Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

Housing Affordability

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A number of indicators suggest that Melbourne’s strong run of price rises may be nearing an end.
There’s no doubt the Melbourne market overall is strong and currently one of the most buoyant in the nation. Some research sources have Melbourne house price growth ahead of Sydney now, although others in the land of dodgy data still have Sydney leading. 
An analysis by Performance Property Advisory finds that the key indicators, while slightly mixed, suggest that Melbourne is now coming to the end of its growth cycle.
Indicators which point to a moderation in price growth include the firm’s affordability index, the level of rental yields, the high price growth in the past three years relative to longer-term trends and a decline in the influence of foreign investors.
Director David McMillan says: “From an investment point of view, Melbourne is showing all the signs of a market running out of steam.”
He says the firm’s Affordability Index (AI) is currently sitting at 43 percent and historically the Melbourne market has struggled to grow past this point.
“Properties become unaffordable in Melbourne when the market’s AI rises to around 45 percent,” he says. “Melbourne’s AI is hovering around the 43 percent mark, indicating that properties are approaching a natural ceiling. The most likely outcome is a low-growth environment over the next 2-3 years.” 
McMillan says that from 2009 to 2016, incomes rose approximately 15 percent while house prices rose 79 percent.
“The out-performance of house prices against incomes is, in our view, unsustainable and this is a negative for future price growth in Melbourne,” he says.
“It is clear that the three-year price movement is well above trend at 12.96 percent per annum. On that basis it could be said that the Melbourne market is likely to slow down in the short term.” 
McMillan also notes that Melbourne has the second lowest yields among the major cities, with only Sydney lower. “Due to an out-performing median house price, we have seen yields progressively deteriorating, which is a negative for both investors and first-home buyers,” he says. 
The report says total foreign investment in Victoria has quadrupled in the last three years, from around $6.6 billion to $26.6 billion, but is expected to decline in the coming year.
“While we encourage foreign investment, the phenomenal rise has led to over-speculation and over-building in some pockets of Melbourne – the consequences of which are yet to be fully understood by the market.
“Given that the banks have now ceased lending to foreigners, we expect that this number will reduce as much as $10 billion in the 2017 financial year. The large swings in foreign investment have distorted normal market cycles and are expected to lead to increased supply.”
But price decline is not expected, as there are counter-balancing positives for the Melbourne market. They include a high level of proposed infrastructure spending by the federal and state governments, the low rate of unemployment, relatively low levels of stock for sale, a low “Days On Market” indicator, and strong levels of population growth (both existing and projected future rises). 
“Victoria has gone from being a loser from Net Interstate Migration in the 1990s, to a fairly neutral position during the 2000s, to being a winner since 2010, which has been a key factor of the price growth we have seen since 2009.”
Performance Property does note, however, that there has been a level of oversupply in B and C grade housing and apartment stock.
It recommends that investors avoid the off-the-plan apartment market and I wholeheartedly endorse that. “This market is showing no value and price falls in the short term are possible,” McMillan says. “There are no fundamentals that support price growth in the short term. 
But he does see some value opportunities in the Lifestyle and Middle Ring housing markets. 
“This is really a tale of two markets, with house-and-land packages on the metro fringe and inner-city off-the-plan property over-supplied, while the established school belt areas of Melbourne are in short supply,” he says.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="mailto:%20%3Cscript%20type='text/javascript'%3E%20%3C!--%20var%20prefix%20=%20'ma'%20+%20'il'%20+%20'to';%20var%20path%20=%20'hr'%20+%20'ef'%20+%20'=';%20var%20addy38821%20=%20'ryder'%20+%20'@';%20addy38821%20=%20addy38821%20+%20'hotspotting'%20+%20'.'%20+%20'com'%20+%20'.'%20+%20'au';%20document.write('%3Ca%20'%20+%20path%20+%20'/''%20+%20prefix%20+%20':'%20+%20addy38821%20+%20'/'%3E');%20document.write(addy38821);%20document.write('%3C//a%3E');%20//--%3E/n%20%3C/script%3E%3Cscript%20type='text/javascript'" 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

Melbourne’s strong run of property price rises may be ending

<html><body>
GUEST OBSERVER
Neither the Government nor the Opposition are being bold enough in their actions to address Australia’s housing crisis.
In particular, the Budget measures intended to encourage investment in affordable housing will do little to change the investment decisions of “mum and dad” investors.
Australian’s have a love affair with property, and a penchant for negative gearing.  If the Government, or the Opposition, was clever, they’d use these tendencies to help resolve Australia’s housing crisis. 
The Government needs to appreciate that investing in affordable housing means lower rental income and lower capital growth. It needs to be as financially attractive for someone to invest in affordable housing, as compared to investing in any other residential property.  This is where tax policy can help.
A key reason for introducing the CGT discount was to encourage capital investments.  Modifying how the CGT discount operates will change the way people invest. Increasing the CGT discount is going down the right path, but an increase from 50 per cent to 60 per cent is not enough to change the investment decisions.
Our bold suggestion: increase the CGT discount to 100 per cent for affordable housing held for 10 years or more.  Make the capital gain tax free.  This will move investment in affordable housing from being a marginal investment decision, to being very attractive.
At the same time, consider reducing the CGT discount on other residential properties from 50 per cent to say 40 per cent, or lower.  Or require a property to be held for five years, rather than one year, before the CGT discount applies.  This change would temper investment into residential property, and reduce speculative investment decisions.  It would also help balance the impact on the Budget.
That is an intelligent policy decision. That is bold, and would start to change people’s investment decisions. 
This change would need to be a long term one.  The CGT discount can become like the superannuation rules, and get changed every Budget. That would only serve to undermine investor confidence.  
If the Government can look to be bold in seriously addressing housing affordability with a scalpel rather than a feather approach, it would really start to make a difference.
 
Greg Travers is tax director, William Buck Chartered Accountants and Advisors and can be contacted <a href="https://www.williambuck.com" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

It will take a bold approach to fix housing affordability: Greg Travers

<html><body>
<img src="https://counter.theconversation.edu.au/content/77714/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Two new tools for measuring and visualising problems in our rental housing system are in the media this week.
They have similar names – the Rental Affordability Index (RAI) and the Rental Vulnerability Index (RVI) – but use different methods to offer distinct but complementary perspectives. Together they reveal that almost nowhere in our capital cities can low-income households – and those on average incomes in Sydney – afford the median rent. Mapping rental vulnerability reveals households in regional areas are struggling too.
The RAI is a project of National Shelter, the peak housing NGO, and SGS Economics and Planning. It gives us a bird’s-eye view of rental housing costs over most of Australia. It does this by showing how affordable the median rent (the midpoint of all rents) is – or isn’t – relative to incomes in each postcode.
An alternative approach considers where and in what proportion renters are actually in stress. We might also consider a range of other factors that indicate where and in what proportion renters are vulnerable to problems in accessing and keeping decent, secure housing. This is the approach we’ve taken with the RVI.
<h2>What does the RAI tell us?</h2>
Affordability is a relative concept – it is about costs relative to incomes. The RAI considers median rents higher than 30% of a household’s income to be unaffordable. The index shows other grades either side of this benchmark (very affordable, very unaffordable) too. 
<a href="https://www.propertyobserver.com.au/images/2017/05/18/file-20170515-3668-qveg8h.jpg" target="_blank">Click to enlarge</a>
<h4><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/18/file-20170515-3668-qveg8h.jpg" alt=""></h4>
<div class="enlarge_hint">The Rental Affordability Index web tool zoomed in on Queensland. SGS Economics and Planning</div>
This is consistent with a widely used benchmark in housing policy, often known as the “30/40 rule”: housing costs should not exceed 30% of income for households in the lowest 40% of incomes.
The rationale is that when low-income households have to spend more than that on housing, they start to go without other things – meals, health care, outings – that they reasonably ought to have. For this reason, low-income households in unaffordable housing are said to be in “housing stress” or “rental stress”. 
The RAI looks at median rents, not the rents individual households are paying. This means it doesn’t tell us where or how many households are actually in rental stress. But it does indicate where renters face different degrees of pressure, in terms of either rents or constraints on the size, quality or location of dwellings. 
So, looking at the affordability of median rents for a number of typical low-income households – single and couple pensioners, single people on benefits, single-parent part-time workers – the RAI shows that almost nowhere in Australia’s capital cities is the median rent affordable for them. 
The RAI also applies the 30% benchmark higher up the income scale. Even for average-income renters, all Sydney postcodes – except for Mt Druitt and in the Blue Mountains – have median rents that are unaffordable or worse. 
Of the capitals, Sydney’s affordability problems are deepest and spread furthest, but much of Melbourne and Brisbane is unaffordable to average renters too. Outside the capitals, most of the regions are affordable. 
The quick takeaway from this perspective would be support for policies to increase the supply of affordable rental housing, particularly in our capital cities. These measures would include:
<ul>
<li>
building more social housing
</li>
<li>
changing planning rules to allow more residential development
</li>
<li>
using inclusionary zoning to ensure a proportion of new development is kept as affordable rental
</li>
<li>
making greater use of land tax, including on owner-occupied housing, to ensure land owners don’t speculatively sit on development opportunities.
</li>
</ul>
<h2>What does the RVI tell us?</h2>
For a different perspective, the City Futures Research Centre producedthe Rental Vulnerability Index (RVI) for Tenants Queensland. This shows (only for Queensland, at this stage) a range of “housing system” and “personal” factors that we know, based on a wider body of research on housing and legal needs, indicate vulnerability to housing problems. 
The housing system indicators include: rental stress, availability of rental housing that is affordable on local incomes, social housing and marginal tenures such as boarding houses, as well as personal indicators including unemployment, low education, disability, single-parent households and both young and elderly renters. 
As well as mapping each of these indicators, the RVI uses principal component analysis. This enables us to look across the indicators to see where they cluster together as a generalised “rental vulnerability”.
<a href="https://www.propertyobserver.com.au/images/2017/05/18/file-20170515-3649-1s65oqm.jpg" target="_blank">Click to enlarge</a>
<h4><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/18/file-20170515-3649-1s65oqm.jpg" alt=""></h4>
<h4>The Rental Vulnerability Index web tool. City Futures Research Centre</h4>
Mapping this out we see that rental vulnerability in Queensland is highest in the regions. In particular, it is high around Bundaberg, Fraser Coast and Gympie, with a band of vulnerability skirting the regions west and south of Brisbane. Cairns also has several highly vulnerable postcodes. 
These places have high rates of unemployment, disability, low education and older people in rental housing. They also have high incidence of rental stress – even though median rents are low compared to Brisbane. 
By contrast, Brisbane generally scores quite low on rental vulnerability. This isn’t because there aren’t any vulnerable households there – there are. But their presence is masked by renter households who are doing well in terms of income, employment, education and other indicators. 
There is a substantial body of research on the “suburbanisation of disadvantage”. This is the phenomenon of high housing costs pushing out, and shutting out, low-income and otherwise disadvantaged households from city centres. The RVI indicates that this process, at least in Queensland, is extending into a “regionalisation of disadvantage”.
<h2>So what can we do about this?</h2>
The takeaway from this? Housing problems are multidimensional and extend beyond the capital cities. 
Regional areas have a pressing need for services – such as tenants advice services – that give vulnerable households material assistance in dealing with housing problems. 
But more than that, we need to build up the economic and social capital of these places – so that they offer greater opportunities for the vulnerable households who are concentrated there – just as we need policies to increase affordable housing opportunities in our cities.
Chris Martin is research fellow, City Housing, UNSW and can be contacted <a href="https://theconversation.com/profiles/chris-martin-203935" target="_blank">here</a>.
Laurence Troy is research fellow - City Futures Research Centre, UNSW and can be contacted <a href="https://theconversation.com/profiles/laurence-troy-2403" target="_blank">here</a>.
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Two pictures of rental housing stress and vulnerability zero in on areas of need

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GUEST OBSERVER
The property market is currently in a state of limbo, particularly those involved in the selling of new property.
Why?
Because the budget statement in relation to helping “reduce pressure on housing affordability” has potentially changed the game and announced dramatic changes to the way depreciation is claimed on property.
Let’s start with the good news:
1. Any existing investment properties purchased (contract exchange date) prior to 7.30pm Tuesday, May 9th 2017 are not affected.
2. Commercial, industrial and other non-residential properties are not affected.
3. Capital works deductions have not been affected. This means you will still be able to claim depreciation on the structure of the building provided it was built after the 16th of September 1987. You will still need a Quantity Surveyor’s depreciation schedule to do so.
Now that we know what isn’t affected, let’s look at what has changed…
According to the budget statement
“From 1 July 2017, the Government will limit plant and equipment depreciation deductions to outlays actually incurred by investors in residential real estate properties. Plant and equipment items are usually mechanical fixtures or those which can be ‘easily’ removed from a property such as dishwashers and ceiling fans.
Here’s the uncertainty….who actually acquired the plant of equipment?
Was it the builder/developer or was it the initial purchaser of the brand new residential property?
This is key.
Why is the government making these changes?
“This is an integrity measure to address concerns that some plant and equipment items are being depreciated by successive investors in excess of their actual value.
Acquisitions of existing plant and equipment items will be reflected in the cost base for capital gains tax purposes for subsequent investors.”
The industry needs urgent clarification on this matter as many agents are currently advising potential buyers on the cashflow advantages of new property. This figures may prove to be inflated and put the developer or marketer at risk further down the line.
You see investors rely on these figures in assessing the merits of the investment.
Here is why I think this is dumb policy.
The proposed changes are being made to “reduce pressure on housing affordability.” In my opinion, it will have the opposite effect for 3 reasons:
<ol>
<li>Property investors may now feel that they need to hang on to their existing properties in order to continue claiming depreciation. With these new changes, if they sell this property, they won’t be able to get anywhere near as many deductions on the next one.</li>
<li>Developers rely on high depreciation figures in the early years to show investors how affordable an investment property can be. If the allowances are taken away, they will struggle to get the pre-sales which are required by banks to fund the deal.</li>
<li>These budget measures are forecast to save $260 million over a 3 year period. I suspect far more will be lost if developers can no longer get new projects off the ground.</li>
</ol>
Whilst I believe housing affordability is a major issue, this truly appears to be an example of policy on the run…
Here’s the solution:
Plant and Equipment in residential property needs to run it’s natural course.
The ability to re-value and re-assess the item after it’s initial effective life has run it’s course should be squashed.
Put simply, if you a buy a property that is say, 11 years old, and it has a dishwasher installed that had an initial effective life of say 10 years you can't claim it, revalue or re-assess it.
That would alleviate the government's concern that:
“....that some plant and equipment items are being depreciated by successive investors in excess of their actual value. “
This would make a lot more sense in my opinion.
I am looking forward to providing a further update once the legislation is finalised and more details regarding the specifics of these changes come to light.
Tyron Hyde is a director of Washington Brown and can be contacted <a href="https://www.washingtonbrown.com.au/staff/tyron-hyde/" target="_blank">here</a>.
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Budget approach to housing affordability changes the game: Tyron Hyde

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GUEST OBSERVER
With so much debate about housing affordability it was always going to be the case that the 2017 budget included key policies aimed at improving the affordability of housing and addressing some of the systemic issues that have pushed housing prices out of reach for many Australians.
At face value, the budget measures present a good attempt at improving housing supply while softening some of the incentives stoking housing demand.  From a housing perspective, key elements of the budget can be divided into polices that influence supply or demand.
From a supply perspective, the government has announcedIncentives for downsizers – proceeds from the sale of the family home can be contributed to superannuation, capped at $300k.
The National Affordable Housing Agreement which currently exists between the states and federal government will be maintained, but the rules of how the $1.3 billion is used will be tightened to ensure states deliver adequate new public housing supply and reform the urban planning framework.
Federally owned land that is available for development will become more transparent via an online register.  Additionally, surplus land holdings will be offered up for residential development with a high profile parcel of land in Melbourne’s Maribyrnong offered as the first example.
A new City Deal has been announced for Western Sydney that will help to support strong population growth via a coordinated funding approach with state and local governments.
The budget has outlined a national $70 billion spend on transport infrastructure through to 2021 (a $50b increase from the last budget). Investment in better transport has the dual benefit of creating jobs and improving productivity as well as linking regions with affordable housing to employment nodes and social precincts. 
Funding for community housing has seen a substantial boost with the establishment of the National Housing Finance and Investment Corporation – a bond aggregator designed to source funds for lending to community housing organisations at lower interest rates on longer terms.
From a demand perspective there have been several policy announcements aimed at reducing housing demand from key areas.
First home buyers have been given a leg up to assist with saving for a deposit via a new First home super savers scheme whereby they can salary sacrifice their income directly into the same account as their superannuation capped at $15k per annum and a total of $30k total.
Investment demand will see some further dampening via changes to what expenses can be claimed. Investors can no longer include travel associated with their investment property and they cant claim depreciation on ‘plant and equipment’ such as the dishwasher, oven and hot water system.  Outside of these changes, negative gearing the capital gains tax concession remains untouched.
Foreign buyer demand could be dampened as well, with the budget announcing a new $5000 levy on foreign owned properties that left vacant for at least six months over a year as well as ensuring foreign buyers are exempt from any capital gains tax concessions. Additionally, developers can’t sell more than half of a development to foreign buyers.
FIRST HOME BUYERS
First home super savers scheme will help prospective first time buyers to save for a deposit, utilising a salary sacrifice arrangement directly into their super fund which will attract the same tax concessions as superannuation donations (15 percent tax rate). 
Savers can add an additional $15,000 per year or $30,000 in total.There was some risk that a demand side policy aimed at first home buyers could further fuel price growth by adding to demand, however this scheme is likely to improve demand gradually and incentive a savings strategy which is a positive outcome for first home buyers and the housing market. 
Question marks remain around how much it will help potential first home buyers in markets like Sydney and Melbourne where the market is moving swiftly but it should assist first home buyers elsewhere.
INCENTIVISING DOWNSIZERS
Home owners aged 65+ can now make non-concessional contributions up to $300,000 into superannuation from the sale of their principal place of residence which has been owned for at least ten years.  These contributions will be outside of the existing caps.This budget policy is aimed at freeing up established housing supply into the market and encouraging long term home owners who are seeking to downsize, while also having the dual effect of allowing retirees to free up equity held in their home.
The policy should add a further incentive for downsizers, however it’s also important that these long term home owners have an appropriate downsizing option to move to. Downsizers will often prefer to stay within their local neighbourhood.
Another barrier is that by cashing in their equity, some downsizers may no longer be eligible for a pension, which is means tested (the PPR is excluded from the assets test).
The other major barrier is stamp duty payments which will continue to add a disincentive to downsizing.
TWEAKS TO NEGATIVE GEARING POLICY
Investors can no longer claim travel expenses as part of their investment expenses. 
Additionally, investors can only claim deductions related to plant and equipment expenses that they have incurred directly rather than claiming expenses incurred by previous owners.
Removing travel to an investment property as a claimable expense will impact those investors with properties in regional areas or in locations that are distant from where the investor lives. 
Regional areas may be disadvantaged by this new policy, however the impact on investment demand is likely to be minimal. This is likely a response to a perception that some investors are claiming travel expenses that may be more related to personal usage rather than legitimate expenses related to their investment.
The changes to plant and equipment deductions could be more material, as it effects an investor’s ability to depreciate things such as appliances &amp; utilities (oven/dishwasher/hot water system etc) if these items were purchased by the previous owner. There could be the potential that this policy encourages investors to renovate established homes rather than purchase recently built product where they won’t be able to realise the depreciation benefits of recently installed appliances.
The 2014-15 taxation statistics show that $3.013 billion in capital works deductions were claimed. We also know that investors overwhelmingly prefer to buy established rather than new stock so this could have a significant impact on the attractiveness of second-hand investment properties and may contribute to an overall slowing in investor demand. From a rental market perspective it may provide better outcomes with owners more prepared to invest in upgrading their properties for the depreciation benefits.
FOREIGN BUYERS
Foreign owners who keep their property vacant for at least six months a year will face a levy of at least $5,000 per annum. 
Developers will be restricted in the proportion of stock that can be sold to foreign buyers.  Going forward, projects can’t have more than 50 percent of stock sold to foreign buyers.
Capital gains tax rules will be strengthened to ensure the risk of foreign buyers avoiding capital gains tax is reduced. Foreign or temporary residents will no longer be able to claim the main residence capital gains tax exemption.This $5,000 vacancy levy is aimed at ensuring foreign investors are actually contributing to housing supply and not simply offshoring their capital with no intention to occupy or lease the dwelling. The additional levy isn’t likely to act as a major disincentive to foreign investment, however the policy could be difficult to monitor and enforce.
The second part of foreign investment policy is more significant and will impact on those developers who sell a large proportion of their stock via roadshows through Asia and other regions or who rely on foreign marketing networks to sell their stock. 
Attracting domestic demand to some high-rise unit projects that have been designed specifically for foreign buyers may not have market appeal domestically.  New unit approvals have already fallen dramatically and these changes may compress new approvals further as developers struggle to achieve the required number of presales to commence construction.
Tightening the taxation rules on foreign owned property is a logical move, ensuring foreign owners pay the full rate of capital gain tax without the concession that would normally apply to Australian residents who have held their property for at least 12 months.
SOCIAL / COMMUNITY HOUSING
A new bond aggregator model will be set up via a newly established National Housing Finance and Investment Corporation with the objective being to provide finance for the community housing sector at lower interest rates over long lending terms.This policy is likely to be based on existing frameworks in the UK and Switzerland. 
The aim here is to source funding for community housing from the bond market rather than through more expensive lending arrangements via the banking sector.  
Funds would be lent to community housing providers at lower interest rates and over longer terms in an effort to support more housing options under affordable rental or purchase arrangements. 
This initiative is likely to be welcomed by community housing providers and should go a long way towards improving the amount of social housing being developed.
RE-JIGGING THE NATIONAL AFFORDABLE HOUSING AGREEMENT
Currently, states are funded with $1.3 billion each year which is to be used by them to support affordable housing initiatives.  Under the new budget policy, the funding will remain the same, however the rules will be tightened to ensure states meet agreed housing supply targets and work towards reforming town planning. This is one of the most legitimate ways the federal government can establish an affordable housing framework in conjunction with the states. 
The funding is substantial, but in the past there is the perception the funds have not been well spent with little visible benefits to public housing additions and improved housing affordability.
The new policy, may promote proper usage of the federal funding and ensure town planning reforms improve strategic land usage and land release. Firm targets around the amount of new supply and town planning reform will need to be set in transparent and achievable terms for this policy to be successful.
FACILITATING LAND RELEASE
An online Commonwealth Land Registry will be created which provides details on government owned sites that can be made available for residential development. 
Releasing suitable surplus Commonwealth land starting with 127 hectares of Defence land in Maribyrnong (Melbourne), which could support up to 6,000 new homes.
A new ‘City Deal’ for Western Sydney aimed at improving the town planning regime across 9 council areas of Western Sydney.Providing more transparency around federal government land holdings that are available, and in fact, promoted as developable for residential housing will be a welcome improvement in urban planning.  It shows the federal government is serious about offloading surplus land and ensuring it used for the highest and best use. The announcement of the Maribyrnong land release is significant, considering its proximity to Melbourne’s CBD and potential for a significant uplift in housing supply in a strategic location. 
‘City Deals’ have previously been signed in Townsville and Launceston with an aim to provide a long term commitment between the three levels of government to deliver strategic outcomes (new infrastructure, more jobs and facilitate growth) for the residents of the area. The City Deal funding announced for Western Sydney should provide a long term strategy for managing the high rate of projected population growth across this region of Sydney.
INFRASTRUCUTRE INVESTMENT
The budget has outlined a national $70 billion spend on transport infrastructure through to 2021 (a $50b increase from the last budget).
Significant spends include:
<ul>
<li>$5.3b to build the first stage of the Western Sydney ‘Badgerys Creek’ Airport.</li>
<li>$8.4b to build the Inland Rail project.</li>
<li>$75 billion for road and rail funding over 10 years</li>
<li>$10 billion for a National Rail Program aimed at improving urban and regional rail over a 10 year period.</li>
<li>$1 billion for infrastructure spending for Victoria, including $500m for regional rail, $30m for airport rail link planning and a further $20.2 million for Murray Basin rail.</li>
<li>$844m for Queensland Bruce Highway upgrades.</li>
<li>$700m for WA’s Metronet rail project</li>
<li>$2.9b for the Western Sydney Infrastructure Plan</li>
</ul>
Additionally, $1b a National Housing Infrastructure Facility over 5 years to support local governments through a range of options to finance critical infrastructure.   Overall, spending on infrastructure is stimulatory to the economy, having the dual effect of creating jobs and improving productivity. 
Many areas where housing and land is more affordable are poorly connected by efficient transport linkages, and the higher budgeted spend on transport infrastructure will go a long way towards linking these areas with more efficient transport and making these outer fringe areas more desirable to home buyers.
In addition to the budget policy announcement around housing and housing affordability, there have also been important announcements around the banking sector.
New legislation will expand APRA’s remit to include non ADI’s. This is likely to be an effort to get some risk minimisation and regulation around the non-banking / shadow banking sector which has become more active since APRA stepped up their regulatory changes aimed at slowing investment demand.
These changes could make it harder for investors, foreign buyers and businesses, who are being turned away from the major banks, to fund their property purchases.
Additionally the budget announces a 6 basis point levy on funding of banks with at least $100m in liabilities (Big 4 plus Macquarie) which is budgeted to raise $1.5 billion per year over the next four years for the federal gov.  Labour has already announced they would support this policy.  The likelihood is that this additional cost could push mortgage rates slightly higher as banks look to recoup the costs.
TIM LAWLESS heads up the CoreLogic RP Data research and analytics team and can be contacted<a href="https://blog.corelogic.com.au/author/timlawless/" target="_blank"> here.</a>
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Overview of budget implications for housing and housing affordability

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<img src="https://counter.theconversation.edu.au/content/76791/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">GUEST OBSERVER
The budget acknowledges the crisis of affordability for first home buyers, but fails to do enough about demand pressures on prices to put home ownership back within their reach.
In its 2017 budget, the federal government repeatedly stated its preference for a “scalpel” rather than a “chainsaw” or “sledgehammer” approach to demand management in the housing market.
The number of housing measures in the budget are more wide-ranging than in previous budgets of recent times. Policy levers on both the supply and demand side have been incorporated within a raft of housing measures. The government claims this is a “comprehensive package that can make a difference”.
However, do the demand measures go far enough to make much-needed inroads into the housing affordability crisis now facing an entire generation of would-be first home buyers? Or is the so-called scalpel too blunt to make a meaningful difference for them?
<h2>First Home Super Savers Scheme</h2>
The budget’s key housing measure for helping young people gain a foothold on the home-ownership ladder is to allow first home buyers to use up to A$30,000 of voluntary superannuation contributions for a deposit on their first home.
Clearly, the scheme will attract the tax advantages of superannuation. Therefore, in principle, it will help first home savers accelerate their savings to buy a home, thus bridging the deposit gap, while protecting superannuation savings accumulated through compulsory employer contributions.
However, at least two key questions are pertinent.
The first relates to how many first home buyers will likely be well positioned to make voluntary contributions to their super saving account. There appears to be a general reluctance among Australians to make voluntary contributions.
Existing research has found household budget constraints are a major barrier that make it unaffordable for many to make voluntary superannuation contributions. Poor financial literacy and lack of knowledge of the superannuation system are other factors.
The second key question relates to the scheme’s impact on property prices. The scheme does not aim to ease demand pressures in the housing market. It is likely that high house prices will not be curbed, so the prospects of home ownership will continue to fade for many first home buyers.
Existing demand-side levers, including the First Home Owners Grant and stamp duty concessions for first home buyers, have not succeeded in improving the affordability of houses for most young people. Hence, it is difficult to see how an additional demand lever such as the First Home Super Savers scheme is going to have a substantial impact on affordability.
This is not to say that the budget has completely ignored the need to temper demand tensions in the property market.
Demand pressures can be eased via measures that target two other types of property owners – older home owners and property investors. The budget does contain measures that target both groups. Yet again, the question remains as to whether the levers are long enough to produce meaningful impacts.
<h2>Targeting older owners and property investors</h2>
Older downsizers aged over 65 years will be allowed to channel up to $300,000 from the sale proceeds of the family home into their super fund.
Many older home owners are living in larger dwellings than they need after their children leave home. Helping elderly home owners – sometimes coined “last home buyers” – to downsize into smaller dwellings can free up larger homes for first home buyers in earlier stages of life who are forming families.
However, the impediments to downsizing are many. These include financial barriers but also non-financial barriers. Importantly, most elderly home owners have strong emotional attachments to their family home and local community.
However, a lack of appropriate and affordable dwellings in neighbourhoods where older owners would like to stay also poses barriers to downsizing. For downsizing reforms to be effective, financial incentives will need to be accompanied by supply-side solutions that broaden the diversity of the housing stock so older home owners’ housing preferences and needs can be met.
The government has not made any significant changes to tighten negative gearing or capital gains tax concessions to reduce competition from property investors. Concern has focused on the potential contraction of private rental housing supply should investors withdraw en masse from the private rental market. However, a longer-term perspective would take into account second-round effects.
As investors sell off their rental properties, more properties will become available in the market to meet demand from first home buyers. This will not only have the impact of easing tensions in the rental market as more renters become home buyers, but it will also encourage subsequent second property investment as young career-builders seek to accumulate more wealth in their property portfolios after securing their first home.
Such second- and third-round effects need to be incorporated more into policy thinking so that policy design rests on not just short-term, but medium-to-long-term, considerations.
<h2>Is the scalpel sharp enough?</h2>
The budget contains myriad demand and supply levers that directly or indirectly aim to assist young people with their first home purchase. It represents an overdue but welcome acknowledgement on the government’s part that much needs to be done to improve home-ownership prospects for first home buyers.
A package of measures that seeks to influence both supply and demand simultaneously in the housing market is, in principle, a sensible approach to an entrenched policy concern such as housing affordability. However, in practice, policy design matters.
In the case of the 2017 budget, it would appear that the scalpel will need a whole lot more sharpening if it is to make an effective incision into the housing affordability crisis that’s plaguing an entire generation of aspiring home owners.
Rachel Ong is deputy director of the Bankwest Curtin Economics Centre, Curtin University and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/rachel-ong-113482" target="_blank">here</a>.
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Budget needs a sharper policy scalpel to help first home buyers: Rachel Ong

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<img src="https://counter.theconversation.edu.au/content/76793/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">GUEST OBSERVER
The bond aggregator by itself cannot create a housing development pipeline. It needs co-investment from government to make it feasible.
Following Treasurer Scott Morrison’s outburst in April over the meagre supply outcomes delivered by state housing agencies, cool Treasury heads have prevailed in the budget.
The Commonwealth has not withdrawn its support. Rather, it will negotiate clear targets under a new national agreement, and aim to ring-fence capital investment to improve social housing outcomes. This will now complement the government’s new strategy of issuing bonds to finance affordable rental housing.
Morrison has already set up a taskforce to fine-tune a new bond aggregator, which the budget proposes to roll into a larger National Housing Finance and Investment Corporation (NHIFC). Establishment funding of A$9.8 million and a $1 billion loan facility will get things moving.
This is safe policy territory and sound strategy. The social housing sector and all major parties have supported housing bonds and a special-purpose intermediary since the 2015 report of the Senate Inquiry into Housing Affordability. It demonstrates the explicit, long-term government commitment required to shore up investor confidence.
If the taskforce gets the design right, the intermediary will provide lower-cost, longer-term financing for affordable rental housing. This will mean public investment goes further and is recycled to build more affordable homes for those who need them.
Yet investment-ready social housing still has several requirements for success. These include good transparent planning, equity, revolving loans, and adequate revenue from rents and rent assistance. Appropriate national regulation is vital, which is also flagged in the budget.
However, without conditional public co-investment and good regulation, the government will miss its own targets and under-invest in this much-needed social infrastructure.
<h2>No silver bullet – feasibility depends on subsidy</h2>
The bond aggregator by itself cannot create a development pipeline. It needs co-investment from government to make it feasible.
Community housing providers can only afford the amount of debt that modest rents and rent assistance can support. Modelling for a 2016 feasibility study found that about 45% of the cost of dwelling construction can be raised when operated as social rental housing, even with the lower rate and longer term of finance the aggregator can provide.
Thus deeply affordable social housing will always require public subsidies. This takes the form of grants, soft loans, or land allocated via public land corporations or planning requirements.
<h2>Policy orphan finally gets Treasury’s attention</h2>
Writing for The Conversation, Chris Martin and Hal Pawson summed up past performance:
It should be no surprise that Australia’s social housing has been largely static for 20 years. Everything we know about the system tells us it is not funded to even cover the costs of its ongoing operation, let alone growth to meet the needs of an expanding population. Aside from a one-off boost under the 2009 federal economic stimulus plan, social housing has been on a starvation ration for decades.
National governments in Austria, the UK, France and the US have made up for shortfalls in social housing funding with good regulation and by attracting private finance since the 1990s. They have done so by establishing a market for special-purpose bonds, government guarantees, special intermediaries, tax credits and supporting circuits of investment in affordable and social rental housing.
These measures often favour not-for-profit housing providers, but can also revitalise public housing agencies.
Meanwhile, Australian social housing policy turned inward. Governments frittered away their skeletal public housing stocks, narrowly targeted the rest and diverted much-needed capital to reduce operating deficits.
This ultimately bankrupted state housing agencies, which were all but given their marching orders by Morrison in April and earlier by his assistant minister, Michael Sukkar, in February. They ran into strong opposition from community and public housing providers (and the for-profit private sector) – which are eager to play a more active role in social housing supply.
Recently, though, Treasury’s “debt and deficit” doctrine has been making way for a new vision of productive public investment to boost both economic and social development. Investment in social housing should be an integral part of urban plans. It needs to be part and parcel of every infrastructure strategy, Smart City Plan, or City Deal. Bringing housing and infrastructure together under the new NHFIC could help, within an overarching plan with strategic housing targets.
Co-operative leadership and national funding remain essential. Morrison and Sukkar seem to appreciate that a coherent and efficient approach to setting standards and creating funding certainty will induce financial institutions to invest in social housing.
<h2>Wanted: dedication to social housing growth</h2>
Investment not only reduces public housing waiting lists most directly, it ensures fairer allocation of housing opportunities. At the same time it provides a shock-absorber for the economy, especially as it transitions from the resources boom, to build more productive and resilient cities.
Social housing creates jobs for the construction industry and uses local commodities, with many social and economic spin-offs.
Well-designed social housing, such as revitalised public and green community housing mixed with a range of housing types, provides a tangible infrastructure asset and a vital community service. It’s especially important for tenants who are elderly, have disabilities, or were formerly homeless.
Emergency services, health care and homelessness shelters, among others, bear the much higher costs of neglecting these households. This ultimately harms both the budget bottom line and our social fabric.
Morrison has directed the Affordable Housing Implementation Taskforce to report on the bond aggregator in July. The taskforce comprises three senior (former) public servants. They are advised, as usual, by one of the big four accounting firms.
It must be hoped their work contributes towards a broader vision for social housing growth. It should draw on international best practice as well as AHURI’s advice on an Affordable Housing Finance Corporation. Government policy needs to embrace the notion that social housing is not only good investment but essential social infrastructure.
Julie Lawson is a Honorary Associate Professor, RMIT University and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/julie-lawson-108364" target="_blank">here</a>.
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Bond aggregator helps build a more virtuous circle of housing investment: Julie Lawson

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GUEST OBSERVER
Stop eating smashed avocado. Stop taking overseas holidays. Live with your parents, save harder and set your sights lower – why don’t you just buy an apartment? The advice to millennials about how to afford the Australian dream of home ownership is as gratuitous as it is patronising.
New research from CoreLogic shows that owning an apartment as a “forever home” is largely a myth in Australia and not much of an option for millennials who are increasingly dependent on their parents for help to enter the property market.
The Perceptions of Housing Affordability Report identifies that while 72 percent of us live in houses, apartment dwellers make up just 15 percent of the population. Add to that duplexes and townhouses and the number of people living in shared title accommodation is still small at 28 percent. 
The data also shows there are just over 152,600 units currently under construction across Australia – 85 percent more than the decade average and virtually double the 30 year average. 
So why don’t millennials just buy into this cheaper housing stock?
There are multiple reasons. The first is that the data also shows that apartments – despite their lower prices when compared to houses - are still significantly more expensive and harder to afford than 15 years ago. The price to income ratio of apartment ownership across Australia is currently 6.6x income for units now compared with 4.8x 15 years ago. Back in 2002, it was not unheard of to snap up a unit within 10km from the city for under $300,000. Now, in Sydney and Melbourne, the figure is closer to $750,000.
The second reason is that saving for a unit is equally difficult. It now takes 1.3 years of average annual income to save the deposit for an apartment compared to 1 year back in 2002. And that’s not “just put some money aside for a year and a bit”. That means put every cent you get into a saving account until you reach 20 percent (and then save some more to cover stamp duty and other costs). You can see therefore for those who want to eat, put petrol in their car or have a roof over their head in the meantime, the time it takes to pull a deposit together can blow out.
According to the CoreLogic research, the biggest impediments preventing Millennials from buying a property are most likely to be finding the deposit (49 percent), interest rates (44 percent) and a combination of certainty of employment and getting loan approval (41 percent each).
The third reason is that the majority of stock currently under construction is not actually intended as long term occupancy. Most is high rise units and most developments currently under construction are one and two bedrooms, making it more suitable to investors and singles, rather than young families. 
Developers are building to where the demand is. Investors have historically comprised of 33 percent to 40 percent of housing demand however the latest data from the Australian Bureau of Statistics shows investors comprised closer to 50 percent of new mortgage demand nationally. 
Despite the emphasis on “rentvesting”, Millennials are the least likely to own an investment property (12 percent) compared to 19 percent for Gen X and 18 percent for Baby Boomers. Investment properties are also more likely to be owned by families with children living at home. It turns out investment properties are most likely to be owned by families with children aged 5-17 (22 percent), indicating that property is an important family investment strategy.  
So simply legislating to reduce the numbers of investors in the market so owner occupiers can step in, needs to be carefully managed. Investors affect the availability and therefore cost of rental accommodation and as we move through an unprecedented ‘boom’ in apartment construction, investors play a critical role in absorbing new unit supply and ensuring off the plan sales transition smoothly to settlement.  
All of this means that cashed up Baby Boomers and late Gen Xers, who are more likely to have paid off their home, more likely to have significant equity that they are looking to invest, and more capable of raising a deposit are the property winners if they are capable of servicing a mortgage. 
But there is no such thing as a free smashed avocado breakfast. The cost of this bounty will are children who stay at home longer with 21% not expecting now to move out until they are at least 30 and a further 38 percent expecting to move out between 25-29. 
Waiting til Mum and Dad either pop off the perch and leave them an inheritance, or stump up to help them fund their move, is now a real option for 30% of Australians, meaning housing affordability really is becoming a life/death issue.
 
Kylie Davis is the head of property services marketing at CoreLogic and the author of the CoreLogic Perceptions of Housing Affordability Report 2017. She can be contacted <a href="https://solutionsblog.rpdata.com/author/kylie-davis/" target="_blank">here</a>.
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Millennials, apartment living and the myth of smashed avocado: Kylie Davis

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Calling all developers interested in affordable housing, the University of Melbourne's Transforming Housing network is set to host the Transforming Housing in 2017 Summit on Friday 2nd June.

The summit organisers would particularly like to hear from developers who have a genuine interest in delivering affordable and social housing. Please use the form below to register your interest.

<h2>About the summit</h2>

<blockquote>
The event, hosted by the University of Melbourne’s Transforming Housing network, will bring together 60 stakeholders from the affordable housing sector including researchers; state government; local government; private developers; the investment community; and not-for-profit housing associations. It will be an opportunity to contribute to current housing debates, create solutions to pressing housing problems and network with others who have a genuine interest in supporting, funding, designing and delivering affordable and social housing for very low to moderate-income households.

Given the changes to tax incentives, access to land, and opportunities for funding related to affordable housing announced in this week’s Federal Budget and the Homes for Victorians strategy, this is an opportunity for interested developers to build both their knowledge and networks in Victoria.

If you wish to be part of the conversation, we invite you to register your interest by contacting Sarah Backhouse using the form below and by briefly stating why you’re interested in participating. As this event is capped at 60 participants, we cannot promise that all registrants will be able to attend, so early registration is encouraged.
<cite>University of Melbourne Transforming Housing network, summit invitation</cite>
</blockquote>

<h2>Event details</h2>

<dl>
<dt>Date</dt>
 <dd>Friday 2nd June</dd>
	<dt>Time</dt>
	<dd>9:00am - 4:30pm, followed by networking drinks</dd>
	<dt>Location</dt>
	<dd>10th floor, Melbourne Law (Building 106), 185 Pelham Street, Carlton VIC 3053</dd>
	<dt>Website</dt>
	<dd>https://msd.unimelb.edu.au/events/the-housing-summit-transforming-housing-in-2017</dd>
</dl>
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Alastair Taylor

Event: Transforming Housing in 2017 Summit

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The Real Estate Institute of Western Australia said the 2017 Budget saw the need to improve housing affordability and address supply constraints as well retain negative gearing and Capital Gains Tax (CGT) arrangements for property investors.
Hayden Groves, president, REIWA said the emphasis on housing affordability is long overdue, and he is pleased the Government is driving policy to improve housing outcomes, by helping first home buyers salary sacrifice a proportion of their pre-tax income.
"The Budget also encourages senior Australians over 65 to down size by making a non-concessional contribution of up to $300,000 into their superannuation fund from the proceeds of the sale of their principal home," he said.
“While we’re pleased the Turnbull Government have recognised the need to assist Australian seniors with housing affordability, more still needs to be done.
"REIWA will continue to advocate for reform to transfer duty, specifically a $10,000 concession for seniors to ‘right size.
The wins for small business owners included:
<ul>
<li>Small businesses with a turnover of up to $10 million will continue to be able to immediately write off expenditure up to $20,000 for a further year.</li>
<li>The Federal Government will take further action to reward States and Territories that cut red tape costs for small businesses.</li>
</ul>
"Most of our members are small business owners and these initiatives by the Federal Government will be a welcome relief to them given the challenging market conditions the industry is currently facing.
"although there were many positives for the WA real estate industry in the Budget, the Institute was disappointed the Government has chosen to slug foreign investors with a $5,000 levy if they fail to occupy or lease their property for at least six months each year.
"Additionally, the 2017-18 Budget prevents developers from selling more than 50 percent of new developments to foreign investors.
“Foreign investment in WA represents a very small proportion of our local market. These policies will only further dampen an already subdued housing market and deter foreigners who are not permanent residents to locate and live in WA."
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