<p>The new <a href="https://www.apartments.com.au/new-apartments/yarraville-green-42-stephen-street-yarraville-vic-3013">Yarraville Green</a> development in Melbourne's inner west is showing that landscaping can be just as influential as architecture, with buyers responding strongly to the garden-first approach adopted from the outset by developer Excelon Projects and the project's design team.</p>

<p>Excelon appointed Six Degrees Architects and landscape architects SBLA to work collaboratively on the development, with a brief to create "a sustainable, design-led building with a focus on community."</p>

<p>That approach has resonated with buyers. According to Next Chapter Director Tom Hirini, who is leading the sales campaign, the landscaped communal garden has become one of the project's defining features, alongside its boutique scale and European-inspired cluster housing concept.</p>

<p>Local downsizers, right-sizers and established families already living in Yarraville and surrounding suburbs have accounted for the majority of purchasers.</p>

<p>[smartcode_project:default project_id=144913 project_image_fid=297740]</p>

<p>Yarraville Green will comprise 53 homes, including apartments and townhomes, arranged around the shared central garden to maximise connections to the landscaped open space. Parking has been moved underground, allowing the ground plane to be dedicated to greenery, pedestrian movement and communal spaces.</p>

<p>The landscape extends well beyond passive planting. Productive garden beds, a pergola, communal gathering spaces, garden sheds and a pet wash have all been integrated into the masterplan, creating spaces designed to encourage everyday interaction between residents.</p>

<p>[smartcode_project:default project_id=144913 project_image_fid=297741]</p>

<p>The interiors continue Excelon's focus on craftsmanship, incorporating bespoke elements by Melbourne artisans including leadlight detailing by Adadaz, hand-turned timber hardware by Auburn Woodturning and blown-glass lighting by Ruth Allen.</p>

<p>Sustainability has also been embedded throughout the project, with Yarraville Green targeting an average 7-star NatHERS energy rating through passive design principles, rooftop solar servicing common areas and rainwater harvesting for landscape irrigation.</p>

<p>[smartcode_project:default project_id=144913 project_image_fid=297735]</p>

<p>Construction continues to progress at Yarraville Green, with structural works well underway and framing works approaching completion under builder Balmain &amp; Co. The project remains on track for completion in mid-2027.</p>

<p>Apartments at Yarraville Green are currently priced from $625,000, while townhomes start from $1.4 million.</p>

<p>[smartcode_project_cta:default project_id=144913]</p>


Joel Robinson

Garden-led design drives buyer demand at Yarraville Green

<p>National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.</p>

<p>Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.</p>

<p>[smartcode_project:default project_id=145922 project_image_fid=373556]</p>

<p>The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.</p>

<p>Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.</p>

<p>"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.</p>

<p>"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.</p>

<p>"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."</p>

<p>[smartcode_project:default project_id=145922 project_image_fid=373559]</p>

<p>Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.</p>

<p>The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.</p>

<p>[smartcode_project:default project_id=145922 project_image_fid=373583]</p>

<p>Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.</p>

<p>Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.</p>

<p>[smartcode_project:default project_id=145922 project_image_fid=373571]</p>

<p>Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.</p>

<p>Completion of Crest &amp; Walker is slated for late 2028.</p>

<p>[smartcode_project_cta:default project_id=145922]</p>


Fortis expands Brisbane pipeline with launch of Crest & Walker in Newstead

<p>The enormity of delivering a true skyscraper in Australia's new development market is often overlooked.</p>

<p>It has taken the best part of a decade since plans for Chevron One were first unveiled, but the 41-storey tower is now complete, with residents collecting their keys and moving into what has become one of the Gold Coast's most recognisable new landmarks.</p>

<p>Rising 127 metres above Chevron Island, Chevron One stands almost twice as high as any other building on the island. Its scale places it alongside the trio of towers at Jewel, arguably the last truly significant addition to the central Gold Coast skyline when they were completed around six years ago.</p>

<p>While there are several developments underway around a similar height to Chevron One, they are more concentrated within clusters of the highest towers in the city. The fact Chevron One sits within a developing precinct, looking back at the other high-rise developments in Surfers Paradise and Broadbeach, makes it a different proposition altogether. It will certainly become a reference point on the Gold Coast skyline.</p>

<p>[smartcode_project:default project_id=6515 project_image_fid=68833]</p>

<p>Developer Bensons Property Group is behind the 41-storey tower, which has 229 apartments, along with an exhaustive list of resident amenity spread across what is the largest development site ever assembled on Chevron Island.</p>

<p>The tower has been the talk of the town for years, says Ray White Projects Gold Coast agent Caitlin Rosenboom, who is selling the remaining apartments.</p>

<p>"People have been watching Chevron One go up for years," Rosenboom says, adding that many prospective buyers have been surprised by the scale of the views once they step inside.</p>

<p>"It's only when they walk through a completed apartment that they truly understand the position of the building," Rosenboom says.</p>

<p>"The views are jaw-dropping. Whether you're looking east over the ocean, across Surfers Paradise, along the river systems or out to the hinterland, every level offers something different but equally impressive."</p>

<p>[smartcode_project:default project_id=6515 project_image_fid=360215]</p>

<p>One of Chevron One's defining advantages is its location on the eastern side of Chevron Island on Stanhill Drive, a position which protects the views forever.</p>

<p>"There's only one row of houses between Chevron One and the water, and the height restrictions along the river means views from Chevron One can never be built out,"&nbsp;Rosenboom says.</p>

<p>While new apartment developments continue to emerge across the Gold Coast, Rosenboom says opportunities to secure a completed apartment with this level of outlook are becoming increasingly rare.</p>

<p>"The size of the site is something that would be incredibly difficult to replicate today," she says.</p>

<p>"That's allowed Chevron One to deliver the sort of amenity, open space and resident facilities that very few projects can offer. There are not many completed apartment buildings on the Gold Coast right now that can compete with the combination of scale, quality and amenity."</p>

<p>[smartcode_project:default project_id=6515 project_image_fid=68839]</p>

<p>There's around 2,000 sqm of amenity solely for the use of residents of Chevron One. Club One features a uniquely shaped swimming pool that mirrors the footprint of the building itself, set within a extensively landscaped gardens. There's also an indoor pool and spa, a fully equipped gym with a Pilates room, a yoga garden, a bookable private dining area and lounge that can host up to 30 people, and a 24-hour concierge service.</p>

<p>As for the buyers, Rosenboom is fielding enquiry from everywhere: Sydneysiders and Melburnians looking at the new and off-the-plan market following the changes in the Federal Budget, as well as those looking to relocate, through to South East Queenslanders seeking either a permanent home or a weekender bolthole.</p>

<p>"The Gold Coast lifestyle continues to resonate with people relocating from the southern states, and when they see the views and the quality of what's been delivered at Chevron One, it becomes very easy for them to understand the appeal," Rosenboom says.</p>

<p>A diverse mix of one, two and three-bedroom apartments remain available, with each offering "something a little different", be it the orientation and views, configuration, or level, to suit a wide variety of buyers.</p>

<p>The remaining apartments are ready to inspect in person, by appointment.</p>

<p>[smartcode_project_cta:default project_id=6515]</p>


A decade in the making: Residents to move into Chevron One as construction wraps up

<p>A general rule of thumb in new apartment developments is that the penthouses get the rooftop.</p>

<p>It's a formula that's become commonplace across Australia's apartment market. Residents might have access to a pool, gym or barbecue facilities on a dedicated lower level, but the most desirable outdoor spaces are typically reserved for the highest-priced homes at the top of the building.</p>

<p><a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> has taken the opposite approach.</p>

<p>Rather than dedicating the rooftop to a handful of buyers, the Gold Coast developer has made it the centrepiece of its Flourish collection, creating expansive shared spaces from the best vantage point in the building.</p>

<p>The philosophy has reached its most ambitious expression at <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> in Palm Beach, where two rooftop precincts connected by a skybridge will deliver one of the most extensive lifestyle offerings seen in a residential apartment project on the Gold Coast.</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=374053]</p>

<p>"We're seeing a clear move toward developments that offer more than just an apartment," Sherpa Group founder Christie Leet said.</p>

<p>"People want spaces that support how they actually live, whether that's working from home, staying active, or spending time with family and friends.</p>

<p>"That's where amenity becomes critical. It's not just about what's included, but how those spaces are designed to be used every day."</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=374052]</p>

<p>The breadth of amenity has already attracted buyers across multiple demographics. Younger first home buyers have been drawn to Soleira's one-bedroom apartments, a product rarely delivered in Palm Beach, while families have responded to practical inclusions such as the shallow children's pool adjoining the main lap pool and the extensive communal recreation areas.</p>

<p>Instead of a single rooftop, Soleira delivers two distinct lifestyle zones.</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=372547]</p>

<p>The southern rooftop has been dedicated to wellness, featuring a gym, yoga and Pilates studio, work-from-home facilities, a wellness centre, spa, and hot and cold plunge pools.</p>

<p>The northern rooftop focuses on recreation and entertaining, incorporating a heated resort-style pool, private dining rooms, pizza ovens, barbecues, a golf simulator, children's recreation areas, and what is expected to be the Gold Coast's first rooftop basketball court, which will also double as a squash court.</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=374054]</p>

<p>Beyond the rooftops, Soleira will introduce 1,500 sqm of curated retail beneath the towers, creating one of Palm Beach's first genuinely mixed-use lifestyle precincts where cafés, restaurants and convenience retail become part of residents' everyday lives.</p>

<p>Sherpa has also retained management rights across the development, allowing it to oversee the long-term operation of the building through a 24-hour concierge model. The developer is also exploring additional revenue streams within the precinct aimed at helping offset ongoing body corporate costs for residents.</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=370962]</p>

<p>While Soleira is the largest project Sherpa has delivered, the rooftop-first philosophy has been evolving for several years.</p>

<p>It began with <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>, the first project released under the Flourish brand. Rather than competing at the ultra-luxury end of the market with oversized half-floor and full-floor residences, Sherpa focused on creating lifestyle-driven apartments supported by resort-style shared spaces.</p>

<p>Amargo introduced more than 800 sqm of rooftop amenity, combining wellness facilities, heated pools, entertaining areas, cabanas, pizza ovens and private dining spaces into what was designed as an extension of residents' homes rather than a facility used only occasionally.</p>

<p>[smartcode_project:default project_id=146527 project_image_fid=366550]</p>

<p>That approach continued with Flourish Oasis, where the same amenity-led philosophy was refined into a more boutique development. Strong demand from Sherpa's growing VIP database saw much of the project sold before it reached the broader market, reinforcing buyer appetite for apartment communities centred around shared lifestyle experiences.</p>

<p>Flourish Amargo is slated for completion mid-way-through next year, with Oasis to be delivered by late 2027. Flourish Soleira is expected to complete in 2030.</p>

<p>[smartcode_project_cta:default project_id=150017]</p>


Sherpa takes amenity to the sky as Flourish Soleira captures booming Palm Beach demand

<p>As apartment living continues to evolve across Sydney's growth corridors, the quality and distribution of shared spaces is increasingly shaping how residents experience home. Rather than functioning as add-ons, amenities are being embedded into the daily rhythm of a building, supporting everything from quiet retreat to social interaction, often within a single vertical community.</p>

<p>At <a href="https://www.apartments.com.au/new-apartments/aeris-melrose-park-nursery-street-melrose-park-nsw-2114">Aeris</a> in Melrose Park, this approach is resolved through a layered amenity offering that unfolds from ground level through to its upper podium. Developed by <a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> in partnership with Hankyu Hanshin Properties, the project introduces 468 apartments across two towers and a mid-rise building, positioned at the highest point of the broader masterplan.</p>

<p>[smartcode_project:default project_id=426 project_image_fid=359199]</p>

<p>The amenity experience begins at street level, where two courtyards sit within a landscaped setting that connects residents to the wider network of parks and green spaces. These green spaces are not isolated pockets but part of a wider pedestrian network that links Aeris to the surrounding <a href="https://www.apartments.com.au/developments/melrose-park-nsw-2114">Melrose Park</a> precinct, including Central Park, future schools, and the Town Centre opening in July 2026. The result is a transition that moves from public to private without abrupt boundaries, allowing residents to pass through shaded, tree-lined environments before reaching the building itself.</p>

<p>Moving upward, the focus shifts to the level five podium, where the primary communal facilities are concentrated. This space brings together a 16-metre swimming pool, outdoor seating areas, and a communal BBQ zone arranged to take advantage of elevated outlooks. Seating is positioned beneath pergolas, creating pockets of shade that extend the usability of the space throughout the day. The pool edge aligns with views toward the wider district, reinforcing the sense of elevation that defines the project’s positioning.</p>

<p>In the adjacent building, this is complemented by quieter, more contemplative spaces, including an outdoor cinema set within the same level. Positioned to operate primarily in the evening, it introduces a different tempo to the shared environment, shifting from daytime activity to after-hours use without requiring separate zones.</p>

<p>[smartcode_project:default project_id=426 project_image_fid=360299]</p>

<p>The podium also accommodates an intimate private resident gym. Located on the lower levels, it gives residents convenient access to fitness facilities without leaving the building.</p>

<p>Above, the elevated podium sky deck extends the amenity offering, providing additional open-air spaces with elevated outlooks across the surrounding landscape. While more restrained in program, this upper level reinforces the project’s vertical progression, from ground-level greenery to elevated outlook, allowing residents to move between distinct spatial conditions within a single address.</p>

<p>This distribution of amenities reflects a deliberate response to how residents use space across the day. Sekisui House Australia Sales and Marketing Director Peter Kalaf points to the role these shared areas play in shaping buyer demand. Aeris has been conceived as more than a collection of apartments, with the podium pool, gym and outdoor cinema forming part of a broader lifestyle offering that extends the home beyond each individual residence.</p>

<p>[smartcode_project:default project_id=426 project_image_fid=360300]</p>

<p>What distinguishes Aeris is not the inclusion of these elements individually, but how they are arranged in relation to one another. Active, social, and passive spaces are layered vertically rather than separated, allowing residents to choose between them without leaving the building or moving far from their apartment. This proximity supports both routine use, such as a morning swim or evening workout, and more occasional gatherings, whether around the BBQ area or within the cinema setting.</p>

<p>The amenity design also sits within a broader framework of connectivity across Melrose Park. The Melrose Park Town Centre, anchored by Coles and Dan Murphys, features a mix of retail, dining, health and lifestyle offerings, bringing everyday convenience closer to residents. By the end of the year, more than five hectares of parks and open space, equivalent to around seven football fields of green space on residents' doorstep, will further enhance the precinct, allowing the internal facilities at Aeris to operate as an extension of the wider neighbourhood rather than a substitute for it.</p>

<p>Construction at Aeris continues to gather momentum, with ground floor slabs expected to be completed in late 2026 before the first sections of the buildings begin to rise above ground.</p>

<p>[smartcode_project_cta:default project_id=426]</p>


Elevated amenity anchors daily life at Aeris, Melrose Park

China

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<p><span>GUEST OBSERVER</span></p>
<p><span>December saw a continuation of the recent trend of softer price growth in tier-1 cities and sustained price gains for tier-2 and 3. </span></p>
<p><span>Of the 70 cities reporting, 46 responded that the price of new dwellings had increased in the month; similarly, 45 cities also saw monthly gains in the secondary market.</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/20/Screen%20Shot%202017-01-20%20at%208.17.08%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
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<p> </p>
<p><span>While down from their respective peaks of 65 (April 2016) and 60 (September 2016), price growth for new and existing dwellings clearly remains robust and broad based. There has been an increase in the number of cities reporting price declines for new builds, but these remain well below the level seen in 2015. </span></p>
<p><span>Over the year, price growth in tier-1 cities remains strong despite having moderated since April. For new builds, prices are currently up 24.9 percent/yr. Price growth in the existing market is a little stronger at 28.8 percent/yr. </span></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/20/Screen%20Shot%202017-01-20%20at%208.25.12%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
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<p><span>As we have outlined on a number of occasions, much of the deceleration in annual price growth in tier-1 cities has come as a result of a material slowdown in Shenzhen, from 62.5 percent/yr in April to 23.5 percent/yr currently (for new homes). </span></p>
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<p>In effect, Shenzhen has come back to the pack, with Beijing and Guangzhou seeing sustained annual growth circa 22 percent/yr over that time and Shanghai having slowed from 32.9 percent/yr (September 2016) to 26.4 percent/yr.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/20/Screen%20Shot%202017-01-20%20at%208.26.23%20AM.png" target="_blank">Click to enlarge</a></p>
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<p><span>Price growth in tier-2 and tier-3 cities was also very healthy in December, respectively at 12.0 percent/yr and 8.8 percent/yr for new builds. The outcomes for existing dwellings were similar albeit a little softer, at 9.6 percent/yr and 5.7 percent/yr. </span></p>
<p><span>Authorities will be pleased that momentum has broadened outside of tier-1 in a sustained manner. Looking ahead, additional demand for domestic property is likely to build as a result of households being unable to (legally) invest abroad.</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/20/Screen%20Shot%202017-01-20%20at%208.27.57%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="https://www.urban.com.au/images/2017/01/20/Screen%20Shot%202017-01-20%20at%208.27.57%20AM.png" alt=""></span></p>
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<p><span>Currently the construction and investment data is only available to November. Till then it is apparent that the inventory of unsold homes and current construction projects continued to be worked through. However, we are yet to see new project starts respond. </span></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/20/Screen%20Shot%202017-01-20%20at%208.29.23%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
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<p><span>If confidence in the housing market and the broader economy is sustained, then a (likely modest) pick-up in starts is only a matter of time. </span></p>
<p><em>Elliot Clarke is senior economist, Westpac and can be contacted <a href="https://www.westpac.com.au/" target="_blank">here</a>.</em></p>
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jchancellor-FAypfDUnLy

New dwelling price increases for December in China

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<p><img src="https://counter.theconversation.edu.au/content/69863/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1"></p>
<p>GUEST OBSERVER</p>
<p>When it comes to discussions about Chinese real estate investors, we tend to focus on the idea that they are buying up property in places like Australia, pushing up prices – even if that is somewhat questionable.</p>
<p>But it also ignores the other side of the equation. The number of properties built by Chinese developers outside of China has grown significantly, even as residential construction within China slows. </p>
<p>The expansion of Chinese residential development outside China has impacts on a number of levels, from property prices through to regional diplomacy.</p>
<h2>The shift to Asia</h2>
<p>Country Garden, a property development company based in Guangdong, China, is constructing apartment buildings that would add more than half-a-million homes and house 700,000 people in Johor Bahru, in southern Malaysia. This project goes far beyond constructing apartment buildings, however. It is part of an even bigger project named “Forest City” that Country Garden plans to build on four artificial islands. </p>
<p>The idea is that Forest City will be equipped with schools, shopping malls, parks, hotels, office buildings and banks. All ensconced in rich greenery, clean water and a quiet transportation system. </p>
<p>This grand project is just one example of the recent surge of overseas investment by Chinese property developers. Total investment in the Chinese real estate sector was growing at a rate above 10% until 2014, then dropped to less than 1% in 2015. This indicates a significant shift in Chinese real estate investment.</p>
<p>All the while, Chinese investment in the real estate sector overseas has picked up strongly. It has grown from $US0.6 billion in 2009 to US$30 billion in 2015. Several Chinese property developers have identified overseas investment as their main business growth strategy.</p>
<h2>Two reasons for the pivot</h2>
<p>Chinese investors have begun looking offshore for a couple of reasons. </p>
<p>Chinese buyer demand for overseas properties is growing. Since China reformed its economy and started growing at a fantastic rate, households have accumulated significant wealth. They now want to diversify their investment portfolios, and so are seeking property elsewhere. </p>
<p>Volatility in domestic housing prices has intensified this trend, despite various government policies aimed at smoothing out price fluctuations. An oversupply of properties in third and fourth-tier cities such as Ordos and Qinhuangdao created “ghost towns” where property isn’t desirable. In first and second-tier cities, however, prices have skyrocketed. House price-to-income ratios of these cities are ranked highest in the world, making it difficult to invest in properties in China.</p>
<p>In recent years there has been a huge expansion of production capacity. In 2015, China produced 51.3% of the cement and 49.5% of the crude steel in the world. As production capacity grows beyond the demand from the domestic market and runs into overcapacity, it is natural that firms will seek returns overseas. </p>
<h2>The impact of it all</h2>
<p>Taking Country Garden as an example, it is worth noting that the developer is not just building residential property, but designing and constructing the entire infrastructure for a city. Transport, greenery, water and noise control are all being put in place. These are beyond the scope of a conventional property developer. </p>
<p>Therefore, one potential positive impact of this project is to help boost the quality of infrastructure in Johor Bahru and so nurture more business activities in the future. The economic and geographic relationships between Johor Bahru and neighbouring Singapore may develop into one similar to that between Shenzhen and Hong Kong. </p>
<p>It is, however, critical that the local government monitors and enforces strict environmental protection and regulation to ensure the project won’t damage the natural environment or disrupt the local market. </p>
<p>The huge influx of newly built apartments has resulted in the value of residential sales dropping by almost one-third in in Johor Bahru last year. Whether this is a short-run phenomenon and housing prices will rally in the long run depends on whether more business activities and job opportunities can attract population inflow to the city and hence create higher demand for housing. In the short run, the fall in housing prices may lower the cost of living and attract firms and workers into the city.</p>
<p>For the Chinese government, it will be important to nurture more talent with legal and financial expertise to help Chinese property developers go out and invest overseas. This expansion by developers is just one, early facet of China’s new diplomatic efforts to develop infrastructure overseas.</p>
<p><em><span class="fn author-name">Yixiao Zhou is l</span>ecturer in Economics, Curtin University and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/yixiao-zhou-320417" target="_blank">here</a>.</em></p>
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As its economy changes, China is starting to export its real estate ideas too

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<div><span style="color: #212121;">GUEST OBSERVER</span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>If you ask anyone where to find Sydney's true Chinatown, they will tell you "Haymarket." They will be wrong.</span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>The location of Chinatown has implications for property markets and real estate development. Anyone who invests in real estate should know where these active participants in the housing market prefer to live and work. </span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>It's true that Haymarket used to be Sydney's main Chinatown. It's full of tall buildings and places to buy Asian food, drink, and trinkets. Sydney's real Chinatown, though, has moved up to the Upper North Shore -- that group of suburbs located between Hornsby and Chatswood, mostly in Ku-ring-gai and Hornsby Shire councils.</span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>Chatswood alone has four times the population of Haymarket ––at more than 20,000 people. Forty-seven percent of Chatswood residents are foreign born.</span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>It's no surprise that Chinatown has moved from Haymarket to the Upper North Shore. It has happened before. Sydney's first Chinatown, or "Chinese Quarter" as it was then known, was located in the Rocks from about the 1850s. </span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>What has turned the Upper North Shore into Sydney's real Chinatown?</span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>Juwai.com's Chinese buyer survey reveals that education motivates 44.6 percent of Chinese buyers in the area. The schools, proximity to ethnic services and retail outlets in Chatswood and quick train connection to the city all make the Upper North Shore a magnet for Chinese families.</span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>You might be surprised to know that just 27.7 percent of Chinese Upper North Shore purchasing inquiries are motivated by investment goals, meaning nearly three-quarters are owner-occupiers.</span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>In 2016, the suburb of Wahroonga has been the fastest gainer with Chinese buyers, with 56 percent more inquiries in the third quarter than in the second.</span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>One other thing you notice about the new Chinatown of Sydney's Upper North Shore is that it's not all cheap apartments and starter homes. Quite the opposite, in fact.</span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>These suburbs are known as some of the best in Sydney, and there are many premium buyers. Nearly half of all area inquiries are for properties with at least four bedrooms.</span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>What is the future for real estate in Sydney's new Chinatown? </span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>For one, don't expect prices to fall much. High prices will continue so long as people like living there as much as they now do. Families who love their suburb don't sell their home unless they have to. That's one reason there are about 20% fewer auctions in the area than there were this time last year.</span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>We also expect the buyer makeup to remain relatively unchanged. Looking at Chinese-background buyers, in particular, almost all are Australian legal permanent residents or Australian citizens. You don’t have as many Chinese flying in from places like Shanghai to buy here.</span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>Another reason we expect to see a floor under prices is the area's high quality, renewed housing stock. The land in the Upper North Shore is often more valuable than the house sitting on it. After buying, the majority of new owners invest in renovating, expanding and even replacing the older homes. This investment will help maintain or even push up prices when these properties go back on the market in the future.</span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>Agent James Pratt, who is director of auctions for Raine &amp; Horne and James Pratt Auctions, told me that on Provincial Road in Lindfield, Houses No. 32 and 36 recently fetched more than $3 million at auction. In previous years, he said, they would have obtained a lower price.</span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>“It used to be that any property over the $2 million mark would have fewer registered bidders than a $700,000 unit, but it’s been the opposite this year, with 12 to 15 people registered at most houses," he said. </span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div><span style="color: #212121;"><span>"Fifteen registered is traditionally seen in highly sought-after entry-priced units."</span></span></div>
<div><span style="color: #212121;"><span> </span></span></div>
<div>
<div><em>Gavin Norris is head of Australia for Juwai.com, the No. 1 Chinese international property portal and can be contacted <a href="https://list.juwai.com" target="_blank">here</a>.</em></div>
<div><span> </span></div>
<span style="color: #212121;"><span><br></span></span>
</div>
<p><span style="color: #212121;"><span> </span></span></p>
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Where is Sydney's real Chinatown? Juwai.com's Gavin Norris

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<p>Annual net permanent and long term arrivals into Australia increased marginally in September to +267,500, some way up from the nadir of +262,800 in June. </p>
<div id="post-body-5241173402093429277" class="post-body entry-content"><a href="/images/2016/11/15/A1.jpg" target="_blank">Click to enlarge</a></div>
<div class="post-body entry-content">
<br><div class="separator"><img src="/images/2016/11/15/A1.jpg" alt=""></div>
<br><div>A significant driver of the rebound has been permanent settlers from Asia, of which there were 74,300 over the year to September, or 56.6 per cent of the total. </div>
<div> </div>
<div>By contrast, permanent settlers from New Zealand, and from Europe with their weakened currencies, continued to wane significantly.</div>
<br><a href="/images/2016/11/15/A4.jpg" target="_blank">Click to enlarge</a>
</div>
<div class="post-body entry-content"> </div>
<div class="post-body entry-content">
<img src="/images/2016/11/15/A4.jpg" alt=""><br><div> </div>
<div><strong><span style="text-decoration: underline;">8 million &amp; beyond</span></strong></div>
<div> </div>
<div>The rebalancing quietly continues, with the number of short term departures ticking a notch lower for a third consecutive month in September, while short term arrivals smashed new records by a huge margin at 709,700 in the month (+11.7 per cent over the year).</div>
<div> </div>
<div>The chart therefore dovetails into a neat 'pincer' formation, as short term arrivals flew beyond 8 million for the first time, and the pace of increase approaching two decade highs!</div>
<div> </div>
<div><a href="/images/2016/11/15/A5.jpg" target="_blank">Click to enlarge</a></div>
<br><img src="/images/2016/11/15/A5.jpg" alt=""><br><br><div>No surprises for guessing that the increase was driven by the 1.58 million visitors from China, Taiwan, and Hong Kong, which even now are still increasing at an annual pace of more than 20 per cent. Extraordinary!</div>
<div> </div>
<div><a href="/images/2016/11/15/A2.jpg" target="_blank">Click to enlarge</a></div>
<br><div class="separator"><img src="/images/2016/11/15/A2.jpg" alt=""></div>
<br><div>There has also been a huge lift in tourism from the United States, rising at an annual pace of around +18 percent. </div>
<br><div>While tourism is of course a major driver, the role of international education should not be underestimated with a record 506,200 education arrivals over the year to September (+12.7 percent).</div>
<br><div class="separator"><a href="/images/2016/11/15/A3.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"> </div>
<div class="separator"><img src="/images/2016/11/15/A3.jpg" alt=""></div>
<div> </div>
<div>While there are inevitably some back-and-forth trips within these figures, as an indicator this chart matches up quite closely with enrolments data which have also suggested rapid growth in international student numbers, particularly from China and India.</div>
<br><div class="separator"><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div class="separator"> </div>
<div class="separator">Quite a solid set of numbers across the board here, with record short term arrivals and increasing immigration. </div>
<div class="separator"> </div>
<div class="separator">Overall, this points to annual population growth tracking at around +350,000, but note how population growth is being driven less by 'permanent' arrivals and more by those arriving on other types of visa. </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>
</div>
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Immigration turns up a notch: Pete Wargent

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<p><img src="https://counter.theconversation.edu.au/content/66921/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1"></p>
<p>GUEST OBSERVER</p>
<p>There has been significant suspicion in Australia and elsewhere on the wealth of particular business people, investors and companies from China.</p>
<p>There’s always the suggestion that there is something unacceptable about it, whether it be tax evasion, corruption money, stolen money and illegitimate or illegal business ventures. </p>
<p>However this is because we’re looking at the situation with Western goggles on. When you consider the way things run in China, corruption starts to look very different.</p>
<p>There is a lot of academic, anecdotal and official material to support the suspicions about China. The problem of corruption is now notorious not least because of the Chinese government’s current anti-corruption campaign. </p>
<p>The diversion of state assets is one form of corruption of major concern in China. This is when resources that belong to the state are diverted into private hands. It takes many forms, from direct cash or asset diversion to the selling of land to developers when there is ostensibly no right to sell.</p>
<p>Pirated goods and fake products as a result of illegitimate businesses is another side of many corrupt practices.</p>
<p>Developed rule of law has simply not existed in China since the economy changed at the end of the 1970s. Although arguably changing, the system in China has been that, those who entrepreneurially take advantage of available state resources and generate wealth for themselves and the country are usually allowed to do so. Many of these people are themselves public officials or closely connected to them.</p>
<p>In addition, the evolving system of government has encouraged local state entrepreneurship through vague laws and localised administrative decision-making and competitiveness. Local officials are meant to adapt laws to fit competitive local economic development and they do. </p>
<p>A large section of the new wealthy middle class has become rich on the exploitation of housing allocations. They got these from connections in particular governmental and state owned enterprise posts, in the previous era. This may appear illegitimate but the state is now actively fostering this middle class for political and economic goals. </p>
<p>China generally supports those who took advantage of state assets in the earlier economic era and successfully generated economic activity because of the role they played in the country’s economic transformation.</p>
<p>This means the government doesn’t really see these people as corrupt or tax avoiders. In fact, tight definitions of legitimacy have little to do with China’s current and past reality. </p>
<p>Notably, a large part of the story of China’s successful economic transformation is the story of individuals and officials who violated restrictive regulations and laws on economic activity to positive economic outcomes for the country. </p>
<p>However, this also means an official can be accused of corruption as part of a politically motivated initiative to remove them. A business person can be accused of breaking a business law or tax evasion for a similar purpose.</p>
<p>For example, there are cases where businesses that local officials view as desirable to the local economy are given tax treatment that is far more generous than the law allows. If the relevant local leaders are subsequently the target of a political campaign, this tax deal can be presented as evidence of corruption. The business concerned, on the other hand, may be accused of tax evasion. </p>
<p>That said, there is no doubt that there are true ill-gotten gains in China and truly corrupt people. It’s just that this truth needs to be understood through a more complex and murky institutional prism of legitimacy. </p>
<p>This all raises some significant problems for other countries that seek to attract Chinese capital and business but do not like the idea that this money may not be legitimate. </p>
<p>It would be unfair to argue that it is illegitimate simply because it does not accord with the standards applicable in Western countries. Likewise, it may be unfair not to protect a person accused of corruption, if the truth is that they are actually the target of a politically motivated persecution.</p>
<p><em><span class="fn author-name">Nolan Sharkey is </span>Winthrop Professor of Law, University of Western Australia and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/nolan-sharkey-64745" target="_blank">here</a>.</em></p>
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Corruption looks different in China

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<div>The number of Chinese tourists was up 23 percent to 1.6 million in the year to September, and spending in the year to July was up 27 percent to $8.9 billion according to figures from Tourism Australia.</div>
<div> </div>
<div>Australia now tops China’s rankings of destinations, with a new generation of tourists are seeking immersive experiences, not days spent in tour buses, according to John O’Sullivan, chief executive officer of Tourism Australia.</div>
<div> </div>
<div>He said Tourism Australia has been running a large-scale campaign in China this year, including promotional videos on massive screens at subway lines, in Beijing and elsewhere. </div>
<div> </div>
<div>"There was a boom in Japanese tourism in the 1980s and 1990s, but not on the scale or rapidity of this, aided by the growing number of Chinese cities with direct flights," he said.</div>
<div> </div>
<div>"The “millennial” visitors, a third of the total from China, are also seeking the type of experience they can’t have back home, and that their friends might not yet have had – so they can claim social media bragging rights.</div>
<div> </div>
<div>"This new generation of inbound tourist use their smartphones constantly, expect free WiFi, they use Union Pay to access to cash. They want to be assured that they have access to their staples, congee for breakfast, staff who speak their language and a safe modern hotel.</div>
<div> </div>
<div>"They are seeking out self-drive holidays and learning to surf. The destination has changed, previously they may have gone for a long haul destination, North America or Europe, however, as they have become more confident about booking their own holidays, they have rapidly turned to Australia.</div>
<div> </div>
<div>"This new generation of tourist likes to shop too, they rely on Australia’s clean image, putting faith in the fact that products are authentic in Australia, they are truly modern consumers, they look for the brands. Tasmania has surged in the last couple of years, particularly after a visit by China’s President Xi Jinping and his wife Peng Liyuan. Tasmania’s lavender bear has also become something of a cult sensation, because it can only be bought at the Bridestowe Lavender Estate farm door in Tasmania."</div>
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Chinese tourism boom goes from strength to strength

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<p>Henderson Land Development Co. Ltd's project Double Cove sets a new benchmark for large-scale residential developments.</p>
<p>With panoramic views of two bays and bordered by extensive woodland and coastline, Double Cove’s masterplan features 265,000 square metres of sustainable housing in 21 residential towers ranging in size from 10 to 35 storeys.</p>
<p>It comes with ample green space covering 50 percent of the site. Green roofs, walls and water features are scattered throughout the development to combat the heat island effect.</p>
<p>Double Cove incorporates 3,500 residential units, as well as a shopping mall, clubhouse, kindergarten, car parks, landscaped gardens and a central park which acts as the precinct’s ‘green lung’.</p>
<p>There's more than 80 electric vehicle charge stations at Ma On Shan, at 39 Conduit Road.</p>
<p>Recycled rainwater harvesting captures 1,700 cubic metres of water each year, saving around 70 percent of the precinct’s drinking water.</p>
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Hong Kong's Double Cove energy reduction residential complex sustainable design

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<p><img src="https://counter.theconversation.edu.au/content/63187/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1"></p>
<p>GUEST OBSERVER</p>
<p>China has a debt problem. But research shows that it’s not the industrial sector or state-owned enterprises (SOEs) to blame but the booming private property market.</p>
<p>The global financial crisis illustrated how debt problems in one part of the world (in this case the US and Western Europe) could have widespread negative consequences. As China is now the world’s top goods trader, second largest economy and third biggest credit nation, a debt meltdown there would have harmful effects well beyond its borders. </p>
<p>The latest data from the Bank of International Settlements shows that since 2008 China has been responsible for nearly one in two dollars of new borrowing globally. China’s debt has reached 254.9% of GDP, up from 147% at the end of 2008. That’s even higher than in the US, where per-capita incomes are nearly four times greater. </p>
<p>Two-thirds of China’s debt is accounted for by corporates, while the remainder is in the hands of governments and households. Many commentators blame inefficient and loss-making SOEs for the problem, particularly those in the construction sector and areas of industrial overcapacity such as steel. </p>
<p>Recent research using survey data from China’s National Bureau of Statistics confirms businesses in steel, coal and electricity have indeed got increased debt levels, relative to their own equity and assets. But when expressed as a proportion of GDP this increase has been small and mostly offset by firms in other parts of the industrial sector with falling debt levels. </p>
<p>Relative to GDP, between 2008-2015 the debt of industrial firms rose by just 4.4 percentage points, while those in construction increased by 7.0 percentage points. Towering above both was businesses in the real estate sector, where debt leapt by 29 percentage points. </p>
<p>So while it might be true to say that construction and an over-producing industrial sector are contributing to China’s debt problem, they aren’t the main drivers.</p>
<p>How real estate and private firms are driving debt in China</p>
<p>A recent chapter by economists at the Reserve Bank of Australia (RBA) looked at data from Chinese listed companies and came to similar conclusions. </p>
<p>Industrial firms (manufacturing, utilities and mining) subtracted from rising overall debt levels from 2008-2015. </p>
<p>Between 2008-12 it was construction firms that were mostly responsible. Since then it has been businesses in real estate. </p>
<p>In terms of how debt is held between state and private firms, survey data shows within the debt-laden real estate sector, private developers have been increasing their debt levels, while those of state developers have been falling. </p>
<p>Across all sectors, state-owned or controlled businesses accounted for three-quarters of the increase in overall debt levels between 2008-2012, evidence from listed companies reveals. But since then these businesses have actually subtracted from rising debt levels, leaving private firms entirely responsible. </p>
<p>What China’s government can do about it</p>
<p>China’s overall debt trajectory is unsustainable. Research from the International Monetary Fund (IMF) finds that very few countries have experienced a similar rapid build up of debt and escaped without an eventual bust. </p>
<p>The question for the country is how to reduce the reliance of corporations on borrowing while still maintaining a robust rate of economic growth. </p>
<p>If state banks throwing good money after bad at SOEs in construction, coal, steel and so on is the problem, then the policy prescription is clear. </p>
<p>In August, deputy managing director at the IMF, David Lipton argued: </p>
<p>“To tackle the problem, the Chinese government must, in the words of Premier Li Keqiang, "ruthlessly bring down the knife [on] zombie enterprises”,…It is especially important to restructure SOEs. Many are essentially on life support.“</p>
<p><strong>SOE reform is undoubtedly valuable but alone is unlikely to solve the problem. This is because the big driver, particularly in recent years, appears to be increasingly speculative behaviour by those in the real estate market. </strong></p>
<p>On the supply side, this has often involved private developers, albeit sometimes with minority state shareholders, while the demand side is comprised of households. The fact that the private sector looms large in China’s debt in some ways makes the problem more complicated to deal with. </p>
<p>Direct administrative measures such as forcing a merger between a weak state firm and a stronger one may not be possible with private sector players because the government does not own or control these companies. </p>
<p>At the same time, the unemployment created by the collapse of a large private company would not be attractive for a government obsessed with social stability either. </p>
<p>Adding further complexity for China’s regulators is that sometimes households do not buy real estate assets directly but instead do so via financially engineered wealth management products, sold by financial institutions. </p>
<p>The growing importance of mortgage lending in China also creates a potentially destructive link between any problems in the housing market and the stability of the financial system more generally. </p>
<p>When house prices began to fall in the US in 2006, banks were left with massive bad debts as households defaulted on their mortgages. That said, downpayment requirements in China tend to be high relative to other countries, providing banks with some degree of protection. </p>
<p>In weighing up China’s debt outlook, another positive consideration is that the household debt to GDP ratio in China is only 40.7%, compared with 78.4% in the US and a whopping 125.2% in Australia. </p>
<p>Still, given the central role that real estate and the private sector play in China’s debt challenge, moves by the Chinese government to curb property market speculation should be welcomed. Similarly, tighter rules on wealth management products also make good sense, such as limiting the involvement of smaller banks that have less capital to offset potential losses.</p>
<p><em><span class="fn author-name">James Laurenceson is d</span>eputy director and professor, Australia-China Relations Institute (ACRI), University of Technology Sydney and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/james-laurenceson-203" target="_blank">here</a>.</em></p>
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Private property developers are really driving China’s debt: new research

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<p>GUEST OBSERVER</p>
<p>The latest available China housing data reports that the pick up in house price momentum in August was sustained in September, across both new and existing markets.</p>
<p>For new housing, 63 cities reported price gains in the month, broadly in line with August’s 64 and the recent peak of 65 in April 2016. Emphasising the breadth of the improvement in 2016, a year ago only 37 cities reported price gains.</p>
<p>The secondary market improved further in September with 60 cities reporting price gains in the month. That contrasts to 57 in August 2016; 54 in March 2016; and 40 a year ago. Only 7 cities are currently experiencing price declines – the best result for this metric since end-2013.</p>
<p><a href="/images/2016/10/24/Screen%20Shot%202016-10-24%20at%2012.24.07%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/24/Screen%20Shot%202016-10-24%20at%2012.24.07%20PM.png" alt=""></p>
<p>Investigating annual price growth by tier, 2016’s key themes endured in September. Price growth of near 30 percent/yr continues to be seen on average in tier- 1 cities, across both new (29.4 percent/yr) and existing (33.0 percent/yr) markets.</p>
<p>Also, the tier-2 averages gained further momentum, from 9.1 percent/yr to 11.1 percent/yr for new and 7.6 percent/yr to 9.0 percent/yr for existing. Meanwhile, tier-3 price growth remains fickle, new and existing house prices up 6.6 percent/yr and 4.4 percent/yr respectively.</p>
<p><a href="/images/2016/10/24/Screen%20Shot%202016-10-24%20at%2012.17.44%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/24/Screen%20Shot%202016-10-24%20at%2012.17.44%20PM.png" alt=""></p>
<p>As we have previously highlighted, the most interesting aspect of the price data is not the tier averages, but rather the city-by-city detail.</p>
<p>Herein we continue to see strong evidence of speculative demand, with a wide spectrum of price activity by city.</p>
<p>In tier-1, against the 29 percent/yr average result for new housing: Shenzhen price growth has slowed from near 63%yr in April to 34 percent/yr currently; over the same period, price growth has accelerated from around 17 percent/yr to 27 percent/yr and 23 percent/yr respectively in Beijing and Guangzhou. Shanghai has been stable near 30 percent/yr.</p>
<p>In tier-2, against the 11 percent/yr average: Hefei and Nanjing are currently seeing price growth of 46 percent/yr and 40 percent/yr, while many other cities such as Dalian are broadly flat year on year.</p>
<p>Similarly in tier-3, against its 6.6 percent/yr average for new housing, annual price growth varies between 47 percent/yr in Xiamen to –4.5 percent/yr in Jinzhou.</p>
<p>Clearly, cities with close ties to tier-1 and/or new industry are attracting investors (and owner occupiers); but elsewhere, demand is lacking.</p>
<p><a href="/images/2016/10/24/Screen%20Shot%202016-10-24%20at%2012.19.11%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/24/Screen%20Shot%202016-10-24%20at%2012.19.11%20PM.png" alt=""></p>
<p>Given the disparate conditions across the nation, the divergence between sales and starts is likely to persist as significant inventory of unsold new homes lingers in many jurisdictions.</p>
<p>Indeed, even in areas where price growth has been strong, developers have cause to manage new supply carefully so as to see prices sustained at high levels. This is particularly true if authorities impose further restrictions in ‘overheated’ markets.</p>
<p><a href="/images/2016/10/24/Screen%20Shot%202016-10-24%20at%2012.20.27%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/24/Screen%20Shot%202016-10-24%20at%2012.20.27%20PM.png" alt=""></p>
<p>As a consequence, while it has improved through 2016, growth in real estate investment is likely to remain soft relative to history, providing only modest support to manufacturing and commodity prices.</p>
<p><a href="/images/2016/10/24/Screen%20Shot%202016-10-24%20at%2012.21.44%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/24/Screen%20Shot%202016-10-24%20at%2012.21.44%20PM.png" alt=""></p>
<p>As a final point, note that the strong price gains witnessed over the past year pose a risk to services activity into 2017. Chinese households remain willing to invest in property despite the higher cost, but doing so could crimp their ability and willingness to spend elsewhere. This is particularly true if job creation in the construction sector and related areas disappoints. </p>
<p><a href="/images/2016/10/24/Screen%20Shot%202016-10-24%20at%2012.22.47%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/24/Screen%20Shot%202016-10-24%20at%2012.22.47%20PM.png" alt=""></p>
<p> </p>
<p><span>Elliot Clarke is senior economist, Westpac and can be contacted </span><a href="https://www.westpac.com.au/" target="_blank">here</a><span>.</span></p>
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Pick up in China housing data sustained: Westpac's Elliot Clarke

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<p><img src="https://counter.theconversation.edu.au/content/67155/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1"></p>
<p>GUEST OBSERVER</p>
<p>People from cultural backgrounds where getting financial assistance from families is the norm are less likely to default on their mortgages, new research shows.</p>
<p>This includes those from South East Asian countries.</p>
<p>We also found in societies where the culture is to save more and for people to control their desires and instincts, the default on mortgages is lower. The findings are true both in relatively stable economic periods (2010-2013) and during a period of financial crisis (2008-2009).</p>
<p>In analysing the factors behind mortgage delinquencies, we used data on default rates from 42 developed and developing countries. These countries represent about 90% of the world’s gross national income and the world’s outstanding balance of housing mortgages in 2013. The rate of people who defaulted on their mortgage varied from 0.05% in Hong Kong to 17.05% in Greece.</p>
<p>Australia has a low default rate on mortgage, thanks to a strong level of national income, stable growth of the property market and a low unemployment rate. But it ranks high in all cultural dimensions that potentially lead to high default rate, this is accentuated during times of widespread economic hardship. So policymakers should be mindful of unfavourable economic conditions that may trigger default on mortgages. </p>
<p>There are a number of explanations for our findings. Individuals who have a tendency to enhance or protect their self esteem, by taking credit for success and denying responsibility for failure, may overestimate their abilities make enough money to meet their long term financial obligations. They also have relatively weaker self-monitoring skills and may not budget well. </p>
<p>Also, in societies where people are expected to be independent and only take care of their own interests, the rate of default on mortgage is higher. A lack of access to support from extended families and groups may make it difficult to pay back their mortgages during the period of financial hardship.</p>
<p>We found that borrowers in countries exhibiting higher degrees of pragmatism (e.g. having a long-term view to life) are less likely to default on their mortgages. People in these countries have a higher tendency to save. These people are also probably less likely to undertake risky mortgages and therefore default less on their mortgages.</p>
<p>In societies with a strong emphasis on enjoying life there was a higher rate of defaults. These people are more likely to follow their impulses and desires and so might not allocate their financial resources efficiently. They may spend more money than they can afford on leisure activities and have less savings to service their mortgages.</p>
<p>Not surprisingly we found countries with higher levels of household disposable income, lower unemployment rates and higher growth in house prices, would have lower default rates on mortgage. However, national debt rules, regulations and chronic and prolonged illness, aren’t significantly associated with defaults on mortgages in our sample countries. </p>
<p>Housing mortgages account for about 75% and 50% of total consumer lending in the developed and developing economies, respectively. Our findings are of particular importance for multinational financial institutions because they hold mortgage loans as a large portion of their assets and therefore higher default rates may significantly lower their market values. </p>
<p>Our results show that lenders should take into account the cultural backgrounds of borrowers when determining how likely it is that they will default. This is in addition to common economic factors, such as income, unemployment, and house prices, socio-demographic factors like divorce and race and health characteristics of borrowers. </p>
<p>For example, multinational financial institutions could promote their mortgage products more in societies where people receive support from their relatives or members of groups. They could also focus on countries where people have a higher propensity to save for the future and are less interested in leisure activities. This could save these institutions a lot in terms of risk, but would also be much better for their customers.</p>
<p><em><span class="fn author-name">Reza Tajaddini is l</span>ecturer in Finance, Swinburne University of Technology and can be contacted <a href="https://theconversation.com/profiles/reza-tajaddini-308121" target="_blank">here</a>.</em></p>
<p><em><span class="fn author-name">Hassan F. Gholipour is l</span>ecturer in Economics, Swinburne University of Technology and can be contacted <a href="https://theconversation.com/profiles/hassan-f-gholipour-309444" target="_blank">here</a>.</em></p>
<p><em>Both are authors for The Conversation.</em></p>
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