<p><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.</p>

<p>The sale equates to around $37,500 per sqm.</p>

<p>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.</p>

<p>Selling agent Freddie Tehle of PRD Burleigh Heads said the result reflects tightening supply of high-quality, large-format apartments in Burleigh.</p>

<p>“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.</p>

<p>“Buyers are increasingly seeking apartments that genuinely replace a standalone home, and this penthouse delivers that with its size, privacy, and direct ocean frontage.”</p>

<p>[smartcode_project:default project_id=146358 project_image_fid=323057]</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>“Real estate, particularly at the premium end, remains one of the most resilient and proven long-term investment avenues,” Mould said.</p>

<p>“Our ambition is that anyone who buys a MAYD-built product can genuinely feel the care, craftsmanship and commitment we bring to every detail.”</p>

<p>[smartcode_project:default project_id=146358 project_image_fid=323055]</p>

<p>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.</p>

<p>Interior designer Sici Design said the approach was to reflect the project’s coastal setting through both materiality and spatial planning.</p>

<p>“ONE Burleigh is our vision of luxury living, designed to bring the essence of Burleigh Heads' vibrant coastal beauty into an unparalleled residential experience.”</p>

<p>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.</p>

<p>[smartcode_project:default project_id=146358 project_image_fid=323052]</p>

<p>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.</p>

<p>Mould said the design intent was to balance that outlook with a sense of retreat.</p>

<p>“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.”</p>

<p>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.</p>

<p>[smartcode_project_cta:default project_id=146358]</p>


Joel Robinson

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

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=110588 project_image_fid=5346]</p>

<p>It was a strategic move for Big Projects to bring in a Sydney eye to the development.</p>

<p>“Our role is to give our design partners the space and freedom to explore,” says Matt Barrett, Director of Big Projects.</p>

<p>“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.”</p>

<p>There are only 39 apartments in The Frederick, including a striking beach house, just 100 metres from the booming Nobby Beach precinct.&nbsp;</p>

<p>[smartcode_project:default project_id=110588 project_image_fid=5347]</p>

<p>Yasmine Ghoniem, Director of YSG Studio, says their vision&nbsp;for The Frederick "reinvents coastal living."</p>

<p>“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.</p>

<p>"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.”</p>

<p data-end="236" data-start="64">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.</p>

<p>[smartcode_project:default project_id=110588 project_image_fid=5360]</p>

<p data-end="523" data-start="308">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.</p>

<p data-end="670" data-start="525">“The rooftop was conceived as a collection of spaces where residents can unwind and connect, an extension of the Nobby’s lifestyle,” Barrett says.</p>

<p data-end="760" data-start="672">Architecture for the project was led by Plus Architecture, with landscape design by LDG.</p>

<p data-end="951" data-start="762">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.</p>

<p data-end="951" data-start="762">"They’ve reviewed a number of projects, however this one has stood out for its design flair/ appeal,"&nbsp;Clydsdale says.</p>

<p data-end="951" data-start="762">Site demolition is slated for this month, with construction commencing soon after. Big Projects is targeting a late 2027 completion.</p>

<p>[smartcode_project_cta:default project_id=110588]</p>


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

<p>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;</p>

<p>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;</p>

<p>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;</p>

<p>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;</p>

<p>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;</p>

<p><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" /></p>

<p>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;</p>

<p>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;</p>

<p>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;</p>

<p>ALTA Property was launched by Nigel Givoni in 2023, bringing over 25 years of experience in multi level residential delivery.&nbsp;</p>

<p>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;</p>

<p><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" /></p>

<p>For ALTA Property Founder Nigel Givoni, this performance speaks to the confidence he has in the Melbourne market.&nbsp;</p>

<p>“Queens Road represents a rare opportunity to continue to shape our presence in the Melbourne market.,"&nbsp;Givoni says.</p>

<p>"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.</p>

<p>“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."</p>

<p>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.</p>

<p>"We are really looking forward to the market’s response,” he said.&nbsp;</p>


ALTA Property to deliver $200 million Queens Road apartment tower

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=150128 project_image_fid=366285]</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=150128 project_image_fid=366277]</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project_cta:default project_id=150128]</p>


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

<p data-end="150" data-start="66">A rare new apartment development has been proposed on the fringe of St Ives Village.</p>

<p data-end="370" data-start="152">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.</p>

<p data-end="370" data-start="152">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.</p>

<p data-end="370" data-start="152"><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" /></p>

<p data-end="745" data-start="537">“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.</p>

<p data-end="912" data-start="747">“This palette references the established materiality of the suburb while elevating it through refined finishes to achieve a more luxurious architectural expression.”</p>

<p data-end="1185" data-start="914">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.</p>

<p data-end="1270" data-start="1187">The proposal would replace two single-storey brick buildings currently on the site.</p>

<p data-end="1270" data-start="1187"><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" /></p>

<p data-end="1467" data-start="1272">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.</p>

<p data-end="1635" data-start="1469">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.</p>

<p data-end="1635" data-start="1469">NewQuest, a construction, design and development firm, has delivered over 24 projects across commercial, residential, industrial, and lad markets.&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>


First look: NewQuest Property proposes new St Ives apartment development

<p>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.</p>

<p>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;</p>

<p>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.</p>

<p>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.</p>

<p>Even in the low seasons of May and June, occupancy levels reach around 40 per cent.</p>

<p><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" /></p>

<p>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</p>

<p>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.</p>

<p><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" /></p>

<p>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.<span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><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" /></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><span><span><span><span><span><span>​</span></span></span></span></span></span></p>

<p>The apartments will feature modern amenities and contemporary designs with expansive windows capturing sweeping views of The Remarkables mountain range.&nbsp;</p>

<p>Interiors are equipped with modern finishes, premium appliances, and secure electronic key-locked doors, ensuring a comfortable living experience for residents and guests alike.</p>

<p>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;</p>

<p>Queenstown’s sustained demand for visitor accommodation and rental properties is underpinned by a shortage of housing options, attracting both local and international buyers.</p>


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

<html><body>
<p>Combined capital city home values have increased substantially since the financial crisis in 2008 however, this is largely being driven by Sydney and Melbourne with value growth muted in most other capital cities.</p>
<p>As the financial crisis hit in 2007/08, Australia’s combined capital city housing markets experienced a -6.1% decline in home values between March and December 2008.  Due to aggressive interest rate cuts by the Reserve Bank (RBA) and the introduction of the boost to the First Home Owners Grant, further home value declines were averted.  In fact, home values began to rise across two cycles; from December 2008 and in June 2016, 7.5 years later, combined capital city home values are now 54.9 percent higher.</p>
<p>The first chart highlights the increases in home values over the past 7.5 years.  What is immediately noticeable is that the increases have been all about Sydney (87.9 percent) and Melbourne (71.8 percent).  In fact, most other capital cities have recorded growth which is around or below the rate of inflation.</p>
<div>
<h3>Total change in capital city dwelling values December 2008 to June 2016</h3>
<p><a href="/images/2016/07/19/2016-07-15--image1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/07/19/2016-07-15--image1.jpg" alt=""></p>
<p>From December 2008, combined capital city home values increased until October 2010, rising by 21.8 percent. </p>
<p>Official interest rates were first increased coming out of the financial crisis in October 2009, rising by 175 basis points to November 2010.  The boost to the First Home Buyers Grant was partially removed in September 2009 and completely removed after December 31 2010.  These combined factors saw the rate of value growth slow, followed by a decline in dwelling values. </p>
<p>The second chart highlights that from December 2008 to October 2010 dwelling values rose in all cities with Sydney, Melbourne and Darwin the standouts.  Despite very low interest rates, Brisbane, Adelaide, Perth and Hobart recorded little value growth over this period.</p>
<h3>Total change in capital city dwelling values December 2008 to October 2010</h3>
<p><a href="/images/2016/07/19/2016-07-15--image2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/07/19/2016-07-15--image2.jpg" alt=""></p>
<p>Between October 2010 and May 2012 as stimulus was removed from the housing market, combined capital city home values fell by -7.4 percent.  Darwin, Melbourne and Brisbane recorded the largest falls over the period.  Looking back at this period it is clear that low interest rates and first home buyer incentives stimulated the market and, as they were removed, demand was shown to be fragile. </p>
<p>In October 2010, official interest rates were recorded at 4.75 percent and by May 2012 they had fallen by 100 basis points to 3.75 percent.</p>
<h3>Total change in capital city dwelling values October 2010  to May 2012</h3>
<p><a href="/images/2016/07/19/2016-07-15--image3.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/07/19/2016-07-15--image3.jpg" alt=""></p>
<p>From May 2012 to June 2016, combined capital city home values have increased by 37.3 percent while official interest rates fell by 200 basis points to 1.75 percent.  Although home values have increased over the period, Sydney and Melbourne have recorded a substantially higher rate of value growth than all other capital cities. </p>
<h3>Total change in capital city dwelling values May 2012 to June 2016</h3>
<p><a href="/images/2016/07/19/2016-07-15--image4.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/07/19/2016-07-15--image4.jpg" alt=""></p>
<p>The data indicates that since the financial crisis the capital city housing market could be described as being extremely interest rate sensitive.  Digging deeper into the data shows that in reality it is only Sydney and Melbourne that have really responded to the stimulus of low interest rates.  The relative strength of the Sydney and Melbourne economies and the much greater employment growth has clearly assisted drive housing values higher in these cities.</p>
<p>Until the economic performance improves outside of Sydney and Melbourne it seems unlikely that sustainable growth will return in these areas despite the extremely low interest rates which are set to potentially move even lower over the coming months.  For Sydney and Melbourne although affordability is increasingly becoming stretched home owners have experienced a substantial increase in equity. </p>
<p>With historically weak rental markets and record low yields it will be interesting to see if investors and upgraders in the two largest capital cities continue to show a thirst for housing in these cities given the growth phase has now been running for more than four years.</p>
<p><em>Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></p>
<p> </p>
</div>
</body></html>

ckusher-ujnxiKuFQs

Home value growth remains all about Sydney and Melbourne: Cameron Kusher

<html><body>
<p>There’s a growing body of research data pointing investors towards the regions.</p>
<p>A recent CoreLogic report, which compiled a Top 50 list of locations where the value of home sales had grown the most over 12 months, found that 46 of the Top 50 were regional locations.</p>
<p>Other recent research highlighted the New South Wales regional areas where price growth is now greater than Sydney’s.</p>
<p>And a report from Brisbane researcher Simon Pressley has predicted that retiring baby boomers will boost regional markets by seeking out towns and cities that offer attractive affordability and good services.</p>
<p>In addition, a State Government report has highlighted regional cities in Victoria where major population growth is expected over the next 15 years.</p>
<p>All that – and a lot more that’s out there in the way of compelling data – is significant because a lot of the simplistic price information and commentary that’s published tells investors that the capital cities are always better than the regions for capital growth. </p>
<p class="Body">This is usually generalised data which produces a single growth figure for the cities and a single growth figure for the regions. It’s quite misleading, because the regional sample includes myriad negative markets (such as resources-impacted towns and drought-affected areas) which drag down the regional average. </p>
<p>That generalised figure doesn’t really tell us anything useful and shouldn’t dissuade investors from considering regional areas – which offer plenty including lower prices and higher yields.</p>
<p>Residex data suggests that Melbourne price growth has averaged 6.9 percent per year over the past decade and regional Victoria only 4.7 percent – but does that matter if you can find a regional centre growing at 8 percent a year?</p>
<p>Right now, the most active and buoyant market in Victoria is not in Melbourne – it's the regional city of Geelong just outside the capital.</p>
<p>A new report on future population growth provides a few clues as to where investors might look for growth in Victoria. Geelong is one of the key places highlighted, alongside Bendigo and Ballarat. </p>
<p>I see all three regional centres as places worthy of consideration by investors. They all offer economic strength and diversity, affordable housing and good transport links to Melbourne, particularly since the completion of the Regional Rail Link. </p>
<p>And, according to the Department of Environment, Land, Water and Planning, all three cities can look forward to strong population growth. </p>
<p>The <em>Victoria in Future</em> report forecasts that the City of Greater Bendigo will grow 30 percent in the next 15 years, assuming current demographic, economic and social trends continue. </p>
<p>According to the report, Bendigo can expect its population to grow from 110,000 in 2016 to 145,000 in 2031.</p>
<p>ABS figures show this will be the continuation of a trend, with the population rising from 93,000 in 2005 to 108,500 at June last year.</p>
<p>Greater Bendigo, Ballarat and Greater Geelong combined are expected to provide half of all regional growth to 2031. </p>
<p>But the municipality likely to see the most dramatic increase is Mitchell Shire, which is forecast to more than double its population from 40,000 in 2016 to 81,500 in 2031. </p>
<p>This will make it the fastest-growing area and the municipality with the second-largest growth in regional Victoria behind Greater Geelong. Mitchell Shire is a little north of Melbourne and includes towns such as Kilmore, Seymour, Broadford and Wallan.</p>
<p>Another LGA getting spill-over growth north of Melbourne is Macedon Ranges, which can expect its population to grow 25 percent over the next 15 years. Macedon Ranges towns have experienced major increases in median prices in the past 12 months, including 20 percent in Gisborne, 14 percent in Riddells Creek and 25 percent in Macedon.</p>
<p>It's further evidence that there is major capital growth to be found in the regions, if you look behind the generalised data.</p>
<p><em>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></em></p>
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Most active property market in Victoria is not in Melbourne: Terry Ryder

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<p>With the national housing market having experienced more than four years of ongoing value rises, affordability in certain areas is deteriorating and sales that were once considered to be at the top end of the market are now becoming more common. </p>
<p>With housing becoming more expensive, there has been a substantial rise in the number of homes selling for, or in excess of, $2 million.</p>
<p>When the current growth phase commenced in June 2012, there had been 4,103 dwelling sales of at least $2 million with these sales spread across 884 suburbs (if they have achieved this for houses and units they have been counted twice).  Over the 12 months to March 2016, there had been 11,648 house and unit sales at a price of at least $2 million with these sales recorded across 1,437 suburbs.</p>
<p><a href="/images/2016/07/26/Chart-1-1-580x198.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/07/26/Chart-1-1-580x198.jpg" alt=""></p>
<p>Looking at the number of sales of at least $2 million, the 11,668 sales were comprised of 10,184 houses and 1,464 units.  Note that the recent dip in sales is likely to be due to the preliminary nature of recent sales data.  Before the financial crisis, the number of sales at or above $2 million peaked at 6,146 sales over the 12 months to February 2008.  They then fell to a low of 3,321 sales in June 2009.  It took until November 2013 for the number of sales of at least $2 million to eclipse their pre-financial crisis level indicating that the premium housing segment was hit particularly hard during the downturn.</p>
<p><a href="/images/2016/07/26/Chart-2-2-580x196.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/07/26/Chart-2-2-580x196.jpg" alt=""></p>
<p>While the previous analysis looked at the number of sales of at least $2 million, the second chart looks at the number of suburbs that had at least one sale over the year at or above this price point.</p>
<p>Over the past year, 1,139 suburbs had a house sale at or above $2 million and 298 suburbs had a unit sale at that price point.  If we compare this to the pre-financial crisis peak there were 1,193 suburbs that had a sale within this price point before the financial crisis with this figure falling as low as 815 suburbs over the year to June 2009. </p>
<p>It took until August 2014 for the number of suburbs with a sale at or above $2 million to eclipse the pre-financial crisis level.  With 1,437 suburbs nationally having at least one sale of at least $2 million over the past year it further highlights that housing is becoming less affordable in more suburbs.</p>
<p><a href="/images/2016/07/26/Chart-3-2-580x197.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/07/26/Chart-3-2-580x197.jpg" alt=""></p>
<p>It is particularly evident of the deteriorating affordability of housing when you look at the number of suburbs with a sale price at or in excess of $2 million over time in NSW and Vic.  As the above chart shows, particularly in NSW and to a lesser extent in Vic, there has been a significant increase in the number of suburbs with sales of at least $2 million over recent years.  This is reflective of housing prices being pushed higher, particularly in Sydney and Melbourne, as home values rise and competition for well-located housing increases.</p>
<p>As home values continue to rise, there will continue to be some bracket creep, with the number of homes selling at $2 million or higher likely to rise further.  We would anticipate an increasing number of sales at or above $2 million over the coming years, particularly in Sydney and Melbourne.  Of course the rising prevalence of sales at this price point is systemic of the deteriorating housing affordability and increasing cost of purchasing a home.</p>
<p> <em>Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></p>
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The $2 million dollar dwelling sales surge: Cameron Kusher

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<p>The most interesting fact revealed by a St George Bank survey of first-home buyers was buried in the small print of the media statement.</p>
<p>The survey of 1,000 first-home buyers across Australia indicated that 26 percent of respondents said they had to make compromises to buy their first homes. Half of those had to compromise on location while 46 percent had to compromise on price.</p>
<p>I was amazed that only a quarter of FHBs felt they had to make compromises to achieve home ownership. I would have expected it to be close to 100 percent.</p>
<p>When I bought my first home over 30 years ago, I had to make a range of compromises, especially on location and the quality of the house I was buying. But it seems most first-home buyers today don’t feel they had to make concessions on location or price, according to this survey at least.</p>
<p>Media would have us believe that the Great Australian Dream is near dead. Journalists continue to support that notion by quoting the discredited ABS data on borrowers identified as first-home buyers, even though the ABS has issued statements admitting it is under-counting them.</p>
<p>This is because only borrowers with a government grant are identified as first-home buyers and grants are no longer available to first-time buyers of existing homes, which severely reduces the numbers identified as first-home buyers.</p>
<p>The figures also ignore first-time buyers who buy an investment property as a first purchase while continuing to rent their homes – the so-called rentvestors, who are a rising force in Australian real estate.</p>
<p>Other more credible research sources, such as the NAB quarterly Residential Property Survey, indicate that a third of sales of new properties across Australia, and 27% of sales of established properties, are made to first-time buyers (some of which are buying investment properties, rather than a home, as a first purchase).</p>
<p>The 27 buyers of buyers of established homes who are first-timers aren’t counted in the ABS figures, but media regularly quotes the bureau’s figures as an indication that first-home buyers are priced out of the market.</p>
<p>Housing affordability and home ownership have become so politically charged in Australia that it’s impossible to have a calm and rational debate about it.</p>
<p>Even the so-called research is tainted by political objectives, so that almost nothing published is believable. The annual Demographia report clearly sets out to achieve a pre-determined result – that all of Australia is deemed unaffordable – and achieves this by arbitrarily setting the “median multiple” bar ridiculously low, so that a house costing $305,000 is described as unaffordable to someone earning $100,000 a year.</p>
<p>The recent HILDA report was a biased document which had its headline written before the research was conducted. The reported claim by Professor Roger Wilkins that “a whole generation of adults would never own a home” was over the top and not supported by the evidence in the report. </p>
<p>We continue to have high home ownership rates by world standards, although they are lower than they were 15 years ago, according to this report. Home ownership rates include almost 70 percent in Western Australia, 68 percent in South Australia and 66 percent in Victoria – although given the political tone of the report and its publicity campaign, I’m don’t feel confident believing any of its figures.</p>
<p>Other reports are tainted by suspect data. The longstanding HIA’s quarterly Affordability Report, which has a long track record of telling it like it is, found affordability (as an average across the nation) improved in the March Quarter but deteriorated in the June Quarter. </p>
<p>The weakness in this report is that it relies on CoreLogic for its price data, which recorded a significant rebound in Sydney prices in the June Quarter – a result that has been starkly contradicted by figures from other major sources, including Domain and SQM Research.</p>
<p>But, taking the latest Affordability Report at face value, it found there had been a worsening of affordability quarter-on-quarter in some jurisdictions (including Sydney, Melbourne, Brisbane and Adelaide) but improvements in affordability in others (such as Perth, Hobart, Tasmania, regional NSW, regional Victoria, regional South Australia and regional WA).</p>
<p>Taking a longer-term view, affordability is the best it’s been in regional Australia at any time in the past five years. We can say the same thing about many individual areas of the nation (including Western Australia, Tasmania and the Northern Territory), though clearly not about Sydney or Melbourne.</p>
<p>The current affordability level in Sydney and NSW is better than it was five years ago, but not as good as it was four years ago before the Sydney boom got under way. In Victoria, affordability in the March Quarter was the best it’s been in five years, but then it dropped in June Quarter, caused by the reliance on CoreLogic figures, which differ from several other sources.</p>
<p><em>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></em> </p>
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The Great Australian Dream is not dead: Terry Ryder

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<div>CoreLogic's home value index for July will show that Sydney's prices have blazed 5.6 percent higher over the last quarter and a rip-snorting 10.3 percent in 2016 to date. </div>
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<div class="separator">And interest rates to fall further? Interesting times. </div>
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<div><strong><span style="text-decoration: underline;">Credit growth slows</span></strong></div>
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<div>The Reserve Bank (RBA) has an inflation target of 2 to 3 percent, and the latest figures this week showed that inflation is running well below that level, and the softest inflation result in 17 years.</div>
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<div>On Friday the RBA released its Financial Aggregates figures for the month of June which showed total credit growth slowing.</div>
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<div>Investor credit growth - denoted by the red line below - has more than halved to an annual pace of just 5 percent now, while personal credit growth remains weak, and business credit went backwards in the month. </div>
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<br><div>All up annual credit growth slowed to 6.2 percent, with broad money growth a little slower at 6 percent.</div>
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<br><strong><span style="text-decoration: underline;">Business...as usual</span></strong><br><br><div>Unfortunately business credit growth printed negative in June, taking the annual result back to 6.6 percent, a disappointing reading which might point towards a cut in interest rates. </div>
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<br><strong><span style="text-decoration: underline;">Banks and housing</span></strong><br><div> </div>
<div>While growth in term deposits remains understandably weak, other deposits with banks continue to surge at a very strong double digit pace. </div>
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<img src="/images/2016/08/01/RBA3.jpg" alt=""><br><br><div>In the housing market investor credit growth slowed to 5 percent, now tracking at just half the arbitrary "speed limit" imposed by APRA. </div>
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<div>Naturally banks and lenders have been pushing owner-occupier loans, but even here growth slow by a tiny fraction from 7.73 to 7.72 percent, having notched a 70-month high in May. </div>
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<br><div>Total housing credit growth of 6.7 percent is now well below the 7.5 percent rate hit in November last year, which will provide some comfort that macro-prudential measures are doing what they were designed to do.</div>
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<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
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<div>Overall, while nobody seems quite so sure any more what the split of credit relates to, total credit of $2.57 trillion is now growing at a slower pace of 6.2 percent, down from 6.7 percent in October last year. </div>
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<br><div>Another factor in this week's interest rate decision was that US real GDP printed at an annual pace of just 1.2 percent in Q2 2016, meaning that the US Federal Reserve won't be hiking rates soon.<br><br>The Aussie dollar jumped to 76 US cents, and will probably jump higher again if interest rates are not cut on Tuesday.<br><br>Bookies and financial markets are leaning towards an interest rate cut in Tuesday to a record low of 1.50 percent. </div>
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<p><span><em>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>.</em><br></span></p>
<p><em>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>.</em></p>
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Brace for record low rates: Pete Wargent

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<p>Adelaide often flies under the radar for investors. It’s perhaps the most under-rated among the capital cities, despite having delivered good growth rates in the past and currently it leads the nation on some measures, including the rise in sales activity.</p>
<p>Across the Adelaide metro area, the standouts are middle-market precincts like the City of Charles Sturt. This LGA, immediately north and north-west of the Adelaide CBD, is at the forefront of Adelaide’s efforts to evolve its economy, as manufacturing industries fade.</p>
<p>Topping the list of Adelaide projects is the $2 billion Royal Adelaide Hospital, due for completion in late 2016. There is also a serious focus on improved transport infrastructure, including road and rail, which will better connect industrial precincts and outer suburbs with the CBD, the Port of Adelaide and Adelaide Airport.</p>
<p>The City of Charles Sturt attracts people because it’s close to the beaches, the CBD, the airport and regional shopping facilities. Henley Beach is one of Adelaide’s most popular, with a noted restaurant precinct with boutique shopping. </p>
<p>The LGA has long been considered the sporting and entertainment hub of Adelaide, with national basketball, soccer and football stadiums, three privately-owned golf courses, an international rowing course, the River Torrens Linear Park, the Adelaide Entertainment Centre, the coast and numerous highly-regarded local sporting venues.</p>
<p>The City is well-catered-for in terms of schools and medical services. Health is the largest employer in South Australia and has replaced manufacturing as the largest employer in Charles Sturt, which has two major hospitals: the Queen Elizabeth Hospital (the Western Region’s primary health care provider) and Western Hospital at Henley Beach.</p>
<p>Charles Sturt is a solid middle-market area that offers affordable homes, low vacancies and a strong construction pipeline. </p>
<p>The LGA has bayside suburbs west of the Adelaide CBD, including rising markets such as Henley Beach (median house price $790,000) and Henley Beach South ($763,000), as well as some more affordable locations such as Findon ($473,000), Kidman Park ($570,000), Semaphore Park ($467,000) and Seaton ($460,000).</p>
<p>Long-term growth rates (average annual growth in median prices over 10 years) are generally 5–6% per year. Henley Beach, Henley Beach South and Woodville Park are slightly higher at 7 percent per year (which means values doubling in 10 years).</p>
<p>Most of properties in the city are stand-alone houses (73 percent), while 28 percent are units, according to the 2011 Census. However, there has been a marked increase in the number of units being built in the last three years.</p>
<p>Vacancies across Charles Sturt are generally low, with many postcodes having vacancy rates below 2 percent. Only postcodes 5020 and 5021 (which includes West Lakes and West Lakes Shore) have vacancies outside the general comfort zone.</p>
<p>Much is happening in Adelaide generally and the City of Charles Sturt specifically, and this is partly attributed to the State Government’s <em>30-Year Plan for Greater Adelaide.</em></p>
<p>Using the plan as a guide, Renewal SA is initiating urban renewal developments, led by four major projects valued at over $2 billion. The largest project will see the population of the small inner suburb of Bowden grow from a few hundred residents to 3,500 over the next decade. This area is being revitalised with cafés, restaurants, shops, offices and parks.</p>
<p>The old AAMI Stadium (also known as Football Park) at West Lakes is to be redeveloped. In 2014, the South Australia National Football League sold AAMI Stadium to developers Commercial and General for $71 million. Commercial &amp; General has plans to develop the site into residential, commercial and community land uses. It is estimated 1,600 homes will eventually occupy the site. </p>
<p>Another Renewal SA project will see land adjacent to the Woodville Railway Station transformed with a mix of medium-density to high-rise dwellings.</p>
<p class="Body"><em>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></em></p>
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Adelaide the most under-rated among the capital cities: Terry Ryder

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<p><span>Over the 12 months to June 2016, 14.0 percent of all house sales and 7.3 percent of all unit sales were at a price of at least $1 million. </span></p>
<p><span>To put these figures into perspective, just five years ago 7.5 percent of all house sales and 4.0 percent of all unit sales were within this price point. </span></p>
<p><span>Research shows that the combined capital cities saw a much higher proportion of sales of at least $1 million over the past year. </span></p>
<p><span>Across all house sales, more than 1 in 5 sales (20.9 percent) were for at least $1 million compared to 8.9 percent of all unit sales. </span></p>
<p><span>Within the regional areas, the sale price for houses and units are typically lower than those in capital cities.</span></p>
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<p><span>An </span><span>emerging trend worth noting is the fact that the difference between the proportion of house and unit sales of at least $1 million is much narrower in regional areas.</span><span><br></span></p>
<p>In regional areas we tend to see that units are only located in larger regional markets and often are positioned in relatively expensive waterfront locations. Often the proportion of unit sales at, or above, $1 million has been above that for houses. Over the past year, 3.3 percent of all regional house sales and 3.0 percent of all unit sales were at least $1 million.</p>
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<p><span>Over </span><span>the past 10 years in particular, </span><span>we’ve </span><span>seen a substantial rise in the proportion of sales of at least $1 </span><span>million.</span></p>
<p><span>CoreLogic data confirms that in Sydney, over the past year more than 2 out of every 5 house sales was at least $1 million, and in Melbourne, 1 in 5 house sales was at least $1 million. Sydney had a higher proportion of total unit sales of at least $1 million than the proportion of house sales at that price point in each city except for Melbourne. </span><span>(Refer adjacent table which highlights the proportion of sales of at least $1 million over the past year, a decade ago and 20 years ago.) </span></p>
<p><span>There is an element of bracket creep in the numbers, however, as the supply of affordable homes selling has declined significantly over recent years, an increasing proportion of stock is selling for a seven figure sum.</span></p>
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<p><span>Demand </span><span>for premium housing and within the most expensive areas of the country remains buoyant which suggests that over the coming year the proportion of sales at a price point of at least $1 million will continue to </span><span>rise</span><span>. </span></p>
<p><span><em>Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></span></p>
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$1 million property market sales on the rise: CoreLogic's Cameron Kusher

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<div>Couldn't think what to blog about today - creative juices aren't flowing at all, perhaps I need black coffee - so thought that for something different I'd take a look at Australia's oft-discussed government debt, and a few forecasts from the Australian Office of Financial Management (AOFM).<br><br>The unemployment rate in Australia has declined from 6.3 percent to 5.7 percent since the beginning of 2015, taking the trend unemployment rate to its lowest level in 34 months at 5.71 percent.</div>
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<br><div>The supporting figures, however, show that we are absolutely miles away from full employment, with oodles of part time work and under-employment around. </div>
<br><div>Indeed, tomorrow's capex report will likely show that the collapse of business investment in the <strong>mining</strong> sector has spilled over adversely into associated parts of the services and manufacturing sectors (since some of these businesses naturally provided inputs into the resources investment boom - warehousing, transport, equipment manufacture, and so on).<br><br>In effect, via the unwinding of mining capex resources regions will be experiencing the multiplier effect of the mining investment boom in reverse, sucking some mining-dependent regions in Western Australia and Queensland into a gravitational black hole. I think this has already happened, in truth, the data will just confirm it.<br><br>Anyway, that's tomorrow's news, but one senses the outlook for capital expenditure won't be all that great, and the recovery in all likelihood has a long way to run.<br><br><a href="/images/2016/09/01/Lifecycle.jpg" target="_blank">Click to enlarge</a>
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<img src="/images/2016/09/01/Lifecycle.jpg" alt=""><br><br>(huge h/t to whichever internet wag created the above graphic - it gets me every time...too funny).<br><br><strong><span style="text-decoration: underline;">Some Treasury forecasts...</span></strong><br><br>As new resources projects come online, Treasury expects the Australian economy to keep growing at a solid clip, in part driven by increasing export volumes, particularly of LNG.</div>
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<div>Treasury has maintained its positive forecasts for real GDP growth over the next few years, with economic growth to be aided by household consumption and net exports as the export volumes increase.</div>
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<div>However, these forecasts somewhat optimistically assume that household consumption will continue to remain positive, with the terms of trade holding also up at a level above anything we saw prior to the start of the boom (rather questionable given the trend since 2012!). Coking coal prices are booming - up by more than 40 per cent in August - but the outlook for iron ore prices may be grim.<br><br><div class="separator"><a href="/images/2016/09/01/TOT.jpg" target="_blank">Click to enlarge</a></div>
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<br>Tourism and education exports are also expected to be key contributors, a theme I've looked at quite a bit on this blog.<br><br><a href="/images/2016/09/01/Services.jpg" target="_blank">Click to enlarge</a><br><img src="/images/2016/09/01/Services.jpg" alt=""><br><br>
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<div><strong><span style="text-decoration: underline;">Government borrowing</span></strong></div>
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<div>While the government is making noises about trimming dollars and cents from its budget expenditure, behind the scenes the government is expected to keep borrowing hard, in part for infrastructure projects.<br><br>There are now $397 billion of Treasury bond securities across 23 lines on issue - a dozen of which have more at least A$20 billion outstanding - but look how low some of those coupon rates are...</div>
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<br><div class="separator">There are a further $30.6 billion of Treasury indexed bonds and $3.5 billion of Treasury notes, adding up to a total of <strong>$431.2 billion</strong> of government securities on issue. </div>
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<div class="separator">Fortunately bond yields are so low that the government can borrow at around the lowest yields on record without adding unduly to the interest burden.</div>
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<div class="separator">And government bonds on issue are expected to keep rising, with there having been strong inflows from Japan into Australia's debt securities over the last three years.</div>
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<div class="separator">Gross issuance of Treasury Bonds is expected to be A$90 billion in 2016-17, up marginally from last year, with net issuance of $68.9 billion (and an additional $3 billion of net issuance in Treasury Notes).</div>
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<div class="separator">That will take Australian government bonds on issue to well beyond 25 per cent of GDP (though Australia's net debt to GDP ratio is somewhat lower) - which is not really very high compared to other deficit countries - e.g. Japan, Canada, the United States, Greece, France, or the United Kingdom - but nevertheless moving in an unmistakeably northwards direction since the financial crisis took hold. </div>
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<div class="separator">How you feel about that really depends upon your position. Some argue that it's borrowing from the future. Others maintain that it makes a lot of sense to borrow for infrastructure projects when bond yields and coupon rates are so low, and while mining investment is still in freefall. </div>
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<p><span><em>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>.</em><br></span></p>
<p><em>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>.</em></p>
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Government debt and the capex black hole: Pete Wargent

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<p>Vacancy rate figures are a leading example of how generalised data can be dangerously misleading for real estate consumers.</p>
<p>Research companies like to publish statistics which describe an entire city in a single figure. One might tell us that “Sydney house prices” have risen 8 percent in the past year, but what does that mean for a metropolitan area with over 700 suburbs and five million residents?</p>
<p>The overall vacancy rate for Melbourne is a healthy 2.1 percent, according to SQM Research, but does that make investment in the city generally safe? Behind that generalised figure lie myriad different situations, including some (like inner-city Southbank and suburban Doncaster) where vacancies are in the 5-6 percent range.</p>
<p>The Brisbane metropolitan area provides a sobering case study for this topic. The overall vacancy rate is 2.9 percent, which is within the accepted comfort zone.</p>
<p>But closer examination reveals some worrying information. The city’s generalised vacancy rate has risen from 2.6 percent a year ago to 2.8 percent in June and 2.9 percent in July.</p>
<p>But specific areas show much higher vacancies and it’s not just the inner-city apartment markets. The unit development frenzy has extended to the suburbs and some precincts have alarmingly high vacancy rates now.</p>
<p>The latest figures show the Brisbane CBD has a vacancy rate of 5.3 percent. Surrounding near-city markets including South Brisbane, Woolloongabba, Kangaroo Point and Fortitude Valley all have vacancies in the range from 4.1 to 5.8 percent.</p>
<p>With major projects under construction, many of these rates will get considerably worse before they get better.</p>
<p>But now suburban markets well beyond the inner-city high-rise precincts are joining this disturbing trend.</p>
<p>There is major new construction of units happening in many of the suburbs on Brisbane’s Northside, in the middle ring suburbs where houses have dominated in the past. Thousands of new apartments received council approval in the financial year just ended. </p>
<p>The suburbs most impacted are Albion, Chermside, Everton Park, Kedron, Gordon Park, Wooloowin and Lutwyche. </p>
<p>The Albion postcode now has a vacancy rate above 9 percent. The postcode covering Kelvin Grove, where major urban renewal projects have been targeted, has a vacancy rate above 5 percent.</p>
<p>The postcode covering Lutwyche and Windsor is at 4.4 percent, while Herston is 4.8 percent. </p>
<p>Chermside’s vacancy rate is currently reported as 3.7 percent but is trending upwards and is likely to go much higher as there is widespread new development in this area. </p>
<p>There was recent publicity for this area, based on a research report that Chermside would become a property hotspot because of projected population growth. This was based on recent residential building approvals. Property marketers weighed in, suggesting this was a good place to buy.</p>
<p>There’s no doubt that the Chermside precinct has many good qualities – well-established residential areas supported by major infrastructure, facilities and jobs nodes. It’s part of a precinct that I wrote about favourably a few years ago, when Brisbane Northside generally was leading price growth in metropolitan Brisbane.</p>
<p>But those days have passed. The momentum has shifted to other parts of the Brisbane market and, in the meantime, developers have dived en masse into the Northside market. </p>
<p>All those positive qualities– population growth, good transport links, employment growth and great services and amenities – can be overpowered and rendered meaningless by one simple factor: oversupply. </p>
<p>Brisbane’s overall vacancy rate of 2.9 percent does not alert us to the reality that places like Chermside have much higher vacancies, which are rising steadily and set to become worse.</p>
<p><em>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></em></p>
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Brisbane unit development frenzy hits the suburbs: Terry Ryder

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<p>Seasonal adjustments for department store sales have delivered a bit of a wild ride in recent years, and this month's Retail Trade figures recorded a monster -6.2 percent decline for the sector in July. </p>
<p>It's not the first time we've seen a 'far out' reading for department store retail (last time the figures snapped back the following month) - but we'll have to wait until next month to see whether that happens again.</p>
<p>In any event, this contributed a flat result in seasonally adjusted terms, for just a +0.1 percent increase in trend terms.</p>
<p>Excluding the department stores reading retail turnover would have been up by +0.4 percent for the month, so we'll have to wait and see what next month brings. </p>
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<br><div>Year-on-year retail turnover growth has sagged over the past year to just +2.7 percent, to now sit well below the half decade average.</div>
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<br><strong><span style="text-decoration: underline;">State versus state</span></strong><br><br><div>The powerhouse states New South Wales (-0.2 percent) and Victoria (-0.5 percent) unusually both recorded negative results in July, possibly because department stores have their head offices in Sydney and Melbourne, though nobody really seems to know if that's why.</div>
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<div>The only decent monthly results were seen in Queensland and South Australia.</div>
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<br><div>Over the past year the opening of a new IKEA in Canberra was the spark to create the strongest retail turnover growth in the Australian Capital Territory (ACT), while the southern states have fared relatively well over the year to July.<br><br>This month's surprise negative result knocked the quarterly and annual figures for NSW and Victoria quite hard.</div>
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<div>Note how demand in the the resources rich Northern Territory has fallen away in tandem with Western Australia, where iron ore and LNG construction projects have recently transitioned to production.</div>
<br><strong><span style="text-decoration: underline;">Department stores crunched</span></strong><br><br><div>Erm, and then there's this. Maybe everyone stopped shopping for a month and there's a rebound pending, or perhaps the timing of revenues being booked is a bit of a lottery.<br><br>Leaving aside the department stores outlier, it's become clear that the household goods boom that piggy-backed off rising house prices as now ended. </div>
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<br><div>Food retail turnover was also weak in dollar terms, in part reflective of soft food prices and intensified competition from low cost supermarkets such as Aldi.</div>
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<br>The best performing sector of the year has been clothing and footwear.<br><br>
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<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
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<div>A rubbish result! We won't know until next month whether department store retail turnover was an anomaly, but it was an inauspicious start to Q3 for retail trade!</div>
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<p><span><em>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>.</em><br></span></p>
<p><em>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>.</em></p>
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