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


Joel Robinson

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

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


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

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


ALTA Property to deliver $200 million Queens Road apartment tower

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


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

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


First look: NewQuest Property proposes new St Ives apartment development

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


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

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<p>If there were a term that I would love to see introduced into the Australian property vernacular it would be just the one word – “shifts”.</p>
<p>For some time now I have found it most frustrating the way commentators and (to a much lesser extent) politicians raise topics, such as housing affordability is a fine example, Headlines such as “Australia’s housing affordability improved in the first three months of 2016” mean very little and serve little purpose. The problem with the housing affordability debate is that it focuses on Sydney and Melbourne which are the two most sort after locations whilst there is no mention of the affordable areas.</p>
<p>Rather we should for example look at what’s actually driving our specific market demographics on a suburb by suburb basis. Only then can we actually get a proper idea of what is actually happening where, believe me, we are now seeing some healthy shifts and some alarming shifts.</p>
<p>For example, in many Sydney suburbs we are now seeing record low stock levels particularly with houses – so what caused these shifts? In the vast majority of cases it always comes back to government policies whether federal, state or local. The reason why we are seeing less houses on the markets is because property values have grown to such a level that the barrier is now stamp duty. For a house purchased at $3,000,000 it is $150,490 and a house purchased at $4,000,000 it is $220,490 so home owners are now going to Plan B – refinancing and renovating.</p>
<p> </p>
<p>When I speak to property valuers in our area I’m told that their workloads are now split 50/50 between purchases and re-financing which is a shift that started 3 years ago. Three years ago in Mosman there would be around 125 houses on the market each week where today there is around 50, so homeowners are refinancing to renovate with a view to a longer hold.</p>
<p>In November 2013, the value of housing finance was 26 percent higher than the previous year. This shift has continued ever since which clearly identifies where homeowners are shifting their monies taking household debts to historic highs with historic low interest rates.</p>
<p>Mosman has 5,890 houses approximately with 55 on the market today. Cremorne has 7,135 houses approximately with 7 on the market today. Neutral Bay has 1,109 houses approximately with 8 on the market today. Cammeray has 1,275 houses approximately with 9 on the market today. Northbridge has 1,914 houses approximately with 10 on the market today and Seaforth has 2,317 houses approximately with 18 on the market today. This has been the pattern for the last three years and don’t expect this to change any time soon.</p>
<p>Now when we look at the shifts in the new apartment markets this is where it gets scary because the blame here is shared equally between the state and federal governments. When the state government starts introducing a strategy for massive high–density developments and the federal government changes the ratio restrictions from 50 per cent to 100 per cent for overseas buyers on off–the–plan purchases, as I said a few years ago – train wreck.</p>
<p>Recently we read that the major banks ceased foreign lending so I immediately thought something is happening here as banks never turn away new revenue streams. Now we read that Westpac and the ANZ have found approximately $1 billion in Chinese mortgage application fraud. No doubt a precursor to the Australian Taxation Office clampdown on non – resident purchases so the anxious buyers then shifted to federal government endorsed off–the–plan purchases. It’s anyone’s guess where this will end up, although you would be right in saying this is only going to get worse. More particularly this has the potential so see a major revaluation of existing apartment purchases significantly down. Little wonder the major lenders announced recently that they were not approving any more loans in many Sydney suburbs.</p>
<p>Now shift your attention to the upcoming federal election where the Liberal party is not going to touch negative gearing and the Labor party are going to only make negative gearing available to new properties. Can you see another potential shift in the markets if negative gearing only applies to the new developments where given what’s currently happening nobody will be buying anything until these markets sort themselves out?</p>
<p>Then I read an article recently where Harry Triguboff announced that recently sales to Chinese buyers had halved and that Chinese buyers over the past few years had accounted for 80 percent of new Sydney apartment sales. Yes – 80 percent! Why is this not an election issue?</p>
<p>Now to put this into further perspective household consumption is actually what’s presently driving the Australian economy. In the December quarter 2015 national accounts household consumption delivered 0.4 percent of the total 0.6 percent growth.</p>
<p>Now there are a few shifts that need much closer examination. First signs for the NSW government will be a dramatic collapse in stamp duty revenues which is happening big time. The once ever dependable existing house market is renovating or has renovated so no financial joy there either. Then there will be a dependence on the off–the–plan purchases actually completing, although that’s looking shaky too. With 93 percent of investors preferring to buy existing properties and now the ALP wants them to but new properties – well that won’t work. We now know that nearly all the off–the–plan sales have gone to Asian investors.</p>
<p>The ALP need to be corrected on this as this policy change to negative gearing is Mining Tax Mark II.</p>
<h4>MOSMAN – 2088</h4>
<p>Number of houses on the market this time last year – 57</p>
<p>Number of houses on the market last week – 51</p>
<p>Number of houses on the market this week – 55</p>
<p>Number of apartments on the market this time last year – 49</p>
<p>Number of apartments on the market last week – 53</p>
<p>Number of apartments on the market this week – 50</p>
<h4>CREMORNE – 2090</h4>
<p>Number of houses on the market this time last year – 4</p>
<p>Number of houses on the market last week – 8</p>
<p>Number of houses on the market this week – 7</p>
<p>Number of apartments on the market this time last year – 14</p>
<p>Number of apartments on the market last week – 24</p>
<p>Number of apartments on the market this week – 23</p>
<h4>NEUTRAL BAY – 2089</h4>
<p>Number of houses on the market this time last year – 3</p>
<p>Number of houses on the market last week – 11</p>
<p>Number of houses on the market this week – 8</p>
<p>Number of apartments on the market this time last year – 27</p>
<p>Number of apartments on the market last week – 25</p>
<p>Number of apartments on the market this week – 21</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>
</body></html>

robertsimeon-hRNTwJyXkQ

Beware of the Sydney property shifts

<html><body>
<div>It's quite commonly argued that if dwelling prices aren't rising then investors will rush to the exits in order to sell their properties, particularly those recording net rental losses. </div>
<div> </div>
<div>It was a popular but flawed argument in 2011 too, come to think of it.</div>
<div> </div>
<div>However, while a significant number of new negatively geared investors in Sydney and Melbourne <em>are</em> making painful losses right now - some of them by design, even! - most investors are not, particularly in the prevailing low interest rate environment. </div>
<div> </div>
<div>This is partly because cash flows on investment property generally improve over time, with only a small share of the total number of investment property owners having bought their asset in the past year.<br><br>It is also partly because the losses reported by the Australian Taxation Office (ATO) include non-cash costs, which aren't incurred annually by the owner.<br><br><strong><span style="text-decoration: underline;">Reported losses</span></strong>
</div>
<div> </div>
<div>Superficially it would appear that a high proportion of investors are losing a good deal of cash, with more than 1.25 million taxpayers claiming net rental losses in FY2014, the most recent tax year for which detailed figures are available to date. </div>
<div> </div>
<div><a href="/images/2016/05/25/NG4.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
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<div> </div>
<div>However, all is not quite as it first appears.</div>
<div> </div>
<div>One of the reasons for this is that non-cash costs (specifically capital works and depreciation allowances) account for a goodly chunk of the reported losses. </div>
<div> </div>
<div>Indeed through increased awareness capital works claimed have increased substantially by 42 per cent since FY2011 to $2.7 billion.</div>
<p><a href="/images/2016/05/25/NG2.jpg" target="_blank"> Click to enlarge</a></p>
<div class="separator"><img src="/images/2016/05/25/NG2.jpg" alt=""></div>
<div class="separator"> </div>
<div>This has been one of the contributing factors in reducing the average net rental loss by 64 percent since 2008, although of course the predominant influence has been falling interest rates. </div>
<p><a href="/images/2016/05/25/NG3.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="/images/2016/05/25/NG3.jpg" alt=""></div>
<div>
<br><strong><span style="text-decoration: underline;">Example</span></strong><br><br>As an example of why most informed investors for whom cash flow is a key consideration need not consider selling even if house prices are stagnant for a period of time - or even falling - refer to the below hypothetical example of a two year old house bought recently by an investor in Brisbane.</div>
<div> </div>
<div>After the mortgage interest repayments and other cash holding costs the investor is making a small loss of a couple of hundred bucks in the first year. </div>
<div> </div>
<div>Yet because the house is relatively new the depreciation and capital allowances deductions are generous, allowing him or her to record a significant loss on their lodged tax return, thereby saving significant tax at their marginal rate.<br><br>Note that since tax is saved at the marginal rate, this strategy is particularly beneficial to higher rate taxpayers. </div>
<p><a href="/images/2016/05/25/NG1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/05/25/NG1.jpg" alt=""><br><br><span>The depreciation and capital allowances are clearly beneficial to the investor in this example.</span></p>
<div>Although the land component does not qualify for a capital works or a decline in value deduction, the total capital works and plant and equipment deduction claimable over 40 years might be around half of the total purchase price of the property (in th<span>is case, <span>~</span>$360,000). </span>
</div>
<div><span> </span></div>
<div><span>The ATO provides a detailed list of depreciable items in its Rental Properties Guide document.</span></div>
<div>
<strong><span style="text-decoration: underline;">Observations</span></strong><br><br>This is rarely well understood in market analysis, in all likelihood because much of the commentary railing against negative gearing is naturally enough undertaken by folk that have never owned a rental.</div>
<div> </div>
<div>The above example highlights a few things to me. </div>
<div> </div>
<div>Firstly, for investors wanting a strong cash flow or to reduce their tax liability, nearly new or newly renovated properties can be attractive for their depreciation benefits, particularly houses. </div>
<div> </div>
<div>Secondly, even if house prices are flat or fall for a period of time the investor in the example above is unlikely to be motivated to sell, particularly having already paid a lump sum of stamp duty and when considering the other entry and exit transaction costs. </div>
<div> </div>
<div>And thirdly, it seems obvious to me that (although I'm not campaigning for them myself) if it were deemed necessary there are a raft of potential avenues to tweak tax legislation to make property investment less attractive without taking a sledgehammer to the market. </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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Property investor average net loss reduced by 64 percent since 2008: Pete Wargent

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<p><span>Auction activity will rise this week, with CoreLogic currently monitoring a total of 2,301 capital city auctions, representing a 20 percent rise in activity compared with last week (1,920). </span></p>
<p><span>Despite the week-on-week rise, the number of capital city auctions compared to last year remains remarkably lower, given 2,792 were held over the same week last year.</span></p>
<p><a href="/images/2016/05/25/Screen%20Shot%202016-05-26%20at%203.44.12%20PM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2016/05/25/Screen%20Shot%202016-05-26%20at%203.44.12%20PM.png" alt=""></span></p>
<p>One of the significant differences when comparing this year to last year is the activity in Sydney. One year ago, over the week there were 1,149 Sydney auctions, while this year there are currently 732 scheduled. In Melbourne, the difference is less noticeable, with 1,110 scheduled for this week, compared to 1,248 one year ago. </p>
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<p>The busiest individual suburb for auctions this week is Melbourne’s Glen Waverley, where a total of 25 residential properties will be taken to auction. Reservoir (19), Craigieburn (16) and South Yarra (16), also in Melbourne, follow on from Glen Waverley as the busiest auction suburbs this week.</p>
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<p><span>Summary of last </span><span>week’s </span><span>results: </span></p>
<p><span>After recording a preliminary clearance rate of 70 percent last week, the final auction clearance rate revised down slightly, to 68.9 percent across 1,765 auction results. </span></p>
<p><span>The two largest auction markets of Sydney and Melbourne recorded the strongest clearance rates last week, at 73.2 percent and 70 percent, respectively, followed by Adelaide (68.8 percent) and Canberra (67.2 percent). </span></p>
<p><span>Results from last week show that across Queensland, auction clearance rates remained within 10.5 percentage points across the three main auction markets of Brisbane (50.9 percent), the Gold Coast (44.1 percent) and the Sunshine Coast (54.6 percent). </span></p>
<p><span>Regional New South Wales auction clearance rates were relatively similar to what was seen across the </span><span>state’s </span><span>capital city, at 71 percent for Hunter and 70.4 percent for Wollongong. The Geelong clearance rate of 70 percent across 20 auction results was the same as Melbourne, at 70 percent across a much more substantial 797 results. </span></p>
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Auction activity will rise this week: CoreLogic RP Data's Shana Miller

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<div id="post-body-3534858795590951741" class="post-body entry-content">
<div>The Detailed Labour Force figures reported that Greater Sydney's unemployment rate fell to just 4.8 percent in April. </div>
<div> </div>
<div>When tracked in rolling annual terms to smooth out the monthly volatility, Sydney's unemployment rate has been cascading lower for 26 beautiful months now.</div>
<div> </div>
<div>The unemployment rate in Melbourne has also been trending lower for 17 months, although the unemployment rate in Brisbane has stopped falling for the time being after an impressive run. </div>
<div> </div>
<div>Across most of the capital cities ex-Sydney unemployment rates seem to be converging to around a 6 per cent level, neither great nor amazingly bad.<br><br>Adelaide has been the outlier on this measure.</div>
<br><div class="separator"><a href="/images/2016/05/31/UNEMPLOYMENT.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/05/31/UNEMPLOYMENT.jpg" alt=""></div>
<br><div>Over the past two years New South Wales and Victoria (read: Melbourne) have created more than 85 per cent of net new employment (+333,000 jobs), although Brisbane has had a more than decent past 12 months (+34,900 jobs). </div>
<br><div class="separator"><a href="/images/2016/05/31/DLF1.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/05/31/DLF1.jpg" alt=""></div>
<strong><span style="text-decoration: underline;"><br></span></strong><strong><span style="text-decoration: underline;">Residex April update</span></strong><br><div>
<br>CoreLogic is reporting that Sydney's median home value has increased by 6.9 percent over the last quarter, the figure perhaps skewed higher by the running of some new parameters.<br><br>
</div>
<div>In its monthly market update Residex reported that Sydney's median house price increased by 0.4 percent month of April to $1,046,000.  </div>
<div>
<br>This is 10.6 per cent higher than one year ago, although the median looks to be struggling a bit to break new highs now.</div>
<br><div>Despite various gloomy predictions and talk of oversupply, Sydney unit prices increased by 1.3 per cent in the harbour city over the thee months to April to be 10.5 per cent higher over the year.<br><br>The median Sydney unit price is now at a new record high for unit prices anywhere in Australia of $695,000.<br><br><strong><span style="text-decoration: underline;">Dichotomy</span></strong>
</div>
<div> </div>
<div>How is this occurring despite lower stock turnover and somewhat lower mortgage finance in New South Wales?</div>
<div> </div>
<div>Without generalizing too much, the inner suburbs (where most units are located) are seeing feisty activity, but many of the outer or secondary suburbs are struggling. </div>
<div> </div>
<div>You can witness this trend in auction clearance rates, with the eastern suburbs, lower north shore, city &amp; south, and northern beaches sub-regions continued star performers. </div>
<div> </div>
<div>As you move away from the prized inner suburbs the market begins to look a little sketchier, while some areas are in all likelihood experienced declining prices.</div>
<br><div class="separator"><a href="/images/2016/05/31/Crs.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/05/31/Crs.jpg" alt=""></div>
<br><div>Remember that the reported median price is a midpoint of the frequency distribution, but it doesn't necessarily reflect what is happening across all markets.</div>
<br><div>Elsewhere, Residex reported that over the year to April there have been solid increases in house prices in Melbourne (10.8 per cent) and Brisbane (5.3 per cent). </div>
<div> </div>
<div>Residex noted that value declines in resources regions, although ongoing, appear to be easing.</div>
<div> </div>
</div>
<div class="post-footer"> 
<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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Sydney apartments surge: Pete Wargent

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<p>The Australian Prudential Regulation Authority (APRA) has released its quarterly Authorised Deposit-taking Institution (ADI) property exposures data for the March 2016 quarter. </p>
<p>This data is really valuable as it provides additional insight into the mortgage market, including data which is not available from the monthly housing finance statistics.</p>
<p><a href="/images/2016/06/01/Chart-1-4-580x207.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/06/01/Chart-1-4-580x207.jpg" alt=""></p>
<p>The data initially focuses on outstanding total values and shows that at the end of the March 2016 quarter there was $906.7 billion outstanding to owner occupiers and $501.3 billion to investors.  While total lending continued to rise, up 8.7% year-on-year, it is interesting to see how the tilt away from investment lending has progressed.</p>
<p>Over the past 12 months, total investor lending has increased by just 0.1% with the total value of investor mortgage lending outstanding down -3.2% from its June 2015 quarter peak.  The data also indicates that investor credit growth now sits significantly below the APRA imposed 10% pa speed limit.  This could lead to a rebound in lending to investors over the coming quarters.  Total lending to owner occupiers has continued to increase and is up 14.0% year-on-year.  In terms of the total value of outstanding mortgages, owner occupiers account for 64.4% compared to 35.6% to investors.  The proportion of outstanding mortgages to investors has fallen sharply from its recent peak of 39.0% in June 2015.</p>
<p><a href="/images/2016/06/01/Chart-2-3-580x211.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/06/01/Chart-2-3-580x211.jpg" alt=""></p>
<p>Although the total value of outstanding mortgages is rising you can see that growth is generally slowing.  Mortgages with offset facilities account for a record-high 43.0% of all outstanding mortgages and the value of these mortgages has increased 20.4% year-on-year.  Interest-only mortgages account for 39.3% of total outstanding mortgages, with the value having increased by 9.6% year-on-year.  Reverse mortgages account for just 0.5% of all outstanding mortgages with the value of outstanding mortgages up 1.4% year-on-year.  Only 2.4% of the value of outstanding mortgages are for low-documentation loans and 0.1% are other non-standard loans.  Year-on-year the value of outstanding low-documentation mortgages is -16.5% lower and other non-standard mortgages are -4.0% lower.  In fact the total value of outstanding low-documentation and other non-standard mortgages is at a record low.</p>
<p><a href="/images/2016/06/01/Chart-3-3-580x208.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/06/01/Chart-3-3-580x208.jpg" alt=""></p>
<p>The average outstanding mortgage balance was recorded at $251,900 in March 2016, having increased by 4.8% year-on-year.  At the end of March 2016, the average outstanding balances across loan types were: $307,200 for loans with an offset, $334,400 for interest-only, $96,500 for reverse mortgages, $192,200 for low-documentation and $193,400 for other non-standard loans.  All loan types except for low-documentation (-1.1%) and other non-standard (-7.0%) have seen the average balance increase over the past year: offset (6.3%), interest-only (5.0%), reverse mortgages (2.4%).</p>
<p>To date, all data analysed has focused on total balances outstanding, the following data will focus specifically on quarterly new lending.</p>
<p><a href="/images/2016/06/01/Chart-4-2-580x208.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/06/01/Chart-4-2-580x208.jpg" alt=""></p>
<p>Over the March 2016 quarter there was $81.7 billion in new mortgage lending, which was the lowest quarterly value of new lending since the March 2014 quarter.  This figure comprises of $56.0 billion in lending to owner occupiers and $25.7 billion in lending to investors.  The value of new lending to owner occupiers has increased by 16.1% year-on-year while the value of investor lending is -25.5% lower year-on-year.  The value of new lending to investors is the lowest since the March 2013 quarter and is -37.7% lower from its peak over the June 2015 quarter.  The data indicates that there has been a significant pull-back in new lending to investors over recent quarters.</p>
<p><a href="/images/2016/06/01/Chart-5-1-580x207.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/06/01/Chart-5-1-580x207.jpg" alt=""></p>
<p>With the value of new mortgage lending falling, the value of most loan types is now also falling.  Over the March 2016 quarter, 0.3% of new lending was for low documentation loans, 34.9% was for interest-only, 0.1% was for other non-standard loans, 46.5% was originated through third part channels and 3.8% of loans were approved outside of serviceability.  The value of new lending for low documentation mortgages was at a record low.  The value of new interest-only lending was the lowest since the March 2013 quarter.  The value of other non-standard lending was the lowest since the same quarter last year as was loans approved outside of serviceability.  The value of new mortgage lending by third parties was the lowest since the September 2014 quarter.</p>
<p>Higher loan to value ratio (LVR) lending is reducing meaning that borrowers are typically using larger deposits.  In fact, the value of new lending for LVRS above 90% in the March 2016 was the lowest since the March 2011 quarter and has fallen by -22.8% over the past year.  Lending for LVRs between 80% and 90% has increased by 2.7% year-on-year however, it has fallen over each of the past four quarters.  In fact, lending for LVRs above 80% represented 22.4% of all new lending in March 2016 which was its lowest proportion on record and well down from the peak in March 2009 where it accounted for 37.6% of all new lending.</p>
<p>The value of lending to investors is falling sharply as assessment criteria is tightened and investors are typically now charged a higher interest rate than owner occupiers.  Interest-only lending which APRA and the Reserve bank have previously sounded warnings about is also starting to fall and is now at its lowest level since March 2013.  Higher LVR lending which is associated with smaller deposits are also trending lower which indicates less risky lending.  The added benefit surrounding lower LVRs is that if a borrower has a deposit of more than 20% of the value of the property they can typically avoid lenders mortgage insurance (LMI).  New lending to loans outside of serviceability, low documentation loans and other non-standard loans has also been falling over recent quarters which is reflective of less risky lending practices being undertaken.  These emerging trends can only be positives for the stability and security of the Australian mortgage lending market.</p>
<p>Based on the data presented, it is apparent that tighter lending policies by lenders is having a noticeable impact on the mortgage market.</p>
<p><em>Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></p>
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Tighter lending policies see a reduction in investor and riskier lending types: Cameron Kusher

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<p class="Body">If you rely on mainstream media for your news, you probably won’t be aware of this: there has been a significant improvement in housing affordability in Australia recently.</p>
<p class="Body"><span style="line-height: 1.3em;">In fact, my reading of the HIA’s Affordability Report for the March Quarter is that the Housing Affordability Index for Australia is now the best it’s been in five years. In some parts of the nation, the situation is the best it’s been in 13 years.</span></p>
<p class="Body">Affordability nationally improved 2.7 percent in the March Quarter, compared to the December Quarter, despite slightly higher interest rates.</p>
<p class="Body">Affordability is significantly better than it was five years ago, because interest rates are much lower (notwithstanding the recent out-of-cycle increases), average earnings have been gradually rising and price growth (meaning changes in the national median dwelling price) has been relatively muted, despite three years of big growth in Sydney.</p>
<p class="Body">Very little was said about this in Australia’s major newspapers. They’re simply not interested in facts that conflict with their cherished storylines about an affordability crisis, young Australians being priced out of the market by foreign investors and negatively-geared Australian investors, and the Great Australian Dream being dead.</p>
<p class="Body">A long-standing joke in journalistic circles is that you never let the facts get in the way of a good story. A good story is, by definition, a negative one. If it bleeds, it leads. If something comes along that doesn’t fit the formula (for example, portrays a positive scenario or contradicts beloved beliefs), bury it.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">So we have a situation where the national affordability index portrays a strong position but few people realise it. The national median dwelling price has decreased and average earnings have risen. The situation would be better were it not for major banks lifting their mortgage rates.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">That’s the average national situation. As the HIA report points out, “the differences in affordability across and within states are still considerable”.</p>
<p class="Body">In aggregate, affordability improved 4.1 percent in the eight capital cities in the March Quarter, with a lesser improvement in the regional areas.</p>
<p class="Body">Sydney’s quarterly improvement was considerably larger than the national average. It recorded an 8.9 percent increase in affordability, while Perth was 4.9 percent better and Darwin 4.4 percent.</p>
<p class="Body">Sydney’s affordability is now at its most favourable since the March 2015 Quarter. Price growth has stopped and incomes have risen. But it still has some way to go before it gets in line with the national average situation of being the best in over five years. Regional NSW, on the other hand, needs only a marginal improvement to achieve that.</p>
<p class="Body">Melbourne’s affordability index has improved with a slight reduction in the median dwelling price and increases in earnings, but remains 4.4 percent less favourable than a year ago.</p>
<p class="Body">Brisbane’s affordability position, on the other hand, has deteriorated because the median dwelling price is up and average earnings are down (slightly).<span style="line-height: 1.3em;"> </span></p>
<p class="Body">But in Perth the affordability index improved 4.9 percent in the quarter and 9.9 percent for the year, because prices have been falling and incomes, surprisingly perhaps, have risen. Perth’s affordability position, and that of Western Australia generally, is the best it’s been for a long time. “Statewide affordability in WA is at its most favourable since the final quarter of 2003,” the HIA report says.</p>
<p class="Body">The position has improved also in Hobart and Tasmania. There the economy has been making notable strides and income growth is well above the national average. The HIA notes: “For Tasmania as a whole, affordability has reached its most favourable level since late 2003.”<span style="line-height: 1.3em;"> </span></p>
<p class="Body">In the Northern Territory, the housing affordability index is 11.3 percent better than a year ago. And it’s better than it’s been any time in at least the past five years. Darwin’s index has improved 13.9 percent compared to a year ago. The Darwin market peaked more than three years ago and prices have been trending downwards since then, but average earnings have been rising.</p>
<p class="Body"><em>Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a></em></p>
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Significant improvement in housing affordability: Terry Ryder

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<div>Whoa, there! It seems that inflation has disappeared into a puff of dust!</div>
<div> </div>
<div>Nothing like an outlying result to shake things up a bit, and today's Consumer Price Index (CPI) or inflation result for the March quarter was an absolute ripper!</div>
<div> </div>
<div>Headline inflation printed negative at -0.2 percent. </div>
<div> </div>
<div>This was miles below expectations and the second weakest reading in nearly two decades, taking the annual result all the way down to 1.3 percent (which is well below the target inflation range to 2 to 3 percent).</div>
<div> </div>
<div>The falls were broad based, with six out of the eleven CPI groups recording declines.</div>
<p><a href="/images/2016/04/28/A6.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/04/28/A6.jpg" alt=""></p>
<p> </p>
<div>More importantly, the "core" analytical series, which strips out outlying readings, notched an extraordinarily soft set of numbers to take the respective annual readings to a record low. </div>
<div> </div>
<div>I've diced the data up below to four decimal places, but all you really need to know is that the incredibly weak trimmed mean (0.2 per cent) and weighted median (0.1 per cent) inflation for the quarter have taken the annual readings down to exceptionally low levels at 1.7 per cent and only 1.4 per cent respectively.</div>
<div> </div>
<div><a href="/images/2016/04/28/A5.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/04/28/A5.jpg" alt=""></div>
<div> </div>
<div>Non-tradables inflation, which is taken to be a reasonable proxy for domestic price pressures, fell to its lowest annual reading since some seventeen years ago in June 1999. </div>
<div> </div>
<div><a href="/images/2016/04/28/A1.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/04/28/A1.jpg" alt=""></div>
<p> </p>
<div>In the normal course of things this sort of result would make an interest rate cut a no-brainer.</div>
<div> </div>
<div>While markets are suddenly pricing a cut as soon as next week on Budget day as an each-way bet, it would nevertheless still be quite a surprise to see such a change of narrative from the Reserve Bank so soon. </div>
<div> </div>
<div>That said many analysts will now see June and August as potentially live meetings for rate cuts, which could take the cash rate down to a record low of just 1.50 per cent.</div>
<div> </div>
<div>Generally it is said that easy monetary policy brings inflation in time, but if a lack of investment is the underlying problem then it is questionable whether more rate cuts alone will bring this to the party.</div>
<p><br><span>Anyway, what a result, and a game-changer, indeed!</span></p>
<div>
<br><strong><span style="text-decoration: underline;">Rental growth slowest since 1994</span></strong>
</div>
<div> </div>
<div>There isn't space here to run through all of the positive (education, medical services, pharmaceuticals) and negative (fuel, transport, holidays) contributors to inflation this quarter in detail, but we can see that rental growth has slowed to its lowest level since 1994. </div>
<div> </div>
<div>As you can see depicted in the chart below, the periods when investors were spooked out of the market (1985 to 1987, and 2008) were also precisely the periods when rents spiked.</div>
<div>
<br>Correspondingly the record surge in investor activity since 2012 in response to low interest rates - which Blind Freddy could have predicted - has led to near-record low levels of rental growth.</div>
<div> </div>
<div>Rampant investor lending has now been successfully stymied so equilibrium should return in due course, as the construction boom also passes its peak. It's always interesting and strangely satisfying when markets work just as they should. </div>
<p><a href="/images/2016/04/28/A2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/04/28/A2.jpg" alt=""></p>
<p> </p>
<div>Rents have continued to rise modestly in most cities through this cycle, but Darwin (-4.4 per cent) and Perth (-4.4 per cent) are in significantly negative territory year-on-year. On the other hand rents kept rising in Sydney by another +2.3 per cent over the year to March.</div>
<div> </div>
<div><a href="/images/2016/04/28/A4.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/04/28/A4.jpg" alt=""></div>
<div> </div>
<div>Looking instead at annual rental growth we can see how Perth has gone from star pupil straight into detention, and now must work through its elevated vacancy rates before annual rental growth reverts to the mean.</div>
<div> </div>
<div><a href="/images/2016/04/28/A3.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div class="separator"><img src="/images/2016/04/28/A3.jpg" alt=""></div>
<div class="separator"> </div>
<div>Rental growth was also negative in Canberra over the year to March (-0.6 per cent) but looks to be heading back into positive territory in the national's capital, while annual rental growth in Hobart increased to 1.4 per cent in the first quarter.</div>
<p><strong style="line-height: 1.3em;"><span style="text-decoration: underline;">The wrap</span></strong><span style="line-height: 1.3em;"> </span></p>
<div>Well, well. A stunningly low inflation result which wrong-footed markets and puts interest rate cuts right back into the frame. Game on.</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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Inflation show stopper: Pete Wargent

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<p><span style="line-height: 1.3em;">This week will be the busiest for capital city auction markets since the week prior to Easter, with 2,419 auctions currently being monitored by CoreLogic.</span></p>
<p><span style="line-height: 1.3em;"> Compared to last week, auction volumes are higher in each individual capital city market and have almost doubled in Melbourne, up from 602 last week to the current scheduled number of 1,233. </span></p>
<p>This week is set to be the busiest for auctions in six weeks for Adelaide, Canberra and Perth, while the number of homes being taken to auction across Brisbane remains relatively steady. Sydney, the nation’s second busiest auction market has 763 auctions scheduled this week.<span style="line-height: 1.3em;"> </span></p>
<p><span> </span><strong>Capital City Auctions this week: </strong></p>
<p>• Sydney: 763 </p>
<p>• Melbourne: 1,233 </p>
<p>• Brisbane: 141 </p>
<p>• Adelaide: 129 </p>
<p>• Perth: 44 </p>
<p>• Canberra: 101 <span style="line-height: 1.3em;"> </span></p>
<p>The busiest individual suburb for auctions this week is Bentleigh East in Melbourne, with 28 auctions to be held. The second busiest suburb is St Kilda (21), followed by Craigieburn, Malvern East and Reservoir, each with 18 auctions. All five suburbs are located in Melbourne. </p>
<p><a href="/images/2016/04/28/Screen%20Shot%202016-04-28%20at%2012.58.31%20PM.png" target="_blank"> Click to enlarge</a></p>
<p><img src="/images/2016/04/28/Screen%20Shot%202016-04-28%20at%2012.58.31%20PM.png" alt=""></p>
<p><span> </span><strong>Summary of last week’s results</strong></p>
<p>While auction volumes fell slightly last week with 1,565 capital city auctions held, the final auction clearance rate rose slightly, from 67.4 per cent the previous week to 69.7 per cent last week. Sydney was the best performing capital city auction market last week, with both the highest volume of auctions (643) and the strongest clearance rate, at 77.4 per cent, having risen substantially from 69.8 per cent the previous week when auction volumes were lower. Of the 15 individual sub-regions of Sydney, five regions recorded a clearance rate in excess of 80 per cent this week.</p>
<p>In Melbourne, 602 auctions took place and the clearance rate remained steady, at 71.5 per cent over the week. Unlike Sydney, no Melbourne sub-regions recorded a clearance rate above 80 per cent. Across the non-capital city auction markets monitored by CoreLogic, the Hunter region was the strongest performer, with 73.9 per cent of reported auctions successful, up substantially from 44.4 per cent the previous week. Clearance rates improved in each individual regional auction market on a week-on-week basis, with the exclusion of the Gold Coast, where the clearance rate fell from 45.5 per cent the previous week to 40 per cent last week.</p>
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Busiest auction week since before Easter: CoreLogic RP Data's Shana Miller

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<p><span>Many doomsday predictions have been dumped on regional cities in the wake of adverse events. Few of those forecasts have come to pass.</span></p>
<p>When negative events sour the economy of a regional city, the community mobilizes. Civic, business and political leaders take action. The apparently doomed city fights back, recovers and often reinvents itself.</p>
<p>The latest to have a premature death proclaimed, Townsville and Whyalla, follow a long line of notable examples of cities about which their death was greatly exaggerated. They include Newcastle, Wollongong and Geelong.</p>
<p>Newcastle was widely considered to have suffered a mortal wound when BHP shut down in the late 1990s. It fought back and is today one of Australia’s largest and strongest regional cities. Its economic strength and diversity has been sufficient to withstand the negative impacts of the recent downturn in the coal sector.</p>
<p>When Bluescope Steel seriously downsized in 2011, it was declared the end for Wollongong. I recall one newspaper headline which predicted a 50% decline in property values. In contrast to that rather extreme forecast, Wollongong’s property market has shown strong growth in recent years. </p>
<p>What many failed to realise is that Wollongong was no longer a smoke-stake town dependent on steel furnaces for its prosperity. It had been reinventing itself for years, with education, IT and tourism the key sectors.</p>
<p>Similar things are true of Geelong, once a factory town but now a modern city where the biggest employers are the health and education sectors. The decision to locate the national headquarters of the NDIS in Geelong has created a new industry sector, with related businesses keen to locate nearby.</p>
<p>So the impending closure of a car plant, while an adverse event many would prefer did not happen, can be absorbed by this growing economy without too many side-affects. Geelong continues to be the strongest Victorian property market outside of Melbourne.</p>
<p>Now we have Townsville apparently on its deathbed because another of Clive Palmer’s extravaganzas has gone belly up.</p>
<p>When this story exploded in January I wrote: “The latest Australian regional city to inspire a premature obituary is Townsville in the wake of the decision by political and business buffoon Clive Palmer to shed 237 jobs at his Queensland Nickel refinery.</p>
<p>“As has become common in the wake of such events, the media coverage has been a tad over the top since the announcement. I’ve seen reports predicting devastation of the local economy. One suggested Townsville would become ‘a ghost town’.”</p>
<p>The story has moved on since then, with the refinery business collapsing. That’s a hit to the Townsville economy, particularly as it was struggling a bit beforehand. But it’s far from terminal.</p>
<p>Townsville is a very resilient place. It has one of the most diverse economies in regional Australia, with strong elements of government administration, education, tourism, the military, the resources sector and manufacturing.</p>
<p>And lots of positive news has emerged more recently. Some seriously major enterprises have stepped forward to help take up some of the economic and employment slack created by Clive’s latest brain explosion.</p>
<p>The economic and defence deal between Australia and Singapore means $2.25 billion in new defence infrastructure will be built in Queensland, including in Townsville, which already has a big military presence through its RAAF Base and recently-expanded Army base.</p>
<p>In the past week came the announcement of “Australia’s biggest solar farm” covering 200ha just outside Townsville, with Origin Energy signed up to buy the electricity generated from 2017 to 2030.</p>
<p>A $400 million maintenance contract for Queensland Rail will be shared between UGL in Townsville and Downer EDI in Maryborough, reportedly at the behest of the State Government.</p>
<p>The State Government says it has fast-tracked almost $200 million worth of infrastructure spending in the Townsville area to boost the economy in the wake of the nickel refinery collapse, while $75 million in Federal Government funding will help establish the new Cooperative Research Centre for Developing Northern Australia in Townsville.</p>
<p>If you add together all those positives, and subtract the nickel refinery negative, I see it as a net gain for the city of Townsville.</p>
<p>Whyalla in South Australia will take a hit if attempts to rescue the Arrium steel business are unsuccessful. Arrium, formerly OneSteel, is a big chunk of Whyalla’s economy and is in voluntary administration.</p>
<p>But is this the end for SA’s biggest regional city? I would suggest not. Like Townsville, Whyalla has been attracting plenty of positive announcements in the past few weeks.</p>
<p>Oz Minerals is advancing its $975 million Carrapateena copper mine expansion and it wants to build its $150 million Concentrate Treatment Plant at Whyalla. The mine expansion will create 800 jobs and it’s hoped many of the workforce members will be sourced from Whyalla.</p>
<p>BHP Billiton continues to work on its alternative plan for development of the Olympic Dam resource and said in April it hoped to include Whyalla in the new project plans (put together after the previous $30 billion scheme was shelved because it was too expensive).</p>
<p>And there is hope for Arrium in the announcement that 15,000 tonnes of its steel will be used for a $620 million road project, the Darlington Upgrade Project, in Adelaide.</p>
<p>The Federal Government has handed Arrium at $80 million contract to replace around 1200km of rail lines for federal agency ARTC.</p>
<p>Arrium is also a chance to attract steel orders from the recently-confirmed Federal Government project to build 12 submarines in Adelaide.</p>
<p>I’ve been getting lots of emails from people who own real estate in Whyalla. I would suggest those who panic and sell in the wake of recent negative headlines will regret it later.</p>
<p><em>Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a></em></p>
<p><span><em> </em></span></p>
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Doomsday predictions dumped on regional cities: Terry Ryder

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<p><span style="line-height: 1.3em;">Housing investment in Australia has generally been a successful, largely one-way bet over many years. </span></p>
<p><span style="line-height: 1.3em;">Although this has been the case, home values have fallen in the past, are currently falling in some capital cities and will almost certainly fall again in the future.</span></p>
<p><span style="line-height: 1.3em;">As can be evidenced in the accompanying charts, in most instances across combined capital cities, the Index has been rising, in fact from December 1995 to November 2015. Combined capital city home values have increased by a cumulative 330.5% and values fell in 2008 and again between 2011 and 2012. </span></p>
<p><span style="line-height: 1.3em;">During 2008, combined capital city home values fell by -6.1% between March and December. Home values fell by -6.5% between March 2011 and May 2012. </span></p>
<p><span style="line-height: 1.3em;">While the Index shows a certain set of trends, it’s important to remember that it is largely influenced by Sydney and Melbourne. In fact, combined capital city home values have increased by 8.7% over the 12 months to November 2015 however, only Sydney and Melbourne have recorded value growth stronger than that level. Values have also been declining over the past year in both Perth and Darwin.</span></p>
<p><a href="/images/2015/12/11/Screen%20Shot%202015-12-11%20at%2010.31.04%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/2015/12/11/Screen%20Shot%202015-12-11%20at%2010.31.04%20AM.png" alt=""></span></p>
<p><span style="line-height: 1.3em;">Over the period from December 1995 to November 1995, all capital cities have seen values increase while each city has seen periods where values fall. Across the cities, the cumulative value increases have been recorded at: </span></p>
<p>• 330.1% in Sydney </p>
<p>• 421.4% in Melbourne </p>
<p>• 259.4% in Brisbane </p>
<p>• 261.2% in Adelaide </p>
<p>• 293.0% in Perth </p>
<p>• 208.0% in Hobart (from Sep-97) </p>
<p>• 180.1% in Darwin (from Apr-99) </p>
<p>• 258.7% in Canberra.</p>
<p>Of all the cities, Melbourne has led by recording the strongest rate of growth over the period followed by Sydney. Growth in Perth has been stronger than in Brisbane, Adelaide and Canberra where cumulative growth has been remarkably similar. While home values have risen significantly in each city, value falls have occurred.</p>
<p>There have been periods where values have fallen in a particular city but not others. As an example, from mid-2004 Sydney values started falling while in other cities, the rate of growth just slowed. Sydney home values fell by - 8.2% between March 2004 and December 2005. They then took until March 2009 to eclipse and remain above March 2004 levels.</p>
<p>Over the past few months we have seen early signs of value falls in the Sydney and Melbourne housing markets. Based on our data, we can see that falls have previously occurred, and will no doubt happen again, however, the question is how large; of course no one knows.</p>
<p>Given that investor activity has been at a record high, building approvals have also hit record highs and record high levels of household leverage there is a possibility that falls could be larger than what we have seen in the past. Note: Adjacent, the table looks at the two most recent periods of decline across the combined capital cities: the financial crisis in 2008 and as the RBA started to lift interest rates in 2011. The data shows the financial crisis saw a short, sharp fall in values and a fairly rapid recovery. The second period saw, in most instances, a much larger decline and a much longer period for recovery. </p>
<p><a href="/images/2015/12/11/Screen%20Shot%202015-12-11%20at%2010.26.15%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/12/11/Screen%20Shot%202015-12-11%20at%2010.26.15%20AM.png" alt="" width="871" height="520"></p>
<p> </p>
<p><a href="/images/2015/12/11/Screen%20Shot%202015-12-11%20at%2010.30.04%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/12/11/Screen%20Shot%202015-12-11%20at%2010.30.04%20AM.png" alt=""> </p>
<p><span style="line-height: 1.3em;"><em>Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/author/cameron-kusher/" target="_blank">here</a>.</em> </span></p>
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