<html><body>
At this time of year, most people are focused more on shopping for gifts than on shopping for a home loan.
Fewer mortgages are sold during December and January than at other times of the year. The property market slows down and so does refinancing activity. Australian Bureau of Statistics data shows a regular dip each January in the value of mortgages sold for refinancing (see chart).
<img src="/images/2014/12/02/rba-graph-dec-2-two.jpg" alt="">
Many people stretch their budgets during the festive season and reviewing the home loan takes a back seat to spending.
Commonwealth Bank research released last month suggests more than half of people overspend during the holidays on gifts, travel, entertaining and shopping in the sales. While 57% set a budget for their spending between 1 December and 6 January, fewer than one in five stick to their plan, the research found.
For mortgage holders who are disciplined with their finances and prepared to set time aside to investigate their refinancing options, there are some attractive home loans available.
The official cash rate has remained steady at 2.5% for more than 18 months now and most economists expect rates to stay low throughout 2015.
Fewer than one in four economists surveyed by Finder.com.au in November expect rates to move before the middle of next year. Some 70% believe rates will change in the latter part of 2015 and a minority expect no increase until 2016. Three of the 37 economists surveyed think the next move will be down.
Borrowers have benefitted this year not only from the low interest rate environment but also from strong competition between lenders.
<a href="https://www.heritage.com.au/" target="_blank">Heritage Bank</a> cut its mortgage rate in late November and is now offering a variable mortgage with a comparison rate of 4.4% to people refinancing with a loan to value ratio of up to 80%. The bank is also waiving its $600 application fee for new loans taken out before Christmas.
Other lenders, such as loans.com.au, Australian Financial, MortgageView and Ubank, are also offering variable mortgages with comparison rates below 4.6%.
Fixed rates are available at competitive levels, such as the one and two-year fixed rate mortgage that Loans.com.au is offering at 4.57% and 4.59%, respectively.
Earlier in the year several lenders began offering non-rate incentives to lure borrowers to their products.
Many home owners have been taking advantage of the deals available. The value of mortgages refinanced rose sharply through 2014, ABS data shows. In July, the peak month for refinancing activity, almost $5.6 billion worth of mortgages were refinanced.
Mortgage holders have also been prudently paying down their debts. The Reserve Bank of Australia has noted that mortgage holders are, in aggregate, months ahead on their repayments, either as a result of paying early or holding balances in offset accounts.
Most households have manageable debt levels, with eight in 10 able to add to their savings or at least make ends meet, the St George-Melbourne Institute Household Financial Conditions Report released in late October showed. 
</body></html>

zfielding-GvX3Uq9KTa

Festive period can be a great time for loan shopping

<html><body>
Australian mortgage providers had $1.25 trillion worth of housing loans on their books at the end of September, up 9% compared with the year before, according to the latest data from the Australian Prudential Regulation Authority.
This included $85.4 billion of new loans issued in the September quarter, which was 11.9% more than the value of new mortgages issued in the same quarter of 2013.
Major banks held just over $1 trillion of the residential loans, having lifted the size of their mortgage books by 8.7% over the year.
Other domestic banks increased their total loan books by 15% to $135.3 billion at the end of September. APRA noted that this jump in mortgages was partly due to the conversion of eight credit unions and one building society to banks during the year. However, separate research by mortgage broking network AFG, the AFG quarterly Competition Index, shows non-major banks did increase their market share of people who refinanced their mortgages.
Foreign subsidiary banks held $54.9 billion worth of residential mortgages, up 5.8% from September 30, 2013, APRA reported. 
In total, there were 5.2 million housing loans outstanding at the end of September, APRA’s data shows. The average balance was $239,000, up from $232,000 in September 2013.
Two thirds of the loans outstanding – $825 billion worth – were to owner occupiers. This was 7.6% more than at the same time in 2013. The remaining $425.3 billion worth of home loans were to investors, an increase of 11.9% compared with the year before.
Australian lenders also had $225.5 billion in commercial property loans at the end of September 2014, down by 0.4% from June 30, 2014 but 6.4% more than in September 2013, APRA figures show.
Commercial property located within Australia accounted for 83.1% of all commercial property exposures. Most of the properties were offices and retail property, which represented 30.3% and 22.4% of all exposures respectively.
</body></html>

Australian lenders holding 9% more home loans than a year ago

<html><body>
Reactions to the federal Parliament’s report into foreign investment in real estate have been mixed with some welcoming its recommendations and others claiming it has missed an opportunity to improve housing affordability.
The report by the House of Representatives Standing Committee on Economics <a href="/news/no-surprises-in-kelly-odwyers-12-firb-report-recommendations">made 12 recommendations</a> centred on better enforcing existing regulations, increasing the penalties for non-compliance and improving access to data on foreign investment.
The Property Council of Australia, the Housing Industry Association and The Urban Development Institute of Australia agreed the recommendations would support housing activity in Australia, boosting the economy and adding to the supply of homes.
“We welcome foreign investment in residential real estate as it provides up to 35% of a new development,” Nick Proud, executive director of the Residential Development Council at the PCA said.
HIA chief executive, industry policy and media Graham Wolfe said foreign investment through pre-sales in multi-unit developments could be crucial to ensuring projects came to market.
“[This] obviously benefits potential domestic buyers as well as renters, through more choice and competition,” he said.
But buyers’ agent Patrick Bright, director of EPS Property Search, said he was disappointed that stronger action had not been taken to curb foreign investment which he said was putting upward pressure on property prices.
“To be frank I am shocked that the government is going to continue to put the desires of wealthy foreigners ahead of its own citizens and ahead of the best long-term interests of the country. The government is also clearly putting the interests of developers ahead of every day Australians,” he said.
Bright’s concerns echo views put forward in private submissions to the inquiry. For example, Jennifer Jaeger said in a submission: “I do not believe that continued overseas investment in Australian residential real estate provides ongoing benefits to Australian residents who are finding themselves “priced out” of purchase and rental booms.”
A submission from First National Real Estate noted that property prices in suburbs that attracted Asian investors had risen more quickly than prices in neighbouring areas that were less attractive to foreign buyers. It gave the examples of Carlingford compared with North Rocks, Coogee versus Randwick and Marrickville compared with Arncliffe/Rockdale in Sydney.
Under existing legislation, foreign nationals can only buy newly constructed dwellings and are prohibited from buying established homes. Temporary residents can buy one established dwelling as their residence but they must sell within three months of leaving the country.
However, the report noted some foreign buyers may be breaking the rules. It was highly critical of the Foreign Investment Review Board’s collection of data and enforcement of existing regulations, saying there had been a “significant failure of leadership at FIRB”. It recommended a number of changes to strengthen enforcement and toughen penalties for non-compliance.
UDIA National President Cameron Shephard said foreign investors that weren’t complying with the rules gave a bad name to those that did the right thing.
“Any changes to the administration of the rules, such as the introduction of an application fee, will have to be very carefully considered, so that they do not unnecessarily deter law abiding investors,” he said.
Nyko Property estate agent Bill Nikolouzakis said the $1,500 fee that was recommended by the report, and estimated to generate revenue of $158.7 million over four years, would be too small to deter foreign buyers and could be put towards better resourcing the FIRB.
“This would continue to allow us to attract foreign investors … while giving FIRB the resources to ensure they are identifying and penalising foreign investors who contravene the law,” Nikolouzakis said.
“Putting a process in place to help identify the foreign investors doing the wrong thing and the individuals helping them is the key. Further, the penalty must be enough of a deterrent to make an effect. If no one is being caught or the deterrent is not sufficient, it will not have the desired outcome,” he said.
</body></html>

Mixed reactions to federal foreign buyer inquiry recommendations

Retail rents on Sydney&rsquo;s Pitt Street Mall ranked as the fifth highest in the world in 2014, up from eighth most expensive the year before, a report from Cushman and Wakefield has found.

The report, Main Streets Across the World 2014/15,&nbsp;showed retail rents on the premier shopping strip grew by 25% over the year.

Pitt Street&#39;s increase was the second largest in the Asia-Pacific region after rents for retail space in Beijing&#39;s CBD, which rose by 26.4%.

In San Fransisco&#39;s Union Square, retail rents soared 30%, while in Istanbul&#39;s Istiklal Street, shop rents increased by 27.3%.

The report attributed the rapid growth of rents on Pitt Street Mall to international retailers signing new leases and taking up larger space through the amalgamation of smaller stores, which reduced the supply of space.

It noted there was a global trend for major retail brands to experiment with design, layout, content and services in their flagship stores. This was expected to remain a key factor influencing growth in major retail centres in the coming year.

Market activity was expected to improve in the next 12 months, despite uncertain economic outlooks for parts of the world.

&ldquo;Premier shopping locations will remain in high demand as retailers are keen to establish a presence and raise their brand profile, but supply as ever will remain tight,&rdquo; the report noted.

The world&rsquo;s most costly retail space was along New York&#39;s Upper 5th Avenue, where rents were US$3,500 per square foot per year.

Hong Kong&rsquo;s Causeway Bay shopping district, the Champs Elysees in Paris and London&#39;s New Bond Street ranked second, third and fourth, respectively.

Rents on Pitt Street Mall cost US$1,016 per square foot, the report found, making retail space along the mall more costly than prime shopping areas in Milan&#39;s Via Montenapoleone and Tokyo&#39;s Ginza district.

Retail rent rises in Australia were confined mainly to Pitt Street Mall and high performing regional shopping centres, where rents rose by 7.8% to A$2,200 per square metre per year, the report found

Landlords of premises in other prime retail strips in Australia have not shared the fortunes of Pitt Street Mall. No rental growth was reported for shops on Rundle Mall in Adelaide, Queen Street Mall in Brisbane, Bourke Street in Melbourne or in Perth&#39;s CBD.

Retail rents along Sydney&rsquo;s Oxford Street continued to lag. Cushman and Wakefield&rsquo;s report showed the cost to rent on the once-fashionable retail strip was A$1,050 per square metre per year, compared with A$12,500 per square metre per year on Pitt Street Mall.

The top 10 most expensive retail locations in each country:

Rent price is per square foot per year.&nbsp;Change in rental rates is compared to 2013 rates

<ol>
	<li>USA, New York, Upper Fifth Avenue 
	 
	Rent price: US$3,500 
	Change in rental rates: +13.3% 
	&nbsp;</li>
	<li>Hong Kong, Causeway Bay 
	 
	Rent Price: US$2,735 
	Change in rental rates: -6.8%&nbsp; 
	&nbsp;</li>
	<li>France, Paris, Avenue des Champs Elysees 
	 
	Rent price: US$1,556 
	Change in rental rates: 0.0 
	&nbsp;</li>
	<li>UK, London, New Bond Street 
	 
	Rent Price: US$1,216 
	Change in rental rates: +4.2% 
	&nbsp;</li>
	<li>Australia, Sydney, Pitt Street Mall 
	 
	Rent price: US$1,016 
	Change in rental rates: +25% 
	&nbsp;</li>
	<li>Italy, Milan,&nbsp; Via Montenapoleone 
	 
	Rent price: US$998 
	Change in rental rates: +13.3% 
	&nbsp;</li>
	<li>Japan, Tokyo, Ginza 
	 
	Rent price: US$953 
	Change in rental rates: +6.9% 
	&nbsp;</li>
	<li>South Korea, Seoul, Myeongdong 
	 
	Rent price: US$932 
	Change in rental rates: +17.6% 
	&nbsp;</li>
	<li>Switzerland, Zurich, Bahnhofstrasse 
	 
	Rent price: US$875 
	Change in rental rates: +1.1% 
	&nbsp;</li>
	<li>Russia, Moscow, Stoleshnikov 
	 
	Rental price: US$557&nbsp; 
	Change in rental rates: +20%</li>
</ol>

Source: Cushman and Wakefield.&nbsp;

Picture courtesy of &nbsp;<a href="https://commons.wikimedia.org/w/index.php?title=User:Mw12310&amp;action=edit&amp;redlink=1" title="User:Mw12310 (page does not exist)">Mw12310</a>/&nbsp;<a href="https://www.propertyobserver.com.au/https://creativecommons.org/licenses/by-sa/3.0" target="_blank">CC BY-SA 3.0</a>.

Sydney's Pitt Street Mall ranked among the world's most expensive retail rental locations

<html><body>
Australian superannuation funds will increasingly look to invest in global real estate in 2015 as they are close to Asian cities that are benefiting from major demographic shifts, while there are fewer opportunities in the domestic market, a fund manager has predicted.
The forecast comes as a separate study by Australian researchers, released by the US-based Defined Contribution Real Estate Council (DCREC), shows an allocation of just 10% of a fund’s portfolio to real estate can match or beat the returns of a fund with less property exposure at a lower risk to investors.
TIAA Henderson Real Estate executive director Nick Evans, who heads the fund manager’s Australian business, said sophisticated investors such as superannuation funds were attracted to creating tailored real estate portfolios that suited their particular risk and return profiles.
Australia’s largest super fund, AustralianSuper has partnered with TIAA Henderson Real Estate to invest in emerging global real estate.
“Major investors are approaching global real estate in a very different way to pre-GFC days and we expect to see more Australian funds building a tailored approach that gives them the flexibility, exposure and returns they need,” Evans said.
He added that Australia’s superannuation funds were searching for better investment solutions for their ageing members who wanted secure income at a reasonable level of risk to support a lengthy retirement.
The study, which was released by the DCREC in the US in early November, found that allocating 10% of a portfolio to a mix of listed and unlisted real estate enhanced the risk-return profile of a defined contribution plan portfolio.
Defined contribution plans are investment vehicles where members contribute set amounts over a period of time, such as Australia’s superannuation funds where members contribute 9.25% of their salary each year.
The study, A Path to Better Retirement Outcomes: Allocating Real Estate Assets to Retirement Portfolios was conducted by researchers at Australia’s Griffith University, professor of finance Michael Drew and Adam Walk, also from Griffith University, and Jason West from Bond University.
It found a portfolio that includes property could smooth fund members' transition from accumulating savings to drawing a pension and could help investors avoid mistakes such as selling risky assets during a market downturn, which locked in losses.
The study noted that funds often used listed real estate investment trusts (REITs) for property exposure due to their liquidity, diversity and valuation cycles that mirrored stocks and bonds, but had been slower to adopt unlisted real estate.
Unlisted property could deliver returns that were closer to those of bonds with less risk than stocks, regular income, low volatility and low correlation to listed markets, the study showed. Some types of unlisted real estate could also act as a hedge against inflation.
</body></html>

Australian funds looks to Asian property markets as domestic opportunities run dry

Buoyant home renovation market pushing retail sales growth

<html><body>
Much of the discussion on housing affordability centres on first home buyers’ ability to enter the property market.
First home buyers accounted for only 12% of the total number of owner occupiers taking out mortgages in September, Australian Bureau of Statistics data shows. That’s down from the long-term average of almost 20% indicating new entrants to the property market are either unable or unwilling to make their first purchase.
But new research, <a href="https://www.ahuri.edu.au/publications/projects/p53021?utm_source=2&amp;utm_medium=53021&amp;utm_campaign=home#sthash.UWqrtVLY.dpuf" target="_blank">Housing affordability dynamics in Australia: new insights from the last decade</a>, reveals a more complicated picture of housing affordability that shows the challenges of paying for accommodation are not confined to those who are looking to enter the property market for the first time.
The research by Gavin Wood, Rachel Ong and Melek Cigdem for the Australian Housing and Urban Research Institute (AHURI) at RMIT University and Curtin University will be presented at Parliament House in Canberra on 4 December.
It finds housing affordability has deteriorated in Australia over recent decades for both owner occupiers and for people in the rental market.
Analysing ABS data, the researchers found the proportion of household income that owner-purchasers spent on housing increased to 18% from 12% over the 27 years from 1982 to 2009.
In line with that increase, the proportion of owner purchasers with housing costs in excess of 30% of their income – a level where people are considered to be in mortgage stress – doubled from 10% to 20% of all owner-purchaser households from 1982 to 2009, the report found.
<img src="/images/2014/11/17/zoe-nov-17-one.jpg" alt="">
<address>
Source: Housing affordability dynamics in Australia: new insights from the last decade
</address>
People in the private rental market are also spending more of their income on accommodation than in the past.
In 2009, tenants spent 24% of median gross household income on rent, while just 17% of median income was needed to cover the median rent in 1982. Nearly one in three tenants in the private rental market was spending more than 30% of their income on rent in 2009, up from 22% in 1982.
The research finds many people go through periods of being comfortable in affording their mortgage or rental payments before slipping into a situation where they struggle to meet these financial commitments.
Between a third and half of tenants in the private rental market have been devoting more than 30% of their income to rental payments for a year or more, the research found.
Around 20% of owner-occupiers had experienced one or more periods of housing affordability stress, the study found. This usually lasted only one year and it was rare for owner occupiers to remain in housing stress for more than five years.
Almost 70% of people who suffered housing stress had only one period where they were in financial difficulty, while 30% had two or more periods between 2001 and 2011 when housing ate up more than 30% of their income.
The price of housing and income levels both contribute to whether a person will find housing affordable. It’s not surprising then that affordability has fallen in some cities where properties have made huge capital gains but income levels have risen more modestly.
Debt levels have also risen significantly for people of all ages, but particularly for those aged 25 to 34 years, the research found.
On average, home owners aged 25 to 34 had mortgage debt worth 61% of the value of their property in 2009, compared with 41% in 1990, the report found. Additionally, fewer people in this age bracket owned a home (37.7% in 2009 compared with 55.5% in 1982).
This was also the case for people aged 35–44 years. In 2009, 62.1% of people in that age bracket were buying their home, compared with over 75% in 1982.
<img src="/images/2014/11/17/zoe-nov-17-two.jpg" alt="">
Source: Housing affordability dynamics in Australia: new insights from the last decade(Page 6)
</body></html>

Both owner occupiers and renters suffering from deteriorating housing affordability

<html><body>
The Insurance Council of Australia has warned householders to check their insurance policies before renting out part of their home to holidaymakers.
Website <a href="https://www.airbnb.com.au/" target="_blank">Airbnb </a>has become popular with property owners looking to cash in on short-term holiday rentals.
Airbnb, which was founded in 2008, has reportedly raised around $800 million from investors, including almost $500 million in April from TPG, T Rowe Price and Dragoneer Investment Group. <a href="https://www.propertyobserver.com.au/https://www.cnbc.com/id/102117120" target="_blank">Its value is estimated</a> at between $10 billion and $13 billion.
However, there has been heated debate internationally over the legality of short-term rentals through the site.
New York State Attorney General Eric T. Schneiderman found that 72% of units for rent in New York through Airbnb <a href="https://www.ag.ny.gov/pdfs/Airbnb%20report.pdf" target="_blank">appeared to be breaking local laws</a> which prevent rental terms of less than 30 days in most apartment buildings and require tax to be paid on hotel-style accommodation.
In Australia, short-term holiday letting is covered by fair trading and consumer laws. Local councils and strata agreements may also place restrictions on holiday letting. Subletting by tenants is permitted only if the landlord consents.
Home owners, tenants and holidaymakers also need to check that insurance policies cover online peer-to-peer house sharing services, ICA chief executive Rob Whelan said.
“It is essential that home owners or tenants who consider using online house-sharing services discuss this with their insurer beforehand, and check how this could impact their home and contents insurance, strata or renter’s insurance policies,” Whelan said.
“Anyone thinking about renting a room or part of their home should know that they might not be covered for property damage and other losses that could happen as a result of renting it out to holidaymakers. Importantly, they may not be covered for public liability should a paying guest be injured on the premises.”
Whelan said many insurers regarded online holiday rentals as a business activity so standard home and contents policies may not apply.
Special insurance policies are available for landlords of short-term rental properties and holiday homes. These are typically separate policies from standard landlord insurance cover.
Travel insurance policies often did not cover cancellation, or loss and damage of possessions in the rental properties and guarantees provided by some peer-to-peer accommodation providers did not cover items such as cash, or pets or personal liability in shared areas, Whelan said.
</body></html>

Short-term holiday rentals warned to check insurance policies

<html><body>
Rental property yields are at decade lows in some Australian cities but cheap mortgage rates, weak returns on other investments and the anticipation of capital gains are expected to further increase investor demand for residential property in the coming year.
Yields on three-bedroom rental properties fell in 2013/14 in all capital cities except Adelaide, where they were stable, according to the QBE Australian Housing Outlook 2014.
Rental yields fell below 3% in Sydney and Melbourne as prices increased strongly, while price rises also cause yields to fall in Brisbane to just above 4%, the report found. It noted that house prices rose by 17% in Sydney, 20% in Melbourne and 6% in Brisbane.
The report attributed lower yields in Perth, Darwin, Canberra and Hobart to weaker rents in those cities.
Rental growth in Perth and Darwin slowed to 2.9% and 4.8% respectively in 2013/14 following 7.5% increases in the previous year, the report found.
Accommodation supply in both cities is rising, while migration and mining investment is slowing. That was expected to put further downward pressure on rental growth in 2014-15.
Canberra has also experienced a boom in new rental supply which has pushed vacancies rates above 4%. The report noted that the ACT is estimated to be already experiencing an excess of dwelling stock.
Despite falling yields, investors have been active buyers of residential property and the trend is expected to continue.
The value of finance for residential investment has been between 45% and 50% since March 2014, up from just under 40% of total residential finance in the year to June 2011, the report found.
All states except Tasmania and the ACT reported an increase in lending for residential investment in 2013/14. NSW was the strongest state for investment lending growth, rising by 43% over the previous year to $49 billion.
"Low mortgage interest rates mean the gap between rental yields and interest rates in most capital cities remains narrow in a long term sense... This narrowed gap, together with the emergence of capital growth in many capital cities in 2013/14, is expected to remain attractive to investors and drive further increases in investor demand across most states over 2014/15," the report said.
</body></html>

Rental yields falling but investor demand continues: QBE

<html><body>
Major infrastructure projects planned around the country could lead to a spate of compulsory property acquisitions and affected land owners are being warned to ensure they receive their full entitlements.
In one of the latest examples, Brisbane City Council announced in early October that it would resume 38 properties on Lytton Road as part of the Wynnum Road corridor upgrade.
Slater and Gordon practice leader Vincent Butcher said owners of affected properties on Lytton Road would know about the acquisitions by now and should already be seeking advice.
The acquisitions are scheduled to take place from mid-2016 through to 2017 with construction expected to begin in early 2018, according to Brisbane City Council.
"The acquiring authority is not going to hold their hand," Butcher said. "Land holders must be vigilant in getting the right entitlements. They can vary significantly depending on the acquisition and the timing."
Governments sometimes need to acquire, or resume, land owned by private individuals and businesses to make way for projects such as road and rail expansions, new electricity, gas or oil facilities, or public buildings like hospitals.
When this happens, the first step in the process is that the acquiring authority must serve a notice of intention to resume, which is an official document. That's not necessarily a letter of offer for compensation, Butcher explained.
Compulsory land acquisitions are subject to a legal process where affected owners have statutory and common law rights. They have three years from a specified date to come to a resumption agreement with the acquiring authority.
"It's better to get advice early rather than wait to a later time," Butcher said. "The reason for that is that once that [three year] statutory period expires they are exempt from making claims."
An acquiring authority can make an offer but typically the owner must obtain their own legal and valuation advice and put forward a compensation claim. That includes the market value of the property and also claims for extensive disturbance, which depend on each individual case.
Legal and valuation advice costs form part of the disturbance claim, so it makes sense to get the best advice available, explained Butcher.
One property owner may receive a different compensation figure from their next door neighbour even if the market value of their properties is identical, he said.
Butcher said land resumptions were a niche area that involved both valuation and legal advice, and it was important that land owners approached parties that specialised in the areas and worked well together.
"They need to get the right people to do the right job because you only get one chance," he said.
In one case Butcher worked on in Queensland, which concluded about 18 months ago, the land owner received eight times more than the initial compensation offer.
</body></html>

What to do when you have to give up your property for new infrastructure

Developers and apartment buyers have a narrowing window of opportunity before Brisbane's Olympic infrastructure pipeline begins competing directly with residential construction, pushing up costs, tightening labour supply and making new projects increasingly difficult to deliver.

While Brisbane's apartment market continues to benefit from strong population growth and limited housing supply, industry research suggests the years leading up to 2027 could prove to be the most important period for developers looking to secure builders and buyers hoping to purchase before the next wave of price increases.

A new Colliers report, Brisbane 2032 Olympic and Paralympic Games: Creating Solutions, highlights the scale of the challenge. While thousands of new homes are planned across South East Queensland, the Brisbane Olympic Athletes Village alone will deliver more than 10,500 beds during the Games before being converted into around 1,750 to 2,000 apartments. Equivalent to almost two years of typical inner-city apartment supply, the project will also absorb a significant share of the construction workforce and building materials.

The broader construction pipeline paints an even clearer picture.

Construction Skills Queensland's Horizon 2032 report forecasts Queensland's annual construction pipeline will average $69 billion over the coming years before peaking at $75 billion in 2027-28. Demand for construction workers is expected to increase by 17 per cent to almost 150,000 people, with the industry facing an annual shortfall of around 19,000 workers that could blow out to as many as 35,000 during the peak construction period.

The Olympic venues, athletes village and supporting infrastructure will account for billions of dollars worth of work across South East Queensland through to 2032, creating intense competition for labour at a time when Australia's residential construction sector is already under pressure.

[smartcode_project:default project_id=150489 project_image_fid=373834]

Colliers Queensland Residential Director Andrew Scriven said the convergence of these projects is creating a clear window of opportunity for both developers and buyers.

"From 2027 onwards, the market will shift dramatically," Scriven said.

"Labour will increasingly be locked into government-led infrastructure and Olympic projects, which means private residential developments will face higher costs and tighter margins. The developers who move now are the ones most likely to get projects off the ground."

Scriven said the same dynamic would also affect buyers, with fewer apartment projects expected to launch once construction capacity tightens.

"If you're looking to change your lifestyle over the next five years, now is your window of opportunity to buy."

[smartcode_project:default project_id=150713 project_image_fid=373827]

Developers are already positioning themselves ahead of that window.

Following the success of Monarch at Toowong, Consolidated Properties is preparing to launch two new Brisbane apartment projects in the second half of 2026. They include <a href="https://www.apartments.com.au/new-apartments/gloriette-30-bedivere-street-yeerongpilly-qld-4105">Gloriette</a> at Yeerongpilly Green, a 25-storey tower within one of Brisbane's key Olympic precincts, and <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, a recently approved 25-storey riverfront development at 47 Skyring Terrace in Newstead.

Hutchinson Builders will deliver both projects, with early works already underway at Yeerongpilly and Newstead expected to commence later this year.

The timing comes as Brisbane's fundamentals continue to strengthen, with strong interstate migration, population growth and vacancy rates remaining below 1.5 per cent.

Colliers Queensland researcher Pragya Sharma said Greater Brisbane is forecast to require around 40,000 new apartments between 2021 and 2031.

"There's a real mismatch emerging between when housing is needed and when it will be feasible to build," Sharma said.

"As a result, the period leading up to 2027 presents a key window of opportunity for developers to secure approvals, funding and construction capacity, while buyers will have greater choice before supply constraints intensify."

Colliers research outlines a critical pre-2027 window to start residential projects before labour squeeze: now is the time to buy

Joel Robinson

Developers, buyers on watch in South East Queensland ahead of construction crunch: Colliers

It's taken less than nine months for developer Sherpa Property Group to sell out all 51 apartments in its <a href="https://www.apartments.com.au/new-apartments/flourish-oasis-palm-beach-7-9-sixth-avenue-palm-beach-qld-4221">Flourish Oasis</a> development in <a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a>, over a year before its anticipated completion.

&nbsp;

Located at 7-9 Sixth Avenue, the $67 million development has resonated strongly with both local owner-occupiers and downsizers seeking high-quality apartments within walking distance of the beach, dining precincts and everyday amenities.

[smartcode_project:default project_id=151449 project_image_fid=357458]

Christie Leet, Founder of <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Group</a>, said the sell-out reflected both the strength of the Palm Beach market and the success of Sherpa's community-first approach to development.

"The sell-out of Oasis is a fantastic outcome and reinforces the strong demand we're seeing for thoughtfully designed apartments in lifestyle locations," Leet said.

"From the outset, our vision was to create a development that genuinely enhanced the Palm Beach community while providing residents with exceptional homes and wellness-focused amenities.

"We've been incredibly encouraged by the level of local support throughout the campaign, 72.5 per cent of buyers are locals, with a significant proportion of purchasers choosing Oasis as their future home rather than an investment."

[smartcode_project:default project_id=151449 project_image_fid=357463]

Construction is now progressing following development approval, with trusted builder LPS Group delivering the project and completion anticipated in Q3 2027.

Oasis forms part of Sherpa Group's successful Flourish collection, which has become recognised for its focus on wellness, community and elevated coastal living.

[smartcode_project:default project_id=151449 project_image_fid=357469]

Residents will have private access to a rooftop amenity space featuring a pool, gym, sauna, steam room, hot and cold plunge pools, spa and barbecue facilities.

"The success of Oasis demonstrates that buyers continue to prioritise quality, location and lifestyle," Leet said.

"We are proud to have delivered a project that has resonated so strongly with the market and look forward to bringing Oasis to life for our future residents."

Sherpa recently launched <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a>, its third instalment of the Flourish brand in Palm Beach following Flourish Oasis and <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>.

[smartcode_project_cta:default project_id=151449]

Sherpa sells out Flourish Oasis in booming Palm Beach

Urban Property Group's <a href="https://www.apartments.com.au/new-apartments/la-vera-macquarie-park-94-talavera-road-macquarie-park-nsw-2113">La Vera</a> is leading the next phase of Macquarie Park's residential evolution, with the new apartment development set to become the first of several new apartment projects in the precinct to complete.

The 169-apartment building has now topped out ahead of its scheduled completion in the third quarter of 2026, as new residential investment continues to reshape one of Sydney's largest employment hubs into a true mixed-use precinct.

[smartcode_project:default project_id=134951 project_image_fid=368645]

Cox Architecture has designed La Vera to capture the best of its unique positioning on Talavera Road, orienting the building towards Lane Cove National Park.&nbsp;The building features a sculpted northern façade with flowing curves inspired by the surrounding landscape, while its city-facing elevation adopts a more structured architectural expression to maximise skyline views.

"The vision for the project was to conceive a building that adopted an organic and curvilinear form to the northern portion that faces the Lane Cove National Park," <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a> Director Felipe Miranda said.

"The residents that reside in the northern portion of the building benefit by having beautifully crafted curved balconies that speak to the natural context and heighten the relationship of their internal living spaces to the external balconies."

[smartcode_project:default project_id=134951 project_image_fid=358802]

La Vera offers a diverse mix of one, two, three, and four-bedroom configurations, with prices currently starting from $740,000. Buyers so far have been a mix of Sydney-based investors,&nbsp;metro commuters, owner-occupiers and downsizers from surrounding North Shore suburbs.

Both investors and owner-occupiers have been drawn to La Vera's proximity to Macquarie University, Macquarie University Hospital, Macquarie Centre and the Sydney Metro, infrastructure that supports both strong rental demand and a convenient lifestyle for residents.

The apartments feature full-height glazing, timber flooring throughout living areas, stone kitchen benchtops, SMEG appliances, floor-to-ceiling bathroom tiling and ducted air conditioning.

Residents will have access to a rooftop recreation level featuring a swimming pool, sauna, barbecue facilities and landscaped relaxation areas, complemented by additional communal space at ground level. Many apartments enjoy uninterrupted views across Lane Cove National Park, reinforcing the project's connection to its natural setting.

[smartcode_project:default project_id=134951 project_image_fid=364551]

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a>, a family-owned developer and builder with nearly four decades of experience, holds a 4.5-star iCIRT rating and was Australia's first developer to introduce 10-Year Latent Defects Insurance (LDI). La Vera is the first apartment development in <a href="https://www.apartments.com.au/developments/macquarie-park-nsw-2113">Macquarie Park</a> approved to offer the additional insurance protection, alongside a five-year warranty on SMEG appliances.

Urban Property Group CEO Patrick Elias said the additional protection reflects changing buyer expectations in the off the plan market.

"Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been. Having LDI is a tool to portray the confidence that we have in our product, and a confidence we want buyers to share," Elias said.

Following completion of the building later this year, buyers will move into their apartments well before Christmas.

[smartcode_project_cta:default project_id=134951]

La Vera closes in on completion as Macquarie Park continues residential transformation

Brisbane developer Red &amp; Co's decision to include dual key apartments in its debut Gold Coast apartment development, <a href="https://www.apartments.com.au/new-apartments/como-varsity-lakes-22-lake-street-varsity-lakes-qld-4227">COMO Varsity Lakes</a>, is proving to be one of the project's biggest drawcards, with buyers quickly snapping up the flexible residences.

More than half of the project's 36 dual key apartments have already sold, helping drive COMO beyond the 50 per cent sold mark within the first month of launch.

The strong response highlights growing demand for apartment designs that can adapt to changing lifestyles, with buyers increasingly looking for homes that accommodate multi-generational living, provide rental income opportunities or simply offer greater flexibility over time.

Located on the shores of Lake Orr, COMO will deliver 156 apartments across 16 levels, with the dual-key residences forming a limited release within the broader development.

Each combines a primary two-bedroom apartment with a fully self-contained studio on a single title, connected by a shared foyer and lockable internal door. The design allows owners to house ageing parents, adult children or guests while maintaining privacy, or lease the secondary residence to generate additional income.

Just 17 of the original 36 dual key apartments remain available.

[smartcode_project:default project_id=135546 project_image_fid=367096]

The innovative configuration combines two fully self-contained residences on a single title, typically comprising a primary two-bedroom apartment alongside a separate studio residence, connected via a shared foyer and lockable internal door.&nbsp;

The model is proving particularly attractive to owner occupiers navigating changing family dynamics and the realities of the current housing crisis.&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363511]

<a href="https://www.apartments.com.au/project-marketer/npa">NPA</a>&nbsp;CEO Andrew Erwin said dual key living was resonating strongly with modern buyers because it delivered both financial flexibility and practical lifestyle benefits.&nbsp;

“The housing crisis and rising cost of living are fundamentally changing how Australians think about home ownership,” Erwin said.&nbsp;

“Dual key apartments provide a genuine solution for families who want to stay connected while maintaining independence. Parents can help adult children save for a future home, ageing parents can remain nearby without moving into aged care, and owners still retain privacy and flexibility.

“Importantly, buyers are also recognising the financial advantages. It creates the opportunity to generate additional income from part of the home without the holding costs associated with owning a separate investment property.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363509]

Unlike traditional dual occupancy arrangements, the residences operate under a single title, meaning owners only incur one set of body corporate fees, council rates and holding costs.&nbsp;

The secondary residence can also evolve over time - functioning as guest accommodation, a home office, creative studio or private retreat before later becoming an income-producing asset.

<a href="https://www.apartments.com.au/developers/red-co">Red &amp; Co</a>&nbsp;Director and Co-Founder David Laverty said the strong early sales reflected growing buyer urgency and changing priorities within the market.&nbsp;

“Securing more than half of COMO’s residences within such a short timeframe is an outstanding result and a clear endorsement of both the design and location,” Laverty said.&nbsp;

“Buyers are responding to the combination of location, connectivity and amenity, but ultimately it’s value relative to other East Coast markets that is driving enquiry.”&nbsp;

“We’re also seeing strong interest from owner occupiers looking for homes that can adapt with them over time. Flexibility has become one of the most important considerations for buyers in today’s market.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363515]

Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, COMO features a mix of one-, two- and three-bedroom residences with 2.7-metre ceilings and larger-format floorplans aimed at owner occupiers, downsizers and lifestyle-focused buyers.&nbsp;

The development will feature an extensive rooftop recreation and wellness offering including a 25-metre lap pool, sundeck, barbecue and dining areas, gym, sauna, plunge baths, landscaped gardens, wellness spaces and rooftop pickleball and paddleball courts.

The remaining dual key apartments range from 137 sqm to 167 sqm and include generous three-bedroom layouts with separate self-contained studio accommodation and dual parking.&nbsp;

Erwin said the dual key concept represented a broader shift in how Australians would live in the future.

“People want homes that can evolve with their lives,” he said.&nbsp;

“A dual key apartment can suit a family today, support an ageing parent tomorrow, and potentially generate income later on. That adaptability is becoming incredibly valuable in the current environment.”

Prices currently range from $2,115,750 to $2,583,000.&nbsp;

[smartcode_project_cta:default project_id=135546]

Inter-generational living drives demand for COMO’s dual key apartments as housing pressures reshape buyer priorities 

Builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/ceerose">Ceerose</a> has doubled down on its Leichhardt ambitions, lodging its second State Significant Development Application (SSDA) in the suburb in the last six months.

Their newest proposal seeks to transform a former industrial precinct into a new residential community centred around the adaptive reuse of one of the site's heritage warehouse buildings.

The new project, on a 6,930 sqm block at&nbsp;<a href="https://www.apartments.com.au/new-apartments/40-76-william-street-leichhardt-nsw-2040">40–76 William Street</a>, will bring more than 200 apartments to a suburb that has seen little to no new supply in recent years. It follows Ceerose's late 2025 SSDA for a mixed-use apartment project on nearby Parramatta Road, signalling the developer's growing investment in Sydney's Inner West.

Ceerose Founder Edward Doueihi told Apartments.com.au the developer’s long-standing presence in Leichhardt and the Inner West had given it a strong understanding of how the area has evolved and where its future opportunities lie.

“Ceerose has had a long-standing presence in Leichhardt and the Inner West, giving us a unique understanding of the area’s evolution and future potential,” Doueihi said.

“Having delivered projects throughout the region, we have witnessed the suburb’s transformation first-hand and understand the opportunities for its continued growth.”

Doueihi said that understanding also informed the planning process, with a comprehensive Stakeholder Engagement Outcomes Report prepared before the application was lodged.

The report identified the key issues and concerns raised by neighbouring residents and other stakeholders, allowing those matters to be considered and incorporated into the design where appropriate.

He said the delivery of additional housing would also play an important role in supporting the revitalisation of Norton Street and the Italian Forum.

“By increasing the local residential population, the development is expected to strengthen demand for local businesses, encourage further investment, and help restore the vibrancy that made the precinct a thriving destination in the early 2000s.”

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="7258c54c-8167-479e-8361-2d5fca9915b4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010B%20-%20CGI%20-%20View%202.jpg?VersionId=S9DQfxu_jpcB5LrAEYFUbyMzg5odW6i5" />

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, the redevelopment would involve the demolition of four existing industrial buildings while retaining and adaptively reusing the site's most significant warehouse. The retained structure would anchor a new residential precinct comprising five interconnected buildings arranged around a large central landscaped courtyard, with heights stepping from five storeys along the surrounding residential streets to 11 storeys at the William Street corner.

According to the Architecture Design Report by Woods Bagot, the proposal "seeks to create a residential village centred around a generous green heart while celebrating the site's industrial heritage through the adaptive reuse of the existing warehouse building."

The development would comprise 203 apartments, with 188 proposed as build-to-sell residences, alongside 15 affordable housing apartments.

Rather than treating the retained warehouse as a standalone heritage object, Woods Bagot has sought to weave the site's industrial history throughout the masterplan. The proposal retains the north and west facades of the landmark corner warehouse, while new buildings reinterpret the site's brick-and-steel industrial language through their material palette and architectural expression.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="9e8c64c2-881b-49e1-8c90-6b6acaaa45b6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010C%20-%20CGI%20-%20View%203.jpg?VersionId=Qm8_8H_Xrg_sc4Mdjc59vlAcKF_5wRTb" />

The design is organised around what Woods Bagot describes as a "green heart", a landscaped communal open space that reinstates the leafy character removed when the site became an industrial storage facility. A new pedestrian laneway running through the site would improve permeability between William, North and Francis streets, linking residents through landscaped public spaces while activating the ground plane.

Residents would have access to communal gardens and shared recreation areas distributed throughout the development. Sustainability has also been prioritised, with the project targeting an average 7.9-star NatHERS rating. Proposed initiatives include rooftop solar generation, rainwater harvesting, passive solar design, naturally ventilated lobbies, extensive cross-ventilation and the reuse of existing building fabric to reduce embodied carbon.

The adaptive reuse strategy became a defining feature of the application after heritage investigations found only one of the site's industrial buildings could feasibly be retained. The Heritage Impact Statement concludes that preserving the key warehouse façades while referencing the site's industrial character throughout the new development provides an appropriate balance between renewal and conservation.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="efffafdb-594f-4e2b-a067-921fd51c05e1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010D%20-%20CGI%20-%20View%204.jpg?VersionId=DPmE4.k16YRt0i27hEZVtJAffarpvUfx" />

"Retention and adaptation of the site buildings has been explored but found not to be feasible except for the tallest building, whose street facades will be retained," the heritage report states.

"The proposed building will interpret the brick and steel character of the subject site, including reuse of some components and construction of a large 'sawtooth' structure in the proposed open space."

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="3bfef2b5-83f5-40cd-9cab-767092f34266" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010E%20-%20CGI%20-%20View%205.jpg?VersionId=7asb3i_ql4ybbuJOUb5UHBEIy0Q9t.DF" />

The William Street site is located around 300 metres from Leichhardt North Light Rail station and a short walk to Norton Street's retail, dining and hospitality precinct. The surrounding area has increasingly become a focus for urban renewal given its proximity to public transport and the Parramatta Road corridor.

Doueihi founded Ceerose in 1998 and has grown the business to become one of Sydney's more active apartment developers in recent years, with completed projects including The Alex Collective in Alexandria, Abbie's Lane in Annandale, and the award-winning Munro House in Elizabeth Bay. They are currently delivering Belgravia, 17 luxury apartments in Potts Point.

Zoe Fielding

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News