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;

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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

<html><body>
Outspoken economist and consistent housing bubble denier Rory Robertson says those who continue to rent in the hope that prices will crash are backing the wrong horse.
Responding to commentary from <a href="https://www.propertyobserver.com.au/https://www.propertyobserver.com.au/residential/blowing-away-the-bubble-deniers/2011121652871" target="_blank">Deakin University academic Philip Soos that Australia</a> has a housing bubble, Robertson labelled him “a know-it-all preaching doom and gloom”.
Writing for academic blog The Conversation, Soos, a researcher at Deakin University's School of International and Political Studies, provides four key arguments that point to a housing crash in the near future.
Firstly, he provides numerous examples to show that not having non-recourse borrowing in Australia (as exists in some states in the US and other parts of the world) has little bearing on preventing a house price crash; secondly he says historically house prices in Australia have crashed eight out of the nine times after there have been housing bubbles; thirdly he says a housing shortage is not causing house prices to rise; and lastly says Australian banks have not been conservative lenders, which is why we have mortgage debt of $1.2 trillion.
Writing on Business Spectator, Robertson admits that the days of “easy capital gains” resulting from “the big structural downshift in inflation and nominal interest rates in the early 1990s and the big structural increase in credit availability as banks were deregulated” are over, but he denies that Australian households are excessively geared because “even now, only about one-third of households have a mortgage (one-third own outright and one-third rent)”.
“In any case, the fact that average home prices are unlikely to surge higher from here does not mean they are destined to collapse. With the one-off structural shift higher now complete, average home prices will tend to rise and subside in cycles over time,” Robertson says
“The most-likely scenario,” Robertson says, “is that real home prices will trend gradually higher over our lifetimes as real incomes rise, and two-thirds of our population continues to compete aggressively to live on the best-located bits of ground near the CBDs of our seven coastal capitals and Canberra.”
He says many of the “doomsters don't actually know very much about local housing and home lending markets, don't own their own home or – commonly – both”.
“Meanwhile, most everyday people choose to buy a home they can afford to fund with a mortgage; then show up to work and happily pay their mortgage for the next 25 to 30 years. Over time, they enjoy a secure home within which to raise kids, and later on have a buffer that protects them from poverty in old age,” he says.
“Ask the dopey bubblemen about how much of their old-age pensions will be left for living expenses (including tasty dog food?) once (expensive) rent is paid. If they had a clue, the know-it-alls would realise that the relative tightness of rental markets – capital-city rent increases have averaged 5.8% per annum over the past five years – is a hint they are barking up the wrong tree.”
“Good luck to those sitting ‘short’ and renting while waiting for home prices to collapse. Just make sure you don't hold your breath.”
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lschlesinger-FZcF9M3vE6

No such thing as an Australian housing bubble: Rory Robertson

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Mining markets are the golden key to economic growth in Australia right now, whereas industries such as tourism are taking a hit from the high Australian dollar. Knowing where to look in Australia for prime investment property takes a bit of due diligence, however there are plenty of fabulous opportunities for the taking, provided an investor knows what he or she is looking for. For example, rising wages are a key factor to search for when seeking a great investment area. This is due to the fact that rising wages are strongly tied to rising property values.

Certainly we're going to invest where rents are going to grow, where populations are going to grow, where unemployment is low, and where certainly wages are going to grow. We're also going to buy where supply and demand is not keeping up, and so these opportunities are in Australia and not necessarily in the rest of the world.

The mining boom we're experiencing now is, essentially, the biggest in our nation's history and it's really set about because we're now intrinsically linked to the Asian marketplaces. We're more aligned with these marketplaces, putting us in a fantastic position as there's really limited times that China and India will stop building over the next 20 years.

The result of our connection with Asia through the mining markets will be higher wages in Australia. The next 20 years of property to me seem pretty good. Of course it's not necessarily all rosy, and I'll show you some other speeds to the economy so you can get a better understanding of where not to invest. 

To show just how huge the impact the mining markets have had on the economy, consider a measure created by HSBC. Some 10 years ago or even 6 years ago, they were measuring 1 ton of iron ore and converting that into what we tend to buy. The example they chose was a flat screen TV.

One ton of iron ore, back six or seven years ago, when the Australian dollar was lower and commodity prices were lower, was essentially worth 2,200 flat screen TVs. As you will remember, back then a flat screen would set you back about $10,000. Today you can pick yourself up a flat screen TV for about $800 bucks. So today's measurement of 1 ton of iron ore is about 22,000 flat screen TVs. This is a result of a mixture of high commodity prices and the high Australian dollar.

Never before in the history of Australia has our arbitrage or what we own been worth so much compared to what we have to buy, and it's such a unique opportunity and a very prosperous opportunity that Australia needs to take advantage of.

The Australian dollar is higher at the moment, and that's obviously not necessarily great for people exporting, but essentially imports are cheaper.  The Australian dollar has been higher than what it is right now, but it's never been this high since it's inaugural flight back in the ’80s. 

I don't necessarily see that this will change very soon. It's not all a bed of roses, there's certainly some data coming out which does show a two speed economy. 

If we were like New Zealand, that doesn't really have that much mining activity, and we relied on say dairy and meat, we would soon be very similar to those economic countries that don't fuel the engine for the great powers of India and China, and as you can see in the chart below, the line essentially dips and we would no doubt be in a far more recessive environment if it wasn't for the opportunity of the mining markets.
<img src="/images/stories/nonmining.gif">
<shapetype coordsize="21600,21600" path="m@4@5l@4@11@9@11@9@5xe" filled="f" stroked="f"><stroke joinstyle="miter"><formulas><f eqn="if lineDrawn pixelLineWidth 0"><f eqn="sum @0 1 0"><f eqn="sum 0 0 @1"><f eqn="prod @2 1 2"><f eqn="prod @3 21600 pixelWidth"><f eqn="prod @3 21600 pixelHeight"><f eqn="sum @0 0 1"><f eqn="prod @6 1 2"><f eqn="prod @7 21600 pixelWidth"><f eqn="sum @8 21600 0"><f eqn="prod @7 21600 pixelHeight"><f eqn="sum @10 21600 0"></f></f></f></f></f></f></f></f></f></f></f></f></formulas><path gradientshapeok="t"><lock aspectratio="t"></lock></path></stroke></shapetype><shape filled="t"><imagedata src="cid:image010.jpg@01CCB99C.3EF5E1C0"><wrap side="largest"></wrap></imagedata></shape>So the mining markets have made a bit of a resurgence, and they're always typically very small areas where the mines are located and so they create great little pockets of buying opportunities. 

Of course some of the capital cities that link to these mining markets also create great pockets of opportunity. Places like Perth and places like Brisbane are fast becoming the global offices for the mining market sector.

So we're going to see the re-emergence of these marketplaces. Brisbane is certainly going to be the first cab off the rank. We've got some great economic data which has just come out to support the fact that Brisbane is really at the bottom of the market, but recovery is so close now, that buying in that particular marketplace is going to be a very strategic investment. 

We saw during the GFC that the Victorian market and the New South Wales markets do very well, yet the mining markets suffered – Queensland and Western Australia – all those particular marketplaces suffered. 

As interest rates were reduced, the masses bought real estate just after the GFC, in fact we're at a 5% variable interest rate and that'll add a lot of people, where there's millions of people in Sydney and Melbourne to jump into the markets and fuel great growth, but in the less populated states it didn't have that impact, but we're going to see that impact into the future.

The business sentiment is weaker, but the reserve bank has stepped in and they've restored a bit of parity back into the markets by reducing their interest rates and the banks have passed that on which is great.

Over the next 12 months, they're predicting more reductions around the interest rate sector, which could be great for creating a bit of urgency when it comes to buying.
 
<hr class="system-pagebreak">
 
Tourism

There are certainly some issues when it comes to buying in certain marketplaces, and these marketplaces I don't particularly want to buy real estate in at the moment, and they tend to be areas where the sole industry in Australia is tourism. 

Because of the high Australian dollar, we are actually losing more tourists than what we're gaining,  and this is a phenomenon that hasn't occurred since the early 80s. In fact we used to get 120,000 visitors to our shores every month - of course these visitors would bring money from their country and spend it on consumables in our country. Today, we're not getting that 120,000 and in fact because of the high Australian dollar, 120,000 more Australians are actually not holidaying at home, but going abroad to spend their money.

The problem though for areas that are reliant solely on tourists, is that there isn't any pressure on wages, and without pressure on wages there tends to be limited opportunities for properties to grow, and we're seeing that in some places, which solely rely upon tourism, that they defy the employment trend and have employment figures closer to 10%. 

When there's higher unemployment, and an industry that typically has lower wages, which travel and tourism do, compared to say the mining sector, there isn't the ability for a market to push on.

Until there's going to be a turnaround in the amount of tourists that stay on shore and the amount of tourists that visit our country, those particular industries will remain very weak indeed, and that will be reflected in those particular housing prices.

We want to find the industries with the higher wages, and the mining companies are essentially paying the higher wages, and so it's going to be quite interesting when we look at the profits at the moment, compared to that of say 1995, which really is only 16 years ago. 

The profits that the mining companies are making now, are twice that of what they were making 16 years ago, which is fantastic - it allows them to share that dividend with the people who work for them, and of course it opens the debate of should there be a mining tax or not, because the mining companies are doing very well.

Obviously then, without the mining companies, the economy wouldn't be doing so well. 

Another thing about mining companies is they don't borrow money off banks – they are essentially cashed up to the hilt, so whenever they make a decision or make money, they're not making it from a point of leverage, they're actually making it from a pure cash position.

This fact always makes them very appetizing as say a blue-chip stock. If we can follow those blue chip stocks, and link the blue-chip companies who are building, or creating mines, then it makes a lot of sense to buy real estate in some of those areas.

Australia has historically low unemployment, one can understand the Reserve Bank worrying us about reducing rates, and 2011 has been a year which they've had to weigh up essentially a thriving economy – a two-speed economy, linkage to the Asian marketplaces and of course the USA and the European debt crisis. 

So when there's low unemployment – around 5% unemployment – inflation increases…you can understand why the Reserve Bank really was on tenterhooks for some time. In fact we didn't really see any great fluctuations for something like 11 consecutive months, so eventually rates have been reduced, not because of our own country's inability to grow, but because we are safeguarding it from the forces of what is going to happen in Europe. 

Europe is essentially a bit of a basket case at the moment, and we are able to stimulate our market forces because we keep our interest rates quite high compared to the rest of the world. So you've just got to ask yourself, when trouble comes along and we're at a 7% interest rate, the RBA says okay, let's drop that to 6% .

By dropping it to 6% and if the banks follow suit, there's a load of relief into the marketplace, and so we've got, I guess an economy right now that if it were 7 gears to it, and we are at a 7% interest rate, we could essentially drop the gear back 7 times, which is far more sound than say our North Atlantic counterparts who really can't adjust their interest rates very much – especially if they had to drop them much more, there wouldn't be an ability for the banks to get a return on their money. 



Funding Issues

The toughest thing that is occurring in the property market, and in other industries, is bank funding problems. In general, it's a potential risk; however it's been fairly benign. We've all had a poor valuation happen, or a bank knock us back because our documents aren't right, and we've seen limited load-up lending, lower LVRs – we've seen all that. 

Essentially we can deal with it – it takes a little bit more care, it takes a little bit more psychology to understand that there are bigger forces at play than essentially we may believe, and as we go through, and lending is tight, it's the only thing we have to deal with to buy real estate. I don't mind the fact that lending's tight, however, because I would prefer that to the lending habits that have seen European and American economies fall in such a poor state. 

It's tough to lend or borrow money, but that's how it should be – people shouldn't just be given money without the ability to pay money back and unfortunately we've seen that overseas.

Interest rates are going down, and that is a good thing. 2012 will see interest rate cuts. As we've seen just earlier this month the RBA cut rates again by .25%, in order to help a fledging retail sector of the economy – provide a bit of a stimulus over the Christmas period, rather than wait till after Christmas.

As the next two years unfold, I don't see that there's going to be any changes. I believe that we're going to have challenges. Every time we buy a property there's going to be potentially a valuation challenge, all that has to happen is you need to resubmit and you need to find a bank that allows you to resubmit and do it again, and so forth. It's just the way it is, I can't help it, and the market is dictating that.
Sam Saggers is CEO of<a href="https://www.positiverealestate.com.au/ME2/Sites/Default.asp?SiteID=697F1E57F8A54C7F9582C3C49417EEC4" target="_blank"> Positive Real Estate.</a>
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ssaggers-cYw3HLcXnJ

Opportunities for property investors in a two-speed market

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<img src="/images/stories/richardslights.jpg">
Canberran David Richards, his wife, Janean, and their three children are getting into Christmas in a big way - perhaps even a world record-beating way. Richards spend hundreds of hours installing 29,630 metres of LED strings and an 18-metre high light-controlled tree, according to the Canberra Times. 
He has sent the <a target="_blank" href="https://www.youtube.com/watch?v=CcMhz9rtcPQ">video of his light extravaganza </a>to London for consideration for the Guinness world record for the most Christmas lights on a residential home. The current record sits at 250,000 lights. The Richards' family home is covered in 331,038 lights. 
''It's not just Christmas lights - it goes in colours and waves up and down the driveway, it changes colour and the tree spins,'' Richards told the <a href="https://www.canberratimes.com.au/news/local/news/general/dads-christmas-dazzle/2382342.aspx" target="_blank">Canberra Times.</a> 
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cknowlton-QnEa6ntUYP

Canberrans aim for Christmas light world record

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The affordability of housing for Victorian owner-occupiers has barely changed in the past year, according to the most recent REIA Deposit Power Housing Affordability Report.
The report shows that, in Victoria, the proportion of family income needed to meet average loan repayments in the September quarter last year was 35.7% compared with 35.6% in the September quarter this year.
There is no doubt that housing has become less affordable over the last few years; Victorians have generally required more than a third of an average income to pay the average loan for the last seven years (with the exception of the year of the GFC).
Between 1999 and 2004, Victorians generally required a quarter of an average income to pay the average loan.
The significant reduction in affordability was a direct result of the state’s rate of population growth doubling between 2005 and 2010 not being matched by an increase in housing construction. This suggests that the solution to affordability concerns is primarily through ensuring adequate housing supply.
When compared with the other states, Victoria is the second least affordable; only in NSW is a greater proportion of income needed at 37.1%.
Renters, however, are in a better position when compared with other states. In Victoria they required 22.7% (same as a year ago) of an average family income to meet the average rent. This was more affordable than in New South Wales, Queensland, South Australia, Tasmania and the Northern Territory.
Enzo Raimondo is the CEO of the<a href="https://www.reiv.com.au/" title="REIV" target="_blank"> Real Estate Institute of Victori</a><a target="_blank" title="REIV" href="https://www.reiv.com.au">a.</a>
 
 
 
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enzoraimond-7fvRFHPR52

Owning Victorian housing has become less affordable over past few years

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Regional hotel operators must find ways of enticing Chinese visitors to coast and country resorts or risk another decade of struggle, according to the RBA’s December quarter bulletin.




The RBA forecasts that growth in Chinese visitors alone is expected to contribute about one-third of the growth in Australia’s tourism export earnings until 2020. 



Between 2001 and 2011, Chinese visitor numbers have grown by 13.4% annually, contributing 16.4% to annual revenue while Indian arrivals have increased by 12.3% annually, contributing 7.7% to tourism revenue. In comparison, visitors numbers from the US and UK have not grown over the last decade.
<img src="/images/stories/tourismchart.gif">
According to the Tourism Forecasting Committee, the share of spending by international visitors in total tourism expenditure in Australia is forecast to continue to rise over the next decade, driven principally by strong arrivals from Asia.
“This poses a challenge for the tourism industry in leisure and regional areas, which have at least to date had limited exposure to the growing segments of the inbound tourism market compared with Australia’s capital cities,” says the RBA.
According to the central bank, overseas visitors prefer to stay in capital cities (and capital city hotels) due “the importance of capital cities as major international gateways to Australia”. 
“Capital cities have benefited from a rising share of overseas visitor expenditure as spending by international visitors in regional areas has declined somewhat in recent years in real terms.” 
“This trend is consistent with the strong growth in Chinese visitors – who demonstrate a strong propensity for travel to capital cities – and the decline in Japanese tourists that has had a more pronounced effect on overall tourism demand in some regional destinations.
“For instance, in 2010-11, Sydney and Melbourne were the most popular destinations for Chinese visitors (as measured by visitor nights), whereas Japanese visitors have demonstrated a relatively stronger preference for travel to Queensland’s beach destinations, notably the Gold Coast and Tropical North Queensland (TNQ),” says the RBA. 
According to the <a href="https://www.propertyobserver.com.au/leisure/queensland-tourism-industry-needs-government-help-midwood/2011100551817" target="_blank">August Midwood Report</a>, Queensland regional and leisure areas heavily dependent on overseas tourists suffered big drops in revenue when comparing the March quarter of 2011 with the March quarter of 2010.
Accommodation takings for Whitsunday Island resorts were down 16% compared with the same time last year, while takings on Great Barrier Reef islands and adjacent mainland areas (including the likes of Port Douglas) were down 21% over this time frame.
 
<img src="/images/stories/tourismgraph.gif">
 
 
 
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More pain for regional hotels as Chinese tourists prefer city over country: RBA

<html><body>
As we look to what's ahead for 2012, Property Observer is republishing some of our most noteworthy stories of 2011.
 
For over half a decade in Australia, a fierce debate has occurred over whether a bubble exists in the housing market. The vast majority of experts, institutions and the public believe that the idea of a bubble is nonsense. On the other side of the coin, a handful of individuals have contested this notion, pointing out the flaws in the bubble deniers’ line of thinking.
We will look over some of the common arguments made by the bubble deniers, to see how they stack up with the facts.
Recourse lending
One of the major arguments made by experts and industry is that a housing bubble cannot exist because mortgages are recourse in Australia, rather than non-recourse. This means that borrowers are liable for the full amount of the mortgage, whereas non-recourse means that borrowers have no legal liability to pay back the mortgage if they default.
This is often compared to the United States, which is alleged to have non-recourse loans. This line of thinking asserts that borrowers took upon irresponsible amounts of mortgage debt to speculate on housing, knowing that if they defaulted down the track, they would not be liable to pay back the full amount.
This has led to the popular term called ‘jingle mail’, referring to the notion of a defaulted borrower mailing back the keys to their lender, and walking away from the property. This typically occurs when the borrower is in a position of negative equity, that is, the property is now worth less than the loan. The lender thus makes a loss on their accounts, to the value of the difference between the loan and the current market value of the property.
As the argument goes, non-recourse lending in the US was a major factor in the run-up in housing prices, whereas Australia has recourse mortgages, and thus does not have irresponsible amounts of mortgage debt.
There is one small problem with this view: it is total nonsense.
A study by two Federal Reserve economists debunks the notion that the US has non-recourse loans. Out of the 50 states, 11 are non-recourse. All of the remaining 39 states are recourse. On top of this, in some of the non-recourse states, the first mortgage may be non-recourse, but all proceeding mortgages are recourse. Also, it often depends on the legalities and judges’ decisions as to whether a borrower is required to pay back the full value of the loan in a non-recourse state.
Worse yet, some of the states that experienced the largest housing bubbles have recourse loans, for instance, Florida and Nevada, whereas California and Oregon, similarly affected, have non-recourse loans. Overall, there is no real difference between states that have recourse and non-recourse loans, apart from recourse borrowers who tend, on average, to hold onto their properties longer before defaulting.
Ireland experienced a colossal run-up in prices over the last decade, resulting in a crash and subsequent debt deflation that has ruined the economy. What is not said is that Ireland has recourse mortgages, governed by strict rules, and non-payment may even result in imprisonment. Clearly, recourse mortgages did not prevent a bubble from forming in the housing market.
The idea that recourse mortgages enforce responsible and conservative behaviour cannot be upheld. A cursory search through Google on this topic provides information that debunks this notion (like the above study). Yet, this has not stopped the leading ‘experts’ within the RBA, Treasury, the banking and real estate industry, and academia from repeating this falsified argument again and again over the years.
Housing prices always go up
Another popular myth that abounds is that housing prices always go up and never crash. If a bubble denier reluctantly admits that past downturns did occur, it certainly won’t occur this time around.
Australia’s recorded housing price history, going back 131 years to 1880, easily debunks this myth. The nine major increases in prices have been met by eight resulting downturns, with the only exception during a small three-year period from 1961-1964, where prices leveled off. The table below, from my Prosper Australia report, shows this.
<img src="/images/stories/soosnew1.gif">
We are supposed to believe that the largest increase in housing prices in Australian history will not result in the same fate as eight of the nine have.
The housing shortage
This is probably the most popular argument used by the bubble deniers. The story is that as Australia is suffering from a chronic deficit of properties to shelter a growing population, so demand is greater than supply, leading to rising housing prices.
The problem with this argument is it can’t explain why prices started to rise in 1996 and skyrocketed from 2001 onwards. Annual population growth between 1996 and 2005 registered at approximately 1 per cent, taking off between 1.5% and 2% from 2006 onwards. (Fundamental supply and demand issues explain rent prices, not housing prices, which is why rents have increased from 2006 onwards).
2007 was the first time since 1950 that the population increased faster than the number of dwellings. If the housing shortage argument was correct, housing prices should’ve started to rise from around 2006-2007 onwards, not 1996. The historical data shows that there is no correlation, let alone causation, between population growth, dwelling supply and housing prices.
According to the 2006 ABS census data, there were 830,376 unoccupied dwellings during the time the survey was taken, out of a total of 8,426,559, or 10% of the dwelling stock. Unfortunately, no indication is given to the status of the vacant properties (derelict, holiday house, undergoing sale, renovations, speculative vacancy).
The Melbourne-based organisation Prosper Australia performed an innovative study of vacant properties using water usage figures. Applying a conservative methodology, it was found that almost 45,000 properties were lying vacant in the areas under study, and extrapolated across Melbourne, 61,000 properties were lying vacant for more than six months. This gives credibility to the idea that speculators are withholding properties from the market to capture capital gains rather than rental income.
Australia’s peak housing body, the National Housing Supply Council, had to include the homeless, caravan park residents, those sleeping rough and couch surfers into their figures in order to arrive at an undersupply of dwellings.
This is reminiscent of every other country affected by a housing bubble whose experts and authorities claimed that rising housing prices were caused by a housing shortage.
Australian banks have lent conservatively
This is one of the more ludicrous defences made by the bubble deniers. Our mortgage debt stands at $1.2 trillion, or 90% of GDP. If personal debt is included as well, as some analyses do, it totals 100% of GDP. A report by the Bank of International Settlements shows that a ratio above 85% becomes damaging to the economy.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/soosnew2.gif"><img src="/images/stories/soosnew2thumb.gif"></a>
That Australia has such a high ratio is unsurprising considering the major banks have lent up to 97 per cent of the value of the property (called the loan to value ratio or LVR) and some non-banking lenders have lent out a staggering 125 per cent. The housing debt to disposable income ratio has reached 160 per cent.
Comparatively, Australia has a greater mortgage debt to GDP ratio than the US. Australians have taken upon an enormous debt load to speculate on housing prices. Why bother to work?
Australia is not unique in having a disbelief in the idea of a housing bubble. By definition, a bubble requires that complicity of the majority of people and institutions to believe that there is no bubble. Otherwise, individual rational action would be promptly taken, which would result in bursting the bubble in the early stages or preventing the formation of one altogether.
The only difference between Australia and other countries affected by housing bubbles is that bubble deniers are as plentiful as kangaroos down under.
This article originally appeared on<a href="https://www.businessspectator.com.au/bs.nsf/Article/housing-bubble-Australia-property-prices-real-esta-pd20111214-PJ3R6?OpenDocument&amp;src=sph&amp;src=rot" target="_blank"> Business Spectator</a> and <a href="https://theconversation.edu.au/" target="_blank">The Conversation</a>.
 
 
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psoos-uR5EGb6SbQ

Blowing away the bubble deniers

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ANZ has denied reports that it and other Australian banks have been ordered by APRA to test how they would cope if the European meltdown spread to Australia.
An article in the Australian Financial Review said banks had been given one week to model the impact of the unemployment rate climbing to 12%, house prices crashing 30% and commercial property values falling 40%.
A spokesperson for APRA said the regulator had not been commenting on the story but referred Property Observer to a number of earlier articles it has published on the subject.
In December 2010, APRA published a paper titled “Stress-testing for authorised deposit-taking institution,” where it called stress-testing “a valuable tool that has been used by financial and non-financial institutions for many years to manage their risks”.
“APRA uses stress-testing in its own supervisory activities across all the industries it regulates. At times, APRA coordinates these stress-tests with the Reserve Bank of Australia (RBA) and the Reserve Bank of New Zealand (RBNZ),” the regulator said in the same paper.
Reports that banks are being asked to model how they would cope in such a crisis follow a speech made by deputy Reserve Bank governor Ric Battelino this week, where he warned that there were “various channels through which developments in Europe could affect Australia including financial linkages, trade linkages and confidence and wealth effects”.
It also follows a week of major bank AGMs where the subject of Europe was raised repeatedly.
At the Westpac AGM, chief executive Gail Kelly warned there was a possibility of credit rationing if conditions in Europe remained strained. Since the start of the year, European banks have been undergoing stress tests following the formation of the European Banking Authority.
Last week, the EBA called on European regulators to require banks to “strengthen their capital positions by building up an exceptional and temporary capital buffer against sovereign debt exposures”.
The AFR quotes bank sources as saying “there is no suggestion APRA is concerned about existing credit quality and assessment.
“Rather, the authority is seeking to understand the impact of a severe external shock."
 
 
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ANZ denies carrying out APRA “stress tests”

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ANZ chief executive Mike Smith says the bank is working on explaining its decision to “decouple” its interest rate decisions from monthly cash rate announcements made by the Reserve Bank.
This follows the bank’s announcement on December 8 (following its decision to pass on the December 6 rate in full) that in future pricing changes for retail and small business variable interest rates will be made on the second Friday of each month because ‘bank funding costs are now largely unrelated to movements in the Reserve Bank’s Official Cash Rate”.
Speaking at the bank’s AGM in Sydney today, Smith says it must explain its new policy “thoroughly”.
“We have got our boffins working on that. We must be transparent and clear about how we calculate this rate,” he says.
Smith says banks themselves are to blame for reinforcing the false public perception that there is a link between the RBA cash rate and bank variable mortgage rates.
“It will be a communication exercise.”
The bank though is unlikely to use Westpac’s “banana smoothie” analogies to explain its decision with Smith saying the best way to explain its new policy will be to ‘go back in time and the show disconnection between the cash rate and the variable mortgage rate.
“In the late 1980s the cash rate was higher than mortgage rate,”
In December 2009, Westpac put together a banana smoothie animated video, where it tried unsuccessfully to explain how the increase cost of wholesale funding (bananas) was pushing up the price of mortgages (banana smoothies) after the bank raised mortgage rates by 45 basis points following an RBA increase of 25 basis points.
 
 
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No banana smoothies, but ANZ to explain its new rates policy

<html><body>
<table width="332" cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td valign="bottom" nowrap width="69">
Postcode
</td>
<td valign="bottom" nowrap width="113">
Suburb
</td>
<td valign="bottom" nowrap width="149">
Median house price
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="69">
3851
</td>
<td valign="bottom" nowrap width="113">
GOLDEN BEACH
</td>
<td valign="bottom" nowrap width="149">
$90,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="69">
3851
</td>
<td valign="bottom" nowrap width="113">
PARADISE BEACH
</td>
<td valign="bottom" nowrap width="149">
$129,500
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="69">
3825
</td>
<td valign="bottom" nowrap width="113">
YALLOURN NORTH
</td>
<td valign="bottom" nowrap width="149">
$135,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="69">
3860
</td>
<td valign="bottom" nowrap width="113">
COONGULLA
</td>
<td valign="bottom" nowrap width="149">
$160,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="69">
3840
</td>
<td valign="bottom" nowrap width="113">
MORWELL
</td>
<td valign="bottom" nowrap width="149">
$161,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="69">
3851
</td>
<td valign="bottom" nowrap width="113">
LOCH SPORT
</td>
<td valign="bottom" nowrap width="149">
$165,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="69">
3825
</td>
<td valign="bottom" nowrap width="113">
MOE
</td>
<td valign="bottom" nowrap width="149">
$170,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="69">
3842
</td>
<td valign="bottom" nowrap width="113">
CHURCHILL
</td>
<td valign="bottom" nowrap width="149">
$172,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="69">
3971
</td>
<td valign="bottom" nowrap width="113">
YARRAM
</td>
<td valign="bottom" nowrap width="149">
$175,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="69">
3888
</td>
<td valign="bottom" nowrap width="113">
ORBOST
</td>
<td valign="bottom" nowrap width="149">
$177,500
</td>
</tr>
</tbody></table>
Source: RP Data
 
 
 
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The 10 cheapest suburbs in Gippsland for houses: RP Data

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The Queensland hotel market is due to recover after recent poor performance, particularly in sites like the Gold Coast and Sunshine Coast, according to the latest report by CBRE.
Queensland’s hotel market should grow 5.2% from 2012 to 2016, outperforming any other state and the 3.3% national average, according to the report.
“Queensland is still in the midst of a difficult economic period which commenced with the GFC. This has continued to the present day due to ongoing problems in the construction and tourism industries as well as the damage caused by the floods and cyclones at the beginning of 2011,” the report finds.
“Further forwards, however, forecast growth rates are strong.
“Capital expenditure is the major contributor to this growth outlook, with many resource related projects providing strong prospects for the state. “
The report also cites the announcement of the 2018 Commonwealth Games in Queensland as a catalyst for growth.
Queensland has suffered a slump in room rates this year, which is not expected to recover until 2012.
“Floods and cyclones have impacted heavily, as did the recent grounding of the Qantas fleet. These one-off events came on top of a consistently high Aussie dollar, which has resulted in less international visitors and a propensity of Australians to take advantage of greater purchasing power and head overseas for their holidays,” says the report.
International tourist arrivals are forecast to increase 8.6% in 2012, then 7.8% in 2013 and 7.6% in 2014. Most international arrivals stayed level from 2001 except for Japan, which fell from more than 450,000 in 2004 to 200,000 in 2011.
The report finds most purchasers for major hotel assets in 2012 are likely to be private investors, foreign interests (especially Asian based) and operators seeking to grow the number of rooms/apartments under management.
“A litmus test for the accommodation market is likely to be the upcoming listing of the Commonwealth Property Fund Hotel portfolio with assets in Brisbane, Sydney and Melbourne,” says senior associate director of global research and consulting at CBRE Craig Godber.
“The listing will provide a good indication of both the true depth of the investment market as well as pricing.”
 
 
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Safari Group offers low-touch investment proposition in Queenstown’s popular ski fields district

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Developments

New apartments

New townhouses

News