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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

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>.

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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;

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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

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