<p><a href="https://www.apartments.com.au/developers/mayd-group">MAYD Group</a> has set a new residential price record in Queensland with the $30 million sale of the penthouse at its <a href="https://www.apartments.com.au/new-apartments/one-burleigh-88-the-esplanade-burleigh-heads-qld-4220">ONE Burleigh</a> development in Burleigh Heads.</p>

<p>The sale equates to around $37,500 per sqm.</p>

<p>The two-level, 800 sqm penthouse, featuring five bedrooms, five bathrooms, five car spaces, and a private infinity pool overlooking the Pacific Ocean, was acquired by a Gold Coast-based entrepreneur, highlighting continued demand for ultra-premium beachfront product.</p>

<p>Selling agent Freddie Tehle of PRD Burleigh Heads said the result reflects tightening supply of high-quality, large-format apartments in Burleigh.</p>

<p>“There’s very limited opportunity to secure this level of scale and absolute beachfront position in <a href="https://www.apartments.com.au/developments/burleigh-heads-qld-4220">Burleigh Heads</a>,” Tehle said.</p>

<p>“Buyers are increasingly seeking apartments that genuinely replace a standalone home, and this penthouse delivers that with its size, privacy, and direct ocean frontage.”</p>

<p>[smartcode_project:default project_id=146358 project_image_fid=323057]</p>

<p>The sale comes as construction progresses on ONE Burleigh, a boutique development of 17 full-floor residences at 88 The Esplanade, scheduled for completion in early 2027.</p>

<p>Developed by MAYD Group and designed by <a href="https://www.apartments.com.au/architects/mas-architecture-studio">MAS Architecture</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/sici-design">Sici Design</a>, the project has been positioned as a collection of house-sized beachfront apartments, each occupying an entire floor with around 381 sqm of internal and external living space.</p>

<p>When construction commenced, MAYD director Todd Mould pointed to the long-term resilience of premium coastal real estate as a key driver behind the project.</p>

<p>“Real estate, particularly at the premium end, remains one of the most resilient and proven long-term investment avenues,” Mould said.</p>

<p>“Our ambition is that anyone who buys a MAYD-built product can genuinely feel the care, craftsmanship and commitment we bring to every detail.”</p>

<p>[smartcode_project:default project_id=146358 project_image_fid=323055]</p>

<p>Each residence has been configured with four bedrooms, multiple living zones, a private office, and expansive ocean-facing terraces. Interiors draw on a restrained material palette, including travertine stone, timber joinery, and integrated premium appliances.</p>

<p>Interior designer Sici Design said the approach was to reflect the project’s coastal setting through both materiality and spatial planning.</p>

<p>“ONE Burleigh is our vision of luxury living, designed to bring the essence of Burleigh Heads' vibrant coastal beauty into an unparalleled residential experience.”</p>

<p>Residents will have access to a suite of wellness-focused amenities, including pools, sauna facilities, and dedicated relaxation spaces, reflecting a broader shift toward lifestyle-driven apartment design on the Gold Coast.</p>

<p>[smartcode_project:default project_id=146358 project_image_fid=323052]</p>

<p>The project occupies a southern Esplanade site with uninterrupted beachfront frontage, an increasingly rare offering in Burleigh Heads, free from the Norfolk Pines that line much of the coastline and often limit direct ocean outlook.</p>

<p>Mould said the design intent was to balance that outlook with a sense of retreat.</p>

<p>“Living at ONE Burleigh is about how your day naturally unfolds, morning light across the ocean, coffee on the balcony, and being in Burleigh but elevated above the noise.”</p>

<p>The result further reinforces Burleigh Heads’ emergence as one of the Gold Coast’s most tightly held and supply-constrained beachfront markets, where boutique, owner-occupier-focused developments are increasingly setting new price benchmarks.</p>

<p>[smartcode_project_cta:default project_id=146358]</p>


Joel Robinson

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

<p>Apartment developers in the Gold Coast are finding new, creative ways to differentiate themselves from competing projects, as new supply starts to flow through up and down the Coast.</p>

<p>Developer Big Projects brought in the renowned Sydney-based design studio YSG to craft the interiors for The Frederick, Big Projects' new Mermaid Beach project and YSG's first move into the multi-residential development space.</p>

<p>[smartcode_project:default project_id=110588 project_image_fid=5346]</p>

<p>It was a strategic move for Big Projects to bring in a Sydney eye to the development.</p>

<p>“Our role is to give our design partners the space and freedom to explore,” says Matt Barrett, Director of Big Projects.</p>

<p>“We wanted YSG Studio to capture the essence of Nobby’s, to design a building that embraces life, light and connection, while creating a genuine sense of place.”</p>

<p>There are only 39 apartments in The Frederick, including a striking beach house, just 100 metres from the booming Nobby Beach precinct.&nbsp;</p>

<p>[smartcode_project:default project_id=110588 project_image_fid=5347]</p>

<p>Yasmine Ghoniem, Director of YSG Studio, says their vision&nbsp;for The Frederick "reinvents coastal living."</p>

<p>“Nobby’s has such an iconic energy, it’s one of those rare pockets of the Gold Coast where the community, the beach, and the streets all feel connected,” Ghoniem says.</p>

<p>"Responding to the neighbouring coastline, soothing curves add a relaxing regional overlay, while unique detailing really sets it apart. It’s a place that feels lived in from the moment you step inside.”</p>

<p data-end="236" data-start="64">A standout feature of The Frederick is its rooftop terrace, an uncommon inclusion for a boutique, low-rise building, where amenity is typically concentrated at ground level.</p>

<p>[smartcode_project:default project_id=110588 project_image_fid=5360]</p>

<p data-end="523" data-start="308">Positioned to capture panoramic views from the hinterland to the ocean, the rooftop has been designed as a series of intimate zones. It includes a pool, sauna, sun decks, workspaces and dedicated entertaining areas.</p>

<p data-end="670" data-start="525">“The rooftop was conceived as a collection of spaces where residents can unwind and connect, an extension of the Nobby’s lifestyle,” Barrett says.</p>

<p data-end="760" data-start="672">Architecture for the project was led by Plus Architecture, with landscape design by LDG.</p>

<p data-end="951" data-start="762">SRQ Projects Director Nick Clydsdale, who is handling sales at The Frederick, says the majority of enquiry is coming from South East QLD and Victorian buyers who have been actively searching between Broadbeach and Mermaid Beach for some time.</p>

<p data-end="951" data-start="762">"They’ve reviewed a number of projects, however this one has stood out for its design flair/ appeal,"&nbsp;Clydsdale says.</p>

<p data-end="951" data-start="762">Site demolition is slated for this month, with construction commencing soon after. Big Projects is targeting a late 2027 completion.</p>

<p>[smartcode_project_cta:default project_id=110588]</p>


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

<p>Melbourne-based property developer ALTA Property has this week achieved planning approval for the adaptive re-use of a former commercial tower into a $200 million, 169-apartment project at 10 Queens Road, one of the last developable sites along the Albert Park Lake-fronting boulevard.&nbsp;</p>

<p>Set within one of Melbourne’s most sought-after precincts and designed by <a href="https://www.apartments.com.au/architects/fraser-partners-0">Fraser and Partners</a>, the illustrious building will offer unparalleled views across Albert Park Lake, Port Phillip Bay and Melbourne CBD.&nbsp;</p>

<p>The mix of 1, 2 and 3-bedroom residences will be complemented by a ground-floor amenity featuring private dining, a lounge bar, gym and wellness spaces, co-working, outdoor communal gardens, and retail.&nbsp;</p>

<p>The 17-storey building is a masterclass in adaptive re-use, with the existing commercial building’s façade, shell and internal structure to be retained, before high-end residences are built from the ground up in a newly built Albert Park facing addition to the building.&nbsp;</p>

<p>Sitting atop the building will be two 320+sqm penthouses with private rooftop terraces, which are expected to be priced between $9 - $11 million.&nbsp;</p>

<p><img alt="ALTA Property achieves permit approval for $200 million Queens Road tower" data-entity-type="file" data-entity-uuid="aa11211b-5581-43f9-940c-fc84d30a0e61" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/C_04.png?VersionId=Yhf5p_1EgGDu_zOIMFgvA8Ug8j3sTFQs" /></p>

<p>Architecturally, the building will feature a curved, geometric façade that celebrates and elevates the existing structure, with warm, muted tones which were selected to extend the materiality of the existing building rather than contrast it.&nbsp;</p>

<p>Interiors will bring together three metre high ceilings with waffle concrete in some spaces, natural timber, granite and Australian materials, culminating in crafted, generous and considered spaces that are defined by authenticity.&nbsp;</p>

<p>The adaptive re-use means that the Queens Road project will be a sustainability led, high-quality finished product, with a 62% saving in carbon emissions by re-using the existing structure rather than knocking it down and rebuilding.&nbsp;</p>

<p>ALTA Property was launched by Nigel Givoni in 2023, bringing over 25 years of experience in multi level residential delivery.&nbsp;</p>

<p>Melbourne’s property market growth is currently led by apartments. According to RPM VIC Apartments &amp; Townhomes Market Report (April 2026), units are outpacing houses, especially in the middle ring suburbs where median prices hit $757,500 – a four-year high that represents 2.9 percent growth quarter-on-quarter.&nbsp;</p>

<p><img alt="ALTA Property achieves permit approval for $200 million Queens Road tower" data-entity-type="file" data-entity-uuid="647e13d7-b4bc-433a-9bc9-fe3c3dd4f2ec" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/V_06.png?VersionId=ou4NUCWUgA3NAy.6CQJlEdKX50j3dOk6" /></p>

<p>For ALTA Property Founder Nigel Givoni, this performance speaks to the confidence he has in the Melbourne market.&nbsp;</p>

<p>“Queens Road represents a rare opportunity to continue to shape our presence in the Melbourne market.,"&nbsp;Givoni says.</p>

<p>"With a considered project team and a premier site along one of the city’s most sought-after boulevards, we look forward to contributing to the fabric of this established address.</p>

<p>“Other Australian markets are getting a lot of attention, but I believe the depth of value in Melbourne is being overlooked. The fundamentals are strong, population growth is steady and, based on our preliminary conversations with a leading builder, construction costs are beginning to normalise, creating further opportunity."</p>

<p>Givoni says the project is a&nbsp;highly considered example of adaptive re-use, delivering quality, high-end residences, premium hotel-inspired amenities and an architecturally striking façade, all achieved without the need to remove the existing structure.</p>

<p>"We are really looking forward to the market’s response,” he said.&nbsp;</p>


ALTA Property to deliver $200 million Queens Road apartment tower

<p>Construction is set to begin at <a href="https://www.apartments.com.au/new-townhouses/orchard-mews-glen-iris-18-scott-grove-glen-iris-vic-3146">Orchard Mews</a> in Glen Iris, with&nbsp;PC Whitehall &amp; Sons&nbsp;now appointed as the townhome development moves into its next phase.</p>

<p>The development by&nbsp;<a href="https://www.apartments.com.au/developers/montcoeur">MontCoeur</a>,&nbsp;located at 18 Scott Grove, is now around 30 per cent sold, with completion targeted for late-2027.</p>

<p>Orchard Mews comprises a curated collection of three- and four-bedroom customisable townhomes, positioned within one of <a href="https://www.apartments.com.au/developments/glen-iris-vic-3146">Glen Iris</a>’ more tightly held residential streets. The low-density project has been designed by <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a>, with landscape architecture by <a href="https://www.apartments.com.au/landscape-architect/jack-merlo">Jack Merlo</a>, bringing together a team known for high-end residential projects across Melbourne.</p>

<p>[smartcode_project:default project_id=150128 project_image_fid=366285]</p>

<p>The development is defined by its focus on flexible living and long-term usability. Each residence includes multiple living zones and a customisable multipurpose room, allowing buyers to tailor spaces to suit changing needs, whether as a home office, additional bedroom, wellness area or entertainment space.</p>

<p>Architecturally, the townhomes emphasise natural light and spatial volume, with dual-aspect layouts and double-height living areas incorporated into the design. Interiors feature natural stone benchtops, premium appliances, and a neutral material palette intended to support everyday functionality rather than statement-driven finishes.</p>

<p>All residences are all-electric and include private lifts and secure double garages, reflecting a broader shift toward sustainability and future-focused housing in Melbourne’s established suburbs.</p>

<p>[smartcode_project:default project_id=150128 project_image_fid=366277]</p>

<p>Outdoor connections are also central to the offering, with a mix of private courtyards and terraces extending internal living spaces and integrating with the landscaped surrounds.</p>

<p>The Scott Grove address places Orchard Mews within close proximity to some of Melbourne’s key lifestyle and education amenities, including Scotch College, Sacré Cœur, Cabrini Hospital and the retail hub of Chadstone. Public transport access is also nearby, with trams and Gardiner Station providing connectivity to the CBD and surrounding suburbs.</p>

<p>[smartcode_project_cta:default project_id=150128]</p>


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

<p data-end="150" data-start="66">A rare new apartment development has been proposed on the fringe of St Ives Village.</p>

<p data-end="370" data-start="152">Developer Newquest Property has lodged plans for a low-rise apartment project designed by well-regarded architecture firm Warren &amp; Mahoney, which is best known for its work in the multi-residential sector in Melbourne.</p>

<p data-end="370" data-start="152">The building, proposed for a 1,916 sqm site on <a href="https://www.apartments.com.au/new-apartments/st-ives-residences-3-5-memorial-avenue-nsw-2075">Memorial Avenue</a> opposite St Ives Village Green, has been designed to blend into the surrounding natural environment.</p>

<p data-end="370" data-start="152"><img alt="St Ives" data-entity-type="file" data-entity-uuid="5c1c7437-2fba-4345-a6d7-05321714ad3e" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-04%20at%201.28.46%E2%80%AFPM.png?VersionId=KrYyMaJvNqR7vbx0xbB3Ef8sJ6FuHpmn" /></p>

<p data-end="745" data-start="537">“Drawing inspiration from the pale trunks and flowering canopies of the scribbly gums and blue gums prevalent in the area, a considered material palette was developed,” the architectural design report states.</p>

<p data-end="912" data-start="747">“This palette references the established materiality of the suburb while elevating it through refined finishes to achieve a more luxurious architectural expression.”</p>

<p data-end="1185" data-start="914">Of the 33 apartments proposed, 21 will be three-bedroom residences. The remaining mix includes nine two-bedroom apartments, one one-bedroom apartment and two four-bedroom residences. The development will be supported by 62 car parking spaces and 33 secure bicycle spaces.</p>

<p data-end="1270" data-start="1187">The proposal would replace two single-storey brick buildings currently on the site.</p>

<p data-end="1270" data-start="1187"><img alt="St Ives" data-entity-type="file" data-entity-uuid="21422eaf-09a9-4439-9278-b9bd9daf22a1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-04%20at%201.38.10%E2%80%AFPM.png?VersionId=v.fXSgcUcEscvOZzqcjG5nk3gVqk_Amt" /></p>

<p data-end="1467" data-start="1272">St Ives remains a relatively untapped market for new apartment development. North Shore developer WINIM has a number of projects in the area, while INCA is nearing completion of Ellis Residences.</p>

<p data-end="1635" data-start="1469">More recently, Traders In Purple has lodged plans for one of the denser projects proposed in the suburb, a 75-apartment development on a 5,900 sqm site on Cowan Road.</p>

<p data-end="1635" data-start="1469">NewQuest, a construction, design and development firm, has delivered over 24 projects across commercial, residential, industrial, and lad markets.&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>


First look: NewQuest Property proposes new St Ives apartment development

<p>Prominent New Zealand apartment and hotel operator, <a href="/developers/safari-group">Safari Group</a>, is offering up a prime investment opportunity for Australians to purchase off the plan in one of the world’s most popular ski destinations.</p>

<p>They recently took to market Mountain Oak Queenstown Apartments, in the growing precinct of Remarkables Park in Frankton, near the airport and at the foot of The Remarkables - the mountain range the locals like to call “The Remarks”.&nbsp;</p>

<p>Sydney investors have shown interest in the one, two and three-bedroom apartments that secure high-season occupancy six months over the year, primarily over summer and winter months.</p>

<p>They average 90 per cent occupancy across their portfolio over January, February, March, August, November and December, while shoulder season months of April, July, September and October are still occupied 70 per cent of the time, with the growing appeal of Queenstown becoming not just a hotspot for the snow, but a lifestyle destination.</p>

<p>Even in the low seasons of May and June, occupancy levels reach around 40 per cent.</p>

<p><img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_auto/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Ext_Cam15_Sunny.jpg?VersionId=SJAROUM_1s.Tr5ciMk4EEj5oAt_Vewmv" /></p>

<p>Safari’s Safari Hotels arm can also manage the holiday letting for an investor, from the listing on holiday accommodation websites such as Airbnb and Booking.com to the cleaning and maintenance of the investment. They’ve been in the short stay management business for 15 years and offer 24/7 support for investors, an important convenience benefit for any overseas investor</p>

<p>Another major drawcard for Australians is that New Zealand doesn’t have a stamp duty policy - so the entry price of NZ$639,000 (AU$586,000), is all that is payable on completion.</p>

<p><img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/313_Livingv2_WEB.jpg?VersionId=nV229fM0ZeYpoxOrX372HyGjfwY_LR8c" /></p>

<p>Safari is starting construction of the 141 apartments in Q2 this year, with a two-year build estimated to complete in mid-to-late 2027.<span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><span><img alt="" data-entity-type="" data-entity-uuid="" height="15" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXczFpFAb7WuA6f4f9TtKWcqXyNwR8qqtakWv352ERkpqNlP3KwIo8YKxw67jZNHfpjEGIZGv5MQTbnvLZwNt8iu9IVdOrswOjCvBZ4zhSoOOLrpt6etVEZTN1gkBho0r_R72zdHNA?key=yq3daOanqHSb88QFd8jGYKdb" title="Click and drag to move" width="15" /></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><span><span><span><span><span><span>​</span></span></span></span></span></span></p>

<p>The apartments will feature modern amenities and contemporary designs with expansive windows capturing sweeping views of The Remarkables mountain range.&nbsp;</p>

<p>Interiors are equipped with modern finishes, premium appliances, and secure electronic key-locked doors, ensuring a comfortable living experience for residents and guests alike.</p>

<p>With its strategic location near Coronet Peak and Cardrona Alpine Resort, as well as key retail and dining precincts such as Market Street, Five Mile Shopping Centre, and Remarkables Market, Mountain Oak offers a strong proposition for investors seeking high rental yields and capital appreciation in one of New Zealand’s most sought-after locations.&nbsp;</p>

<p>Queenstown’s sustained demand for visitor accommodation and rental properties is underpinned by a shortage of housing options, attracting both local and international buyers.</p>


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

<html><body>
<p>EXPERT OBSERVER</p>
<p>Is Perth about to boom?</p>
<p>The NAB survey today certainly suggests so.</p>
<div id="post-body-5780827678701089214" class="post-body entry-content">
<div>In Q3 Business Conditions for Western Australia practically exploded higher from a reading of 2 to 25, while business confidence went from a negative reading of -1 all the way up to 10 across a single quarter of trading. </div>
<div> </div>
<div><a href="https://1.bp.blogspot.com/-sopqcq0XBLA/X3sNbSaoZDI/AAAAAAAA4qM/50kqimyXn8cO78694yN01OsiE3dt-7VngCNcBGAsYHQ/s740/NAB.jpg" target="_blank">Click to enlarge:</a></div>
<div> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-sopqcq0XBLA/X3sNbSaoZDI/AAAAAAAA4qM/50kqimyXn8cO78694yN01OsiE3dt-7VngCNcBGAsYHQ/s740/NAB.jpg"><img src="https://1.bp.blogspot.com/-sopqcq0XBLA/X3sNbSaoZDI/AAAAAAAA4qM/50kqimyXn8cO78694yN01OsiE3dt-7VngCNcBGAsYHQ/w640-h606/NAB.jpg" width="640" height="606" data-original-height="700" data-original-width="740"></a></div>
<br><div><em>Source: NAB</em></div>
<div> </div>
<div>Having barely been touched by COVID-10 since April, the local jobs market is clearly enjoying the stimulus, and jobs vacancies for Western Australia are suddenly at the highest level since the resources boom years. </div>
<div> </div>
<div>Is Perth property about to boom, then?</div>
</div>
<p><strong>PETE WARGENT</strong><em><strong> </strong>is the co-founder of AllenWargent property buyers and a best-selling author and blogger </em></p>
</body></html>

pwargent-M4siyDbqQY

Perth property looks set to boom: Pete Wargent

<html><body>
<div>Interesting figures from SQM Research showed rental vacancies in Melbourne rising to 27,070 in October 2020, due to the lockdown.</div>
<div> </div>
<div>That's a vacancy rate of 4.4 per cent, and well up from only 11,882 rental vacancies a year earlier.</div>
<div> </div>
<div>SQM Research reported that the vacancy rate was most acute in Melbourne's CBD, at 10.6 per cent.</div>
<div> </div>
<div>The 6mMA figures showed that rental vacancies in Sydney have begun to level off.</div>
<div> </div>
<div class="x__Entity x__EType_OWALinkPreview x__EId_OWALinkPreview x__EReadonly_0"><img src="https://1.bp.blogspot.com/-HkllQbH-vBk/X7OJT4rBTZI/AAAAAAAA5XY/m7gdK7ltSz4w5rlcQfWM7Izx4QwyDhUfQCNcBGAsYHQ/s1464/SQM1.jpg" data-imagetype="External"></div>
<p> </p>
<div> </div>
<div>Rental vacancies in Brisbane continued to ease lower, down to 6,912 from 7,950 a year earlier.</div>
<div> </div>
<div>More than 400,000 Australians have returned home this year, which might go some of the way to explaining low rental vacancy rates in Perth, Canberra, Hobart, Adelaide, and Darwin, all of which now have tight vacancy rates of under 1 per cent.</div>
<div> </div>
<div> </div>
<div class="x__Entity x__EType_OWALinkPreview x__EId_OWALinkPreview_1 x__EReadonly_0"><img src="https://1.bp.blogspot.com/-lxv8bsS_t5I/X7OKx-nT9GI/AAAAAAAA5Xk/p54r32aOISct4ihncXbRCTHOKA6JEZw4QCNcBGAsYHQ/s1174/cc.jpg" data-imagetype="External"></div>
<p> </p>
<div> </div>
<div>Consumer confidence lifted again to a 9-month high.</div>
</body></html>

Melbourne rental vacancies rise to 27,000 as lockdown lifts: Pete Wargent

<html><body>
<div>EXPERT OBSERVER</div>
<div> </div>
<div>As Australia gets back to business I've been following the UK government's inept handling of the Coronavirus with increasingly wide-eyed incredulity.</div>
<div> </div>
<div>The cost to date has now been estimated at a mind-boggling £284 billion according to the government's own spending review this week. </div>
<div> </div>
<div>If you were wondering what exactly has been achieved by this interplanetary level of spending (so far), then you wouldn't be Robinson Crusoe there.</div>
<div> </div>
<div>With the Brits expected to announce approval of the rollout of a Biontech/Pfizer jab as early as this coming week then the UK's effective lockdown will likely continue through until the new year, accounting for thousands more blameless small businesses.</div>
<div> </div>
<div>To add insult to injury the botched and inoperable test-and-trace system has alone cost an absurd £22 billion, single-handedly erasing years of pointless austerity measures.</div>
<div> </div>
<div>Britain's public sector net debt will soon be well above 100 per cent of GDP and back to the highest level since the post-war years. </div>
<div> </div>
<div>Higher taxes will doubtless be back on the agenda soon enough to pay for it all, but this time around capital will likely up and leave. </div>
<div> </div>
<div>Just the Brexit debacle to finish off now before the incumbent PM gets ushered out of politics...</div>
<div> </div>
<div><strong>Money printer go #Brrr...</strong></div>
<div> </div>
<div>It's remarkable how quickly views have changed in respect of quantitative easing and related stimulus. </div>
<div> </div>
<div>Fears of inflationary spirals in the financial crisis aftermath have been replaced the money printers being embraced with joyful abandon. </div>
<div> </div>
<div>Grant Williams of RealVision and TTMYGH rustled up this belter of an infographic this week to compare the scale of the Covid-19 stimulus to that of the 2008 financial crisis. </div>
<div> </div>
<div>
<div class="separator"><img src="https://1.bp.blogspot.com/-Z8fJVDAqWXQ/X8P9QxCvh9I/AAAAAAAA5h8/sEVcHmlohJg_2QA_I1bHON3L0gje6t2GQCNcBGAsYHQ/w640-h466/TTMYGH.jpg" width="640" height="466" data-original-height="732" data-original-width="1005"></div>
<div class="separator"> </div>
</div>
<div>With interest rates mired at zero for the foreseeable future capital has been flowing into real estate, stocks, and cryptocurrencies. </div>
<div> </div>
<div><strong>Lucky country</strong></div>
<div> </div>
<div>Numerous medical journal studies are now showing how Vitamin D can play an important role in reducing Covid-19 infection.</div>
<div> </div>
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<div> </div>
<div>This might go some of the way to explaining Australia's near elimination of the virus, with zero deaths or cases in ICUs or on ventilators for a long time now. </div>
<div> </div>
<div>Whatever the reasons, it's looking increasingly likely that Australia has dodged another sizeable bullet and will become a remarkably sought-after destination once its international borders are reopened.</div>
<div> </div>
<div>Data due to be released this week will show that the Aussie economy began to expand again with output growing by about 3-4 per cent in the third quarter of 2020, with another pumping current account surplus, and housing prices rising by +0.6 per cent in the month of November. </div>
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The UK; a case study on botched COVID-19 stimulus: Pete Wargent

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<p>EXPERT OBSERVER</p>
<p>Australian is on the cusp of a national real estate boom. And I do emphasise “national”.</p>
<p>We haven’t had a genuine national real estate boom in Australia since the one from 2001 to 2004, when all the major markets experienced strong price rises.</p>
<p>The one that drove Sydney and Melbourne prices higher from 2013 to 2017 was not a nationwide phenomena, as few other locations around the nation shared that price uplift.</p>
<p>But right now forces are building which will generate growth in most major cities and towns across the nation. They will be boosted by new events which will energise economies, including infrastructure spending and increased activity in the resources sector.</p>
<p>We currently have a remarkably strong situation with markets across Australia – everywhere, in fact, except the two biggest cities, which are so often the exception rather than the rule.</p>
<p>The new price data from CoreLogic suggests that all capital cities except Sydney and Melbourne had price growth in September, while most regional market jurisdictions also recorded growth. The September figures continued the stubborn performance of markets since February when the pandemic first started to impact Australia.</p>
<p>Many of our capital cities have recorded some level of house price growth in most months since February. Canberra has had growth in each of the past seven months and Adelaide has had uplift in six of the seven months.</p>
<p>Regional markets around Australia are pumping strongly, with vacancies ultra low, rents rising and buyers outnumbering sellers. People at the coal-face of these markets, including buyers agents, valuers and selling agents, have been reporting very competitive markets for several months – and the data supports those views.</p>
<p>So I would argue that significant sections of the nation already have notable up-cycles under way, particularly those where the virus has been got under control early, local economies are strong, consumer confidence is good, vacancies are low, first-home buyers are active and the Exodus to Affordable Lifestyle is having an impact.</p>
<p>Some locations have most or all of those factors in play. Those places include Perth, Adelaide, Hobart, Canberra and regional centres like Ballarat, Bendigo, Albury-Wodonga, Orange, Newcastle, the Sunshine Coast, Mackay, Rockhampton and Townsville.</p>
<p>Of the 15 major market jurisdictions in Australia – eight capital cities and seven state/territory regional markets – 11 have house prices higher than at the start of 2020, led by Regional Tasmania (up 7.1%) and Darwin (up 6.6%), as well as Hobart, Canberra, Regional NSW and Regional South Australia (all up 4-5% since the start of the year).</p>
<p>Twelve of the 15 jurisdictions have house prices higher than a year ago. For apartments, 11 of the 15 locations have prices higher than a year ago.</p>
<p>This means there is a groundswell of positive factors, a rising tide of markets – particularly outside the two biggest cities, which is where two-thirds of Australians live.</p>
<p>Against that background, there are positive forces building which will turbocharge the situation and create a national property boom.</p>
<p>We have seen that local economies and property markets have charged out of lockdown phases with considerable exuberance. We can also get a message from New Zealand, where the economy has continued to emit positive signals and property prices have been rising strongly right across that country.</p>
<p>The more our local economies return to normal, with Melbourne recovering and state border restrictions easing, the more we will see improved confidence and rising market activity.</p>
<p>But the big looming factor is the upcoming infrastructure spend – and, partly as a by-product, considerable uplift in the resources sector.</p>
<p>It is clear that federal and state governments intend to generate an infrastructure-led economic recovery and are willing to go deep into budget deficit to achieve it.</p>
<p>Few things supercharge economies and real estate markets like big infrastructure projects, be they motorways, rail links, hospitals or energy facilities.</p>
<p>Infrastructure developments create economic activity and jobs – and the energises property markets. These projects also improve the amenity of the locations that are directly impacted by the new projects.</p>
<p>A by-product of the infrastructure-inspired recovery will be a new resources boom, with that sector already busy servicing overseas demand.</p>
<p>Another big factor which will drive prices higher is the extraordinary shortage of real estate in most locations in Australia. Vacancy rates of 1% and lower are the norm now and it’s putting upward pressure on rents. Developers have been building less in the past 2-3 years and investors have been largely on the sidelines for the past 18 months in particular. The rental stock the market needs has not been created at the required levels.</p>
<p>At the same time, vendors have been reticent – which means that buyers outnumber sellers in many locations.</p>
<p>Recently we have seen economists from the major banks and other institutions recanting their March-April forecasts of real estate prices dropping 10%, 20% or 30% - and are now suggesting much more moderate outcomes. Westpac is now predicting boom-level price growth starting in mid-2021.</p>
<p>While they and others are becoming increasingly bullish for their predictions, they’re still getting it wrong. Prices may be nudging downwards, generally speaking, in Melbourne and Sydney but they are rising in most other places. And the big uplift will come much sooner than the economists expect.</p>
<p>We’re starting to see media reacting to the change in sentiment, although well behind the game as usual. Here are some of the headlines from the past week:</p>
<ul>
<li>Top End of housing market will lead recovery – The Australian</li>
<li>Housing bears face extinction as forecasts turn bullish – Financial Review</li>
<li>Regional house price rises on the way – Financial Review</li>
<li>House prices bounce in September – ABC News</li>
<li>Houses emerge stronger over September as Sydney and Melbourne declines soften: Property Observer</li>
<li>Are we nearing another property boom? – Smart Property Investor</li>
<li>Victoria set for big summer of sales post-lockdown – Australian Property Investor</li>
<li>Huge sign the property market is heading up again – Yahoo Finance</li>
</ul>
<p>This is significant because mainstream media is reluctant to present positive scenarios about the housing market.</p>
<p>I note also that Simon Pressley of Propertyology – who I think is the best real estate research analyst in Australia - is also predicting a property boom.</p>
<p>He writes in a report published last week: “Make no mistake, property markets in large parts of Australia will be booming by summer! Several locations in different parts of the country have already produced double-digit capital growth over the first 9-months of this calendar year and there are umpteen others with fast growing momentum.</p>
<p>“Anecdotal evidence from research conducted by Propertyology suggests that property markets are already booming in locations such as Noosa, Canberra, Orange, Dubbo, Burnie, Bendigo, Mildura, Mount Gambier, Coffs Harbour and Karratha. That’s ten towns in seven states and territories.</p>
<p>The cast of thousands who, during the March-April national lockdown, were forecasting a real estate Armageddon score an epic ‘Fail’.”</p>
<p><strong>Terry Ryder</strong> <em>is the founder of hotspotting.com.au </em><br><em>ryder@hotspotting.com.au</em><br><em>twitter.com/hotspotting</em></p>
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Australia on the cusp of a national real estate boom: Hotspotting's Terry Ryder

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<p>EXPERT OBSERVER</p>
<p><span>Federal and state political leaders intend to generate an infrastructure-led economic recovery in Australia. And this will turbocharge a residential property boom which is already building across the nation.</span> </p>
<div>Infrastructure spending is always a key driver of growth in residential property markets and government plans to fast-track shovel-ready projects will enhance the established trend of rising markets in many parts of Australia.</div>
<div> </div>
<div>That’s why we created a new report titled “Australia’s Infrastructure-led Property Boom: National Top 10 Hotspots”.</div>
<div> </div>
<div>The research conducted daily by the Hotspotting team places considerable emphasis on infrastructure.</div>
<div> </div>
<div>The best places to invest have impact from infrastructure in two key ways: excellent existing infrastructure (public transport, schools, medical services, retail outlets, etc) and spending on new infrastructure.</div>
<div> </div>
<div>New infrastructure is particularly influential on generating growth in residential property markets. Our belief is that no other factor impacts property markets as strongly as major new infrastructure spending.</div>
<div> </div>
<div>Infrastructure such as new motorways, rail links, hospitals and universities improve the amenity and desirability of the locations directly impacted.</div>
<div> </div>
<div>These projects generate major economic activity and employment – and from that flows demand for real estate.</div>
<div> </div>
<div>From 2013 to 2017 both Sydney and Melbourne had significant real estate booms, but this was not replicated in other parts of Australia. During that period, the markets in Perth and Darwin were in reverse, and those in Brisbane, Adelaide and Canberra were largely stagnating.</div>
<div> </div>
<div>The fundamental difference was the infrastructure spend. Both Sydney and Melbourne were spending tens of billions of dollars on new infrastructure. As a consequence, the economies of the two biggest cities were strong, as a time when the other cities were weak or in decline.</div>
<div> </div>
<div>We have seen major infrastructure spending transform local economies and their property markets in many significant regional cities across Australia. Projects totalling more than $20 billion have transformed the Sunshine Coast from a tourist town to an international city and it currently has one of the strongest property markets anywhere in Australia.</div>
<div> </div>
<div>Newcastle, Geelong and Wollongong are all regional cities which have transitioned by older-style economies based on manufacturing to prosperous modern economies through spending on new infrastructure and the generation of new employment sectors. Growth property markets have emerged from the transition in these places.</div>
<div> </div>
<div>The recent Federal Budget provided evidence that the Australian Government intends the past-pandemic economic recovery to be largely inspired by spending on major projects across the nation. It’s also clear that State Governments are ramping up their spending on roads, rail links and other projects to generate jobs.</div>
<div> </div>
<div>In the new National Top 10 report we highlight ten locations which are poised for growth as a result of big spending on new infrastructure. They include some locations which might now normally blip on the radar screens of property investors, like Toowoomba in Queensland.</div>
<div> </div>
<div>More potential hotspots will emerge as governments firm up their plans and announce start dates for major developments.</div>
<div> </div>
<div>
<strong>Terry Ryder</strong><em><span class="Apple-converted-space"> </span>is the founder of<span class="Apple-converted-space"> </span><a href="http://hotspotting.com.au/">hotspotting.com.au</a><span class="Apple-converted-space"> </span><br><a href="https://mailto:ryder@hotspotting.com.au">ryder@hotspotting.com.au</a></em>
</div>
<p><em><a href="http://twitter.com/hotspotting">twitter.com/hotspotting</a></em></p>
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Infrastructure boom setting up a property boom: HotSpotting's Terry Ryder

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<p>EXPERT OBSERVER</p>
<p>Regional Victoria continues to be a national leader of price performance. No other market jurisdiction in Australia has such a high percentage of locations delivering price growth.</p>
<p>In the past 12 months, 92% of towns and suburbs across Regional Victoria have had growth in their median house prices. Most have increased by more than 5% and many have had double-digit growth.</p>
<p>It’s all part of the Exodus to Affordable Lifestyle, a trend which (contrary to many media reports) did not arise out of the pandemic – it was well under way before 2020 and has been turbo-charged by the lockdown periods.</p>
<p>It’s a trend that first became evident with the rise of markets close to Melbourne three or so years ago, and continues to be a major force in Regional Victoria.</p>
<p>The standouts are Ballarat, Bendigo and Geelong, but there are growth markets spread right across the state – from Portland, Warrnambool and Mildura in the west and north-west, to Wodonga in the north and the towns of East Gippsland and the Latrobe Valley in the east.</p>
<p>Most of the suburbs of Ballarat (pictured top), have had double-digit annual growth in their median house prices, including Redan (15%), Alfredton (11%), Ballarat Central (13%), Brown Hill (10%), Canadian (12%), Sebastopol (15%) and Mt Clear (10%).</p>
<p>Bendigo is a little further back in the cycle than Ballarat, but is now delivering growth at comparable levels, led by Strathdale (17%), California Gully (15%) and Eaglehawk (13%).</p>
<p>White Hills, Strathfieldsaye and East Bendigo have all grown 10-11%, while numerous other suburbs have had 8-9% increases over 12 months, including Flora Hill, Kangaroo Flat, North Bendigo, Long Gully and Epsom.</p>
<p>The City of Greater Geelong was the first the regional cities to get on the growth path and has now had 3-4 years of rising prices. But many suburbs are still delivering good uplift in their median prices, led by Drysdale (10%), East Geelong (13%) and Newtown (10%).</p>
<p>Elsewhere, the Strathbogie LGA is a standout, with both Euroa (up 17%) and Nagambie (up 20%) showing exceptional growth.</p>
<p>In the far west of the state, Portland continues to rise, with its median house price up 15%. Warrnambool is another western centre with good growth, up 10% over 12 months.</p>
<p>In other parts of the state, Myrtleford (13%), West Wodonga (10%), Swan Hill (10%), Maddingley (11%), and Beechworth (10%) have all done well.</p>
<p>Overall, Regional Victoria is one of many market jurisdictions which rubbish the general line in mainstream media that house prices in Australia are now recovering after a Covid downturn. In most locations across Australia, notably including Regional Victoria, there never was a downturn.</p>
<p>What we’ve seen, and continue to see, is something approaching a boom.</p>
<p><span>TERRY RYDER</span> <em>is the founder of hotspotting.com.au</em><br><em><a href="https://mailto:ryder@hotspotting.com.au">ryder@hotspotting.com.au</a></em><br><em>twitter.com/hotspotting</em></p>
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Regional Victoria leads Australia in property price performance: Hotspotting's Terry Ryder

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<p>EXPERT OBSERVER</p>
<p>The Brisbane market has shrugged off the impacts of the pandemic and is in its strongest position in five years to generate price growth. Increasingly, this is translating into evidence of uplift in property values.</p>
<p>Our analysis of sales activity across the Brisbane metropolitan area has identified 56 suburbs with rising momentum, the highest number since late in 2015 and double the number identified in our quarterly survey six months ago.</p>
<p>The numbers show an all-round improvement in the Brisbane market, with a sharp reduction in the number of declining suburbs and a reduction also in the number of danger markets.</p>
<p>Brisbane’s affordability relative to the biggest cities is helping to boost its market, with more people relocating to South-East Queensland from Sydney and other parts of Australia. Brisbane is a natural beneficiary of the Exodus to Affordable Lifestyle trend and is also benefiting from strong consumer confidence as a result of the success in controlling Covid-19.</p>
<p>It’s notable that Brisbane is prominent in the forecasts for prices in 2021 from the major banks. The NAB Residential Property Survey is tipping Brisbane to be the joint leader on dwelling price growth next year, alongside Adelaide and Hobart – with a 7.4% annual rise and similar growth in 2022.</p>
<p>I think this is a tad conservative – and so does ANZ, which is forecasting Brisbane to rise almost 10% next year, with only Perth tipped to do better. Westpac and Commonwealth Bank have also tipped good growth in 2021.</p>
<p>In the six years we have been conducting our quarterly surveys of sales activity and prices, it has been common for northern Brisbane to dominate the positive results – and that is certainly the case in this Summer 2020 survey. Of the 56 suburbs with rising sales activity, 12 are in the Brisbane-north precinct of the Brisbane City Council area and 13 are in the neighbouring Moreton Bay Region.</p>
<p>Both precincts also have a high number of suburbs with consistent sales activity across multiple successive quarters, a notable achievement given the negative pressures in this year of the pandemic.</p>
<p>The rising suburbs in the north of Greater Brisbane include Murrumba Downs (where quarterly sales activity has been 39 44 73), Ashgrove (quarterly sales 54 57 60 72 76 50 78) and Bellara (quarterly sales 23 30 26 40)</p>
<p>While the most prolific markets are in the north, there also has been a notable revival in Logan City in the south. The municipality is the urban bridge between Brisbane City and the Gold Coast and traditionally attracts buyers seeking cheap real estate and good infrastructure.</p>
<p>Logan City markets have been in the doldrums in recent years: six months ago we identified 12 suburbs with a pattern of declining sales, but only five in this latest survey – and there are now nine suburbs with rising sales momentum. At a time when first-home buyers are very active and others are seeking an affordable lifestyle, it’s perhaps not surprising that Logan City would show signs of uplift.</p>
<p>Nearby Ipswich City – another centre of affordable buying in the south-west of the metro area – has only two growth suburbs, so Logan City is the standout of southern Brisbane.</p>
<p>There are growth markets in other parts of the Greater Brisbane area as well – Brisbane-inner (4), Brisbane-east (5), Brisbane-south (3) Brisbane-west (3) and Redland City (5) all have some suburbs with rising sales activity.</p>
<p>There are still six suburbs we classify as danger markets, but that is half as many as two years ago. These are all inner-city suburbs where the market is dominated by high-rise apartments and where vacancy rates continue to be high, in contrast to the rest of the Greater Brisbane Area, and sales rates remain low.</p>
<p>Our analysis of price trends across the Brisbane metropolitan area shows that most suburbs have recorded house price growth in the last 12 months, but an even higher percentage have had growth in the most recent quarter.</p>
<p>This again shows that the city has done well through the pandemic period.</p>
<p>Our analysis shows that 62% of suburbs have recorded annual growth in their median house prices, but 73% have had uplift in the latest quarter.</p>
<p>It’s clear that the top end of the Brisbane market is doing best in this climate, driven partly by the reality that highly-ranked, well-located suburbs in this city often have median house prices in the $800,000s and $900,000s. For people leaving Sydney and Melbourne to relocate to South-East Queensland as part of the Exodus to Affordable Lifestyle, this looks attractive.</p>
<p>Suburbs to record annual median house price growth above 20% include Highgate Hill (28%), Fig Tree Pocket (25%), Nundah (20%) and Windsor (21%).</p>
<p>The inner-city house markets (in contrast to the apartment markets) are doing well, with good annual price growth in Bardon (10%) and Coorparoo (15%), as well as Highgate Hill.</p>
<p>Inner northern suburbs are also performing, including Grange (17%), Windsor and Nundah.</p>
<p>The upper end western suburbs are a standout. In addition to Fig Tree Pocket, there has been strong annual growth in median house prices in Sherwood (12%), St Lucia (14%) and Toowong (13%).</p>
<p>In the south, Yeronga (15%) and Greenslopes (10%) have done well, while in the affordable far north, there has been notable uplift in Woody Point (15%) and Beachmere (10%).</p>
<p><strong>Terry Ryder</strong><em> is the founder of hotspotting.com.au </em><br><em>ryder@hotspotting.com.au</em><br><em>twitter.com/hotspotting</em></p>
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Brisbane set to be Australia's property market leader: Hotspotting's Terry Ryder

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<p>EXPERT OBSERVER</p>
<div>Consumer confidence rose +1.2 per cent last week to 93.5, according to ANZ-Roy Morgan, a 13-week high.</div>
<div> </div>
<div>However, confidence levels remain well below the monthly average since 1990 of 112.6, and even still a reading of 93.5 is equivalent to what Australia experienced through the financial crisis. </div>
<div> </div>
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<div> </div>
<div><em>Source: ANZ-Roy Morgan</em></div>
<div> </div>
<div>On March 29 the COVID shock saw consumer confidence reading hit the lowest level in half a century at 65.3, but it has since rebounded by 43 per cent. </div>
<div> </div>
<div>Curiously confidence levels in Melbourne have picked up this week to a level 'a touch below neutral' -  possibly on optimism of restrictions being eased - and confidence levels in Melbourne are now higher than in Sydney. </div>
<div> </div>
<div><strong>RBA update</strong></div>
<div> </div>
<div>The RBA put out some state level payroll jobs figures this week which showed that jobs have been steadily picking up elsewhere, but not in Victoria. </div>
<div> </div>
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<p>However, the payrolls recovery has stalled this week, and indeed it cannot really take hold until the Victorian economy sees restrictions broadly eased. </p>
<div>Separate analysis from UBS highlighted how small businesses have disproportionately felt the pain this year, and this is reflected in hiring figures relative to large businesses. </div>
<div> </div>
<div>This has raised the prospect of a potential further reduction of interest rates, as discussed today by the RBA’s Guy Debelle.</div>
<div> </div>
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<div> </div>
<div>The RBA has now expanded its balance sheet significantly, almost doubling from from $170 billion in February to $300 billion, through its various policy measures. with a further 'decently large' expansion to come. </div>
<div> </div>
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<div> </div>
<div>In the money markets swap rates are now at record lows. </div>
<div> </div>
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<div>Banks are now allowing their offshore funding to roll off, which has reduced the share of offshore bonds funding, and this has been replaced by take-up of the cheaper Term Funding Facility (TFF). </div>
<div> </div>
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<div> </div>
<div>It's interesting to note that the Chinese economy has come surging back from its 10 per cent decline in the March 2020 quarter, to the extent that its output is now greater than it was at the end of 2019, as targeted stimulus measures have successfully bolstered production.</div>
<div> </div>
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<div> </div>
<div>Australia has gone down a different route, focusing instead on income support, to the extent that household income actually <em>increased</em> over the previous quarter, which is a very unusual outcome for a recession.</div>
<div> </div>
<div>This was driven by a range of factors including lower interest rates, super withdrawals, mortgage and rent deferrals, and all of the various government stimulus measures (including JobKeeper payments, and JobSeeker). </div>
<div> </div>
<div>No wonder them Harvey Norman shares have come roaring back! </div>
<p><strong>PETE WARGENT</strong><em><span> </span>is the co-founder of AllenWargent property buyers and a best-selling author and blogger </em></p>
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Consumer confidence hits three month high: Pete Wargent

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<p>EXPERT OBSERVER</p>
<p>Australian household debt levels have increased substantially over the past thirty years, with the ratio of household debt to annual disposable income rising from 68% in June 1990 to a recent peak of 188.5% in June 2019. Since June last year, the ratio has reduced slightly to 185.0%. Most of the debt held by households is housing debt, which comprises around 76% of overall household debt. Thirty years ago housing debt comprised a much smaller 46% of overall household debt.</p>
<p>The skew towards housing debt can also be seen in the latest Household Income and Wealth survey from the Australian Bureau of Statistics, which showed the median value of debt held against owner occupied dwellings was $102,600, compared with a median debt level of $5,000 for student loans, $3,000 on credit cards and $3,700 on car loans. Most of Australia’s household debt accrual occurred between 1990 and 2010.</p>
<p>The ratio of household debt to income increased by 45.7 percentage points between 1990 and 2000, and by another 49.3 percentage points between 2000 and 2010. The past decade has seen growth in the ratio more than half to 21.5 percentage points, with most of that growth aligned with the property boom between late 2012 and 2017.</p>
<p>Importantly, the value of assets held against the debt has recorded a more significant increase, pushing household net worth to new record highs at the end of 2019. Residential dwellings comprise by far the largest component of household assets, totaling $6.8 trillion, or 53% of household wealth. Household debt levels are important for two reasons.</p>
<p>Heavily indebted households are generally more vulnerable to a ‘shock’ such as job loss, illness or a sharp rise in the cost of debt, which in turn has implications for financial stability. The other key area of concern relates to household spending; heavily indebted households may be more likely to save rather than spend during periods of uncertainty or economic hardship. With around 60% of Australia’s economy dependent on household consumption, a sustained drop in spending activity would have a negative impact on economic growth.</p>
<p>These risks were recently covered in detail by the RBA in a discussion paper released in May this year. The outcomes of the paper noted the risk to financial stability was likely to be relatively low due moderate loan-to-valuation ratios on residential mortgages. In separate analysis from the latest Financial Stability Review, the RBA notes that only 3% of Australian mortgages are thought to be in negative equity. The risks associated with high household debt levels weighing on consumption are more substantial, especially under a scenario where housing prices fell.</p>
<p>While household debt is high, and potentially a concern for consumption, servicing debt is at its most affordable since 1999 due to record low interest rates. The ratio of housing interest payments to household disposable income has more than halved since 2008, from a high of 13.3% to 6.4% in June 2020. With interest rates moving lower since June, it is likely the ratio has fallen even further. Another factor helping to minimise risk is the fact that asset values are substantially higher than the debt held against them.</p>
<p>The ratio of household debt to household assets was 19.4% and the ratio of housing debt to housing assets was 28.2% in June 2020, implying a remarkably large amount of equity is held within the household sector. Other factors helping to alleviate risk associated with high household debt, and potentially support a reduction in debt levels are credit policy and less consumer appetite for credit. Lending standards have improved over the past five to ten years, with a trend towards fewer loans originating with a high loan to valuation ratio and substantially fewer interest only loans.</p>
<p>9.2% of home loans were originated with a deposit of 10% or less in June this year, down from a recent peak of 22% in 2009. Similarly, interest only loans comprised almost 46% of new home loans in mid2015, but have averaged only 17% of new lending since mid-2017. Additionally, loans with a high loan to income ratio have remained low, with June data showing only 5.8% of new home loans were originated with a loan to income ratio of 6% or higher.</p>
<p>It is clear that households became more risk averse through the worst of the COVID period. National accounts data showed the household saving ratio skyrocketed to almost 20% through the June quarter, up from 2.5% in the June quarter of 2019. Given that the virus curve has flattened and consumer sentiment surged in recent months, it is likely the saving ratio will drop. Additionally, the trend in personal credit, which has been in negative monthly growth territory since late 2019, has plummeted since March.</p>
<p>Although the risks around high household debt are manageable at the moment, interest rates will eventually rise down the track.</p>
<p>As debt servicing costs move higher, a heavily indebted household sector would need to devote more of their income towards servicing debt and less to spending, which implies a medium-to-long term risk to household spending. This implies high debt levels may also stagger and slow an economic recovery. If increases in housing debt servicing costs result from higher interest rates, the exacerbated drag on spending could slow economic growth.</p>
<p>Additionally, with household debt remaining high, the sector is more exposed to unforeseen events such as job loss and illness, as well as black swan events like a pandemic or financial crisis. It is likely policy makers and regulators will be keeping watch for any signs of rising household debt or slippage in lending standards that could lead to higher household debt.</p>
<p>Higher LVR lending or higher loan to income ratios could be the trigger for a new round of macro-prudential style intervention. Recent macro-prudential interventions targeted interest only lending and growth in lending for investment housing through 2014 and 2019. Future interventions may be aimed at keeping a lid on household debt levels, and minimizing longer term risk, via firm limits on loan to valuation ratios, loan to income ratios or debt to income ratios.</p>
<p><strong>TIM LAWLESS </strong><em>is the research director Asia Pacific at CoreLogic</em></p>
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tlawless-5VLUrbAk9s

Growing household debt could cause a credit squeeze: Tim Lawless

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<p>EXPERT OBSERVER</p>
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<div>Economists had expected employment to fall by 30,000 in October as Victoria's lockdown persisted.</div>
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<div>Instead we got a rollicking increase of 178,800 or 1.4 per cent, most of which were full-time jobs.</div>
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<div>There was a big leap in participation to 65.8 per cent (a huge beat - economist forecasts were for a flat result here), which is now returning close to record highs and only 0.1 pts lower than a year earlier.</div>
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<div>Despite the leap in participation, the unemployment rate has nestled in at 7 per cent, which is far, far better than previously feared. </div>
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<div>How did economists land <em><strong>so</strong></em> far away from the target?</div>
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<div>It's hard to say for sure, but the huge rebound in Victorian employment in the month - despite the lockdown persisting through October - was an interesting and totally unexpected result. </div>
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<div>Queensland has added back a stunning 206,000 jobs in only 5 months, to see total employment actually higher than a year ago.</div>
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<div>But despite ostensibly adding 82,000 jobs in October, total employment in Victoria is still 124,000 lower than a year earlier.</div>
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<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
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<div>To date 648,000 of the 875,000 jobs lost have been recovered across only five months, so we are already 74 per cent of the way back to employment topping new highs at above 13 million.</div>
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<div>Overall, this was a great result, which introduces the exciting possibility of a strong snap-back in the Aussie economy in 2021. </div>
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<div>Lest anyone becomes too excited at this early stage in the recovery, measures of underemployment remain understandably high, and monthly hours worked were still 3.4 per cent lower than a year earlier (largely due to a huge year-on-year decline in Victoria). </div>
<div> </div>
<div>In October the underemployment rate by 1.0 pts to 10.4 per cent, but that's still 1.9 pts higher than a year ago.</div>
</div>
<p><strong>PETE WARGENT</strong><em><strong> </strong>is the co-founder of AllenWargent property buyers and a best-selling author and blogger </em></p>
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