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>
Housing affordability has been in the headlines again, but this time around some seriously good research is the cause.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">A new <a target="_blank" href="https://www.ahuri.edu.au/themes/housing_affordability/">study</a> for AHURI (Australian Housing and Urban Research Institute) strongly suggests that the traditional method of calculating housing affordability is outdated and should be considered in conjunction with other ways of weighing up whether people can afford their mortgage or rent.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">We have been banging on about this for close to a decade, and this missive pulls together some of our thoughts on this matter.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">The most commonly used benchmark to determine whether housing is affordable is if it costs less than 30% of a household’s income.  However, few know that the 30% benchmark was established at the government’s 1992 National Housing Strategy and was intended to apply to lower-income households only.  However, it is more often than not now quoted in reference to all households – even those on higher incomes.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">Another point of contention is the source of the “household income” information.  Most commentary on this issue uses median weekly family income.  A family is defined as a married couple with or without dependent children.  Such a definition is quite prescriptive and precludes a large number of home buyers.  No consideration is given to age, for example, which provides a much better basis on which to analyse housing affordability.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">Also contentious is that the income data is derived from the ABS census and updated on the basis of movements in average weekly earnings.  We remain sceptical about certain elements of the census and the income data concerns us the most.   One in eight households across Australia do not state their income on their census form, resulting, we believe, in a lower median household income than is really the case.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">In our experience, using income figures sourced from the Australian Tax Office provides a more accurate picture.  And the statistics here don’t lie, with median household income across Queensland, for example, being 21% higher when measured by the ATO against the census.  In short, it is harder to lie to the ATO than it is to the statistical bureau.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">Some better measures

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">The first one looks at income left over after debt servicing.  This approach paints a different picture to that obtained simply by calculating the proportion of income devoted to repayments.  Rising incomes have allowed households to meet rising loan repayments while maintaining, and often increasing, living standards.  Rising household incomes mean that the 30% traditional affordability benchmark is now outdated.  In fact, given higher income levels now, households can devote as much as half of their income to debt servicing, while maintaining the same standard of living.  The AHURI study found similar results.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">Another approach recognises the shortcomings of using median incomes of all households (or families) and instead considers the incomes of households in the age bracket of typical first-home buyers.  In this case, this relates to households in the 25 to 39 age bracket.  When looking at the proportion of residential sales by price range and taking into account interest rates and borrowing capacity, the typical first-home buyer could afford to buy one-third of the dwellings for sale across the country.  We estimate that this figure lifts to just under 40% for Queensland.  Now, while this is down on the long-term average of 45%, housing affordability measured by this series appears far less stressed than the traditional measures.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">The big problem here is that first-home buyers these days want everything that opens and shuts in their first home.  A recent ABS study shows that three out of four first-home buyers bought either three- or four-bedroom dwellings last year, with 26% buying a property with four or more bedrooms – as their first home!  It probably had fully ducted air, secured off-street parking and a swimming pool, too.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">A third of first-home buyers are couples and another 25% live alone.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">The last measure involves taking into account investment assets and income.  Ratios of household debt to assets have been much more stable over recent years than the ratios of debt to income.  It needs to be noted that traditional measures of affordability fail to take into account investment income.  When you do so, affordability measures appear far less stretched.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">These three measures suggest that housing affordability is not as dire as many fear.  This is borne out by Australia’s very low housing loan arrears rate.  While the housing loan arrears rate has risen over the five years, it still remains low by international comparison.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">Anecdotal evidence also suggests that housing affordability is not as constrained as some would have us believe.  If you remain sceptical, spend a few hours in a major shopping centre and watch how many potential first-home buyers are spending up – and big.  Or visit your local airport on the weekend and see how many young couples are off for a weekend away.  The same applies when dining in some of our better restaurants.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">Housing affordability is at nowhere near crisis level in this country.  Instead of the government giving ‘hand outs’ to first-home buyers – which only lifts price – policy should address structural factors that lead to excessive housing demand and/or inadequate supply.  And please don’t get me started on the baby bonus!

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">In the meantime, some “plain speak” is needed.  Potential first-home buyers need to be told that buying your first property is not easy; it involves sacrifice and compromise to your current lifestyle.

<p style="margin-bottom: 6pt; background-image: initial; background-attachment: initial; background-origin: initial; background-clip: initial; background-color: white; background-position: initial initial; background-repeat: initial initial;">To renters (and first-home buyers alike) paying 30% of your income for shelter is not outrageous.
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

Housing affordability in Australia is not as dire as you think

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Greater Dandenong is the feeling the most housing stress in Melbourne as renters and home purchasers struggle with high housing costs across the region, according to the latest Australians for Affordable Housing report.
In Greater Dandenong 21% of households experienced housing stress, as did 19% of residents in Hume and Melbourne local government areas.
In Greater Dandenong 31% of mortgagees and 38% of those in private rentals experienced housing stress.
Residents in the municipalities Bayside and Nilumbik experienced the least amount of housing stress, at only 9%.
“Housing is the single biggest cost of living pressure in Australia. When low-income households spend more than 30% of their income on housing costs they are officially in housing stress. This means they have very little left over to cover other costs like food, transport, bills or money for emergencies,” says AAH spokesman Sarah Toohey.
The report found renters tended to have a harder time than mortgagees with renters experiencing greater stress that mortgagees in every area surveyed.
Click to enlarge
<img src="/images/stories/stress.gif">
Toohey used the report to call for a government focus on cheaper housing.
“Urgent action is needed by both the Victorian and Commonwealth governments, with a proper housing strategy that includes more than releasing land on the city fringe,” she says.
“Premier Ballieu needs to invest in more affordable housing options close to jobs and services to reduce the squeeze on weekly budgets.”
 
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awalsh-7Ub9EypybQ

Greater Dandenong tops list of Melbourne suburbs with most housing stress

<html><body>
Well, 2011 will be remembered as the year the property market slumped. It didn’t crash like many property pessimists predicted, but it stalled in some areas, dropped a little in others, while prices fell significantly in a few spots.
Ongoing economic uncertainty, the worry of rising interest rates for much of the year, decreasing affordability and political uncertainty were a volatile mix that stalled the property markets.
To see what really happened over the last year here are the latest figures from RP Data:
<table border="1" cellpadding="0" cellspacing="0" width="348"><tbody>
<tr>
<td valign="bottom" width="85">
 
</td>
<td valign="bottom" width="99">
HOUSES
</td>
<td valign="bottom" width="87">
 
</td>
<td valign="bottom" width="100">
UNITS
</td>
<td valign="bottom" width="93">
 
</td>
</tr>
<tr>
<td valign="bottom" width="85">
City
</td>
<td valign="bottom" width="99">
Median Price
</td>
<td valign="bottom" width="87">
Growth last yr
</td>
<td valign="bottom" width="100">
Median Price
</td>
<td valign="bottom" width="93">
Growth last yr
</td>
</tr>
<tr>
<td valign="bottom" width="85">
Sydney
</td>
<td valign="bottom" width="99">
$550,000
</td>
<td valign="bottom" width="87">
-2.3%
</td>
<td valign="bottom" width="100">
$457,000
</td>
<td valign="bottom" width="93">
1.1%
</td>
</tr>
<tr>
<td valign="bottom" width="85">
Melbourne
</td>
<td valign="bottom" width="99">
$483,500
</td>
<td valign="bottom" width="87">
-5.7%
</td>
<td valign="bottom" width="100">
$425,000
</td>
<td valign="bottom" width="93">
-5.7%
</td>
</tr>
<tr>
<td valign="bottom" width="85">
Brisbane
</td>
<td valign="bottom" width="99">
$425,000
</td>
<td valign="bottom" width="87">
-8.8%
</td>
<td valign="bottom" width="100">
$360,000
</td>
<td valign="bottom" width="93">
-2.4%
</td>
</tr>
<tr>
<td valign="bottom" width="85">
Adelaide
</td>
<td valign="bottom" width="99">
$387,000
</td>
<td valign="bottom" width="87">
-4.2%
</td>
<td valign="bottom" width="100">
$315,000
</td>
<td valign="bottom" width="93">
-4.8%
</td>
</tr>
<tr>
<td valign="bottom" width="85">
Perth
</td>
<td valign="bottom" width="99">
$453,000
</td>
<td valign="bottom" width="87">
-4.4%
</td>
<td valign="bottom" width="100">
$390,000
</td>
<td valign="bottom" width="93">
-0.7%
</td>
</tr>
<tr>
<td valign="bottom" width="85">
Darwin
</td>
<td valign="bottom" width="99">
$495,000
</td>
<td valign="bottom" width="87">
-0.9%
</td>
<td valign="bottom" width="100">
$405,000
</td>
<td valign="bottom" width="93">
-0.8%
</td>
</tr>
<tr>
<td valign="bottom" width="85">
Canberra
</td>
<td valign="bottom" width="99">
$537,500
</td>
<td valign="bottom" width="87">
0.8%
</td>
<td valign="bottom" width="100">
$410,050
</td>
<td valign="bottom" width="93">
0.5%
</td>
</tr>
<tr>
<td valign="bottom" width="85">
Hobart
</td>
<td valign="bottom" width="99">
$330,000
</td>
<td valign="bottom" width="87">
NA
</td>
<td valign="bottom" width="100">
$266,000
</td>
<td valign="bottom" width="93">
NA
</td>
</tr>
<tr>
<td valign="bottom" width="85">
Australia
</td>
<td valign="bottom" width="99">
$465,000
</td>
<td valign="bottom" width="87">
-4.5%
</td>
<td valign="bottom" width="100">
$415,000
</td>
<td valign="bottom" width="93">
-1.5%
</td>
</tr>
</tbody></table>
Source: <a href="https://www.rpdata.com.au/">RP Data</a>
The markets are fragmented
What these figures don’t show is how fragmented the markets really are.
Did you know that the median home price in 80% of Sydney suburbs has actually had capital gain of around 1% over 2011? It is only the most expensive suburbs in Sydney, the more affluent areas, which have been the hardest hit and have suffered price declines. In these suburbs prices fell around 3.2% over the year.
And the markets are similar right across Australia. The most expensive homes across the country experienced the biggest capital losses and the lowest priced homes have dropped in value much less.
By the way… there is nothing unusual about this – the lower end of the market has always been less volatile.
What I call “investment grade properties” – good properties in the middle price range (say $450,000 to $950,000), in prime locations and with an element of scarcity are still selling well and holding their values, even though there is clearly less interest from both owner occupiers and investors than there was before.
On the other hand “B” and “C” class properties are not selling well. Some have dropped in value by 10% or more and some can’t be given away. Well, it’s not really as bad as that, but you’d have to give a very steep discount for someone to buy in areas like the Gold Coast.
And all the key indicators suggest the slow down will continue well into the first half of 2012. The number of properties on the market is high, properties are remaining on the market for longer and many buyers are still nervous about making a decision.
2012 – the year ahead 
I’ll cover myself with my first prediction being that most predictions will be wrong. 
Just look at what happened in 2011… 
For much of the year we thought interest rates were going to rise and they’ve fallen. We thought Europe would sort out its financial problems and things got worse. And many people predicted Australia’s property market would crash – and it didn’t! 
Looking forward I think 2012 will be a better year for property – but not by much. 2012 will be another year of crises. But if you think about it, every year has its crises. 
The European Debt Crisis will still dominate over the first few months of 2012. The US economic recovery is likely to slowly continue, but many of its property markets will fall further. China’s booming economy will slow a little and the Australian economy should chug along nicely as strong business investment spending will counter the lower growth in consumer spending and housing activity. 
Interest rates have come down twice over the last two months and it looks like they’ll drop further in 2012. This will increase housing affordability and slowly entice buyers back into the market. 
When the Government tried to stimulate our property markets in previous downturns, it combined rate cuts with first home owners grants (2001 and 2009) and this caused people to rush into the markets. I can’t see a first home owners boost being brought back in 2012. 
My observation is that the recent rate cuts have increased confidence in buyers, but many are still sitting on the sidelines waiting for something else. 
Some are waiting to see how the problems in Europe play out, others are interested to see what happens in our local political scene and yet others want confirmation that property prices won’t fall any further. They don’t want to buy in a falling market. 
In the meantime, many savvy investors are back picking the eyes out of the market. I was interested to read John Gandel, one of Australia’s biggest property investors, is on the look out to buy again. There must be a lesson in that somewhere. 
It is likely that the average home buyer won’t need to see a lot of price growth to regain confidence; they just want to know that home values won’t fall further. Meanwhile they are stashing their cash waiting for someone to ring the bell that the market has bottomed. 
Of course, no one will do that, so I like to remind buyers that they are not buying “the market” but an individual property in the market. 
If they buy well and purchase a good property below it’s intrinsic value, they will be covered, even if the market drops a little further. And when they look back in a few years' time they’ll be pleased they took action while others waited for the “bell to ring”.
Michael Yardney is the director of <a href="https://www.metropole.com.au/">Metropole Property Investment Strategists</a> , a best-selling author and one of Australia's leading experts in wealth creation through property. He also writes the <a href="https://www.propertyupdate.com.au/">Property Investment Update</a> blog.
 
 
 
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myardney-DFoGhGbSJX

The year that property markets slumped

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See-sawing investor appetite for new houses fell sharply in October, according to the latest ABS housing finance figures.
Construction finance to investors decreased 26.2% over October, to be 2.1% lower in trend terms as the total value of loans for the purpose of building new houses decreased by 9%. Demand from investors for construction finance has risen and fallen sharply over the past year, and has been broadly flat since mid-2008.
Owner-occupier construction finance was 2.7% lower in the month.
<img src="/images/stories/absdec12.gif">
Source: ABS
The October decline follows a similar decrease in September taking the value of construction finance 8.9% lower than levels a year earlier, highlighting both the depressed current state of new housing and the poor outlook for 2012.
According to the most recent HIA - JELD-WEN New Home Sales Report, <a href="https://www.propertyobserver.com.au/residential/new-home-sales-recover-modestly-in-october-hia/2011120852759" target="_blank">the total number of new homes (detached and non-detached) sold was down 8% over the three months to October</a>.
For tips for buying your first investment property, <a href="http://propertyobserver.com.au/ebooks/free-ebook-how-to-buy-your-first-investment-property" target="_blank">download Property Observer’s free eBook</a>.
 
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lschlesinger-FZcF9M3vE6

Investor interest in new housing fell 26% in October: ANZ

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Australia's ageing pool of workers need greater flexibility to ensure they can stay in work, a report into senior Australians says, adding that housing needs an "urgent shake-up" to cope with looming demographic changes.

A report released yesterday entitled Realising the economic potential of senior Australians notes that the percentage of Australians aged over 55 is expected to rise to nearly 20% by 2050, up from 16% nowadays.
"While participation rates for people over 55 have risen significantly, barriers still inhibit older workers' participation," the report, written by the Panel on the Economic Potential of Senior Australians, says.
"These barriers directly affect the living standards of Australians, with the cost of not using the skills and experience of older Australians already at an estimated $10.8 billion a year."
"These barriers also directly affect the ability of individuals to contribute, with two million older Australians outside the workforce wanting to work, some because of financial necessity."
But the report - written by National Seniors Australia chair Everald Compton, former deputy Prime Minister Brian Howe, and Professor Gill Lewin - says the country's shift to a knowledge-edge based company, from a manual-based society, leaves Australians better placed to work longer.
"This move away from physically demanding work opens up more opportunities for older workers. It coincides with a looming skills shortage in key industries (mining, construction and services), increasing the opportunity for older workers to retrain for new careers or to backfill in sectors depleted by the movement of more mobile workers," the report says.
It also praises the increase in the retirement age to 67 and the removal of the age limit on superannuation guarantees as developments likely to keep older workers in paid work – although this shift requires support from industry, employers and governments.
The report recommends:
<ul>
<li>Extending flexible work arrangements for people aged 55 and over, allowing this group great time for volunteering and babysitting commitments, for example.</li>
<li>Looking at the affordability of income protection for people over 60.</li>
<li>Appointing a cabinet minister for maximising the potential of the ageing population.</li>
<li>Increasing housing supply by removing stamp duty.</li>
<li>Reviewing planning regulations and removing regulatory impediments to new developments and promote greater mobility.</li>
<li>Reviewing how income payments affect seniors' housing decisions.</li>
<li>Get governments to embed age diversity within workforce.</li>
</ul>
Speaking on the prospect of abolishing stamp duty after the report was released, Treasurer Wayne Swan said he was meeting with state treasurers to discuss state taxes.
"If there are impediments in the tax and transfer system that stop older Australians from contributing to the labour force, we should do something about that," Swan added.
He also called on business to "recruit many of those greying Australians who are looking for a job but have had difficulty getting one."
This article originally appeared on<a href="https://www.smartcompany.com.au/index.php" target="_blank"> SmartCompany</a>.
 
 
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cknowlton-QnEa6ntUYP

Housing needs “urgent shakeup”, and older workers need more flexibility: Report

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On a seasonally adjusted basis, new house starts declined by 2.5% in the September quarter to 22,290 following a fall of 1.6% in the June quarter, according to the latest dwelling commencement figures released by the ABS.
This was the seventh straight quarter that new housing starts have declined, reflecting the current depressed state of new house construction.
The last time new house starts increased was in the December 2009 quarter, when they rose to just under 29,900 new starts.
In raw terms, the largest rises in private sector house commencements were experienced in the Northern Territory (11.4%), Queensland (10.8%) and Western Australia (5.3%), while the largest falls occurred in Tasmania (-17.8%), South Australia (-14.9%) and the Australian Capital Territory (-12.1%).
The more volatile other residential building (flats, units, attached townhouses, villas and terrace houses, etc) declined by 12.2% in the September quarter to 12,198 properties following a fall of 6.1% in the June quarter.
Overall, the construction of new housing fell by 6.2% in the September quarter.
In raw terms, the total number of dwelling units commenced fell 3.3% in the September quarter to 37,000.
Queensland (+16.4%) and the Northern Territory (+30.7%) were the only states or territories to experience an increase in dwelling unit commencements this quarter.
The largest decreases were seen in Tasmania (-18.5) and the Australian Capital Territory (-9.5%)
 
 
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New house starts decline for seventh straight quarter: ABS

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<table border="1" cellspacing="0" cellpadding="0" width="385"><tbody>
<tr>
<td width="64" nowrap valign="bottom">
Postcode
</td>
<td width="228" nowrap valign="bottom">
Suburb
</td>
<td width="93" nowrap valign="bottom">
Median house price
</td>
</tr>
<tr>
<td width="64" nowrap valign="bottom">
820
</td>
<td width="228" nowrap valign="bottom">
<a target="_blank" href="/news">BAYVIEW</a>
</td>
<td width="93" nowrap valign="bottom">
$1.215,000
</td>
</tr>
<tr>
<td width="64" nowrap valign="bottom">
820
</td>
<td width="228" nowrap valign="bottom">
<a target="_blank" href="/news">FANNIE BAY</a>
</td>
<td width="93" nowrap valign="bottom">
$883,000
</td>
</tr>
<tr>
<td width="64" nowrap valign="bottom">
820
</td>
<td width="228" nowrap valign="bottom">
<a target="_blank" href="/news">PARAP</a>
</td>
<td width="93" nowrap valign="bottom">
$805,000
</td>
</tr>
<tr>
<td width="64" nowrap valign="bottom">
810
</td>
<td width="228" nowrap valign="bottom">
<a target="_blank" href="/news">LYONS</a>
</td>
<td width="93" nowrap valign="bottom">
$775,000
</td>
</tr>
<tr>
<td width="64" nowrap valign="bottom">
810
</td>
<td width="228" nowrap valign="bottom">
<a target="_blank" href="/news">NIGHTCLIFF</a>
</td>
<td width="93" nowrap valign="bottom">
$759,500
</td>
</tr>
<tr>
<td width="64" nowrap valign="bottom">
820
</td>
<td width="228" nowrap valign="bottom">
<a target="_blank" href="/news">STUART PARK</a>
</td>
<td width="93" nowrap valign="bottom">
$700,000
</td>
</tr>
<tr>
<td width="64" nowrap valign="bottom">
812
</td>
<td width="228" nowrap valign="bottom">
<a target="_blank" href="/news">MARRARA</a>
</td>
<td width="93" nowrap valign="bottom">
$690,000
</td>
</tr>
<tr>
<td width="64" nowrap valign="bottom">
810
</td>
<td width="228" nowrap valign="bottom">
<a target="_blank" href="/news">RAPID CREEK</a>
</td>
<td width="93" nowrap valign="bottom">
$660,000
</td>
</tr>
<tr>
<td width="64" nowrap valign="bottom">
810
</td>
<td width="228" nowrap valign="bottom">
<a target="_blank" href="/news">JINGILI</a>
</td>
<td width="93" nowrap valign="bottom">
$585,000
</td>
</tr>
<tr>
<td width="64" nowrap valign="bottom">
812
</td>
<td width="228" nowrap valign="bottom">
<a target="_blank" href="/news">LEANYER</a>
</td>
<td width="93" nowrap valign="bottom">
$575,000
</td>
</tr>
</tbody></table>
Source: RP Data
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Top 10 most expensive suburbs in Darwin for houses: RP Data

<html><body>
Yesterday we read Paul Sheehan in the Sydney Morning Herald <a href="https://www.smh.com.au/opinion/politics/four-pillars-bashed-but-holding-firm-20111211-1opk5" target="_blank">arguing</a> that Australia’s major banks “look like ports in a storm”, and were prudent in hesitating to pass on the RBA’s cuts. 
Sheehan claims that “reflexive calls for our banks to pass on the Reserve Bank's interest rate cuts, in full, are now double-edged… A healthy bank is far preferable than a stressed bank. They may need their fat for harder times.” 
In case you missed it, his op-ed’s title conveyed the message even more crisply: “Our banks aren't so greedy after all." 
Sheehan was accompanied by a second SMH piece, ironically produced by an economic consultant to the banks, which <a href="https://www.smh.com.au/business/no-need-for-banks-to-pass-the-cut-20111212-1oqv4" target="_blank">posited</a> that we should, in fact, only ever expect the banks to pass on 80% of any RBA move. Again, the article’s pithy title told you all you needed to know: “No need for banks to pass the cut.” 
Sheehan’s insinuation that we should prioritise major bank profitability over competitive considerations is not novel. He is merely trotting out the very standard RBA and Australian Bankers Association (ABA) line on the purported trade-off between “financial stability” and “competition”. The two are supposedly mutually exclusive, which necessitates a more concentrated financial system. Privately, serious policy thinkers know that both the RBA and APRA would prefer fewer banks to regulate rather than more. 
To this line of logic, more competition means lower margins, which means less profitable and hence less “stable” institutions. It’s that crude. And it's wrong. 
Sheehan would have almost certainly been worded up by someone in the RBA- Treasury-ABA-major bank network to present the “other side” of the bank bashing story. 
Oh, and rest assured, this is an “insiders' network”, much like the “financial oligarchy” that MIT’s Simon Johnson famously identified as the source of so many problems in the US. 
A former head of Treasury and director of the RBA, Ted Evans, is chairman of Westpac. 
His successor as head of Treasury and a director of the RBA, Ken Henry, has just been appointed to NAB’s board. 
The governor of the RBA between 1996 and 2007, Ian MacFarlane, joined ANZ's board once his term at the RBA expired. 
David Morgan, a long-time Treasury official who rose to become 2iC, left to join Westpac, which he led as CEO during the 1990s and 2000s. 
Another former RBA official, Andrew Mohl, was until recently chief executive of AMP. 
And I fully expect the outgoing deputy governor of the RBA, who was well-known as a defender of the banking oligopoly, to end up on some bank board. 
If during your career as a (relatively) lowly paid regulator or public servant you have one eye on a lucrative banking job to secure your retirement nest egg, it’s hard to believe that this does not in some way contaminate your ability to exercise independence. 
The Washington-Wall Street-like crossover between Australian banks and the bureaucracy may be one reason why domestic regulators have been so keen to protect the majors from the reforms their peers overseas are being subject to following the GFC. 
After all, according to the local oligarchy’s narrative, luck had little role to play in Australia’s success in skirting the crisis. It had nothing to do with our leverage to Asia, extraordinary endowments of resources, high population growth, 20 years of rising real GDP, or the fact that our banks had not expanded overseas due to their focus on servicing the high growth domestic economy. 
In Sheehan’s words, “we can thank good government policy and good banking.” No sight of providence in this play!
 
This may explain why the RBA has been pushing hard to have the major banks exempted from the extra capital charge that the world’s 30 largest banks will be hit with under BASEL III, even though the majors rank among this list. 
The argument goes that Australia’s banks don’t have significant overseas exposures. But is it not the explicit corporate strategy of the CEOs of two of the four majors to expand into foreign territories? Of course it is. We’ve even had the newly appointed CEO of the Bank of Queensland claim that Australian banks should use their (taxpayer-underwritten) pricing power to buy cheap assets overseas. 
The dysfunctional regulatory-banking nexus is also possibly one reason why our banks have been exempted from holding the standard “liquid assets” that all other global banks will be required to keep. The official explanation was Australia has little government debt to satisfy this requirement. 
Yet Australia’s unique solution involved the RBA offering all banks a so-called “Committed Liquidity Facility”, which for a cost of just 0.15% per annum will give banks an immediate line of credit whenever they face funding stress. That is, they can swap illiquid assets with the RBA for cash and thus directly cauterise their solvency concerns. 
One of the reasons I have argued consistently for better pay in the public sector is so that officials feel less need to leave and seek lucrative private sector gigs. (And officials do use this explanation when asked why they are taking on such jobs.) 
The financial stability/competition trade-off that guides so much banking policy thinking in Australia is actually a sham. To demonstrate why, I put to you this idea. 
The four major banks’ combined market capitalisation is an extraordinary $250 billion (that’s about 20% of the national GDP). 
Imagine, for a moment, if we could replace the majors with, say, a larger number of smaller institutions. That is, if we took this quarter of a trillion dollars and spread it across, say, 10 smaller, safer banks – with no offshore expansion plans, with no “non-core” banking activities – worth, say, $20 billion to 30 billion each. Think of 10 different versions of Bendigo and Adelaide Bank. 
Our financial system would no longer have four “too-big-to-fail” legs, and all of the long-term moral hazard problems that these government-guaranteed institutions engender. Instead, it would have 10 smaller pins across which to apportion the economy’s risk. This is just smart diversification. 
How might one achieve this? You could begin by introducing a financial transactions tax that became much more punitive as an institution’s size – measured by its assets as a share of the system’s total assets – rose beyond a certain, unacceptably high threshold. 
You would basically be signalling that if you want to become a mega, too-big-to-fail bank, you are going to have to pay taxpayers a hefty price for the explicit and implicit catastrophe insurance. 
And if you think I am being melodramatic about taxpayers bailing out banks, I would encourage you to refer to Standard and Poor’s independent perspective. In assessing the creditworthiness of the major banks this month, Standard and Poor’s commented that their funding costs were substantially lower because of the assumption of taxpayer support. Specifically: 
 “Our counterparty credit rating on CBA is two notches higher than the [stand-alone credit rating], reflecting our view of a high likelihood of extraordinary government support in a crisis. This reflects our view of CBA's high systemic importance in Australia, and our assessment of the Australian government as highly supportive of institutions core to the national economy." 
And if you want a lighter take on everything I have argued today, have a glance at this online <a href="https://www.xtranormal.com/watch/12784379/leaked-secret-video-of-two-major-bank-ceos-chat">cartoon skit between two of the big banks CEOs</a>.
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

Bashing the banks is A-OK: Christopher Joye

<html><body>
The inner city of Perth, which has about 15,000 residents, is experiencing the second highest rate of housing stress of all Perth municipalities, according to a new report by lobbying group Australians for Affordable Housing. 
AAH defines housing stress as being the lowest 40% of equivalised household incomes who spend more than 30% of their income on housing costs. 
Nearly one in five (17%) inner-city Perth residents fall into this category (as well as an equal proportion in Mosman Park, Mandurah and Victoria Park) in a list headed by Kwinana, a suburb about 30 kilometres south of the CBD. 
These five suburbs make up the top five housing stressed council areas, according to AAH. 
<table style="width: 470px;" border="0" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="187" valign="top">
 
</td>
<td width="142" colspan="2" valign="top">
Housing Stress
</td>
<td width="132" colspan="2" valign="top">
Mortgage Stress
</td>
<td width="141" colspan="2" valign="top">
Private Rent Stress
</td>
</tr>
<tr>
<td width="187" valign="top">
LGA Name
</td>
<td width="142" colspan="2" valign="top">
%          Number
</td>
<td width="132" colspan="2" valign="top">
%         Number
</td>
<td width="141" colspan="2" valign="top">
%          Number
</td>
</tr>
<tr>
<td width="187" valign="top">
Kwinana (T)
</td>
<td width="63" valign="top">
20
</td>
<td width="78" valign="top">
2219
</td>
<td width="57" valign="top">
20
</td>
<td width="76" valign="top">
1047
</td>
<td width="66" valign="top">
38
</td>
<td width="75" valign="top">
938
</td>
</tr>
<tr>
<td width="187" valign="top">
Mosman Park (T)
</td>
<td width="63" valign="top">
17
</td>
<td width="78" valign="top">
734
</td>
<td width="57" valign="top">
9
</td>
<td width="76" valign="top">
83
</td>
<td width="66" valign="top">
35
</td>
<td width="75" valign="top">
552
</td>
</tr>
<tr>
<td width="187" valign="top">
Perth (C)
</td>
<td width="63" valign="top">
17
</td>
<td width="78" valign="top">
1397
</td>
<td width="57" valign="top">
10
</td>
<td width="76" valign="top">
216
</td>
<td width="66" valign="top">
26
</td>
<td width="75" valign="top">
985
</td>
</tr>
<tr>
<td width="187" valign="top">
Victoria Park (T)
</td>
<td width="63" valign="top">
17
</td>
<td width="78" valign="top">
2575
</td>
<td width="57" valign="top">
10
</td>
<td width="76" valign="top">
468
</td>
<td width="66" valign="top">
32
</td>
<td width="75" valign="top">
1806
</td>
</tr>
<tr>
<td width="187" valign="top">
Mandurah (C)
</td>
<td width="63" valign="top">
17
</td>
<td width="78" valign="top">
4885
</td>
<td width="57" valign="top">
17
</td>
<td width="76" valign="top">
1419
</td>
<td width="66" valign="top">
42
</td>
<td width="75" valign="top">
2945
</td>
</tr>
<tr>
<td width="187" valign="top">
Wanneroo (C)
</td>
<td width="63" valign="top">
16
</td>
<td width="78" valign="top">
9041
</td>
<td width="57" valign="top">
17
</td>
<td width="76" valign="top">
4965
</td>
<td width="66" valign="top">
37
</td>
<td width="75" valign="top">
3388
</td>
</tr>
<tr>
<td width="187" valign="top">
Armadale (C)
</td>
<td width="63" valign="top">
16
</td>
<td width="78" valign="top">
3610
</td>
<td width="57" valign="top">
17
</td>
<td width="76" valign="top">
1621
</td>
<td width="66" valign="top">
40
</td>
<td width="75" valign="top">
1654
</td>
</tr>
<tr>
<td width="187" valign="top">
Belmont (C)
</td>
<td width="63" valign="top">
16
</td>
<td width="78" valign="top">
2458
</td>
<td width="57" valign="top">
14
</td>
<td width="76" valign="top">
667
</td>
<td width="66" valign="top">
30
</td>
<td width="75" valign="top">
1314
</td>
</tr>
<tr>
<td width="187" valign="top">
Swan (C)
</td>
<td width="63" valign="top">
16
</td>
<td width="78" valign="top">
6453
</td>
<td width="57" valign="top">
17
</td>
<td width="76" valign="top">
3375
</td>
<td width="66" valign="top">
34
</td>
<td width="75" valign="top">
2359
</td>
</tr>
<tr>
<td width="187" valign="top">
Gosnells (C)
</td>
<td width="63" valign="top">
16
</td>
<td width="78" valign="top">
6169
</td>
<td width="57" valign="top">
17
</td>
<td width="76" valign="top">
3015
</td>
<td width="66" valign="top">
35
</td>
<td width="75" valign="top">
2580
</td>
</tr>
<tr>
<td width="187" valign="top">
Subiaco (C)
</td>
<td width="63" valign="top">
15
</td>
<td width="78" valign="top">
1366
</td>
<td width="57" valign="top">
7
</td>
<td width="76" valign="top">
130
</td>
<td width="66" valign="top">
30
</td>
<td width="75" valign="top">
1071
</td>
</tr>
<tr>
<td width="187" valign="top">
Fremantle (C)
</td>
<td width="63" valign="top">
15
</td>
<td width="78" valign="top">
1996
</td>
<td width="57" valign="top">
12
</td>
<td width="76" valign="top">
441
</td>
<td width="66" valign="top">
32
</td>
<td width="75" valign="top">
1039
</td>
</tr>
<tr>
<td width="187" valign="top">
Bayswater (C)
</td>
<td width="63" valign="top">
15
</td>
<td width="78" valign="top">
3934
</td>
<td width="57" valign="top">
13
</td>
<td width="76" valign="top">
1149
</td>
<td width="66" valign="top">
33
</td>
<td width="75" valign="top">
2327
</td>
</tr>
<tr>
<td width="187" valign="top">
Stirling (C)
</td>
<td width="63" valign="top">
15
</td>
<td width="78" valign="top">
12852
</td>
<td width="57" valign="top">
13
</td>
<td width="76" valign="top">
3455
</td>
<td width="66" valign="top">
32
</td>
<td width="75" valign="top">
7671
</td>
</tr>
<tr>
<td width="187" valign="top">
Canning (C)
</td>
<td width="63" valign="top">
15
</td>
<td width="78" valign="top">
4908
</td>
<td width="57" valign="top">
14
</td>
<td width="76" valign="top">
1656
</td>
<td width="66" valign="top">
32
</td>
<td width="75" valign="top">
2613
</td>
</tr>
<tr>
<td width="187" valign="top">
Cockburn (C)
</td>
<td width="63" valign="top">
14
</td>
<td width="78" valign="top">
4949
</td>
<td width="57" valign="top">
14
</td>
<td width="76" valign="top">
2214
</td>
<td width="66" valign="top">
34
</td>
<td width="75" valign="top">
2083
</td>
</tr>
<tr>
<td width="187" valign="top">
Bassendean (T)
</td>
<td width="63" valign="top">
14
</td>
<td width="78" valign="top">
866
</td>
<td width="57" valign="top">
13
</td>
<td width="76" valign="top">
313
</td>
<td width="66" valign="top">
34
</td>
<td width="75" valign="top">
424
</td>
</tr>
<tr>
<td width="187" valign="top">
South Perth (C)
</td>
<td width="63" valign="top">
13
</td>
<td width="78" valign="top">
2598
</td>
<td width="57" valign="top">
10
</td>
<td width="76" valign="top">
534
</td>
<td width="66" valign="top">
28
</td>
<td width="75" valign="top">
1723
</td>
</tr>
<tr>
<td width="187" valign="top">
Vincent (T)
</td>
<td width="63" valign="top">
13
</td>
<td width="78" valign="top">
1807
</td>
<td width="57" valign="top">
7
</td>
<td width="76" valign="top">
330
</td>
<td width="66" valign="top">
26
</td>
<td width="75" valign="top">
1240
</td>
</tr>
<tr>
<td width="187" valign="top">
Kalamunda (S)
</td>
<td width="63" valign="top">
12
</td>
<td width="78" valign="top">
2483
</td>
<td width="57" valign="top">
14
</td>
<td width="76" valign="top">
1258
</td>
<td width="66" valign="top">
33
</td>
<td width="75" valign="top">
1010
</td>
</tr>
<tr>
<td width="187" valign="top">
Claremont (T)
</td>
<td width="63" valign="top">
11
</td>
<td width="78" valign="top">
486
</td>
<td width="57" valign="top">
10
</td>
<td width="76" valign="top">
100
</td>
<td width="66" valign="top">
31
</td>
<td width="75" valign="top">
344
</td>
</tr>
<tr>
<td width="187" valign="top">
East Fremantle (T)
</td>
<td width="63" valign="top">
11
</td>
<td width="78" valign="top">
320
</td>
<td width="57" valign="top">
10
</td>
<td width="76" valign="top">
102
</td>
<td width="66" valign="top">
33
</td>
<td width="75" valign="top">
184
</td>
</tr>
<tr>
<td width="187" valign="top">
Joondalup (C)
</td>
<td width="63" valign="top">
11
</td>
<td width="78" valign="top">
6480
</td>
<td width="57" valign="top">
12
</td>
<td width="76" valign="top">
3125
</td>
<td width="66" valign="top">
30
</td>
<td width="75" valign="top">
2904
</td>
</tr>
<tr>
<td width="187" valign="top">
Melville (C)
</td>
<td width="63" valign="top">
10
</td>
<td width="78" valign="top">
3918
</td>
<td width="57" valign="top">
11
</td>
<td width="76" valign="top">
1354
</td>
<td width="66" valign="top">
29
</td>
<td width="75" valign="top">
2010
</td>
</tr>
<tr>
<td width="187" valign="top">
Cambridge (T)
</td>
<td width="63" valign="top">
9
</td>
<td width="78" valign="top">
927
</td>
<td style="text-align: left;" width="57" valign="top">
8
</td>
<td width="76" valign="top">
257
</td>
<td width="66" valign="top">
27
</td>
<td width="75" valign="top">
592
</td>
</tr>
<tr>
<td width="187" valign="top">
Nedlands (C)
</td>
<td width="63" valign="top">
9
</td>
<td width="78" valign="top">
725
</td>
<td style="text-align: left;" width="57" valign="top">
10
</td>
<td width="76" valign="top">
221
</td>
<td width="66" valign="top">
25
</td>
<td width="75" valign="top">
397
</td>
</tr>
<tr>
<td width="187" valign="top">
Cottesloe (T)
</td>
<td width="63" valign="top">
8
</td>
<td width="78" valign="top">
270
</td>
<td style="text-align: left;" width="57" valign="top">
8
</td>
<td width="76" valign="top">
60
</td>
<td width="66" valign="top">
18
</td>
<td width="75" valign="top">
171
</td>
</tr>
<tr>
<td width="187" valign="top">
Peppermint Grove (S)
</td>
<td style="text-align: left;" width="63" valign="top">
8
</td>
<td style="text-align: left;" width="78" valign="top">
49
</td>
<td style="text-align: left;" width="57" valign="top">
2
</td>
<td style="text-align: left;" width="76" valign="top">
3
</td>
<td style="text-align: left;" width="66" valign="top">
29
</td>
<td style="text-align: left;" width="75" valign="top">
44
</td>
</tr>
</tbody></table>
 “The high cost of housing in Perth is not new, but these figures show where the pain is being felt,” says AAH campaign manager Sarah Toohey. 
“Households in Kwinana are suffering the most, with 20% experiencing housing stress, while Mandura has the highest proportion of people in the rental market in housing stress (42%)”. 
“Areas such as Kwinana, Armadale, Mandurah and Wanneroo all have rates of rental stress over 36%, as well as high rates of mortgage stress with over 17% of home buyers in those areas under financial pressure.” 
“Housing is the single biggest cost-of-living issue in Australia. When low-income households spend more than 30% of their income on housing costs they are officially in housing stress. This means they have very little left over to cover other costs like food, transport, bills or money for emergencies.” 
“The WA government has produced an excellent housing strategy for the state. Now we need the state and federal governments to work together to fund that strategy and deliver the housing system that WA needs.” 
The lobby group is urging Perth residents in housing stress to join the campaign to convince governments to work together to address the housing crisis. 
“We need collective action at all levels of government to ensure that we fix our broken housing system, and take the pressure off families struggling with high housing costs and lack of affordable options,” Toohey says. 
Outside of the most stressed suburbs, the most recent REIA/Deposit Power Housing Affordability Report found that Western Australia recorded the largest improvement in housing affordability across the country, with the proportion of family income required to meet home loan repayments decreasing 2.3% to 23.9%. 
Western Australia is the third most affordable state or territory in which to buy a home. Over the year, housing affordability improved by 4.1%. 
The median family income increased 6% and the average monthly loan repayments decreased 3.2% during the September 2011 quarter, contributing to the improvement in housing affordability.
Rental affordability improved over the September quarter, with the proportion of income required to meet median rents decreasing 0.7% to 19.3%. Over the year, rental affordability improved by 1.8 percentage points.
 Picture by Michael Coghlan
 
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Mandurah residents among those with most housing stress in Perth

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McGrath Estate Agents has defied the current gloom in Sydney’s market by posting record sales in November led by a 55% increase in Sydney’s eastern suburbs. 
The agency’s Eastern Suburbs office posted 140 sales with a cumulative value of $170.5 million, with 10 sales over $2 million. The office accounted for almost a quarter of the total sales achieved across the group in November. 
In total the agency recorded 758 sales worth $723 million during the month, surpassing the previous record set in March 2010 ($635 million from 572 transactions). 
Prestige eastern suburbs sales in the $2 million-plus category include a five-bedroom California bungalow in Cottingham Avenue in Kensington, which sold on November 4, marketed by McGrath agents Peter Delimitrou and George Faris.
McGrath chief operating officer Geoff Lucas says the strongest sector is the price range between $500,000 to $1.5 million, with 444 sales. 
“This has been a popular sector of the market driven largely by first home buyers and investor activity.” 
“Currently first home buyer activity comprises 16.4% of the market while investors hit a peak of 38.4% of the market in November according to AFG. 
“While there has been increased buyer activity in some regional areas such as Ballina, Byron and the Central Coast, our long standing Sydney metro offices have achieved some impressive gains while growing their market share”. 
Other regional offices to record strong sales growth over November included McGrath Inner West, which reported $75.7 million from 75 sales, with three sales over $2 million, (+21%) McGrath Lane Cove, which reported $32 million from 22 sales, with five sales over $2 million (+68%) and McGrath Cronulla, which reported $29.1 million from 34 sales, with one sale over $2 million (+9.9%). 
A returning confidence in the market has resulted in a record number of listings by the group in the past month with 1,019 listings across the network, compared with 651 for the corresponding period last year. 
Current average auction days on market were 36 for the group.
 
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