<a href="https://www.apartments.com.au/developers/mayd-group">MAYD Group</a> has set a new residential price record in Queensland with the $30 million sale of the penthouse at its <a href="https://www.apartments.com.au/new-apartments/one-burleigh-88-the-esplanade-burleigh-heads-qld-4220">ONE Burleigh</a> development in Burleigh Heads.

The sale equates to around $37,500 per sqm.

The two-level, 800 sqm penthouse, featuring five bedrooms, five bathrooms, five car spaces, and a private infinity pool overlooking the Pacific Ocean, was acquired by a Gold Coast-based entrepreneur, highlighting continued demand for ultra-premium beachfront product.

Selling agent Freddie Tehle of PRD Burleigh Heads said the result reflects tightening supply of high-quality, large-format apartments in Burleigh.

“There’s very limited opportunity to secure this level of scale and absolute beachfront position in <a href="https://www.apartments.com.au/developments/burleigh-heads-qld-4220">Burleigh Heads</a>,” Tehle said.

“Buyers are increasingly seeking apartments that genuinely replace a standalone home, and this penthouse delivers that with its size, privacy, and direct ocean frontage.”

[smartcode_project:default project_id=146358 project_image_fid=323057]

The sale comes as construction progresses on ONE Burleigh, a boutique development of 17 full-floor residences at 88 The Esplanade, scheduled for completion in early 2027.

Developed by MAYD Group and designed by <a href="https://www.apartments.com.au/architects/mas-architecture-studio">MAS Architecture</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/sici-design">Sici Design</a>, the project has been positioned as a collection of house-sized beachfront apartments, each occupying an entire floor with around 381 sqm of internal and external living space.

When construction commenced, MAYD director Todd Mould pointed to the long-term resilience of premium coastal real estate as a key driver behind the project.

“Real estate, particularly at the premium end, remains one of the most resilient and proven long-term investment avenues,” Mould said.

“Our ambition is that anyone who buys a MAYD-built product can genuinely feel the care, craftsmanship and commitment we bring to every detail.”

[smartcode_project:default project_id=146358 project_image_fid=323055]

Each residence has been configured with four bedrooms, multiple living zones, a private office, and expansive ocean-facing terraces. Interiors draw on a restrained material palette, including travertine stone, timber joinery, and integrated premium appliances.

Interior designer Sici Design said the approach was to reflect the project’s coastal setting through both materiality and spatial planning.

“ONE Burleigh is our vision of luxury living, designed to bring the essence of Burleigh Heads' vibrant coastal beauty into an unparalleled residential experience.”

Residents will have access to a suite of wellness-focused amenities, including pools, sauna facilities, and dedicated relaxation spaces, reflecting a broader shift toward lifestyle-driven apartment design on the Gold Coast.

[smartcode_project:default project_id=146358 project_image_fid=323052]

The project occupies a southern Esplanade site with uninterrupted beachfront frontage, an increasingly rare offering in Burleigh Heads, free from the Norfolk Pines that line much of the coastline and often limit direct ocean outlook.

Mould said the design intent was to balance that outlook with a sense of retreat.

“Living at ONE Burleigh is about how your day naturally unfolds, morning light across the ocean, coffee on the balcony, and being in Burleigh but elevated above the noise.”

The result further reinforces Burleigh Heads’ emergence as one of the Gold Coast’s most tightly held and supply-constrained beachfront markets, where boutique, owner-occupier-focused developments are increasingly setting new price benchmarks.

[smartcode_project_cta:default project_id=146358]

Joel Robinson

MAYD Group sets Queensland record with $30 million penthouse sale at ONE Burleigh in Burleigh Heads

Apartment developers in the Gold Coast are finding new, creative ways to differentiate themselves from competing projects, as new supply starts to flow through up and down the Coast.

Developer Big Projects brought in the renowned Sydney-based design studio YSG to craft the interiors for The Frederick, Big Projects' new Mermaid Beach project and YSG's first move into the multi-residential development space.

[smartcode_project:default project_id=110588 project_image_fid=5346]

It was a strategic move for Big Projects to bring in a Sydney eye to the development.

“Our role is to give our design partners the space and freedom to explore,” says Matt Barrett, Director of Big Projects.

“We wanted YSG Studio to capture the essence of Nobby’s, to design a building that embraces life, light and connection, while creating a genuine sense of place.”

There are only 39 apartments in The Frederick, including a striking beach house, just 100 metres from the booming Nobby Beach precinct.&nbsp;

[smartcode_project:default project_id=110588 project_image_fid=5347]

Yasmine Ghoniem, Director of YSG Studio, says their vision&nbsp;for The Frederick "reinvents coastal living."

“Nobby’s has such an iconic energy, it’s one of those rare pockets of the Gold Coast where the community, the beach, and the streets all feel connected,” Ghoniem says.

"Responding to the neighbouring coastline, soothing curves add a relaxing regional overlay, while unique detailing really sets it apart. It’s a place that feels lived in from the moment you step inside.”

A standout feature of The Frederick is its rooftop terrace, an uncommon inclusion for a boutique, low-rise building, where amenity is typically concentrated at ground level.

[smartcode_project:default project_id=110588 project_image_fid=5360]

Positioned to capture panoramic views from the hinterland to the ocean, the rooftop has been designed as a series of intimate zones. It includes a pool, sauna, sun decks, workspaces and dedicated entertaining areas.

“The rooftop was conceived as a collection of spaces where residents can unwind and connect, an extension of the Nobby’s lifestyle,” Barrett says.

Architecture for the project was led by Plus Architecture, with landscape design by LDG.

SRQ Projects Director Nick Clydsdale, who is handling sales at The Frederick, says the majority of enquiry is coming from South East QLD and Victorian buyers who have been actively searching between Broadbeach and Mermaid Beach for some time.

"They’ve reviewed a number of projects, however this one has stood out for its design flair/ appeal,"&nbsp;Clydsdale says.

Site demolition is slated for this month, with construction commencing soon after. Big Projects is targeting a late 2027 completion.

[smartcode_project_cta:default project_id=110588]

Big Projects taps Sydney’s YSG for first multi-residential project at The Frederick Mermaid Beach

Melbourne-based property developer ALTA Property has this week achieved planning approval for the adaptive re-use of a former commercial tower into a $200 million, 169-apartment project at 10 Queens Road, one of the last developable sites along the Albert Park Lake-fronting boulevard.&nbsp;

Set within one of Melbourne’s most sought-after precincts and designed by <a href="https://www.apartments.com.au/architects/fraser-partners-0">Fraser and Partners</a>, the illustrious building will offer unparalleled views across Albert Park Lake, Port Phillip Bay and Melbourne CBD.&nbsp;

The mix of 1, 2 and 3-bedroom residences will be complemented by a ground-floor amenity featuring private dining, a lounge bar, gym and wellness spaces, co-working, outdoor communal gardens, and retail.&nbsp;

The 17-storey building is a masterclass in adaptive re-use, with the existing commercial building’s façade, shell and internal structure to be retained, before high-end residences are built from the ground up in a newly built Albert Park facing addition to the building.&nbsp;

Sitting atop the building will be two 320+sqm penthouses with private rooftop terraces, which are expected to be priced between $9 - $11 million.&nbsp;

<img alt="ALTA Property achieves permit approval for $200 million Queens Road tower" data-entity-type="file" data-entity-uuid="aa11211b-5581-43f9-940c-fc84d30a0e61" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/C_04.png?VersionId=Yhf5p_1EgGDu_zOIMFgvA8Ug8j3sTFQs" />

Architecturally, the building will feature a curved, geometric façade that celebrates and elevates the existing structure, with warm, muted tones which were selected to extend the materiality of the existing building rather than contrast it.&nbsp;

Interiors will bring together three metre high ceilings with waffle concrete in some spaces, natural timber, granite and Australian materials, culminating in crafted, generous and considered spaces that are defined by authenticity.&nbsp;

The adaptive re-use means that the Queens Road project will be a sustainability led, high-quality finished product, with a 62% saving in carbon emissions by re-using the existing structure rather than knocking it down and rebuilding.&nbsp;

ALTA Property was launched by Nigel Givoni in 2023, bringing over 25 years of experience in multi level residential delivery.&nbsp;

Melbourne’s property market growth is currently led by apartments. According to RPM VIC Apartments &amp; Townhomes Market Report (April 2026), units are outpacing houses, especially in the middle ring suburbs where median prices hit $757,500 – a four-year high that represents 2.9 percent growth quarter-on-quarter.&nbsp;

<img alt="ALTA Property achieves permit approval for $200 million Queens Road tower" data-entity-type="file" data-entity-uuid="647e13d7-b4bc-433a-9bc9-fe3c3dd4f2ec" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/V_06.png?VersionId=ou4NUCWUgA3NAy.6CQJlEdKX50j3dOk6" />

For ALTA Property Founder Nigel Givoni, this performance speaks to the confidence he has in the Melbourne market.&nbsp;

“Queens Road represents a rare opportunity to continue to shape our presence in the Melbourne market.,"&nbsp;Givoni says.

"With a considered project team and a premier site along one of the city’s most sought-after boulevards, we look forward to contributing to the fabric of this established address.

“Other Australian markets are getting a lot of attention, but I believe the depth of value in Melbourne is being overlooked. The fundamentals are strong, population growth is steady and, based on our preliminary conversations with a leading builder, construction costs are beginning to normalise, creating further opportunity."

Givoni says the project is a&nbsp;highly considered example of adaptive re-use, delivering quality, high-end residences, premium hotel-inspired amenities and an architecturally striking façade, all achieved without the need to remove the existing structure.

"We are really looking forward to the market’s response,” he said.&nbsp;

ALTA Property to deliver $200 million Queens Road apartment tower

Construction is set to begin at <a href="https://www.apartments.com.au/new-townhouses/orchard-mews-glen-iris-18-scott-grove-glen-iris-vic-3146">Orchard Mews</a> in Glen Iris, with&nbsp;PC Whitehall &amp; Sons&nbsp;now appointed as the townhome development moves into its next phase.

The development by&nbsp;<a href="https://www.apartments.com.au/developers/montcoeur">MontCoeur</a>,&nbsp;located at 18 Scott Grove, is now around 30 per cent sold, with completion targeted for late-2027.

Orchard Mews comprises a curated collection of three- and four-bedroom customisable townhomes, positioned within one of <a href="https://www.apartments.com.au/developments/glen-iris-vic-3146">Glen Iris</a>’ more tightly held residential streets. The low-density project has been designed by <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a>, with landscape architecture by <a href="https://www.apartments.com.au/landscape-architect/jack-merlo">Jack Merlo</a>, bringing together a team known for high-end residential projects across Melbourne.

[smartcode_project:default project_id=150128 project_image_fid=366285]

The development is defined by its focus on flexible living and long-term usability. Each residence includes multiple living zones and a customisable multipurpose room, allowing buyers to tailor spaces to suit changing needs, whether as a home office, additional bedroom, wellness area or entertainment space.

Architecturally, the townhomes emphasise natural light and spatial volume, with dual-aspect layouts and double-height living areas incorporated into the design. Interiors feature natural stone benchtops, premium appliances, and a neutral material palette intended to support everyday functionality rather than statement-driven finishes.

All residences are all-electric and include private lifts and secure double garages, reflecting a broader shift toward sustainability and future-focused housing in Melbourne’s established suburbs.

[smartcode_project:default project_id=150128 project_image_fid=366277]

Outdoor connections are also central to the offering, with a mix of private courtyards and terraces extending internal living spaces and integrating with the landscaped surrounds.

The Scott Grove address places Orchard Mews within close proximity to some of Melbourne’s key lifestyle and education amenities, including Scotch College, Sacré Cœur, Cabrini Hospital and the retail hub of Chadstone. Public transport access is also nearby, with trams and Gardiner Station providing connectivity to the CBD and surrounding suburbs.

[smartcode_project_cta:default project_id=150128]

Construction to commence at luxury Glen Iris townhome project, Orchard Mews

A rare new apartment development has been proposed on the fringe of St Ives Village.

Developer Newquest Property has lodged plans for a low-rise apartment project designed by well-regarded architecture firm Warren &amp; Mahoney, which is best known for its work in the multi-residential sector in Melbourne.

The building, proposed for a 1,916 sqm site on <a href="https://www.apartments.com.au/new-apartments/st-ives-residences-3-5-memorial-avenue-nsw-2075">Memorial Avenue</a> opposite St Ives Village Green, has been designed to blend into the surrounding natural environment.

<img alt="St Ives" data-entity-type="file" data-entity-uuid="5c1c7437-2fba-4345-a6d7-05321714ad3e" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-04%20at%201.28.46%E2%80%AFPM.png?VersionId=KrYyMaJvNqR7vbx0xbB3Ef8sJ6FuHpmn" />

“Drawing inspiration from the pale trunks and flowering canopies of the scribbly gums and blue gums prevalent in the area, a considered material palette was developed,” the architectural design report states.

“This palette references the established materiality of the suburb while elevating it through refined finishes to achieve a more luxurious architectural expression.”

Of the 33 apartments proposed, 21 will be three-bedroom residences. The remaining mix includes nine two-bedroom apartments, one one-bedroom apartment and two four-bedroom residences. The development will be supported by 62 car parking spaces and 33 secure bicycle spaces.

The proposal would replace two single-storey brick buildings currently on the site.

<img alt="St Ives" data-entity-type="file" data-entity-uuid="21422eaf-09a9-4439-9278-b9bd9daf22a1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-04%20at%201.38.10%E2%80%AFPM.png?VersionId=v.fXSgcUcEscvOZzqcjG5nk3gVqk_Amt" />

St Ives remains a relatively untapped market for new apartment development. North Shore developer WINIM has a number of projects in the area, while INCA is nearing completion of Ellis Residences.

More recently, Traders In Purple has lodged plans for one of the denser projects proposed in the suburb, a 75-apartment development on a 5,900 sqm site on Cowan Road.

NewQuest, a construction, design and development firm, has delivered over 24 projects across commercial, residential, industrial, and lad markets.&nbsp;

&nbsp;

&nbsp;

First look: NewQuest Property proposes new St Ives apartment development

Prominent New Zealand apartment and hotel operator, <a href="/developers/safari-group">Safari Group</a>, is offering up a prime investment opportunity for Australians to purchase off the plan in one of the world’s most popular ski destinations.

They recently took to market Mountain Oak Queenstown Apartments, in the growing precinct of Remarkables Park in Frankton, near the airport and at the foot of The Remarkables - the mountain range the locals like to call “The Remarks”.&nbsp;

Sydney investors have shown interest in the one, two and three-bedroom apartments that secure high-season occupancy six months over the year, primarily over summer and winter months.

They average 90 per cent occupancy across their portfolio over January, February, March, August, November and December, while shoulder season months of April, July, September and October are still occupied 70 per cent of the time, with the growing appeal of Queenstown becoming not just a hotspot for the snow, but a lifestyle destination.

Even in the low seasons of May and June, occupancy levels reach around 40 per cent.

<img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_auto/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Ext_Cam15_Sunny.jpg?VersionId=SJAROUM_1s.Tr5ciMk4EEj5oAt_Vewmv" />

Safari’s Safari Hotels arm can also manage the holiday letting for an investor, from the listing on holiday accommodation websites such as Airbnb and Booking.com to the cleaning and maintenance of the investment. They’ve been in the short stay management business for 15 years and offer 24/7 support for investors, an important convenience benefit for any overseas investor

Another major drawcard for Australians is that New Zealand doesn’t have a stamp duty policy - so the entry price of NZ$639,000 (AU$586,000), is all that is payable on completion.

<img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" 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/313_Livingv2_WEB.jpg?VersionId=nV229fM0ZeYpoxOrX372HyGjfwY_LR8c" />

Safari is starting construction of the 141 apartments in Q2 this year, with a two-year build estimated to complete in mid-to-late 2027.<img alt="" data-entity-type="" data-entity-uuid="" height="15" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXczFpFAb7WuA6f4f9TtKWcqXyNwR8qqtakWv352ERkpqNlP3KwIo8YKxw67jZNHfpjEGIZGv5MQTbnvLZwNt8iu9IVdOrswOjCvBZ4zhSoOOLrpt6etVEZTN1gkBho0r_R72zdHNA?key=yq3daOanqHSb88QFd8jGYKdb" title="Click and drag to move" width="15" />​

The apartments will feature modern amenities and contemporary designs with expansive windows capturing sweeping views of The Remarkables mountain range.&nbsp;

Interiors are equipped with modern finishes, premium appliances, and secure electronic key-locked doors, ensuring a comfortable living experience for residents and guests alike.

With its strategic location near Coronet Peak and Cardrona Alpine Resort, as well as key retail and dining precincts such as Market Street, Five Mile Shopping Centre, and Remarkables Market, Mountain Oak offers a strong proposition for investors seeking high rental yields and capital appreciation in one of New Zealand’s most sought-after locations.&nbsp;

Queenstown’s sustained demand for visitor accommodation and rental properties is underpinned by a shortage of housing options, attracting both local and international buyers.

Safari Group offers low-touch investment proposition in Queenstown’s popular ski fields district

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<div>The December 2015 Residential Property Price Indexes figures confirmed the expected slowing in the final quarter of last year, although more timely private sector indices suggest that nationally prices began to rise again in the first quarter of 2016, perhaps by around +1.5 percent. Let's look through the macro trends from the 2015 figures in three concise parts. Part 1 - Market steadier in summer The total value  of dwelling stock increased only marginally to $5.9 trillion in the December quarter, rising by $482 billion or +8.9 per cent over the calendar year. This was broadly in line with capital city dwelling price growth of +8.7 per cent, plus a bit more reflecting the value of the new supply of new dwellings. The total value of dwelling stock has increased by a third or $1.5 trillion since December 2011, now tallying 3.5 times the size of nominal GDP. </div>
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<div> <img src="/images/2016/03/23/R4.jpg" alt="">
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<div>The weighted 8 capital city average indexes showed that both house and unit prices steadied in the last quarter of 2015, with house price growth (+9.3 per cent) outperforming the market attached dwellings (+6.7 per cent) over the course of the calendar year, a triumph for scarcity over affordability. </div>
<a href="/images/2016/03/23/R10.jpg" target="_blank">Click to enlarge</a>
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<div>
Part 2 - City by city While Sydney showed the expected moderate final quarter correction and Darwin prices tumbled, Perth saw its prices increase by +0.5 per cent leading a number of commentators to call the bottom on Perth's market cycle and to project moderate gains for 2016. Melbourne prices rose by +1.6 per cent to record strong growth of +9.6 per cent for the year, second only to another immense calendar year for Sydney at +13.9 per cent. Canberra went on a tear with prices leaping by +2.8 per cent in the December quarter (for +6 per cent growth in 2015). while Hobart prices also spiked by +2.5 per cent for an annual result of +3.5 per cent, mirroring more timely reports from other private sector data providers.</div>
<div> </div>
<div>The most steadily consistent performer has been Brisbane, notching up another solid +1.6 per cent increase for its 14th consecutive quarterly gain and a +4.2 per cent annual increase. Since June 2012 dwelling prices have increased steadily by +17.1 per cent in Brisbane. Adelaide has followed a very similar trajectory with somewhat more suppressed nominal price growth. </div>
<a href="/images/2016/03/23/R6.jpg" target="_blank">Click to enlarge</a> <img src="/images/2016/03/23/R6.jpg" alt=""> 
<div>Over the past three years the total value of Australia's dwelling stock has increased by $1.33 trillion, with New South Wales (+$682 billion), Victoria (+$377 billion) and Queensland (+$143 billion) accounting for the bulk of the increase. </div>
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<div>Since December 2008 growth in property prices has been driven overwhelmingly by Sydney (+79.8 per cent) and Melbourne (+53.5 per cent), while Brisbane has recorded considerably less price growth (+22.1 per cent) over this timeframe. In fact since that time both Darwin and Canberra have fared better, although the Top End is now in correction mode.</div>
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<div>The ABS also now provides some interesting insights into the unstratified median price of established dwelling transfers, which also inferred a slowdown in Sydney house prices (in fact Sydney unit prices rose more than established house prices on this metric, jumping by +11.4 per cent to $685,000). This data series is most instructive in depicting just how far Sydney and Melbourne house price growth has outpaced that of its respective regional market counterparts. </div>
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<div>There are myriad ways to look at house price data, some of which involve inflation adjustments and carefully selected data points, while others use hedonic regression analysis, but the simple long run data from March 2002 shows the median transfer price of established houses to be as follows:</div>
<ul>
<li>Sydney up from $365,000 to $910,000</li>
</ul>
<ul>
<li>Melbourne up from $241,000 to $621,000 </li>
</ul>
<ul>
<li>Brisbane up from $185,000 to $499,800 </li>
</ul>
<div class="separator">At the state level the mean dwelling prices tell a broadly similar story to the capital city narrative for the past year, with New South Wales (+$76,300) and Victoria (+$56,100) once again recording the greatest gains in calendar year 2015, while the ACT (+$35,000) and Queensland (+$17,600) also saw notable increases.</div>
<a href="/images/2016/03/23/R7.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/23/R7.jpg" alt="">
 Part 3 - Supply response mixed 
<div>Finally, the data denoting the total number of dwellings at the state level shows how New South Wales added just +7,400 dwellings to its total stock in the December quarter. Nationally the total number of dwellings increased solidly by +162,900 or +1.7 per cent in 2015 to 9.62 million, having now increased by +578,600 or +6.4 per cent since December 2011. </div>
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<div>
Over the past four years, while the less densely populated territories of the Northern Territory (+10.2 per cent) and the ACT have added substantially to their stock of dwellings in percentage terms, the same has not been true everywhere.  Of the most populous states Western Australia (+8.9 per cent) and Victoria (+7.8 per cent) have co-ordinated the most material supply response as a percentage of established dwellings. However, the percentage increases in Queensland (+6.8 per cent) and in particular New South Wales (+4.6 per cent) have been less marked, reflected in their respective shallower gradients in the below chart. </div>
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<div>This seems likely to in part to reflect stock obsolescence and demolition in the larger capital cities, where older dwellings are often pulled down in order to make way for new apartment developments. However, in some locations there does remain an elevated volume of apartment construction in the pipeline, which you can doubtless see for yourself if you frequent the inner city hubs.</div>
<div> </div>
<div>The wrap</div>
<div> </div>
<div>Overall this historical data reflected already known market trends with the restraints on investor lending propitious in tapering price growth towards the end of the calendar year. At the macro level we can expect price growth nationally in 2016 to be lower than the +8.7 per cent seen in 2015, with investor lending have been successfully curbed and more supply due to come online. </div>
<div> </div>
<div>House price growth has resumed in 2016 in parts of Brisbane and Melbourne, Sydney's market has become a bona fide dichotomy, with many of the inner ring suburbs firing, but the outer ring now recording funereal auction results. Naturally at the sub-regional level results are far more mixed and trends more nuanced.</div>
<div> </div>
<div>
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. 
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.
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pwargent-M4siyDbqQY

Brisbane racks up 14th consecutive quarterly gain: Pete Wargent

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They say that when you point the finger of blame at someone, three fingers are pointing back at you. This is a particularly apt analogy for posturing politicians who are directing accusatory digits in various directions on the issue of housing affordability.
The Federal Government has scapegoated foreign investors. The Federal Opposition has targeted negatively-geared Australian investors. Both are wrong and both know it. Politicians know that the people most responsible for fuelling high housing costs are the pollies themselves.
That’s why their response to this issue is the classic tactic, made famous by Yes Minister, of holding lengthy inquiries, punctuated with frequent press conferences, while declining to take effective action, other than to blame unpopular minorities. Foreign investors are the perfect scapegoats because they don’t vote. 
Both foreign investors and negatively-geared Australian investors are small minorities in the real estate market and have little or no influence on the high costs of housing in this country. You could exterminate both species today and housing would still cost the same tomorrow.
The fundamental issue is the hideously high cost of creating residential land and building dwellings. And much of the blame for that rests at the feet of politicians at all levels of government.
So while politicians are busily pointing the affordability finger of blame at others, they might want to consider the high cost of producing home sites as a relevant issue, with themselves as the major problem. 
In our major cities, housing blocks have become smaller over time but the cost keeps rising. In Sydney, according to one set of recent figures, the median price for a home site is $410,000, up 20% in the past year. Melbourne’s median has risen 23.5%. In Perth, you pay $300,000 for a housing block. 
The average situation across the capital cities is a 466m2 block priced at $265,000. 
Another set of figures came recently from the Urban Development Institute of Australia. Its State of the Land report earlier this month found that in 2010 a typical Sydney block was 524m2 costing $293,250. Today the size has shrunk to 454m2  but the cost has jumped 50% to $440,725.
That’s the cost people face before building a house. 
Over 40% of the cost of new dwellings is the taxes and charges imposed by various levels of government. Numerous studies have been done on this issue and they all arrive at pretty much the same result.
It means that a house-and-land package priced at $500,000 could be sold for $300,000 if you removed all the politicians’ imposts that inflate the cost.
You can be sure that politicians won’t discuss this, not while they can grandstand about clamping down on allegedly rich investors who allegedly sort the tax system, while continuing to milk their favourite cash cow, the real estate industry.
Here’s an example of how government behaviour causes high land prices. In Canberra, the ACT Government drip-feeds land to the market in a way that ensures there’s always a shortage and prices are kept high. 
A recent auction of new blocks in Throsby resulted in the successful bidders paying, on average, $108,000 above the reserve prices. One 540m2 block sold for $536,500. Nine blocks of just 315m2 each sold for between $340,000 and $356,000. 
The Canberra Times reported: “The ACT Government’s method of releasing small parcels of around 100 blocks at auction has been strongly criticised by advocates of affordable housing who say it artificially inflates prices, pushing land out of the reach of all but the well-off.” 
This Canberra situation is a microcosm of a national problem, where the high cost of land underpins all affordability issues. 
Similar things happen in Darwin. In Darwin’s residential market there are big spikes in sales whenever a rare release of residential land takes place.
New development suburbs such as Muirhead in Darwin, and Zuccoli and Johnston in nearby Palmerston, have project releases which create sales spikes which distort the overall figures. For example, total residential sales in Muirhead have been 44, 16, 22, 155, 10, 4, 32, 131, 17 and 82 in consecutive quarters over the past three years. 
This is an unnatural sales pattern causes by staged releases in new projects. Releases of new product are rare and sought-after. The authorities drip-feed homes to the market, keeping prices high. 
In capital cities like Brisbane, Adelaide and Hobart, you can find plenty of suburbs where median prices of established housing are in the $300,000s and sometimes in the $200,000s. But you can’t in Canberra or Darwin. There are no cheap suburbs in these cities because of government manipulation of housing supply.
The developer lobby argues that similar things happen in the larger cities as well, hence the high cost of land in Sydney, Melbourne and Perth, although the method is different. The groups that represent builders and developers argue that the core issue in the affordability debate is limited land supply.
Harley Dale, chief economist at the Housing Industry Association, has urged the Federal Government to show more leadership on housing supply and policy reform. Rather than tinkering with h policies, they should focus on increasing supply, he says.  Of course, it’s not quite as simple as increasing the supply of available land and all problems will be solved. Nor do I agree with the developer lobby’s favourite mantra that we have a major dwelling shortage.
We’re actually facing the opposite problem, a significant oversupply, in some sectors - the inner-city apartment markets. But we do have a shortage of affordable houses on land, created by limited supply, bureaucracy and politicians’ taxes and charges.
Terry Ryder is the founder of hotspotting.com.au
hotspotting@gmail.com
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terryryder-YECXbqmri2

Foreign investors are the perfect housing affordability policy scapegoats because they don’t vote: Terry Ryder

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Melbourne is the No.1 capital city, still buoyant in contrast to Sydney’s steady decline. But South-East Queensland – the vast urban area including the Gold Coast, Brisbane and the Sunshine Coast – now has more growth suburbs than the Melbourne metropolitan area.
In simple terms, Melbourne has been strong for at least two years while many South-East Queensland markets are still quite early in their cycle. There are strong growth precincts right throughout this region, headed by Gold Coast City, but with Logan City, Moreton Bay Region and the Sunshine Coast Region all providing lots of rising markets.
According to our quarterly surveys of sales activity for The Price Predictor Index, the Gold Coast remains the clear national leader among the Local Government Areas of Australia. It has the most growth suburbs, by a wide margin, as has been the case in recent surveys. Among the standouts are some of the canal suburbs south of Surfers Paradise.
They include Burleigh Waters, where sales rates have risen from 85-90 per quarter 18 months ago to 140 more recently. Mermaid Waters has also shown a pattern of rising sales levels, while nearby Miami has increased sales from 56 to 69 to 81 to 87 to 95 in consecutive quarters.
The Moreton Bay Region in Brisbane’s north stands out as a market that has come from a long way back in the field to challenge Logan City as the No.1 market in Brisbane. If the pattern continues, Moreton Bay Region will be Brisbane’s market leader in the next quarterly survey.
Three suburbs in this LGA make our national top 30 list of growth suburbs – Morayfield, Deception Bay and Warner. Sales rates have doubled over the past two years in Morayfield, while sales in Warner over the past five quarters have been 57, 60, 75, 87 and 92. 
Logan City, which borders the Gold Coast to the south and Brisbane City to the north, led the revival of Brisbane markets in 2015 and continues to be the standout precinct (just ahead of Moreton Bay). It has more growth suburbs than any other Brisbane precinct, headed by Beenleigh, the LGA’s administration centre, where house sales have increased steadily over the past 18 months. Another standout suburb is affordable Shailer Park, where sales have increased steadily from 65 per quarter 18 months ago to 105 in the survey. 
Meanwhile, there are growing signs that Melbourne’s up-cycle is close to its peak. As in many growth markets, Melbourne’s cycle started in the near-CBD areas and over a couple of years has gradually rippled further out. During 2015 the leading precincts were mostly middle-market areas like the outstanding Whitehorse LGA (where some suburbs recorded 20%-plus growth in their median prices).
Now the outer-ring areas are rising to prominence, always a sign that the cycle has almost run its course. Among the Melbourne market leaders are the Casey LGA in the far south-east, the Brimbank LGA in the west and the Whittlesea LGA in the far north.
Growth is the Whittlesea LGA is headed by the suburb of Mill Park (median house price $480,000), where sales rates have been 87, 108, 109 and 140 in the past four quarters. Other growth suburbs in this precinct include Mernda, Wollert and Thomastown.
The LGA of Brimbank is an under-rated area in Melbourne’s west, centred on the suburb of Sunshine. This area has been stigmatised as downmarket in the past but its perception and market performance is improving on the back of good infrastructure and urban renewal developments. Deer Park is a standout suburb, with sales totaling 68, 97, 95, 100, 110 and 115 in the past six consecutive quarters.
That growth pattern is now being reflected in a steady rise in median prices.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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SEQ overtaking Melbourne in price growth prospects: Terry Ryder

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Bill Shorten believes there’s an affordability crisis in Australia. He believes he knows how to fix it. But I’m sure he doesn’t believe the tax policy he announced is the solution. What he announced is the smokescreen.
The tragedy for Shorten, the dead man walking of Australian politics, and the Labor Party, is that he is telling Australian households that he is going to force down the value of their homes. And that, in reality, the most likely outcome is that the cost of new housing will rise.
Short-term Shorten and his advisors don’t appear to realise that the high cost of new housing is the key to the affordability situation in Australia. And his policy will probably make it worse.
Firstly, the issue of an affordability crisis. Shorten apparently believes we have one. I believe we don’t.
The Housing Affordability Index shows that national affordability today is considerably better than it was five years ago. Sydney, following three years of big price growth, is the only jurisdiction that doesn’t have a demonstrably better affordability situation that it did in 2010. Everywhere else in Australia does. Even Sydney is marginally better off than in 2010. 
There were improvements in 2015 in many parts of the nation, reinforcing yet again that most of Australia did not have a property boom any time recently.
Jurisdictions which have a better affordability position now than 12 months ago include Perth (11% better than a year ago), Darwin (13.5% better), Hobart (7% better), regional WA (13% better), regional NSW, regional South Australia, regional Tasmania (6% better) and regional NT (10% better).
Affordability is essentially unchanged in Brisbane, regional Queensland and regional Victoria, compared to a year ago.
Sydney’s position is 4.5% less favourable, Melbourne 7.6% less, Canberra’s 9% less and Adelaide 2.6% less. But in each of those locations, affordability remains better than five years ago, even in Sydney (just). 
What we have from Federal Labor is what we got from APRA: over-the-top policy impacting the whole nation to attempt to solve a Sydney problem.
There’s going to be a major backlash against Labor once people realise the essence of Shorten’s proposal on affordability. He’s going into the upcoming federal election telling the electorate that the value of their homes is going to fall.
The essence of the tax policy announced on 12 February is that his proposed changes to negative gearing will somehow make housing more affordable. He’s not proposing to force down interest rates nor to lift average incomes, therefore the only way homes can become more affordable is for home values to fall. This would be seriously unpalatable for voters in the 70% of households that own their homes. It’s the ultimate election loser.
But home-owners need not worry. Shorten’s announced policies won’t cause home values to fall. They won’t make a single home cheaper in Australia because they don’t address the real causes of poor affordability. They have targeted the wrong culprits. 
And I’m quite sure Shorten knows that. Like most politicians, he’s not interested in addressing the real issues. He simply wants to give the appearance that he is. And he has achieved that by taking cheap shots at an easy target.
There are many problems with the announced policy. The first is that it’s based on a false premise - that the 15% or so of property buyers who are negatively-geared investors have a greater influence on property prices than the other 85%. (That 85%, incidentally, includes the biggest and most influential chunk of the buying market – home-buyers other than first-home-buyers – the people who have the numbers, the financial capacity and the motivation to pay high prices for homes).
Shorten says typical houses cost about three times average annual income 30 years ago and now it’s six times. He’s claiming that the small number of buyers who are negatively-geared investors are responsible for that change. He doesn’t provide any evidence to support this outlandish and quite illogical claim. He doesn’t provide it because it doesn’t exist.
He further claims that eliminating the tax claims of 15% of buyers will make housing more affordable. He doesn’t explain how that would happen.
But he is claiming his policy will make prices lower. If he’s right, that would be alarming for most voters. It would be also alarming for the nation, because the family home is the core asset for most Australians and the basis of their ability to provide for their retirement. 
This latter point is crucial. It’s the most important issue in the whole debate about negative gearing but is never mentioned.
Successive governments have told Australians they have to provide for their own retirement, because the Government can’t afford to fund the increasing numbers of retirement age people through pensions. We know that superannuation doesn’t cut it, so Australians need to invest to be self-funded in retirement. Governments need to encourage that. 
Negative gearing is one way to encourage people to invest - keeping in mind that it applies to all forms of investment, not just real estate. 
Eliminating it will stop many from buying real estate. Long-term it will cost the Federal Budget more than it saves - especially as the claimed savings are not great. Shorten’s figures suggest it will save the Budget just $570 million in the first four years, although I doubt he has considered the overall impact through loss of revenue to state and federal budgets – given that people buying investment property pay stamp duty, land tax and capital gains tax.
Shorten thinks that keeping negative gearing on new homes will cause investors to switch to the new product. But many won’t - because new homes are too expensive. On average, they cost $100,000 more than the equivalent existing home. That’s why 90% of investors (and most first-home buyers) buy existing properties rather than new. The negative gearing tax deductions don’t come close to making up for the price differential.
But if he’s right – and investors do switch to buying new homes – it will make new dwellings more expensive. If he’s right that prices are forced up by negatively-geared investors competing with home buyers, then switching all investors to new housing will create massive competition for a finite product and force up prices. Keep in mind that state government grants for first-home buyers are available only to buyers of new homes – and current Federal policy forces foreign investors to buy new properties, not existing.
So, if Shorten succeeds, we will have first-home buyers competing with Australian investors and foreign investors for new properties. Everyone will be trying to buy a finite supply of new homes, given that Australia is in the midst of a period of record creation of new dwellings and doesn’t need more. Shorten’s policy won’t make housing cheaper, it will make it more expensive.
And that brings us to the real issue in the affordability debate - the one that politicians including Short-term Shorten don’t want to talk about: the reality that government taxes and charges are responsible for the high cost of new housing. Multiple research studies have confirmed that more than 40% of the cost of new house-and-land packages are taxes and other government charges. Eliminate those and suddenly new homes are affordable to most buyers. A $400,000 product can be sold for $240,000.
So the real problem is not tax benefits flowing from government to the real estate industry - it’s the money flowing in the opposite direction, the taxes that are ripped out of the real estate industry.
Politicians never discuss this factor. They’re addicted to the massive amount of revenue they rip out of the real estate industry - over $70 billion in a typical year. They would rather blame unpopular minorities - a standard political tactic - than address the real issue.
The Federal Government, after two very long and expensive parliamentary inquiries which achieved little, has decided to make foreign investors the scapegoats. But forcing a small number of foreigners to sell back their mansions won’t make housing cheaper for first-home buyers.
Now the Federal Opposition has decided to make negatively geared Australian investors the scapegoats. It’s dishonest, deceitful and, frankly, disgusting.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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Bill Shorten's Opposition makes negatively-geared investors the scapegoats: Terry Ryder

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Despite the higher than expected clearance rates over the early phase of the new year auction market, auction volumes are yet to reach the same levels seen last year.  
After the weighted capital city average auction clearance rate was tracking in the high 50 percent range throughout December last year, auction results have shown a higher than expected bounce, with the clearance rate holding higher than 70 percent over the past three weeks. The preliminary clearance rate of 72.3 percent has moved higher compared to last week (71.8 percent). 
This week’s preliminary clearance rate is lower relative to last year’s results of 77.3 percent. This week, 2,215 capital city auctions took place, compared to 1,400 last week and 2,372 one year ago. Over the next few weeks it is expected that auction activity will continue to ramp up which will further test the resilience of auction markets on higher volumes.
<a href="/images/2016/02/22/20160222-Capital-city.jpg" target="_blank">Click to enlarge</a>
 <img src="/images/2016/02/22/20160222-Capital-city.jpg" alt="" width="702" height="527">
This week Melbourne’s preliminary auction clearance rate was 73.0 percent. Melbourne’s auction volumes continue to climb, up from 556 last week to 1,057 this week, which is similar to last year (1,074). On a year to date basis, Melbourne’s auction activity is just -1.4 percent lower than over the same period last year. This week, Inner Melbourne (234), Inner South Melbourne (157) and Inner East Melbourne (146) were the busiest sub-regions across the city, however the best performing region in terms of clearance rate was the Outer East, where 54 auctions were reported with a clearance rate of 79.6 percent. All regions with the exclusion of Mornington Peninsula (62.5 percent) saw clearance rates of at least 70 percent this week.
 
<a href="/images/2016/02/22/20160222-Melbourne.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/22/20160222-Melbourne.jpg" alt="" width="662" height="442">
After recording the highest clearance rate for the city since August 2015 last week (78.1 percent), Sydney’s preliminary results show that the clearance rate for the city has slipped slightly lower this week, currently recorded at 77.2 percent. This week 724 auctions were being tracked across the city, higher than the 513 last week, but lower than one year ago when 921 auctions were held across the city. Having recorded a relatively strong clearance rate for the past three weeks, it will be interesting to see if strength is maintained as auction volumes pass the 1,000 mark over the coming weeks.  
Preliminary results show that the performance of each individual sub-region across the city is diverse, with clearance rates as low as 50 percent In Baulkham Hills and Hawkesbury (albeit on a very low volume of auctions with just 12 results reported) and as strong as 88.2 percent for the City and Inner South Region and 88 percent across the Eastern Suburbs.
<a href="/images/2016/02/22/20160222-Sydney.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/22/20160222-Sydney.jpg" alt="" width="713" height="485">
 
The preliminary clearance rate for Brisbane was 54.5 percent this week, compared to a final auction clearance rate of 48.4 percent last week and a stronger 63.6 percent last year. More homes went to auction this week (169) compared to last week (111) and relative to last year (119). This week’s preliminary clearance rate for the Gold Coast across the 18 reported results is 50 percent.
<a href="/images/2016/02/22/20160222-Brisbane.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/22/20160222-Brisbane.jpg" alt="" width="796" height="532">
 
69.9 percent of Adelaide auctions were successful this week, based on preliminary results. Last week a clearance rate of 75 percent was reported and one year ago it was significantly lower at 53.3 percent, however Adelaide’s clearance rate tends to move more than cities with larger auction volumes on a week on week basis.
<a href="/images/2016/02/22/20160222-Adelaide.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/22/20160222-Adelaide.jpg" alt="" width="804" height="545">
 
<h1 class="title">Preliminary clearance rate edges slightly higher to 72.3 per cent while auction volumes remain lower than last year</h1>
<div class="post-meta">
by <a href="https://blog.corelogic.com.au/author/shana-miller/" title="Posts by Shana Miller" rel="author">Shana Miller</a> on <abbr class="date time published" title="2016-02-22T09:33:13+1100">February 22, 2016</abbr>  in <a href="https://blog.corelogic.com.au/category/auction-results/">Auction results</a>, <a href="https://blog.corelogic.com.au/category/national-market/">National Market</a>
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<div class="entry">
<a id="dd_start" href=""></a>
Despite the higher than expected clearance rates over the early phase of the new year auction market, auction volumes are yet to reach the same levels seen last year.  After the weighted capital city average auction clearance rate was tracking in the high 50 per cent range throughout December last year, auction results have shown a higher than expected bounce, with the clearance rate holding higher than 70 per cent over the past three weeks.  The preliminary clearance rate of 72.3 per cent has moved higher compared to last week (71.8 per cent). This week’s preliminary clearance rate is lower relative to last year’s results of 77.3 per cent. This week, 2,215 capital city auctions took place, compared to 1,400 last week and 2,372 one year ago. Over the next few weeks it is expected that auction activity will continue to ramp up which will further test the resilience of auction markets on higher volumes.
<a href="https://blog.corelogic.com.au/wp-content/uploads/2016/02/20160222-Capital-city.jpg" rel="attachment wp-att-6340"><img class="aligncenter size-full wp-image-6340" src="https://blog.corelogic.com.au/wp-content/uploads/2016/02/20160222-Capital-city.jpg" alt="20160222 Capital city" width="979" height="735"></a>
This week Melbourne’s preliminary auction clearance rate was 73.0 per cent. Melbourne’s auction volumes continue to climb, up from 556 last week to 1,057 this week, which is similar to last year (1,074). On a year to date basis, Melbourne’s auction activity is just -1.4 per cent lower than over the same period last year. This week, Inner Melbourne (234), Inner South Melbourne (157) and Inner East Melbourne (146) were the busiest sub-regions across the city, however the best performing region in terms of clearance rate was the Outer East, where 54 auctions were reported with a clearance rate of 79.6 per cent. All regions with the exclusion of Mornington Peninsula (62.5 per cent) saw clearance rates of at least 70 per cent this week.
<a href="https://blog.corelogic.com.au/wp-content/uploads/2016/02/20160222-Melbourne.jpg" rel="attachment wp-att-6341"><img class="aligncenter size-full wp-image-6341" src="https://blog.corelogic.com.au/wp-content/uploads/2016/02/20160222-Melbourne.jpg" alt="20160222 Melbourne" width="984" height="657"></a>
After recording the highest clearance rate for the city since August 2015 last week (78.1 per cent), Sydney’s preliminary results show that the clearance rate for the city has slipped slightly lower this week, currently recorded at 77.2 per cent. This week 724 auctions were being tracked across the city, higher than the 513 last week, but lower than one year ago when 921 auctions were held across the city. Having recorded a relatively strong clearance rate for the past three weeks, it will be interesting to see if strength is maintained as auction volumes pass the 1,000 mark over the coming weeks.  Preliminary results show that the performance of each individual sub-region across the city is diverse, with clearance rates as low as 50 per cent In Baulkham Hills and Hawkesbury (albeit on a very low volume of auctions with just 12 results reported) and as strong as 88.2 per cent for the City and Inner South Region and 88 per cent across the Eastern Suburbs.
<a href="https://blog.corelogic.com.au/wp-content/uploads/2016/02/20160222-Sydney.jpg" rel="attachment wp-att-6342"><img class="aligncenter size-full wp-image-6342" src="https://blog.corelogic.com.au/wp-content/uploads/2016/02/20160222-Sydney.jpg" alt="20160222 Sydney" width="983" height="669"></a>
The preliminary clearance rate for Brisbane was 54.5 per cent this week, compared to a final auction clearance rate of 48.4 per cent last week and a stronger 63.6 per cent last year. More homes went to auction this week (169) compared to last week (111) and relative to last year (119). This week’s preliminary clearance rate for the Gold Coast across the 18 reported results is 50 per cent.
<a href="https://blog.corelogic.com.au/wp-content/uploads/2016/02/20160222-Brisbane.jpg" rel="attachment wp-att-6339"><img class="aligncenter size-full wp-image-6339" src="https://blog.corelogic.com.au/wp-content/uploads/2016/02/20160222-Brisbane.jpg" alt="20160222 Brisbane" width="969" height="648"></a>
69.9 per cent of Adelaide auctions were successful this week, based on preliminary results. Last week a clearance rate of 75 per cent was reported and one year ago it was significantly lower at 53.3 per cent, however Adelaide’s clearance rate tends to move more than cities with larger auction volumes on a week on week basis.
<a href="https://blog.corelogic.com.au/wp-content/uploads/2016/02/20160222-Adelaide.jpg" rel="attachment wp-att-6338"><img class="aligncenter size-full wp-image-6338" src="https://blog.corelogic.com.au/wp-content/uploads/2016/02/20160222-Adelaide.jpg" alt="20160222 Adelaide" width="971" height="658"></a>
Preliminary results show 46.2 percent of Perth auctions sold this week, with 13 reported results so far. In comparison, last week the clearance rate was 31.6 percent, while one year ago 46.4 percent of Perth auctions were successful.
This week auction volumes almost doubled in Canberra, with 104 homes taken to auction, compared to 59 last week. Despite the rise in auction activity, Canberra’s preliminary clearance rate has remained steady at 71.2 percent over the past two weeks. Canberra’s auction market has started 2016 in a relatively strong position, with four consecutive weeks of clearance rates above the 70 per cent mark, similar to what we saw one year ago.
There were 10 auctions across Tasmania this week. Based on preliminary results, five of the six reported auctions were successful.
 
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smiller-vwPjRHTkST

Combined capital city clearance rate edges slightly higher to 72.3 percent: Shana Miller 

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According to the just-launched CoreLogic-Moody’s Analytics Australian Forecast Home Value Index, home values are forecast to continue rising solidly in Sydney and Melbourne over the next decade. 
<a href="/images/2016/02/29/Modys.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/29/Modys.jpg" alt="">
 
<div>It sees annual price growth of more than +5 per cent returning for Perth by 2017, but subdued growth for Adelaide over the next two years, while Darwin prices are expected to decline in 2016.</div>
<div> </div>
<div>Of the capital cities, Brisbane is forecast to fare best over the next two years with home value growth of around +12 per cent.</div>
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<div>
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. 
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.
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10 year home price forecast for Sydney: Pete Wargent

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The latest doomsday forecasts for Australian real estate call to mind the shameful history of overseas spruikers and local economists in getting it spectacularly wrong on house prices.
There’s nothing new in individuals with ulterior motives (usually seeking publicity for a seminar tour, new business venture or a book launch) getting acres of free mileage by predicting our markets will collapse. The 60 Minutes debacle is merely the latest.
I note that the nation’s worst forecaster of property trends, academic Steve Keen, has publicly admitted recently that he got it “hopelessly wrong” with his price forecasts. It’s about time - Keen famously predicted in 2008 that Australian house prices would fall 40% in 2009. Prices rose that year and in the years since Keen has rehashed his predictions in various guises with different time frames but with the same result – he’s been wrong every time. Now he has written a column for Business Spectator which says: “I was hopelessly wrong on house prices. Ask me how.”
But Keen has lots of company at the bottom when it comes to faulty forecasting, sometimes perhaps for dodgy reasons. 
One of the worst examples was US doomsday specialist Harry S Dent who came to Australian in 2011 for a seminar tour and sought (and received) publicity by predicting our home values would fall 40% in 2012. He advised Sydney owners to “sell their excess real estate”. We all know how well that forecast worked out.
But Dent was back in Australia two years later for another lucrative seminar tour and again went to the media for some free mileage. He said house prices would crash “some time in 2014”, with values falling at least 27% in Sydney and Melbourne. The market made a fool of him again.
Given the state of Australia media, I have no doubt that if Dent shows up again next year, he will make the same style of prediction and will be handed another round of massive national publicity.
Many others have come to our shores and used the Armageddon formula of generating publicity for their venture.
Little-known US spruiker Jorgan Wirsz suddenly became well-known in 2012 by forecasting a “bloodbath” in Australian real estate, with home values tipped to fall 60% in 2013. He also said land values would drop 90%.
Think for a moment what that means. He was suggesting that residential land in Australia would be almost worthless. Nothing remotely like has ever occurred in the history of the world, not even in the worst basket-case economy post-GFC. But Australian media chose to give these ridiculous claims credibility. And of course they were subsequently shown to be nonsense.
There have been many others, including another US spruiker called Jeremy Grantham who claimed in 2010 that the “Australian housing bubble” would burst that year. 
There also have been plenty of local commentators, mostly economists who don’t understand the dynamics of Australian real estate, who have forecast significant declines.
Morgan Stanley’s Gerard Minack said in August 2010 that property was 40% over-valued and the bubble was about to burst.
AMP’s Shane Oliver, who regularly calls it wrong on real estate prices, claimed in 2005 that homes were grossly over-valued and there would be no growth anywhere in Australia for the next decade. Those 10 years have come and gone, and I have to ask: How did that one work out for you, Shane?
Oliver was in the media again in June 2012 claiming that house prices were “over-valued’ and “chronically weak” and were heading for “a sharp fall”. Ooops, again.
Commonwealth Bank chief Ralph Norris said in November 2011 that the sovereign debt crisis in Europe had put Australian house prices at risk.
Prosper Australia claimed in August 2011 that Melbourne was about to experience “a US-style property crash with price falls of 30%”. (Those who suggest Australia must decline because it happened in the US appear to be unaware that US markets dropped for clear reasons, and those circumstances don’t exist in Australia. 
Michael Power of Investec declared in September 2012 that Australian house prices would fall by up to 20% by the end of 2014.
The Herald Sun ran the headline “Prices could fall as higher interest rates bite” based on comments by CommSec’s Craig James. (This notion that rising interest rates means a market crash is quite prevalent, but there is historical evidence to support the idea.)
Citibank economist Josh Williamson said in June 2013 that house prices would peak in March 2014 and fall thereafter. Propell National Valuers put out a media release in June 2014 declaring the end of the Sydney boom and, around the same time, Morgan Stanley analyst Malcolm Wood also called the end for Sydney, saying:” If you’re an investor, you’ve missed the boat.” 
Fringe dweller Leigh van Onselen, who has a lifetime of raging against real estate, stated in February 2012 that the “slow melt” in Australian house prices would continue. 
Another guerilla-style opponent of all things real estate, Kris Sayce, shouted in March 2011 that “the value of your home could fall 61% the minute interest rates start rising”.
The list goes on. And there’s a clear pattern. Since the start of the 21st Century, claims of markets collapsing, bubbles bursting and prices disintegrating have been an almost weekly occurrence. Journalists never seem to tire of doomsday stories.
They’ve all been wrong. And they’ve been wrong for clear reasons. Australia is not in recession, it does not have high unemployment, we don’t have a vast oversupply of dwellings nationwide and our banks don’t lend recklessly. We would need all of those circumstances to fall into alignment, as they did in the US around the time of the GFC, before our property markets would be in danger.
Property Observer would welcome a response from any of those named to give the context on their call.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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Company at the bottom for faulty market forecasters: Terry Ryder

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<div>Building Approvals data revealed the expected rebound in February after the seasonal lull in January, but the downtrend is clearly in place from the trend peak of 11 months ago.</div>
<a href="/images/2016/04/5/BA1.jpg" target="_blank">Click to enlarge</a>
<div class="separator"><img src="/images/2016/04/5/BA1.jpg" alt=""></div>
<div> </div>
<div>House approvals have rolled a little, but the tailing off is more likely to be seen in the units, apartments and townhouses sector following an impressive burst since 2012. </div>
<a href="/images/2016/04/5/BA2.jpg" target="_blank">Click to enlarge</a>
<div class="separator"><img src="/images/2016/04/5/BA2.jpg" alt=""></div>
 Capital city analysis
<div>House approvals are faading fast in Perth in reaction to elevated vacancy rates, while Melbourne continues to approve the greatest number of houses by some margin, and as such may be the city with the greatest potential for overbuilding. </div>
<div> </div>
<div><a href="/images/2016/04/5/BA4.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/04/5/BA4.jpg" alt=""></div>
<div> </div>
<div>The last couple of months have been much slower for unit approvals in Sydney and Melbourne, which is now being reflected in the rolling annual figures below. After nearly a decade of under-building Sydney is now approving a decent number of attached dwellings.</div>
<div> </div>
<div class="separator"><a href="/images/2016/04/5/BA3.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/04/5/BA3.jpg" alt=""></div>
 Dream over for high rise 
<div>This record approvals boom for Australia has largely been driven by "high rise" or four plus storey unit blocks, but this part of the approvals boom has noticeably slowed over the past four months. </div>
<a href="/images/2016/04/5/BA5.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/5/BA5.jpg" alt="">
 
<div>Sydney, Melbourne and Brisbane have each gone hard at approvals in the high density sector over the past few years, but all three cities have now passed their respective peaks. </div>
<div> </div>
<div class="separator"><a href="/images/2016/04/5/BA6.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/04/5/BA6.jpg" alt=""></div>
<div> </div>
<div>The wrap</div>
<div> </div>
<div>With APRA having insisted upon tigher lending criteria for investors building approvals will in all likelihood continue to slow from here, following a record run. Even at this well advanced stage in the construction cycle vacancy rates have been tightening in inner Sydney to just 1.3 percent, but cracks are starting to show in some of the secondary and outer areas where vacancy rates are above 2 per cent (and in some pockets higher again). </div>
<div> </div>
<div>
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. 
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.
</div>
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Building approvals boom all over bar the grouting: Pete Wargent

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GUEST OBSERVER
The Australian Bureau of Statistics (ABS) has released demographic data for the September 2015 quarter recently.
The data showed a continuation of the trend towards a slower rate of population growth at a national level. At the end of the quarter, it was estimated that there were 23,860,133 residents of Australia, an increase of just 0.3 percent over the quarter and 1.3 percent over the past year.
<a href="/images/2016/03/30/Chart-1-4-580x206.jpg" target="_blank">Click to enlarge </a>
<img src="/images/2016/03/30/Chart-1-4-580x206.jpg" alt="">
The 12 months to September 2015 saw an additional 313,237 residents of Australia which is 7.3 percent lower than over the same quarter in 2014.  In fact, the annual increase in population for the country is the lowest it has been since the June 2011 quarter.
<a href="/images/2016/03/30/Chart-2-3-580x205.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/30/Chart-2-3-580x205.jpg" alt="">
At a national level, there are two components of population growth, natural increase (births minus deaths) and net overseas migration.  Over the past year, there was a natural increase of 145,585 persons and net overseas migration of 167,652 persons.  As the above chart shows, the two measures are converging due to a sharp decline in net overseas migration.  Annual net overseas migration is now at its lowest level since September 2006, is -7.0 percent lower over the year and -46.9 percent lower than its peak in December 2008.
<a href="/images/2016/03/30/Chart-3-4-580x206.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/30/Chart-3-4-580x206.jpg" alt="">
Looking at population growth across the states and territories, the rate of growth has been strongest over the past year in Victoria at 1.7 percent and lowest in the Northern Territory at 0.3 percent.
The annual rate of population growth is above 1 percent in all states and territories except the Northern Territory, Tasmania and South Australia. In terms of raw number population increase over the year, New South Wales and Victoria are way out in front of all other areas with increases of 102,243 persons and 102,311 persons respectively. 
Queensland (55,232) and Western Australia (32,542) were the only other two regions to record annual population growth of more than 15,000 persons.  Across the remaining states and territories the annual population increase was recorded at: 12,396 persons in South Australia, 5,491 persons in the Australian Capital Territory, 2,159 persons in Tasmania and 826 persons.
The four most populous states accounted for 93.3 percent of total population growth over the year with New South Wales and Victoria accounting for 65.3 percent.
The mining states and territories in particular have felt the full brunt of the slowdown in population. At its peak in December 2008, Queensland recorded a population increase of 115,561 with annual growth now less than half this figure.  In Western Australia, annual population increases peaked at 88,156 persons in September 2012 and in Northern Territory the annual population increase peaked at 7,073 persons in March 2013.
It is also worthwhile at the state and territory level to have a look at the interstate migration trends.  As well as net overseas migration there is net interstate migration across the states and territories which affects population growth.
<a href="/images/2016/03/30/Chart-4-4-580x206.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/30/Chart-4-4-580x206.jpg" alt="">
Firstly if we look at annual net overseas migration, New South Wales (66,540) and Victoria (55,447) account for an overwhelming majority of the population increase.  In fact, 72.8 percent of all net overseas migration was into these two states which is the highest proportion since December 1984.
Elsewhere the number of net overseas migrants has been recorded at: 16,725 persons in Queensland, 10,255 persons in South Australia, 14,249 persons in Western Australia, 1,119 persons in Tasmania, 975 persons in the Northern Territory and 2,333 persons in the Australian Capital Territory. Annual net overseas migration into Queensland is at its lowest level since December 2000 and South Australian net overseas migration is at its lowest level since December 2011.
<a href="/images/2016/04/5/Chart-5-2-580x205.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/5/Chart-5-2-580x205.jpg" alt="">
Turning to net interstate migration, movement between the states and territories is slowly starting to rise again; the above chart shows the annual movements between states and territories.  The chart shows that since 2003 there has been a fairly consistent decline in the proportion of the population moving interstate.  I have to admit this is a little surprising given that it coincides with the end of Sydney’s and Melbourne’s housing boom and is pretty much the beginning of the mining boom.  Although, the sudden slowing of interstate migration coincides with the substantial ramping-up of net overseas migration and with net overseas migration we are now seeing a pick-up in interstate migration.
<a href="/images/2016/04/5/Chart-6-1-580x210.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/5/Chart-6-1-580x210.jpg" alt="">
Over the past 12 months, Victoria and Queensland are the only two states or territories to have recorded a positive net inflow of population form other states.  Net interstate migration to Victoria was a record high 11,187 persons over the past year compared to 6,890 persons to Queensland. 
Net interstate migration into Queensland seems to be turning a corner after hitting a trough of 5,598 persons over the year to December 2014. 
Across the remaining states and territories there have been losses from net interstate migration of: -7,451 persons in New South Wales, -4,125 persons in South Australia, -2,721 persons in Western Australia, -180 persons in Tasmania, -3,019 persons in the Northern Territory and -581 persons in the Australian Capital Territory.  The net loss of persons from interstate migration is at its highest level since March 2014 in New South Wales, its highest since June 2009 in South Australia and its greatest since March 2003 in Western Australia. In Tasmania the loss of residents to interstate migration is at its lowest level since June 2011 and it is at its lowest level since December 2013 in the Australian Capital Territory.
The more up-to-date overseas arrivals and departures data indicates that net overseas migration is likely to trend even lower next quarter which will dampen the national rate of population growth further.  At the same time, the data shows that Victoria (which would seem to be a proxy for Melbourne) is the migration epicentre of the country attracting large numbers of both overseas and interstate migrants. 
Meanwhile the outflow of residents leaving New South Wales is picking up pace while interstate migration to Queensland is starting to build.
Perhaps we are seeing the impact of high housing costs in Sydney and fairly strong jobs growth in Victoria and Queensland starting to attract Sydneysiders to other parts of the Eastern Seaboard.  Weaker economic conditions in Western Australia are seeing residents leave with Victoria and Queensland the benefactors.  Meanwhile, Tasmania’s outflow of residents is slowing on the back of the booming tourism sector and a recent improvement in economic conditions.
Finally with population growth slowing we are seeing a better relationship between housing supply and housing demand.  After recently hitting record high levels, it is reasonable to expect that the slowing population growth will see property developers respond by seeking fewer approvals for new residential properties.
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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ckusher-ujnxiKuFQs

Population growth continues to slow due to ongoing decline in net overseas migration: Cameron Kusher

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<div>Macroprudential measures have had the desired effect, and the rate of home price growth has steadied.</div>
<div> </div>
<div>CoreLogic-RP Data's Daily Home Value Index may be a little seasonal, but the year-on-year figures show the slower gradient of growth.</div>
<div> </div>
<div>Nationally home price growth has slowed to +6.3 percent year-on-year.</div>
<div> </div>
<div>Melbourne (+8.8 percent), Sydney (+8.1 percent) and Brisbane (+4.5 percent) between them have accounted for most of the price growth over the past year.  While Sydney and Melbourne have been grabbing all the attention in recent years, Brisbane prices have just kept rising steadily and under the radar.  CoreLogic's index shows the median price for Brisbane &amp; Gold Coast having increased by $61,330 or +13.1 per cent over the past three years.  Although I have long been sceptical about the somewhat parlous state of the South Australian economy, Adelaide mediabn prices have also increased by just shy of +10 per cent over the same timeframe.</div>
<a href="/images/2016/04/11/RP1.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/11/RP1.jpg" alt="">
<div class="separator"> </div>
<div> </div>
<div>I was busy doing other things than charting data over the Christmas/New Year 2014-15 period, so actually have no idea what happened in the gaps in the chart.  Maybe there was a property crash and a speedy recovery, for all I know, not sure.</div>
<div> </div>
<div>
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. 
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.
</div>
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