A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.

The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.

The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.

The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.

Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.

"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.

"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."

<img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" />

Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.

Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.

Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.

"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.

"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."

Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.

Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.

Joel Robinson

Rainbow Bay apartment doubles in price since off the plan sale during pandemic

The long-planned transformation of Brisbane's historic Shafston Estate has taken another major step, with Capella Hotel Group announced as the luxury hospitality partner behind what will become Brisbane's first branded residences.

The project, to be known as Capella Residences Brisbane, is being delivered by Verso Projects at the landmark Kangaroo Point riverfront estate, with completion targeted for 2029.

The announcement follows a series of planning changes to the project over recent years. The site was originally approved in 2023 for a 15-level, 37-apartment development designed by Rothelowman for Burgundy Group before Verso Projects took over the 10,070 sqm riverfront holding and lodged revised plans with Kerry Hill Architects to increase the development to a 25-level tower with 51 apartments.

The latest announcement confirms Capella Hotel Group will bring its branded residential offering to the project, marking just the second Capella Residences development globally after Seoul, and the group's first branded residential project in Australia.

The <a href="https://www.apartments.com.au/new-apartments/23-castlebar-street-kangaroo-point-qld-4169">Castlebar Street development</a> will centre around the restoration of the heritage-listed Shafston House, one of Brisbane's oldest residences, originally constructed in 1851 by Reverend Robert Creyke as a single-storey cottage known as Ravenscott.

<img alt="Capella" data-entity-type="file" data-entity-uuid="2b9f4ce5-638f-4d6b-8082-3ca7e4b75fca" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-09%20at%207.20.41%E2%80%AFAM.png?VersionId=f7aeqsW_DzOJI4FymWb3lD8NptSfsP7q" />

Capella said the project aligns with its focus on heritage-led developments, with the Brisbane estate combining the restored historic residence with a new luxury apartment tower and hospitality-inspired resident amenities.

Residents will have access to the Capella Living Room, a concierge-led communal space inspired by the group's luxury hotels, alongside landscaped gardens, six swimming pools, wellness and recreation facilities.

The broader estate will also include two riverfront homes, a six-berth private marina, porte cochère arrival experience, secure basement parking and a new section of public riverwalk along the Brisbane River frontage.

The heritage Postal Depot Building will also be retained and repurposed as a guest house, in line with the revised development plans.

The project represents another evolution for the site, which Kerry Hill Architects previously described as a rare opportunity to restore one of Brisbane's most significant heritage estates while creating a new benchmark for apartment living.

"The Shafston Estate provides a once-in-a-generation opportunity to restore one of Brisbane's finest heritage precincts and to reinstate residential use as a unique site perched on the edge of Kangaroo Point," Kerry Hill Architects said in its Urban Context Report accompanying the planning submission.

"The project will celebrate excellence in sub-tropical residential design, setting a new benchmark for vertical living in Brisbane."

Verso Projects, which now has an $8.5 billion development pipeline spanning more than 6,000 dwellings across apartments, townhouses, retail and commercial projects, said the partnership with Capella would elevate the development beyond a traditional residential project.

"We feel honoured to be restoring Shafston Estate to its former glory, elevating it to new heights of luxury and excellence underpinned by Capella's distinctive service ethos and design philosophy, and making it a standout landmark in Brisbane," Verso Projects CEO Steve Laffey said.

"By partnering with Capella, globally recognised for its refined approach to luxury hospitality and deep respect for cultural and historical context, we will elevate this project beyond a residential offering into a world-class destination."

Capella Hotel Group President Roland Fasel said Brisbane's emergence as a global city made it the right location for the company's Australian residential debut.

"Brisbane is a city on the cusp of something remarkable, and Capella Residences is our commitment to being part of that story," Fasel said.

"The Capella residential experience is more than luxury. It is about a sense of belonging to a place with deep meaning."

Private appointments have now opened for the project, with a display suite expected to open in late 2026 ahead of the planned 2029 completion.

Capella to launch Brisbane's first branded residences at Shafston House, Kangaroo Point

Lewis Land's latest apartment release within its <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> masterplan is targeting one of the Gold Coast's fastest-growing buyer groups, with almost a third of apartments at Solis priced below $1 million.

The seven-storey building at Biggera Waters will comprise 91 apartments, including 24 one-bedroom residences starting from $778,000, a price point Lewis Land says is aimed squarely at first home buyers struggling to enter the Gold Coast market.

<img alt="Harbour Shires" data-entity-type="file" data-entity-uuid="e7486e37-22f6-4c92-b212-9b0622070b8f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-08%20at%209.09.34%E2%80%AFAM.png?VersionId=W8MJwJUCf6HkIyl_EVSksnd.QI6MZryY" />

<a href="https://www.apartments.com.au/developers/lewis-land-group">Lewis Land</a> Head of Development Michael Long said the developer deliberately allocated a significant proportion of the project to more affordable apartment types.

"First home buyers have been priced out of many parts of the Gold Coast, and we saw a clear opportunity to address this and play our part in a longer-term housing solution," Long said.

"That's why 24 of the 91 apartments being delivered at Solis have been designed and priced for the city's next generation of homeowners, quality one-bedroom apartments, half of which include an additional multipurpose room to maximise space and flexibility.

"This approach places 30 per cent of apartments in Solis under $1 million, and with close proximity to Harbour Town's future light rail extension connecting residents to the city's major employment and knowledge hubs, it's a win for buyers looking to secure their first property."

<img alt="Sores" data-entity-type="file" data-entity-uuid="550526d3-73ba-4710-9739-c5f4294a30ef" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-08%20at%209.09.29%E2%80%AFAM.png?VersionId=cQQdXHt9wS0UXwZEm5Py5bH_3kAmzyhu" />

Designed by BDA Architecture, Solis will deliver a mix of one, two and three-bedroom apartments, with residences ranging up to 232 sqm. Apartments feature generous balconies and contemporary finishes, while residents will have access to Harbour Shores' lagoon pool, clubhouse, tennis court, gym, yoga studio and sauna.

The focus on first home buyers resonated with purchaser Holly Humphreys, who said she and her boyfriend spent more than a year searching for their first property before shifting their attention from houses to apartments.

"We fell in love with the first house we bid on and got our hopes up, but after repeated knockbacks we learned not to get too attached," Humphreys said.

"We offered at the high end of price guides, but sales kept going even higher. That's where we really struggled and we needed to re-evaluate our budget and our expectations. Standalone houses were off the table, and we pivoted to apartments and townhouses."

Humphreys said it was encouraging to see developers recognising the growing demand from first home buyers.

"There's a growing number of young buyers looking to enter the market earlier because they understand that getting in now can make a real difference as prices continue to rise," she said.

"It's fantastic to see a developer recognise this and then actively take measures to deliver an apartment with us in mind."

Solis is the first development planned within the second stage of the Harbour Shores masterplan, with early works expected to commence in September 2026.

[smartcode_project_cta:default project_id=113271]

Lewis Land targets first home buyers at latest Harbour Shores release, Solis

Luxury apartment developer Abadeen has recorded $19.25 million in apartment sales across two of its Lower North Shore developments in the lead-up to the end of the financial year, headlined by the sale of a $6.75 million penthouse at <a href="https://www.apartments.com.au/buildings/koyo-crows-nest-5-rodborough-avenue-crows-nest-nsw-2065">KOYO in Crows Nest.</a>

The transactions also included the sale of a newly completed three-bedroom apartment at <a href="https://www.apartments.com.au/buildings/park-residences-cremorne-2-sutherland-street-cremorne-nsw-2090">Park Residences in Cremorne</a> for $6.35 million, with the residence selling shortly after the project's first public inspections following completion.

The sales come as completed, owner-occupier-focused apartments continue to attract strong demand across Sydney's Lower North Shore, particularly from buyers looking for certainty and immediate occupancy.

The penthouse at KOYO spans 491 sqm across a single level and was designed by architect Koichi Takada. The development is one of Abadeen's flagship boutique projects in Crows Nest.

[smartcode_project:default project_id=108800 project_image_fid=370093]

Abadeen Executive Chairman and Founder Justin Brown said buyer activity lifted noticeably in the lead-up to the end of the financial year.

"We saw a clear increase in enquiry levels, inspection numbers and buyer engagement across our completed projects leading into the end of the financial year," Brown said.

"Buyers have become far more decisive over the past six months. The combination of improving confidence, limited supply and the ability to physically inspect completed residences is creating strong competition for premium apartments in the best locations."

Brown says the&nbsp;response to Park Residences following completion has been particularly strong.

"Buyers want certainty and are responding positively to the opportunity to walk through a finished product, inspect the quality firsthand and move in immediately," Brown suggested.

"Projects such as Park Residences and KOYO demonstrate that when the product is exceptional and the location is irreplaceable, buyers are prepared to act quickly."

[smartcode_project:default project_id=114246 project_image_fid=370116]

Abadeen CEO Joe Tack said quality continued to differentiate projects in the current market.

"Today's buyers are incredibly discerning," Tack said.

"They are seeking larger floorplans, premium finishes, walkability, lifestyle amenity and confidence in the developer delivering the project. Well-designed boutique developments continue to outperform because they offer something genuinely difficult to replace.

"The enquiry we are seeing across our completed and recently completed Lower North Shore portfolio is very encouraging, and we expect this momentum to continue into spring."

The sales follow increased enquiry across Abadeen's Lower North Shore portfolio which also includes <a href="https://www.apartments.com.au/buildings/northcote-collective-naremburn-2-northcote-street-naremburn-nsw-2065">Northcote Collective in Naremburn</a> which also completed recently.

KOYO penthouse headlines Abadeen's $19.25 million EOFY sales flurry

The City of Sydney has approved plans for <a href="https://www.apartments.com.au/developers/billbergia">Billbergia Group</a> and Metrics Credit Partners’ $3.5 billion Castlereagh Place project in the heart of the Sydney CBD

The towers will be among the tallest in <a href="https://www.apartments.com.au/developments/sydney-nsw-2000">Sydney</a>'s CBD, with more floors than any other residential tower in the city.&nbsp;

The 6,000 sqm site was acquired by the joint venture partners in 2024. It is the largest amalgamated land parcel in the Sydney CBD and comprises eight individual sites fronting Castlereagh, Pitt and Liverpool Streets.&nbsp;

<a href="https://www.apartments.com.au/new-apartments/castlereagh-place-sydney-324-348-pitt-street-sydney-nsw-2000">Castlereagh Place</a> will transform an underutilised city block into a landmark mixed-use destination, anchored by two 82-storey towers comprising 607 luxury residences above an 8-level podium housing a 209-room luxury hotel. A 1,000 square metre civic park on ground level features a curated mix of food, beverage and retail.

The plans have been refined over the past year to rebalance the residential and hotel offering, and reconfigure the retail footprint to create a stronger, more dynamic dining experience.

A three-level flagship building on the prominent corner of Pitt and Liverpool Streets will be the gateway to the Castlereagh Place lifestyle precinct. Set to become a Sydney icon, the building is capable of housing multiple hospitality venues.

“Castlereagh Place is designed to be the City's next great urban oasis - an energetic mixed-use precinct that pulses with life, day and night,"&nbsp;said Joseph Kinsella, Group Director of Billbergia.

"It will bring the vibrancy of places like Barangaroo and Darling Quarter into a more accessible, central destination at the very heart of Sydney."

Kinsella said the project will build on&nbsp;Sydney’s growing laneway culture with the City’s largest network of new activated lanes - an expanded, next-generation take on precincts like Angel Place, Palings Lane and Ash Street in Wynyard.

[smartcode_project:default project_id=134477 project_image_fid=374401]

Castlereagh Place has been designed by architects <a href="https://www.apartments.com.au/architects/fjc-studio">fjcstudio</a> in collaboration with Trias Studio, Aileen Sage and Polly Harbison Design, joint winners of an international design competition in 2018.&nbsp;

Signature design elements from the original scheme remain unchanged, while the public domain has been significantly enhanced, delivering 60 per cent more open-to-sky space.

Pedestrian access will also be enhanced through new laneways linking Pitt, Liverpool and Castlereagh Streets, drawing people into a new civic park with outdoor seating, landscaping and integrated public art.

With activated laneways supported by strong hospitality offerings, Castlereagh Place is tipped to become a vibrant new dining destination in the heart of Sydney’s CBD.

It marks the largest undertaking to date for the Billbergia and Metrics Credit Partners partnership. Together they are developing other underutilised Sydney sites into mixed-use precincts, including the $2.2 billion Concord Central and the $1.3 billion Chatswood Grand Residences.

Metrics Managing Partner and Group CEO Andrew Lockhart said Castlereagh Place is a landmark project that will redefine Sydney’s skyline.

"As the tallest residential high-rise development, the revitalised site will offer panoramic views across the CBD and surrounds. We are excited to partner with Billbergia to reinvigorate an underutilised site and create a sophisticated and contemporary mixed-use offering situated in the heart of Sydney.”

Total apartments within the towers have increased to 607 dwellings, with a focus on larger floorplans. Aligned to growing market demand, Castlereagh Place now comprises 299 three-plus-bedroom apartments, 198 two-bedroom units and 110 one-bedroom configurations.

[smartcode_project:default project_id=134477 project_image_fid=374402]

Resident amenities will include an exclusive residents club containing a gym, rooftop pool, dining rooms, co-working spaces, library, golf simulator, games room, cinema room, and access to an exclusive concierge service. There will be around 500 basement car spaces below the towers.

The development will also include a state-of-the-art wellness centre, set to feature a bathhouse with magnesium pools, hot/cold plunge pools and premium amenities.

&nbsp;

According to fjcstudio, the towers will feature distinctive yet elegant architectural design reflecting Sydney’s geometry and urban character, with a network of through-site links and intimate public spaces activating the streetscape.

"Castlereagh Place is a city-making project of significant scale and ambition," said Richard Francis-Jones, Design Director at fjcstudio.

"It will create a rich urban complex of public open spaces, landscaped gardens, and vibrant laneways. Defining these new public spaces and the important streetscape of Castlereagh Street is a sequence of fine-grained, diverse retail and hotel architecture designed in collaboration with Aileen Sage, Polly Harbison Design and Trias.

“Rising above the tree-lined, human-scale streetscape are two slender residential towers that will transform the city skyline and look towards the Harbour, Hyde Park, and the Royal Botanic Garden.”

Demolition and early construction works have commenced onsite at Castlereagh Place.

[smartcode_project_cta:default project_id=134477]

Billbergia, Metrics, approved for $3.5 billion Sydney skyscrapers

COVID-19

The extended lockdown across greater Sydney could be the catalyst for another Australian recession, according to experts surveyed in this month&rsquo;s Finder RBA Cash Rate Survey.&nbsp;

All 40 experts and economists that weigh&nbsp;in on future cash rate moves and other issues relating to the state of the economy, expect&nbsp;a rate hold for this month.

With greater Sydney set to be in lockdown until at least the end of August, the majority of experts who weighed in* (63%, 19/30) believe that the lockdowns could see Australia enter another recession.&nbsp;

Nearly 2 in 5 (38%, 8/21) of economists think that it could take as little as another two months in lockdown for the recession to hit.&nbsp;

Graham Cooke, head of consumer research at Finder, said all eyes will be on the length of Sydney&rsquo;s lockdown.

Close to half of respondents who responded (43%, 12) think that Australia&rsquo;s response to the pandemic has hurt its international reputation.&nbsp;

[smartcode_project:default project_id=7363 project_image_fid=41840]

Uncertainty returns for employment and wage growth&nbsp;

While positivity towards both wage growth and employment surged in July, August saw both of these economic indicators dip significantly.&nbsp;

Cooke said it was no surprise that the latest Covid developments had driven sentiment into the ground.&nbsp;

&ldquo;Last month, we saw positivity towards wage growth spike to its highest point since our survey began. While this has seen a sharp decrease, it&rsquo;s employment that&rsquo;s seen the biggest dip, dropping from 71% in July to 29% in August.&quot;

&ldquo;Positive economic sentiment overall has dropped to 14% in August, down from 28% last month,&rdquo; Cooke added.&nbsp;

All 40 experts and economists surveyed expect a rate hold for this month.

jordan_55689

Experts warn extended Sydney lockdown could lead to another recession: Finder

<html><body>After a year of COVID-19 impacts, getting back to business as usual will present challenges for some real estate agencies. According to a Melbourne Institute study, 70 per cent of workers who worked remotely during the pandemic wish to continue working from home.

The challenge for businesses is creating those beneficial moments that occur during face-to-face contact. In a hybrid work model where team members might not align on working days, those connections that are so important to collaboration and innovation will be fewer and farther between. 

Leading firms believe that holding in-person business events is key to improving the hybrid working model with moments of powerful team building.

The human brain is hardwired for physical connection and eye contact, something that cannot be replicated by using screens.

In less than a second of meeting someone, physical engagement fires up your neurons, generating the chemistry that pre-empts the beginnings of empathy and trust. A group of connected people can change how we see an issue, alter our priorities as a group, and create a capacity to collaborate around shared values.

At First National Real Estate, we’re working hard to make sure that the crucial bonds that lead to knowledge sharing are re-established as quickly as possible. I’ve always strongly believed in holding business events that bring people together and our national convention, this May in Canberra, is on track for 500 First National co-operative members and their employees. The event is already oversubscribed and we’ve had to book an overflow hotel.

After spending so long away from peers during COVID, the desire to get together to share our journeys and our experiences is critical. But the way I see it, this is not just a business session or awards event, it’s about helping our people return to normality, become a better person and run a better business.

Pre-COVID, First National would run 30-50 events a year in each state, ranging from training to functions, as well as two to three national events. Having in-person meetups in different locations is critical to the success of the business.

The greatest benefit has been the sharing of ideas. We’ve got offices from Bendigo to Cairns and that shared business experience, whether staffing, sales, legalities, or HR, is 100 times better than Googling or trying to muddle through on your own. 

The building of relationships cannot be done over Zoom or via email, only done by good old-fashioned chat and advice, so events are critical to what we do.
Events can fast-track the restoration of relationships that have diminished during the pandemic. 

According to researchers at Yale University’s School of Management, during COVID-19 our professional and personal networks have shrunk by almost 16 per cent, or the equivalent of 200 people.
That has dramatic consequences for businesses. It can lead to less creativity and more groupthink. 

People with fewer connections at work have a decreased sense of belonging and are less likely to identify with the organisation, which puts them at higher risk of turnover and possibly even fraud and negligence.

Ray Eliis is the CEO of First National Real Estate</body></html>

The building of relationships cannot be done over Zoom or via email, says Ray Ellis

rellis

Rebuilding real estate connections after COVID-19: First National's Ray Ellis

<html><body>
EXPERT INSIGHT

Many Australians whose jobs were decimated by the COVID business shutdowns will soon be waking up to new income shocks and the prospect of rental stress. This is because people whose employers can’t afford to keep them on will suddenly lose more than A$300 per week when the <a href="https://www.ato.gov.au/general/jobkeeper-payment/">JobKeeper</a> scheme <a href="https://www.ato.gov.au/General/JobKeeper-Payment/JobKeeper-key-dates/">ends on March 28</a>. Worryingly, this income shock will happen just days before the payment to people on the <a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/jobseeker-payment">JobSeeker</a> benefit is effectively <a href="https://www.ideas.org.au/blogs/jobkeeper-jobseeker-what-has-changed#:%7E:text=The%20JobSeeker%20Payment%20replaced%20the,This%20was%20announced%20in%20November.">cut by $100 per fortnight</a>.

At that point, all income support recipients – more than 2.6 million people – will be below the poverty line and many will face extreme rental stress.

This income shock has been anticipated for some time, but what does it means for rates of rental stress, particularly in Victoria? Despite <a href="https://www.theage.com.au/politics/federal/victoria-s-economic-recovery-to-outstrip-all-other-states-as-nation-bounces-back-20210115-p56ufo">promising signs of recovery</a>, Victorian jobs lost in the COVID-induced recession, such as in the hard-hit <a href="https://www.theage.com.au/national/victoria/business-tourism-on-its-knees-as-covid-19-casts-long-shadow-over-events-20210203-p56z2j">business tourism</a> and <a href="https://www.theguardian.com/culture/2021/feb/22/more-job-losses-ahead-for-australian-live-music-industry-operators-warn">live music industries</a>, have not bounced back at the same rate as others.

What will happen to rental affordability?

To illustrate this point we have modelled housing affordability for single people who were on either the full-time or part-time JobKeeper rate. In this scenario, they could also get JobSeeker payments at a part-rate because of the temporary increase in the <a href="https://www.propertyobserver.com.au/https://www.servicesaustralia.gov.au/individuals/topics/income-test-jobseeker-payment/29411">income-free threshold to $300</a>. This made them eligible for <a href="https://www.dss.gov.au/housing-support/programmes-services/commonwealth-rent-assistance">Commonwealth Rent Assistance</a> too.

The chart below shows the impacts on income and rental affordability when JobKeeper and <a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/coronavirus-supplement">Coronavirus Supplement</a> payments end. Their incomes and the amount of rent they can afford are roughly halved.

<img alt="" height="278" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/jobkeeper_poverty.jpg" width="754">

Full-time and part-time single workers were able to afford weekly rent of $265 and $245 respectively before the withdrawal of JobKeeper. Afterwards, affordable rent goes down to $115 per week. That’s about $110 less than the <a href="https://www.dhhs.vic.gov.au/sites/default/files/documents/202011/DHHS%20Rental%20Report%20September%20quarter%202020.docx">$450 median rent</a> ($225 per person) for a two-bedroom share house in Melbourne.

Based on <a href="https://theconversation.com/city-share-house-rents-eat-up-most-of-newstart-leaving-less-than-100-a-week-to-live-on-123772">our earlier calculations</a>, this leaves these renters with only $17.57 per day to meet basic costs. They have a lavish $3.57 per day more than they did before the pandemic to pay for food, utilities and job-seeking costs such as mobile phone plans and travel cards (A$4.40 a day in Melbourne).

What is different now than for pre-COVID unemployment was that business shutdowns thrust people who had reliable earnings – and accompanying high rents and mortgages in metropolitan areas – onto JobSeeker and JobKeeper payments.

The chart below shows the change in rental affordability for a number of household types before the pandemic and during the Coronavirus Supplement stages (i.e. payments of $550, then $250, then $150).

<img alt="" height="391" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/jobkeeper_poverty_2.jpg" width="754">

For example, when their income was highest during the $550 stage, two singles sharing could afford rent of $430 per week. Once the supplement ends and is replaced by the <a href="https://www.smh.com.au/politics/federal/it-breaks-my-heart-jobseekers-hit-back-at-25-a-week-dole-increase-20210225-p575p9">$25-a-week increase in JobSeeker</a> payment, affordable rent declines to only $230 per week or $115 each.

Rental affordability for single-parent households is notable here because the COVID Supplement was payable to one person only. Once the supplement is withdrawn, they will again be disadvantaged relative to other households because they will not be receiving the increase in the JobSeeker payment.

What sort of job losses can we expect?

It is hard to predict exactly how many people will lose their jobs when JobKeeper ends. What we do know is the economic recovery in Victoria has lagged behind the other states. We also know that at the end of December 2020 <a href="https://theconversation.com/victorians-struggle-to-exit-jobkeeper-as-the-schemes-end-looms-155288">1.55 million people</a> were on JobKeeper and a large proportion of them (626,000) were in Victoria.

Economist Jeff Borland <a href="https://drive.google.com/file/d/1kE4f5qxNQwdh5Xp_6l2Cu-HrjiZvfkrB/view">conservatively estimates</a> national job losses could range between 125,000 and 250,000. It is reasonable to expect as many as half of these could be in Victoria.

Our analysis also shows there are worrying signs that the economic recovery celebrated in the January labour force data was not sustained in February. The latest data provided to a <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/COVID-19/COVID19">Senate inquiry</a> into COVID-19 show JobSeeker recipients increased by 7,267 between <a href="https://www.aph.gov.au/DocumentStore.ashx?id=60c91b42-dde2-415f-9f9b-7d5fd3935cb6">January</a> and <a href="https://www.aph.gov.au/DocumentStore.ashx?id=9c1805cb-fe51-419b-8a7b-61315c64c302">February</a>. The increase in Victoria could be attributed to the temporary Christmas retail boom, but in states like New South Wales and Queensland claims decreased slightly.

While <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2021-03-17/jobkeeper-end-will-hit-these-postcodes-hardest/13242400?nw=0">fewer people</a> will lose their jobs in other states than in Victoria when JobKeeper is withdrawn, they are not immune to this income shock. We created the chart below to show the overall scale of the coming problem of rental stress when the fortnightly $150 Coronavirus Supplement disappears and is replaced by the $50 JobSeeker increase.         

Once the supplement reduced to $250 per fortnight, singles and single parents with two children were below the poverty line.  When it was reduced to $150, the number of household types in poverty increased again. From April 1, all income support recipients – covering more than 2.6 million people including children – will be waking up to poverty and the prospect of extreme rental stress.

What can be done to avoid this?

So how can governments prevent people from falling off the rental cliff? It is unlikely to be achieved by introducing <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2021-03-10/tourism-coronavirus-pandemic-assistance-package-cheap-flights/13235432">cut-price flights</a> to Far North Queensland.

A new range of strategies will be needed. These include options <a href="https://www.acoss.org.au/wp-content/uploads/2021/03/Strengthening-Income-Support-Bill-2021.pdf">advocated by ACOSS and others</a> to increase the maximum rate of Commonwealth Rent Assistance by 50%, increase the JobSeeker base rate above the poverty line and introduce rental stress grants targeted at individuals who need help.

Over the longer term, there is also a need to adopt strategic approaches to increase the supply of affordable rental housing such as those <a href="https://www.ahuri.edu.au/housing/policy-analysis/increasing-affordable-rental-supply">recommended by researchers</a> at the Australian Housing and Urban Research Institute (AHURI).<img alt="The Conversation" height="1" jamjgoj="" src="https://counter.theconversation.com/content/157244/count.gif?distributor=republish-lightbox-basic" tblrv1n7b="" width="1">

<a href="https://theconversation.com/profiles/simone-casey-130516">Simone Casey</a>, Research Associate, Future Social Service Institute, <a href="https://theconversation.com/institutions/rmit-university-1063">RMIT University</a> and <a href="https://theconversation.com/profiles/liss-ralston-295934">Liss Ralston</a>, Adjunct associate, <a href="https://theconversation.com/institutions/swinburne-university-of-technology-767">Swinburne University of Technology</a>

This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/at-least-2-6-million-people-face-poverty-when-covid-payments-end-and-rental-stress-soars-157244">original article</a>.
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Many Australians whose jobs were decimated by the COVID business shutdowns will soon be waking up to new income shocks and the prospect of rental stress

At least 2.6 million people face poverty when COVID payments end and rental stress soars

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EXPERT INSIGHT

Over the past year, many of us have enjoyed outdoor dining in spaces that would otherwise have been car parks or part of the road. These spaces are one example of the temporary projects that popped up to help cities in Australia and <a href="https://www.forbes.com/sites/carltonreid/2020/04/22/paris-to-create-650-kilometers-of-pop-up-corona-cycleways-for-post-lockdown-travel/?sh=3936edb754d4">around the world</a> adapt to COVID. These quickly installed projects have met our changing needs for space for walking, <a href="https://www.rms.nsw.gov.au/projects/popup-covid-19-infrastructure/index">cycling</a>, <a href="https://theconversation.com/we-cant-let-coronavirus-kill-our-cities-heres-how-we-can-save-urban-life-137063">public space</a> and, of course, <a href="https://theconversation.com/4-ways-our-streets-can-rescue-restaurants-bars-and-cafes-after-coronavirus-139302">dining</a> to help businesses to stay afloat.

While these temporary projects were driven by the necessity for short-term fixes, we can draw deeper lessons from these experiences. They have been, intentionally or not, a large-scale experience with experimentation in cities, and short-and long-term impacts should flow. In the short term, some of these experiments can be become permanent. In the long term, wider-scale urban experiments can become a permanent feature of how we shape cities.

Experiments can help us navigate change in cities. They can also make us braver by allowing us to test out ideas that might fail or that not everyone seems to like. If the past year has made us more comfortable and confident with experimenting, all the better to help our cities meet the challenges ahead.

Opening our eyes to new possibilities

At their simplest, of course, experiments test things. The projects that popped up during COVID have helped meet our short-term needs (well, we hoped they would be short-term) for different ways to live and get around, like <a href="https://www.vicroads.vic.gov.au/traffic-and-road-use/cycling/pop-up-bike-lanes">pop-up bike lanes</a>.

In making these short-term changes, we tried something new and perhaps we’ve found we like the results.

During COVID, I meandered down Lygon Street, Carlton, full of <a href="https://www.theage.com.au/national/victoria/melbourne-unveils-16-covid-safe-outdoor-dining-precincts-20201001-p560z2">new al fresco dining areas</a> making the street feel even more European. Along the Victorian coast, I sipped <a href="https://www.therip.com.au/news/lets-go-al-fresco">coffee in Skiplets</a>. It could always be this nice, I thought.

These projects are already sparking debate about the future use of streets and bringing the trade-offs into focus. One example is the <a href="https://www.theage.com.au/national/victoria/outdoor-dining-under-a-cloud-as-cash-strapped-council-misses-parking-fees-20210210-p5714a">trade-off between parking revenue and outdoor dining</a>.

What more can we gain from ‘tactical urbanism’?

Well before COVID, cities started using temporary projects to test changes. From <a href="https://www.propertyobserver.com.au/https://vimeo.com/22886687">New York</a> to <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2014-12-16/yarraville-pop-up-park-becomes-permanent-after-singing-protest/5970092">Yarraville</a>, cities used experiments to test out risky ideas and balance competing street uses. This is often referred to as <a href="http://tacticalurbanismguide.com/guides/tactical-urbanism-volume-2/">tactical urbanism</a> .

Benefits gleaned from these experiences show we have much to gain from more experimenting beyond COVID. City experiments get things moving and let us figure out if an idea is a good one.

In the aptly titled book <a href="http://www.jsadikkhan.com/streetfight-the-book">Street Fight</a>, former New York City transport commissioner Janette Sadik-Khan describes turning the tangled intersection at Times Square into a pedestrian plaza. It began as a temporary experiment. A lower-cost, temporary version meant getting the project on the ground right away, rather than spending years convincing everyone to build it permanently. The added advantage was collecting data during the trial to prove it actually worked.

Overcoming suspicion of change

Experiments help navigate change, which we don’t always like. Based on my <a href="https://www.propertyobserver.com.au/https://apo.org.au/node/59916">own research</a>, street experiments help cities work with, not against, some people’s tendency to dislike change.

People’s hackles can go up in response to change. They prefer to stick with what’s familiar over something new. This is the type of status quo bias Nobel laureate Daniel Kahneman discusses in <a href="https://www.penguin.com.au/books/thinking-fast-and-slow-9780141033570">Thinking Fast and Slow</a>.

A temporary experiment can help disarm this response. As one of my interviewees put it:

“If change is worrisome, then it’s not that big a deal if we can come back to where we are today.”

Through experimenting, people allow themselves to try it. Often they also get to see their fears aren’t realised.

Experiments let us tweak projects to get them right. In 2008, Copenhagen rolled out a bold <a href="https://urban-leds.org/wp-content/uploads/2019/resources/case_studies/UrbanLEDS_case_story_Copenhagen_2015_Web.pdf">experiment on Nørrebrogade</a>, providing wider bike lanes and bus-only sections painted with huge red dots. Experimenting, they found, helped them have a better <a href="https://www.propertyobserver.com.au/https://apo.org.au/node/59916">conversation with the community</a>. They were able to tweak the design in response to community feedback and evaluation.

Experiments also do the imagining for us. My current research (as yet unpublished) looks at ways city transport planners try to effect change.

One barrier to change planners discussed is that people often struggle to imagine how things could be different. Without this, they tend to happy to stick with the status quo. Experiments show us how streets can be different.

What stands in the way of more street experiments?

My research suggests many city planners are striving to find new and better ways to explore change and help cities adapt to challenges. Many are starting to experiment with temporary projects, but it’s not always easy.

A number of transport planners I’ve talked with say doing temporary projects can be hard. That’s not because they are difficult to build but because the rules about what can be done on streets are set up for building things permanently. This can be a barrier to temporary experimenting.

However, after delivering many temporary projects during the pandemic, cities should now be well placed to embed processes that make street experiments easier.

Given COVID is just one of the many looming challenges facing our cities, being braver and adaptable is going to be more important that ever. Experimenting can help pave the way.

<hr>
The impact of temporary projects is the focus of the <a href="https://mpavilion.org/program/">MPavilion</a> event, <a href="https://mpavilion.org/program/is-temporary-new-permanent/">Is Temporary the New Permanent?</a>, on March 22.<img alt="The Conversation" efhwkxino="" foro="" height="1" jyuj="" nx5bekkdr="" src="https://counter.theconversation.com/content/156591/count.gif?distributor=republish-lightbox-basic" wg="" width="1" yfwc="">

<a href="https://theconversation.com/profiles/helen-rowe-803223">Helen Rowe</a>, PhD Candidate, Centre for Urban Research, <a href="https://theconversation.com/institutions/rmit-university-1063">RMIT University</a>

This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/is-temporary-the-new-permanent-covid-street-experiments-open-our-eyes-to-creating-better-cities-156591">original article</a>.
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The projects that popped up during COVID have helped meet our short-term needs (well, we hoped they would be short-term) for different ways to live and get around, like pop-up bike lanes

urban.com.au

Is temporary the new permanent? COVID street experiments open our eyes to creating better cities

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EXPERT INSIGHT

The temporary supplement to JobSeeker payments in Australia are set to finish at the end of March 2021. The JobSeeker ‘coronavirus supplement’ was a temporary boost to new and existing recipients of welfare schemes in response to the onset of COVID-19 including JobSeeker, Youth Allowance, Austudy and the Parenting Payment. 

In early 2020, the supplement was set at an additional $275 per week, virtually doubling payments for some recipients. Recently, it was announced that as the coronavirus supplement is wound down from March, a permanent $25 increase will be added to payments. While a permanent increase will make some better off, welfare recipients will be worse off by $250 per week compared with the onset of COVID-19.

But will the removal of the JobSeeker supplement have any impact on the housing market?

First and foremost, it is important to acknowledge that the JobSeeker supplement has already been reduced significantly in recent months, with no dampening impact apparent on the housing market as a whole.

In late March 2020, the original JobSeeker supplement was set at an additional $275 per week. In late September, the supplement was reduced to $125 per week, and it was reduced further to $75 per week through the first quarter of 2021.

However, housing market momentum has increased from September to January, amid the reduction in the supplement. Between the end of September and January, the CoreLogic national home value index rose 3.2%, and rental values increased 2.5%.

Another consideration is that even as the JobSeeker coronavirus supplement was reduced, fewer Australians have been reliant on welfare due to a strong recovery trend in the labour market.

Data from the Australian Government Department of Social Services (DSS) suggests there were 11.7% fewer JobSeeker recipients toward the end January 2020, compared with the end of September. However, there is still a heightened risk to wider-spread housing stress, as the number recipients at January was still 55.9% higher than at the onset of COVID-19 in March 2020.

Changes to JobSeeker would likely have little direct impact on housing market values. With lower income households generally having lower rates of home ownership, it is more likely that households receiving JobSeeker are renters. This would imply an indirect impact on housing prices, where reduced rental return could impact an investor’s willingness to pay for a property.

However, even looking at regions with the highest proportion of JobSeeker recipients in Australia relative to the local population, rental outcomes have been mixed since the significant reduction of the Jobseeker supplement in September. 

Only one region has actually seen a decline in rental values, while other SA2 markets have seen an average increase in market rents of 4.2%, which is actually above the 2.5% increase in rent values nationally over the same period.

Importantly, there is no counter-factual for rental performance in these markets where the coronavirus supplement is unchanged. Under these circumstances, rents may have increased even further.

However, what this data does highlight is that the impending changes to JobSeeker could create increased divergence between incomes and housing costs for some of Australia’s most vulnerable households. While these rental markets may be increasing in aggregate, housing stress, and even homelessness, may be faced by individuals whose livelihoods have been impacted by COVID-19.

While changes to JobSeeker are unlikely to impact the housing market, the welfare reduction could greatly disrupt housing situations for many.

Eliza Owen is the Head of Research Australia at CoreLogic
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pchatterjee-seVgoiQgz5

Will changes to JobSeeker impact the housing market? CoreLogic's Eliza Owen

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Expert Observer

The standout feature of the behaviour of our politicians is the degree to which they are out of touch with their constituents and the impact of the decisions they make.

In the real estate sphere, the most startling recent example was the knee-jerk decision-making of state and territory governments in favour of pandemic-affected tenants, without any regard for the impact on the mum-and-dad households who own an investment property.

Equally, our elected representatives collectively appear oblivious to the rental shortage crisis that exists in most (not all) locations across the nation.

The situation has become dire in many parts of Australia, with queues of prospective tenants showing up at open houses and candidates offering more than the asking rent and/or offering to pay six or 12 months in advance to beat the competition.

Here’s the current situation …

According to the monthly report from SQM Research, vacancy rates in our already-tight rental markets fell in six of the capital cities and were unchanged in the other two in January.

The national average vacancy rate fell from 2.2% in December to 2% in January, but five capital cities – Perth, Adelaide, Canberra, Darwin and Hobart – all have vacancy rates below 1%, while Brisbane sits at 1.7%.

[smartcode_project:default project_id=8240]

Throughout regional Australia, many centres have vacancy rates below 1% in what represents a national rental crisis for people seeking tenancies. It’s common to find regional locations where the vacancy rate is closer to zero than to 1%.

Keep in mind the industry benchmark is that vacancy rates below 3% represent a shortage of rental properties. Below 1% is a dire situation.

The two biggest cities, where vacancies are highest, showed marked improvements in January, with Sydney falling from 3.6% in December to 3.2%, and Melbourne falling from 4.7% to 4.4%.

SQM CEO Louis Christopher says the figures provide more evidence the worse is over for landlords in the Sydney and Melbourne rental markets. 

He says: “The falls in vacancy rates for the month in those two cities, combined with the increased tightness in other cities and regions, has now brought rental vacancy rates down to below where they were prior to the outbreak of Covid19.”

Christopher says the data, overall, suggests that 2021 will remain largely a tenant’s market in the inner-city areas of the biggest cities “but will also very much remain a landlord’s market for regional Australia”. It would add to that the smaller capital cities – as shown earlier, six of them have ultra-tight rental markets. 
He also notes that rents for both houses and units have risen in the capital cities, on average, over the past month.

In annual terms, the national average is a 10% rise in house rents and a 4% increase in apartments rents.

The growth has been higher in regional markets than in the capital cities, with Sydney and Melbourne rents still lower on average than a year ago.

But there have been strong rises in Perth, Canberra and Darwin.

[smartcode_project:default project_id=22017]

In Perth, rents have risen 11.5% for houses and 12.3% for apartments, while in Darwin house rents have increased 27% in 12 months. In Canberra rents have risen around 6% for both houses and units.

The repercussions are spreading well beyond the immediate participants, tenants and landlords. Businesses in regional areas are struggling to find the workers they need because people interested in taking the jobs on offer can’t find anywhere to rent in those areas.

So what are our elected representatives doing about that? Essentially, nothing. They give the impression that aren’t even aware of the problem. This situation is just not part of the national discussion.

Partly mainstream media is to blame. Our major newspapers, especially the Fairfax ones, have been focusing their coverage on the few places in the nation that have high vacancies, specifically inner-city Melbourne and inner-city Sydney and creating the impression that we have an over-supply of dwellings – which is laughable.

[smartcode_project:default project_id=6201]

Federal Labor, if they had their way, would make matters worse by scrapping negative gearing, which would be a huge disincentive to investors.

What we need is the opposite – measures to encourage people to buy investment properties and make them available for rental. Rental vacancies are an outcome of the activity of investor buyers – and their absence in recent years is a chief reason we have this crisis.

HomeBuilder is helping the situation by encouraging the creation of new dwellings, but more needs to be done.

If politicians want to help tenants, they need to encourage landlords – instead of treating property investors (most of them ordinary mum-and-dad households) as a criminal class.

Terry Ryder is the founder of hotspotting.com.au

ryder@hotspotting.com.au

twitter.com/hotspotting
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According to the monthly report from SQM Research, vacancy rates in our already-tight rental markets fell in six of the capital cities and were unchanged in the other two in January.



terryryder

Mum and dad investors hit by favourable COVID-affected tenant rules: Hotspotting's Terry Ryder

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Mortgage deferrals prompted by the COVID-19 pandemic have continued to trend down, according to the latest figures from the Australian Prudential Regulation Authority (APRA).

Householders and small businesses who were struggling to make mortgage repayments at the onset of the pandemic are back paying down their home loans again.

Repayments are not being made on about 2 per cent of the value of total housing loans on issue, compared to the 10 per cent peak deferral tally, according to the Herald Sun.

According to the Australian Banking Association, home loan deferrals at Commonwealth Bank, Westpac, National Australia Bank, ANZ, BOQ, Suncorp and Bendigo banks dropped 80 per cent between June and December last year, from 493,000 to 101,000.

Business loan deferrals dropped almost 90 per cent from 228,070 to 25,497 at the seven banks during the same time period.
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Repayments are not being made on about 2 per cent of the value of total housing loans on issue, compared to the 10 per cent peak deferral tally

jchancellor

COVID-19 based mortgage deferrals trending lower

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EXPERT OBSERVER

Housing market data has shown a fairly strong post-COVID recovery trend following a short, sharp slowdown in activity through the middle of 2020. Australian housing values rose 2.3% in the final quarter of the year, trending higher from a recent low in September 2020, to be just 0.1% below the previous record high value in October 2017.

Data from CoreLogic reveals which housing markets have seen the highest value increases relative to their value at March 2020.

March 2020 is a good yardstick for measuring the impact of COVID on housing markets. That is because it encompasses the ‘start’ of COVID in Australia, when the country reached the milestone of 100 cases diagnosed, and subsequently stage 2 restrictions rolled out nationally.

At the capital city level, Melbourne, Sydney, Perth, Brisbane and Hobart saw some level of value falls close to the onset of COVID. By December however, Perth, Brisbane and Hobart housing values had surpassed their March 2020 highs. Home values across Darwin, the ACT and Adelaide have continually increased since March, with Darwin values up 8.3% since the onset of the pandemic.

<img alt="" height="716" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/corelogic_dwelling_value_changes.jpg" width="1200">

Of the 116 LGA markets analysed, 95 saw some level of decline in values since the onset of COVID. Of those 95 markets, 37 have recovered to value levels above March.

Some of the strongest value increases since March are located in areas that did see a COVID-induced decline including Kwinana in Perth( up8.7%), Burnside in Adelaide( up 7.0%),and Scenic Rim in Brisbane (up 6.5%). Most of the markets with a strong recovery had seen relatively mild downturns to begin with.

A good example of this is Sydney’s Central Coast, where values declined just -0.1% over April. The Central Coast has been a resilient and popular market through much of 2020 due to the relatively affordable and low density stock across the region, as well as the coastal appeal. Since March, dwelling values on the central coast have increased 6.5% through to December.

Of the 10 council regions where values have been most impacted since the onset of the pandemic, eight were located across Melbourne, and two were in Sydney. It is unsurprising to see Melbourne dwelling markets have a long way to go before recovering value. Housing demand in this historically global city has been hampered by extended international border restrictions, as well as domestic social distancing policies through the September quarter.

Highlighting the depth of decline, or value increases, at a LGA level has important implications for real estate, banking and finance. The data shows inner-Melbourne council areas may be at greater risk of negative equity for recently purchased homes. For first home buyers or first time investors, the data also demonstrates where values are relatively discounted due to COVID-19. However, it is worth noting that in 2021, more markets are likely to move into recovery mode. This is expected as long as economic conditions continue to recover, and mortgage rates remain at record lows.

Eliza Owen is CoreLogic's head of research.
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Data from CoreLogic reveals which housing markets have seen the highest value increases relative to their value at March 2020.

Which housing markets are back above pre-COVID values?

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<h2>EXPERT INSIGHT</h2>

A pull back in the Index was to be expected.

Since the last survey in the second week of December we have seen domestic border closures; the emergence of Covid clusters in some states; and the sharp upswing in Covid cases overseas, notably the US and the UK.

This result compares to the 15% fall that was registered over July and August last year as the nation was shocked by Victoria’s severe second wave and associated hard lockdown. It still points to healthy Consumer Sentiment.

At 107.0 optimists clearly outnumber pessimists while the Index is 14.6% above the level a year ago and 41.5% above the low in April.

There may also be an element of statistical correction given that the Index had surged by 40% between August and December with the December print reaching its 10 year high. 
All components of the Index fell in January.

There were significant falls in the components associated with the economic outlook with the ‘12 month outlook’ falling by 8.3% and the ‘5 year outlook’ down by 4.5%.

Respondents were also less positive about their finances. The component ‘family finances relative to a year ago’ fell by 7% while the ‘12 month outlook for family finances’ was steady, falling by only 0.3%.

Spending intentions were also down with the component ‘time to buy major household items’ slipping by 2.8%.

Since January last year, before Covid was impacting Sentiment the ‘economic outlook’ components have lifted by around 26%; the ‘finances’ components by around 9%; while the ‘time to buy’ is up by 4.8%.

BILL EVANS is the Chief Economist at Westpac
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bevans

Consumer sentiment pulls back: Westpac's Bill Evans

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Home loan deferrals secured early during the pandemic continued to decline in November.

They are now down to 2.8 per cent of home loans and 2.3 per cent of all loans, according to the latest APRA data..

The share of loans deferred has fallen from above 10 per cent at the May 2020 peak. 

<img alt="" height="948" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/loan_deferrals_december.jpg" width="1200">

Source: APRA

While Victoria retained by far the highest share at nearly four per cent, following the state's lockdown, there was also a sharp decline among Victorian borrowers. 

<img alt="" height="894" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/housing_deferrals_state_december.jpg" width="1200">

Source: APRA

Property commentator Pete Wargent expects deferrals will be back into the normal range by the end of March, “assuming lockdown measures don't encroach again.”

Tim Lawless at CoreLogic noted “the significant reduction in deferred loans implies the risk of a surge in distressed properties coming on the market has reduced substantially.” 
“However there are likely to be some key precincts where distressed property sales will be more common, such as inner city high rise apartment markets where vacancy rates have risen substantially and rents have reduced,” Lawless said.

APRA calculated as at 30 November, according to data submitted by ADIs with over $20 million in loans subject to repayment deferral, a total of $60 billion worth of loans are on temporary repayment deferrals, which is around 2.3 per cent of total loans outstanding. 

Exits from deferral continued to outweigh new entries for the fifth straight month in November, with $32 billion in loans expiring or exiting deferral and $7 billion entering or being extended. 

Victoria remains the state with the highest proportion of loans subject to deferral amongst the states and territories, with 3.2 per cent of loans deferred compared with the rest of the country at 1.7 per cent. 

 
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The share of loans deferred has fallen from above 10 per cent at the May 2020 peak

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