Article summary

<ul data-end="785" data-start="311">
	<li data-end="459" data-section-id="5hbcyr" data-start="311">Pikos Group has released the five-penthouse collection at Skye Kangaroo Point, headlined by a two-storey sky home spanning more than 1,000 sqm.</li>
	<li data-end="561" data-section-id="1p7lq8n" data-start="460">Early buyer interest suggests the residences could set a new Queensland apartment price record.</li>
	<li data-end="667" data-section-id="1y70z0l" data-start="562">The collection includes four move-in ready penthouses and the highly customised Skye One residence.</li>
	<li data-end="785" data-section-id="yvm0y1" data-start="668">The release caps one of Bri​sbane's most ambitious luxury apartment developments overlooking the Brisbane River.</li>
</ul>

<hr data-end="790" data-start="787" />
Pikos Group has released the five-penthouse collection at its <a href="https://www.apartments.com.au/buildings/skye-residences-by-pikos-kangaroo-point-8-river-terrace-kangaroo-point-qld-4169">Skye by Pikos</a> development in Kangaroo Point, with early buyer interest indicating the flagship residences could eclipse every apartment sale previously recorded in Queensland.

The collection crowns the luxury riverfront development with five residences, including four completed penthouses and Skye One, a two-level sky home spanning more than 1,000 sqm that will be tailored to its eventual owner.

[smartcode_project:default project_id=90059 project_image_fid=374075]

Wanting to offer a fully customisable home, Pikos is offering Skye One as a blank canvas, allowing the buyer to work alongside the developer's design team to customise the home's layout, finishes and internal spaces.

The residence will feature a 247 sqm private rooftop terrace with its own swimming pool, sauna, steam room, outdoor kitchen and multiple entertaining areas overlooking the Brisbane River and CBD skyline.

The remaining four penthouses have been completed and are ready for immediate occupation, each offering four bedrooms, expansive open-plan living areas, soaring ceilings and private lift access.

[smartcode_project:default project_id=90059 project_image_fid=374059]

One of the defining features throughout the project is its use of Roman Classic Travertine, with more than 20,000 sqm of the natural stone imported from Italy after being personally selected by Pikos Group Founder and Executive Director Pedro Pikos, interior designer Julie Williamson and third-generation stone specialist Mario Caucci.

Pikos said the penthouse collection represented the culmination of the company's long-term vision for Skye.

"True legacy isn't measured by what we build today, but by what endures tomorrow," Pikos said.

"Our ambition is to create places that become more valuable with time, enrich the lives of generations, and stand as timeless landmarks long after we've stepped away."

[smartcode_project:default project_id=90059 project_image_fid=374060]

Williamson said the interiors were inspired by the natural character of Kangaroo Point and the Brisbane River rather than international design trends.

"Materiality tells the story of a place," Williamson said.

"We looked to the movement of the Brisbane River, the texture of the cliff face and the warmth of the surrounding landscape to create interiors that feel understated, enduring and unmistakably Brisbane."

Positioned above the Kangaroo Point cliffs, Skye places residents within walking distance of Howard Smith Wharves, South Bank and James Street while offering uninterrupted river and city views.

[smartcode_project_cta:default project_id=90059]

Joel Robinson

Brisbane's next apartment price record? Pikos unveils Skye's exclusive penthouse collection

Article summary

<ul data-end="888" data-start="289">
	<li data-end="442" data-section-id="8tsh6o" data-start="289">DVB Projects is preparing to launch its second Gold Coast apartment development, with demolition now underway at 137 Old Burleigh Road, Broadbeach.</li>
	<li data-end="573" data-section-id="1nyxl3e" data-start="443">The 34-level tower will comprise just 49 ultra-luxury residences, including half-floor, full-floor and penthouse apartments.</li>
	<li data-end="717" data-section-id="oiyimj" data-start="574">The launch follows strong demand at DVB's nearby Sea Glass project, which is more than 50 per cent sold and currently under construction.</li>
	<li data-end="888" data-section-id="epk9o9" data-start="718">The development adds to the transformation of Old Burleigh Road, with premium beachfront apartment projects continuing to reshape the tightly held Broadbeach strip.</li>
</ul>

<a href="https://www.apartments.com.au/developers/dvb-projects">DVB Projects</a> is preparing to launch its second Gold Coast apartment development, with demolition now underway on the Broadbeach site as the Sydney developer moves closer to bringing the ultra-luxury project to market.

The 34-level tower at <a href="https://www.apartments.com.au/new-apartments/137-old-burleigh-road-broadbeach-qld-4218">137 Old Burleigh Road</a> will comprise just 49 residences, ranging from half-floor apartments through to full-floor homes and a penthouse. The launch follows the strong sales performance of DVB's nearby Sea Glass development. More than half of the apartments at Sea Glass, on the other side of Broadbeach, have been snapped up, well ahead of its late 2027 completion

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="2944b4be-c84e-4b54-8dc1-c712e76704c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E02_Exterior_Street%20Level%20Entrance.jpg?VersionId=YoNig7pRdrE3HCue7sUj78LzJteeQf3H" />

The start of demolition at 137 Old Burleigh Road signals DVB Projects’ underlying confidence in the Gold Coast’s luxury beachside apartment sector.

“We see the Gold Coast as one of the most compelling lifestyle markets in Australia, particularly at the premium end where demand continues to deepen,” said Dean Brown, Managing Director of DVB.&nbsp;

“This project has been carefully designed to respond to that demand - delivering large-format residences with a level of quality, privacy and amenity that is still relatively rare in the apartment market on the beachside."

Brown says the site itself is "exceptional."

"Old Burleigh Road is one of the most tightly held beachfront strips, and opportunities to deliver a project of this scale and calibre in this location are extremely limited.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="398f377a-c037-455e-9250-0c5e0d84c35b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/I12_FF%20Balcony.jpg?VersionId=NwOiRWGMubR1c8wthuEfggklcja7al9." />

The project will comprise 40 half-floor residences of approximately 260 sqm, alongside eight full-floor residences spanning around 524 sqm.

A single penthouse will crown the building, featuring a private pool, barbecue area, indoor gym and dedicated entertaining spaces.

Residents will have access to a resort-style suite of amenities, including a 20-metre pool with daybeds, a gymnasium, hot and cold plunge pools, a sauna, and private residents’ lounge and dining facilities.

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="d1642bb0-9a66-4427-a022-dfc0988c6287" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/A02_Pool%20to%20View.jpg?VersionId=c0IXPyn_Gp_Kn3XCwzMrqIVkAdCEwVXP" />

Sales agent Todd Matheson, of <a href="https://www.apartments.com.au/project-marketer/pezet-matheson">Pezet Matheson</a>, which is marketing both 137 Old Burleigh Road and Sea Glass, said 137 Old Burleigh Road would address a clear gap in the market for genuine luxury products.

“There are very few opportunities on the Gold Coast where buyers can secure a residence of this size and quality in a new building,” Matheson said.

“What we’re seeing is a growing cohort of downsizers and interstate buyers who still want space - they’re not willing to compromise on living area, entertaining or finishes.

“This project has been designed with that buyer in mind. It offers the scale of a home, combined with the convenience and security of apartment living, in one of the coast’s most desirable positions.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="59aae0ca-5639-4320-8aca-d0bf60f48e43" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E01_Exterior%20Hero.jpg?VersionId=DS8Zfy2WtgUEtdfe0TEUuf1W1GfcZq8S" />

Located on a 1,156 sqm site one block from the beachfront, the development will replace an ageing walk-up building and is expected to contribute to the ongoing transformation of the Old Burleigh Road strip into one of the Gold Coast’s most prestigious residential corridors.

With the development moving into the delivery phase, 137 Old Burleigh Road is slated to hit the market later this year.

[smartcode_project_cta:default project_id=145141]

DVB Projects to launch second Broadbeach apartment tower as demolition commences

A proposal to redevelop one of North Sydney's ageing commercial buildings has taken another step forward, with plans for a 38-storey mixed-use tower adding momentum to the long-awaited transformation of the Alfred Street precinct.

Now on public exhibition through the NSW Government's Housing Delivery Authority-led State Significant Development pathway, the proposal for 271-273 Alfred Street would replace an underutilised commercial building with 95 apartments, ground-floor retail, commercial space and affordable housing. The proposal was submitted by&nbsp;Tara Shore Pty Ltd, acting for the John Taylor Family Trust.

While the project will deliver much-needed housing on the southern edge of the North Sydney CBD, it also represents another piece of a broader precinct that has spent years in planning limbo.

<img alt="First look: New public domain vision underpins 95-apartment North Sydney tower on Alfred Street" data-entity-type="file" data-entity-uuid="7e1ce1b4-38df-48ab-992f-386814d86308" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Alfred%20St%20da%20podium.png?VersionId=sC_h6w.A9VEoB98qsqowPlIoz__sBZBt" />

Despite its proximity to both North Sydney Station and the Victoria Cross Metro, redevelopment of Alfred Street has progressed slowly over the past decade as broader planning controls, zoning and building heights remained unresolved. The introduction of the Housing Delivery Authority pathway has provided a new avenue for projects to progress, allowing rezoning and development assessment to occur concurrently and unlocking sites that have long been earmarked for renewal.

Designed by Office of Cortese &amp; Gilder, the proposal seeks to do more than replace an ageing office building. The architects have positioned the project as the first stage of a wider public domain vision that would improve pedestrian connectivity and create a more cohesive mixed-use precinct as neighbouring sites are redeveloped over time.

The proposal includes a widened Alfred Street setback, new street trees, landscaping and outdoor seating, along with a landscaped through-site pedestrian link connecting Alfred Street with Little Alfred Street. The connection is intended to become the first section of a future east-west pedestrian network extending across the precinct.

<img alt="First look: New public domain vision underpins 95-apartment North Sydney tower on Alfred Street" data-entity-type="file" data-entity-uuid="8ea39ac3-46ad-4562-b4a0-b862e91c2dda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Alfred%20St%20da%20site.png?VersionId=K7umCd21KpetEFuVfsPlnJKhUOsmTTdV" />

The mixed-use tower would comprise retail space at ground level, commercial uses on level two and apartments from level three upwards.

In total, the development would deliver 95 apartments, including nine one-bedroom, 28 two-bedroom, 56 three-bedroom and two four-bedroom residences. Twenty-one apartments, representing 15 per cent of the residential gross floor area, would be secured as affordable housing and managed by a registered community housing provider for at least 15 years.

Nine basement levels would provide 133 resident car spaces, seven motorcycle spaces and 111 bicycle spaces.

According to the Architecture and Urban Design Report, the public domain strategy is designed to transform what is currently an inward-facing commercial edge into a more active and connected pedestrian environment, creating a stronger relationship between the commercial core and surrounding residential neighbourhoods.

Office of Cortese &amp; Gilder has also prepared a broader public domain framework spanning neighbouring properties between 263 and 283 Alfred Street, arguing that a coordinated approach to redevelopment will deliver better public spaces, improved tower separation and a more connected streetscape as the precinct evolves.

The proposal comes at a time where North Sydney is slated for future residential growth. Commercial developer FiveX has residential plans for the neighbouring site at 275 Alfred Street. They've proposed a 39-storey mixed-use tower with 184 apartments, while Freecity was recently approved for nearly 300 apartments across a 51-storey building on Walker Street.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-freecity-gets-green-light-for-mixed-use-apartment-and-hotel-tower-in-north-sydney">First look: Freecity gets green light for mixed-use apartment and hotel tower in North Sydney</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-plans-39-storey-residential-tower-in-booming-north-sydney">First look: Fivex plans 39-storey residential tower in booming North Sydney</a>

&nbsp;

Alfred Street the latest North Sydney pocket to be transformed by residential development

Buyers considering a residence at boutique Gordon townhouse development <a href="https://www.apartments.com.au/new-townhouses/lume-gordon-43-47-dumaresq-street-gordon-nsw-2072">Lume</a>&nbsp;now have another reason to bring forward their decision.

For a limited time, purchasers of a residence at Lume will receive a BMW iX3 50 electric SUV, valued at more than $120,000, as part of their purchase. The offer is designed to add value for buyers while complementing the lifestyle envisioned for the architecturally designed Upper North Shore development.

Scott Timmins, Development Manager at <a href="https://www.apartments.com.au/developers/winim">WINIM</a>, said the partnership was created to provide buyers with a compelling reason to act.

"In today's market, buyers need a compelling reason to act now, and the BMW partnership was designed to create that catalyst. We wanted to add genuine value for our future purchasers. Choosing the all-electric BMW iX3 50 also reflects the values behind LUME, forward-thinking design, innovation and a more sustainable way of living. It's a premium incentive that complements the lifestyle our buyers aspire to and rewards those who commit early."

[smartcode_project:default project_id=7354 project_image_fid=374893]

Delivered by WINIM in partnership with Burtonwood Investment Partners, Lume comprises 14 architecturally designed two, three and four-bedroom townhomes created for families seeking the space of a freestanding house with the ease of modern, low-maintenance living.

The three-storey residences, designed by award-winning architecture practice <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, have been tailored for families and multi-generational living, featuring private internal lifts, flexible lower-level spaces, generous open-plan living and entertaining areas, media rooms, and landscaped outdoor spaces with custom outdoor kitchens.&nbsp;

Inside, engineered oak flooring, bespoke dining joinery with integrated wine fridges and backlit bars, sculptural porcelain bathrooms, Parisi freestanding baths and Astra Walker tapware create interiors that balance functionality with refined finishes.

Each townhome has been designed to combine generous internal spaces with sustainability initiatives such as EV charging infrastructure, while <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>'s landscaped communal areas, centred around a restored creek line and native planting, encourage residents to connect with nature and spend more time outdoors.

[smartcode_project:default project_id=7354 project_image_fid=269527]

Rothelowman's Gary Tsui said the architecture was conceived to respond carefully to its Upper North Shore setting.

"Our vision was to create elegant, uplifting homes that draw on and positively contribute to the local character through meticulously considered design and an interaction with the surroundings."

The communal landscape has been designed as more than an open space between homes. Arcadia's Ben Newell and Kate Phillips said the adjoining reserve provided an opportunity to create a distinctive natural retreat for residents.

"Just as waterways carve their way through Ku-ring-gai's landscape, a raised boardwalk weaves through the reserve, connecting the homes to this tranquil oasis."

[smartcode_project:default project_id=7354 project_image_fid=374892]

Located just 300 metres from <a href="https://www.apartments.com.au/developments/gordon-nsw-2072">Gordon</a> Village and Gordon railway station, Lume offers convenient access to Sydney's CBD while placing residents close to some of the North Shore's leading schools, including Ravenswood, Pymble Ladies' College and Knox Grammar. Lane Cove National Park, Gordon Golf Club and a range of cafés and restaurants further reinforce the family-focused lifestyle on offer, with the BMW iX3 50 complementing everything from local trips around Gordon to weekend drives and city commutes.

Construction is underway with completion expected in mid-2027.

[smartcode_project_cta:default project_id=7354]

Boutique Gordon townhomes now come with a BMW iX3 50

Two apartments have sold for more than $10 million at EADE Byron Bay, setting some of the highest apartment prices ever achieved in the coastal town and underlining the growing appetite for luxury beachfront apartments in Australia's most popular coastal locations.

The $210 million project by Vitale Property Group has now secured more than $70 million in sales, led by residences that changed hands for $12.75 million and $11.75 million.

The record-breaking transactions reinforce the shift occurring in Byron Bay's premium property market, where affluent downsizers and lifestyle buyers are increasingly opting for high-end apartments over large beachfront homes.

<a href="https://www.apartments.com.au/new-apartments/eade-byron-bay-29-shirley-street-byron-bay-nsw-2481">EADE Byron Bay</a> occupies a rare 6,000 sqm absolute beachfront site on the corner of Shirley and Milton Streets overlooking Main Beach and The Wreck surf break, just 350 metres from Byron Bay's town centre.

The 25-residence development is the first beachfront apartment project approved in Byron Bay in more than a decade and is currently under construction, with completion expected in May 2027.

[smartcode_project:default project_id=145590 project_image_fid=359521]

The project has attracted a mix of local Byron Shire residents downsizing from larger homes, alongside interstate buyers from Sydney, Melbourne and Brisbane seeking a permanent coastal lifestyle without compromising on space.

Designed by <a href="https://www.apartments.com.au/architects/hayball">Hayball</a> and with interiors by <a href="https://www.apartments.com.au/interior-designers/alexander-co">Alexander &amp; Co</a>, EADE comprises&nbsp;10 garden apartments ranging from 284 sqm to 622 sqm, nine with private pools, five full-floor apartments and 10 rooftop residences with private plunge pools, expansive outdoor entertaining areas and uninterrupted ocean views.

[smartcode_project:default project_id=145590 project_image_fid=359527]

<a href="https://www.apartments.com.au/developers/vitale-property-group">Vitale Property Group</a> Managing Partner Chris Vitale said the project's combination of scale, location and limited future supply was driving buyer demand.

"There isn't another beachfront holding in Byron Bay of this size and position that could be developed again," Vitale said.

"Buyers are responding to the scarcity and the irreplaceability of a site of this calibre and to floorplans they can't find elsewhere in the market.

"We are seeing buyers place significant value on quality, space, design, resort-style amenities and the rarity of the location. The sales achieved to date demonstrate that discerning purchasers recognise the long-term significance of what is being created at EADE Byron Bay.

"Many are coming from larger homes in the Byron region, or from Sydney, Melbourne and Brisbane, and are after the space, security and convenience, without the upkeep of a house."

&nbsp;

[smartcode_project:default project_id=145590 project_image_fid=359523]

The Byron Bay project follows Vitale Property Group's delivery of the Mondrian Hotel and Private Residences at Burleigh Heads, with EADE continuing the developer's focus on luxury coastal developments.

Residents will have access to a resort-style swimming pool, gymnasium, sauna, cold plunge pool, concierge services and dedicated workspaces, while the project is targeting an 8-Star Green Star rating.

EADE Byron Bay is being exclusively marketed by Projx Australia in conjunction with WHITEFOX Projects.

WHITEFOX National Projects Director Phillip Rand said demand had been driven predominantly by owner-occupiers.

"We are seeing buyers at EADE place significant value on quality, space, design, resort-style amenities and the rarity of this location," Rand says.

"The sales achieved to date demonstrate that purchasers at this level recognise the long-term significance of what is being created at EADE Byron Bay."

Residences at EADE Byron Bay are currently priced between $4.75 million and $15.95 million.

&nbsp;

&nbsp;

&nbsp;

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[smartcode_project_cta:default project_id=145590]

Vitale breaks Byron Bay records with EADE sales flurry 

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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We all know that the Gold Coast won the right to host the 2018 Commonwealth Games. Congratulations to Mark Stockwell and his team.
This two-week event will be held in April 2018. Some amazing claims are already being made as to the impact of such an event on the Gold Coast market and economy. While some statements seem to have gone through some rigour, others are just utter spruiking – “the Gold Coast will be exposed to billions of people around the world as preparations unfold in the lead-up to April 2018” and “property markets will reap rewards too” are two recent examples.
So far, we understand that these games will cost $1.97 billion, with local taxpayers expected to foot close to three-fifths of the bill. Up to $500 million of this money will be spent on sport and infrastructure projects. Queensland will also go $1 billion further into debt to host the event. But apparently 30,000 new jobs will be created and $2 billion worth of economic benefits will be derived. It is estimated that 120,000 extra tourists will visit the coast because of the games.
Out of the 53 sovereign states that make up the Commonwealth of Nations, just two competed for the 2018 games, with the other being Sri Lanka. Hambantota budgeted to spend just $650 million if it won the right to hold these games.
Melbourne held the 2006 Commonwealth Games – 245 events were held across 17 sports; 71 countries, territories and bodies competed and 635 medals were awarded, of which Australia won 222 or a third; and when combined with England and Canada, these three nations took home two-thirds of the spoils.
As the tone above indicates, I remain very sceptical about the real economic impact of such sporting events.  But before we finalise our post on this topic – to be released in coming weeks – we are seeking your thoughts.
Please <a href="https://www.surveymonkey.com/s/MatusikCommonwealthGames" target="_blank">click here</a> to participate.  It will only take a minute or two of your time
Michael Matusik is the director of independent property advisory Matusik Property Insights. Matusik has helped over 500 new residential developments come to fruition and writes the weekly  <a title="Matusik's Missive" target="_blank" href="https://matusikmissive.wordpress.com/">Matusik's Missive</a>.
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michaelmatusik-49YzLvdmNv

Jury is still out on claims of Commonwealth Games boost for Gold Coast

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Today I want to give you a snappy summary of my (interlinked) thoughts on both the outlook for Aussie interest rates and our much-maligned, misunderstood yet economically meaningful housing market.
Yesterday’s housing finance data from the ABS confirmed what I’ve been arguing here for months. After the flood-induced downdraft in prices at the start of the year, which was given an equally serious kick-along by the RBA’s de facto double hike in November 2010 (lifting mortgage rates to historically high levels), the number of loans approved to buyers of existing homes has been rising steadily since March.
As I’ve explained before, one wants to focus on the number of seasonally adjusted loans approved for purchasing established dwellings (the red line in the chart below) in preference to the “value” of housing finance series (as this is distorted by house prices) or anything relating to newly built dwellings, which make up a tiny fraction of the established dwellings series.
We are, to be sure, interested in things like finance for construction purposes, which gives us insights into the rate at which new homes are being built. But even the most fervent housing destructionists concede that Australian building approvals have been running at or below the demand-side, or household formation, implied needs for years now. Coupled with low rental vacancy rates, only a dissembling imbecile would have us believe that Australia’s housing market is characterised by significant excess supply.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/jan171.gif"><img src="/images/stories/jan171thumb.gif"></a>
What we can see from the chart above is that since May 2011 the three-month moving average growth rate for the number of loans approved for purchases of existing dwellings (refer to the blue bars) has been around 1.5%. That means that new home loan approvals have actually been rising at a double-digit pace since March 2011, which is good news for the banks that rely on credit growth to generate profits, and anyone concerned about the quality of the collateral (i.e., home loans) sitting on their balance-sheets (e.g., covered bond investors or hedge funds shorting their stock).
Critically, this demand-side momentum started to materialise well before the RBA bequeathed its interest rate munificence on the market with not one, but two fully passed-through mortgage rate cuts in November and December. They don’t call him Santa Claus Stevens for nothing! And all home owners will be crossing their fingers that Stevens passes out the interest rate presents over and over again, with the financial markets currently pricing in another four to five cuts. If we get that much RBA relief, and the banks pass most of the reductions on, Australia will almost certainly see the return of rapid house price appreciation, much like we did in 2009.
We now know that housing participants responded to the sharp turnaround in home loan affordability almost immediately: in November, RP Data-Rismark reported the first increase in seasonally adjusted dwelling values since December 2010. Observe also in the next chart that one very useful bellwether of the housing market cycle – the share of first-time buyers as a proportion of all loans approved – has surged back to 20%, which is its highest level since February 2010.
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So all analytical eyes will be focusing on the December house price index results, which are released at the end of this month. Another seasonally adjusted gain in dwelling values will confirm that genuine stabilisation is afoot and excoriate the notion that November was merely statistical noise. I personally expect a surprise on the upside, but only time will tell.
Now to Australia’s central bank. While I will write more on this subject in the days preceding the RBA’s February meeting, it is perhaps most instructive to consider the options available to the bank.
<a href="https://www.propertyobserver.com.au/economy/february-rate-cut-tipped-to-boost-australian-housing-market/2012011253030" target="_blank">Anyone who tells you that an interest rate cut in February is a “done deal”</a> is a fool. Frankly, nobody knows with certainty, including the RBA, what the outcome of that meeting will be. It hinges most heavily on three pieces of information that we will get over coming weeks:
First, the fourth-quarter inflation data, and any revisions to the second- and third-quarter numbers. This will give the RBA a good feel for the nature of the inflationary pressures bubbling across the economy and whether it was justified cutting rates in November on the basis of one low third-quarter print. The consensus view is that inflation will be very benign in the fourth quarter, which will help the push for a rate cut in February (one economist thinks it will be negative!).
On the other hand, a high print, perhaps combined with some upward revisions to past data, would call into question the RBA’s recent decisions, and significantly reduce the chance the central bank doles out more ‘insurance’ to financial markets. A high quarterly number would be anything clearly in the top half of the RBA’s target 2-3% band (annualised), or, god forbid, beyond.
The second key tranche of data is the December month unemployment results. While the overall tone of Australia’s real economic data has been positive, and, as the RBA has repeatedly observed, insinuates that the economy was tracking at or above trend during 2011 (abstracting away from the floods), there have still been some conflicting signals.
First, there was the very modest step-back in house prices, which look like they will finish the year off around 3% lower. Then there has been some soft retail data based on the narrow monthly surveys, which have been refuted by the ABS’s much more comprehensive consumer spending data contained in the quarterly National Accounts. This tells us that overall consumption spending has been tracking at or above trend over the six months to September.
And finally we have the labour market. While the number of people on the dole has been declining consistently and the number of job seekers receiving unemployment benefits has also been shrinking, the monthly ABS labour force survey has offered a more sketchy story: the closely followed unemployment rate has been bobbing around 5% for the best part of a year, with a marked drop-off in absolute employment growth.
Any spike in the December unemployment data will lend credence to the analysts who have swung around to forecasting a steady increase in Australia’s jobless rate from 5.3% today to over 5.5% during 2012 and, combined with anodyne inflation data, would give the doves on the RBA’s board enough ammunition to lock in another interest rate reduction.
Our final consideration is, as always, the pulse of the global economy, and eurozone conditions specifically. Although Europe itself only contributes a relatively small fraction of global economic growth, which is why the US, India and China have managed to weather its headwinds relatively well, the RBA seems increasingly prone to bowing to pressure from the banks and financial markets to dole out scarce monetary policy insurance to protect these constituents against “tail risks”.
As you can tell, I don’t think this is an especially astute strategy, and would have exercised the “option to wait”, rather than boxing at manufactured shadows. Nevertheless, one curve ball is bank funding costs.
If, hypothetically, the eurozone crisis gets much worse, and the wholesale price of money that banks have to pay – which accounts for about 30% of their total funding – continues to rise (no one seriously disputes that it’s been increasing), the RBA might be convinced that to preserve current lending rates it needs to further lower its target cash rate.
This, crucially, assumes that the banks and their shareholders cannot absorb the higher funding costs themselves via lower net interest margins, lower profits, and lower returns on equity, which, at this stage, remain very high for government-guaranteed utilities.
Fortunately for borrowers, but not savers, none of the above contingencies countenances rate hikes. There is, by definition, some small probability that the next move in interest rates is not actually down.
If you believed the average or “consensus” economist view 12 months ago, you were budgeting on another three to four rate hikes. If you believe the average or “consensus” economist today, you are banking on another one to two cuts. The truth is nobody knows, and the RBA will be guided by what actually happens in the real world.
Christopher Joye is a leading financial economist and a director of Rismark International and Yellow Brick Road Funds Management. The above article is not investment advice.
 
 
 
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chrisjoye-JYhJsTrNRC

Economists' rate cut consensus outcomes await real-world momentum: Christopher Joye

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Some 70% of prospective Brisbane home buyers will not consider purchasing a house that was inundated during last year's floods, a report by the Australian Property Institute has found.
The report concluded that homes that were completely inundated last January have dropped more than 20% in value and took a month longer to sell than unaffected homes.
There was a decline in value of between 10% and 20% for properties where flood waters had partially affected living areas.
Homes that experienced only minor flooding of the garden dropped in price by between zero and 10%, the report found.
Even properties that remained dry in flood-affected areas have been affected, with the report noting national house prices have fallen by 3.4% and Brisbane house prices by 6.1%.
Tradesmen were the main buyers of flood-affected properties. Within the Brisbane region, flooding impacted upon parts or all of the following areas, among others: Milton, Toowong, Auchenflower, Rocklea, Goodna, Ipswich, Yeronga, Bellbowrie, Booval, Oxley and Jindalee.
The report found many investors had been the ones who decided to sell at discounted prices rather than carry out home repairs from a distance.
“Initially there was a steady turnover of flooded properties, generally for properties in the entry-level segment of the market.
“The owners of these properties were typically interstate or overseas investors who were unable to coordinate the required repairs and also felt that by the time they paid for repairs and factored in the lost rental income that it was easier for them to move the property on quickly,” the report says.
Brisbane valuer Gavin Hulcombe said the proximity of the flood to the November 2010 interest rate rise also helped to exacerbate any drop in value.
"There's no doubt that the two coincided. In a soft market negative attributes of a property are exaggerated.''
Hulcombe says insurance would play a role in how well the market recovered in flooded areas.
"One of the issues going forward will be availability and the cost of insurance to those properties,'' he says.
"If that becomes prohibitive then that's always going to be an issue that is going to impact buyers' minds,” he told The Courier Mail.
He notes the flood inundation of significant areas within Brisbane and further to the west, including Ipswich and the Lockyer Valley, has fundamentally impacted the Queensland residential property market.
At the peak of the flood, approximately 11,900 homes were completely flooded and a further 14,700 homes were partially flooded.
Hardest hit suburbs were West End, Rocklea, Graceville, Milton, St Lucia and Bellbowrie.
Almost 12 months on the clean?up continues, the report notes, along with limited stock coming onto the market.
“Many owner-occupiers of flood?affected properties have decided to carry out repairs to the dwelling and sit tight for the medium term until the market starts to recover,” the report says.
<img src="/images/stories/apiflood1.gif">
“There has been a limited amount of riverfront prestige properties in excess of $2 million coming onto the market in 2011.
“In the last couple of months some properties have come onto the market although there has been limited demand at present, despite the fact the properties are for sale often below replacement value,” says API president Philip Willington.
“As a result of the changes to the minimal habitable floor level by the Brisbane City Council it is possible that a sub-sector of the market in the under $1 million price bracket may develop.
“One sector of the market will comprise properties that were affected by flooding and carried out the necessary repairs, whilst the other sector of the market will comprise flood-affected properties where the owners have raised the dwelling to the new minimum habitable floor level as well as carrying out the necessary repairs," Willington says.
“The market may view more favourably the properties that have been raised to try and mitigate any future flooding events.”
But the overall market within the flood-affected properties was expected to remain subdued for the medium term.
<img src="/images/stories/apiflood2.gif">
Along with minimal demand in the general property market, the flood-affected suburbs were likely to have lower levels of supply and limited demand.
”As time goes by, and floods do not re?occur, as seems likely, history suggests that the discount will shrink, though not disappear entirely.
“The floods of 1974 provide a good indication of the pricing correction that is likely to now occur,” Willington says.
“Properties flooded in 1974 experienced an immediate fall in demand from purchasers and we have seen a similar trend in 2011.
“For owner-occupiers and investors looking to buy, the knowledge that Wivenhoe Dam (completed in 1984) cannot necessarily stop future flooding in Brisbane is likely to form a key factor in the due diligence process.
“The longer term influence of the 1974 floods on property prices diminished as buyers became less cautious about the likelihood of another significant flood event and perhaps more focused on issues such as the high population growth rate in south-east Queensland.”
As memories faded about the damage in 1974 to suburbs such as St Lucia, Indooroopilly, Graceville, Chelmer and West End, substantial price growth occurred in these suburbs.
“One could therefore expect that in the longer term, upwards of 10 years, if there are no further flood events, there may be a rebound of the flood affected areas as the memories of 2011 become more distant,” the report says.
The Australian Property Institute represents 8,600 property professionals. API members include residential and commercial valuers.
The report was compiled with the assistance of CBRE, Herron Todd White and Propell National Valuers.
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jchancellor-FAypfDUnLy

Brisbane buyers shun flood-affected properties: API

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There’s no doubt purchasing a property is the single biggest investment most people make. Even when housing was a cheaper acquisition back in the 1950s – long before it was recognised as a common investment model and subject to turbulent property cycles, purchasing a house and servicing a mortgage was a major financial stress factor in most property owners’ lives.  It was a simpler equation then.  Most waited until they were married to make the commitment, and then tended to purchase the property they intended to stay in for the next 20 to 30 years and bring up a family.  There was little need to move or commute long distances to work, as many occupied the same job position for life.  The motivation to pay off the mortgage was a security for retirement, and equity models were largely unheard of.
We’ve come leaps and bounds since then.  Debt is no longer a dirty word but a means to “wealth creation”. House prices have been inflated by a long-established ease of lending practices, various inflationary policies such as the first-home owner’s grant, and tax incentives to encourage investors onto the property ladder. Our inability to effectively plan for future population growth has ensured prices in those areas attracting the highest demand have sustained tight vacancy rates, rising rents and unsustainable booms followed by sharp corrections in the property cycle.  And it’s hard to ignore housing affordability has split the market between those who can and those who can’t (broadly speaking, the asset-rich with access to existing equity – and the asset-poor).
The motivation to ease the pain for first-home buyers and increase affordability in particular has led to a raft of policies that have done precisely the opposite. The first-home buyer grants have been renamed by various professionals as the first-home “vendor” grant, with widespread acknowledgement that they increase competition and as a consequence, increase property prices.  The incitement to borrow against equity and increase debt with interest-only loans, decreasing loan-to-valuation ratios, and various lending models such as “rent to buy” schemes have encouraged some borrowers to invest short term – “speculating” on a continuation of the housing boom. This is dangerous territory.
In Victoria, first-home buyers are underway to get a 50% stamp duty cut by 2014, while NSW is busy reining in stamp duty cuts on established properties for first-home buyers, which will no doubt skew market prices – at least in the short term. And to confuse the equation a little further, first-home buyers could now be termed “first-investment buyers” because the choice to live at home longer and purchase the first property as an investment rather than principal place of residence is now encouraged as a method to establish a foothold.
Neither does it help to see numerous “get-rich-quick” schemes wafted around like confetti. As I write, an email with the headline “How Linda Built a $12k per Month Positive Income (from property) in Just 6 Years” has landed in my inbox, and I don’t need to emphasise it sounds too good to be true.  Everyone’s looking for short cuts into what should always and principally be regarded as a long-term investment with the primary purpose of providing shelter – and not just to creating wealth.
In short, the only effective way to ease house prices is to increase supply in “liveable” areas of the city (areas with enough amenities to provide jobs, transport and options for those able to make the move into newer estates).  However, seeing as this isn’t happening at any great pace, and it’s unlikely that the already established incentives such as depreciation models and incentives will be abolished and further constrain inflation, we have to move our focus to a more traditional path.
Among all attempts by government to encourage home ownership, the only real policy that seemed to have the potential of genuinely addressing affordability was the introduction of the first-home savers’ account. It was launched back in 2010 as a high-interest, low-tax saving account, set up specifically to assist first-home buyers enter the market.  It committed (and educated) purchasers to save over a four-year period, however on the proviso funds were “locked” for the entirety of that period and only accessible for use towards home ownership at the end of the term.  Furthermore, requirements were for at least $1,000 savings to be deposited per year. Therefore those taking up the scheme had to have a long-term plan, secure employment, and plenty of dedication and vision to stick to the contract – something our 21st-century lifestyle rebels against.
As touched upon above, changes in employment are expected, particularly among the first-home buyer generation, and understandably there was reluctance to lock away funds with no “get out” plan for an extended period of time.  Therefore, take-up was initially poor. From a predicted 750,000 accounts, just 15,300 were created, with only $40 million spent out of the $1.2 million originally allocated. Thankfully there’s been some relaxation on the previous conditions, and funds can now be accessed before four years if a purchase occurs beforehand.  However, the changes have come too late and as far as I’m aware, the savers’ accounts are now only offered by a limited number of smaller lending institutions. For those interested, more information can be accessed <a href="https://bit.ly/zg5EZE">here</a>.
Thankfully there’s been a gradual trend towards the psychology of saving and paying down debt since the GFC.  This isn’t isolated to <country-region><place>Australia</place></country-region>; the reaction has been the same worldwide – it’s natural in such times.  It’s also significant that the changes have been prevalent in gen Y’s age group.  Westpac New Year's Financial Resolution Survey questioned 2,000 Australian’s on their prospective spending habits for 2012. The results showed that three out of four gen Ys were committed to a focus on saving in the new year, and this can only be welcomed.
However, how long the changes will last is debatable, especially considering further talks of rate cuts by the RBA, which are solely designed to get us out there spending once again and will in turn stimulate inflation in the housing market.  There’s no argument from consumers that the rate cut was needed, however as has been pointed out many <a href="https://bit.ly/woOYlV">times</a>, what’s needed in one sector isn’t necessarily needed in all.
Underlying demand and a shortage of homes in the capital cities will keep growth in house prices on an upward curve; the concern is around how many we are locking out the market with “kind” inflationary incentives that do nothing to educate our future workforce of the real tricks to building wealth and sustaining growth over the long term – principally saving, limited spending and wise long-term investment of the surplus.  One of the problems that led us full throttle into the GFC in the first place was short-focused, irresponsible unrestricted lending practices (principally in the US), which promised purchasers they could jump into home ownership without the strict self-governance of basic lessons such as the ability to comfortably service debt.  We thankfully didn’t have the same phenomenon here, however if we keep feeding the psychology that when the going gets tough someone will produce the taxpayer cheque book, we’re in the process of building bubbles and unstable foundations.
The lesson isn’t just one that needs to come from above.  It starts at home – according to various surveys, including one recently conducted by <a href="https://bit.ly/xSMl0S">Rabo Direct</a>, one in five gen Xs agree with more than 35% of gen Ys who accept that the only way they will be able to purchase a property is through handouts from their family (who purchased the traditional way, with no help and stricter lending conditions and generally higher interest rates).
Is it really that much harder now than it was then?  Well, yes, it is if initial expectation is too high.  We often see headlines exclaiming that the Australian dream is no longer a suburban detached house with ample backyard for games of cricket, but instead has been replaced with apartment living.  It’s not a replacement of the dream, it’s acceptance from those who are unprepared to move into the outer, more affordable, suburban areas, that they need to compromise and build towards the dream or accept a long commute to work.
So let’s drop the incentives, the handouts, and get back down to basic education. Housing is expensive and no one – government included – is going to step in and relieve the pain.  Therefore teach your children to start saving young and build stepping stones towards their long-term dreams – one of which should always be home ownership (most don’t want a life time renting and yet that’s what we’re slowly heading towards).
Take advantage of educational incentives such as the first-home savers’ account, but don’t give the lesson with a handout.  Warren Buffet is over quoted, however when you read his pearls of wisdom you can understand why - “A very rich person should leave his kids enough to do anything but not enough to do nothing.” The valuable long-lasting lessons are the ones we work hard for.
Catherine Cashmore is senior buyer advocate for <a href="https://www.elitebuyeradvocates.com.au/" target="_blank">Elite Buyer Advocates</a>. With extensive experience in all matters regarding real estate, Elite Buyer Advocates purchases and negotiates more than $100 million worth of property each year for its clients.
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catherinecashmore-6LXia3pPQj

Put an end to first-home buyer handouts

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The total land value of the Hunters Hill municipality was $4.865 billion as at July 2011, according to NSW Valuer-General Philip Western, with the latest riverfront residential values showing a slight decrease over the three-year period.
But there was a 6% jump across the 3,720 properties, which had a combined $4.585 billion value as at July 2008.
“Residential land on the waterfront generally showed a slight decrease in value over the three-year period,” Western said.
The extent of the drop has not been revealed by the official data.
“The value of residential land west of Burns Bay Road in Gladesville and Hunters Hill generally showed a moderate increase, while residential land to the east of Burns Bay Road generally showed a slight increase.
“The value of small retail sites generally showed a slight increase, while the larger commercial and mixed use sites showed moderate to strong increases in value,” he said.
He said the real estate analysis in the Hunters Hill municipality included 94 residential and eight commercial sales.
In the 2008 analysis the Valuer-General had 74 residential sales and three commercial sales on which to base the 2008 valuations.
Over the past year until July 2011, the municipality’s residential median land value moved from $898,000 to $899,000.
Median business land values jumped from $506,000 to $530,000 in the period.
The municipality’s most recently sold prestige listing confirms the fall in values. <a href="https://www.propertyobserver.com.au/new-south-wales/record-setting-woolwich-mansion-sold-for-loss-as-saga-winds-down/2011092551674" target="_blank">It’s the $9.2 million sale of an imposing house</a> on a 2,037-square-metre Angelo Street, Woolwich, riverfront block.
The property was given a $7.4 million land value in 2008, but in the past two years the Angelo Street property maintained a $7.03 million value as at July 2010 and July 2011.
Most houses in the municipality would be principal places of residence and therefore exempt from land tax, although if the home owner was to be posted overseas and renting the property out for a lengthy time, the tax could apply.
Typical residential land values were:
<ul>
<li>1,034 square metres at Campbell Street, Hunters Hill valued at $3,320,000 </li>
<li>418 square metres at Le Vesinet Drive, Hunters Hill valued at $1,840,000 </li>
<li>717 square metres at Lyndhurst Crescent, Hunters Hill valued at $2,640,000</li>
<li>835 square metres at The Close , Hunters Hill valued at $1,480,000 </li>
<li>487 square metres at Paul Street, Hunters Hill valued at $763,000 </li>
<li>621 square metres at Ryde Road, Hunters Hill valued at $530,000 </li>
<li>556 square metres at Toocooya Road, Hunters Hill valued at $1,270,000 </li>
<li>1331 square metres at Mark Street, Hunters Hill valued at $1,200,000</li>
</ul>
Typical commercial land values were:
<ul>
<li>342 square metres at Gladesville Road, Hunters Hill valued at $636,000 </li>
<li>202 square metres at Victoria Road, Gladesville valued at $462,000 </li>
<li>249 square metres at Woolwich Road, Woolwich valued at $520,000</li>
</ul>
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Riverfront land value down in Hunters Hill

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Perth house prices may have finally bottomed out, with the Real Estate Institute of Western Australia recording its first median dwelling price rise since March 2010, while property listings are also at near two-year lows.
The Perth median house price increased by 0.5% in the December quarter, putting the current median at $465,000; up by $5,000 on the revised September quarter figure. 
The number of properties on the market fell by 12% to 13,500 over the quarter, their lowest level since May 2010 – Perth’s long-term average is about 12,000 listings. 
In a further sign that the market is stabilising, REIWA figures show that discounting fell from 7% to 4.2% over the quarter once sales that achieved or exceeded the asking price are factored in. 
Lastly, the rental market has tightened from 3.4% to 2.3% over the past 12 months, with median weekly rents for houses rising $20 to $420 over the December quarter. 
REIWA president David Airey says the shift in median price is largely insignificant because it was “triggered by an increase in trade-up buyers countering the influence of first-home buyers”. 
“First-home buyers have been skewing the median downwards by generating large sales volumes of more affordable homes, but now this has been balanced with more upgrade buyers in the market, who tend to purchase the more expensive properties,” Airey says. 
“REIWA data show that while first-home buyers continue to be increasingly active in the market, we saw an increase in trade-up buyers during the December quarter and an increase in house sales of around 6% to 7%, which may have put a floor under prices.” 
“It’s a similar situation in the multi-residential sector with units, apartments, villas and townhouses also experiencing an increase in turnover and a 1% increase in median price,” he says. 
Airey says the drop in listings is not unexpected and reflects a seasonal decline over the holiday period when some sellers remove their properties from the market until the new year. 
“We may see listings swell towards the end of March as they have done in some previous years, so we’ll be watching that.” 
However, he says it is encouraging that listings are currently 12% lower than the same time last year and “well down on the peak of 18,200 we saw in April last year, which pushed prices down,” he says. 
“The number of houses for sale has fallen to its lowest level since March 2010, while land remains over represented with 2,800 lots on the market. 
“The housing market seems to be stabilising, with an increasing number of sellers adopting more realistic asking prices, with both the number of sellers discounting and the average discount both coming down in the quarter,” he says.
According to Airey, the rental market is the emerging pressure point in the housing system, with the vacancy rate tightening further and rents for houses increasing. 
“Our preliminary data show the vacancy rate dropping to 2.3% in the quarter and well down on the 3.4% from the same period last year. While the median rent for units and apartments remains steady at $380 per week, it has increased by $20 for houses to $420 per week,” he says. 
The overall median rent for Perth has reached $400 per week, representing an increase of 8.1% over the last year. 
“It’s evident there is greater confidence retuning to the property market reflected in the increase in sales activity in the December quarter and the fall in listings we saw across 2011. 
“This bodes well for a positive start to 2012, but we still maintain some level of cautiousness given the global economic situation despite WA having a more robust economy,” Airey says.
 
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lschlesinger-FZcF9M3vE6

Perth median house price up in December quarter to $465,000, first rise in almost two years

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The Queensland property market has a long way to go to get back to full health one year on from the natural disasters that devastated the state, but housing confidence is slowly returning. 
The January 2011 south-east Queensland floods and northern Queensland cyclone one month later killed 35 people and affected more than 500,000 square kilometres of Queensland, including low-lying parts of Brisbane, Ipswich and the Lockyer Valley and up North, Cairns, Townsville Tully, and Innisfail.
The Queensland floods resulted in 58,463 claims totalling $2.4 billion, while cyclone Yasi resulted in 72,203 claims amounting to $1.33 billion. An estimated 15% of claims are still to be processed, <a href="https://www.propertyobserver.com.au/residential/strata-insurance-premiums-surge-in-wake-of-queensland-natural-disasters-giving-investors-financial-grief/2011112552542" target="_blank">with insurers warning premiums will soar</a> should flood cover become mandatory.
The hard data shows that Brisbane is still struggling.
Last week, as part of his mid-year budget update, Queensland Treasurer Andrew Fraser adjusted his forecasts for housing investment, with the state still struggling to attract property investors.
“The dwelling investment outlook has softened since the budget, when investment was forecast to partly recover by 5.75% in 2011-12,” Fraser said.
In its most recent monthly update, the RP Data-Rismark index reported that Brisbane remains, alongside Melbourne, the weakest capital city, with values down 1.7% over the three months to November on a seasonally adjusted basis.  Brisbane house prices are down 9% from their peak and 7% for the year to November.
Real Estate Institute of Queensland chief executive Anton Kardash says the property market is “currently transitioning from a very tough 2011 into a market characterised by increasing buyer enquiry, sales activity, and confidence levels, and the extension of the boost will add to this more positive state of play”. The REIQ September 2011 quarter report (its most recent survey) noted some signs of green shoots, with the preliminary number of house sales up a healthy 17% compared with the June quarter. Some regions recorded substantial jumps in activity as buyers finally started to foray back into the market. “What these figures show is that it appears it took about six months for our property market to begin to heal from the natural disasters earlier this year,” says REIQ chairwoman Pamela Bennett. “Activity in most areas improved markedly in the September quarter compared to the first six months of this year, but we mustn’t get ahead of ourselves given sales activity is still about 20% below where we were this time last year.”     
While the median house price in Brisbane reduced 2% to an even $500,000 over the period, the number of preliminary house sales was up 13%. 
 
<hr class="system-pagebreak">
 
Up north there are also signs of recovery, with the Fraser Coast, Bundaberg, Rockhampton and Cairns all recording double-digit growth in the number of house sales over the September quarter.
The most recent Property Council of Australia (PCA)-ANZ Property Industry Confidence Survey of industry players <a href="https://www.propertyobserver.com.au/residential/australian-property-market-confidence-highest-in-resource-rich-areas-pca-anz-survey/2012011153018" target="_blank">found housing confidence had risen above the national average for the December 2011 quarter</a>, after a very glum reading in September.
The improvement has been noted by Kathy McDermott, executive director of the Queensland branch of the PCA, though she says much more needs to be done to aid the state’s recovery.
“There was a nice improvement in confidence in the December quarter, but the market is still very distressed and needs support,” she told Property Observer.
The Property Council of Australia alongside the Housing Industry Association, Master Builders Australia and Urban Development Institute of Australia were united in their call for the state government to extend the $10,000 building boost available for those buying or building new homes.
This plea was answered last week, <a href="https://www.propertyobserver.com.au/residential/queensland-government-to-extend-building-boost-until-april/2012011253029" target="_blank">with the stimulus scheme extended to April</a>.
Figures released by the government show the scheme is gaining traction, with more than 500 people applying for the grant between December 30 and January 11, taking total application numbers to 3,700.
Fraser himself noted the state’s housing market is still doing it tough, particurlarly in attracting property investors.
“Civilian population growth slowed further to 11,200 persons in September quarter 2011, dampening owner-occupier demand. Lower demand has seen the ABS measure of Brisbane house prices fall 5.2% over the past year,” he said. 
“While this benefits housing affordability, weaker prospects for capital gains and greater uncertainty since the escalation in the euro debt crisis have weighed on investor demand since the budget, as has ongoing tight credit conditions. 
“These negative effects are expected to be partly offset by the positive impact from recent cuts in official interest rates and the Queensland government’s Queensland building boost grant, which is to be extended until 30 April 2012. With the surge in business investment expected to generate higher migration levels and stronger employment growth next year, the expected recovery in dwelling investment is forecast to strengthen in 2012-13.” 
There has of course been very real recovery and progress, with photos released last week showing Brisbane suburbs close to the Brisbane River that were under water and mud a year ago now completely cleaned up and back to their pre-flood state. 
The city has cleared mud and debris from 460 kilometres of the stormwater drainage network, with 23 damaged CityCat and ferry terminals back up and running, 38,000 trees planted and 403 out of the 406 flood-affected parks restored. 
Brisbane City Council has committed to providing free advice and assistance to help residents restore properties affected by the floods. 
Outside of Brisbane, some of the worst affected regions are also recovering, notes Lucinda Coates <a href="https://theconversation.edu.au/institutions/macquarie-university">Macquarie Universit</a>y’s Natural Hazards Research Centre.
“As part of a voluntary land-swap initiative, Lockyer Valley Regional Council is now giving flood-impacted residents the option to move to a new land parcel located adjacent to Grantham but outside the flood zone. At the time of writing the first residents are moving into their new homes, and 70% to 80% of residents are expected to eventually relocate.
“While this is the first time a local government authority has assisted a disaster-struck community this way, it’s certainly not the first time an Australian town has been shifted to higher ground to avoid floods,” she says.
Photograph by Erik K. Veland
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One year after floods, Queensland property market showing signs of tentative recovery

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Will Australia's  resources boom continue? Well, the experts certainly think so.  If you have any interest in the resources sector, arguably the best source for information is the Bureau of Resources and Energy Economics.  The most recent forecast for the 2011-12 financial year is a 15% increase in the value of Australian energy minerals and metals over the previous year, bringing the total value to over $200 billion, which is a record for export earnings.
The number and value of advanced resources projects is at an all-time high with most of these projects located in Queensland (31) and Western Australia (40).
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Additionally there are a further 404 "less advanced" projects that are either undergoing feasibility study, awaiting approval or awaiting final investment decisions.  These include 14 proposed LNG developments, which have the potential to add 75 million tones to Australia’s annual LNG production capacity.  BREE also point out that there are 15 less advanced iron ore projects, which have an estimated capital expenditure of $1 billion or more.
In its Resources and Energy Quarterly for December, BREE outlines its forecasts for the sector and acknowledges there is some risks based on the global economic woes, specifically European sovereign debt and the liquidity crisis.  Additionally there has been some weakening in the spot prices for key commodities such as iron ore and metallurgical coal.
The bulk of the demand for mineral and energy commodities will continue to be supported by China, India and other non-OECD economies.  Within the OECD, demand for Australian commodities is likely to be strongest in Japan, where the infrastructure spending post earthquakes and tsunami will be high.  Economic growth is likely to slow across our major export markets (China GDP is projected to ease to 9%, India’s economic growth is expected to slow to 7.5% and Japan’s economy should increase by 2.3%), however BREE has suggested the improved economic conditions in the ASEAN countries, where GDP growth is expected to be around 5.5%, should offset any slowdown in export growth.
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Growth across the sector will be accompanied by employment growth.   The size of the mining industry work force increased 19% during 2010-11 and is up by more than 170% over the past decade.
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BREE is forecasting improved performances in the volume and value of key Australian commodity exports. Exports of iron ore, which is Australia’s largest commodity market, is forecast to increase by 13% in volume and 11% in value. The export of metallurgical coal, the second largest commodity export, will rise by 7% in volume and 13% in value.
Based on the above information it looks like the resources sector will continue to benefit from ongoing demand for Australian commodity exports.   A direct benefit will continue to be seen in those housing markets that are closely tied to each of the respective commodity markets and the major service centers that provide essential services and a large component of the labour force to the mining regions.  Mining-related investments are of course very sensitive to movements in commodity prices and global demand; however there don't appear to be any cracks emerging in these markets just yet.
The indirect benefit, of course, will be seen in robust local economic conditions and a continuation of the two speed economy.  The most recent forecasts from the RBA show GDP growth at 4% by June 2012 before easing to 3-3.5% by December 2012 and underlying inflation tracking around 2.5% to 2.75%.
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Tim Lawless is head of research at <a href="https://www.rpdata.com/" target="_blank">RP Data</a>.
This article originally appeared on <a target="_blank" href="https://blog.rpdata.com/2012/01/will-the-resources-sector-continue-to-boom/">RP Data's blog</a>.
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No cracks appearing in resources sector: RP Data's Tim Lawless

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ANZ has kept its variable mortgage lending rates unchanged following its first interest rate review out of step with the RBA. 
The bank’s standard variable rate is currently 7.3%.
 
The monthly review follows a statement in December 2011 that the bank would announce any changes to variable mortgage rates for retail mortgages and small business lending on the second Friday of each month, not following official RBA cash rate announcements. 
The next RBA announcement will be made on February 7, <a href="https://www.propertyobserver.com.au/economy/february-rate-cut-tipped-to-boost-australian-housing-market/2012011253030" target="_blank">when it is expected to cut the cash rate by 25 basis points to 4%</a>. 
ANZ will make its next independent rate decision on February 10. 
“By reviewing key variable lending rates each month we can more accurately reflect the sustained changes in funding costs we incur through the interest we pay to customers for their deposits and to investors in wholesale money markets,” says ANZ chief executive Australia Philip Chronican. 
“It helps us to contribute to an informed debate about how we fund our customers’ loans and the effects of the continuing global financial crisis on Australia, particularly the significant economic instability which currently exists in Europe. 
“We want the process of setting interest rates for our customers to be simple and transparent. This includes a promise to work hard to maintain competitive interest rates that will not disadvantage customers over the term of their loan. 
“To increase certainty for our customers the effective date for any variable interest rate changes made as part of the monthly review process will now be one week after the announcement, regardless of whether interest rates are going up or down. 
“In coming to our decision this month we wanted to be clear that these higher interest rates we are now paying our depositors and the elevated prices we are required to pay for wholesale funds are going to be sustained given the volatility we saw late last year. 
“We also assessed our competitive position, the subdued state of credit demand and the overall state of the economy and decided it was prudent to maintain our current rates at this time,” he says. 
The bank used the following criteria in making its decision: 
1. "Ensuring attractive returns for depositors: ANZ is committed to providing customers with competitive returns and absolute security for their savings. 
2. "The cost of wholesale funding: This covers the interest we pay on funds from wholesale markets. The cost of these funds has become more volatile and expensive since the GFC and has been elevated in recent months as a result of the European debt crisis. 
3. "Our competitive position: ANZ is determined to remain competitive by attracting customers, winning business and managing our costs. 
4. "Our customers’ ability to afford loan repayments: We are committed to pricing loans and lending in a responsible way and giving consideration to the financial health of our customers, the economy and the banking system in Australia. 
5. "Regulatory requirements: As a bank, ANZ works within a strong prudential and regulatory environment. For example, we must hold capital reserves and levels of liquidity to operate safely and securely for customers.
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ANZ keeps rates unchanged in first independent call

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Members of the Fairfax-owned holiday accommodation listing site Stayz have received compensation after the website suffered a technical glitch that stopped them being paid for properties rented out to tenants.
The glitch, which lasted from December 19 to January 4, was extended due to staff going on holiday, a spokesperson has confirmed.
"It was a small number of transactions caused by a simple technical problem. It lasted a little longer than it should have because of the holiday period," the spokesperson confirmed to SmartCompany this morning.
The spokesperson says the affected members – less than 3% of property owners – will have their listing on the site free of charge for the next two months.
"A review is also underway to determine how the glitch was extended due to the holiday period."
Notification of the problem was sparked when users said they had not received payments dating back to Christmas, with some bills running into the thousands of dollars.
But the spokesperson says everything is back to normal for the site, which lists 33,000 properties.
"It was a simple technical problem, the system is now carrying on as it was before and the problem is resolved."
This article was originally published on <a target="_blank" href="https://www.smartcompany.com.au/">SmartCompany</a>.
 
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