<p>Design-led developer-builder Lowe Living has unveiled its latest residential development, Jardin House, marking its first foray into Melbourne's blue-chip City of Boroondara.</p>

<p>Located a short walk from Camberwell Junction, <a href="https://www.apartments.com.au/new-apartments/jardin-house-by-lowe-living-camberwell-335-camberwell-road-camberwell-vic-3124">Jardin House</a> has been designed to appeal to affluent local downsizers and established families seeking a low-maintenance alternative to the large homes that have long defined Camberwell and surrounding suburbs.</p>

<p>The project will comprise a collection of two and three-bedroom apartments ranging from 92 sqm to 280 sqm, alongside a limited number of penthouse residences featuring rooftop terraces spanning more than 100 sqm, with optional private pools.</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=146717 project_image_fid=372212]</p>

<p>Lowe Living Co-Founder and Managing Director Tim Lowe said Camberwell represented a natural next step for the developer as it expands into some of Melbourne's most tightly held residential markets.</p>

<p>"Jardin House is an important project for our team as it marks the next evolution of our portfolio into different well-established blue-chip pockets of Melbourne," Lowe said.</p>

<p>"Camberwell, with its incredible walkability, family-led neighbourhood feel and superb access to education and transport, makes it a natural choice for us."</p>

<p>[smartcode_project:default project_id=146717 project_image_fid=372227]</p>

<p>Designed by Tristan Wong Architects, with interiors by Hecker Guthrie and landscaping by Acre, the development takes inspiration from the Art Deco architecture that remains a defining feature of many of Camberwell's established streets.</p>

<p>A curved facade, arched openings, textured brickwork and sculpted forms reference the suburb's architectural heritage, while extensive landscaping softens the building's presence and creates a strong connection to the surrounding tree-lined streetscape.</p>

<p>The project will be set behind a secure gated entrance, with residents arriving through landscaped gardens designed to create a transition between the public realm and private residences.</p>

<p>Inside, the residences feature natural stone and timber finishes, full-height glazing, Miele appliances and generous open-plan living areas designed for long-term owner occupation.</p>

<p>[smartcode_project:default project_id=146717 project_image_fid=372225]</p>

<p>While the apartments themselves have been designed to attract discerning owner-occupiers, it is the amenity offering that sets Jardin House apart from many other boutique projects currently launching across Melbourne.</p>

<p>The centrepiece is a 350 sqm private bathhouse curated in partnership with Aurora Spa &amp; Bathhouse founder Lyndall Mitchell.</p>

<p>The wellness precinct includes mineral pools, hydrotherapy experiences, a Himalayan salt room, sauna, steam room, cold plunge pools and dedicated relaxation spaces, creating what Lowe Living describes as a private wellness retreat exclusively for residents.</p>

<p>[smartcode_project:default project_id=146717 project_image_fid=372222]</p>

<p>The collaboration follows Lowe Living's recent partnership with Aurora at Maison Savoy in Brighton, although Jardin House is the first project to incorporate both indoor and outdoor wellness experiences.</p>

<p>Emma Lowe, Co-Founder and Managing Director of Lowe Living, said wellness was becoming an increasingly important consideration for apartment buyers.</p>

<p>"Collaborating with Lyndall Mitchell from Aurora Spa &amp; Bathhouse for a second time is an intentional nod to creating residences that are more than just homes, but a way to enrich the lives of our residents through wellness and longevity," Lowe said.</p>

<p>The amenity offering is complemented by a Technogym fitness studio, residents' lounge, private dining spaces and concierge services.</p>

<p>The launch comes as developers increasingly target Melbourne's established eastern suburbs, where rising land values, ageing housing stock and growing downsizer demand are creating opportunities for boutique apartment projects.</p>

<p>Lowe said the company expects significant generational wealth transfer across suburbs such as Camberwell in coming years, creating further demand for luxury apartment living.</p>

<p>"Camberwell is a blue-chip suburb where homes regularly transact for multiple millions of dollars," he said.</p>

<p>"The generational change of wealth in these locations expected in the coming years is significant, so we see an opportunity to create exclusive residences that appeal to older families and downsizers in order to meet this demand."</p>

<p>Apartments at Jardin house start from $1,195,000. The project forms part of Lowe Living's near-$1 billion portfolio of new developments across Melbourne.</p>

<p>[smartcode_project_cta:default project_id=146717]</p>


Joel Robinson

Lowe Living launches Jardin House in Camberwell

<p>As <a href="https://www.apartments.com.au/developments/north-sydney-nsw-2060">North Sydney</a> continues its transition from a commercial centre into a more layered residential and lifestyle precinct, a new generation of apartment developments is reshaping expectations around scale, amenity, and long-term liveability.</p>

<p>Improved transport connections through the Victoria Cross Metro, continued investment in dining and public spaces, and a constrained supply of new luxury apartments have sharpened demand for homes that combine proximity to the CBD with the privacy and outlook traditionally associated with harbourside houses.</p>

<p>At 177 Walker Street, <a href="https://www.apartments.com.au/developers/aland">ALAND</a>’s new apartment development <a href="https://www.apartments.com.au/new-apartments/the-walden-north-sydney-177-walker-street-north-sydney-nsw-2060">The Walden</a> enters the market with a distinctly residential approach to high-rise living. The 30-level tower will deliver 161 residences, ranging from one-bedroom apartments through to sub-penthouses and a full-floor penthouse, all oriented to capture uninterrupted views across Sydney Harbour, the Opera House, and out toward the Pacific Ocean.</p>

<p>[smartcode_project:default project_id=134323 project_image_fid=6395]</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, the project takes advantage of the site’s natural topography and elevated position above the harbour. Rather than relying on density alone, the architecture focuses on outlook, orientation, and spatial flow, with every apartment occupying a corner position to maximise natural light and cross ventilation.</p>

<p>Rothelowman says the site itself shaped much of the architectural response.</p>

<p>“The site has a long history in terms of its inevitable transformation and when we came in, we took inspiration from the idea of reestablishing a sense of the site’s natural terrain and fall. Our scheme aims to integrate with the terrain and the landscape, using the undulating site to slowly reveal glimpses and views of the harbour. The rotation of the tower off grid means every apartment has a view and is naturally cross ventilated. The building's colour palette is quintessentially Sydney, with bronze and sandstone and a luminescent green colour in the glass, making it very earthy and grounded in its location.”</p>

<p>[smartcode_project:default project_id=134323 project_image_fid=6399]</p>

<p>Inside the residences, the emphasis moves toward larger-format living typically associated with standalone homes. Kitchens sit at the centre of the apartments, connecting directly to open-plan dining and living areas before extending outward into expansive winter gardens and balconies. Calacatta marble, bespoke joinery, integrated appliances, and custom metal detailing are used throughout, while three distinct interior palettes, Terrace, Opera, and Harbour, allow buyers to personalise the spaces without compromising the architectural consistency of the project.</p>

<p>The larger residences place particular attention on separation between entertaining and private zones. In many apartments, master suites occupy the outer corners of the floorplates, allowing bedrooms to benefit from floor-to-ceiling glazing and harbour outlooks independent of the living spaces. Dressing rooms and ensuites continue the material palette through fluted detailing, freestanding baths, and layered stone finishes.</p>

<p>Rothelowman says the design intent centred on creating homes that feel enduring rather than transient.</p>

<p>“Our philosophy is all about the way people live in these spaces, and we wanted to create homes that reflect the quality of life in this unique Sydney location. The apartments showcase expansive living spaces that are generous, sophisticated, and bold, with the ability to connect with views throughout each apartment.”</p>

<p>[smartcode_project:default project_id=134323 project_image_fid=353235]</p>

<p>A separate four-storey amenity building known as The Pavilion expands the residential offering beyond the apartments themselves. Positioned alongside the tower, the building consolidates wellness, recreation, and social spaces into a dedicated resident retreat. Facilities include a 20-metre rooftop pool and sundeck, sauna, spa, ice bath, wellness studio, gymnasium, concierge service, wine cellar, residents’ lounge, private dining spaces, and dedicated co-working areas with meeting rooms and boardroom facilities.</p>

<p>The amenity mix reflects the buyer profile emerging in North Sydney, where owner-occupiers and downsizers are increasingly prioritising convenience, apartment scale, and long-term usability over purely investment-driven decisions.</p>

<p>The Walden also represents a significant milestone for ALAND, marking the company’s first major move into Sydney’s inner-city luxury apartment market after more than two decades delivering large-scale residential communities across Greater Sydney. Founder Andrew Hrsto says the Walker Street site stood apart because of both its positioning and its rarity.</p>

<p>[smartcode_project:default project_id=134323 project_image_fid=6390]</p>

<p>“As a company, we had been searching for a site in one of Sydney’s blue-chip locations, spanning the Eastern Suburbs, the Sydney CBD and the North Shore, and when we had the opportunity to purchase this site, we immediately recognised that it could be something iconic.”</p>

<p>At launch, The Walden recorded more than $103 million in sales, with buyers drawn to the project’s harbour positioning, apartment scale, and proximity to the Metro, which now connects North Sydney to Barangaroo in three minutes and Martin Place in five.</p>

<p>ALAND has commenced construction, and is expecting a completion date in 2028.</p>

<p>[smartcode_project_cta:default project_id=134323]</p>


The Walden pairs house-scale living with North Sydney connectivity

<p>The ACT will become the first jurisdiction in Australia to abolish stamp duty for all first home buyers, with no income caps and no property price thresholds from 1 July.</p>

<p>The move, announced as part of the ACT Budget, completes a key election commitment from the Barr Government and removes what Chief Minister Andrew Barr described as one of the biggest barriers to entering the housing market. The reform forms part of the ACT's long-running transition away from transaction taxes and towards a broader-based property tax system.</p>

<p>"This budget marks a major milestone in our long-term tax reform program," Barr said, adding that the government had maintained a sustained focus on removing barriers to home ownership. He said stamp duty had long been one of the largest upfront hurdles facing buyers and that from July, "that barrier is gone" for first home buyers in the Territory.</p>

<p>[smartcode_project:default project_id=139989 project_image_fid=350986]</p>

<p>The changes come alongside a range of measures designed to encourage new housing supply, including support for the delivery of so-called "missing middle" housing such as terraces, townhouses and low-rise multi-unit developments.</p>

<p>The announcement has renewed debate around whether the ACT's approach could provide a blueprint for improving housing affordability nationally.</p>

<p>New research from OurTop10.com.au, conducted by Primara Research, suggests the Territory's decade-long reform agenda has produced outcomes unmatched elsewhere in Australia.</p>

<p>While stamp duty costs have increased by an average 67 per cent nationally over the past decade, the ACT has recorded growth of just 15 per cent, the lowest increase of any jurisdiction.</p>

<p>The Territory has also emerged as one of the strongest performers on housing delivery. Based on population-weighted housing targets, the ACT is sitting less than one per cent behind its target. Victoria is the next closest at seven per cent behind, while the national average sits 25 per cent below target. New South Wales is tracking 39 per cent behind.</p>

<p>The latest reform removes one of the final barriers facing first home buyers in Canberra.</p>

<p>[smartcode_project:default project_id=139989 project_image_fid=359152]</p>

<p>The average Australian home buyer currently pays $61,714 in stamp duty. In the ACT, that figure is $38,399 despite the Territory having the third-highest median house price in the country.</p>

<p>Until now, the ACT's first home buyer concession scheme only applied to purchases up to $1.02 million, around $51,000 below Canberra's median house price of $1.071 million. In practical terms, many first home buyers were unable to access the median-priced home without losing the concession.</p>

<p>From July, those restrictions disappear.</p>

<p>Every first home buyer in the ACT will pay no stamp duty, regardless of income or purchase price.</p>

<p>Canberra remains one of Australia's most expensive housing markets, with dwelling values increasing 82 per cent over the past decade. However, that growth ranks only 11th among Australia's 15 major housing markets, suggesting affordability pressures have been less severe than in many other parts of the country.</p>

<p>Simon Ma, CEO of OurTop10.com.au, said the latest reforms recognise that many first home buyers have simply outgrown thresholds set years ago.</p>

<p>"Many first home buyers aren't just looking for a way onto the ladder, they want a home their family can actually live in," Ma said.</p>

<p>"In a market where the median house price is over a million dollars, a concession scheme that cuts out at $1.02 million was never going to get them there.</p>

<p>"Removing the ceiling entirely means ACT first home buyers can now pursue the home they actually want, rather than limiting themselves to a price point designed for a very different market."</p>

<p>Whether other states follow remains to be seen. But at a time when most jurisdictions are struggling to improve affordability while also increasing housing supply, the ACT has quietly become the national test case for both.</p>


15% stamp duty growth. Just 1% off the national housing target. Zero stamp duty for FHBs. Is the ACT the blueprint for the great Australian dream?

ACT abolishes stamp duty for first home buyers

<p>A rooftop pool and spa overlooking the Brisbane CBD, private dining spaces, expansive landscaped gardens and a residents' lounge are set to crown <a href="https://www.apartments.com.au/new-apartments/callista-on-park-west-end-49-mollison-street-west-end-qld-4101">Callista on Park</a>, the final residential building within Brisbane's West Village precinct.</p>

<p>The rooftop amenity collection has been designed as an extension of the lifestyle already established throughout West Village, providing residents with a series of indoor and outdoor spaces that capitalise on the building's elevated position above West End.</p>

<p>A swimming pool and heated spa form the centrepiece of the rooftop offering, surrounded by landscaped gardens developed through a collaboration between developer Sekisui House and ASPECT Studios. The design incorporates expansive lawn areas surrounded by English garden-inspired planting.</p>

<p>[smartcode_project:default project_id=134800 project_image_fid=370648]</p>

<p>Residents will also have access to two barbecue and outdoor dining areas positioned to take advantage of views across Brisbane's skyline, neighbouring Mollison Park, and the surrounding inner-city landscape.</p>

<p>For larger gatherings, the rooftop includes a private dining room centred around a substantial stone island bench, complete with a full kitchen and a 10-seat dining table set beneath four-metre-high ceilings. The space has been designed to overlook both the rooftop gardens and the Brisbane CBD skyline.</p>

<p>A separate residents' lounge provides an additional indoor retreat connected to the broader rooftop amenity offering, creating another space for residents to work, relax or entertain guests.</p>

<p>[smartcode_project:default project_id=134800 project_image_fid=370647]</p>

<p>The attention to detail extends beyond the rooftop.</p>

<p>Upon arrival, residents will enter through a lobby featuring a bespoke ceiling light installation developed in collaboration between Sekisui House and Alcorn Middleton Architecture. The arrival experience is complemented by private resident mailboxes and carefully considered interior finishes designed to reflect the premium positioning of the building.</p>

<p>[smartcode_project:default project_id=134800 project_image_fid=372541]</p>

<p>The amenity offering forms part of Callista on Park, the final residential release within the decade-long transformation of the former Peters Ice Cream Factory site into West Village, one of Brisbane's most established mixed-use communities.</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> and being delivered by <a href="https://www.apartments.com.au/builders/hutchinson-builders">Hutchinson Builders</a>, Callista represents the most premium residential offering within the masterplanned precinct.</p>

<p>Construction is now entering its final stages, with scaffolding beginning to come down and completion expected in the first quarter of 2027.</p>

<p>Prices for the three-bedroom plus MPR apartments start from just over $2.6 million.</p>

<p>[smartcode_project:default project_id=134800 project_image_fid=351535]</p>

<p>Callista will mark the final opportunity to purchase within West Village, where residents have direct access to more than 35 retail, dining, wellness and medical operators including Harris Farm Markets, Woolworths, Function Well and Goodlife Health Clubs, Metro Arts, and a growing collection of restaurants and cafés.</p>

<p>Located just 800 metres from the Brisbane CBD, the precinct also places residents within walking distance of South Bank, West End's dining scene, riverfront parklands and major public transport connections.</p>

<p>For Sekisui House, which has delivered more than two million homes globally, Callista serves as the concluding piece of the West Village masterplan, bringing together the precinct's heritage character, parkland setting and emphasis on walkability in a final collection of larger-format residences.</p>

<p>[smartcode_project_cta:default project_id=134800]</p>


Rooftop pool, private dining and skyline gardens to crown West Village's final apartment release, Callista on Park

<p><a href="https://www.apartments.com.au/developments/wahroonga-nsw-2076">Wahroonga</a>’s enduring appeal has long been tied to its balance of bushland, established amenity, and access to some of Sydney’s most respected education and healthcare institutions.</p>

<p>Along Fox Valley Road, that combination is becoming increasingly sought after by buyers looking to remain connected to the Upper North Shore lifestyle while prioritising walkability, wellbeing, and convenience.</p>

<p>Developer Capital Corporation's initial vision of a 62-hectare site on Fox Valley Road was that they could create their own walkable community, bordered by&nbsp;more than 25 hectares of bushland and adjoining Coups Creek.</p>

<p><img alt="Wahroonga" data-entity-type="file" data-entity-uuid="b84917a1-0d75-49b9-888c-ddf7ebfd6692" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/NEW2026_Wahroonga_Walkway.gif?VersionId=Gk3_xi5ssYfalmwuQQ5umQakddceC31j" /></p>

<p><a href="https://www.apartments.com.au/new-apartments/the-residences-at-wahroonga-estate-169-fox-valley-road-wahroonga-nsw-2076">The Residences at Wahroonga Estate</a> draws directly on the area’s natural landscape, with walking trails and green corridors linking into sections of Lane Cove National Park. The surrounding network of bushwalks, cycling tracks, and reserves reinforces the suburb’s long-standing reputation as one of Sydney’s most nature-oriented residential pockets, while still maintaining close ties to village retail and transport infrastructure.</p>

<p>The address places residents within minutes of Wahroonga and Turramurra villages, where cafés, local grocers, boutiques, and everyday services support a highly localised lifestyle. Popular nearby venues including The Fox Café and Breeze Valley Café provide easy options for morning coffee or casual dining, while longstanding retailers such as IGA Wahroonga Fresh and Novella Fine Books continue to anchor the area’s village character.</p>

<p>&nbsp;</p>

<p><img alt="Wahroonga" data-entity-type="file" data-entity-uuid="c4a950f7-4f05-4370-b360-b106359788e5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/2026_Wahroonga_Entry_Gates.gif?VersionId=7n5kh9ymu.azYEYDemJkPgiIAfSw44oj" /></p>

<p>Healthcare access remains one of the defining locational advantages of the estate. Sydney Adventist Hospital, known locally as The San, sits directly adjacent and is one of the largest and most respected private hospitals in New South Wales. The hospital precinct incorporates specialist medical services, radiology, physiotherapy, and outpatient care, contributing to growing buyer demand from downsizers and owner-occupiers seeking long-term convenience and peace of mind.</p>

<p>Research commissioned by Capital Corporation found that health and wellbeing considerations are increasingly influencing downsizing decisions, particularly among buyers wanting to remain within familiar neighbourhoods while accessing medical infrastructure more easily.</p>

<p>Education has also historically underpinned demand across Wahroonga and the broader Upper North Shore. The estate sits close to several of Sydney’s leading private and independent schools, including Knox Grammar, Abbotsleigh, Barker College, Pymble Ladies’ College, Ravenswood School for Girls, and Loreto Normanhurst. Co-educational options including Wahroonga Adventist School and Sydney Adventist School further strengthen the area’s appeal to established families looking for long-term schooling pathways within a tightly held catchment.</p>

<p>[smartcode_project:default project_id=135247 project_image_fid=262183]</p>

<p>Transport connectivity supports the suburb’s liveability without compromising its quieter residential character. Wahroonga and Turramurra train stations provide direct rail access into the Sydney CBD, while the nearby Pacific Highway and M1 motorway strengthen links across the North Shore and broader metropolitan area. At the same time, the heavily treed streetscape and low-density character continue to distinguish the precinct from more urbanised parts of Sydney.</p>

<p>The Residences at Wahroonga Estate forms the first stage of <a href="https://www.apartments.com.au/developers/capital-corporation">Capital Corporation</a>’s broader masterplanned vision for the precinct, delivered alongside the Seventh-day Adventist Church.</p>

<p>[smartcode_project:default project_id=135247 project_image_fid=364995]</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/group-gsa">GroupGSA</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/coco-republic-interior-design">Coco Republic</a>, the development integrates landscaped communal spaces including a pet-friendly Green Spine, resident lounge, BBQ pavilion, and direct bushland access, reinforcing the project’s focus on outdoor connection and community-based living.</p>

<p>Now under construction by Gold Star iCIRT-rated builder <a href="https://www.apartments.com.au/builders/dasco-australia">DASCO</a>, The Residences at Wahroonga Estate will deliver a collection of one, two, and three-bedroom apartments priced from $990,000, with completion anticipated in 2027.</p>

<p>[smartcode_project_cta:default project_id=135247]</p>


Capital Corporation to cater to Upper North Shore downsizers by creating walkable community at The Residences at Wahroonga Estate

<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><span>There were 2,948 auctions held across the combined capital cities this week, with a preliminary auction clearance rate of 59.3%. </span></p>
<p><span>Last week, a clearance rate of 57.3% was recorded across 3,252 capital city auctions, the lowest clearance rate since February 2013. At the same time last year, both auction volumes and the auction clearance rate were stronger, with a clearance rate of 65.5% across 3,511 residential auctions.</span></p>
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<p> </p>
<p><span>Across </span><strong>Melbourne</strong><span>, 1,561 homes were taken to auction this week, compared to 1,622 last week, while the clearance rate strengthened slightly to 65.7%, up from 63.3% over the previous week. Looking back at last year, a clearance rate of 68.6 per cent was recorded across 1,585 auctions. Of the 9 individual Melbourne sub-regions, this week the strongest performer, in terms of clearance rate was the Inner South region. So far, CoreLogic RP Data has collected 193 results for the region and the preliminary result shows 72.5 per cent of these auctions were successful.</span></p>
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<p> </p>
<p>I<span>n </span><strong>Sydney</strong><span>, 869 auctions were held this week, down from 1,070 over the previous week. The preliminary clearance rate of 55.2 per cent is an improvement, compared to last week, when the final auction clearance rate for the city was 52.9 per cent, the lowest clearance rate Sydney has seen since December 2012. Despite the slight strengthening over the week, Sydney’s current clearance rate remains significantly lower than one year ago, when a clearance rate of 69.8 per cent was recorded across 1,357 auctions. Looking at the sub-regions of Sydney, the Inner West region recorded the strongest clearance rate of 74.6 per cent across 55 auctions, while the Inner South West region had the highest volume of auctions (126).</span></p>
<p><a href="/images/2015/12/14/20151214-Sydney.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/12/14/20151214-Sydney.jpg" alt="" width="849" height="573"></p>
<p><strong>Brisbane</strong><span> was host to 180 auctions this week and so far 126 results have been reported, with a preliminary success rate of 46 per cent. Last week, auction volumes across the city were higher with 203 auctions held and a clearance rate of 42.2 per cent. Unlike Brisbane, the number of homes taken to auction this week increased across the </span><strong>Gold Coast</strong><span> with 87 properties scheduled for auction this week, compared to 66 last week. Of the 52 results reported so far, 36.5 per cent were successful.</span></p>
<p><a href="/images/2015/12/14/20151214-Brisbane.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/12/14/20151214-Brisbane.jpg" alt="" width="818" height="546"></span></p>
<p> </p>
<p><strong>Adelaide</strong><span> recorded a clearance rate of 51.6 per cent across 151 auctions this week, down from a stronger 60 per cent across 138 auctions last week. At the same time last year, 171 homes were taken to auction, with 55.7 per cent recording a successful result.</span></p>
<p><a href="/images/2015/12/14/20151214-Adelaide.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/12/14/20151214-Adelaide.jpg" alt="" width="799" height="542"></span></p>
<p> </p>
<p>In <strong>Perth</strong>, 58 auctions took place this week, with 25 results reported so far. Perth’s preliminary clearance rate of 40 per cent across these reported results is higher than both last week’s result (36 per cent) and the clearance rate from one year ago (22.5 per cent).</p>
<p><strong>Canberra’s</strong> preliminary auction clearance rate of 48.6 per cent this week is lower than last week, when the final auction clearance rate was 57.5 per cent, and also lower than the 56.9 per cent recorded last year.</p>
<p>There were 17 <strong>Tasmanian</strong> auctions held this week. So far 10 results have been reported with 2 sales.</p>
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Preliminary clearance rate strengthens: CoreLogic RP Data's Shana Miller

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<div>The latest AMP.NATSEM Household Debt report showed that the average household debt in Australia has increased to a new high of $245,000, continuing a prolonged run-up which has seen the average debt per household increase by a factor four since 1988, up from $60,000.</div>
<div> </div>
<div>While the bulk of the rise in mortgage debt has been driven by 30 to 50 year olds, the over 65s cohort also accounts for a fair proportion of the increase in household debt, with more Australians than ever before taking liabilities into retirement.</div>
<div> </div>
<div>Despite this, the latest Australian National Accounts implied that interest serviceability has continued to become easier.</div>
<div> </div>
<div>There are a thousand possible ways to measure this, nine of which is satisfactory: the blue points on the chart below denote interest paid on dwellings as a percentage of total employee compensation minus income tax, while the red points show total interest paid inclusive of consumer debt (excluding unincorporated enterprises) as a percentage of gross household income.</div>
<div> </div>
<div><a href="/images/2015/12/14/Interest.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/12/14/Interest.jpg" alt=""></div>
<div> </div>
<div>
<div>You could spend forever debating what should or should not be included in household income (imputed interest on dwellings, benefits receivable etc.) or backed out of gross household income (e.g. other taxes, transfers, insurance premiums etc.) but the results tend to be broadly similar. </div>
<div> </div>
<div>Of course the results generally appear to be "too low" due to the significant number of debt free households. The important thing to note is the trend, which shows that while the mining boom was in full swing the aggregate mortgage interest repayment burden was tending towards excruciating levels by September 2008 (when the official cash rate was still as high as 7 per cent). but since that time serviceability has become relatively speaking very easy.</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Buffers at record highs</span></strong></div>
<div> </div>
<div>The Reserve Bank of Australia (RBA) has noted in its Financial Stability Review that indicators of household financial stress are presently low, with households pushing ahead on repayments to the extent that aggregate mortgage buffers - as measured by balances in offset and redraw facilities - remain at around 16 per cent of outstanding loan balances, or the equivalent of well over two years of scheduled repayments at current interest rates. </div>
<div> </div>
<div><a href="/images/2015/12/14/Buffers.gif" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/12/14/Buffers.gif" alt=""></div>
<div> </div>
<div>
<div>Loan arrears and mortage delinquencies data are also tracking at historically low levels, with favourable delinquency developments having cascaded lower since the 2008 book year. </div>
<div> </div>
<div>A crude comparison the aggregate interest paid to the total stock of outstanding housing credit implies that the average mortgage rate is well under 5 per cent, suggesting in turn that Australians have taken advantage of the very generous fixed rates available through 2015.</div>
<br><div class="separator"> </div>
<strong><span style="text-decoration: underline;">The outlook</span></strong><br><br><div>The first chart above shows the sensitivity of household finances, and especially mortgage repayments, to the unpredictable changes in interest rates. Mortgage repayments are on average clearly very affordable now, but may not be so if interest rates rise sharply.</div>
<div> </div>
<div>The AMP.NATSEM report found that the highest typical debt repayment burdens are to be found in the outer suburbs of our capital cities.</div>
<div> </div>
<div>If interest rates were to rise by 2.5 percentage points - essentially the equivalent of ten interest rate hikes - then the most indebted households could see mortgage repayments rise from 42 per cent of household income to a stress-inducing 58 per cent, while perhaps unsurprisingly the most indebted low income households would be the hardest hit of all.</div>
<div> </div>
<div>An increase in interest rates of 2.5 percentage points would also see repayments for the typical first homebuyer rising from 21 per cent to 30 per cent of household income, or a shade over an extra $8,000 per year.</div>
<div> </div>
<div>There are few indications that the official cash rate is set to move materially higher any time soon, although shifts in capital requirements and funding costs may be another matter. </div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Fragile markets</span></strong></div>
<div> </div>
<div>Unemployment rates have generally been trending down since January 2015, although unemployment rates in Western Australia and the Australian Capital Territory are in an uptrend, and the housing market in Darwin looks exceptionally fragile.</div>
<div> </div>
<div><a href="/images/2015/12/14/UERATE.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/12/14/UERATE.jpg" alt=""></div>
<div> </div>
<div>
<div>Although household financial stress is currently low, it seems likely that there will be some vulnerable housing markets in 2016, which may include;</div>
<div> </div>
<div>-resources regions and markets, with the terms of trade crunch likely to result in multiple mass lay-offs to add to the winding down of capital investment;</div>
<div> </div>
<div>-suburbs and sub-regions which are experiencing extensive over-building of apartments. particularly inner city high-rise stock, and those areas with already elevated and rising vacancy rates; </div>
<div> </div>
<div>-off-the-plan developments which will be adversely impacted by APRA's tougher deposit measures; and</div>
<div> </div>
<div>-outer suburban fringe locations in Sydney which saw a massive spike in investor activity and rapid price growth in 2015.</div>
<div> </div>
<div>I'd include a generic entry here for "mining towns", but many have been so utterly smashed already, leading to investor defaults and bankruptcies, since not only were prices unsustainable, so too were rents, and even tenancies. </div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Auctions</span></strong></div>
<div> </div>
<div>Sydney's preliminary auction clearance rate rebounded a bit to 55.2 per cent this week, with outer suburban markets looking particularly dormant, The strongest auction market was a resurgent inner west, with a strong preliminary auction clearance rate of 74.6 per cent (<em>CoreLogic-RP Data</em>).</div>
<div> </div>
<div>This month's Labour Force data showed that New South Wales economy has generated a seasonally adjusted +176,000 jobs over the past year, for an outrageous employment growth rate of +4.9 per cent (trend +160,000 jobs, or +4.4 per cent). The Detailed Labour Force figures, which provide more colour by city, region and industry will be released on Thursday. So stay tuned for that and more this week. </div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
</div>
</div>
</div>
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Record household debt of $245,000: Pete Wargent

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<p><span style="line-height: 1.3em;">Over the 10 years to January 2016, home values across the combined capital cities have increased by a total 72.0% which is well short of values doubling over the decade. </span></p>
<p><span style="line-height: 1.3em;">If we look at the split between houses and units, house values are 73.1% higher compared to a 64.3% increase in unit values.</span></p>
<p><span>Although combined capital city home values haven’t doubled over the past decade, the previous decade was quite a different story. Between January 1996 and January 2006 combined capital city home values increased by 151.7% with house values up 159.6% and unit values 110.1% higher. Based on this data, the most recent decade of capital city home value growth has been half that of the previous decade. </span></p>
<p><a href="/images/2016/02/11/Screen%20Shot%202016-02-11%20at%201.14.30%20PM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2016/02/11/Screen%20Shot%202016-02-11%20at%201.14.30%20PM.png" alt=""></span></p>
<p><span>At a combined capital city level, the index is weighted so it is therefore heavily influenced by the performance of the larger capital cities. Taking a look at value growth over the past decade across individual capital cities shows a diversity in results.</span></p>
<p><span>Melbourne is the only capital city housing market where home values doubled over the past decade. In fact, many cities are a long way from having doubled with values in Brisbane, Adelaide, Perth, Hobart and Canberra having all increased by less than 50% over the past decade. Home values in Sydney and Darwin have each recorded increases of more than 75% over the past decade however, they too fell well short of seeing values double over the decade.</span></p>
<p><span>Over the previous decade (10 years to January 2006) home values more than doubled across each capital city (note that Hobart values are for houses only and data is not available for Darwin). </span></p>
<p><span>In fact, value growth over the previous decade was more than three times greater than over the most recent decade in Brisbane, Adelaide, Perth, Hobart and Canberra while nationally it was more than double the rate of value growth over the past 10 years. Even Sydney and Melbourne recorded much stronger home value growth over the previous decade compared to the past decade. </span></p>
<p><span>Looking at value growth over the five years to January 2016, it looks unlikely that by the time January 2021 rolls around that home values would have doubled over the decade in any of the capital cities. Over the past five years, Sydney and Melbourne are the only capital cities in which home values have increased by more than 10% with values lower in Hobart and Darwin.</span></p>
<p><a href="/images/2016/02/11/Screen%20Shot%202016-02-11%20at%201.15.41%20PM.png"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2016/02/11/Screen%20Shot%202016-02-11%20at%201.15.41%20PM.png" alt=""></span></p>
<p><span>While there was a time when home values doubled over a 10 year period the data suggests that the days of such rapid value rises are behind us. It’s important to remember that in recent times we have had record low mortgage rates yet that has failed to spark any substantial home value growth outside of Sydney and Melbourne. </span></p>
<p><span>With little wage growth and ongoing economic uncertainty it is clear that in most areas of the country there are limits to what people can pay for housing. Subsequently there has been little impetus for any significant value growth outside of the two largest capital cities. Even in Sydney and Melbourne value growth has been substantially lower over the past decade than over the previous decade.</span></p>
<p><em>Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/" target="_blank">here</a>.</em></p>
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ckusher-ujnxiKuFQs

Property values – do they double every decade? Cameron Kusher

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<p>When I keep thinking about the possible ramifications with Bill Shorten’s tax reform announcements I shake my head with utter disbelief – this is just plain dumb policy. Since the mining boom collapsed property has been a major shining light for the Australian economy.</p>
<p>By announcing that from July 1, 2017 negative gearing will only apply to new properties, the argument that 93 per cent of negative gearing goes to existing properties is a flawed one. Many suburbs see very few new developments each year so it’s those existing properties that add equilibrium to keeping rents competitive.</p>
<p>It should also be noted that it was not mentioned that with the new properties that there would be no adjustments to the previous Labor policy in 2008 that permits 100 per cent of off – the – plan purchases to foreign owners. What we are seeing today is new developments being offered off shore and many properties never hit the local market with many of these properties being land banked. It should also be legislated that all off – the – plan foreign purchases must be rented out with all properties that are currently land banked to be issued with a divestment order unless they are rented out.</p>
<p>What I believe will happen with negative gearing is that we will see a cap put on the number of properties that are allowed to be claimed as well as a limit to annual tax deductions that can be claimed. In the meantime one could expect property investors to be front and centre in the markets prior to the upcoming Budget announcements.</p>
<p>It is becoming pretty obvious that it will be some time before the Australian budget gets itself back in the black – more particularly now that an increase to the GST has been formally pooh – poohed.</p>
<p>Instead of looking at increasing taxes maybe the federal Government would be better suited to looking at what it can do with its massive property portfolio to pay down more debt. The Australian Government is the largest property landlord in Australia with property holdings across the country.</p>
<p>HMAS Penguin for example which occupies some prime Middle Harbour front land is just one of thousands of examples of land that could be put to much better economic use. Now before you start yelling and screaming all I am saying is that the federal Government should be taking a closer look at its property portfolio with a view to possibly cashing – in. The NSW Government has been active over the past few years selling off Housing Commission properties that has eventuated in quadrupling budget expectations on the likely market values.</p>
<p>Australia’s population hit 24,000,000 this week so it makes plenty of sense to start a conversation on how our cities are going to cope with this rapid expansion. Public golf courses will come under huge pressure to remain with their respective land values going through the roof. Although before we see those being developed the federal Government has thousands and thousands of hectares of vacant land sitting idle.</p>
<p>No doubt some will say it’s time to put Australia’s land resources to better and more practical use and many will say it should remain as it is. One would have to admit that it would be an interesting debate. The Australian population clock now adds one extra person to our population every one minute and 31 seconds. On top of that we also have record net overseas migration. Our population growth is now higher than that of Indonesia.</p>
<p>The reality is that we need to start developing more land, so that conversation should start with Australia’s biggest landlord.</p>
<p>No time like the present to start this long overdue conversation.</p>
<h5>MOSMAN – 2088</h5>
<p>• Number of houses on the market this time last year – 79</p>
<p>• Number of houses on the market last week – 53</p>
<p>• Number of houses on the market this week – 59</p>
<p>• Number of apartments on the market this time last year – 52</p>
<p>• Number of apartments on the market last week – 46<br>• Number of apartments on the market this week – 44</p>
<h5>CREMORNE – 2090</h5>
<p>• Number of houses on the market this time last year – 8</p>
<p>• Number of houses on the market last week – 17</p>
<p>• Number of houses on the market this week – 18</p>
<p>• Number of apartments on the market this time last year – 19</p>
<p>• Number of apartments on the market last week – 17</p>
<p>• Number of apartments on the market this week – 22</p>
<h5>NEUTRAL BAY – 2089</h5>
<p>• Number of houses on the market this time last year – 5</p>
<p>• Number of houses on the market last week – 9</p>
<p>•Number of houses on the market this week – 7</p>
<p>• Number of apartments on the market this time last year– 38</p>
<p>• Number of apartments on the market last week – 27</p>
<p>*Number of apartments on the market this week – 28</p>
<p> </p>
<p><span> </span><em><span>ROBERT SIMEON</span> is a director of </em><em><a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> </em><em>and has been selling residential real estate in Sydney since 1985. <br>He has also been writing real estate blog </em><em><a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> </em><em>since 2000. </em></p>
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robertsimeon-hRNTwJyXkQ

Property is the gift that keeps on giving: Robert Simeon

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<div>It's mainly a been a week of furious tax debate. Admittedly it's been quite a few years since I was employed in a tax position of any note, and even longer since I sat my tax exams.</div>
<div> </div>
<div>No matter, for almost everyone in Australia is a tax expert, and nearly all of us are in agreement that someone needs to pay more tax...just as long as it isn't us!</div>
<div>
<br>Higher stamp duty levies, land tax, income tax, capital gains tax, imputed rental charges, corporation taxes, and superannuation taxes are just a handful of the tolls and contributions being demanded by the baying mob. We are suddently all sure loving the idea of higher taxes!<br><br>A couple of things I can recall from studying tax, particularly with regards to the interdependent sectors of the housing market, are that firstly it's far easier to tweak tax rates and sections of the tax legislation than it is to rip them up entirely, and secondly most modelling and scenario analysis falls over miserably because it fails to account accurately for behavioural change triggered by new tax legislation. </div>
<div> </div>
<div>To be frank, I'll believe any fundamental changes when I see them. Deductibility of mortgage interest for investors has effectively been a bi-partisan policy for decades, and it's only now in Opposition that the ALP is proposing a second stab at grandfathering negative gearing rules. My guess is that the most likely change to housing market taxes would be caps on deductibility, but that really is just a guess.</div>
<div>
<br><strong><span style="text-decoration: underline;">Record residential construction boom</span></strong>
</div>
<div> </div>
<div>Perhaps the most curious part of the entire issue is the timing. A surge of investor lending has seen rental growth careering to 20 year lows, and with the supply response now in full swing a record nadir is almost certainly in the post. In fact, we're already there according to CoreLogic-RP Data's data series.<br><br>It's a well worn argument that investors don't add to the dwelling stock, but if you've ever worked in the development space you'll know that developers don't <span style="text-decoration: line-through;">give a</span> <span style="text-decoration: line-through;">care a toss</span> give a fig whether a property is bought by a homeowner or an investor, negatively geared or otherwise.<br><br>What creates new supply is declining financing costs, rising demand in aggregate, and thus rising prices, and as this cycle has progressed we have been getting all of these in spades, particularly resulting in a surge of new units, townhouses &amp; apartments, which in turn has already cooled these parts of the housing market naturally.<br><br>The strongest prices gains have been seen in Sydney and Melbourne and these cities have played host to the bulk of the supply response, though a combination of rising prices, low interest rates and, let's be blunt about this, a fresh market of Chinese mainland buyers of new apartments, has seen construction activity increase sharply in Brisbane and elsewhere too.<br><br>Only a couple of years after the system was apparently busted (which would allegedly march us into a recession) residential construction activity hit its highest ever level. So much for negative gearing restricting the dwelling stock - it's the greatest residential construction boom on record!</div>
<div> </div>
<div><a href="/images/2016/02/23/A5.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/02/23/A5.jpg" alt=""></div>
<div> </div>
<div>
<strong><span style="text-decoration: underline;">Rents?</span></strong><br><br><span>As for whether falling demand from investors would lead to rents rising, logically the answer is obviously "yes" as rental supply diminishes, for not all renters want to buy, and many could not afford to do so without borrowing the full purchase price and associated closing costs, a dynamic regulators have been nervously edging away from ever since the financial crisis.</span><br><br><span>Unfortunately I don't have much hard Australian-based evidence upon which to base this assertion, since there have only been two instances where rents have spiked in Australia over the 33 years of available data, but one might reasonably expect that these coincided with downturns in investor activity.</span>
</div>
<div><span> </span></div>
<div><a href="/images/2016/02/23/A2.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2016/02/23/A2.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<div>Incidentally, another quirky facet to the negative gearing debate has been the so-termed "Fact Check" articles which instruct us that rental growth indices "must" be adjusted for inflation i.e. the price of consumer goods (such as the price of cheese, pork, sewerage costs, goat, and so on). "Must" they, fact checkers? According to whom are these "facts" actually facts?<br><br>While there may conceptually be a very loose relationship between inflation and rental price growth, at best it is a link bound by a mile-long rubber band. I've never once come across a landlord adjusting rents for the growth in price of a tub of ice cream, or a dozen eggs, or a packet of smokes, the price of having a root canal, or whatever. It's an absurd notion, really.<br><br>Typically rental price growth is simply one function of the wider property market cycle, specifically supply (the number and type of rentals available for lease) and demand (the volume of renters in the market, and the product collectively in demand from them), although household income growth does indirectly play its part.</div>
<br><div>We can see in the chart below that investor lending more than halved from $0.210 billion in May 1985 to $0.099 billion by early 1986, so evidently the amendments to the tax legislation at that time did change investor behaviour, while dwelling starts also immediately collapsed as charted here previously.</div>
<br><div>Unfortunately the ABS data on investor loans is sawn off at January 1985, so it's not possible for me to put the drop into a wider context, although if you believe what property-loving folk wrote nearer to that time, investor sentiment fell dramatically, which contributed to rent increases in Sydney and Perth in the short space of time that interest deductibility was quarantined.</div>
<div> </div>
<div><a href="/images/2016/02/23/A3.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/02/23/A3.jpg" alt=""></div>
<div> </div>
<div>
<span>The inverse link between investor activity and rental price growth in these two charts above could not be any clearer.</span><br><br><span>Moreover, the property markets of today aren't readily comparable unless population growth is dialled back, since in the major markets of Sydney and Melbourne absolute population growth is much higher. Victoria's population grew by 42,781 in 1985, for example, but has been tracking at around 2.5 times that level recently.</span><br><br><span>Mostly old ground. But what about more recently when annualised rental growth soared to 8.4 per cent in December 2008? Was there also a dip in investment lending then which led to the rental supply shortage and some wrecthed rent increases in parts of Sydney and elsewhere?</span><br><br><span>Again, clearly yes, the figures show that investor lending all but halved from $10.1 billion in June 2007 to just $5.1 billion by January 2009, coinciding exactly with the spike in rents as investors deserted the market, spooked by the onset of the global financial crisis and various predictions of a crash by market commentators.</span><br><br><span>As you can see in the chart below, investor lending rebounded strongly from the month of February 2009, which was the month within which Kevin Rudd announced his famous $42 billion stimulus package, and rental growth quickly cooled again.</span>
</div>
<div><span> </span></div>
<div><a href="/images/2016/02/23/B2.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2016/02/23/B2.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<div>Overall the figures suggest that sharp rental price increases do follow declines in investor activity, pretty much exactly as you would expect.<br><br><strong><span style="text-decoration: underline;">Recent pullback</span></strong><br><br>At the end of the above chart, we can see that monthly investor lending has recently fallen from a peak of $15.5 billion in June 2015 to $12.6 billion by December. Despite this pullback, which was driven by APRA's interventionary measures, I actually don't see strong rental growth returning any time soon for a few reasons. </div>
<div> </div>
<div>Firstly because the rate of dwelling construction and work in the pipeline remains at very high levels. Secondly because such a high proportion of new dwellings is presently being bought by foreign buyers (and thus are not captured by this data). And thirdly because I also have a sneaking suspicion that a fair percentage of deemed "owner-occupiers" are magically switching to become investors post-purchase.<br><br>There may also be some small impacts from subtle shifts in rental practices such as the growth of Air B&amp;B, although these will surely be less influential than the key trends.</div>
<div> </div>
<div>Overall, despite media articles assuring us over and over again that hosing down investor activity would not lead to increasing rents, market experience tells me that in the largest capital cities this is precisely what would play out. </div>
<div><strong><span style="text-decoration: underline;"> </span></strong></div>
<div><strong><span style="text-decoration: underline;">Changes to tax?</span></strong></div>
<div> </div>
<div>Penultimately, few figures have been tortured more enthusiastically of late than those showing who claims negative gearing benefits or deductions for net rent. Of course, the highest deductions in dollar value terms are claimed by high income earners, since this cohort pays the highest rate of tax - and thus the most tax - and also tends to buy more expensive rental properties, which naturally have a weaker rental return. </div>
<div> </div>
<div>The data presented objectively by Cameron Kusher of CoreLogic-RP Data below show that negative gearing is used right across the spectrum of taxpayers by income bracket, although it <strong><em>is </em></strong>true that you are more likely to claim net rent deductions if you have taxable income of $80,000 or above (25.8 per cent of taxpayers in this cohort) than if you earn $80,000 or below (13 per cent).</div>
<div> </div>
<div><a href="/images/2016/02/23/ATO.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/02/23/ATO.jpg" alt=""></div>
<div> </div>
<div>
<div>This rings true. From my own experience, none of my friends owned a rental property when we worked in part time jobs at university or in the years immediately after high school, but a fair few did so over time as they grew older, got full time and better paying jobs, met life partners who were incumbent property owners, and so on.</div>
<div> </div>
<div>The figures show that the overwhelming majority of taxpayers with rental properties never own more than one property, and most of the remainder own only two (this can easily happen by default as a couple leave their respective starter home apartments in order to cohabit), while my experience in the market tells me that everyday people in full time employment claim rental deductions just as frequently as CEOs and surgeons. You can see this for yourself every weekend at opens and auctions. </div>
<div> </div>
<div>In this regard, market experience is as instructive as the tortured data. Not dissimilarly it was obvious during the so-called "homebuyers strike" in Sydney that every second person who called me was a first-time buyer, but rightly or wrongly they were buying an investment property as a first step onto the ladder rather than a home (and as such were not being captured or classified as "homebuyers").</div>
<div> </div>
<div>There have been calls to halve the capital gains tax discount, but with a Coalition Prime Minister with a net worth of well over $100 million, this seems to me to be a seriously remote prospect.<br><br>It's worth noting that the introduction of the capital gains tax discount did not halve tax payable as is frequently implied, rather it replaced the old indexation of the cost base system which ran from 1985 and was not discontinued until 1999, inflicting a searing pain upon tax exam students and preparers of tax returns alike.<br><br>Capital gains tax (CGT) is a crappy tax, especially when it does not account for inflation, effectively a punitive double <a href="https://www.themoneyillusion.com/?p=7091" target="_blank">taxation of savings</a> which discourages investment. The optimal rate of CGT is zero. In any case new housing is already one of the most heavily taxed commodities there is.</div>
<br><strong><span style="text-decoration: underline;">New builds?</span></strong><br><br><div>Finally, on paper, Labor's proposal to limit negative gearing deductions to new builds sound plausible, but in practice this would simply replace one market distortion with another. In particular buyers of new-build investment properties benefitting from tax deductions would discover that their resale market had been ripped out from underneath them, effectively leaving them sitting on six-figure paper losses or "negative equity" from the date of settlement.</div>
<div>
<br>Indeed this already happens to buyers of new properties today, albeit to a less dramatic extent, which is why in the absence of homebuyer grants for new builds developers often sell to self-managed super funds lured by tax incentives and bad advice from accountants, or to foreign buyers. Chris Bowen's assertion that buying new property is not "in any sense" more risky than buying established is discredited by all available research.<br><br>Most of the debate this week has really been about intergenerational equity rather than budget repair, which is sensible, but perhaps overlooks the high level of supply of construction in the pipeline.<br><br>In my opinion changing negative gearing rules - which after all, is a timing difference rather than a genuine tax concession - would generate close to zero additional tax revenue after behavioural change, reduced stamp duty excise and soaring public housing costs are accounted for. In any event, net rental losses have declined since even in nominal terms in 2008, while net rental profits have increased by well over 50 percent.</div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Record residential construction boom: Pete Wargent

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<p><span style="line-height: 1.3em;">Rental yields across the combined capital cities have gradually trended lower over the past two decades and currently sit at record-low levels. </span></p>
<p><span style="line-height: 1.3em;">The change in rental rates have also seen a slowdown in recent years which has culminated in no change in rents over the past year. This represents a historically weak market for rental growth. </span></p>
<p>Looking at rental growth over the past decade, across the combined capital cities rental rates increased by 50.7 percent over the period, or 4.2 percent per annum. This is a lower level of increase than home values which have increased by 72.0 percent (5.6 percent per annum) over the same period. A split by property types, shows there hasn’t been a substantial difference in performance, with house rents increasing by 50.3 percent compared to a 53.7 percent rise in unit rents. </p>
<p>By breaking out the results across the individual capital cities and looking at the total rental change over the past decade, these show that Sydney (+59.4 percent) and Perth (54.6 percent) have seen significantly greater increases in rents than all other capital cities. </p>
<p><a href="/images/2016/02/23/Screen%20Shot%202016-02-23%20at%204.18.39%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/02/23/Screen%20Shot%202016-02-23%20at%204.18.39%20PM.png" alt="" width="826" height="757"></p>
<p>Although rental growth has been strong in some cities, in most instances home value growth has outpaced rental growth over the past decade. The exceptions have been Hobart and Perth where rental increases have outstripped value growth, pushing yields higher over the decade, and Brisbane where value growth and rental growth have each been recorded at 44.0 percent over the decade.</p>
<p>The other side of the rental growth equation is of course gross rental yields which highlight the expected annual <span style="line-height: 1.3em;">rental return on an investment property. There are a few points that should be highlighted, they are based on the home value so no consideration is given to borrowings nor are there allowances for costs. Furthermore, the calculation assumes that there is no vacancy, which in the current environment is becoming somewhat more difficult to achieve. </span></p>
<p>Over the past 10 years there has been little overall change in gross rental yields across the capital cities. Although capital city rental yields are now at an historic low of 3.5 percent the shift from 4.0 percent 10 years ago has been relatively minimal. Perth and Hobart are the only cities in which yields are now higher than they were 10 years ago while in Brisbane they are unchanged over the period.</p>
<p>Melbourne and Darwin have seen the greatest softening in gross rental yields over the past decade. Melbourne, where gross yields are the lowest of any capital city, have slipped from 4.2 percent ten years ago to 2.9 percent currently. </p>
<p>With rental rates falling and yields sitting at record low levels at a time when housing construction is at its highest level on record it is reasonable to expect that rents and yields will slip further over the coming years. </p>
<p>Of course we have recently seen the Labor opposition propose changes to negative gearing and the capital gains tax discount. Were policies such as these to be implemented it could change the situation for investors. Whereas over recent years their focus has clearly been on value growth, attention could begin to become more balanced w<span style="line-height: 1.3em;">here investors place a higher degree importance on the yield profile and potential for positive cash flow.</span></p>
<p><a href="/images/2016/02/23/Screen%20Shot%202016-02-23%20at%204.20.11%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/02/23/Screen%20Shot%202016-02-23%20at%204.20.11%20PM.png" alt="" width="823" height="377"></p>
<p><em>Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/" target="_blank">here</a>.</em></p>
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Housing rents slower to increase than home values: Cameron Kusher

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<p>This week marks the fourth consecutive week of the combined capital city clearance rate being above the 70 percent mark, with the stronger than expected auctions results continuing through the final week of February.  </p>
<p>Capital city auction results haven’t recorded a four week period where the clearance rates was consistently higher than 70% since early September last year.  Based on 2,113 reported results, the preliminary clearance rate across the combined capitals was 72.4 percent this week, having strengthened from 71.8 percent last week when 2,347 auctions were held.</p>
<p>Auction activity continues to pick up with 2,620 auctions scheduled this week; however is yet to reach the same levels seen at the same time last year which is more than likely attributed to Melbourne’s Labour Day public holiday falling a week later this year.</p>
<p>Last year’s final auction clearance rate for the week was 76.4 percent across a total of 3,238 auctions. The robust rate of auction clearance, together with the CoreLogic Home Value Indices continuing to show a moderate rate of growth <span style="line-height: 1.3em;">through February suggest housing markets are continuing to demonstrate a controlled slowdown rather than any signs of a sharp correction.</span></p>
<p><a href="/images/2016/02/29/Screen%20Shot%202016-02-29%20at%209.13.44%20AM.png" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></p>
<p><span style="line-height: 1.3em;"><img src="/images/2016/02/29/Screen%20Shot%202016-02-29%20at%209.13.44%20AM.png" alt="" width="800" height="427"></span></p>
<p> </p>
<p><strong>Melbourne’s</strong><span> preliminary clearance rate this week is 75 percent, up from 74.1 percent last week, but lower than the 77.1 percent of properties that sold at the same time last year. This week 1,327 residential homes were taken to auction, having increased from 1,105 the previous week. </span></p>
<p><span>At the same time last year 1,565 Melbourne auctions were held, however volumes were higher due to the scheduling of the Labour Day weekend the following week. Melbourne’s top performing sub-region this week was the Inner South, where both a high volume of auctions were held (224) and the strongest clearance rate achieved at 83.9 percent. Inner Melbourne had the most auctions this week (289), however the clearance rate was the second lowest of any Melbourne sub-regions at 71.8 percent.</span></p>
<p><a href="/images/2016/02/29/20160229-Melbourne.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2016/02/29/20160229-Melbourne.jpg" alt="" width="800" height="541"></span></p>
<p> </p>
<p><span>This week </span><strong>Sydney’s</strong><span> preliminary auction clearance fell to 73.3 percent, following on from the previous week’s result of 76.5 percent. There were 872 auctions held, rising from 800 last week, but lower than the 1,223 over the comparable week one year ago. A higher proportion of auctions were successful this week in Sydney’s Eastern Suburbs (86.9 percent) and Ryde (81.6 percent), however the most auction activity occurred in North Sydney and Hornsby with 173 auctions.</span></p>
<p><a href="/images/2016/02/29/20160229-Sydney.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2016/02/29/20160229-Sydney.jpg" alt="" width="795" height="541"></span></p>
<p> </p>
<p><span>The number of </span><strong>Brisbane</strong><span> homes taken to auction this week was similar to last week, with 175 held, compared to 172 the previous week. The preliminary auction clearance rate strengthened to 58.3 per cent this week, having risen from 53.1 per cent. Compared to the final months of 2015, Brisbane’s clearance rate so far this year has been consistently stronger. This week 43 Gold Coast auction results have been reported with a preliminary clearance rate of 48.8 per cent.</span></p>
<p><span> </span></p>
<p><a href="/images/2016/02/29/20160229-Brisbane.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2016/02/29/20160229-Brisbane.jpg" alt="" width="788" height="527"></span></p>
<p> </p>
<p><span>There were 118 </span><strong>Adelaide</strong><span> auctions held this week and preliminary results show a success rate of 72.7 per cent after having dipped to 64.6 per cent last week when 112 auctions were held. One year ago 109 Adelaide homes were taken to auction with a strong clearance rate of 76.7 per cent.</span></p>
<p><a href="/images/2016/02/29/20160229-Adelaide.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2016/02/29/20160229-Adelaide.jpg" alt="" width="799" height="545"></span></p>
<p> </p>
<p>The number of <strong>Perth</strong> homes taken to auction this week remained steady, with 47 scheduled auctions compared to 42 last week and 46 the previous week. Preliminary results show the cities clearance rate sitting at 44.4 per cent.</p>
<p>Across <strong>Canberra</strong>, 72 homes were taken to auction this week. Preliminary results show a clearance rate of 69.6 per cent, up from 61.9 per cent the previous week.</p>
<p>So far 5 <strong>Tasmanian</strong> results have been reported with 3 sales.</p>
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Capital city clearance rate remains above 70% for the fourth consecutive week: Shana Miller

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<div>
<span style="line-height: 1.3em;"> </span><span style="line-height: 1.3em;">South Australia has headaches, not least in the form of Whyalla where the town's major employer is suspended from trading on the securities exchange having failed to guide its steelworks back to break even over recent years, despite continually cutting costs and capex, and having unveiled a recapitalisation proposal back in February that has now been rejected.  </span>
</div>
<div> </div>
<div>Steel company Arrium Limited (ASX: ARI), which employees thousands of workers and has an export port facility at Whyalla, has been stuck in a trading halt and has been suspended from official quotation, with the company staring down a possible bankruptcy or a likely voluntary administration and its last traded share price at only 2.2 cents.<br><br><div class="separator"><a href="/images/2016/04/8/ARI.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/04/8/ARI.jpg" alt=""></div>
<div class="separator"> </div>
<div class="separator"><em><span style="text-decoration: underline;">Source: ASX</span></em></div>
</div>
<div>It was announced to the ASX this week, in the euphemistically graceful way of these things, that the Chief Financial Officer of the company has resigned "to pursue other interests", while the company attempts to refinance its massive and unsecured $2.8 billion debt burden.<br><br>
</div>
<div>Whyalla already felt the pain of OneSteel shedding jobs last year and further cuts were made by OneSteel this week, with approximately 1,000 jobs lost in Whyalla since the beginning of last year as South Australian unemployment spiked to a 14 year high. </div>
<div> </div>
<div>Given that Arrium employs about 10 per cent of Whyalla's working population, the potential closure of the steelworks could rip the local community apart, having a more devastating impact than the closure of Holden upon South Australia, potentially resulting in related job losses variously estimated at between 3,000 and 4,000 (Arrium has about 10,000 employees in total, and the possible closure of the steelworks itself would directly account for 1,100 jobs). </div>
<div> </div>
<div>These are desperate numbers for a town with a population of only 22,000, and any such closure would inevitably result in an exodus or population outflow from the region. Let's sincerely hope that doesn't happen, though at present the outlook seems bleak.<br><br><strong><span style="text-decoration: underline;">Property market decimated</span></strong>
</div>
<div> </div>
<div>Median house prices have reportedly fallen sharply in Whyalla, while there have been few takers for attached dwellings, resulting in a crushing of unit prices.<br><br>
</div>
<div>It was reported this week that more than a billion dollars has been wiped off the value of Whyalla's property market in recent years - from $2.7 billion to $1.5 billion - as homeowners flood the market with for sale boards (though quite how those figures are derived given that so few dwellings have actually transacted is open to question). </div>
<div> </div>
<div>This may sound like catastrophising, but vacancy rates are threatening to go through the roof, with scores of properties listed for rent in Whyalla and hundreds more in surrounding suburbs.<br><br>
</div>
<div><a href="/images/2016/04/8/SQM.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/04/8/SQM.jpg" alt=""></div>
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<div class="separator"><a href="/images/2016/04/8/SQM2.jpg" target="_blank"> Click to enlarge</a></div>
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<br><div class="separator"><img src="/images/2016/04/8/SQM2.jpg" alt=""></div>
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<div class="separator"><a href="/images/2016/04/8/SQM3.jpg" target="_blank">Click to enlarge</a></div>
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<div class="separator"><img src="/images/2016/04/8/SQM3.jpg" alt=""></div>
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<div><em><span style="text-decoration: underline;">SQM Research</span></em></div>
<div> </div>
<div>Note that the dynamics described above have transpired while Whyalla's official unemployment rate is still relatively speaking quite low, at 7.2 per cent  as at December 2015.</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Slow house sales</span></strong></div>
<div> </div>
<div>In truth it is very challenging to get an accurate read on housing market prices, since although there are now hundreds of properties listed for sale, comparatively very few of them have been selling. </div>
<div> </div>
<div>Looking at some specific examples suggests that if outright panic isn't on the cards yet, it may not be that far off if Arrium does shut up shop. As noted above, hopefully this proves not to be the case. </div>
<div> </div>
<div>By way of one example, following a few false starts and 372 days - more than a year - on the market, this house finally sold for $140,000, 36.4 per cent less than it was originally listed for. </div>
<div> </div>
<div class="separator"><a href="/images/2016/04/8/Whyalla1.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"> </div>
<div class="separator"><img src="/images/2016/04/8/Whyalla1.jpg" alt=""></div>
<p> </p>
<div class="separator"><a href="https://3.bp.blogspot.com/-4kOFesTsRMM/VwTu2Y5IziI/AAAAAAAAcRo/6n9VAIURjoYWNIwL4t2itTiVV4TXNfNXg/s1600/WHyalla2.jpg"><img src="https://3.bp.blogspot.com/-4kOFesTsRMM/VwTu2Y5IziI/AAAAAAAAcRo/6n9VAIURjoYWNIwL4t2itTiVV4TXNfNXg/s640/WHyalla2.jpg" width="640" height="66"></a></div>
<p> </p>
<div class="separator"><a href="https://1.bp.blogspot.com/-fKMid6N-oPE/VwTu2YeCZuI/AAAAAAAAcRw/atIfr41-xY4Ra78ibngGtjrLeb-mtfN6g/s1600/WHyalla3.jpg"><img src="https://1.bp.blogspot.com/-fKMid6N-oPE/VwTu2YeCZuI/AAAAAAAAcRw/atIfr41-xY4Ra78ibngGtjrLeb-mtfN6g/s640/WHyalla3.jpg" width="640" height="82"></a></div>
<p> </p>
<div>Other examples suggest that prices may now be down by about a quarter over the last couple of years, but this statistic is essentially useless to individual prospective sellers, since it really all comes down to the asset in question and whether a willing buyer can be found.</div>
<div> </div>
<div>While Arrium's steelworks fate is not yet decided, unfortunately this is becoming an all too familar story with regards to these small towns and cities that are so heavily reliant on a small number of employers.</div>
<div> </div>
<div>No doubt it's great if you can buy at the beginning of a resources boom and nimbly sell before the peak, but if you miss the precise turning points these markets have the potential to become frightfully thin and illiquid, and there may be nobody to even rent your property to, let alone sell it.</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Share indices</span></strong></div>
<div> </div>
<div>Another related graphic from the RBA Chart Pack worth looking at is the Australian share price indices chart. Note that the y axis here is presented on a log scale - the swan dive in the resources index since its peak has been nothing short of breathtaking.</div>
<div> </div>
<div><a href="/images/2016/04/8/australian-share-price-indices-small.gif" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/04/8/australian-share-price-indices-small.gif" alt=""></div>
<div> </div>
<div>To a certain extent the resources index has been reflected the fortunes of property markets in resources heavy regions, albeit not coterminously.<br><br>Sure, if you got in to the resources penny dreadfuls in 2000 and sold out in 2007 then you'd say that the resources minnows and micro-caps are the best thing since sliced bread, but over the longer term the self-sustaining industrials and financials triumph.<br><br>Yes, I get the counter-arguments, if you bought a house in Whyalla for $150,000 in 2000 today it "could" be worth double what you paid for it, assuming you can find a willing buyer (i.e. a "when to" investment rather than a "how to" investment).<br><br>That said, looking at actual resales of like-for-like properties shows that price performance has not been as smart as suggested by median prices (which are distorted by development).<br><br>Unfortunately many property investors hopped on to the mining boom bandwagon around 2012 egged on by seminar groups and promoters, and are somewhat more precariously placed as voluntary administration looms large for Arrium.<br><br>Don't get me wrong, I hailed from a depressed steel city myself, and the last thing anyone with a heart wants to see is a single job lost. But the steelworks is not viable, and it appears likely to close without government handouts, and as such the housing market is wobbly to say the least.</div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
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Whyalla wipeout on the brink (redux): Pete Wargent

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<p>I’m not sure just how closely you have been following Australia’s property markets but what I can add is we are now starting to see some amazing trends emerging that will have both negative and positive outcomes.</p>
<p>This week we read that despite our national apartment building boom rents continue to rise. With approximately 30,000 apartments nearing completion in Sydney I predict that we have seen the rental peak. Unbeknown to many the major banks have already started black spotting many areas across Australia – where they are now no – go areas for future lending. For example, where you have an area that has undergone unprecedented new apartment high density developments you can expect values to start decreasing quite rapidly.</p>
<p>In Sydney the areas on ignore include, Darling Harbour, Dawes Point, Haymarket, Millers Point, Sydney, Sydney South, Waterloo, Annandale, Zetland, Homebush and Arncliffe. It will only be a matter of time before these areas spread further given the sudden – impact of oversupply where the vast majority of these properties will be left fighting it out in this newly created competitive rental market. It is quite unprecedented to see the lenders adopting this strategy given they are creating their own problems although they did approve the respective loans.</p>
<p> </p>
<p>Gen Y (or Gen Why? as I call them) should stop complaining and consider themselves lucky that they missed most of this modern day apartment investment boom. Since December 2008, when the Rudd government moved the off – the – plan apartment overseas buying ratio from 50 per cent to 100 per cent where the large percentage of these buyers came from Asia, which has a combined population of approximately 4 billion people compared to our 24 million. Whilst I certainly don’t agree with this decision we have introduced foreign owners although the debt remains local – another big problem.</p>
<p>Then of course it would be remiss of me not to mention that the Australian Taxation Office (ATO) has gladly accepted the role of “Big Brother” where every single property transaction in Australia dating back to 1985 now being scrutinised. Whilst the ATO has been remarkably quiet on the announcement side of developments this is an election year and the decision to hand the ATO total ownership of Australian property data was a decision by the present government, so we can expect this to figure prominently in the forthcoming election debate.</p>
<p>Now if developments were not getting interesting we now have the Panama Papers (the largest leak in journalistic history) which the ATO would be all over given 800 Australians managed to make guest appearances as a direct result from the leaked papers.</p>
<p>Just what the exposure to Australian property markets is remains to be seen although I did read in <em>The Guardian</em> this week – “Which is exactly why today’s revelations about the connections between tax havens and property ownership are so important. Revealed in the leaked documents was the fact that 2,800 Mossack Fonseca companies are connected to more than 6,000 UK title deeds, worth at least £7bn. On top of this, according to Guardian analysis, more than 90,000 properties in England and Wales are listed in the Land Registry to overseas owners, at least 75,000 of which are owned by companies or individuals registered in tax havens.”</p>
<p>Now can you start to see why raising the overseas buyers’ ratio from 50 per cent to 100 per cent could have a serious impact on our Australian property markets? Given all that is presently going on it would be sage advice to closely monitor exactly what is going on in these areas of high density development.</p>
<p>To be fair many areas saw very little development so they will go through this with minimum downside to property prices and rental returns. Having said that the property aggregators bundle all the statistics into the one bundle so rents will then show signs of easing although in some areas it will be quite the opposite.</p>
<p>I have no doubt that the role the ATO is currently playing within the tapestry of the Australian property markets will have a defining outcome that will result in many forced sales. Just what effect this will have on property prices is way too early to call although I see the investment market under significant pressure with all presently going on. Then again there will be a knock – on effect with all the new developments which are presently in the re – zoning and planning stages more particularly, those areas that already that are already marked as being over developed – over supply.</p>
<p>On the other hand the owner operated housing market has just been ambling along and looks to have well and truly dodged this modern day investor bullet. If there were to be an investor market collapse the owner occupiers would then be placed again with the opportunity of a lifetime with record low cash rates coupled with an investor market collapse. Yes, we have seen such markets before although never on this grand scale.</p>
<p>In my opinion, these are the markets you should be closely following on high visual alert.</p>
<h5>MOSMAN – 2088</h5>
<p>• Number of houses on the market this time last year – 56</p>
<p>• Number of houses on the market last week – 45</p>
<p>• Number of houses on the market this week – 43</p>
<p>• Number of apartments on the market this time last year – 53</p>
<p>• Number of apartments on the market last week – 46</p>
<p>• Number of apartments on the market this week – 48</p>
<h5>CREMORNE – 2090</h5>
<p>• Number of houses on the market this time last year – 0</p>
<p>• Number of houses on the market last week – 5</p>
<p>• Number of houses on the market this week – 6</p>
<p>• Number of apartments on the market this time last year – 8</p>
<p>• Number of apartments on the market last week – 26</p>
<p>• Number of apartments on the market this week – 14</p>
<h5>NEUTRAL BAY – 2089</h5>
<p>• Number of houses on the market this time last year – 0</p>
<p>• Number of houses on the market last week – 7</p>
<p>•Number of houses on the market this week – 11</p>
<p>• Number of apartments on the market this time last year– 42</p>
<p>• Number of apartments on the market last week – 26</p>
<p>*Number of apartments on the market this week – 24</p>
<p> </p>
<p><em><span>ROBERT SIMEON</span> is a director of </em><em><a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> </em><em>and has been selling residential real estate in Sydney since 1985. <br>He has also been writing real estate blog </em><em><a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> </em><em>since 2000. </em></p>
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Why property markets keep confusing us: Robert Simeon

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<div>It's almost becoming an annual tradition that the Treasury scrambles until 4.59pm on a Friday before pinging out the Foreign Investment Review Board (FIRB) Annual Report and nipping off for a few cold ones.</div>
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<div>And this year the finance team surely did not disappoint scrimmaging until mere moments before "schooner o'clock" on Friday before delivering the goods!</div>
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<div>Broadly as expected total foreign investment in Australia was very strong in FY2015, increasing by +16.3 percent to $194.6 billion, with real estate (both commercial and residential) the largest sector at $97 billion.</div>
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<div>The total number of real estate approvals increased from 23,428 to 37,347 in FY2015, mainly for new dwellings.</div>
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<div>Real estate approvals have more than tripled in only two years. Bazinga. </div>
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<div>Proposed investment in real estate soared to $96.9 billion, incorporating $36.2 billion of commercial real estate proposals.</div>
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<p><br><strong><span style="text-decoration: underline;">Foreign investment in residential real estate</span></strong></p>
<div>Proposed foreign investment in residential real estate ripped from $34.7 billion in FY2014 to $60.8 billion in FY2015, a level that could even not have been imagined only two years earlier.<span style="line-height: 1.3em;"> </span>
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<div>No proposals were rejected in FY2015 following three rejections in the preceding year, although 40 percent of approvals were granted with conditions attached, such as time periods for development or the requirement for temporary residents to sell should they depart Australia (approvals are filtered by specific questions, and therefore are to a large degree self-selecting).</div>
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<div>One divestment order was made in May 2015 by the FIRB, with an established $39 million residential Sydney property having been purchased illegally by a foreign company.</div>
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<div>Thereafter in May last year responsibility for divestment orders was assumed by the Australian Taxation Office (ATO), and a further 26 divestment orders were actioned.</div>
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<div>There was a massive 60 percent increase in the number of residential real estate approvals, with about 80 percent of those approvals for purchases of under $1 million in value (i.e. apartments).</div>
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<div>The bulk of this monster increase in foreign investment related to new real estate, including developer off the plan purchases, meaning that in aggregate foreign investors accounted for nearly 60 percent of all new residential construction.</div>
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<div><span><strong><span style="text-decoration: underline;">China's rise</span></strong></span></div>
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<div><span>The value of total FIRB approvals for China has increased by around 68 per cent since the prior year and accounted for around 33 per cent of the total value of approvals by foreign country in FY2015.</span></div>
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<div><span>Approvals for all Chinese investment in real estate, incorporating residential and commercial investment, all but doubled to $24.3 billion.</span></div>
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<div>Finally, Melbourne retained its crown as the king of foreign investment in terms of residential real estate, reflecting the huge volumes of residential construction in that city, with Sydney comfortably  bopped into second place.</div>
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<div>There was also enormous foreign investment in vacant land in Victoria at $3.4 billion, far exceeding the $1 billion seen in New South Wales, for example.</div>
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<div>The above having been said, Queensland saw far larger increases in foreign residential real estate investment in percentage terms.</div>
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<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
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<div>Foreign investment in Australian residential real estate is something of a double-edged sword.</div>
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<div>It is abundantly clear that foreign investors became more active in the purchase of new dwellings in FY2015, and monumentally so, with most of that foreign interest coming from China.</div>
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<div>Foreign investment has thus been a crucial factor in the strength of this residential construction boom, accounting for more than half of the investment in new dwellings, helping in turn to keep rental growth subdued.  </div>
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<div>On the flip side, foreign developers in Sydney have shown a willingness on occasion to pay prices for development opportunities far in excess of what locals are generally prepared to pay, putting significant upwards pressure on land values.</div>
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<div>Whether this can level of investment in new dwellings can be sustained is less clear as the residential construction cycle passes its peak imminently.</div>
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<div>Clearly there is vast foreign interest in Australian property from China, and it seems reasonable to me to suggest that any holes in the FIRB Annual Report are likely to be errors of omission rather than errors of commission.</div>
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<div>As such, the above information acts as a useful indicator, but it may not be complete.</div>
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<div>With immigration now rising again, the share of overseas born Aussies at a 120 year high, and as the number of international students in Australia skyrockets, the potential pathways for foreign capital to ultimately find its way into established residential property markets are multiplying, particularly in the largest capital cities.<br><br>A final thought or question for you - what percentage share of these new apartments bought by investors from the Chinese mainland ever make it to the local rental market?</div>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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