Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

Joel Robinson

First look at MAYD's North Kirra mixed-use precinct

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Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

&nbsp;

[smartcode_project_cta:default project_id=152737]

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Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.

Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.

Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.

[smartcode_project:default project_id=150999 project_image_fid=374005]

The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.

Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.

Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.

[smartcode_project:default project_id=150999 project_image_fid=374010]

Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.

The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.

“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.

[smartcode_project:default project_id=150999 project_image_fid=374002]

“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”

The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.

[smartcode_project_cta:default project_id=150999]

Maréa Residences brings parkside apartments to Coolangatta

Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.

The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.

The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.

PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.

<img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" />

Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.

The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.

A significant component of The One will be its residential amenity.

More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.

The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.

<img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" />

The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.

PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.

“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.

“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”

The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.

PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.

PDG secures approval for $1.5bn Southbank apartment development, The One

Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.

The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.

That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.

The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.

A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.

&nbsp;

Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.

First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

Housing Affordability

<h2>Expert Observer</h2>

With the Federal election all but wrapped up, what can prospective buyers expect from the change in government, with the Labor party&rsquo;s win bringing a raft of policy changes.

With a look to address the property market&rsquo;s biggest issues,&nbsp; the headlining &lsquo;Help to Buy&rsquo; scheme is likely to be popular with prospective home buyers, as it provides a more affordable entry point to the Australian housing market for those individuals on low-to-mid level incomes.

This will contribute to more equality in rates of home ownership across income cohorts, and could create more opportunities for key workers to live in more central areas.

[smartcode_project:default project_id=27815 project_image_fid=185118]

Being able to share up to 40% of the purchase price with the government, along with only a small deposit and opportunity to save on lenders mortgage insurance, helps to overcome several of the hurdles of home ownership.

Keeping in mind buyers will still have to fund their transactional costs, including stamp duties, legal costs and bank fees.

Labor&rsquo;s Help to Buy scheme will involve an equity contribution from the Federal Government of up to 40 per cent of the purchase price of a new home, and up to 30 per cent for an existing home for 10,000 Australian&rsquo;s each financial year, with homebuyers needing just a 2 per cent deposit.

With a cap of 10,000 places, the scheme could be quickly oversubscribed as prospective Australian home buyers take advantage of the leg up into the housing market, Lawless says, highlighting the First Home Loan Deposit scheme, which saw the first 10,000 places of the scheme allocated within six months.

[smartcode_project:default project_id=112253 project_image_fid=193233]

However places for new homes were not taken up as quickly, and building constraints and high construction costs could deter the uptake of a shared equity scheme for new homes.

Having said that, a higher interest rate environment, which may see lower prices, could make people more cautious of buying, reducing demand for the scheme in the short term.

Historically, residential transaction activity correlates with property price movements. Additionally, we have just been through a period of significantly elevated transaction activity, including from the first home buyer cohort, where many home purchasing decisions were likely brought forward to take advantage of the swathe of home buying grants and incentives over 2020 and 2021.

The added flexibility of buyers being able to &lsquo;top up&rsquo; their ownership stake once in a better financial position is another advantage of the scheme, although any change in the proportion of ownership would presumably be accompanied by a paydown in the share of equity that has accrued in the property back to the government.

[smartcode_project:default project_id=3260 project_image_fid=62316]

Help to Buy scheme

<ul>
	<li>Government helps with up to 40% of property price for new homes, 30% for established, households source the rest of finance with as little as 2% deposit. Government holds a part ownership stake in the property, which can be bought out over time.</li>
	<li>Spots: 10,000 ▪ Income cap: $90k for individuals / $120k for couples</li>
	<li>Property price cap: varies by region, from $400k up to $950k ▪ Restricted to owner occupier buyers who don&rsquo;t currently own a property</li>
	<li>Commences from July 2022 Although the scheme is expected to be popular among buyers, Lawless warned anyone considering the scheme should be aware of the risks associated with buying on such a small deposit.</li>
</ul>

[smartcode_project:default project_id=6515 project_image_fid=68832]

With the housing market probably heading into a downturn over the coming year or years, some buyers may find their home is worth less than the debt held against it.

It&rsquo;s important to know if the government will share in the downside risk if the property is sold while in a negative equity situation.

KeyStart Loans in WA is a good example of what can happen to a shared equity scheme in a declining market. According to the WA government, the portion of KeyStart loan accounts in default did rise between January 2017 and September 2019, from 0.92% to 1.21% of KeyStart accounts, in the midst of a long, large housing downturn across WA.

However, he also added the default rate is still relatively low and the scheme has helped thousands of people into home ownership, saying, the nature of the housing and economic downturn in WA has posed a lot more risk to serviceability than the relatively tight labour market conditions we see in Australia at the moment.

While the Help to Buy scheme will help thousands of Australian&rsquo;s enter the property market, it&rsquo;s only addressing the symptoms of housing affordability rather than aim to actually fix the underlying issues.

[smartcode_project:default project_id=7020 project_image_fid=25155]

Similar to the First Home Loan Deposit Scheme, the new Labor Government appears to be adjusting from housing affordability solutions to more pragmatic policies that target home ownership, avoiding any downward pressure on housing prices.

It is also worth considering any demand-side incentives can add upward pressure to home prices. For this reason, the limited number of places in this particular scheme, along with price caps and income caps, should help to contain some of the excess demand that could result in upward pressure on prices.

Help to Buy is restricted to Australian&rsquo;s with a taxable income of up to $90,000 for individuals and up to $120,000 for couples. Capped at 10,000, applicants are also required to be Australian citizens and first home buyers.

Regional First Home Buyer Support Scheme 

<ul>
	<li>Government provides a deposit guarantee for regional home buyers with a deposit of at least 5%</li>
	<li>Spots: 10,000</li>
	<li>Income cap: $125k for individuals / $200k for couples</li>
	<li>Property price cap: varies by region, from $350k up to $800k to be reviewed half yearly</li>
	<li>Restricted to owner occupier buyers who haven&rsquo;t previously owned a property and have been living in the region for at least 12 months</li>
	<li>Commences from January 2023</li>
</ul>

[smartcode_project:default project_id=94147 project_image_fid=197738]

The Regional First Home Buyer Support Scheme extends the existing First Home Loan Deposit Scheme by providing an additional 10,000 places specifically for regional first home purchases, providing a guarantee of up to 15 per cent for eligible first home buyers &ndash; so that locals with a&nbsp;five per cent deposit can avoid paying mortgage insurance.

Based on the property price caps, the scheme is likely to be most popular for those buyers targeting a unit purchase, or lower priced regional markets where detached housing values are more affordable.

CoreLogic&rsquo;s analysis of regional Australian suburbs shows roughly one third recorded a median house value equal to or under the Regional First Home Buyer Support Scheme price cap, and 71.1 per cent recorded a median unit value equal to or less than the price cap.

The Labor party notes &lsquo;the housing crisis is hitting regional Australia the hardest&rsquo;, which isn&rsquo;t necessarily true from a purchasing perspective.&quot;

Although regional housing values have risen faster than capital city housing values over the past few years, we are still seeing the dwelling value to household income ratio across regional Australia (a ratio of 7.9 in March 2022) lower than the capitals (a ratio of 8.5).

From a rental perspective, regional renters have been dedicating a larger proportion of their incomes towards rent than the capital cities since 2017.

[smartcode_project:default project_id=3459 project_image_fid=179458]

Establishment of a National Housing Supply and Affordability Council 

<ul>
	<li>The newly established council would sit within an expanded remit of NHFIC (National Housing Finance and Investment Corporation) renamed Housing Australia. ▪ The council would: ▪ take a leadership role for setting land supply targets (in consultation state and territory governments)</li>
	<li>Establish a housing data warehouse focussed on housing supply, demand and affordability</li>
	<li>Advise on town planning policies and land supply</li>
	<li>Report on government owned land releases, rental affordability, homelessness and the number of new social &amp; affordable homes built annually</li>
	<li>Advise on appropriate housing measures within all current and future City and Regional Deals.</li>
</ul>

[smartcode_project:default project_id=108641 project_image_fid=192963]

Many of the factors contributing to worsening housing affordability, such as insuffficent land release and restirive town planning policies will soon be part of an extended remit for the reframed NHFIC, which would be re-branded as Housing Australia, The expanded role will administer the various government programs, including the Help to Buy scheme, existing deposit guarantee schemes and the Housing Australia Future Fund, as well as take responsibility for the newly created National Housing and Affordability Council and National Housing and Homeless Plan.

Lawless said NHFIC&rsquo;s expanded remit should help to address the issues that make housing unaffordable, while also providing more transparency and reporting about the release of government owned land and helping to steer policies related to social and affordable housing supply.

It was interesting to note Labor intends to fund some of these initiatives by applying higher fees on foreign buyer purchases.

Higher fees and costs associated with foreign buying activity comes after a recent history of substantially higher federal and state-based taxes on this buyer segment. In fact, this may have contributed to foreign buying approvals hitting record lows according to FIRB data.

Further disincentives for foreign buying have the potential to keep foreign purchasing at low levels, which could have a negative outcome on rental supply. Arguably, higher levels of foreign buying activity could help to alleviate the rental crisis Australia is navigating by introducing more rental housing into Australia, given that foreign buyers generally have to buy new homes.

[smartcode_project:default project_id=111979 project_image_fid=194079]

The Housing Australia Future Fund 

<ul>
	<li>A $10 billion initiative with the objective of funding social and affordable housing properties.</li>
	<li>Over the first five years the fund has a goal of building:
	<ul>
		<li>20,000 social housing properties &nbsp;</li>
		<li>10,000 affordable homes for key workers</li>
		<li>$200 million in maintenance/improvements of housing in indigenous communities</li>
		<li>$100 million for transitional housing options supporting women and children in domestic violence situations</li>
		<li>$30 million for housing veterans who are experiencing or at risk of homelessness.</li>
	</ul>
	</li>
</ul>

[smartcode_project:default project_id=90532 project_image_fid=180653]

With the stock of social housing increasing only marginally since 2006, investment in social and affordable housing is long overdue.

While the additional funding and housing support for disadvantaged sectors of the community is welcome, the 30,000 additional dwelling over five years remains insufficient.

A recent report from Brendan Coates at the Grattan Institute noted even with 100,000 extra social housing properties targeted towards people in most need, more than two thirds of low-income Australians would remain in the private rental market where national rents are currently rising at around 9% per annum.

National Housing and Homelessness Plan 

<ul>
	<li>Aims to establish key short, medium and longer term reforms making it easier for Australians to buy a home, rent and provide shelter for homeless Australians.</li>
</ul>

There is little detail so far on this initiative and the plan is yet to be formulated. However, the Labor party has expressed a commitment to working with a broad range of stakeholders including the states and territories, local governments, industry bodies, superannuation funds and other relevant experts on how to address housing, finance and urban development.

Tim Lawless is CoreLogic&#39;s Research Director.

Labor’s Help to Buy scheme will involve an equity contribution from the Federal Government of up to 40 per cent of the purchase price of a new home, and up to 30 per cent for an existing home


tlawless

What a Labor Government means for housing affordability and the Australian property market

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Soaring home prices have put first home buyers on the back foot, with affordability now a key issue in the Australian property market.

The continued house price growth has poured cold water on first home buyers, who until the end of March had the $15,000 HomeBuilder Grant as a financial platform when buying new property.

The median sale price for a house has reached over $1.1 million in Sydney in April, followed by $806,000 in Melbourne, according to CoreLogic. Apartments approve the more attractive proposition for first home buyers, with Sydney's median at $755,360 and Melbourne's at $593,121.

The growing property prices has led to first home buyers considering buying interstate, Finder’s First Home Buyers Report 2021 has found.

Finder surveyed 1,028 first home buyers, and 20 per cent said they are searching for their first property in a different state to where they currently live. That equates to around 2,362 first home buyers a month willing to buy in another state to get on the property ladder.

<a href="/news/vic/urban-s-top-suburbs-for-vic-first-home-buyers-in-q1-2021">Read more: Urban’s top suburbs for VIC first home buyers in Q1 2021</a> 
The report found that first home buyers from New South Wales (24%) are more likely to consider buying a property in another state than those living in Queensland (19%) and Victoria (17%).  
Sarah Megginson, home loans expert at Finder, said that many prospective buyers are being lured by cheaper property across state borders.  
“Some first home buyers are looking at real estate in other parts of the country where prices are more affordable, with many feeling the pressure to buy while interest rates are low. 

<a href="/news/vic/urbans-most-popular-vic-projects-for-first-home-buyers-in-q1-2021">Read more: Urban's most popular VIC projects for first home buyers in Q1 2021</a> 
“The impact of COVID-19 has also caused a spike in demand for regional properties, as residents in Sydney and Melbourne consider swapping city living for more of a laidback lifestyle.  
“With property prices soaring in recent months, it can put additional pressure on first home buyers, who may find themselves priced out of their own city. 

[smartcode_project:default project_id=5559]

“This is where an interstate move can work to your advantage as a prospective buyer.  
“Even if you’re not keen to move, a rentvesting strategy – where you buy a more affordable home in a different location and continue renting where you want to live – offers a way to get your foot on the property ladder,” Megginson said.  

<a href="/news/qld/find-out-where-in-south-east-queensland-you-can-buy-a-townhome-from-230-000">Read more: our homes to secure in Queensland’s City of Logan from $230,000</a> 
Finder’s First Home Buyers Report 2021 also found that men (24%) are more likely than women (17%) to be considering an interstate move to get into the property market.
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The growing property prices has led to first home buyers considering buying interstate, Finder’s First Home Buyers Report 2021 has found

One in five first home buyers open to buying in a different state

<html><body>
The 2021 Demographia International Housing Affordability Survey ranks Australia as having two of the most expensive housing markets in the world.

This year’s report assesses 92 major metropolitan markets in eight nations in the third quarter of 2020 with 36 severely unaffordable major housing markets.

The 10 least affordable were ranked as Hong Kong, Vancouver, Sydney, Auckland, Toronto, Melbourne, San Jose, San Francisco, Honolulu and London.

It is presented by the Urban Reform Institute and the Frontier Centre for Public Policy who work on a price to income ratio.

"It is not surprising that housing affordability — given the large influx of new buyers, particularly in suburban and outlying areas — has continued to deteriorate," institute president Charles Blain advised.

"As a result many low-income and middle-income households who already have suffered the worst consequences from housing inflation will see their standards of living further decline."

The report noted virtually all of the markets with severely unaffordable housing have urban containment policies that severely restrict building on their periphery.

It noted by 2004, all of the major markets of Australia had become severely unaffordable. "National price-to-income ratios were 3.0 or less in Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States until the late 1980s or 1990s.

"However since that time, housing affordability has deteriorated significantly and by 2019 national median multiples had increased to 4.0 in the United States and Canada, nearly 6.0 in Australia and 7.0 in New Zealand," it noted.

<h2>Recently listed properties:</h2>

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The report assesses 92 major markets in metropolitan areas across eight nations

jchancellor

2021 Demographia International survey ranks Australia among the most expensive housing markets

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Come in spinner or should that be spinners?
In a property week that can only be described as unprecedented we have had the prime minister, treasurer and newly elected NSW premier all declare that they are going to tackle housing affordability.
Previously housing affordability was a bit like going to your doctor for the annual check-up where after your consultation you advise the doctor that you don’t need to see the results. For years and years, our elected politicians have refused point blank to accept any responsibility for being the actual cause of this problem.
The new premier is already stumbling and stuttering where she stated that the heart of the problem is supply so NSW must build more properties. We all know that, this is only a part of the problem, so then the remedies moved to negative gearing (a federal problem) which explains why the prime minister has been silent following his announcement that he too, will personally pursue the housing affordability issues in Australia.
Next, the premier stated that she needed to make sure that the state’s finances are in order before she considers changing stamp duty. I would refer the premier to her media release on December 15, 2016. “NSW has recorded the lowest unemployment rate of the nation for 18 consecutive months and has widened its lead over the next strongest state, the latest ABS data shows. Our unemployment rate is by far the lowest in the nation and demonstrates our economic strength.”
Of course, the premier may always wish to investigate just why in Sydney we presently have public transport considered to be amongst the worst in the world. Back in November 2012 a global survey of 27 of the most important cities in the world ranked Sydney as fourth – worst for public transport. To make matters worse the survey also identified that Sydneysiders pay more for public transport than anywhere else.
Despite that embarrassing finding where our public transport would be even worse since that survey NSW continues to attract more than 50 per cent of the residential investment spend in Australia. On top of that it was revealed this week that the Sydney median house price had climbed a further ten percent in 2016 to now sit at $1,123,991 – another new record.
<a href="https://www.propertyobserver.com.au/images/2017/01/29/Investor-Lending.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/01/29/Investor-Lending.png" alt="">
Most people already know the answer to Australia’s housing affordability woes – look no further than the Henry Tax Review that was commissioned back in 2008 then published in 2010 only to be ignored by elected politicians because it was too hard and significantly threatened their parliamentary pensions. The report consisted of nine broad themes with point 8 stating – “Toward more affordable housing: substantially increase rent assistance, gradually move to a uniform land tax and remove transfer taxes (stamp duty), and gradually move to a neutral treatment of rental and owner – occupied housing.”
The Henry Tax Review has now come back with a vengeance and deservedly biting our politicians where it hurts. Although the real reason why NSW refuses to make changes to Stamp Duty is succinctly explained in the following graph.
<a href="https://www.propertyobserver.com.au/images/2017/01/29/NSW-Stamp-Duty.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/01/29/NSW-Stamp-Duty.png" alt="">
In Australia, currently the Top 10 taxes deliver 90 per cent of Australia’s taxation revenues. Three of the state taxes are in the Top 10 taxes by revenue collected, although these three state taxes are at the bottom of the Top 10 and represent less than 11 per cent of all tax revenues.
Many simply say increase the taxes for foreign buyers, although there are major issues on that horizon when this week two major Chinese private providers of home price data stopped publishing figures so what’s happening to the home-grown Chinese property markets? The Chinese Index Academy stopped distributing monthly housing price data for 100 cities which was usually made available at the commencement of each month. The Academy told Reuters last Friday, it had suspended distribution indefinitely and then politely declined to provide a reason.
Coincidentally on New Year’s Eve the Chinese government issued a statement that effectively makes it much harder for Chinese investors to now get their money out of China. In an email I received on January 5 here are the key points.
<ul>
<li>The individual annual foreign exchange purchase quota of $50,000 is unchanged.</li>
<li>Banks are “encouraged” to increase scrutiny of currency transfers.</li>
<li>Banks must report any overseas transfers by individuals of US$10,000 or more.</li>
<li>Starting in July 2017, banks and other financial institutions in China will have to report all domestic and overseas cash transactions of more than 50,000 yuan ($7,201), compared with the current amount of 200,000 yuan.</li>
<li>Beijing is signalling to banks, companies and individuals that it disapproves of foreign spending and investment, except for a few purposes that are explicitly defined by the government (e.g. buying foreign-made machinery to increase the efficiency of a Chinese factory).</li>
<li>Overseas property investment has been called out by at least one major Chinese bank as insufficient reason for transferring money abroad.</li>
</ul>
With great interest, we shall watch very carefully how the Chinese buyers perform in 2017 especially as very little (actually nothing) has been written on these forced changes by the Chinese government.
Housing affordability will be major election issues at forthcoming state and federal elections and that could not happen to a nicer group of politicians who have been complicit by neglecting these issues for decades.
Oh and on Australia Day, 2014 Mosman had 68 houses on the market, 2015 it fell to 58, then in 2016 it fell to 45 and this week it’s 25.
ROBERT SIMEON is a director of <a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> and has been selling residential real estate in Sydney since 1985. 
He has also been writing real estate blog <a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> since 2000.
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Politicians to battle housing affordability - an oxymoron? Robert Simeon

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When Malcolm Turnbull addressed the National Press Club this week I was really hoping that he was going to announce some major policy critiquing for all matters pertaining to Australia’s ongoing housing affordability woes. 
Sadly, very little was offered where he clearly laid the blame at the states and territories which simply identified that very little would be happening to this space.
We can then expect political huffing and puffing until November 2, 2019 which is when Australia must contest the next election. A very strong possibility that we will see a changing of the guard where negative gearing laws will be changed which will then probably coincide with a major property downturn. On that basis, it is clear to predict the game plan for the next two and a half years. Property investors will go -hard simply because they want to get in before the negative gearing rules are changed (should there be a change in government.)
There is no doubt that property prices will continue to rise in 2017 to the extent that we may well see the cumulative house prices reach 100 per cent gains in five years in some areas. The latest statistics from CoreLogic revealed this week, identified the January price rise results showed Melbourne up an additional 11.8 per cent and continues to run amok at 16 per cent. Since June 2012, the cumulative increase in house prices has been 70.5 per cent, CoreLogic reported.
Two things I was expecting announcements on this week were immigration and reducing the off – the – plan ratios to overseas buyers. CBA senior economist Michael Workman said, ‘’housing affordability is set to worsen without federal action. 
The Federal Government controls some of the significant demand factors for housing markets, namely population growth via migration and the spectrum of tax and foreign investment policies that significantly inflate demand for existing and new housing. Housing affordability can be improved, via stabilising growth in house prices and rents, by gradual reforms to both supply and demand issues.”
In the present property environment, there is no need for off – the – plan sales to foreign buyers to remain at 100 per cent and this ratio is controlled by the Turnbull government.
<a href="https://www.propertyobserver.com.au/images/2017/06/VRN-2.png" target="_blank">Click to enlarge </a>
<img src="https://www.urban.com.au/images/2017/06/VRN-2.png" alt="">
Despite the construction of thousands of new apartments, we are not seeing an easing of rents as was the expected case. Data analysis from the NSW Rental Bond Board identified that NSW has more tenants than ever before. No surprises to learn that the most expensive five suburbs are Manly, Waverly, Woollahra, Willoughby and Mosman.
We can therefore expect to see these areas hot – spotting with investors as they know these areas provide the best rental returns as well as capital appreciation. Investors will keep driving these markets simply because the federal government has tinkered with superannuation, and property markets are out-performing the share market.
Of course, we all know that this will change over time although the momentum is much stronger with our respective governments doing absolutely nothing aside from weekly lip service.
 
<a href="https://www.propertyobserver.com.au/images/2017/06/VRN-Statistics.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/VRN-Statistics.png" alt="">
 With much being written about money laundering within the Australian property markets the appointed watchdog, the Australian Transaction Reports and Analysis Centre (AUSTRAC), is investigating more than $3 billion in suspicious transfers from Chinese property investors last year.
This was further backed – up late last year when the major Australian lenders ceased lending to foreign buyers amid concerns. I was then surprised to read this week that foreign investors are again on the surge where this time they are paying cash to settle the full amount of the purchase.
Now many will be asking the obvious questions as to where all these monies are originating from based on recent announcements that the Chinese government had shut down money transfers from China?
Well, allow me to lay your concerns to rest – the smartest thing that Joe Hockey did when he was treasurer was to hand all data collection on every property transfer in Australia over to the Australian Taxation Office (ATO). You may have forgotten that some months later after reviewing the respective data an excited ATO announced that they were expanding their forensic property investigations back to 1985.
Just this week, I received a telephone call from one of the ATO investigators requesting purchaser contact information for a property we sold late last year. Nothing was said, I simply adhered to their request and provided the relevant information.
What this clearly tells us, is that every property transaction is scrutineered by the ATO and you can no longer beat the system.
With so many discussions on housing affordability this is one announcement that should please all those closely following the real estate movements. As each property settles all the data is then sent to the ATO for recording and investigation.
It has become very clear that everybody buying Australian real estate should know that each transaction is noted and investigated. And yes, they have the resources.
ROBERT SIMEON is a director of <a href="https://www.rwm.com.au/">Richardson Wrench Mosman and Neutral Bay</a> and has been selling residential real estate in Sydney since 1985. 
He has also been writing real estate blog <a href="https://www.rwm.com.au/news/">Virtual Realty News</a> since 2000.
 
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Why housing affordability is a political no – go zone: Robert Simeon

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Bill Shorten and Labor are promising to perform a mathematical miracle in the real estate industry: they have a policy under which prices will keep rising but affordability will improve.
Labor justified its real estate taxation policy with the claimed desire to improve housing affordability. Shorten in his policy announcement essentially blamed all price rises over the past 30 years on negatively-geared investors and inferred that nobbling them would revolutionise affordability.
This has scared the living daylights out Australians who live in the 70 percent of households which own their homes. Labor was promising to reduce the value of their major asset.
Since Labor realised the fundamental flaw in its policy pitch, it has been at pains to claim that property values won’t fall under its changes. The ALP-aligned think tank, The McKell Institute, is now saying that house prices will keep rising under the Labor policy.
So Labor proposes to perform a statistical miracle. Prices will keep rising but affordability will improve. One wonders about the means they will use to achieve this. Other than lower prices, the only mechanisms for improving affordability are a big cut in interest rates (already at record lows and not controlled by the politicians) and/or a big rise in incomes (not part of the plan, as far as I know).
This confirms – yet again – that politicians collectively lack even a primary school understanding of how property markets work and how their blinkered policies impact on real estate consumers. They seem unable to think policies through to logical conclusions. They keep introducing laws which they claim will improve affordability but which make it worse – every time.
This is playing out at a state level, with the Governments in charge of the two biggest states slugging foreign investors with new taxes. They maintain that this will somehow make housing cheaper but sadly - yet again - it will have the opposite impact.
There are widely diverging views on affordability – how serious it is, what causes the problem, who’s to blame for prices rising and how to fix things. But one area where most parties tend to agree is that increasing the supply of dwellings would have a beneficial impact.
In fact, the best chance of bringing down prices at a local level is creation of an oversupply. As we have seen in selected locations around Australia in recent years, it’s the one major element that causes prices to drop.
Specific markets, notably inner-city apartment markets in some capital cities, are poised for a hefty rise in supply which is linked directly to foreign investment. If planned projects proceed, price decline is almost inevitable.
But state government moves in Victoria and New South Wales to lift sharply increase taxes on foreign buyers of Australia real estate are likely to prevent or limit that increase in supply.
Coupled with moves by the banks to curtail lending to foreign buyers and ATO measures affecting sales above $2 million, Australia has quickly cobbled together a series of major disincentives to foreign investment. There are reports of Asian investors switching their focus away from Australia to other, more welcoming nations.
If foreign investors stop buying (they won’t all be turned away, but many will, I suspect) many of the proposed apartment projects simply will not be built. 
The big increase in new dwelling supply will be lost, as will many construction jobs. 
In reality, I suspect the state measures have little to do with a desire to improve affordability. It’s essentially a cash grab, disguised as a measure to help young Australians achieve home ownership.
Like everything else coming out of the befuddled brains of politicians, the moves will make the problems in real estate worse.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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terryryder-YECXbqmri2

Cash grab or about affordability? Terry Ryder

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There are few real estate activities more depressing than observing a media debate about housing affordability.
It’s a downer because it’s clear from the rhetoric that this nation is unlikely to ever achieve any kind of resolution of the issue.
There are four reasons: (1) the politicians don’t understand it and/or are unwilling to do what’s needed; (2) industry people who do understand it champion their vested interests rather than the national interest; (3) everyone else has their heads full of misinformation, political agendas and unhelpful emotion; and (4) most discussions focus on Sydney prices and ignore the realities in other parts of Australia.
The outcome is mishmash of misconceptions, myths and outright lies. Nothing useful is ever achieved.
A recent discussion of ABS TV program The Drum was representative of how bad it gets. None of the people at the discussion table had any knowledge on the issue and simply indulged their prejudices and personal agendas. One spectacular twit claimed no one can get into the housing market any more because you need a $200,000 deposit to buy a typical house. Not even in Sydney is that remotely close to the truth.
The so-called affordability crisis is never far from the headlines and it stepped up in prominence this week with Federal Treasurer Scott Morrison declaring he was serious about fixing the problem. But of course he wasn’t serious at all. He essentially dumped the problem at the feet of state governments, with a generalised assertion that taking steps to increase dwelling supply will make everything better.
That’s one of the subject’s biggest furphies – a simplistic policy of lifting supply won’t force down prices unless the idea is to deliberately generate a major oversupply. One thing Morrison got right was his statement that you won’t fix the problem by crashing the market.
As a general observation, we don’t need more dwellings in Australia. We’re already building far too many apartments, which will result in falling values, but only in specific areas such as the inner-city unit markets of Melbourne, Brisbane and Perth, as well as surfside Gold Coast. This runs contrary to the statement by Malcolm Turnbull this week that “we simply haven’t been building enough dwellings” – which shows how little he understands about the situation.
Federal Labor responded with its standard party line that restricting tax benefits for investors will make housing affordable again – despite the assertion by leader Bill Shorten that his policy won’t cause house values to decline (so therefore how will it make housing more affordable?). And that, sadly, is the extent of his understanding of the issue.
There followed lots of finger-pointing, with each level of government blaming another level of government for the perceived problems, and each side of politics scapegoating their opponents.
Industry lobby groups leapt at the opportunity to advance their pet causes. Master Builders Australia agreed, naturally, that a big lift in new home construction would be the solution, but argued that politicians needed to make changes to make it really attractive for developers and builders. The Urban Taskforce declared that developers would be happy to build lots of affordable homes, just so long as government handed them plenty of financial incentives. 
As I’ve often commented, the biggest noise in real estate is always the voice of vested interest.
Even in Perth, where there is vast oversupply and high vacancies right across the metropolitan area, the Urban Development Institute of Australia urged the WA State Government to take steps to increase housing supply. 
To paraphrase Shakespeare, they were all tales told by idiots, full of sound and fury, signifying nothing.
The problem is that none of solutions put forward will make the required difference. They’re all targeting the wrong villains.
Everyone has a theory on who’s to blame for rising prices: some say foreign investors, others claim Australian investors, a few proclaim it’s first-home buyers pumped up by government incentives and still others, including former federal minister Bob Carr, reckon it’s the high level of overseas migration into Australia.
Who’s right? Well, none of them. The real culprits are never mentioned.
The biggest single force in driving house prices comprises the market sector known as next-time buyers –i.e. home-buyers other than first-home buyers. Numerically they’re the biggest chunk of the market and they’re aspirational. They have the financial capacity and ambition to pay top dollar to secure the property they’re obsessing over.
Investors, generally, don’t do that and first-timers can’t afford to.
But there’s an even bigger villain, one the politicians never mention while they’re busy pointing their fingers in various other directions - because the biggest problems are caused by the politicians themselves.
The value of homes in Australia is under-pinned by their replacement cost – i.e. the high cost of creating new house-and-land packages, the biggest chunk of which comprises taxes, fees and charges from all three levels of government.
As long as local, state and federal governments treat the housing industry as a beloved cash cow, housing will remain pricey in this country. Most of the state budgets handed down this year made the problem worse by adding to housing costs. 
You can build as many new houses as you like, but developers can’t sell them for $250,000 if they cost $400,000 to create.
Federal politicians recently conducted an inquiry into the affordability issue, which took a lot of time, cost of lot of money and achieved absolutely nothing. The Federal Government made a show of clamping down on foreigners illegally buying mansions, but that has changed nothing for first-home buyers 
Last year another inquiry was initiated by the House of Representatives economics committee but, according to reports this week, that has lapsed through lack of energy.
So where are we after all that “sound and fury”? Exactly the same place we were before Scott Morrison stepped up to the microphone – nowhere closer to any solutions.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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We don’t need more dwellings in Australia

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We're not asking the right questions. That's why the property industry is getting so many misleading answers about important issues.
I think this explains, in part, why so many believe we have an affordability crisis and a housing shortage, when so much of the research data contradicts these widely-held beliefs.
Surveys of prospective first home buyers usually ask whether they think they can afford a home. The answer is meaningless, or at best misleading, unless there are further questions.
Those might include:
<ul>
<li>
Why do you think you can't afford to buy? 
</li>
<li>
Have you tried to buy? 
</li>
<li>Where have you looked? </li>
<li>Are you willing to compromise to get into the market?</li>
</ul>
The big problem, as I see it, is not an affordability problem but an expectation problem.
If you read between the lines in industry surveys and street interviews by media, it's clear many wannabe home buyers have a perceived problem because they've absorbed newspaper headlines and looked no further.
Why bother when you read daily that prices are through the roof (when in reality this is true only of Sydney)?
Others have a problem because they want their dream situation in their first purchase. People are quick to complain they can't afford a home but then we discover they want to live in a million dollar suburb.
Many commentators on real estate issues such as affordability apparently believe nothing ever changes. The assumption is that the current generation of young adults want what their parents wanted and should behave accordingly. That assumption is wrong.
<blockquote>
The big problem, as I see it, is not an affordability problem but an expectation problem.
</blockquote>
When the market share of first time buyers declines, it's assumed there's an affordability problem. No other option is considered. The possibility of demographic change is overlooked.
This is the nub of the issue because it's clear that today's 20-something's have different priorities to their parents. Married with kids and a mortgage before the age of 30 is not on the bucket list. Lifestyle takes priority and commitments can wait.
There's a similar issue with the idea of an undersupply of housing. Individuals and organisations stating under-supply as a fact (one that's accepted by many journalists without question) also fall into the trap of believing nothing changes.
Their analysis is flawed because they're using out-dated models about how many new dwellings are needed for a particular level of population growth. The assumption is that the average household size is X and if you divide population growth by X, that's how many houses should be built.
But a lot has changed. Young Australians are staying longer at home with their parents. Overseas migrants comprise a major chunk of population growth but it's coming from non-traditional sources with different household patterns.
Household sizes are rising again. Whereas in the past the typical household was a small family in a big house with surplus bedrooms, people are now buying homes that reflect their actual needs - e.g. opting for a two-bedroom apartment rather than a large, expensive and wasteful four-bedroom house.
The bottom line is that housing demand is created when someone buys a block of land and engages a builder. If that's not happening to the degree many expect because of what their formula tells them, then the formula is flawed.
The industry that complains about the alleged housing shortage is the industry whose job it is to build houses. If the vast undersupply they claim is real, there's a massive opportunity being missed by the industry doing the grizzling.
The industry will continue spinning its wheels until it starts asking the right questions. If there's a shortage, where are the queues at housing estates? And why is there no rental growth? And what are the real reasons young people have stopped buying in numbers?
You can contact Terry via <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email</a> or on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>. 
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The problem with first home buyers isn't affordability, it's expectations

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There are many measures of affordability in the marketplace, sadly I believe that many of these measures fail to accurately depict the affordability or otherwise of housing in Australia.  
The main reason being that housing affordability is an extremely complex issue and many factors drive the affordability of housing. In my future posts I am going to investigate some of these factors and tell you what you should really be asking yourself about affordability when purchasing a home.
Can I start by stating that simplistic means of comparing property prices between countries I believe are ineffective. 
Due to different tax regimes, standards of housing and attitudes to property and wealth accumulation there may be perfectly good reasons why a household is prepared to spend more on housing in Australia for example than they are in the United States.  I think common measures such as the median multiple (ratio of household income to property prices) are not necessarily a good way to measure affordability or otherwise, there are a lot more factors at play.
Interest rates
Interest rates are obviously an important component in determining housing affordability.  When interest rates are lower, interest repayments on home loans are lower and as a result ‘affording’ the repayments on a mortgage should be easier.  Of course, as we are seeing at the moment, lower mortgage rates often encourage higher property values. 
So while it’s true that lower interest rates make housing relatively more affordable, if values are rising and sales increase then it can somewhat off-set the affordability benefit of lower mortgage rates.
Furthermore, the typical home loan in Australia is 25 years and the vast majority of home loans are on a variable rate.  As a result, as the Reserve Bank adjusts monetary policy there is virtually an instant effect on household budgets and balance sheets.  For example, at the moment the standard variable mortgage rate sits at 5.95% however, over the past 10 years the variable mortgage rate has averaged 7.27%, over the last 20 years it has averaged 7.45% and over the past 25 years (the typical home loan length) it has averaged 8.47%. Over the past 25 years, standard variable mortgage rates have been as high as 17.0% and as low as 5.75%.
The point is that interest rates can vary greatly over 25 years and over the life of the loan the current interest rate is not a great means of measuring the cost of a mortgage over its lifetime.
Wages / Income
If you are going to take out a mortgage on a home (as most purchasers do) you are going to need an income and you are going to need some savings.  In Australia there are a number of measures of wages/income and it is difficult to know exactly which one is best to use to measure housing affordability.
The National Accounts measure the ‘Real net national disposable income – chain volume’.  This measure does have a number of shortcomings in that it is not an individual measure and that it includes items that one can’t really spend such as superannuation.  Additionally this data is only available from a national standpoint. 
The Australian Bureau of Statistics (ABS) publishes its wage price index each quarter however, it measures wages only and doesn’t measure income captured from other sources.  The Census is undertaken each five years and does report on the median weekly household income however, the shortcoming here is that it is only updated every five years. 
We also have the Household Income Survey from the ABS however it is only undertaken bi-annually and takes a fairly macro view of household incomes
Unfortunately all of these measures have significant shortcomings which need to be considered when looking at any housing affordability measure.
Article continues on next page. Please click below.
<hr class="system-pagebreak">
Labour force / unemployment
Paying off a mortgage eats up a significant portion of a family’s wage.  Undoubtedly if home values weren’t so high and mortgages weren’t so large disposable incomes would be much greater.  Although labour force data or unemployment statistics need not necessarily be an input into any housing affordability measure they are a key consideration for someone looking to purchase. 
The threat of unemployment means that despite the fact housing may seem affordable it is less likely someone would purchase. Obviously if you are unemployed it is going to be difficult to purchase a home.
Another factor to consider is although measures of income show that over recent years wages and disposable income have increased, what they don’t take into account is how many more women are working nowadays.  Labour force data shows that in May 2014, 54.1% of the workforce was male and 45.9% was female, 30 years ago 62.3% was male and 37.6% was female.  Today, 35.5% of full-time workers are female compared to 28.9% 30 years ago. 
The point here is that although household incomes have increased, a big proportion of the increase is due to the structural change associated with a greater number of women in the workforce.  
The rising prevalence of dual income households means that whereas 20 to 30 years ago couples could afford mortgage repayments on a single wage, today they largely require dual incomes.
Home values / prices
Most measures of housing affordability look at median prices or median values. 
The important thing to remember here is that a median is just the middle value so there are just as many homes worth more and less than that figure.  In fact the median price looks only at the middle value of properties which have sold over a period.
This obviously has significant shortcomings because what is predominately selling could be at the affordable or expensive end of the market and this could bias the median one way or another.  Remember that typically only 5% to 7% of total housing stock transacts in a given year.
Another important consideration here is that a national median measure doesn’t really tell you very much at a localised level.  In Australia, 66% of residents live in a capital city with around 55% in Sydney, Melbourne, Brisbane or Perth. 
Quite simply many residents don’t have a choice but to live in a capital city so if you are trying to determine affordability in Melbourne, the cost of housing in Mildura is of no valuable comparison whatsoever.
Rental rates
If you don’t own a home or pay-off a mortgage you have to live elsewhere, for the most part non-homeowners rent.  The cost of renting is an important consideration when trying to determine housing affordability.  If rents are increasing but home values are flat or falling purchasing a home may start to look a more attractive prospect. 
Once again the challenge with a measure which compares rents to house price (or mortgage repayments) is that it is not a localised analysis.  For example for the cost of renting in Paddington in Sydney you may actually be able to pay off a mortgage in Guildford but to the renter is the opportunity cost of owning their own home and being further away from the city centre, harbour and the beaches worthwhile? 
Who knows but for anyone looking to purchase these are the sorts of questions they need to be asking themselves.
The other key consideration is that the ongoing costs associated with owning a home as opposed to renting are difficult to determine, but they are much more than renting.  As a renter, the ongoing costs generally include: the rent, the bond, electricity, gas (if applicable), cleaning (if you move rentals) and the cost of moving if/when you move. 
As an owner of a home the costs incurred include: the mortgage, electricity, gas, council rates, stamp duty when you purchase, ongoing maintenance of the property, strata fees (if you own a unit) and agent fees if/when you decide to move.  The ongoing costs associated with owning a home are much greater than the ongoing costs of renting.
Who does housing affordability affect most?
Housing affordability affects everyone.  The high cost of housing acts as a disincentive for people to move to more appropriate locations, discourages people from upsizing and downsizing and discourages movement intra or interstate for employment.  The group most affected by housing affordability however is those who don’t as yet own a home.
Again if we think about many of the measures of affordability used they look at typical or median prices values and compare to interest rates and typical wages.  The problem with this approach is that very few people are actually typical.  As a generalisation, most people that rent are younger, starting out their careers. 
There is a high likelihood that their wage is currently lower than the median (although there is a good chance it will increase as they are promoted or move jobs).  If their wage is below the typical wage then they should not be looking to buy the typical (or median house).
Of course there are plenty of renters that earn above average wages but choose not to purchase as well but when trying to tackle the affordability question I think many of the measures that we look at are far too simplistic, but hamstrung by the quality and granularity of income data. 
Housing affordability is an individual thing and none of the measures really tell the true story about how affordable or unaffordable housing in Australia is.  When determining whether you can afford to buy a home I think the most important things to consider are:
<ol>
<li>What are current mortgage rates and at what higher level would I not be able to repay my mortgage?</li>
<li>How secure is my job and what would happen if I was to lose my job for an extended period?</li>
<li>Over the next few years what is the realistic expectations for my wage, will it rise and by how much?</li>
<li>What impact would it have if I found a partner or lost a partner on my ability to repay the mortgage?</li>
<li>If I plan to have children, children cost a lot what impact would that have on my ability to repay the mortgage?</li>
<li>Compared to my current rent and associated costs, how much more is paying off a mortgage and the other day-to day costs of home ownership really going to be and can I afford this?</li>
<li>What am I willing to sacrifice in order to buy a home; lifestyle, location, overseas travel etc?  What is the opportunity cost of buying a home?</li>
</ol>
I am sure there are many more questions to ask when looking to purchase but I think as a start these questions are essential.  I say that the measures of affordability which are readily available should be taken with a grain of sale. 
It’s more important to ask yourself some tough questions about whether or not you can really afford to be a home owner.  If you have any doubt you really need to consider whether it is worth the risk or not.
For what it’s worth, I think that housing affordability is a significant issue for young Australians, particularly those within our capital city markets.  he major problem is that most Australian’s choose to build wealth through property and 23 years of unabated economic growth has on exacerbated this. 
The challenge now is how can you deliver affordable housing for younger Australians without bringing down the cost of existing housing which politically and economically would be detrimental to the overall health of the Australian economy.
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ckusher-ujnxiKuFQs

Forget affordability measures and ask yourself some tough questions

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Few things make me more cynical than the sound of a politician mouthing concern about housing affordability.
In my lifetime, there have been hordes of politicians and governments claiming to want to solve the problem, but none willing to take any real action.
When it comes to improving affordability, many politicians talk a good fight, but none is capable of delivering a knockout punch.
The latest masquerade in this regard is being led by MP Kelly O'Dwyer.
O'Dwyer has obviously watched a few episodes of Yes Minister before deciding on a course of action: bring on an inquiry, issue lots of press releases, target an unpopular minority and take "strong action" against these alleged perpetrators of the perceived problem – but essentially do nothing meaningful so that the status quo remains intact.
The truth is, 40% of the cost of a new house in Australia comprises government fees, charges and taxes. Remove those and the cost of a $400,000 house-and-land package would drop to $240,000.
In all the froth and bubble coming out of the federal inquiry, we haven't heard O'Dwyer or any other politician confront this reality. Why not? Because if they did, their advancement within the party would suffer a sharp U-turn.
Governments are addicted to the revenue they milk from their favourite cash cow, the real estate industry. That's sacred and the possibility of scraping stamp duty, for example, is not up for discussion.
So what to do? How to create the illusion of doing something while changing nothing?
<blockquote>
Many Australians have a big issue with Chinese investors, although they don't seem to mind American, British, Dutch, Italian or New Zealand investors.
</blockquote>
The answer, as always, is this: target an unpopular minority, talk tough, issue lots of press releases, look strong, do nothing. Works a treat every time.
O'Dwyer has a bee in her bonnet about foreign investors. I'm not sure whether she truly believes that foreign investors are the cause of the perceived affordability problem. I seriously doubt that she does, because someone armed with all the relevant information, as she should be, must know that foreign investors are not impacting the price of suburban houses in Australia.
But foreign investors are a great scapegoat, particularly as this currently means Chinese investors. And many Australians have a big issue with Chinese investors, although they don't seem to mind American, British, Dutch, Italian or New Zealand investors.
So tough-talking Kelly is going a come down hard on Chinese investors. It'll be good for some media sound bytes and it'll help to advance the career of a politician no one had heard of until recently.
But will it make housing more affordable? No, it won't change a thing.
A quote from Shakespeare comes to mind: "It is a tale told by an idiot, full of sound and fury, signifying nothing."
Chinese investors are not impacting the price of houses in first-home buyer markets in Australian cities. Overwhelmingly, they are buying high-rise apartments in the CBDs of Melbourne and Sydney, as well as the Gold Coast, which is a perennial favourite for Asian investors who enjoy losing money.
If they're buying suburban houses, it's primarily top-end homes in the millionaire suburbs.
The Federal Government could pass a law tomorrow banning all foreign investment in Australian residential property – and the price of houses in the suburbs of Sydney and Melbourne would not change.
But if they removed the taxation component of a house-and-land package, that would make a dramatic difference.
Any chance of that happening? Not remotely.
This is a publicity exercise. Meaningful change is not on the agenda.
Terry Ryder is the founder of <a href="https://hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email</a> him or contact him on <a href="https://twitter.com/hotspotting" target="_blank">twitter</a>.
 
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