<p data-end="309" data-start="290"><strong data-end="309" data-start="290">Article summary</strong></p>

<ul data-end="785" data-start="311">
	<li data-end="459" data-section-id="5hbcyr" data-start="311">Pikos Group has released the five-penthouse collection at Skye Kangaroo Point, headlined by a two-storey sky home spanning more than 1,000 sqm.</li>
	<li data-end="561" data-section-id="1p7lq8n" data-start="460">Early buyer interest suggests the residences could set a new Queensland apartment price record.</li>
	<li data-end="667" data-section-id="1y70z0l" data-start="562">The collection includes four move-in ready penthouses and the highly customised Skye One residence.</li>
	<li data-end="785" data-section-id="yvm0y1" data-start="668">The release caps one of Bri​sbane's most ambitious luxury apartment developments overlooking the Brisbane River.</li>
</ul>

<hr data-end="790" data-start="787" />
<p data-end="896" data-section-id="ojaazg" data-start="792">Pikos Group has released the five-penthouse collection at its <a href="https://www.apartments.com.au/buildings/skye-residences-by-pikos-kangaroo-point-8-river-terrace-kangaroo-point-qld-4169">Skye by Pikos</a> development in Kangaroo Point, with early buyer interest indicating the flagship residences could eclipse every apartment sale previously recorded in Queensland.</p>

<p data-end="1358" data-start="1137">The collection crowns the luxury riverfront development with five residences, including four completed penthouses and Skye One, a two-level sky home spanning more than 1,000 sqm that will be tailored to its eventual owner.</p>

<p data-end="1358" data-start="1137">[smartcode_project:default project_id=90059 project_image_fid=374075]</p>

<p data-end="1577" data-start="1360">Wanting to offer a fully customisable home, Pikos is offering Skye One as a blank canvas, allowing the buyer to work alongside the developer's design team to customise the home's layout, finishes and internal spaces.</p>

<p data-end="1781" data-start="1579">The residence will feature a 247 sqm private rooftop terrace with its own swimming pool, sauna, steam room, outdoor kitchen and multiple entertaining areas overlooking the Brisbane River and CBD skyline.</p>

<p data-end="1977" data-start="1783">The remaining four penthouses have been completed and are ready for immediate occupation, each offering four bedrooms, expansive open-plan living areas, soaring ceilings and private lift access.</p>

<p data-end="1977" data-start="1783">[smartcode_project:default project_id=90059 project_image_fid=374059]</p>

<p data-end="2314" data-start="1979">One of the defining features throughout the project is its use of Roman Classic Travertine, with more than 20,000 sqm of the natural stone imported from Italy after being personally selected by Pikos Group Founder and Executive Director Pedro Pikos, interior designer Julie Williamson and third-generation stone specialist Mario Caucci.</p>

<p data-end="2423" data-start="2316">Pikos said the penthouse collection represented the culmination of the company's long-term vision for Skye.</p>

<p data-end="2519" data-start="2425">"True legacy isn't measured by what we build today, but by what endures tomorrow," Pikos said.</p>

<p data-end="2688" data-start="2521">"Our ambition is to create places that become more valuable with time, enrich the lives of generations, and stand as timeless landmarks long after we've stepped away."</p>

<p data-end="2688" data-start="2521">[smartcode_project:default project_id=90059 project_image_fid=374060]</p>

<p data-end="2840" data-start="2690">Williamson said the interiors were inspired by the natural character of Kangaroo Point and the Brisbane River rather than international design trends.</p>

<p data-end="2900" data-start="2842">"Materiality tells the story of a place," Williamson said.</p>

<p data-end="3105" data-start="2902">"We looked to the movement of the Brisbane River, the texture of the cliff face and the warmth of the surrounding landscape to create interiors that feel understated, enduring and unmistakably Brisbane."</p>

<p data-end="3300" data-start="3107">Positioned above the Kangaroo Point cliffs, Skye places residents within walking distance of Howard Smith Wharves, South Bank and James Street while offering uninterrupted river and city views.</p>

<p data-end="3300" data-start="3107">[smartcode_project_cta:default project_id=90059]</p>


Joel Robinson

Brisbane's next apartment price record? Pikos unveils Skye's exclusive penthouse collection

<p data-end="288" data-start="269"><strong data-end="288" data-start="269">Article summary</strong></p>

<ul data-end="888" data-start="289">
	<li data-end="442" data-section-id="8tsh6o" data-start="289"><strong data-end="374" data-start="291">DVB Projects is preparing to launch its second Gold Coast apartment development</strong>, with demolition now underway at 137 Old Burleigh Road, Broadbeach.</li>
	<li data-end="573" data-section-id="1nyxl3e" data-start="443"><strong data-end="513" data-start="445">The 34-level tower will comprise just 49 ultra-luxury residences</strong>, including half-floor, full-floor and penthouse apartments.</li>
	<li data-end="717" data-section-id="oiyimj" data-start="574"><strong data-end="646" data-start="576">The launch follows strong demand at DVB's nearby Sea Glass project</strong>, which is more than 50 per cent sold and currently under construction.</li>
	<li data-end="888" data-section-id="epk9o9" data-start="718"><strong data-end="787" data-start="720">The development adds to the transformation of Old Burleigh Road</strong>, with premium beachfront apartment projects continuing to reshape the tightly held Broadbeach strip.</li>
</ul>

<p data-end="1011" data-start="790"><a href="https://www.apartments.com.au/developers/dvb-projects">DVB Projects</a> is preparing to launch its second Gold Coast apartment development, with demolition now underway on the Broadbeach site as the Sydney developer moves closer to bringing the ultra-luxury project to market.</p>

<p data-end="1296" data-start="1013">The 34-level tower at <a href="https://www.apartments.com.au/new-apartments/137-old-burleigh-road-broadbeach-qld-4218">137 Old Burleigh Road</a> will comprise just 49 residences, ranging from half-floor apartments through to full-floor homes and a penthouse. The launch follows the strong sales performance of DVB's nearby Sea Glass development. More than half of the apartments at Sea Glass, on the other side of Broadbeach, have been snapped up, well ahead of its late 2027 completion</p>

<p data-end="1296" data-start="1013"><img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="2944b4be-c84e-4b54-8dc1-c712e76704c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E02_Exterior_Street%20Level%20Entrance.jpg?VersionId=YoNig7pRdrE3HCue7sUj78LzJteeQf3H" /></p>

<p>The start of demolition at 137 Old Burleigh Road signals DVB Projects’ underlying confidence in the Gold Coast’s luxury beachside apartment sector.</p>

<p>“We see the Gold Coast as one of the most compelling lifestyle markets in Australia, particularly at the premium end where demand continues to deepen,” said Dean Brown, Managing Director of DVB.&nbsp;</p>

<p>“This project has been carefully designed to respond to that demand - delivering large-format residences with a level of quality, privacy and amenity that is still relatively rare in the apartment market on the beachside."</p>

<p>Brown says the site itself is "exceptional."</p>

<p>"Old Burleigh Road is one of the most tightly held beachfront strips, and opportunities to deliver a project of this scale and calibre in this location are extremely limited.”</p>

<p><img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="398f377a-c037-455e-9250-0c5e0d84c35b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/I12_FF%20Balcony.jpg?VersionId=NwOiRWGMubR1c8wthuEfggklcja7al9." /></p>

<p>The project will comprise 40 half-floor residences of approximately 260 sqm, alongside eight full-floor residences spanning around 524 sqm.</p>

<p>A single penthouse will crown the building, featuring a private pool, barbecue area, indoor gym and dedicated entertaining spaces.</p>

<p>Residents will have access to a resort-style suite of amenities, including a 20-metre pool with daybeds, a gymnasium, hot and cold plunge pools, a sauna, and private residents’ lounge and dining facilities.</p>

<p><img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="d1642bb0-9a66-4427-a022-dfc0988c6287" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/A02_Pool%20to%20View.jpg?VersionId=c0IXPyn_Gp_Kn3XCwzMrqIVkAdCEwVXP" /></p>

<p>Sales agent Todd Matheson, of <a href="https://www.apartments.com.au/project-marketer/pezet-matheson">Pezet Matheson</a>, which is marketing both 137 Old Burleigh Road and Sea Glass, said 137 Old Burleigh Road would address a clear gap in the market for genuine luxury products.</p>

<p>“There are very few opportunities on the Gold Coast where buyers can secure a residence of this size and quality in a new building,” Matheson said.</p>

<p>“What we’re seeing is a growing cohort of downsizers and interstate buyers who still want space - they’re not willing to compromise on living area, entertaining or finishes.</p>

<p>“This project has been designed with that buyer in mind. It offers the scale of a home, combined with the convenience and security of apartment living, in one of the coast’s most desirable positions.”</p>

<p><img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="59aae0ca-5639-4320-8aca-d0bf60f48e43" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E01_Exterior%20Hero.jpg?VersionId=DS8Zfy2WtgUEtdfe0TEUuf1W1GfcZq8S" /></p>

<p>Located on a 1,156 sqm site one block from the beachfront, the development will replace an ageing walk-up building and is expected to contribute to the ongoing transformation of the Old Burleigh Road strip into one of the Gold Coast’s most prestigious residential corridors.</p>

<p>With the development moving into the delivery phase, 137 Old Burleigh Road is slated to hit the market later this year.</p>

<p>[smartcode_project_cta:default project_id=145141]</p>


DVB Projects to launch second Broadbeach apartment tower as demolition commences

<p>A proposal to redevelop one of North Sydney's ageing commercial buildings has taken another step forward, with plans for a 38-storey mixed-use tower adding momentum to the long-awaited transformation of the Alfred Street precinct.</p>

<p>Now on public exhibition through the NSW Government's Housing Delivery Authority-led State Significant Development pathway, the proposal for 271-273 Alfred Street would replace an underutilised commercial building with 95 apartments, ground-floor retail, commercial space and affordable housing. The proposal was submitted by&nbsp;Tara Shore Pty Ltd, acting for the John Taylor Family Trust.</p>

<p>While the project will deliver much-needed housing on the southern edge of the North Sydney CBD, it also represents another piece of a broader precinct that has spent years in planning limbo.</p>

<p><img alt="First look: New public domain vision underpins 95-apartment North Sydney tower on Alfred Street" data-entity-type="file" data-entity-uuid="7e1ce1b4-38df-48ab-992f-386814d86308" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Alfred%20St%20da%20podium.png?VersionId=sC_h6w.A9VEoB98qsqowPlIoz__sBZBt" /></p>

<p>Despite its proximity to both North Sydney Station and the Victoria Cross Metro, redevelopment of Alfred Street has progressed slowly over the past decade as broader planning controls, zoning and building heights remained unresolved. The introduction of the Housing Delivery Authority pathway has provided a new avenue for projects to progress, allowing rezoning and development assessment to occur concurrently and unlocking sites that have long been earmarked for renewal.</p>

<p>Designed by Office of Cortese &amp; Gilder, the proposal seeks to do more than replace an ageing office building. The architects have positioned the project as the first stage of a wider public domain vision that would improve pedestrian connectivity and create a more cohesive mixed-use precinct as neighbouring sites are redeveloped over time.</p>

<p>The proposal includes a widened Alfred Street setback, new street trees, landscaping and outdoor seating, along with a landscaped through-site pedestrian link connecting Alfred Street with Little Alfred Street. The connection is intended to become the first section of a future east-west pedestrian network extending across the precinct.</p>

<p><img alt="First look: New public domain vision underpins 95-apartment North Sydney tower on Alfred Street" data-entity-type="file" data-entity-uuid="8ea39ac3-46ad-4562-b4a0-b862e91c2dda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Alfred%20St%20da%20site.png?VersionId=K7umCd21KpetEFuVfsPlnJKhUOsmTTdV" /></p>

<p>The mixed-use tower would comprise retail space at ground level, commercial uses on level two and apartments from level three upwards.</p>

<p>In total, the development would deliver 95 apartments, including nine one-bedroom, 28 two-bedroom, 56 three-bedroom and two four-bedroom residences. Twenty-one apartments, representing 15 per cent of the residential gross floor area, would be secured as affordable housing and managed by a registered community housing provider for at least 15 years.</p>

<p>Nine basement levels would provide 133 resident car spaces, seven motorcycle spaces and 111 bicycle spaces.</p>

<p>According to the Architecture and Urban Design Report, the public domain strategy is designed to transform what is currently an inward-facing commercial edge into a more active and connected pedestrian environment, creating a stronger relationship between the commercial core and surrounding residential neighbourhoods.</p>

<p>Office of Cortese &amp; Gilder has also prepared a broader public domain framework spanning neighbouring properties between 263 and 283 Alfred Street, arguing that a coordinated approach to redevelopment will deliver better public spaces, improved tower separation and a more connected streetscape as the precinct evolves.</p>

<p>The proposal comes at a time where North Sydney is slated for future residential growth. Commercial developer FiveX has residential plans for the neighbouring site at 275 Alfred Street. They've proposed a 39-storey mixed-use tower with 184 apartments, while Freecity was recently approved for nearly 300 apartments across a 51-storey building on Walker Street.</p>

<p><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-freecity-gets-green-light-for-mixed-use-apartment-and-hotel-tower-in-north-sydney">First look: Freecity gets green light for mixed-use apartment and hotel tower in North Sydney</a></em></p>

<p><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-plans-39-storey-residential-tower-in-booming-north-sydney">First look: Fivex plans 39-storey residential tower in booming North Sydney</a></em></p>

<p>&nbsp;</p>


Alfred Street the latest North Sydney pocket to be transformed by residential development

<p>Buyers considering a residence at boutique Gordon townhouse development <a href="https://www.apartments.com.au/new-townhouses/lume-gordon-43-47-dumaresq-street-gordon-nsw-2072">Lume</a>&nbsp;now have another reason to bring forward their decision.</p>

<p>For a limited time, purchasers of a residence at Lume will receive a BMW iX3 50 electric SUV, valued at more than $120,000, as part of their purchase. The offer is designed to add value for buyers while complementing the lifestyle envisioned for the architecturally designed Upper North Shore development.</p>

<p>Scott Timmins, Development Manager at <a href="https://www.apartments.com.au/developers/winim">WINIM</a>, said the partnership was created to provide buyers with a compelling reason to act.</p>

<p>"In today's market, buyers need a compelling reason to act now, and the BMW partnership was designed to create that catalyst. We wanted to add genuine value for our future purchasers. Choosing the all-electric BMW iX3 50 also reflects the values behind LUME, forward-thinking design, innovation and a more sustainable way of living. It's a premium incentive that complements the lifestyle our buyers aspire to and rewards those who commit early."</p>

<p>[smartcode_project:default project_id=7354 project_image_fid=374893]</p>

<p>Delivered by WINIM in partnership with Burtonwood Investment Partners, Lume comprises 14 architecturally designed two, three and four-bedroom townhomes created for families seeking the space of a freestanding house with the ease of modern, low-maintenance living.</p>

<p>The three-storey residences, designed by award-winning architecture practice <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, have been tailored for families and multi-generational living, featuring private internal lifts, flexible lower-level spaces, generous open-plan living and entertaining areas, media rooms, and landscaped outdoor spaces with custom outdoor kitchens.&nbsp;</p>

<p>Inside, engineered oak flooring, bespoke dining joinery with integrated wine fridges and backlit bars, sculptural porcelain bathrooms, Parisi freestanding baths and Astra Walker tapware create interiors that balance functionality with refined finishes.</p>

<p>Each townhome has been designed to combine generous internal spaces with sustainability initiatives such as EV charging infrastructure, while <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>'s landscaped communal areas, centred around a restored creek line and native planting, encourage residents to connect with nature and spend more time outdoors.</p>

<p>[smartcode_project:default project_id=7354 project_image_fid=269527]</p>

<p>Rothelowman's Gary Tsui said the architecture was conceived to respond carefully to its Upper North Shore setting.</p>

<p>"Our vision was to create elegant, uplifting homes that draw on and positively contribute to the local character through meticulously considered design and an interaction with the surroundings."</p>

<p>The communal landscape has been designed as more than an open space between homes. Arcadia's Ben Newell and Kate Phillips said the adjoining reserve provided an opportunity to create a distinctive natural retreat for residents.</p>

<p>"Just as waterways carve their way through Ku-ring-gai's landscape, a raised boardwalk weaves through the reserve, connecting the homes to this tranquil oasis."</p>

<p>[smartcode_project:default project_id=7354 project_image_fid=374892]</p>

<p>Located just 300 metres from <a href="https://www.apartments.com.au/developments/gordon-nsw-2072">Gordon</a> Village and Gordon railway station, Lume offers convenient access to Sydney's CBD while placing residents close to some of the North Shore's leading schools, including Ravenswood, Pymble Ladies' College and Knox Grammar. Lane Cove National Park, Gordon Golf Club and a range of cafés and restaurants further reinforce the family-focused lifestyle on offer, with the BMW iX3 50 complementing everything from local trips around Gordon to weekend drives and city commutes.</p>

<p>Construction is underway with completion expected in mid-2027.</p>

<p>[smartcode_project_cta:default project_id=7354]</p>


Boutique Gordon townhomes now come with a BMW iX3 50

<p>Two apartments have sold for more than $10 million at EADE Byron Bay, setting some of the highest apartment prices ever achieved in the coastal town and underlining the growing appetite for luxury beachfront apartments in Australia's most popular coastal locations.</p>

<p>The $210 million project by Vitale Property Group has now secured more than $70 million in sales, led by residences that changed hands for $12.75 million and $11.75 million.</p>

<p>The record-breaking transactions reinforce the shift occurring in Byron Bay's premium property market, where affluent downsizers and lifestyle buyers are increasingly opting for high-end apartments over large beachfront homes.</p>

<p><a href="https://www.apartments.com.au/new-apartments/eade-byron-bay-29-shirley-street-byron-bay-nsw-2481">EADE Byron Bay</a> occupies a rare 6,000 sqm absolute beachfront site on the corner of Shirley and Milton Streets overlooking Main Beach and The Wreck surf break, just 350 metres from Byron Bay's town centre.</p>

<p>The 25-residence development is the first beachfront apartment project approved in Byron Bay in more than a decade and is currently under construction, with completion expected in May 2027.</p>

<p>[smartcode_project:default project_id=145590 project_image_fid=359521]</p>

<p>The project has attracted a mix of local Byron Shire residents downsizing from larger homes, alongside interstate buyers from Sydney, Melbourne and Brisbane seeking a permanent coastal lifestyle without compromising on space.</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/hayball">Hayball</a> and with interiors by <a href="https://www.apartments.com.au/interior-designers/alexander-co">Alexander &amp; Co</a>, EADE comprises&nbsp;10 garden apartments ranging from 284 sqm to 622 sqm, nine with private pools, five full-floor apartments and 10 rooftop residences with private plunge pools, expansive outdoor entertaining areas and uninterrupted ocean views.</p>

<p>[smartcode_project:default project_id=145590 project_image_fid=359527]</p>

<p><a href="https://www.apartments.com.au/developers/vitale-property-group">Vitale Property Group</a> Managing Partner Chris Vitale said the project's combination of scale, location and limited future supply was driving buyer demand.</p>

<p>"There isn't another beachfront holding in Byron Bay of this size and position that could be developed again," Vitale said.</p>

<p>"Buyers are responding to the scarcity and the irreplaceability of a site of this calibre and to floorplans they can't find elsewhere in the market.</p>

<p>"We are seeing buyers place significant value on quality, space, design, resort-style amenities and the rarity of the location. The sales achieved to date demonstrate that discerning purchasers recognise the long-term significance of what is being created at EADE Byron Bay.</p>

<p>"Many are coming from larger homes in the Byron region, or from Sydney, Melbourne and Brisbane, and are after the space, security and convenience, without the upkeep of a house."</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=145590 project_image_fid=359523]</p>

<p>The Byron Bay project follows Vitale Property Group's delivery of the Mondrian Hotel and Private Residences at Burleigh Heads, with EADE continuing the developer's focus on luxury coastal developments.</p>

<p>Residents will have access to a resort-style swimming pool, gymnasium, sauna, cold plunge pool, concierge services and dedicated workspaces, while the project is targeting an 8-Star Green Star rating.</p>

<p>EADE Byron Bay is being exclusively marketed by Projx Australia in conjunction with WHITEFOX Projects.</p>

<p>WHITEFOX National Projects Director Phillip Rand said demand had been driven predominantly by owner-occupiers.</p>

<p>"We are seeing buyers at EADE place significant value on quality, space, design, resort-style amenities and the rarity of this location," Rand says.</p>

<p>"The sales achieved to date demonstrate that purchasers at this level recognise the long-term significance of what is being created at EADE Byron Bay."</p>

<p>Residences at EADE Byron Bay are currently priced between $4.75 million and $15.95 million.</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>[smartcode_project_cta:default project_id=145590]</p>


Vitale breaks Byron Bay records with EADE sales flurry 

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


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

<html><body>
<p>The Reserve Bank of Australia (RBA) touches on some interesting points in its latest <em>Financial Stability Review</em>, including the paradox of low interest rates.</p>
<p>Household debt-to-income ratios have been flat for the past eight years, but the RBA quite rightly senses a risk that low rates could see this figure busting out to new highs and looks on cautiously.</p>
<p><img src="/images/2014/10/7/RBA1.jpg" alt=""></p>
<p>The paradox is that low interest rates have made life pretty easy going for existing owners of property on variable rate mortgages, with the interest payments-to-income ratio falling from 13% to just 9%</p>
<p><strong>Mortgage buffers</strong></p>
<p>The RBA notes that aggregate mortgage buffers are at remarkably high levels, the equivalent of "more than two years" of scheduled repayments. A big reason for this, as I've experienced myself, is that banks have frequently left mortgage repayment amounts on auto-pilot despite declining mortgage rates:</p>
<p>"Households' ability to service their debt has been aided by ongoing low interest rates. The proportion of disposable income required to meet interest payments on household debt has stabilised accordingly, at around 9%.</p>
<p>"Households continue to take advantage of lower interest rates to pay down their mortgages more quickly than required. The aggregate mortgage buffer – balances in mortgage offset and redraw facilities – has risen to be around 15% of outstanding balances, which is equivalent to more than two years of scheduled repayments at current interest rates.</p>
<p>"Prepayment rates and the proportion of borrowers ahead of schedule on their mortgage repayments are also high according to liaison with banks. Part of this prepayment behaviour has been due to some banks' systems not automatically changing customer repayment amounts as interest rates have declined, while in many cases households have not actively sought to reduce their repayments.</p>
<p>"This might be a sign that household stress is currently limited. The household saving ratio, although trending down a little lately, remains high at just under 10%. Households' aggregate balance sheet position has continued to improve in recent quarters: real net worth per household is estimated to have increased by 4% over the year to September 2014."</p>
<p><strong>Rental market</strong></p>
<p>With dwelling prices rising we might expect to see rental vacancies increasing and yields declining. Historically speaking, however, Sydney's vacancy rate remains low despite pockets of forthcoming oversupply. RBA again:</p>
<p>"Despite the activity and housing price inflation in the Sydney and Melbourne property markets, rental yields have not declined to a significant extent and vacancy rates in these cities remain fairly low."</p>
<p><img src="/images/2014/10/7/RBA3.jpg" alt=""></p>
<p>True, but vacancy rates are elevated and likely to rise in inner city Melbourne apartments as the RBA observes.</p>
<p><strong>Household financial stress?</strong></p>
<p>Generally 90 day+ loan arrears at now at very low levels at only 0.5 percent, but there are some indicators of household financial stress in Victoria. Back to the RBA:</p>
<p>"Aggregate indicators suggest that household financial stress is generally low, despite the increase in the unemployment rate over the past year. The share of banks' housing loans that are non-performing has declined for both owner-occupiers and investors since reaching a peak in the middle of 2011.</p>
<p>"Data on securitised housing loans show that the share that are 90  days or more past due has declined over the year for most states, coinciding with lower interest rates and rising housing prices. In Victoria, however, loan performance has deteriorated slightly."</p>
<p><img src="/images/2014/10/7/RBA2.jpg" alt=""></p>
<p>The RBA notes instances of mortgage stress and arrears in "outer west and north Melbourne".</p>
<p><strong>Interest rate rises?</strong></p>
<p>So it's largely happy days for homeowners at present. But what about interest rate increases?</p>
<p>Previously we have covered off the possibility here that interest rates might yet fall further as the mining construction boom tails off.</p>
<p>So, what could lead to hikes? Mostly we'll be looking at inflation and the jobs market.</p>
<p>The TD-MI inflation gauge printed flat again for the month, leaving this particular measure sliding towards the bottom of the 2-3% range (now at just 2.2%) and suggesting little in the way of inflationary pressures or a pressing need to hike interest rates.</p>
<p>The declining Aussie dollar could well wash through a little more tradables inflation in due course, but sustained inflationary pressure would likely need the labour market to pick up, since there currently appears to be a fair amount of slack therein.</p>
<p><img src="/images/2014/10/7/4br-tradeinf-small.gif" alt=""></p>
<p>Some heartening news on that front today with ANZ job adverts recording its fourth consecutive monthly gain to hit its best reading in two years.</p>
<p>Could this suggest that the labour market is picking up as was suggested here by last month's figures? Maybe! The next round of Labour Force figures on the 9th of this month is very eagerly anticipated for all of the above reasons.</p>
<p>In any case, interest rates will be very much stuck on hold today at 2.50%. It seems likely that prudent households will have at least another year of low rates ahead to keep building up those mortgage buffers.</p>
<p> </p>
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Reserve Bank muses on housing stress

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<p>The Australian Bureau of Statistics (ABS) released its Lending Finance data this week, and it was a pretty weak reading after a couple of apparently very strong months for commercial lending.</p>
<p>Total new lending fell by 10.3% in August from the previous month with a sharp 16% drop in commercial lending the driver of the result.</p>
<p>Owner occupier housing loans fell by 2% in the month of August on a seasonally adjusted basis, with most states seeing activity fall in the month (although notably not Queensland).</p>
<p>Note that the ABS classifies property investor loans separately from owner occupier loans and thus these come under the commercial lending header in the chart below.</p>
<p><img src="/images/2014/10/15/1.jpg" alt=""></p>
<p>Year on year total new lending remains 11% higher, which is promising, and the rolling 12 monthly figures about do show that the overall trend has been a good 'un.</p>
<p>However, there is no getting away from the fact that August was a fairly rubbish result for commercial and business lending and quickly quells the enthusiasm of the markets from last month which saw some excitable claims that interest rates will be heading up imminently.</p>
<p>In short: No, they won't be.</p>
<p><strong>Property investor loans</strong></p>
<p>As for those property investor loans, in aggregate, property investor loans were pretty much flat in August on a seasonally adjusted basis.</p>
<p>On a trend basis, investor loans were down in all states, as one might expect. On a rolling 12 monthly basis, however, property investor loans across all of the main states continued to rise, with New South Wales and Victoria marching on to new heights.</p>
<p>New South Wales (read: Sydney) loans are a whopping 42.5% higher year-on-year on a rolling annual basis.</p>
<p><img src="/images/2014/10/15/2.jpg" alt=""></p>
<p>Just looking at the straight raw monthly property investor loan data, New South Wales and Victoria are the clear standouts with 30% and 28% increases respectively.</p>
<p>Elsewhere activity has been softer, although evidently property investors are becoming more active in Queensland. Property investor activity has been solid in Western Australia and flat in South Australia.</p>
<p><img src="/images/2014/10/15/3.jpg" alt=""></p>
<p><strong>Macro-pru</strong></p>
<p>Overall, it's not yet quite clear what this means for so-termed macro-prudential regulation to cool the investor market.</p>
<p>Clearly with property investor loans up very strongly over the past year, macro-prudential measures from the regulator (APRA) are very much in play in order to keep the proportion of lending to investors under some kind of check.</p>
<p>The August data taken by itself was far from alarming so there may be no knee-jerk announcements or reactions while the Reserve Bank and APRA await another month or two of data.</p>
<p>It's impossible to second guess these volatile data sets or indeed the actions of the regulator, although one generally gets the sense that dramatic macro-prudential measures are not really a preferred option.</p>
<p>Wayne Byres of APRA made the point the other day that although "people love the term" there is "nothing really new" about macro-prudential measures, which sort of implied moderation (to me at least).</p>
<p>I do just note in passing that AFG's more timely data for September showed record transactional activity for New South Wales as well as 49.7% investor loans.</p>
<p><img src="/images/2014/10/15/4.jpg" alt=""></p>
<p>The Sydney property market marches on to new heights, and unlike in the previous boom cycle of a decade ago higher interest rates are not anywhere to be seen on the horizon in order to slow the market down (and vacancy rates remain much lower today too) - this cyclical boom will have to die of all age and of its own accord or be slowed by regulation.</p>
<p> </p>
<p> </p>
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Sydney's property market reaches new heights

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<p><span>Golly. My word there's some crappy economic data doing the rounds globally at the moment - the commodity markets smash-up continuing to take front and centre stage, while China's manufacturing activity gauge slumping to a 77 month low for good measure.</span></p>
<p><span>The commodity price exuberance was in part an echo of China's own property market largesse. Or if bubbles are your thing - and they seem to be all the rage these days - an echo-bubble of China's property bubble.</span></p>
<p><span>With stock markets in the business of tanking anywhere and everywhere from the US to the UK, Australia, China, Japan and...well, pretty much all over the show to be honest...perhaps it's no surprise that real estate is sifting back in favour togiven record low borrowing rates around the developed world.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>Aussie stocks are well on track for their worst month since the global financial crisis having wiped close to 9 per cent off their value already in the month of August alone, while UK stocks have already meandered into correction territory.</span></p>
<p><span>On the flip side for British investment markets, the UK Council of Mortgage Lenders reported that UK mortgage lending has bolted to its highest level in seven years - since before the financial crisis fallout - at an estimated £22 billion for the month (where is the pound symbol on keyboards these days, by the way?).</span></p>
<p><a href="/images/2015/08/24/CML.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/08/24/CML.jpg" alt=""></span></p>
<p> </p>
<div>This is particularly noteworthy for Australian investors since the United Kingdom introduced macro-prudential measures of its own to its housing market back in 2014 in the form of the Mortgage Market Review (MMR).</div>
<div> </div>
<div>Now that the impacts of the MMR are already receding into the rear view mirror - and with interest rates still stuck at rock bottom at the effective "zero lower bound" - mortgage lending appears to be ripping higher again.<br><br>The key point here being that while macro-prudential markets may be designed to effectively slow the market, they don't take away the demand for property completely or permanently.</div>
<div> </div>
<div>
<em>Hometrack</em> noted that Cambridge, Oxford and the English capital city of London are continuing to lead the way in terms of capital growth over the past year, which will come to no surprise to readers of my book <em>Get a Financial Grip</em> from some years ago, of course. </div>
<div> </div>
<div><a href="/images/2015/08/24/UK.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/08/24/UK.jpg" alt=""></div>
<div> </div>
<div>
<span>What's more, the boom could be only just be </span><a href="https://www.telegraph.co.uk/finance/property/house-prices/11815503/House-prices-soar-in-major-UK-cities-and-this-is-just-the-beginning" target="_blank">in its infancy</a><span>.</span><br><br><strong><span style="text-decoration: underline;">Australia - 3 positives for property in 2016?</span></strong><br><br><div>Despite the implementation of macro-prudential measures in Australia whereby APRA will aim to cap investor lending credit growth at around 10 per cent per annum, there are three other forces which may conspire to see 2016 being a strong year for property.</div>
<br><div>Firstly, Assistant Treasurer Josh Frydenberg has <a href="https://www.afr.com/business/banking-and-finance/financial-services/josh-frydenberg-flags-no-ban-on-smsf-property-borrowing-20150820-gj4amh" target="_blank">reportedly</a> flagged that there will no banning of SMSF property borrowing, which could come as something of an upside surprise for capital city property markets, although those without substantial deposits may find real estate investment via their SMSF a tough proposition.  </div>
<div> </div>
<div>Secondly, does anyone else think that interest rates are on the "<a href="https://petewargent.blogspot.com.au/2015/05/the-long-slow-march-to-zero" target="_blank">long, slow march to zero</a>"? I can't predict the future, of course, but put it this way - I wouldn't be betting against it! </div>
<div>
<br>The cash rate futures implied yield curve suggests that markets area already looking for another interest rate cut to 1.75 per cent by the second half of 2016.</div>
<div> </div>
<div>It's hard to know where to start with commodity prices crash. The iron ore and coal correction, of course, has been one for the ages. Crude futures have hit upon a deadly slick.<br><br>"Dr. Copper" is testing 6 year lows and toying with financial crisis depths while lurking below US$2.30/lb. Precious metals are miles below their peaks...and on the list goes.<br><br>Ordinarily one might say that this will be bad news for property markets and investor sentiment, yet realistically with mortgage rates falling towards record lows and cash in the bank paying essentially nothing worthwhile after inflation, where else are Aussies going to invest their money?<br><br>Into our tanking and resources-heavy stock market? Hmm, not so sure about that.</div>
<br><div>Thirdly, with APRA targeting investor loans banks and lenders are likely to go all in on targeting owner-occupier lending.<br><br>HSBC are already now <a href="https://www.afr.com/business/banking-and-finance/owneroccupiers-targeted-with-interest-rate-deals-20150820-gj42mv" target="_blank">offering</a> variable rate mortgages from 3.99 per cent, with is just unbelievably cheap. We might expect to see other banks to follow suit. </div>
<br><div>
<em><a href="https://www.corelogic.com.au/" target="_blank">CoreLogic-RP Data</a></em>'s index shows that Sydney home values are up by 1 per cent in first three weeks of August alone and a stonking 18.2 per cent over the past year. It's turning into a monster property boom, with Sydney dwelling values now up by more than 50 per cent since 2012.</div>
<div> </div>
<div><a href="/images/2015/08/24/RPD.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/08/24/RPD.jpg" alt=""></div>
<div> </div>
<div><span>With Sydney inching closer to its market peak, investors are increasingly shaping up to scope out Brisbane for better value, with investor lending on a 12mMA basis now tracking at its highest level since April 2008.</span></div>
<div><span> </span></div>
<div><a href="/images/2015/08/24/QLD.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2015/08/24/QLD.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div><span>Sure, APRA's investor lending crackdown will jam a stick in the spokes for a while, but meanwhile Queensland owner-occupier lending has also ghosted past five year highs on a 12mMA basis, after a subdued half decade. </span></div>
<div><span> </span></div>
<div><a href="/images/2015/08/24/QLD2.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2015/08/24/QLD2.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<span>And remember the Queensland figures are being dragged down by any number of mining towns and regions which are experiencing negative demand i.e. recessionary conditions.</span><br><br><span>Brisbane could be the one to watch in 2016.</span>
</div>
<div><span> </span></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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Three positives for property in 2016: Pete Wargent

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<p>Almost 100% of the market analysis and media focus in real estate is devoted to the capital cities. But in two major states the regional markets are outperforming their capital cities.</p>
<p>And they’re not just any old cities that are being outdone by their country cousins. Sydney is one of them, which will amaze many people, and Brisbane is the other one.</p>
<p>I explained in a recent column why Sydney has passed its peak and is slowly losing its heat. You won’t be reading about it in mainstream media because journalists lack expertise and are reliant on press releases from research companies. And those research companies base their market analysis on median price movements. And median prices are six months behind the market.</p>
<p>The real story of markets is told by sales volumes. And sales activity has been gradually falling across metropolitan Sydney – to the extent that I count just 36 growth suburbs (compared to 114 six months ago).</p>
<p>Regional New South Wales has almost double the number of growth markets of Sydney. The momentum that started with regional areas close to the state capital – like Wollongong and Gosford – has spread throughout the state.</p>
<p>The Gosford LGA remains the most buoyant regional NSW market, followed by nearby Wyong. The Newcastle region – where the Newcastle, Lake Macquarie, Maitland, Cessnock and Port Stephens LGAs all have multiple growth suburbs – is also on a positive trajectory.</p>
<p>The Southern Highlands market has more recently sprung to life, with Moss Vale, Bowral and Mittagong all looking strong.</p>
<p>Further afield in NSW, Port Macquarie looks really good and the Tweed region at the Queensland border is joining the growth party. At the opposite end of the state, the twin cities of Albury and Wodonga on either side of the Victoria border are attracting growing attention from investors.</p>
<p>Dubbo continues to be one of the strongest regional economies in the state and the nation, while Goulburn and Orange also look good.</p>
<p>Everywhere I look in New South Wales there are markets percolating, without (with the exception of Gosford) having delivered price growth of Sydney proportions.</p>
<p>Brisbane is still producing plenty of growth markets, although the limelight has switched from the north to the south. While the Brisbane City Northside precinct was the first to burst into life with elevated activity and good price growth in 2014, the leading markets are now Brisbane City Southside and, a little further south, Logan City.</p>
<p>But there busy markets across Brisbane, with upwardly-mobile suburbs springing up in the Redland, Ipswich and Moreton Bay LGAs around the periphery of the metropolitan area.</p>
<p>And regional Queensland is matching the Greater Brisbane area for the number of growth locations. The regional action is headed by the Gold Coast, which continues to gather momentum and has now overtaken Logan City to be the No.1 LGA in Australia, in terms of the number of growth suburbs.</p>
<p>Fortunately, most of the growth markets in Gold Coast City are genuine residential markets – i.e. inland housing markets, rather than the high-rise precincts along the glitter strip. Let’s hope that’s where investors focus their attention, because the new mega towers will return the Gold Coast to its grand tradition of apartment over-supply.</p>
<p>The Sunshine Coast, which continues to progress as a more well-rounded regional city, is the next biggest growth market, while resurgent Cairns is still featuring strongly. </p>
<p>But there’s a new contender – the Fraser Coast region based on Hervey Bay is now producing more growth suburbs than Cairns and almost as many as the Sunshine Coast. Townsville is slowly spluttering back to life.</p>
<p>Toowoomba, which was the first regional city in Queensland to get on a growth path, looks to have had its run. This is demonstrated by the high number of “plateau” markets among the Toowoomba suburbs. The big infrastructure investment happening in and around the city should keep its market solid, but sales activity has undoubtedly tapered off in Toowoomba.</p>
<p>No other states have regional markets as prominent as NSW and Queensland, although there are good possibilities for investors in Victoria and Western Australia – but that’s another story.</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>
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terryryder-YECXbqmri2

Capital cities outdone by country cousins: Terry Ryder

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<div>
<span style="line-height: 1.3em;">APRA </span><span style="line-height: 1.3em;">released</span><span style="line-height: 1.3em;"> its latest property exposures figures for the June 2015 quarter today, which confirmed an ongoing surge in new housing loans. </span>
</div>
<div><span> </span></div>
<div><span>As at June 2015 the total of residential term loans to households held by all institutions (ADIs) was $1.33 trillion. </span></div>
<div><span> </span></div>
<div><span>In total this represented an increase of +$31.8 billion (+2.4%) from the prior quarter, and a solid increase of +$97.1 billion (+7.9%) over the year to June.</span></div>
<div><span> </span></div>
<div><span>There were a total of 5.4 million loans outstanding, with an average balance of $243,000.</span></div>
<div><span> </span></div>
<div><span><strong><span style="text-decoration: underline;">Investment loans surging higher</span></strong></span></div>
<div><span> </span></div>
<div><span>Investment loans totalled $518.3 billion, an increase of +$17.7 billion (+3.5%) from the March quarter and massive +$81.1 billion (+18.6%) from one year ago.</span></div>
<div><span> </span></div>
<div><span>That's huge, and well ahead of the rate that the regulator would or should be comfortable with.</span></div>
<div><span> </span></div>
<div><span>Interestingly while loans held by the major banks increased by +7.5% over the past year to $1,076 billion, loans held by other domestic banks increased by a much faster +18.8% pace to $155 billion.</span></div>
<div><span> </span></div>
<div>The major banks still accounted for close to 80 per cent of the domestic new housing loan market, however, with the remainder of the market comprising other banks, credit unions and particularly building societies.</div>
<div><span> </span></div>
<div>
<span>It should be noted that there have been a few issues relating to the reclassification of loans between owner-occupied and investment loans, with material revisions (&gt;10%) pushed through for the September 2014 to March 2015 quarters relating to ANZ and National Australia Bank.</span><br><span><br></span><span>You can see the jump in the chart below. </span><br><span><br></span><span>This has had the impact of accentuating the rate of increase in investment loans while dampening the growth in owner-occupier loans. </span>
</div>
<div><span> </span></div>
<div><span>In any case the trend in <strong>total </strong>loans outstanding since March 2008 has been more than clear, with total residential term loan exposures captured by this data more than doubling over that time.</span></div>
<div><span> </span></div>
<div><span>This is at least partly because the investor segment of the market often opts to amass new debt rather than paying loan balances down, particularly because Australia has prevailing tax legislation which encourages this behaviour.</span></div>
<div><span> </span></div>
<div><a href="/images/2015/08/26/APRA1.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span> </span></div>
<div><span><img src="/images/2015/08/26/APRA1.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<div>The data revealed that the overwhelming majority of new housing loans in the quarter at 89.3 per cent of new loans were of a loan to value ratio (LVR) of 90 per cent or lower. </div>
<br><div>As denoted by the pink area in the chart below there has been a surge in the number of borrowers using 20 to 40% deposits, now accounting for more than half of new housing loans in the last quarter.<br><br>This may imply that "cashed up" property owners with deep pools of equity are buying investment property at the expense of first time buyers who must save their deposits. </div>
<div> </div>
<div>More than one fifth of new loans in the quarter had a very low loan to value ratio of just 60% or lower.</div>
<div> </div>
<div><a href="/images/2015/08/26/APRA2.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/08/26/APRA2.jpg" alt=""></div>
<div> </div>
<div>
<div>Higher risk "low doc" loans continued to represent only a tiny fraction of the Australian mortgage market in the June quarter at 0.4 per cent.</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Market risks</span></strong></div>
<div> </div>
<div>With very few low doc loans written and the overwhelming majority of loans being written with deposits ranging from 10 to 40 per cent, where lies the risk?</div>
<div> </div>
<div>After all, it is hardly as though the market is highly leveraged in aggregate with aro<span>und <span>~</span>$1.4 trill</span>ion of debt sitting against a stonking $6 trillion residential housing market.</div>
<div> </div>
<div>For my money, in terms of the residential mortgage market the answer is that the risk lies in the very high percentage and concentration of interest only loans, whereby typically no repayments are made against the principal in the first five years. </div>
<div> </div>
<div>It is true that loans with offset facilities are continuing to flourish, but nevertheless a whopping 45.8% of new housing loans written in the June 2015 quarter were of the interest only variety.</div>
<div> </div>
<div>Although only 4% of new housing loans in the June quarter were written outside serviceability, it would not be a surprise to see APRA looking more closely at the elevated percentage of interest only loans with renewed interest.</div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
</div>
<div> </div>
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Investment loans power on: Pete Wargent

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<p>On Wednesday I spoke at seminars in Sydney where I heard about a property investment strategy that is different in many respects to one I would pursue. But it<span>’</span>s a very good and successful one, nevertheless.</p>
<p>It reinforces a point about which I<span>’</span>m constantly aware: there<span>’</span>s no single strategy for property investment that can be called the right one. The best strategy for buying property and building a portfolio differs from one person to the next.</p>
<p>Here<span>’</span>s what David McMillan of Performance Property Advisory does on behalf of his clients. He and his team identify one market which, above all others, stands out as the one that offers the most value.</p>
<p>They focus exclusively on that market and devote big resources there to learn all they can, establish a network of service providers and be ready to move quickly when the right properties become available.<span style="line-height: 1.3em;"> </span></p>
<p>A core plank of the strategy is to buy in areas likely to show good growth in the first three years. Early growth creates the equity that helps to fund the next purchase and build the portfolio.</p>
<p><span>“</span>People can<span>’</span>t stump up a deposit of $100,000 or $150,000 every time they want to buy another property,<span>” </span>McMillan says. <span>“</span>So we buy them something for $500,000 that will be worth $650,000 in three years time. They build their portfolio using the equity that has been created.</p>
<p><span>“</span>Most investors only get as far as one property, because they make mistakes. Those mistakes are leveraged and amplified.<span>”</span></p>
<p>McMillan and his team has a track record of targeting future growth markets well ahead of the pack. They were buying in prime suburbs of Sydney in 2012, in advance of the three years of strong price growth that followed.</p>
<p>Once the temperature rose as the herd stampeded into Sydney, the PPA team exited. The properties bought for their clients in Sydney have grown 40% to 60% in value.</p>
<p>The next focus was Brisbane, with the emphasis on prime suburbs close to the CBD. They started buying there in mid-2013 and have bought close to 300 properties for clients. They<span>’</span>re now on the way out of Brisbane, as more investors come into that market, making it harder to find good-value investments.</p>
<p><span>“</span>We buy established property, not new property. New property is the most expensive way to buy real estate and the least effective way to grow a portfolio. We look for scarcity and we look for good quality property in good areas.<span>”</span></p>
<p>How do they know the right time to focus on a particular market? One of the key research tools is charting the relationship between prices and rents.</p>
<p>When Sydney had gone multiple years without significant price growth, but rents had grown considerably, they knew it was the right time to strike. <span>“</span>We want a location with price stagnation for 5-7 years plus a significant increase in rents,<span>” </span>he said.</p>
<p>An example was the top end suburb of Rose Bay. In 2012, the median price had grown only 15% in the previous eight years. But rents had grown 70%. According to the formula, that meant the suburb and many others like it in Sydney were primed for a growth spurt.<span style="line-height: 1.3em;"> </span></p>
<p><span>“</span>It was very clear what was going to happen in Sydney,<span>” </span>McMillan says.<span style="line-height: 1.3em;"> </span></p>
<p>McMillan offers three keys to successful investment:  buy in markets showing value, buy at or below the median price for the target region, and buy quality.</p>
<p><span>“</span>We won<span>’</span>t recommend a property to a client that we wouldn<span>’</span>t put in our own portfolio. If you don<span>’</span>t like it and wouldn<span>’</span>t live in yourself, then it<span>’</span>s probably not a good property to invest in.<span>”</span></p>
<p><span><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></span></p>
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Charting the relationship between prices and rents: Terry Ryder

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<div>The ABS released its Construction Work Done figures for the June quarter, which showed total construction for the quarter rebounding by +1.6% to a seasonally adjusted $49.8 billion.</div>
<div> </div>
<div>Over the last year total construction remained at historically very high levels at $198 billion, although this is now down from a sky-high annual figure of $211 billion one year ago.</div>
<div> </div>
<div><a href="/images/2015/08/27/A1.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/08/27/A1.jpg" alt=""></div>
<div> </div>
<div>
<div>As any good politician would, of course, smiling Treasurer Hockey immediately took to Twitter to claim credit for the rebound.</div>
<div> </div>
<div class="separator"><a href="https://4.bp.blogspot.com/-MXXSPCW_nbQ/Vd49Y3e_dTI/AAAAAAAAXz8/ZfZZ5h_X5Ic/s1600/a9.jpg"><img src="https://4.bp.blogspot.com/-MXXSPCW_nbQ/Vd49Y3e_dTI/AAAAAAAAXz8/ZfZZ5h_X5Ic/s640/a9.jpg" width="640" height="178"></a></div>
<div class="separator"> </div>
<div class="separator">
<div>But in fact public infrastructure work has been very weak. </div>
<div> </div>
<div>Furthermore, against recent trends the rebound in the June quarter was not driven by residential construction either, rather it was a punchy quarter for engineering (i.e. resources) construction works, with expenditure rebounding by +5.6 per cent to a seasonally adjusted $25.6 billion.</div>
<div> </div>
<div><a href="/images/2015/08/27/a2.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/08/27/a2.jpg" alt=""></div>
<div> </div>
<div>
<div>Despite this positive blip, engineering construction work done was -8.8 per cent lower than a year ago, and will doubtless resume its downward trajectory in due course, as considered in more detail below.</div>
<br><strong><span style="text-decoration: underline;">Mining rebound in WA</span></strong><br><div> </div>
<div>The driver of the engineering construction rebound was an increase in spend of nearly +$3 billion in Western Australia to $11.3 billion for the second quarter.</div>
<div> </div>
<div><a href="/images/2015/08/27/A3.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/08/27/A3.jpg" alt=""></div>
<div> </div>
<div>
<div>In fact, anyone who was paying very close attention might have anticipated this.</div>
<div> </div>
<div>Recall that the so-termed "record trade deficit" in April 2015r actually included an <a href="https://petewargent.blogspot.com.au/2015/06/trade-deficitwtf" target="_blank">anomalous spike</a>in Western Australian imports from Korea. As I <a href="https://petewargent.blogspot.com.au/2015/06/trade-deficitwtf" target="_blank">noted at the time</a>:</div>
<br><div><span><em>"<span>No further detail is provided by the ABS, but given that there was a kahuna $1.5 billion spike in merchandise imports in Western Australia, and we can assume that this was probably related to a major mining project.</span></em></span></div>
<div><span><em> </em></span></div>
<div><span><em>In all likelihood, one might hazard that this was rail capex for Gina Rinehart's Roy Hill iron ore project (which typically a business would treat as an investment in a fixed asset for the generation of revenue streams, rather than trading expenditure)."</em></span></div>
<br><div>In all probability, therefore, the June quarter rebound was capex driven with a large asset purchase accounting for most of the spike.</div>
<div> </div>
<div>Moreover we can expect that the September quarter will see engineering construction work resuming its inevitable decline.</div>
<br><strong><span style="text-decoration: underline;">Building by state</span></strong><br><br><div>At the state level, Victoria has been the king of residential building across recent years.</div>
<div> </div>
<div>However New South Wales is now the one state which is benefitting from a material public sector and non-residential building contribution, thereby thrusting total building work done in the Premier State to its highest ever level in the June quarter.</div>
<div> </div>
<div><a href="/images/2015/08/27/A8.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/08/27/A8.jpg" alt=""></div>
<div> </div>
<div>
<span>Indeed, the New South Wales economy in generally is in very fine shape at the present time.</span><br><br><strong><span style="text-decoration: underline;">Residential building by state</span></strong><br><br><div>Looking at specifically residential buiding we can see that the +7.4 per cent year-on-year increase has been overwhelmingly a function of "other residential" building - which is to say, the construction of units, townhouses and apartments.</div>
<br><div>As denoted by the green line below, outside Sydney major renovations activity has been very subdued through this cycle.</div>
<div> </div>
<div><a href="/images/2015/08/27/A4.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/08/27/A4.jpg" alt=""></div>
<div> </div>
<div>
<div>Although new house building has responded to low interest rates almost everywhere to a greater or lesser extent, the trend has been looking increasingly peaky over the past four quarters.</div>
<div> </div>
<div>Victoria continues to lead the way on the house building front, a state which appears to suffer less from greenfield land supply constraints than other states and territories do.</div>
<div> </div>
<div><a href="/images/2015/08/27/A6.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/08/27/A6.jpg" alt=""></div>
<div> </div>
<div><span>On the other hand the higher density sector building work continues apace, particularly in Melbourne, Sydney and Brisbane, which is a trend you can see everywhere from West End, South Brisbane, Fortitude Valley and Newstead (Brisbane), to Mascot, Wolli Creek and Zetland (Sydney). </span></div>
<div><span> </span></div>
<div><a href="/images/2015/08/27/a7.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2015/08/27/a7.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<div>The latest building approvals figures suggest that the cycle for unit and apartment approvals may also be set to peak in due course, thoughthe duration of higher density projects from approval to completion may run to several years.</div>
<div> </div>
<div>Consequently the elevated levels of building activity in this sector may have quite some way to run yet.</div>
<br><strong><span style="text-decoration: underline;">The wrap</span></strong><br><br><div>Overal this was a positive result for construction in the June quarter which masks an ongoing decline in resources construction that is locked and loaded for the next few years. </div>
<div>
<br>Residential building remains strong for the time being, but even here Australia can only build new apartment projects for so long.</div>
<div> </div>
<div>Of more significance will be today's capex intentions for the 2015/16 financial year, and specifically whether businesses are becoming more inclined towards investment plans.</div>
<div> </div>
<div>If not, in a nutshell, interest rates will have further to fall.</div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
</div>
<div><span> </span></div>
</div>
</div>
</div>
</div>
</div>
</div>
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Construction rebounds...for now: Pete Wargent

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<div>
<em>Residex</em> released its data and property market update to 31 July which showed house growth over the quarter accelerate to "an astonishing" 7.6% to be 21.2% higher over the year.</div>
<div> </div>
<div>As the below <em>Residex</em> graphic shows capital growth in Sydney has continued to outstrip by far that seen in other capital cities where average growth for the quarter was under 1%.</div>
<div> </div>
<div>Sydney median house prices have now blasted well past $1 million at $1,017,500</div>
<div>
<br>Regional house price growth was relatively soft across all states and territories on this index. </div>
<div> </div>
<div><a href="/images/2015/08/31/Resi1.jpg" target="_blank">Click here</a></div>
<div> </div>
<div><img src="/images/2015/08/31/Resi1.jpg" alt=""></div>
<div>
<div>Sydney unit prices also recorded very strong 6.6 per cent quarterly growth to be 15.2 per cent higher over the year.</div>
<div> </div>
<div>
<em>Residex</em> has also recorded very strong growth in rents for houses and units over the past twelve months.</div>
<br><span>On the other hand median prices contracted in resources capitals Perth and Darwin over the past year.</span>
</div>
<div><span> </span></div>
<div><a href="/images/2015/08/31/Table_1_July_Stats_Summary2.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2015/08/31/Table_1_July_Stats_Summary2.jpg" alt="" width="765" height="670"></span></div>
<div> </div>
<div> </div>
<div>
<div>These<em> Residex </em>updates are well worth a read.</div>
<div> </div>
<div>Discussed in this newsletter is how the increasing population density of Sydney may have contributed to outperforming capital growth.</div>
<div> </div>
<div>
<em>Residex</em> considers that strong captial growth in Sydney could continue for the next few quarters before stabilising at a high level.</div>
<div> </div>
<div>
<div>These<em> Residex </em>updates are well worth a read.</div>
<div> </div>
<div>Discussed in this newsletter is how the increasing population density of Sydney may have contributed to outperforming capital growth.</div>
<div> </div>
<div>
<em>Residex</em> considers that strong captial growth in Sydney could continue for the next few quarters before stabilising at a high level.</div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
</div>
</div>
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Astonishing Sydney boom accelerates: Pete Wargent

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<p>The herd mentality and the FOMO syndrome drive far too many investment decisions in Australian real estate.</p>
<p>It helps to explain why most Australians who attempt property investment have a bad experience. </p>
<p>When people are driven by an impulse to do what others are doing (the herd mentality) or to get in because they don’t want to miss all that lovely capital growth they keep hearing about (the FOMO – Fear Of Missing Out – syndrome), they’re buying well after the boom started.</p>
<p>Many investors buy real estate at the peak of the cycle. Worse, some buy after the peak.</p>
<p>People are still out there bidding up prices at Sydney auctions, driven by the FOMO syndrome, unaware that the peak has passed and Sydney’s boom is fading.</p>
<p>It means that fundamentally they are paying too much and destroying their chances of maximizing capital growth.</p>
<p>No one ever got rich following the herd. Some have succeeded by leading the herd but the truly successful people are those who run in the opposite direction to the herd.</p>
<p>People love the comfort of the pack. They would rather be part of a herd stampeding towards a cliff, than detach and run in the opposite direction, towards safety and potential prosperity.</p>
<p>Because of the power of the herd mentality and the FOMO syndrome, most people buy when prices are high.</p>
<p>When the market is down, they stay out of the market. They’ll get back in when they read that the herd is running again.</p>
<p>Crazy stuff. </p>
<p>Right now, the Perth market is down. I’ve been suggesting to people it’s a great time to consider buying there. The Perth market, which was strong in 2011 and 2012, peaked early in 2013.</p>
<p>The heat has long since evaporated from that market, there’s no competition from other buyers, prices have eased off and the buying is good.</p>
<p>You just have to believe that the Western Australian economy has a future and that the Perth property market will rise again.</p>
<p>Taking a long-term view, Perth is a strong market with a great track record. Its 10-year capital growth record is the strongest among the state and territory capital cities, much better than Sydney’s or Melbourne’s.</p>
<p>It has a history of strong population growth and a buoyant economy boosted by its links to the resources sector. It’s currently struggling but that won’t last. </p>
<p>Perth has also shown itself to be resilient during periods of downturn. I don’t expect any major price decline in the current phase, with the exception of oversupplied inner-city apartment markets which should be avoided.</p>
<p>While awaiting recovery in the Perth market, the best strategy to maximise capital growth prospects is to follow the infrastructure trail. Find a location primed to benefit from spending on new infrastructure, especially transport infrastructure, and well-linked to major jobs nodes.</p>
<p>Locations with those qualities include the precincts around Rockingham, Fremantle, Midland and Forrestfield.</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>
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The Perth property market will rise again: Terry Ryder

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<p><span>As at the week ending 25 October 2015, a total of 240,384 residential properties were listed for sale across the country.</span></p>
<p><span>Just over 40% of these (103,852) were situated in one of the 8 capital cities. In comparison to the same period last year, total listings are -2.6% lower nationally and -1.9% across the capitals. Relative to last year, the latest data also shows that the number of new listings being added to the market is lower, despite the number of new properties advertised for sale increasing on a rolling four week basis for the last four weeks.</span></p>
<p><a href="/images/2015/10/28/Table.jpg" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></p>
<p><span style="line-height: 1.3em;"><img src="/images/2015/10/28/Table.jpg" alt="" width="569" height="126"></span></p>
<p><span>Sydney and Canberra are the only two cities where the number of new property listings over the most recent four week period was higher than at the same time last year, albeit by only 0.3% in Sydney, and 3.7% across Canberra. </span></p>
<p><span>This result comes from 9,552 new listings added to the market in Sydney over the four weeks ending 25 October, compared to 9,526 one year ago and 720 residential Canberra properties added to the overall stock available for sale, compared to 694 over the corresponding four weeks one year ago. In all other cities the number of new properties listed for sale are lower relative to last year, with the largest differential seen in Perth (-22.4%), Darwin (-13.6%) and Adelaide (-12.0%). In particular, the data for Perth and Darwin indicates that home owners are likely aware of the weak housing market conditions and are therefore less inclined to put properties up for sale.</span></p>
<p><span>In terms of the total stock pool, across the residential capital city markets the results are more varied when compared to one year ago.</span></p>
<p><span><strong>There are more listings this year compared to last year in: </strong></span></p>
<ul>
<li><span><strong>Darwin</strong>, 1,581 currently, 1,389 last year (+13.8%)</span></li>
<li><span><strong>Perth</strong>, 19,284 currently, 17,423 last year (+10.7%)</span></li>
<li><span><strong>Sydney</strong>, 22,564 currently, 21,609 last year (+4.4%)</span></li>
</ul>
<p><span><strong>All other remaining capital cities are showing less stock availability this year relative to one year ago:</strong></span></p>
<ul>
<li><span><strong>Hobart</strong>, 2,494 currently, 2,907 last year (-14.2%)</span></li>
<li><span><strong>Adelaide</strong>, 7,646 currently, 8,335 last year (-8.3%)</span></li>
<li><span><strong>Melbourne</strong>, 29,948 currently, 32,574 last year (-8.1%)</span></li>
<li><span><strong>Canberra</strong>, 2,184 currently, 2,370 last year (-7.8%)</span></li>
<li><span><strong>Brisbane</strong>, 18,151 currently, 19,288 last year (-5.9%)</span></li>
</ul>
<p><a href="/images/2015/10/28/Combined-capitals.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/10/28/Combined-capitals.jpg" alt="" width="694" height="263"></p>
<p><span>Furthermore, last week we took a look at the current level of </span>housing supply<span> across each of the capital city markets. The analysis compares the absorption of stock by comparing the trend number of properties selling and the availability of stock for sale. The findings show that Perth and Darwin each have 6.8 months of housing supply on the market, the greatest of any capital cities, while stock levels in Sydney, Adelaide and Melbourne indicate less than 3 months’ worth of supply, showing that these housing markets are somewhat healthier than that of Perth and Darwin. On the flip side, Perth and Darwin’s market conditions are more favourable for those looking to buy a property with more choice and vendors becoming more willing to sell below the current list price to secure a sale.</span></p>
<p><a href="/images/2015/10/28/National.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/28/National.jpg" alt="" width="709" height="269"></span></p>
<p> </p>
<p><span>Across the states and territories, the number of listings is lower than one year ago in all but two regions; Western Australia, where current stock levels are 7.1% higher than they were one year ago and Northern Territory, where the number of listings currently is 14.0% higher than over the same period in 2014. </span></p>
<p><span>At the other end of the scale, the Australian Capital Territory (-8.0%) and Victoria (-6.4%) are the two regions with the largest differential in listing volumes compared to one year ago, however, interestingly new listings across the Australian Capital Territory over the four weeks ending 25 October were higher than one year ago (+3.3%), while across Victoria they were -4.3% lower.</span></p>
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