000 people. University of SA has a campus in Whyalla, offering programs such as business, health, and community services. Daily flights to Adelaide are available with Regional Express; Qantaslink is also looking to service the region from 2015.
Three hours north of Whyalla is Olympic Dam. Opened in 1988, Olympic Dam holds some of the biggest reserves of copper, gold, uranium, and silver in the world. State and federal government approvals were granted to BHP for a $30 billion expansion in October 2011. In September 2012, BHP suspended the project, although it is widely expected that a scaled-down expansion will proceed at some point.
<img src="/images/2015/03/26/Whyalla.jpg" alt="">
Whyalla already has deep sea port infrastructure at Port Bonython which is very likely to come in to play when BHP eventually find the most viable development model. When it does, Whyalla’s property market will, yet again, perform much stronger than capital cities.
Whyalla’s property market is currently flat. Then again, so are most markets across Australia. An investor could buy a solid three-bedroom house in Whyalla today and get change from $300,000; rental yields are over 6%. Risk? I’d suggest there is considerably more risk investing in an inner-city apartment in <a href="https://www.propertyology.com.au/wp-content/uploads/2014/04/2015-02_Propertyology_SydneyOutlook.pdf">Sydney</a> or <a href="https://www.propertyology.com.au/wp-content/uploads/2014/04/2015_01_Propertyology_MelbourneOutlook.pdf">Melbourne</a>.
But, then again, I guess that depends on whether one bases things on perception or solid research and logic!
Simon Pressley is managing director of Propertyology, a REIA Hall Of fame Inductee, property market analyst, accredited property investment adviser, and buyer’s agent. 
<a href="https://www.propertyology.com.au/more-than-a-buyers-agent/" target="_blank">Propertyology</a> works exclusively with property investors to purchase properties in strategically chosen locations all over Australia.
Photo of Whyalla courtesy of Wikimedia Commons.
</body></html>

The regional city that has outperformed all capital cities for 15 years: Simon Pressley

<html><body>
GUEST OBSERVATION
With a population of approximately 170,000 people, Toowoomba is Australia’s second largest, non-coastal city, behind Canberra. It is the only zone in South East Queensland not to experience population growth above the national average over the last decade.
While its property market has teased with glimpses of green shoots every so often Toowoomba mostly underperformed over the last decade.
Situated 700 metres above sea level on the Great Dividing Range, ‘The Garden City’ is among rich volcanic soils. With agriculture among its economic mix, prolonged drought adversely affected the region for a few years, although new infrastructure has subsequently improved water security.
The city is a well established service centre for the Darling Downs agriculture industry, the expanding coal and gas industry in the Surat Basin, and the army aviation centre at Oakey. Toowoomba is also somewhat of an education hub with the well-funded South Queensland University, a few small university campuses and quality private schools.
A new, <a href="https://www.facebook.com/Propertyology" target="_blank">international-scale airport</a> officially opened in November 2014. This significant piece of transport infrastructure has the potential to <a href="https://www.propertyology.com.au/understanding-asian-century-key-to-success/" target="_blank">open up the region’s economy</a>. Qantas has already committed to a dozen flights per week to and from Sydney
Construction of the Wellchamp business park is currently underway and there is also a proposal for a nearby aviation school. $500 million is to be invested in expansion of retail facilities.
The tender for the <a href="https://www.propertyology.com.au/wp-content/uploads/2014/04/2014_09_Propertyology_MainEmploymentSectors_web.pdf" target="_blank">$1.5 billion Second Range Crossing</a> project is due to be announced early in 2015; construction should start shortly thereafter. This will significantly improve general public access between Brisbane and Toowoomba and significantly improve road freight safety and commute times.
Up and down housing supply from year to year has tended to keep pace with demand overall. <a href="https://www.propertyology.com.au/your-results/" target="_blank">Our research</a> suggests areas where new supply will be concentrated most include Highfields, Gowrie, Glenvale, and Westbrook.
<img src="/images/2015/02/25/Toowoomba_SupplyDemand_2006-2014.jpg" alt="">
Toowoomba is positioned along a national inland freight corridor and the proposed Melbourne-Brisbane inland port. Private and government investment <a href="https://www.propertyology.com.au/more-than-a-buyers-agent/">provides opportunities</a> for economic growth in tourism, agricultural, aviation, warehousing and logistics.
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/more-than-a-buyers-agent/">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014).
Photo courtesy of Porjo/ <a class="mw-mmv-license" href="https://creativecommons.org/licenses/by-sa/3.0/" target="_blank" style="font-size: 12.1599998474121px; line-height: 1.3em;">CC BY-SA 3.0</a>.
<h2>How to purchase high-performing investment properties: a free Propertyology eBook</h2>
 
 
</body></html>

Toowoomba has underperformed, but new infrastructure is promising: Simon Pressley

<html><body>
GUEST OBSERVATION
Our reading of key metrics suggests that Perth property values are likely to end this year a below where they started the year. Sadly, the news doesn’t get any better.
Sales volumes peaked two years ago and the numbers since have steadily declined. REIWA has reported the latest vacancy rate for Greater Perth at 4.2%, making it easily the highest of all Australian capital cities. Put simply, neither property values nor rents have any pressure currently being applied.
As shown in this graphic, the levels of new supply in the pipeline are at record levels so the pressure valve will be released even further as new stock comes on line. Sales listings have increased over the last 12 months by a massive 46% and broke through the 13,000 barrier in December 2014.
<img src="/images/2015/02/26/BuildingApprovals_Style_2014.12.jpg" alt="">
But, the bigger concern for Perth’s market is on the demand side of the equation. Perth’s impressive run as the nation’s leader in population growth stakes has ground to a halt.
76% of Western Australia’s total population live in the state’s capital (the highest concentration rate in Australia).
<img src="/images/2015/02/26/Population_GrowthRate_2014.06.jpg" alt="">
There has been a sharp decline in the number of people relocating to WA (that is, Perth) over the last 12-18 months. The latest figures released by Australian Bureau of Statistics (ABS) shows a net overseas migration figure of 3,384 for the June 2014 quarter; well below the 10,201 average for the previous three comparative periods.
<img src="/images/2015/02/26/PropertyEconomy_2014.12.jpg" alt="">
As shown above, interstate migration has also been in decline. During 2011 to 2013, a net 2,000 people would typically relocate to WA from other states every quarter. The latest ABS data shows that a net 33 people left WA; the first time that the state has produced a negative figure since June 2003. To describe demand for extra accommodation as ‘easing’ is a gross under-estimate.
When we took a closer analysis of Perth’s economy to see where future demand might come from things look dull.
Iron ore plays a hugely important role in WA’s economy, accounting for 20% of the State’s total revenue and employing more than 61,000 people directly in 2013-14. Iron ore prices have fallen 50% over the last 3 years, hitting state government revenues hard and resulting in its first budget deficit in 15 years ($1.3 billion in 2014 and estimated to be a further $900 million in 2015).
While there are many mining jobs are in the state’s north, most of them live in Perth. 10,000 employees currently working on the Gorgon liquefied natural gas project and Roy Hill iron ore mine will be looking for new jobs once construction is completed later this year. The scenario will be the same for a further 6,000 workers on the Wheatstone LNG project that is set to be completed in 2016.
In spite of lower iron ore prices, mining heavy weights Rio Tinto and BHP have ramped up production. There is a school of thought that this is a strategic choice to squeeze out smaller players. There is a suggestion that, once the damage is done, production will be allowed to slow which can only mean job losses. Sentiment on the Perth jobs front is subdued. There’s no sign of new mining projects to support Perth’s engineering muscle.
To the current state government’s credit, there are an unprecedented number of large projects in metropolitan Perth. As shown in this info-graphic, these include the Crown Casino expansion, new sporting stadium, a large entertainment precinct, railway and airport upgrades, hospitals, and highways.
These big projects will ensure that new jobs will continue to be created in Perth. But, the rate of job growth has definitely slowed down and government finances are likely to remain tight for some time.
<img src="/images/2015/02/26/Jobs_Trend_2009-2014.jpg" alt="">
With the most active first home buyer market in the country over the last couple of years the reduction in residents competing for rental stock has resulted in rising vacancy rates. SQM Research lists the highest vacancies in East Perth (6.7%), Yanchep (5.3%), Perth City (5.0%), Darlington (4.8%), West Perth (4.6%), South Perth (4.2%), and East Fremantle (4.0%).
Bottom line, this will be more than a lull for Perth. Something significant will need to come from left field to stimulate housing demand otherwise Perth looks headed for a prolonged slump.
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014).
<h2>How to purchase high-performing investment properties: a free Propertyology eBook</h2>
 
</body></html>

Perth is headed for a prolonged slump: Simon Pressley

<html><body>
GUEST OBSERVATION
Ipswich has one of the fastest growing populations in Australia over the last decade.
When a few marketing jazz words are combined with a low entry price and above-average rental yields, it’s never been difficult for the so-called property guru to attract property investors to Ipswich. But does the region really stack up?
With its vast amounts of developable, cheap land available, Ipswich plays a key role in the <a href="https://www.propertyology.com.au/keep-granny-ditch-the-flat/" target="_blank">state government’s strategy</a> to try and direct population growth away from the coast.
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="176">
Population Growth
</td>
<td valign="top" width="158">
2003-2013
</td>
<td valign="top" width="201">
2008-2013
</td>
</tr>
<tr>
<td valign="top" width="176">
 
</td>
<td valign="top" width="158">
(10yrs)
</td>
<td valign="top" width="201">
(Post-GFC)
</td>
</tr>
<tr>
<td valign="top" width="176">
Australia
</td>
<td valign="top" width="158">
1.7%
</td>
<td valign="top" width="201">
1.8%
</td>
</tr>
<tr>
<td valign="top" width="176">
Queensland
</td>
<td valign="top" width="158">
2.4%
</td>
<td valign="top" width="201">
2.1%
</td>
</tr>
<tr>
<td valign="top" width="176">
Ipswich
</td>
<td valign="top" width="158">
4.2%
</td>
<td valign="top" width="201">
3.7%
</td>
</tr>
</tbody></table>
The impact of a relatively large volume of sales of new properties in a developing region creates a distortion between the data for changes in median property values and the real change in property values.
As the graphic below illustrates, dwelling supply and population growth have kept pace with each other. In spite of the regular hotspot rhetoric that Ipswich cops from time to time, its property market performance has in fact been quite underwhelming.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2015/01/27/Ipswich_SupplyDemand_2006-2014.jpg" alt="">
With a traditional blue-collar demographic, successive state governments and the Ipswich City Council have had to work hard to create sufficient jobs for its growing population.
The award-winning Springfield masterplanned community has been developed over the last decade as a satellite city - Brisbane’s version of Parramatta.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2015/01/27/Ipswich_GreenfieldMap.jpg" alt="">
Already with a new hospital, business park, and railway line, Springfield currently has several good projects in the pipeline. These include a $50 million expansion of the University of Southern Queensland, $70 million headquarters for GE, $80 million Mater hospital, $100 million Brookwater resort and plans to further extend the Orion shopping centre.
The existing Amberley RAAF base has also been spoken about as an anchor tenant for a potential aeronautical precinct.
Investors could do worse than Ipswich, although it is far from our first preference. With so much land flagged for development, expect to see significant new supply, mostly concentrated around Springfield, Ripley, and Redbank Plains.
There is currently in the vicinity of $275 million in house and land packages currently under construction. The Springfield Land Corporation has also just announced a proposal to develop 10,000 new apartments.
Simon Pressley is managing director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, a full-time property market analyst, accredited property investment adviser, and Australia’s (REIA) Buyer’s Agent of the Year (2012+2013+2014).
Picture courtesy of Clarebear/ <a class="mw-mmv-license cc-license" href="https://www.propertyobserver.com.au/https://creativecommons.org/licenses/by-sa/3.0" target="_blank">CC BY-SA 3.0</a>.
 
</body></html>

How the Ipswich region stacks up: Simon Pressley

<html><body>
GUEST OBSERVATION
While there may still be a bit of steam left in Sydney’s property engine, I previously described Sydney’s market fundamentals as being <a href="/expert-insights/sydney-s-property-market-is-a-house-of-cards">as fragile as a house of cards</a>.
A statement in February’s Reserve Bank press release could be a suggestion that a joker in the pack may soon be played.
It is this statement from the RBA that could suggest that policy makers may soon play that joker:
"Credit growth picked up to moderate rates in 2014, with stronger growth in lending to investors in housing assets. Dwelling prices have continued to rise strongly in Sydney, though trends have been more varied in a number of other cities over recent months. The Bank is working with other regulators to assess and contain economic risks that may arise from the housing market".
The concerns for Sydney are these:
<ol>
<li>Lack of affordability (long been Sydney’s Achilles heel),</li>
<li>A very high level of sales transactions to investors,</li>
<li>Potential tightening of credit policy specific to Sydney,</li>
<li>Potential policy changes by Australia’s Foreign Investment Review Board to curb Asian investors, and</li>
<li>A significant supply of <a href="https://www.propertyology.com.au/wp-content/uploads/2014/04/ApartmentsApproved_States_2014-04.jpg" target="_blank">new dwelling stock in the pipeline</a>.</li>
</ol>
Under ‘normal’ circumstances the RBA responds to a property boom with a few interest rate hikes to caution consumers. But this current boom is isolated to Sydney – it’s not like the RBA can raise rates just in Sydney.
In fact, the RBA’s decision at its February meeting to reduce rates has the potential to add fuel Sydney’s market. A subdued employment market and sharp declines in commodity prices are bigger national issues which forced the RBA’s hand.
This is where that “working with other regulators to assess and contain economic risks that may arise from the housing market” comment is so interesting. What if the Foreign Investment Review Board passed legislation to restrict Asian investment in Australian real estate? Joker number one!
What if banks (with some ‘encouragement’ from the likes of APRA and / or RBA) tighten their credit policy just on Sydney-based securities to shelter themselves from extra risk? Banks have been known to do this before when they’ve identified a ‘location risk’ in the likes of the Pilbara and Moranbah. Joker number two!
Another possibility lies in China where there are reports of residential market declines of 15% over the last 12 months. Chinese banking executives and economists say that a severe housing downturn could cause a considerable increase in non-performing loans amongst Chinese banks. We know that when times get tough investment properties are often one of the first assets disposed of in order to bring the household budget back in to order. Further instability in China’s market could result in high levels of resale stock in Sydney. Joker number three!
Regardless, we expect vacancy rates to increase and rental yields to reduce in Sydney. An unhealthily high ratio of investor-owned properties is already occurring with ABS data confirming that 60% of NSW home loan approvals (refer Sydney) were for investors [30% is ‘normal’].
The Fundamentals
The performance of Sydney’s property market over the past 18-24 months is as spectacular as it is concerning.
Contrary to tabloid rhetoric, outside of Sydney, property markets are experiencing <a href="https://www.propertyology.com.au/wp-content/uploads/2014/04/MedianValues_Capitals_2011-2014.jpg">a predictable post-GFC recovery phase</a> with normal rates of growth (0 to 6%) over the past 12 months.
The state of New South Wales is home to 7.4 million people (a third of <a href="https://www.propertyology.com.au/wp-content/uploads/2014/10/Aust_PopulationConcentration.jpg">Australia’s total population</a>) and 4.3 million (18.7%) of these are in Sydney
<img src="/images/2015/02/09/pressley%20feb%209%20one.png" alt="">
Greater-Sydney can be broken in to ‘Metropolitan’ and ‘Western Sydney’. With a population of 2.06 million people (8.9% of Australia), Western Sydney on its own is bigger than the combined populations of South Australia, Tasmania, ACT, and Northern Territory.
With a median house price of $730,000 Sydney is the least affordable location in Australia (miles above the capital city average of $580,000).
For the same price that you can buy a Sydney apartment (median value $576,000) you can buy a house in every other location in Australia with the exception of Melbourne.
Sydney’s population growth rate has been below the national average for much of the past 10 years, and only ahead of economic minnows South Australia and Hobart. Rate of growth is completely different to population size.
<img src="/images/2015/02/09/pressley%20feb%209%20two.jpg" alt="">
New South Wales has a long history of people immigrating away from Sydney to alternative locations. Cost of living, especially housing, is a key factor.
<img src="/images/2015/02/09/pressley%20feb%209%20three.jpg" alt="">
Sydney has been Australia's worst performing capital city market since the 2000 Olympic Games. Sydney’s high property prices meant less buyer competition to force the rate of growth that other locations around the country have historically experienced. It’s not until we had 60-year low interest rates that Sydney has first significant price growth spurt in more than a decade.
<img src="/images/2015/02/09/pressley%20feb%209%20four.jpg" alt="">
Through 2000 to 2010, the NSW unemployment rate was regularly above the national average. A massive job swing has recently occurred; of the <a href="https://www.propertyology.com.au/the-environment-for-property-investors-is-healthy/" target="_blank">134,408 jobs created nationally</a> during 2014, 52,975 of these were in Sydney. Boom!
<img src="/images/2015/02/09/pressley%20feb%209%20five.jpg" alt="">
Metropolitan Sydney is Australia’s white-collar capital and unemployment rates are currently up to 50% better than the national average. Much of the recent jobs growth has been in white collar sectors such as financial services. If only people can afford to buy a property in Metro Sydney.
Large parts of Western Sydney, on the other hand, have significantly fewer job opportunities. Manufacturing accounts for 16% of jobs (not ideal in the current climate) while a fifth of all businesses are in the construction industry. Australia’s highest crime rates are in Western Sydney.
<img src="/images/2015/02/09/pressley%20feb%209%20six.png" alt="">
To overcome a reported 182,000 job shortfall, tens of thousands of people have to commute from the more affordable western suburbs to work in metro Sydney each day.
Transport infrastructure has not kept pace with population growth. The rail network has not been significantly expanded since the 1930s, yet the region’s population is now five times greater. The heavy reliance on passenger cars results in horrendous traffic congestion, loss of productivity, and high fuel costs. Remember that earlier Interstate Immigration graph?
15 years of babble about Sydney having run out of land and therefore having <a href="https://www.propertyology.com.au/wp-content/uploads/2014/04/Supply-and-Demand-State-by-State_2014.11.pdf" target="_blank" style="font-size: 12.1599998474121px; line-height: 1.3em;">an under-supplied property market is not totally correct</a>. Metro Sydney’s land shortage has been compensated by higher density construction while sprawl has occurred to the west. Overall, dwelling construction was greater than required until the GFC handbrake was applied. The tightening of supply is another reason for the more recent pressure on Sydney property prices.
There is significantly more supply in the property pipeline. Building approvals are now at record levels.
<img src="/images/2015/02/09/pressley%20feb%209%20seven.jpg" alt="">
My money is on Sydney performing similar to the last 15 years – below the Australian average. But the immediate question is whether policy makers play one of those jokers!
Simon Pressley is managing director of Propertyology, a property market analyst, accredited property investment adviser, and buyer’s agent.
<a href="https://www.propertyology.com.au/more-than-a-buyers-agent/" target="_blank">Propertyology </a>works exclusively with property investors to purchase properties in strategically chosen locations all over Australia.
<h2>How to purchase high-performing investment properties: a free Propertyology eBook</h2>
 
</body></html>

The Sydney property market house of cards - the joker in the pack: Simon Pressley

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 

<section data-scroll-anchor="false" data-testid="conversation-turn-6" data-turn="assistant" data-turn-id="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-2" data-turn-id-container="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-2" dir="auto">
<section data-scroll-anchor="false" data-testid="conversation-turn-2" data-turn="assistant" data-turn-id="request-WEB:5a5ab36c-8dd3-454c-b456-c501f22f0eb4-0" data-turn-id-container="request-WEB:5a5ab36c-8dd3-454c-b456-c501f22f0eb4-0" dir="auto">
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.
</section>
</section>

[smartcode_project_cta:default project_id=112661]

Simon Pressley

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News