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

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The iconic Dickens Manor estate in Elwood has been listed for sale.
The house was built for the architect T.J. Crouch, who established the Royal Victorian Institute of Architects in 1856.
It’s been a wedding reception venue for many decades.
Offers are due by October 28, with more than $3.5 million expected.
The 1,296-square-metre site has an older-style two-level mansion and comes with a planning permit to reconfigure the existing building into individual residential units with scope for additional development on the vacant land.
The Dickens Street property has been listed by CBRE city sales agents Mark Wizel and Josh Rutman.
“We anticipate the strongest interest to come from developers looking to construct a multi-unit project and also expect interest from buyers looking to add a modern extension to the current classically styled building,” Rutman says.
Wizel says the location of the property is likely to help drive interest in the site.
“This is an ideal offering in the current funding climate as we have observed significantly less barriers to entry for developments of 50 or less units.
“We understand this to be both the preference of the majority of developers, as well as the preference of Australia’s leading financial institutions,” Wizel says.
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jchancellor-FAypfDUnLy

Subdivision likely as Elwood's Dickens Manor put on the market

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<img src="/images/stories/tamarama3.jpg">
The architect-designed Tamarama house (pictured above) owned by Dan White, the Bellevue Hill-bound great-grandson of the founder of the Ray White real estate empire, and his wife, Sam, has been sold.
At $6.6 million it was a little short of its <a target="_blank" href="https://www.propertyobserver.com.au/residential/title-tattle-bill-gates-rents-on-sydney-harbour/2011092351664">desired $7 million selling hopes </a>when initially listed through Ray White Double Bay's Elliott Placks.
The suburb’s record $11 million sale – and another at $10.5 million – were achieved in mid-2008 just before the global financial crisis and its ensuing prestige price re-adjustment.
While certainly no longer commanding ambitious boomtime prices, it’s the second prestige home to sell at Tamarama in the past month.
<img src="/images/stories/wolorai.jpg">
The Bellevue Hill-bound plastic surgeon<a href="https://www.propertyobserver.com.au/residential/title-tattle-third-brighton-behemoth-joins-the-fray/2011091651583" target="_blank"> Robert Drielsma</a><a target="_blank" href="https://www.propertyobserver.com.au/residential/title-tattle-third-brighton-behemoth-joins-the-fray/2011091651583"> has sold his Tony Masters-designed Tamarama house</a> (pictured above) for about $6.75 million.
The four-bedroom house last sold for $6.1 million in 2004 when it was bought from the Rubicon bigwig Gordon Fell and his wife, Pip.
The contemporary, three-level house in Wolaroi Crescent was built after the 501-square-metre block was bought for $1.45 million in 1997.
Bordering the gully reserve of Tamarama Park opposite the beach, the three-level house is set in landscaped gardens designed by William Dangar.
The house sold through Pauline Goodyer of GoodyerDonnelley Real Estate and Belle Property's David Vereker, who were aiming for $8 million.
Its initial hopes last year were $11 million.
It’s now been listed at $5,000 a week through Sydney Slice Executive Rentals by its new owner.
The White couple sold because they're upgrading to a 2,460-square-metre Victoria Road property in Bellevue Hill with tennis court.
The four-bedroom, four-bathroom Tamarama residence constructed three years ago has interiors by Briony Fitzgerald, the interior designer daughter of the acclaimed designer Ann Gyngell.
Drielsma and his wife, anaesthetist, Debbie Hong, have upgraded to a Bellevue Hill residence they bought for $9.85 million earlier this year. It had been listed in August last year with $14 million hopes.
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Tamarama loses some glamour as post-GFC prestige sales find their feet

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There are 40 suburbs across Melbourne that have $1 million-plus median house prices, according to RP Data.
This is four more than last year and 18 more than recorded over the year to June 30, 2009.
Toorak, with 111 house sales during the financial year, ranked as the most expensive suburb according to the RP Data list, with a $2.4 million median price.
Toorak was the founding member of Melbourne's million-dollar club, when 10 years ago it recorded 174 house sales resulting in a median price of $1.05 million.
Deepdene was second priciest at $2.02 million – but from just 11 sales ranging from $1.55 million to $3.7 million.
Tim Lawless, national head of research at RP Data, says 10 of the 40 suburbs fell within the prestigious Boroondara Council region.
There were six of the suburbs in the Bayside Council area nd five in each of the Port Phillip and Stonnington precincts.
The remainder were distributed across Glen Eira (four), Banyule (three), Whitehorse (two), Melbourne (two), Darebin (one), Mornington Peninsula (one) and Moonee Valley (one).
New entrants to the list were Alphington ($1.07 million from 31 sales), Caulfield South ($1.03 million from 87 sales), Ivanhoe ($1 million from 83 sales) and South Melbourne ($1.01 million from 101 sales).
Given the list’s requirement for at least 10 sales over the 12-month period, some suburbs such as Kooyong don't show enough activity.
“Over the year to June 30, Kooyong has recorded only nine transactions and all except two of them were over the million-dollar mark,” Lawless notes in The Age.
Lawless notes statistics from the RP Data-Rismark home value index had the premium sector of the market slowing at a more rapid rate than other price segments.
Throughout the year to July, values across Melbourne's top 20% of suburbs dropped 9.8% compared with much smaller falls across the more affordable price segments.
“Next year it will be interesting to see how the million-dollar-club is fairing,” Lawless notes.
Australian Property Monitors recently <a target="_blank" href="https://www.propertyobserver.com.au/residential/sydney-now-has-106-suburbs-above-%241-million/2011092351661">indicated Sydney had 106 suburbs with median house prices of more than $1 million in the six months to July</a>.
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Melbourne's million-dollar-club continues to grow: RP Data

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Property investors continue to come under heavy fire for distorting the housing market and exacerbating housing affordability problems as the Canberra Tax Forum gets under way today.
The latest to have a go at landlords is Sarah Toohey, campaign manager of lobbying group Australians for Affordable Housing, who says the current tax system allows investors to use their rental properties like an offshore bank account. Toohey is not attending the tax summit.
Toohey points the finger at negative gearing provisions, which she says “encourage investors to make a loss and reduce their tax payable”.
“Essentially it allows higher income earners to use rental housing as a tax shelter. It's the offshore account of the Australian tax system,” Toohey writes in an opinion piece for the ABC’s opinion website The Drum.
“If that wasn't enough, investors also get a 50% tax discount on any capital gain they make on the sale of the property. It means that any income gained through property appreciation gets taxed at half the rate of other income,” she adds.
Her complaint follows <a href="https://www.propertyobserver.com.au/residential/housing-academic-says-landed-gentry-destroying-fair-go/2011092851716" target="_blank">property investors being called the “landed gentry”</a> by Ian Winter, executive director at Australian Housing and Urban Research Institute and <a href="https://www.propertyobserver.com.au/tax/academic-calls-on-canberra-to-fix-housing-tax-mess/2011100251762" target="_blank">accused of being unfairly favoured under the current tax system</a> by Melbourne University’s Miranda Stewart.
Toohey says the insidious effect of these two tax breaks (negative gearing and capital gains) is felt when they work together.
“Tax deductibility encourages investors to borrow more than they can afford, because they're really borrowing to make a loss on the cost of running the property, in anticipation of a capital gain payoff.
“Because investors aren't constrained by what they can actually pay, they push up house prices, and get an unfair advantage over first-home buyers, indeed all home buyers, who can only spend what they're able to afford based on their income,” she says.
Toohey quotes ATO statistics for the 2008-09 financial year that show that landlords claimed a collective loss of $6.5 billion, while earning $24 billion in rent.
“These tax breaks go to people who need it least, generally existing home owners with some wealth to spare. They encourage investment in established housing at and do little to relieve the shortage of 493,000 rental properties that are affordable and available to people on low incomes,” she says.
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lschlesinger-FZcF9M3vE6

Property investors under fire as tax summit kicks off

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An auction of the next tranche of 7-Eleven convenience stores is expected to attract interest from private investors, particurlarly those with self-managed super funds. 
The 10 stores are all based in NSW within a roughly 80-kilometre radius from the Sydney CBD.
The Sydney auction is schedule for November 9 and is the third auction of 7-Eleven properties in New South Wales this year.  Previous auctions attracted yields of between 6% and 8%.
The stores, purchased as part of 7-Eleven’s acquisition of 250 retail sites from Mobil Retail in 2010, include service stations, convenience stores and customer parking.
All stores come with 15-year leases to 7-Eleven with three renewal options of five years each. 
They range in size from 1,200 square metres in Yagoona on the Hume Highway to a 4,300-square-metre site in Wilson Street in St Mary’s. 
The sale is being handled by John Macree, NSW head of sales and investments at Jones Lang LaSalle, who says prices and yields are expected to vary greatly given the different sizes.
 
Macree says the NSW portfolio will appeal to “self-funded retirees including those with self-managed super funds because of the stable long-term income stream and the banks’ willingness to offer attractive finance packages on these style of assets”. 
He says that following the success of the previous campaign, a number of prospective buyers had already been making enquiries. 
“The last auction attracted a number of keen bidders and we expect that some of those who missed out on an opportunity last time will be heading to the auction room again in November. This portfolio is attractive for a number of reasons including the quality of the tenant, long-term leases and prime locations,” he says. 
During a previous auction in July 12 out of 13 sites sold, with a 5,575-square-metre Hoppers Crossing site on the corner of Old Geelong and Heaths Road achieving the highest price of $3.49 million. 
The properties that will be up for auction in November include: 
<table cellpadding="0" cellspacing="0" border="1" style="width: 470px;"><tbody>
<tr>
<td valign="top" width="308">
Location
</td>
<td valign="top" width="308">
Site area (sqm)
</td>
</tr>
<tr>
<td valign="top" width="308">
Emu Plains, 126-128 Old Bathurst Road 
</td>
<td valign="top" width="308">
3,328 
</td>
</tr>
<tr>
<td valign="top" width="308">
St Mary’s, 2 Wilson Street 
</td>
<td valign="top" width="308">
4,328 
</td>
</tr>
<tr>
<td valign="top" width="308">
Gymea, 110 Gymea Bay Road and 353 President Avenue 
</td>
<td valign="top" width="308">
1,233 
</td>
</tr>
<tr>
<td valign="top" width="308">
Lindfield, 238-240 Pacific Highway 
</td>
<td valign="top" width="308">
1,708
 
</td>
</tr>
<tr>
<td valign="top" width="308">
Yagoona, 519 Hume Highway 
</td>
<td valign="top" width="308">
1,267
 
</td>
</tr>
<tr>
<td valign="top" width="308">
Ingleburn, 72 Cumberland Street 
</td>
<td valign="top" width="308">
1,728 
</td>
</tr>
<tr>
<td valign="top" width="308">
Ryde, 328 Blaxland Road 
</td>
<td valign="top" width="308">
2,093
</td>
</tr>
<tr>
<td valign="top" width="308">
Lansvale, 22-36 Hume Highway
</td>
<td valign="top" width="308">
4,874
</td>
</tr>
<tr>
<td valign="top" width="308">
Woolooware, 192-196 Kingsway
</td>
<td valign="top" width="308">
2,532
</td>
</tr>
<tr>
<td valign="top" width="308">
Turramurra, 1408 Pacific Highway
</td>
<td valign="top" width="308">
2,824
</td>
</tr>
</tbody></table>
The 7-Eleven company has 32% of the convenience retailer Eastern Seaboard market. The company generates approximately $3 billion in sales per year.
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Investor interest expected for 7-Eleven portfolio auction

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Five out of 20 economists surveyed by the Australian Financial Review expect the Reserve Bank to cut interest rates by the end of the year, while six tip rates to fall over the next six months. Five others expect rates to rise in the next six months.
The most popular six-month forecast (the view held by nine out of 20 economists) is for the RBA to leave its finger on the pause button.
In the previous AFR quarterly survey carried out at the end of June, only four out twenty economists (Westpac, St.George, Goldman Sachs and UBS) correctly predicted that rates would remain on hold at 4.75% with the majority of economists expecting a rate rise by now.
The economic barometer has shifted significantly over the past three months as the world economy lurched from one crisis to the next and the outlook for the US and the Eurozone remains unstable and uncertain.
Looking ahead to March next year, Shane Oliver, AMP’s head of investment strategy, is tipping the greatest fall in the cash rate by 75 basis points to 4% by while at the opposite end of the scale HSBC’s chief economist Paul Bloxham expects the cash rate to rise by 25 basis points to 5% over this period.
Oliver forecasts GDP growth of just 1.5% for the 2011 calendar year and 3.2% for the 2012 calendar year.
Four economists, including Westpac’s chief economist Bill Evans expects the cash rate to sit at 4.25% by March next year.
<table border="1" cellpadding="0" cellspacing="0"><tbody>
<tr>
<td valign="top" width="205">
Economist
</td>
<td valign="top" width="205">
3 month forecast
</td>
<td valign="top" width="205">
6 month forecast
</td>
</tr>
<tr>
<td valign="top" width="205">
Shane Oliver, AMP
</td>
<td valign="top" width="205">
4.5%
</td>
<td valign="top" width="205">
4%
</td>
</tr>
<tr>
<td valign="top" width="205">
Warren Hogan, ANZ
</td>
<td valign="top" width="205">
4.75%
</td>
<td valign="top" width="205">
4.75%
</td>
</tr>
<tr>
<td valign="top" width="205">
John Honan, Ausbil Dexia
</td>
<td valign="top" width="205">
4.75%
</td>
<td valign="top" width="205">
4.75%
</td>
</tr>
<tr>
<td valign="top" width="205">
Gavin Stacey, Barclays Capital
</td>
<td valign="top" width="205">
4.75%
</td>
<td valign="top" width="205">
5%
</td>
</tr>
<tr>
<td valign="top" width="205">
Dominic Bryant, BNP Parabis
</td>
<td valign="top" width="205">
4.5%
</td>
<td valign="top" width="205">
4.25%
</td>
</tr>
<tr>
<td valign="top" width="205">
James McIntyre, CBA
</td>
<td valign="top" width="205">
4.75%
</td>
<td valign="top" width="205">
5%
</td>
</tr>
<tr>
<td valign="top" width="205">
Joshua Williamson, Citigroup
</td>
<td valign="top" width="205">
4.75%
</td>
<td valign="top" width="205">
4.75%
</td>
</tr>
<tr>
<td valign="top" width="205">
Adam Boyton, Deutsche Bank
</td>
<td valign="top" width="205">
4.5%
</td>
<td valign="top" width="205">
4.25%
</td>
</tr>
<tr>
<td valign="top" width="205">
David Bassanese, Fin review
</td>
<td valign="top" width="205">
4.5%
</td>
<td valign="top" width="205">
4.25%
</td>
</tr>
<tr>
<td valign="top" width="205">
Paul Bloxham, HSBC
</td>
<td valign="top" width="205">
4.75%
</td>
<td valign="top" width="205">
5%
</td>
</tr>
<tr>
<td valign="top" width="205">
Stephen Walters, JP Morgan
</td>
<td valign="top" width="205">
4.75%
</td>
<td valign="top" width="205">
4.75%
</td>
</tr>
<tr>
<td valign="top" width="205">
Richard Gibbs, Macquarie Grp
</td>
<td valign="top" width="205">
4.75%
</td>
<td valign="top" width="205">
4.5%
</td>
</tr>
<tr>
<td valign="top" width="205">
Alan Oster, NAB
</td>
<td valign="top" width="205">
4.75%
</td>
<td valign="top" width="205">
4.75%
</td>
</tr>
<tr>
<td valign="top" width="205">
Stephen Roberts
</td>
<td valign="top" width="205">
4.75%
</td>
<td valign="top" width="205">
5%
</td>
</tr>
<tr>
<td valign="top" width="205">
Su-Lin Ong, RBC Capital Mkts
</td>
<td valign="top" width="205">
4.75%
</td>
<td valign="top" width="205">
4.75%
</td>
</tr>
<tr>
<td valign="top" width="205">
Felicity Emmett, RBS
</td>
<td valign="top" width="205">
4.75%
</td>
<td valign="top" width="205">
5%
</td>
</tr>
<tr>
<td valign="top" width="205">
Besa Deda, St.George Bank
</td>
<td valign="top" width="205">
4.75%
</td>
<td valign="top" width="205">
4.75%
</td>
</tr>
<tr>
<td valign="top" width="205">
Roland Randall, TD Securities
</td>
<td valign="top" width="205">
4.75%
</td>
<td valign="top" width="205">
4.75%
</td>
</tr>
<tr>
<td valign="top" width="205">
Scott Haslem, UBS
</td>
<td valign="top" width="205">
4.75%
</td>
<td valign="top" width="205">
4.75%
</td>
</tr>
<tr>
<td valign="top" width="205">
Bill Evans, Westpac
</td>
<td valign="top" width="205">
4.5%
</td>
<td valign="top" width="205">
4.25%
</td>
</tr>
</tbody></table>
The range of six month-forecasts highlights the “very usual, set of complex forces” shaping the Australian economy mentioned by RBA governor Glenn Stevens in a recent speech.
Evans’ predictions of two rate cuts by March 2012 come with forecasts of low GDP growth of just 1.2% for the 2011 calendar year and 3.6% for the 2012 calendar year on the back of “underperforming housing”
Optimistic forecasters include Nomura’s Stephen Roberts and Roland Randall from TD Securities, who expect the economy to grow by 4.6% during the 2012 calendar year.
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Economists divided on six-month rates forecast

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Cairns is still attracting its fair share of lifestyle migrants, albeit at a slower rate than before, but the number of economic migrants has diminished, according to the October Month in Review report from Herron Todd White.
“People relocating to Cairns tend to fall into two classes – the lifestyle and the economic migrants,” the report says.
“With the slowdown in the Cairns economy, the economic migration component, consisting largely of young singles or young couples or young families moving to Cairns for employment reasons, has diminished,” the Cairns office of Herron Todd White says.
According to the report, recent lifestyle migrants are typically the “pre-retirement empty-nester demographic, looking for a nice place to live but with opportunities for full- or part-time work if required”.
“Indeed, cashed-up lifestyle migrants who have sold up in Sydney or Melbourne to move to Cairns are like gold in the current market environment.”
According to the Cairns office market observations, lifestyle migrants are demanding a variety of accommodation styles, “some buying up big as if expecting to be constantly descended upon by the friends and relatives they have left behind, while others are seeking well-located unit accommodation with good amenities”.
The northern beaches are often a preferred destination, the report says.
The latest report puts the Cairns residential property market at the bottom of the property cycle and says it is still “very much a buyer’s market”, with property demand from investors and first-home buyers weak and the market for low-end housing slow.
“Demand for better-quality houses and units in good locations remains solid, largely sustained on the basis of the trade-up buyer segment,” it says.
“There are two types of trade-up buyer: existing locals trading up (or down or sideways) in response to changing circumstances and/or preferences, and people relocating to Cairns.”
“Locals are also active in the trade-up market, but the catch with this segment is selling their existing home. We often hear of sales that fall through because buyers are unable to sell their existing house in the presently slow market environment.”
Two recent reports have highlighted the struggles facing the Cairns market.
The Moody’s mortgage delinquency report highlighted the <a href="/news">tourist regions of far north Queensland, Sunshine Coast and Gold Coast as having performed very poorly over the June quarter</a>, with delinquencies of 2.59%, 2.68%, and 3.11% respectively.
Similarly, the RP Data Equity Report says far north Queensland <a href="https://www.propertyobserver.com.au/residential/queensland-hit-hardest-post-gfc-as-6.3-of-homes-worth-less-than-their-purchase-price/2011092851719" target="_blank">has recorded the greatest proportion of properties in a negative equity position</a>, at 13.5% of all homes.
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Cairns still attracting lifestyle buyers, as tide  goes out on economic migration

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Many investors just simply fall in love with retail property. This is probably because of familiarity — as it tends to influence so much of our daily lives.
Therefore, after investing in residential property for a while, you find people will gravitate naturally towards retail properly.
To them, it seems to be the next logical step. But is that actually the case?
Let's talk about the weather!
Surely, that only affects rural property — doesn't it? Well, just ask struggling retailers, and they'll tell you otherwise.
You see, in the run up to summer clothing retailers will be holding their breath. Any onset of wet weather will greatly affect the sale of thongs, board shorts and bikinis. And Coca-Cola blamed the fall in its soft-drink sales upon last summer's heavy rains.
Interestingly though, rain also tends to drive people indoors to regional shopping centres — but mostly to browse and eat, rather than buy specialty items.
Cinemas will also benefit from poor weather conditions, whereas, tourist and outdoor entertainment operators find the going tough.
What about interest rates?
The residential sector will always suffer first (and the most), whenever interest rates are on the rise. But as people need to spend more on their mortgage payments, they have less to spend on discretionary retail items. This is particularly when <a target="_blank" href="/news">they also decided to boost their savings to near-record levels</a>.
In this rising interest-rate sequence, industrial property will tend to follow retail — and begin to slow about six to nine months afterwards.
This is because Australia's industrial property is predominantly occupied by "distributors", rather than manufacturers. And these distributors are mainly supplying those struggling retailers.
So that only leaves offices!
According to an 80-year study by BIS Shrapnel, there appears to be little or no correlation between rising interest rates and the office sector.
Therefore, the rise and fall for offices is dictated by the prevailing supply and demand within the sector. And traditionally, that has tended to span a 16- to 18-year cycle.
Bottom Line: If you understand how to read the signs and can anticipate the cycles, you need not be caught out.
But clearly, the retail sector is delicately poised at the moment, whereas, offices are currently heading along a predictable upward path.
Chris Lang is an advisor to commercial property investors and gives keynote speeches and regular seminars on the best way to invest in commercial property. He maintains a blog, <a href="https://his-best.biz/" title="Chris Lang's blog" target="_blank">his-best.biz</a>, which he updates regularly about the best way to get the most out of your commercial property investment.
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chrislang-EQKojcgJPV

Offices a more stable commercial investment than retail

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One of the things that investors and economists struggle with is “dynamics”. George Soros prefers to term it “reflexivity”. In the econo-jargon they have an even fancier sounding term: “endogeneity”.  A brickie might sum it up simply as “the knock-on effect”. 
Bluntly stated, events have consequences, and to have the best possible chance of working out the future, you need to spend a lot of time thinking hard about them. A good example is the current public or “sovereign” debt crisis. All of this started off with a credit crisis among private borrowers. The consensus solution was to bail out the private sector with public money because we wanted to avoid the risks of a 1930s-style depression. 
Setting aside the long-term moral hazard implications of “socialising” private mistakes (i.e., the “heads I win, tails taxpayers lose” dynamic), an unanticipated knock-on effect of the policy reactions to the 2007-09 calamity has been the 2010-11 public debt crisis and, more particularly, the possible disintegration, or at least restructuring, of the Euro zone and its once-successful common currency. 
Another knock-on effect that I’d like to discuss today has been the stunning appreciation of the Aussie dollar during 2010-11. Many economists and investors believed that due to the enormous local investment in resources, Australia would eventually run into an inflation problem, with the consequence being higher interest rates. We did indeed see a rebound in core inflation, and the RBA has dutifully lifted rates to above-average levels. But what most people, including the RBA, did not originally count on was that the Aussie dollar would soar to more than 110 US cents. 
According to the RBA’s research, every 10% increase in the currency reduces core consumer prices by about 1% over the following three years, with most of the impact coming in the first 12 months. We had a peak-to-trough 36% increase in the Australian dollar spot (as measured against the US dollar) since its low of about 81 US cents in 2010. Taking a more reasonable trading range, the rise has been more like 15%. 
The key point is that the unexpectedly strong advance of the currency was a crucial “deflationary” impulse that helped the RBA to keep rates on hold following its first contractionary hike in November 2010. The central bank has recognised this by referring to the role of the currency with mounting regularity as a restraining influence on inflation and activity over 2011. 
Coupled with a rolling series of crises that nobody predicted, from the east coast floods to the Japanese tsunami-cum-nuclear catastrophe to the oil price shocks induced by the Middle Eastern revolutions, domestic hikes that were slated to materialise have gradually disappeared (my own views have not changed). 
Now the economy’s restraining knock-on effects are actually working in reverse. Just when every second bank in the country was upwardly revising its forecast for the Aussie dollar to around 110 US cents or higher, the currency has fallen like a stone on the back of risk aversion arising from the snowballing European woes. 
As I write, it is trading at just 95.28 US cents, and looks like it may break through to 94 US cents. That is a 16% fall from its peak, and a 10% plus decline from its average in 2011 (see chart). Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/joyeoctober41.gif"><img src="/images/stories/joyeoctober41thumb.gif"></a>
So, while a raft of banks have swung 180 degrees to adjust their interest rate forecasts from hikes to cuts in 2011-12, including, among others, Goldman Sachs, Deutsche Bank, Westpac, Macquarie and AMP, the “shock absorber” that is Australia’s currency is delivering de facto rate cuts as we speak. 
Recall the chorus of calls in the media from countless vested interests that the high Aussie dollar was killing industry? You don’t need to have a plus-size cranium to work out why such whining has suddenly stopped. 
The 10% to 15% fall in the Aussie dollar significantly improves the competitive position of exporters (including those that sit on the RBA’s board) as the price of their goods and services is lower (assuming our trade-weighted exchange rate moves by a similar margin). It also assists import-competing industries, such as manufacturers, given that the price of imports increases (thus making their goods and services relatively cheaper). 
A permanent decline in the exchange rate of this magnitude is also quite explicitly inflationary, as research <a href="https://www.rba.gov.au/publications/bulletin/2011/sep/bu-0911-2a" target="_blank">published by the RBA</a> only a couple of weeks ago shows. 
A final knock-on effect I want to discuss today concerns interest rates. As most know, the RBA is responsible for setting the level of interest rates across the economy via changes to its "official target cash rate". In this context, one of the many good things the RBA does is provide detailed information on the "average" interest rates (e.g., deposit and home loan rates) that prevail across the market. 
I have been writing for quite a while now about how the "inversion of the yield curve" has driven down the cost of fixed-rate loans. This is basically econo-speak for telling you that the financial markets believe that the price of money in the future will be lower than it is today (i.e., future interest rates will be less than current-day rates). The markets believe this because they think the RBA will be forced to cut its cash rate on the back of lower-than-expected global growth. A related nuance, which I have explained in detail before, is that the price of fixed-rate Aussie government bonds has exploded due to the latter’s appeal in a world of deteriorating sovereign credit quality. 
On Monday Australia's largest mortgage broker, AFG, <a href="/news">reported a "huge spike" from 9% to 16% in the share of people using fixed-rate loans</a>. Now, according to the official RBA data, we can say with certainty that the average three-year, fixed-rate home loan has fallen by 0.70 percentage points in recent months, or by nearly three full RBA rate cuts, which would amount to 0.75% (see chart).
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/joyeoctober42.gif"><img src="/images/stories/joyeoctober42thumb.gif"></a>
Indeed, three-year fixed-rate home loans have not been this cheap since way back in July 2009 (i.e., more than two years ago). The RBA has lifted interest rates on seven occasions since that time. In fact, the cost of three-year fixed-rate home loans actually peaked at 7.8% in April last year. Today's rates are now 1.1 percentage points lower than those levels (the equivalent of more than four RBA rate cuts). 
A similar thing has happened with small business loans (see chart above). According to the RBA's data, the three-year fixed rate for small businesses has fallen from 8.75% in April 2011 to 7.80% today, or by almost a full percentage point (i.e., four RBA cuts). 
In summary, the markets and the economy have responded to quickly deliver the stimulus many doves argue that Australia desperately needs — in the form of a much lower currency and substantially reduced interest rates—without the policymakers at the RBA or Treasury having to lift a finger. This is one illustration of why markets can play a very valuable, self-correcting role. It is also another reason why the RBA will likely keep its finger off the rate trigger until the global dust settles.
Christopher Joye is a leading financial economist and works with <a target="_blank" title="Rismark International" href="https://www.rismark.com.au/">Rismark International</a>. Rismark and RP Data provide house price analytics products, and solutions that enable investors to go long and/or short the housing market. The above article is not investment advice.
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chrisjoye-JYhJsTrNRC

We have had three rate cuts, without the RBA lifting a finger

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Single first-home buyers have a battle on their hands if they want to secure a property in today’s market, which is predominantly dominated by second-home buyers, investors, and young couples who are able to draw on combined salaries.  In fact the only time we see a significant rise in this sector of the market is during periods where generous incentives are offered by the government, which conversely does little to ease the pain for property buyers.  The resulting increase in competition caused by a temporary inflation of the economy – particularly in the inner- and middle-ring suburbs – makes it harder to get a foothold, not easier.
We only have to take a brief backward glance at the initiation of the first-home owner boost in 2008 to understand the advantages fleeting targeted schemes like this can effect. The post-GFC property boom was ignited by the first-home owner boost introduced in October 2008. During this period grant recipients accounted for 40% of overall housing turnover.
However, in Victoria it was the extra dollar incentives offered for purchasing new properties in the growth corridors that had the biggest effect on first-home buyer trends, and this was where the buying activity centred. Immediately following the introduction in November 2008 overall sales of new dwellings had increased by 1,764 to 11,695.  Melton, in Melbourne’s West, grew by 8.2%, equating to 7,535 new residents – an all-time high.  Other regions such as Deer Park (17 kilometres west of Melbourne’s CBD) recorded a 15.67% rise in its median value. And by January 2009 there had been 530 house sales recorded in Tarneit (25 kilometres south west of Melbourne), with prices increasing 21%. Werribee (32 kilometres southwest of Melbourne) and Point Cook (25 kilometres south of Melbourne) attracted the greatest number of grant recipients, with Werribee South recording a whopping 25.74% rise in its median house price, which was clearly unsustainable over the long term. 
When the grant was finally scaled back demand substantially declined, and the effects are still being felt.  The REIV recorded a 4.3% decline in Werribee’s median house price over the last quarter alone, and according to RateCity, there have been 40,000 fewer first-home buyers entering the residential market in the year from July 2010 – 2011.
The decline has caused a two-tier rift in our property market and left home buyers in the outer-suburban regions facing a long road of potential property stress.  RP Data’s recent equity report shows that “3.7% of home owners across the nation are in a negative equity position,” which includes a significant proportion who purchased at the peak of the market (many of whom were first-home buyers).  Clearly, the reduction in demand following the drawback of the first-home owner’s boost and a sharp period of interest rate rises has taken its toll. Another report analysing mortgage-backed securities by Moody's Investor Services shows a worrying i<a target="_blank" href="/news">ncrease in delinquencies</a> from those holding the least amount of equity in their properties. The report has produced a “heat map” for each metropolitan and regional housing market across the country and it reveals the greatest deterioration in mortgage performance is evidenced in those areas “radiating” away from our well facilitated metropolitan inner- and middle-ring suburbs – principally the outer regional areas.  These are the areas our first-home buyers flocked to during the boost and the areas that are now s<a target="_blank" href="https://www.propertyobserver.com.au/residential/queensland-hit-hardest-post-gfc-as-6.3-of-homes-worth-less-than-their-purchase-price/2011092851719">truggling with negative equity </a>and an inability for buyers to bail out due to the reduction in demand.
On the other side of the coin the inner-metropolitan regions where most people want and need to live are fast becoming unaffordable for the majority of home buyers who don’t already have existing equity in the property market – principally first-home buyers.  RP Data now has 40 Melbourne suburbs listed with a median house price of a million dollars or more.  Furthermore, in its recent equity report Victoria came top of the list, with 71.4% of Victorians currently holding at least 50% equity in their property. Melbourne has also recorded the highest rate of capital growth over a five-year period (to July 2011), with dwelling values up 51.5%. The overall results of the report specified that the biggest gains were understandably in the capital cities – areas where job security is strong and vendors are under no pressure to sell. Regional “mortgage belt” areas containing the highest default rates dwindle some 10% behind.
Obviously Australia is suffering a housing dilemma, which is largely the result of our geographical landscape where more than 75% of Australians live in and around our major cities along the eastern and south-eastern costal planes.  The limited land available in these locations, along with a growing population of buyers and immigrants, naturally puts pressure on Australia’s metropolitan prices and even taking into account the recent soft market, which has slightly improved buying conditions across the country, it’s clearly splitting the housing market into a gradual rich/poor divide.
Luring people out of the metropolitan inner-suburban areas is the only obvious way to ease inner-city demand and consequently make housing more affordable. However any future plans to do so have to be sustainable and not fuelled with fly-by-night incentives. In Victoria, the state government’s answer to the shortage of housing has been to action urban land releases on former farmland in growth corridors such as Casey, Hume, Whittlesea, Wyndham, and Melton – areas lacking in public transport, adequate health services, and other amenities needed to support a growing population.  It was boldly stated that infrastructure would be provided in these areas to make them liveable for new home buyers; however this was to come in the form of a hefty new tax called the ”growth areas infrastructure contribution” – the GAIC. 
As I understand it, the GAIC is levied if land is sold, transferred or subdivided, or if sizable building works are conducted. The cost can be up to $95,000 per hectare and essentially it falls at the feet of the purchaser, which further increases the underlying cost of purchasing. There is negligible encouragement for any new home buyer to move into these areas, and quite clearly it’s going to do little, if anything, to address the growing issues facing the practicalities of sustainable population growth.
We have a looming crisis on our hands, and the only way to solve it is to build suburbs with enough diversity and infrastructure to foster a sense of community.  Re-igniting the first-home buyer market and committing to a strategised plan to adequately facilitate the outer-metropolitan regions would be a great initial step towards addressing this issue. This means providing more than simply an abundance of “roof space” or high-rise inner- city rabbit hutches, it requires substantial hand-in-hand investment in schools, small business, open spaces, and transport facilities without which growth cannot be sustained. All in all, most owner-occupiers will admit the most valuable asset they own is their home – however it is no longer a right reserved for all – for a growing sector of our population, it’s fast falling out of reach.  
Catherine Cashmore is senior buyer advocate for <a target="_blank" title="JPP" href="https://www.jpp.com.au">JPP Buyer Advocates</a> – the largest dedicated buyer advocacy service in Victoria. With extensive experience in all matters regarding real estate, JPP successfully purchases and negotiates more than $100 million worth of property each year.
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