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Australia can expect a shortage of residential property for the next two decades as developers face barriers to lifting supply, according to AV Jennings managing director Peter Summers.
Population growth and increasing demand for housing, coupled with years of under-building have lead to shortages of new residential property, but government land release policies made it difficult for developers to catch up and meet demand increases, Summers said.
“It’s something that I think Australia will be struggling with for 10 or 20 years,” he said in a teleconference discussing the company’s full year result last week.
Low interest rates, low inflation and improving sentiment were adding to demand from consumers.
“In residential, consumer confidence is as high as it has been for many years. There’s a willingness to transact and engagement is as high as we’ve seen,” Summers said. 
He was not concerned about the prospect of interest rates rises, which are forecast by many economists for next year.
“The main driver in this market has been consumer confidence and that’s about job security,” he said.
Consumer anxiety was down even though unemployment had risen, he said.
Forward indicators such as investor and first home buyer demand had also improved. First home buyers accounted for 13.2% of new housing loans in June, up from 12.6% in May, Australian Bureau of Statistics figures show.
Housing affordability was still a concern for many buyers but this was moderated by limited price growth on the urban fringes of capital cities and government incentives, Summers said.
AV Jennings plans to focus on affordable housing by maximising land utilisation at its project sites.
The group, which concentrates on building low-rise homes and town houses, plans to move more into medium rise apartments, although Summers said it was not likely to start building highrise apartments.
AV Jennings announced a profit before tax of $27 million for the 2014 financial year, up from a $23.3 million loss the year before.
It had 1,415 contracts signed over the year to June 30, 2014, up from 819 at the same time in 2013. There were 1,254 settlements in the 2014 financial year, compared with 829 the year before.
The company forecast there would be between 1,500 to 1,700 lot settlements in the 2015 financial year as the number of sites under development had risen dramatically.
Work in progress at 30 June, 2014 was 77% higher than in 2013 and 298% higher than the level two years ago, the company reported.
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Residential shortage to last at least two decades: Developer

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Consumers believe property prices will rise and say now is a good time to buy, despite expectations of higher interest rates, a sentiment survey has revealed.
The August reading of the Westpac-Melbourne Institute House Price Expectations Index was up 7.6% compared with the month before and 20.6% higher since the federal budget in May, indicating Australians have become more confident of house price gains.
The index tracking whether now was a good time to buy property also jumped by 9.7% in the month to be 12.1% above the reading following the budget.
The results mirror a general rise in consumer confidence revealed in the survey, although Westpac's Chief Economist, Bill Evans noted sentiment generally is still 10.8% below its recent peak following the federal election.
The improvement in confidence levels comes despite an expectation of mortgage interest rate rises.
“The August survey found 63% of consumers expect mortgage rates to be higher in 12 months time, with 28% predicting no change and just 9% expecting rates to decline,” Evans said.
Interest rate experts surveyed by finder.com.au ahead of the Reserve Bank of Australia’s last decision to keep interest rates level unanimously agreed the next cash rate move would be up.
Experts from Commonwealth Bank and Urbis predicted the cash rate would rise by the end of this year, while the others forecast rises in 2015.
Seven of the economists surveyed expected a rate rise in the first half of next year, six thought rates would rise in the second half and three did not give more specific predictions.
Financial markets are still expecting rates to be stable in the short term, although they are pricing in a small chance of rate cuts. The Australian Securities Exchange’s RBA Rate Indicator was suggesting the market believes there is a 96% chance interest rates will remain on hold at the next RBA decision in September, and a 4% chance of an interest rate cut to 2.25%.
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Consumers believe prices will rise and now a good time to buy

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The website of the newest competitor to online property listing giants realestate.com.au and domain.com.au started operating last week.
Applabs Australia’s <a href="https://www.homeopen.com/" target="_blank">Home Open</a> website was launched last Monday, completing the company’s set of real estate search portals.
The iPhone application version of the real estate search site was launched at the end of May. The iPad version was made available at the end of June and Android version launched in late July.
Real estate agents are also able to 'white label' the site, applying their own branding to system.
“Over the coming months, work will continue on the agent signup process with a particular focus on Western Australia where the greatest adoption has occurred to date,” Applabs managing director Stuart Kidd said in a statement to the Australian Securities Exchange.
“Having a particular focus on an individual state initially will also allow for greater assessment of the effectiveness of any initiatives before they are rolled out Australia wide.”
REA Group’s Realestate.com.au and Fairfax Media's Domain.com.au portals dominate the online property search market nationally, particularly in Sydney and Melbourne.
Fairfax Media’s purchase of the Canberra-based All Homes property portal in July, adds to its share of the eastern market.
Fairfax reported last week that Domain’s online revenue grew by 33% compared with the previous the year.
Revenue in from REA Group’s Australian residential business also grew by 33% in the year ending June 30, 2014, the company reported this month.
Applabs Technologies will now concentrate on the agent registration process for the site and an upcoming consumer launch. Upgrades of the iPhone and iPad versions will be released in the coming weeks.
Patrick Glovac, who <a href="/expert-insights/buying/q-a-will-new-site-home-open-challenge-domain-and-rea">spoke to Property Observer in March about the new venture</a>, was appointed managing director of Applabs Technologies last Thursday to provide additional management resources to the company. Glovac had previously been a non-executive director of the company.
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New property listings website set to challenge industry giants

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Foreign investors have a role to play in the Australian property market, buying inner city apartments that are needed to accommodate growing populations but shunned by local buyers for their poor investment performance, according to Bill Nikolouzakis, director of real estate advisory firm Nyko Property.
Nikolouzakis said that cultural factors attracted foreign investors to buy inner city apartments as that type of property was viewed as the most desirable investment in Asian cities, such as Jakarta.
“What we have noticed is that most foreign investors want to buy in the CBDs of major cities like Melbourne and Sydney and that’s not that popular with local investors,” Nikolouzakis said.
As populations expand there will be a greater need for residential accommodation in the cities.
Melbourne’s population of 4.35 million at June 2013 is forecast to swell to 7.9 million by 2053, according to Australian Bureau of Statistics projections.
The population has been expanding most rapidly in the inner city areas of Melbourne, which increased by 23%, as well as <a href="/news">Docklands</a> and <a href="/news">Southbank</a>, with 15% population increases, ABS figures show. The population of <a href="/news">Abbotsford </a>in the city’s inner north grew by 20%.
Local investors tend to steer away from inner city apartments, Nikolouzakis said.
“[Inner city apartments] have not been proven to perform. They don’t have the same growth as inner ring suburbs in Melbourne,” he said.
An oversupply of new apartments in Melbourne’s city areas is likely to put pressure on capital values in the short to medium term, Nikolouzakis adds.
“There’s not a lot of money to be made in inner city apartments in the short term. For a 50 year investment strategy that’s a good option but medium term – 10 years – I don’t think they’re going to perform,” he said.
But Nikolouzakis said it’s difficult to convince foreign buyers that properties outside of the main CBDs are good investments. Laws prohibit foreign owners from buying existing properties, which tend to be more popular with local investors.
Nyko Property focuses its research on new Melbourne investment properties, predominantly townhouses and small apartment complexes in suburban Melbourne.
Almost three quarters of its sales in the 2014 financial year were <a href="/guides/financial-services-industry-increasingly-selling-property-smsfs-playing-a-key-role-nyko-property">made are through Australian financial intermediaries such as accountants, financial advisers and mortgage brokers</a>. Its remaining sales were to foreign investors via local and international agents.
The company licensed its business name in Indonesia in March and has given a local agent the right to distribute its properties in Indonesia. It has plans to open offices in Jakarta and Surabaya.
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Foreign buyers are needed to purchase inner city apartments locals think are bad investments: Nyko Property

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Folkestone has entered joint ventures with ID_Land to develop two new residential communities in Melbourne’s suburbs.
The listed real estate funds manager and developer acquired a call option over eight hectares of land in south-east Melbourne in a 50-50 joint venture with ID_Land, a developer that specialises in land subdivision and medium density projects.
The purchase was made on deferred terms and development planning will start immediately.
The land is diagonally opposite the 236 lot Potters Grove residential sub-division at Officer in Melbourne’s south-east growth corridor. Folkestone is developing Potters Grove in a 50-50 joint venture with ID_Land. Around 69% of that estate has settled or is under contract.
The new subdivision at <a href="/news">Officer</a> is expected to have an end value of around $30 million.
Folkestone also announced last week that a newly established Folkestone fund will work in partnership with ID_Land on a project in Melbourne’s western growth corridor.
The Folkestone Truganina Development Fund acquired an 80% interest in a 52.5 hectare residential master planned community in Truganina, 20 kilometres west of Melbourne’s CBD for $18.25 million.
ID_Land holds the remaining 20% of the land and will manage the project’s delivery.
The development will include 680 residential lots and a 3.1 hectare town centre.
A masterplan for the site, which sets out the layout of roads, housing, employment, infrastructure and amenities, is awaiting approval by the Metropolitan Planning Authority and the Victorian Minister for Planning.
The fund will seek investors after the masterplan’s approval. Folkestone will retain 20% of the fund.
This is the company’s third development fund and its first residential land subdivision development fund. 
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Folkestone joins forces with developer for two residential communities in Melbourne's south-east

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Multi-storey residential towers will be built in many parts of Sydney as numerous areas are being rezoned to allow for higher density development.
But development proposals are likely to face community opposition as residents resist changes they expect to increase traffic congestion and restrict access to amenities such as schools.
Three new areas along the future North West Rail Link in Sydney’s Hills district were announced by NSW Minister for Planning Pru Goward in August as Urban Activation Precincts.
These precincts will be rezoned to help NSW state government deliver on its policy to “substantially increase the supply of housing and employment, and improve housing choice and affordability”.
One of NSW government’s aims is to boost the supply of housing in areas with good access to infrastructure, particularly transport, to accommodate Sydney’s expanding population.
Forecasts suggest the city’s population will swell by more than 1.6 million people by 2031, requiring around 664,000 more homes, according to NSW government. As part of that anticipated expansion, the population in Sydney’s Hills district is predicted to swell by 100,000 people.
The Urban Activation Precincts around train stations being built along the $8.3 billion rail link at Bella Vista, Kellyville and Showground are expected to provide up to 12,000 homes, including townhouses, detached homes and apartments.
The Minister for Planning has allocated $15 million to the three areas for local infrastructure. Local communities will decide how the funds are allocated.
The announcement received mixed responses from Hills residents who <a href="https://www.facebook.com/TheHillsShireCouncil" target="_blank">took to Facebook</a> to air their views. Some support the changes while others complained of over-development and worsening traffic problems.
Hills Shire Mayor Dr Michelle Byrne said Council had debated where the forecast population growth could be accommodated.
“We need increased densities around town centres and transport hubs so that the rest of Shire can be preserved as single-lot housing,” he said in a statement.
More broadly along the North West Rail Link corridor, <a href="https://www.planning.nsw.gov.au/en-au/planningyourregion/northwestraillinkcorridorstrategy.aspx" target="_blank">28,800 new homes are expected to go up by 2036</a>.
The three locations in the Hills add to eight areas already identified as Urban Activation Precincts elsewhere in Sydney at North Ryde Station; Epping Town Centre; Herring Road, Macquarie Park; Randwick; Anzac Parade South; Carter Street, Lidcombe; Wentworth Point; and Mascot Station. Higher density development will be encouraged in each of these locations.
The Urban Taskforce is calling for even higher density than what has been suggested in the Hills’ Urban Activation Precincts.
“The proposed 12,000 new homes around three stations is a good start but more housing needs to be planned for,” Urban Taskforce chief executive Chris Johnson says.
The three new areas will need to incorporate residential towers in the mixed-use and high-density residential areas, he says.
“Taller buildings can help with affordability particularly if apartment sizes are kept to state government standards,” Johnson says. “The Urban Taskforce is concerned that the Draft Development Control Plan by the Hills Shire Council proposes apartment sizes well in excess of the state’s sizes and that this will make each apartment more expensive.”
Strong growth in capital values in the Sydney metropolitan area have contributed to a high volume of apartments being planned for development or under construction, according to Knight Frank Residential Research’s Sydney Apartment Market Update, released last week.
The market update reveals Sydney property values have been increasing by 12.15% annually to a median of $549,000, says Knight Frank Residential Research associate director Michelle Ciesielski. Rents have remained stable at $520 per week, with rental yields estimated at 4.95%.
Ciesielski says there are 26,680 apartments in metropolitan Sydney due for completion over the next three years. Almost 10,000 of these will be in the city’s North West including Parramatta, Macquarie Park, Sydney Olympic Park, Wentworth Park and Epping.
But extra development often meets with opposition, particularly in areas that have traditionally had few or no high-rise apartment buildings.
In Lewisham in Sydney’s inner west, for example, developers have faced battles since 2005 with local residents who are against proposals to build multi-storey residential towers at a site on Old Canterbury road near the Lewisham railway station and light rail corridor.
Several development applications have been knocked back and local residents formed action groups to block the development.
The site was sold to Meriton in 2012 for around $50 million and approvals have been now given for work to begin on the site. Meriton’s latest proposals include seven multi-storey buildings between four and 10 storeys tall containing 314 dwellings over two levels of basement car parking plus 128 square metres of retail space. These plans are going through Marrickville Council’s development application processes.
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Numerous Sydney areas rezoned to allow for higher density developments

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The Reserve Bank of Australia publishes a number of different indicator lending rates each month.
These include indicator rates for home loans issued by banks and mortgage managers, as well as personal loans and loans to large and small businesses.
Indicator rates for home lending are published for standard variable loans from banks and mortgage managers; discount variable loans from banks; basic variable rate loans from mortgage managers and three-year fixed interest rate loans from banks.
As the chart below shows, of the variable interest rates offered by lending institutions standard variable loans offered by banks generally have the highest indicator lending rate. Mortgage managers’ standard variable rate loans are next highest, followed by banks’ discount variable rate loans, with mortgage managers’ basic variable rate loans having the lowest interest rates.
Chart 1: Indicator lending rates over the decade 2004-2014
<img src="/images/2014/08/01/rba-chart-aug-1.gif" alt=""> 
Source: Property Observer using RBA data
Canstar research manager Mitchell Watson says lenders use the standard variable indicator rate as a reference rate when issuing discounts on mortgages to customers.
Few people pay the standard variable indicator rate. Most consumers will pay around 0.7 percentage points less than that rate, either through a packaged loan which offers a discount rate, or through a basic home loan, Watson says.
Consumers interested in home lending rates should look at the RBA’s indicator rates for bank discount variable loans, mortgage managers’ basic variable loans and bank three year fixed rate loans when comparing products.
“What they provide is an indication of the type of interest rates that you should be looking for,” Watson says. “That should be a benchmark if you are researching or looking to take out a home loan.”
Lenders offer two main types of variable-rate mortgage products: basic loans and packaged loans.
“A basic home loan is a product that doesn’t have all the bells and whistles. It may not have an offset account and if you want to access certain features it might cost to do that,” Watson says.
“A discount [variable rate mortgage] will have an offset account and all the bells and whistles but also attract a higher annual fee.”
The rates the RBA publishes are an average. Watson says there will be lower rates available, so it pays to shop around.
Fully featured discount variable rate loans tend to be slightly more expensive than basic home loans, but that is not always the case. During the financial crisis the indicator rate for home loans from banks briefly fell below the indicator lending rate for mortgage managers’ basic variable loans (see chart below).
Chart 2: Detail from Chart 1
<img src="/images/2014/08/01/rba-chart-aug-1-two.gif" alt="">
 
Source: Property Observer using RBA data (detail from Chart 1)
Watson says that was most likely due to interest rate cuts at the time being passed on more quickly on discount variable rate loans than on mortgage manager basic rate loans.
While movements in the RBA’s cash rate direct mortgage interest rate changes to some extent, lenders often lower or raise the mortgage rates they offer on their products independently of the RBA’s interest rate movements.
In late July, the country’s biggest banks cut rates on five-year fixed mortgages, despite there being no change from the RBA.
The Commonwealth Bank, National Australia Bank and Westpac all cut five-year fixed rate loans to less than 5%. NAB also cut its four-year to 4.99% and its three-year loan to 4.94%.
Smaller lenders followed quickly. Last week, St George cut its rates to 4.99% for four and five year loans under its Advantage package. ME Bank and RAMS also dropped their fixed rates below 5%.
Watson says the banks have been able to offer lower rates to customers as their lending costs – which are determined by factors such as the outlook for the RBA cash rate – have fallen.
Finder.com.au money expert Michelle Hutchison says in the past, when lenders lowered the rates on their fixed loan products, it was a good indication that variable rates would soon be cut too. But now, most interest rate experts believe the next rate movement will be up, according to Finder.com.au’s monthly survey of economists.
The recent mortgage rate cuts are likely to be part of a competitive push by lenders to lock in customers for a longer period of time, Hutchison says.
“The longer the bank can lock you in to a home loan the better it is for the bank,” she says. “Often fixed home loans have limitations and caps on how much you can repay in lump sums. Also, there are break costs if you want to break within the fixed period so if you fix the loan as a borrower you are likely to stay in that loan for at least that fixed period.”
Consumers can more easily change mortgage products than in the past due to the banning of early exit fees on variable rate mortgages in 2011, Hutchison says. That has encouraged banks to take steps, such as offering very low five-year fixed rates, to lock in customers.
Finder.com.au has calculated that with the average variable rate at around 5.5%, the low five-year rates available will offer considerable savings to many borrowers. According to their calculations, variable rates would need to be cut by 25 basis points every six months for the next four and a half years before rising again – a total of 125 percentage points of cuts – for a variable rate mortgage to cost less than the fixed rate loans.
But five-year fixed rate loans will not suit everybody, Watson says.
“The big thing to consider is the term. Understand that big changes in your financial situation might have an impact on what’s the best term for you. If you are looking to upgrade in four years time, a five-year fixed term may not suit you due to break costs,” Watson says.
People who wish to repay a fixed-rate loan in full before the end of the term typically have to pay a fee called a break cost. This can be very high depending on factor such as how much of the term is left to run.
Fixed rate loans also tend to have fewer features than variable rate loans, although Watson says fixed rate mortgages with offset accounts and facilities to allow extra repayments are becoming more common. CUA, Mortgage House and ANZ for example, have fixed rate loans with some of the same features traditionally offered only by a variable rate loan.
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What the RBA's indicator rates can tell you about your home loan

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Investors will be looking to listed property companies’ results and outlook statements for indications of whether the market for residential real estate has deteriorated in light of weakening consumer confidence.
Dalton Nicol Reid portfolio manager Scott Bender said investors were expecting the residential property sector to continue to be reasonably buoyant, but not as strong as in the first quarter of 2014.
“The market is going to be focused on the commentary on the outlook. Contracts on hand will be strong but we’re interested in enquiry and conversion rates and whether they have seen an impact from the softer consumer,” Bender told Property Observer.
“Residential will still be quite strong but there will be a focus on whether [property companies] see softening in those leading indicators following the federal budget.”
Stockland Property Group, which reports to the market on 18 August, will be one to watch given the size of its residential book, said Bender, who manages Dalton Nicol Reid’s property trust portfolio.
Mirvac Group’s results would give an indication of the outlook for medium density residential developments, particularly given the group’s exposure to the NSW market. Bender said NSW property had been selling well for Mirvac and he expected that trend to continue. Mirvac reports on 21 August.
Bender expects further merger and acquisition activity in the coming months as companies are able to access low cost debt and equity and it is becoming more difficult to increase revenue.
“Given there’s cheap equity and cheap debt [merger and acquisition activity] is going to be on the radar but whether companies are going to get something cheap enough to make the numbers work will be the tricky part,” he said.
Land developer Australand is the target of a takeover bid by Singapore-based Frasers Centrepoint. Australand’s directors have recommended shareholders accept Frasers’ off-market takeover bid of $4.48 cash per Australand security. Earlier in the year, Stockland made an unsuccessful play for the group.
Australand reported on 21 July that it had made a $131.5 million net profit after tax for the half year results to 30 June, up 49% on the prior corresponding period.
It reiterated earlier guidance that earnings for the full 2014 year were likely to be up 20-25% on 2013, and earnings per share would grow by 10-15% from 2014 to 2016, assuming the residential market remained strong. However, the company noted that Frasers would review its structure and operations if the takeover proceeded, so guidance may change. 
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Reporting season may hold key residential market indicators for investors

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The SMSF Professionals Association of Australia has released a set of best practice guidelines on advice and lending practices for limited recourse borrowing arrangements (LRBAs) following criticism of the loans in the Financial System Inquiry.
National Australia Bank has agreed to adhere to the guidelines and SPAA is working with other lenders in the sector to try to win their support.
“We believe that by publishing these guidelines, and with NAB signing on and other major lenders in the pipeline (the major banks are estimated to have more than 85% of this market), the government and regulators can have a high degree of confidence that LRBAs are being used appropriately,” said SPAA chief executive Andrea Slattery.
LBRAs are loans that self-managed superannuation fund trustees can use to buy property and other assets through their funds.
The Reserve Bank of Australia warned in its submission to the Financial System Inquiry that increased borrowing through SMSFs warranted close monitoring due to the potential risks it posed to the financial system and individuals’ retirement incomes.
There were $2.72 billion worth of limited recourse borrowing arrangements in place at December 2013, the Australian Taxation Office reported. That was up from $515 million five years earlier.
The FSI interim report observed that if allowed to continue, growth in direct leverage by superannuation funds may create vulnerabilities for the superannuation and financial systems.
Slattery said a “tiny rogue minority” had been spruiking the borrowing facilities to SMSF trustees and that best practice guidelines were needed to ensure lenders and advisers took a responsible approach to the borrowing arrangements.
The lenders’ guidelines are intended to complement individual LRBA credit policy and practices. They require lenders to provide information to trustees about LBRAs and recommend they seek professional advice before entering into the arrangements, although they stop short of forcing trustees to seek advice.
The advice guidelines lists a series of topics advisers should cover in conversations with SMSF trustees about LRBAs, including risks, tax and what can and can’t be done with the property that secures the loan.
Slattery said the guidelines were intended to encourage self-regulation in the SMSF lending sector.
Six tips for staying out of trouble with LBRAs
<ol>
<li>Seek advice from an appropriately qualified and licensed SMSF specialist, accountant or financial adviser as to whether a LRBA is appropriate for you and how it would fit with your investment strategy</li>
<li>Seek legal advice on how to structure the loan and what is involved</li>
<li>Ensure the advisers and/or lawyers you speak to are independent of any property company that is advising you on a sale to minimise the chance of receiving biased advice</li>
<li>Understand your responsibilities in relation to the LRBA as distinct from the responsibilities of the lender and/or any adviser</li>
<li>Understand the rules about what you can and can’t do with a property bought with a LBRA</li>
<li>Understand the implications of the investment for your fund including factors such as tax, risk, diversification and time frames.</li>
</ol>
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Six tips for staying out of trouble with limited recourse borrowing arrangements

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The Housing Industry Association has launched a research division which will provide data and analysis to the property, financial services and government sectors.
The research body, called Australian Construction Insights, was launched at the 2014 HIA Building Better Cities Summit in Sydney last week.
ACI will issue research and in-depth analysis on the building and construction sector. It will also provide short and long-term outlooks on national and state economies, new home building, residential and non-residential construction and the renovations market, HIA national president Ron Dwyer said in launching the research body.
HIA chief economist Harley Dale has become ACI’s chief economist. Other members of the team include senior economist Shane Garrett, and economists Georgan Murray and Diwa Hopkins.
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Housing Industry Association launch research division

<a href="https://www.apartments.com.au/developers/consolidated-properties">Consolidated Properties Group</a> (CPG) is approaching the launch of its latest Brisbane riverfront development, Castile, on the dress circle Skyring Terrace in Newstead.

VIP buyers are now being engaged, with a full public sales launch coming later this year.

Positioned as the final opportunity to secure a new absolute riverfront residence on the East bank of Newstead, Teneriffe or New Farm, Castile at 47 Skyring Terrace has been designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> as a timeless addition to the Brisbane skyline.&nbsp;

[smartcode_project:default project_id=150489 project_image_fid=371113]

The name Castile draws on themes of permanence, sophistication and legacy, reflecting a broader vision centred on enduring architecture and timelessness in the rarest of riverfront positions.&nbsp;

CPG Chairman and CEO Don O’Rorke said the project had been envisioned as a future Brisbane icon.&nbsp;

“With 47 metres of direct river frontage and never to be built out views, 47 Skyring Terrace is the definitive address on the Brisbane River,” O’Rorke said.&nbsp;

[smartcode_project:default project_id=150489 project_image_fid=371114]

“Rather than following trend-based apartment design, Castile draws inspiration from Brisbane’s great heritage buildings, reinterpreting classical architecture into a contemporary riverfront landmark designed to stand proudly for the next 100 years,” he said.&nbsp;

The approved development will comprise 227 apartments across a 25-storey tower alongside a boutique six-storey riverfront building of just 12 residences.&nbsp;

Construction is scheduled to commence in September 2026.

[smartcode_project_cta:default project_id=150489]

Joel Robinson

CPG unveils Castile Newstead ahead of upcoming sales launch

Australia’s online shopping habits have shifted dramatically over the last decade. As eCommerce volumes surged, so too did the frustrations that came with traditional parcel delivery: missed deliveries, long Post Office queues, parcel theft and the challenge of being home during business hours.

Australia Post’s Parcel Lockers emerged as one of the more practical responses to that changing consumer behaviour.

What started as a relatively niche delivery option has evolved into a nationwide network of more than 1,400 self-service Parcel Lockers positioned at train stations, shopping centres, supermarkets and Post Offices across the country. The system allows Australians to send, collect and return parcels 24 hours a day, fundamentally changing how many people interact with deliveries.

The appeal is relatively straightforward: flexibility.

Instead of waiting at home for a delivery driver or rushing to a Post Office before closing time, users can direct eligible parcels to a Parcel Locker location of their choice. Once the parcel arrives, Australia Post sends a notification with a collection code or QR access through the AusPost app, allowing customers to retrieve their package at any time within the collection window.

For apartment residents in particular, the system has become increasingly valuable.

Higher-density living has created logistical challenges around deliveries, especially in buildings without concierge services or secure parcel rooms. Missed deliveries are common, while parcel theft has become an increasing concern as online shopping volumes continue to rise.

Australia Post itself has repeatedly highlighted the growing issue of “porch pirates” during peak shopping periods, encouraging customers to use Parcel Lockers as a safer alternative to unattended home deliveries.

That security aspect is one of the key reasons the Australia Post Parcel Locker network has grown so rapidly.

Parcel Lockers are positioned as secure, monitored collection points that reduce the risk of theft while also improving delivery efficiency for Australia Post. Instead of multiple redelivery attempts, parcels can be consolidated into a single secure destination.

The Parcel Lockers themselves are free to use through a MyPost account and support a range of parcel sizes up to 16 kilograms and dimensions of approximately 35 x 44 x 61 centimetres.

Beyond receiving parcels, the system has increasingly become integrated into the broader eCommerce ecosystem.

Customers can now use Parcel Lockers to return online purchases, while retailers have embraced the model as a way to improve delivery success rates and reduce friction in the shopping process. Australia Post has actively expanded partnerships with major retailers and promoted Parcel Lockers as part of a broader out-of-home strategy.

The timing of that expansion aligns with broader changes in Australian shopping behaviour.

The acceleration of online retail during and after the pandemic placed enormous pressure on delivery infrastructure. Parcel volumes reached record highs, particularly during Black Friday and Christmas periods, with Australia Post delivering more than 100 million parcels during peak festive seasons.

That growth forced logistics providers to rethink the “last mile” of delivery, widely regarded as the most expensive and operationally difficult stage of the process.

Parcel Locker systems have increasingly been viewed as part of the long-term solution.

The concept itself is not unique to Australia. Parcel Locker networks have become common globally, particularly across Europe and Asia, where dense urban environments and apartment living create similar logistical challenges. But Australia’s geography and suburban sprawl made adoption slower initially.

Now, however, the convenience factor is driving mainstream usage.

For commuters, Parcel Lockers near train stations allow parcels to be collected on the way home from work. For apartment dwellers, they remove the uncertainty around access and missed deliveries.

The rise of the AusPost app has also streamlined the experience, centralising notifications, tracking and Parcel Locker access into a single platform. Australia Post has increasingly pushed customers toward app-based delivery management, partly as a way to combat phishing scams and fake delivery notifications, which have become more sophisticated in recent years.

The Parcel Locker model is also beginning to influence property development itself.

Parcel management has become a growing consideration in apartment building design, particularly as online shopping becomes embedded in everyday life. Many new residential developments are now incorporating dedicated parcel rooms or Parcel Locker systems into foyers and communal spaces.

For developers, parcel management is increasingly viewed as part of the broader resident amenity offering, alongside gyms, wellness spaces and communal work areas.

That reflects a wider evolution in how residential buildings are designed.

Apartment buyers are placing greater emphasis on convenience, security and operational functionality, particularly in higher-density urban environments. Parcel delivery, once considered a minor operational detail, has become an increasingly important part of that equation.

Australia Post’s Parcel Locker network sits at the centre of that behavioural shift.

What began as a simple alternative delivery option has evolved into a key piece of infrastructure supporting Australia’s growing eCommerce economy and changing urban lifestyles.

And as online shopping continues to expand, the role of Parcel Lockers is likely to become even more embedded in how Australians live, shop and receive goods.

How Australia Post Parcel Lockers changed parcel delivery convenience in Australia

Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Zoe Fielding

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