<a href="https://www.apartments.com.au/new-apartments/smith-by-valli-collingwood-224-228-smith-street-collingwood-vic-3066">Smith Collingwood</a> is a new boutique apartment development bringing a refined, design-led approach to one of Melbourne’s most established inner-city neighbourhoods.

Designed by <a href="https://www.apartments.com.au/architects/pandolfini-architects">Pandolfini Architects</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/lisa-buxton-interiors">Lisa Buxton</a>, Smith by Valli sits on iconic Smith Street and comprises just 22 residences tailored toward owner-occupiers seeking a more considered style of apartment living.

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The design of Smith focuses on a north-facing orientation across all residences, a relatively uncommon feature in dense inner-Melbourne settings. Each apartment has been planned to maximise natural light and outlook, alongside a material palette defined by warm tones, custom joinery, and a full suite of Gaggenau appliances.

The development comprises a mix of one, two, and three-bedroom apartments, with pricing currently ranging from just under $1 million to around $4.85 million for the premium penthouse-level residences, reflecting growing demand for luxury owner-occupier product in Melbourne’s inner urban market.

Residents will also have access to a private rooftop garden designed as an elevated retreat above the city, &nbsp;featuring curated landscaping, veggie boxes, intimate seating areas and spaces for relaxed gatherings. Sustainability has also been integrated into the project through a 7-star energy rating and two secure bicycle facilities for every residence.

[smartcode_project:default project_id=140747 project_image_fid=367529]

Smith by Valli sits in the heart of one of Melbourne’s most established retail and hospitality strips, within walking distance of venues such as Falco Bakery, Carnation Canteen and Alimentari, alongside parks and everyday services. With a Walk Score of 99, the location reinforces the project’s positioning toward buyers prioritising walkability and access over car dependency.

With only a limited number of residences, Smith reflects growing demand for smaller, highly curated apartment developments that prioritise design quality, liveability, and connection to neighbourhood character.

[smartcode_project_cta:default project_id=140747]

Joel Robinson

Smith by Valli delivers design-led apartments to Melbourne’s inner north

<a href="https://www.urban.com.au/developers/far-east-consortium">Far East Consortium</a>’s 640 Bourke Street stands as a testament to&nbsp;<a href="https://www.urban.com.au/developments/melbourne-vic-3000">Melbourne</a>’s ability to bridge its storied past with a bold vision for the future.&nbsp;

Rising above the heritage-listed Eliza Tinsley building, the development reflects a broader shift toward adaptive reuse in the city, where historical assets are retained and reinterpreted as part of new residential development.

Designed by <a href="https://www.urban.com.au/architects/rothelowman">Rothelowman</a>, <a href="https://www.apartments.com.au/new-apartments/640-bourke-street-melbourne-640-bourke-street-melbourne-vic-3000">640 Bourke Street</a> incorporates the Eliza Tinsley building as its foundation, housing a grand gallery and lobby space that serve as both a functional and symbolic centrepiece. The heritage façade informs the tower’s design, creating a connection between Melbourne’s past and its contemporary skyline.

"It's a significant asset and wants to be celebrated and experienced by all residents every single time they go in and out of the building," Rothelowman Principal Stuart Marsland said.

[smartcode_project:default project_id=509 project_image_fid=365684]

Above this historic base, the 68-storey tower will deliver just over 600 residences, a notable reduction from earlier schemes, reflecting a deliberate move toward larger-format apartments and a stronger owner-occupier focus.

Unlike traditional CBD developments that prioritised investor stock, 640 Bourke Street has been repositioned to respond to changing buyer expectations.

"The discussion was all around making 640 Bourke Street the best residence to live in, to be much more focused on the people in the building rather than people looking at the building," Marsland explained.&nbsp;

This shift is evident in the development’s interiors, which emphasise practical luxury with spacious layouts, high ceilings, and floor-to-ceiling windows framing sweeping views of Melbourne and Port Phillip Bay.&nbsp;

“What it's meant for 640 Bourke is we've actually reduced the number of apartments. We've increased the overall size of the apartments. We don't have any studios in here, and what that does for a project is it elevates it," Lauren Sheldon, Far East Consortium’s Director of Sales and Marketing, said.&nbsp;

[smartcode_project:default project_id=509 project_image_fid=365687]

Rothelowman Associate Jun Chang added, "We were given the opportunity to be more generous. The apartments became bigger and squarer than any other apartments which had been designed in the CBD before that."&nbsp;

Amenities spanning more than 3,000 sqm across multiple levels further reinforce this focus on resident experience. These include a pool, gym, co-working areas, and a range of hospitality-inspired spaces such as a whisky lounge, library, and private dining rooms, many drawing reference from traditional bathhouses and Melbourne’s laneway culture.

"We wanted to make both the pool and the gym area to be absolutely destinational, and when you traverse across to these spaces, there is a gentle familiarity to the beautiful notions of the hammams and the Roman baths, a gentle nod to history," Chang noted.

At street level, the project contributes to the ongoing transformation of the western CBD, with upgrades to Langs Lane and the introduction of retail, hospitality, and gallery spaces designed to activate the precinct and strengthen its connection to the surrounding city fabric.

[smartcode_project:default project_id=509 project_image_fid=365689]

The location places residents within walking distance of Southern Cross Station, Flagstaff Gardens, Queen Victoria Market, and the Docklands waterfront, positioning the development within a rapidly evolving inner-city neighbourhood.

"We believe it's the best site left in the city of Melbourne," Craig Williams, Executive Director at Far East Consortium, said.&nbsp;

640 Bourke Street is Far East Consortium’s 14th building in Melbourne’s western CBD.

"A very elegant designed building. It's going to be a Melbourne statement for many, many years to come."

One-bedroom apartments are priced from around $640,000, with 640 Bourke Street targeting completion in 2029.

Renders shown are Artist's Impressions correct as of May 2026.

[smartcode_project_cta:default project_id=509]

Heritage-led design anchors Far East Consortium’s 640 Bourke St, Melbourne

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

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

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

Sydney’s YSG Studio makes Gold Coast multi-residential debut with BIG Projects at The Frederick

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

ALTA Property to deliver $200 million Queens Road apartment tower

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

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

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An ANZ retail banking facility in Mona Vale failed to sell at Burgess Rawson auction this morning.
It was passed in at $5.7 million
Situated at 10-12 Bungan Street, the building is leased to ANZ for 10 years until 2025 with options to 2040.
The building recently underwent building upgrades as well as an ANZ fitout to bring it up to corporate standards.
Net income on the property is currently $260,549 with 3.5% annual rent increases.
The tenant pays all outgoings.
The listing notes there is proposed zoning uplift allowing future development potential (STCA).
<img src="https://www.urban.com.au/images/2018/10/15/ANZ%202.JPG" alt="">
Set on a 294 square metre block, the two storey building last sold for $2.02 million in 2000.
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ANZ premises in Mona Vale fails to sell

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An ANZ retail banking facility in Mona Vale is set for October 23 auction.
Situated at 10-12 Bungan Street, the building is leased to ANZ for 10 years until 2025 with options to 2040.
The building recently underwent building upgrades as well as an ANZ fitout to bring it up to corporate standards.
Net income on the property is currently $260,549 with 3.5% annual rent increases.
The tenant pays all outgoings.
The listing notes there is proposed zoning uplift allowing future development potential (STCA).
<img src="https://www.urban.com.au/images/2018/10/15/ANZ%202.JPG" alt="">
Set on a 294 square metre block, the two storey building last sold for $2.02 million in 2000.
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ANZ premises in Mona Vale set for auction

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The Colonel is coming to St Kilda in time for summer.
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KFC will offer its famous “11 herbs and spices” fried chicken from the prime corner of Carlisle Street and Acland Street after signing a five-year lease over 90 sqm. 
Fitzroys agent James Spencer negotiated the lease, which includes with a five-year option, for <a href="https://www.realcommercial.com.au/property-retail-vic-st+kilda-502467738" target="_blank">70A Acland Street</a> at $80,000 per annum net.
KFC is currently undertaking its fit-out at the base of the apartment complex. Spencer acted on behalf of a local developer.
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“KFC wanted to capitalise on being in a prime location opposite Luna Park and McDonald’s, the new Palais Theatre, close to St Kilda beach and at the top of the popular retail and nightlife precinct of Acland Street,” Spencer said. 
“The recent conversion of Acland Street into Melbourne’s newest pedestrian mall made this property a sought-after prospect. 
"It has enhanced the vibrancy of the strip, which remains a popular tourist destination for interstate and overseas travellers, as well as Melburnians, and brought an added buzz to its thriving food and beverage and nightlife offering.” 
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jrobinson-rf4aSBido9

KFC headed for St Kilda's cosmopolitan Acland Street

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A 1900s warehouse conversion in Newtown, currently the home to Brewtown Newtown, has been listed for sale.
The property, which began life as an ambulance station for the local area, is set to be traded for the first time in over two decades.
It was 1996 when it was bought for $400,000.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/15/brew2.jpg" alt="">
Over the years the building at <a href="https://www.realestate.com.au/property-warehouse-nsw-newtown-129510646" target="_blank">6-8 O’Connell Street</a> has also housed an artificial flower business and a bookstore.
Some of the original features have been retained, such as the oregon and steel beams and a large atrium. There's steel framed windows and original staircase and floors.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/15/brew3.jpg" alt="">
The 390 sqm commercial space a 210 sqm parcel has eight metre O'Connell Street frontage.
LJ Hooker agent Phil Scarlett is marketing the property for a November 13 auction. 
The property has a five + five year lease, with a rental income of $169,000.
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It is zoned residential, with existing commercial usage rights.
Brewtown Newtown is the brainchild of Simon Triggs and Charles Cameron, who met when working at fellow coffee roasters Toby’s Estate.
Downstairs is the main dining and cafe area, while the upper level plays home to a retail section focused on artisan goods and a bakery.
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Brewtown Newtown premises for sale

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EXPERT OBSERVER
Total housing finance was lower as expected back in August at $30.67 billion in seasonally adjusted terms, well down from the peak of above $34 billion a year earlier.
The Reserve Bank of Australia posted some useful insights on household finances, financial stress (or rather the lack of it), and the impact of tighter lending standards on loan sizes.
The RBA doesn't always help itself when citing very old data, but made some handy insights on borrowing capacity, specifically noting how most loans are made significantly below borrowing capacity.
In the surveyed figures only about 13 per cent borrowed 90 per cent or more of the maximum amount potentially available, while some two-thirds borrowed only 70 per cent or less of their capacity (thereby implying that tighter lending standards only impact some borrowers).
This was to some extent borne out by the housing finance data, with average loan sizes having continued to rise for owner-occupiers to be significantly higher than a year earlier, including in all three of the most populous states.
The borrowers most likely to be materially impacted by tighter lending standards include portfolio investors, and this is also reflected in the totals for investment loans.
The monthly trend result for investment loans has fallen from $14 billion at the 2015 peak to $10 billion, suggesting that the best performing properties are likely to be those actively sought by homebuyers (and the worst, investment units designed primarily for leasing).
More interest-only loans were reset in the third quarter.
Non-banks have been picking up more business, as expected.
With construction loans and the number of new dwellings financed now in decline new supply will be dropping off in time.
First homebuyers continued to account for about 18 per cent of new home loans, partly driven by incentives.
PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.
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Housing finance squeezed in August: Pete Wargent

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EXPERT OBSERVER
Key points
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<div class="column">1. The current pullback in shares has been triggered by a range of things – but most notably worries about rising US interest rates and the US/China conflict.</div>
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 2. Shares may still have more downside, but we are of the view that it’s just another correction.</div>
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 3. Key things for investors to bear in mind are that: corrections are normal; in the absence of recession, a deep bear market is unlikely; selling shares after a fall locks in a loss; share pullbacks provide opportunities for investors to buy them more cheaply; while shares may have fallen, dividends haven’t; and finally, to avoid getting thrown off a long-term investment strategy it’s best to turn down the noise during times like this.</div>
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Rough Patches
Every so often shares go through rough patches. We saw this most recently around February on the back of US inflation and interest rate concerns and the start of US tariffs which saw US shares and global shares fall roughly 10% and Australian shares fall 6%. Shares mostly recovered – even getting through the seasonally weak months of August and September surprisingly well – with US shares making new records and Australian shares hitting a ten-year high, but the worry list has returned again with US, global shares and Australian shares now down around 7% from their recent high. This note looks at the issues for investors and puts the falls into context.
What’s driving the latest plunge?
The recent plunge reflects a range of factors.
<ul>
<li>Investors have started to worry again that the very strong US economy will push the Fed into tightening a lot more and that this will cause a further sharp rise in bond yields which will threaten growth and share market valuations.</li>
<li>The trade conflict between the US and China is continuing to intensify and spilling over into other areas.</li>
<li>Technology shares, which have been key drivers of the US share markets rally (and outperformance) have been vulnerable – being somewhat overvalued and facing increased regulation in the US (which is something that President Trump has been threatening).</li>
<li>Rising oil prices due to strong global demand and threats to supply have added to concerns about inflation and growth.</li>
<li>Problems in the emerging world partly due to rising US interest rates poses a threat to global growth as reflected in a recent downgrade to the IMF’s global growth forecasts.</li>
<li>Nervousness remains in the US around President Trump and the Mueller inquiry and the upcoming US mid-term Congressional elections.</li>
<li>Tensions in the Eurozone regarding the Italian budget are weighing on European shares.</li>
<li>October is also known for share market volatility and this October is the 31st anniversary of the 1987 crash which often seems to create a bit of apprehension.</li>
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Because shares have fallen rapidly they are technically oversold and so could have a short-term bounce. But given that many of these issues could get worse before they get better the risk is that the pullback has further to go.
Considerations for investors
Sharp market falls with headlines screaming that billions of dollars have been wiped off the share market (funny that you never see the same headlines on the way up!) are stressful for investors as no one likes to see the value of their investments decline. However, several things are worth bearing in mind:
First, periodic corrections in share markets of the order of 5- 15% are healthy and normal. For example, during the tech/dot. com boom from 1995 to early 2000, the US share market had seven pull backs greater than 5% ranging from 6% up to 19% with an average decline of 10%. During the same period, the Australian share market had eight pullbacks ranging from 5% to 16% with an average fall of 8%. All against a backdrop of strong returns every year. During the 2003 to 2007 bull market, the Australian share market had five 5% plus corrections ranging from 7% to 12%, again with strong positive returns every year. More recently, the Australian share market had a 10% pullback in 2012, an 11% fall in 2013 (the taper tantrum), an 8% fall in 2014, a 20% fall between April 2015 and February 2016 and a 7% fall earlier this year all in the context of a gradual rising trend. And it has been similar for global shares, but against a strongly rising trend. See the next chart. While they can be painful, share market corrections are healthy because they help limit a build-up in complacency and excessive risk taking.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/12/AMP%201.jpg" alt=""> 
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Related to this, shares climb a wall of worry over many years with numerous events dragging them down periodically, but with the long-term trend ultimately up &amp; providing higher returns  than other more stable assets. Bouts of volatility are the price we pay for the higher longer-term returns from shares.
 <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/12/AMP%202.jpg" alt="">
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Second, the main driver of whether we see a correction (a fall 5% to 15%) or even a mild bear market (with say a 20% decline that turns around relatively quickly like we saw in 2015-2016) as opposed to a major bear market (like that seen in the global financial crisis (GFC)) is whether we see a recession or not – notably in the US. The next table shows US share market falls greater than 10% since the 1970s. I know it’s a bit heavy – but I like this table! The first column shows the period of the fall, the second shows the decline in months, the third shows the percentage decline from top to bottom, the fourth shows whether the decline was associated with a recession or not, the fifth shows the gains in the share market one year after the low and the final column shows the decline in the calendar year associated with the share market fall. Falls associated with recessions are highlighted in red. Averages are shown for the whole period and for falls associated with recession at the bottom of the table.
 <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/12/AMP%203.jpg" alt="">
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Several points stand out. First, share market falls associated with recession tend to be longer and deeper. Second, falls associated with recessions are more likely to be associated with negative total returns (ie capital growth plus dividends) in the associated calendar year as a whole. Finally, as would be expected the share market rebound in the year after the low is much greater following falls associated with recession.
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So whether a recession is imminent or not in the US is critically important in terms of whether we will see a major bear market or not. In fact, the same applies to Australian shares. Our assessment remains that US/global recession is not imminent:
• Still high levels of business and consumer confidence globally are only just starting to help drive stronger consumer spending and business investment.
• While US monetary conditions have tightened they are far from tight and they are still very easy globally and in Australia (with monetary tightening still a fair way off in Europe, Japan and Australia). We are a long way from the sort of monetary tightening that leads into recession.
• Fiscal stimulus will boost US growth into next year, partly offsetting Fed rate hikes.
• We have not seen the excesses – in terms of debt growth, overinvestment, capacity constraints and inflation – that normally precede recessions in the US, globally or Australia.
Reflecting this, global earnings growth is likely to remain reasonable providing underlying support for shares. So, for all these reasons its likely that the current pull back is more likely to be a correction rather than a major bear market.
Third, selling shares or switching to a more conservative investment strategy or superannuation option after a major fall just locks in a loss. With all the talk of billions being wiped off the share market, it may be tempting to sell. But this just turns a paper loss into a real loss with no hope of recovering.
Fourth, when shares and growth assets fall they are cheaper and offer higher long-term return prospects. So, the key is to look for opportunities the pullback provides. It’s impossible to time the bottom but one way to do it is to average in over time.
Fifth, while shares may have fallen, dividends from the market haven’t. So the income flow you are receiving from a well- diversified portfolio of shares remains attractive, particularly against bank deposits.
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Sixth, shares and other related assets often bottom at the point of maximum bearishness, ie just when you and everyone else feel most negative towards them. So the trick is to buck the crowd. “Be fearful when others are greedy. Be greedy when others are fearful,” as Warren Buffett has said.
Finally, turn down the noise. At times like this, negative news reaches fever pitch. Talk of billions wiped off share markets and warnings of disaster help sell copy and generate clicks and views. But such headlines are often just a distortion. We are never told of the billions that market rebounds and the rising long-term trend in share prices adds to the share market. Moreover, they provide no perspective and only add to the sense of panic. All of this makes it harder to stick to an appropriate long-term strategy let alone see the opportunities that are thrown up. So best to turn down the noise and chill out – yeah, I agree it’s sometimes easier said than done, but still!
Dr Shane Oliver Head of Investment Strategy and Chief Economist AMP Capital
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The pullback in shares - seven things investors need to keep in mind: Shane Oliver 

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EXPERT OBSERVER 
This month’s small gain follows a 5.2% fall through August and September. During that period the boost from the tax cuts announced in the May budget had faded while the leadership change; mortgage rate increases; declining house prices and rising petrol prices were weighing on confidence.
It is encouraging that these negatives seem to have, at least for the time being, run their course. Several positives have likely helped stabilise the Index, including strong economic growth, a solid labour market and ongoing recoveries in the previously weak mining states.
The net effect has seen the headline index holding slightly above the 100 line indicating that optimists are just outnumbering pessimists. The slight ascendency of optimists has been the case for 11 consecutive months since December 2017. That contrasts with the previous 12 months between December 2016 and November 2017 when the Index registered below 100 for 11 of those 12 months.
Concerns around interest rates and house prices are still apparent. The sub-group detail showed sentiment amongst households with a mortgage continued to weaken in October, dipping a further 0.8% to be down 6.4% over the last two months. Interestingly, the breakdown by voter group suggests some of the negative sentiment impact from the change in Prime Minister in late August may have reversed with confidence amongst those identifying as Coalition voters recovering about two thirds of the 6.4% drop recorded in September.
Most index components recorded small gains in October. Assessments of family finances showed the most promising revival. The ‘finances vs a year ago’ sub-index rose 2.6% to be comfortably above levels this time last year, albeit still a couple of percentage points below the highs seen earlier this year. The forward view is less convincing. The ‘finances, next 12 months’ sub-index only edged up 0.6% and is 4.1% below its high following the announcement of the tax cuts in the Budget in May.
Consumer expectations for the economy also showed mixed moves. The ‘economic outlook, next 12 months’ sub-index posted a solid 2.3% rally but longer term expectations continued to soften. The ‘economic outlook, next 5years’ sub-index is now down 9.1% from the five year high recorded back in July.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/10/consumer%20sentiment%201.jpg" alt="">
Spending-related sentiment showed little change on the relatively downbeat tone in recent months. The ‘time to buy a major household item’ sub-index inched 0.1% higher but is still around the lowest levels seen since November last year.
Labour market expectations, which were a notable bright spot in the weak September survey, softened a touch in October. The Westpac Melbourne Institute Unemployment Expectations Index lifted 1.7% (recall that higher reads mean more consumers expect unemployment to rise in the year ahead). Despite this, the index still shows a clear improvement from the softer reads through June-July-August with a solid 5% improvement on a year ago. Most of this is coming from a more balanced performance across the major states, with a particularly dramatic turnaround in labour market expectations in Western Australia.
<a href="https://www.propertyobserver.com.au/images/2018/10/10/consumer%20sentiment%202.jpg" target="_blank">Click here</a> to enlarge:
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/10/consumer%20sentiment%202.jpg" alt="">
Consumer views around housing continue to deteriorate. The ‘time to buy a dwelling’ index slipped a further 0.9% following September’s 4.8% fall, unwinding all of the 5.5% gain in August. Despite the weakening, buyer sentiment is still well above the lows seen through mid-2017.
Consumer expectations for house prices posted another sharp fall in October. The Westpac Melbourne Institute Index of House Price Expectations dropped 7.4% to 101.4, taking the index below its 2015 low point to the weakest level since the first month the survey question was run, in May 2009. The state detail showed a particularly sharp 20.3% drop in Victoria, suggesting the price correction in Melbourne, which has been slower to come through than in Sydney, is starting to bite.
Bill Evans is the Chief Economist for Westpac
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Consumer sentiment stabilises: Bill Evans

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A recently opened boutique grocer in Sydney’s Milsons Point has been listed with $5.5 million hopes.
The property at 88 Alfred Street is run by QE Foodstores and is the group’s ninth offering, with other stores in Balmain, Camperdown, Darlinghurst, Newtown, Randwick, Waterloo and Waverley.
It is set to go under the hammer in early November.
Interest is expected from local, interstate and offshore investors, said Savills Australia’s David Hickey, Tom Tuxworth and Nick Tuxworth.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/10/88%20Andrew%20Street%20Milsons%20Point%20-%20internal%203.jpg" alt="">
“The new 10-year lease with two five-year options to renew and strong annual increases will attract buyers from local, national and international markets looking for secure, super-prime investments in the sub-$10 million category,” Hickey said.
“Throughout 2018, we have seen a weight of capital chasing retail properties in prime locations, particularly in highly populated and affluent inner-urban and suburban areas.
“Investors are certainly looking for quality over quantity in the current market, and 88 Alfred Street fits that category.” 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/10/88%20Andrew%20Street%20Milsons%20Point%20-%20internal%202.jpg" alt="">
He said QE Foodstores owners had recognised a gap in the Lower North Shore retail market for a boutique grocery store.
“QE Foodstores took a strategic view on the local Milsons Point, Kirribilli, McMahons Point and Blues Point precinct when they noticed the community had been starved of a quality supermarket for a very long period of time,” Mr Hickey said.
“The business decided to venture to Sydney’s North Shore and open its ninth grocery store to cater to this pent-up demand for fresh, quality and artisan produce.
“At 88 Alfred Street, the store benefits from being situated in Sydney’s second most-liveable suburb, only a 10-minute walk from the Sydney CBD and North Sydney.
“These shoppers demand personalisation, special services and quality products, which is what QE Foodstores has strived to deliver since opening its first store 16 years ago,” he said.
“The owners’ goal is to keep growing and provide a great range of products and services to many more Sydney neighbourhoods.
“They are constantly on the lookout for new sites in the inner city and east, and they’re now very seriously considering additional sites on the Lower North Shore.”
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Boutique Milson's Point supermarket set for auction 

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A Chinese buyer has flown in from Beijing to buy a Hampton retail asset, paying $3.6 million - $200,000 over reserve – on a tight 3.2% yield.
The 2 Small Street property, comprising a 368 square metre shop on a 438 square site, was sold at a healthy $8219 a square metre land rate.
Just 150 metres from Hampton railway station and within a short distance of Hampton Beach, the highly exposed corner site offered dual access points and on-site parking for five cars. The property was sold fully leased, returning $113,500 per annum net.
CBRE Senior Manager, Rorey James, who sold the property with Jing Jun Heng, Nic Hage and Mark Wizel, said the buyer had pointed to Australian commercial real estate as being a safe haven for investment.
"This is another example of the post June 30 trend showing encouraging signs that Chinese money is beginning to flow again," he said.
"Governments may put hurdles in the way but they cannot stop the almost irresistible perception of safety in Australian property.
“How significant that renewed flow is we will see over coming months, particularly towards the end of the year and into the new year with the conclusion of transactions."
Despite the restrictions on off-shore Chinese investors, CBRE has sold 22 properties worth more than $200 million to Asia-linked buyers since the first week of July.
Heng said the property had attracted a strong field of local, interstate and off-shore purchasers, who were also drawn to the potential development upside of a site within Hampton’s prime retail precinct.
"The property offered encouraging value-add growth prospects in the medium to long term based on surrounding heights being achieved and the flexibility of the underutilised landholding in the best location in Hampton," Heng said.
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Buyer flies in from Beijing to swoop on Hampton retail property

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Commercial property confidence is at much more encouraging levels than its residential counterpart, according to the latest ANZ Property Council Survey.
The survey found that the gap in confidence between commercial and residential property has now reached record levels.
Despite this, commercial sentiment has also dropped.
The drop in sentiment in the most recent quarter occurred across all segments, although the retail segment is still the weakest.
<a href="https://www.propertyobserver.com.au/images/2018/10/11/AMP%20Capital%201.JPG" target="_blank">Click to enlarge </a>
<img src="https://www.urban.com.au/images/2018/10/11/AMP%20Capital%201.JPG" alt="">
Sluggish income growth, rising mortgage rates and utility costs and reduced wealth effects as house prices fall are all issues reducing the level of household consumption taking place.
Online retailing and global competition are also continuing to hinder domestic bricks and mortar retailers.
However, the industrial segment is now the most optimistic, displacing tourism.
<a href="https://www.propertyobserver.com.au/images/2018/10/11/AMP%20Capital%202.JPG" target="_blank">Click to enlarge </a>
<img src="https://www.urban.com.au/images/2018/10/11/AMP%20Capital%202.JPG" alt="">
Firms in the industrial industry report that the construction pipeline has increased further over the recent quarter, especially in New South Wales, while it remains elevated in Victoria and Queensland.
Danial Gradwell and David Plank, the authors of the report stated:
"The outlook for capital values is solid, which we think is consistent with demand coming from the strong pipeline of infrastructure projects coming through in those states.
"In addition, while online retailing is disrupting the retail sector, the storage and logistics requirements are supporting the industrial sector."
<a href="https://www.propertyobserver.com.au/images/2018/10/11/AMP%20Capital%203.JPG" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2018/10/11/AMP%20Capital%203.JPG" alt="">
"It is disappointing to see that survey respondents’ appraisal of the federal government has retreated considerably," the report said.
"While the September quarter showed a solid improvement in the government performance index (likely in response to the 2018-19 Budget), the subsequent leadership spill in August appears to have hindered confidence once more."
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