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

<html><body>
<img src="https://counter.theconversation.edu.au/content/72354/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
For all the talk of a housing affordability crisis across Australia, having unaffordable housing isn’t necessarily bad for people.
This is perhaps a dangerous statement to make, but housing cost stresses and other problems – when experienced in isolation – may be tolerable. Difficulties usually emerge not from one problem but from an accumulation of problems.
Housing affordability alone may have limited impact on people if they are able to adjust the household budget or their rental or mortgage costs. But if a household has an accumulation of problems (for example, unaffordable housing, plus insecure tenure, plus unemployment), that greatly reduces their capacity to adjust or respond effectively.
Acknowledging the difference between separate problems and an accumulation of problems is more important than you’d think. If we don’t, we underplay the impact of multiple problems on people, incorrectly identify who most needs assistance and probably misdirect our attempts to help.
Generations of Australians have enjoyed very high housing standards compared to most other nations. For the last couple of decades, though, cracks have appeared (and are widening) in the Great Australian Dream.
Australia now has some of the most unaffordable housing in the world. The problems of housing quality and insecurity in the private rental sector are increasing.
And the public housing safely net is now so small it cannot catch all of the people who need it.
Researchers, governments and Australia as a society are concerned and heavily invested in understanding and responding to housing-related problems. But perhaps we are too “problem-focused”.
We often seek to understand and solve housing affordability, or rental insecurity, or homelessness, or even more broadly, employment or problems associated with disability. But we tend to look at each aspect separately.
In doing so, we overlook the fact that many housing-related problems are experienced in combination – usually by the same people.
Teasing out patterns of problems
What if we were to think of people with multiple problems, instead of the separate problems that multiple people have?
<a href="https://www.propertyobserver.com.au/images/2017/02/15/image-20170201-22560-14ebw5a.png" target="_blank"> Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/15/image-20170201-22560-14ebw5a.png" alt="" width="1117" height="727">
In the current edition of Cities, we model how people’s problems accumulate. Using data from the Household Income and Labour Dynamics in Australia (HILDA) dataset, we look at more than 17,000 adult Australians in unaffordable housing. We define people as having unaffordable housing if they have low to moderate incomes and spend more than 30% of their household income on housing costs.
Our research set out to test the degree to which these people experience multiple housing and related problems. In this experiment we focus on six problems: affordability, locational advantage, security, welfare, employment and disability.
This simple analysis far from captures the full breadth of housing-related problems that individuals face. Even so, it reveals enough about people’s accumulation of housing problems in Australia to challenge our current thinking.
Our analysis shows us that only a relatively small proportion of people (around 10%) have an accumulation of these housing-related vulnerabilities. But simply identifying who has multiple problems doesn’t necessarily indicate the package of assistance they might need.
When we examine the collection of accumulated problems among the 10%, we see few clear patterns of shared problems. Even in this small analysis, there are 40 distinct combinations of problems.
The largest group sharing a pattern of problems represents only 12% of the 10%. Remember that we are only looking at a limited list of six problems here. It would almost certainly be much more complex in the real world.
The findings allow us to reflect on how assistance might shift if focused on people with an accumulation of problems. Using the example of housing affordability, we might seek to address it for every person in the whole population of 17,000 classified as having unaffordable housing.
However, this research shows that more than half of these people (60 percent) do not have any other problems.
How does this affect policy?
Perhaps our concern for housing affordability should be disproportionately focused on the small group who have an accumulation of multiple problems.
What this research leaves us with is a call for a different way to think about and respond to housing-related problems. It suggests we should look beyond separate problems – such as housing affordability – and focus more attention on the people with an accumulation of multiple problems.
The substantial variation in combinations of housing problems also suggests that “individualised” responses may be much more effective than generic packages of problem-focused assistance.
To some extent, the suggestion that we should be thinking about people’s accumulation of vulnerabilities and problems is not new.
Policy thinking appears to be heading in this direction anyway. Australia is well down the path of exploring individualised welfare, with approaches and packages like Consumer Directed Care and the NDIS (the intentions of which were well discussed in recent work).
Perhaps the way we think about housing affordability just needs to catch up.
Emma Baker is associate professor, School of Architecture and Built Environment, University of Adelaide and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/emma-baker-172081" target="_blank">here</a>.
 
</body></html>

jchancellor-FAypfDUnLy

Housing affordability problems might not be all bad

<html><body>
Reserve Bank Governor Philip Lowe's address to the A50 Australian Economic Forum Dinner.
I would like to offer you all a very warm welcome to Sydney for the A50 Forum. To those of you who have travelled to our shores from afar, thank you for visiting.
I am confident that you will find your investment in time a worthwhile one. In just a short period, you will hear from the leaders in the worlds of politics, business, the policy institutions and the investment community.
You will find an openness and transparency that is not always seen elsewhere around the world and you will experience a genuine desire to share perspectives.
You also find a country that is prosperous and wealthy; Australians enjoy a standard of living that relatively few people around the world enjoy.
You find a country that has grown consistently for some decades now, despite a pretty volatile global environment. Australia's year-ended growth rate has been in positive territory since 1991.
You find a country that has a strong and stable banking system. We have deep and liquid financial markets. The public here question why banks are so profitable, not why they performed so badly during the global financial crisis.
You find a country that is well placed to benefit from growth in Asia, not only because of our natural resources base, but also because of stronger demand for our food and a wide range of services.
You find a country with a growing and diverse population and one that has a high degree of social cohesion. Our population has recently been growing at around 1½ per cent a year, and around 40 per cent of us were either born overseas or have one parent born overseas. This brings a dynamism that isn't there in countries with stagnant and less diverse populations.
You also find a country with strong public institutions and whose economy is resilient and flexible. We have a demonstrated capacity to address our problems and to adjust to the changing world that we live in. In the past decade, our flexibility has meant that we have been able to maintain economic stability through the biggest investment boom in the resources sector in more than a century, and the subsequent unwinding of that boom.
You also find a country with positive interest rates and a conventional monetary policy framework. The central bank is independent, analytical and pragmatic. Our inflation target is focused on medium-term outcomes. This approach means that we have the flexibility to pursue our price stability objective while taking into account developments in balance sheets in a way that can be difficult to do in more rigid monetary policy frameworks.
So that is Australia. Welcome. There is a lot to like here.
In the spirit of openness and transparency though that I mentioned a moment ago, we are not without our challenges. I will talk about a few of those in a moment.
I first want to say a few words about openness to trade and investment and its role in Australia's prosperity.
Australia is a country that has benefited greatly from the open international trading system. Our ability to sell to the rest of the world goods and services that we can produce really well has boosted our living standards. We also benefit from being able to buy goods produced overseas. And the need to compete with others is one of the things that leads us to strive to do things better.
Australians have also benefited from the relatively free flow of financial capital. Year after year, for more than two centuries now, capital from the rest of the world has helped build our country. If we had had to rely on just our own resources, we would not be enjoying the prosperity that we do today. Our asset base and our productive capacity would be lower, and so too would our standard of living. As investors, Australians have also benefited from being able to diversify our portfolios by buying foreign assets and by building strong businesses overseas.
So, again, that is Australia. We provide a very good illustration of how a medium-sized country that is committed to an open international order, has a strong role for markets and a floating exchange rate, a largely open capital account and a dynamic and innovative financial sector can prosper in today's complex world.
I promised openness and transparency. So now to some of the issues, or challenges, that we face.
The first is to reinvigorate productivity growth. Australia, like many other advanced economies has experienced slower productivity growth over the past decade. In our case, this has been partly due to a large increase in mining investment in response to soaring commodity prices. In recent years though, as the new production made possible by all this investment has come on stream, the productivity figures have improved. This is clearly good news, although underlying productivity growth remains relatively modest.
A number of structural factors are at work here. If we do not address these factors, then we will have to adjust to noticeably slower growth in our average incomes than we have become used to. In some ways, this adjustment has already started and it is proving difficult. On the more positive side, there is no shortage of things that could be done to lift our performance. The challenge is that most of these ideas require difficult political trade-offs.
A related challenge is how best to capitalise on the opportunity that the economic development of the Asian region provides. We have benefited from the surge in commodity prices driven by the rapid industrialisation of China, and from the increased demand for our food products, tourism, education and other services as incomes in Asia have grown.
But it is a competitive world out there, and other countries see these opportunities too. So we need to find ways of building upon our strengths to bring goods and services to growing Asian markets at competitive prices. Lifting our productivity is a good place to start.
A third issue is the task of providing adequate high-quality infrastructure to help our citizens be as productive as they can and enjoy a high quality of life. As I said earlier, our population is growing strongly which is a source of dynamism for our economy. But this growth can put strains on our infrastructure, including on transport infrastructure.
These strains can reduce public support for a growing population. They can also impair our ability to compete and to be as productive as we can be. Good transport infrastructure, for example, opens up opportunities for people and opens markets. It also improves communities. Investment in transportation infrastructure can also play an important role in addressing housing affordability, which is an increasingly important issue.
Infrastructure investment does of course need to be paid for. The positive news here is that there is no shortage of finance for the right projects. The task we face then is to identify the best possible projects, harness the planning capacity of government, design the best deal structures to attract private finance where it makes sense to do so, make sure that the construction process is as efficient as possible and price use appropriately. These are challenging things to do, but they are not beyond our capabilities.
The final issue that I will mention this evening is that of ensuring that our public finances are on the right track. Australia has a good historical record here. Net government debt, as a share of GDP, is still low, although it is higher than it used to be. Our good record has provided us with a form of insurance. It meant that when difficult times did strike last decade, fiscal policy had the capacity to play a stabilising role. We had options that not all other countries enjoyed.
Looking forward, we need to make sure that we continue to have this insurance. We can do this by rebuilding our fiscal buffers. This too is a challenging thing to do, particularly given the additional demands being placed on government. A related complication is that simultaneously we need to make sure that our tax system is internationally competitive.
One example of this complication is in the area of corporate tax, where there is a form of international tax competition going on in an effort to attract foreign investment. Like other countries, we face the challenge of responding to this, while achieving a balance between recurrent spending and fiscal revenue.
So those are some of the issues we face. Of course, there are others too. No doubt you will discuss these over the course of this conference.
I would like now to turn to the near-term outlook for the Australian economy. The Reserve Bank will be releasing updated detailed forecasts tomorrow in our quarterly Statement on Monetary Policy.
For 2017 and 2018, these forecasts will show little change from our earlier forecasts. Over the next couple of years we expect GDP growth to be around the 3 percent mark. In both years it will be boosted by a significant pick-up in LNG production. And the headwinds that we have been experiencing from the unwinding of the biggest mining investment boom in a century will blow themselves out. Indeed, we are already around 90 per cent of the way through the fall from the peak to expected trough in mining investment.
Another headwind we have had over recent years – that is the decline in our terms of trade – has already stopped. Since earlier last year, a rise in global commodity prices has provided a boost to our national income. And the improvement in the global economy since late last year should also help us.
So, with the end of the unwinding of the mining investment boom in sight, the economy is in reasonable shape. Unexpectedly, GDP did fall in the September quarter last year, but this largely reflected a confluence of temporary factors. We expect that in the December quarter, the economy returned to reasonable growth.
Inflation remains low, running at around 1½ per cent in both headline and underlying terms. Importantly, inflation is not expected to fall further. Instead, our central forecast is for underlying inflation to gradually rise over the next couple of years, and for headline inflation to increase a bit more quickly, boosted by increases in oil and tobacco prices.
We continue to pay close attention to the housing market and to household balance sheets. The picture varies widely across the country. Prices for houses in Sydney and Melbourne are rising strongly, but apartment prices in some cities, including Perth and Brisbane have fallen. The population is growing strongly, but there is a large number of additional dwellings to come onto the overall market this year. Growth in rents is weak, but vacancy rates in most markets are not unusually high. And investor demand looks to have strengthened in the closing months of 2016. So it is a complex picture.
One reason for trying to understand this complex picture is that the level of household debt is relatively high. Overall, households are coping reasonably well with this. But there are clearly risks. So it is a positive development that over the past couple of years, banks have tightened their lending standards in some areas. This tightening was partly prompted by the supervisory measures put in place by the prudential regulator, APRA, and the Reserve Bank and APRA continue to work closely together monitoring developments.
Another issue that we are paying close attention to is developments in the labour market. Employment growth slowed over 2016 and the growth that did take place was almost entirely in part-time employment. As is the case with the housing market, conditions vary across the country. Looking forward, the number of job vacancies and job ads suggest that some strengthening in employment growth might be in prospect. Our central forecast though is for the unemployment rate to remain close to its current level for some time to come.
In summary then, the Bank's central scenario is for some pick-up in economic growth and for inflation to move gradually higher. As always, though, there are risks around that outlook. As our record demonstrates, our economy does have a degree of resilience and flexibility that has allowed us to maintain stability during a pretty difficult time in the global economy.
There is no reason that this can't continue. But we do need to continue to build that resilience, while we take advantage of the considerable advantages that we have as a nation.
 
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Households coping reasonably well with debt: RBA’s Philip Lowe 

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GUEST OBSERVER
Australian housing finance approvals to owner occupiers edged up 0.4 percent in Dec, slightly softer than the 1 percent gain expected but with the detail mostly positive.
Nov’s 0.9 percent gain was tweaked up to 1.3 percent and the number of loans ex refi (“new loans”) posted a solid 2.4 percent gain to be up 0.9 percent/yr.
Construction-related loans were flat but loans for the purchase of newly built dwellings rose 3.2 percent to be up 11.9 percent/yr – the gain reflecting settlements on ‘off the plan’ purchases of apartments now being completed.
The value of housing finance approvals to investors dipped 1 percent in the month – a bit softer than might have been expected given the wider market’s strong finish to 2016 (centred on Sydney and Melbourne).
Despite the dip the value of loans to this segment is still up 20 percent on the lows in late 2015.
Overall, the numbers suggest more of the pick-up in momentum late in 2016 was from owner occupiers although the resurgence in investor activity still looks to be the prime mover.
 Details 
Owner–occupiers (no.)   0.4%mth, –4.4%yr
– ex-financing (no.)        2.4%mth, 0.9%yr
Construction of dwellings (no.)               –0.3%mth, –5.8%yr Purchase of newly built dwellings (no.)   3.2%mth, 11.9%yr     
Value of loans:
Owner-occupiers ($bn)   1.3%mth, –3.4%yr Investors ($bn)                 –1%mth, 19.9%yr Total ($bn)                         0.4%mth, 4.6%yr Total ex refi ($bn)             0.8%mth, 10.2%yr
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/">Westpac</a>.
 
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mick.cee-iDmgDDAmu8

Owner occupier housing finance approvals up: Westpac's Matthew Hassan

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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.
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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.
 
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 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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robertsimeon-hRNTwJyXkQ

Why housing affordability is a political no – go zone: Robert Simeon

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The NSW economy has continued to outperform the rest of Australia by a wide margin, but the state’s economic strength is placing pressure on housing affordability, said Westpac’s Red Book January 2017 report.
The state recorded 3.5 percent growth for the 2015/16 financial year, the strongest result since the pre-Olympic boom in 1999/2000.
The more recent performance has been more mixed with state demand stalling in Q3 and consumers reining in spending growth in line with slow incomes.
The consumer mood has also been toned down a little but remains more upbeat than the rest of Australia.
At 102.8 the average NSW sentiment index read over the last 3 months is not particularly strong but is comfortably above the 98.5 reading for the rest of Australia.
The biggest wedge is around views on the economy which remain less pessimistic in NSW (i.e. above the rest of Australia but still sub-100).
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Unemployment expectations are also materially better in NSW – the only state recording responses below its long run average.
The picture is less constructive around housing. Deteriorating affordability continues to weigh on assessments of ‘time to buy a dwelling’, the state index still 18 points below the rest of Australia and firmly in negative territory.
Notably, NSW consumers also appear to be becoming warier of risk, the state risk aversion index converging with the national measure in December.
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NSW's economic strength straining housing affordability: Westpac

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A housing affordability crisis looms for Melbourne and Sydney should the underdevelopment in Sydney not change with Melbourne better prepped due to partner investment in public infrastructure, according to the latest REA Group Property Demand Index.
Nerida Conisbee, REA Group chief economist said we’re likely heading straight towards a housing affordability crisis in our two largest cities unless something changes.
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"Demand levels on realestate.com.au continue to surge in Sydney and Melbourne, while house median prices continue to break records on the Eastern seaboard, she said.
"Melbourne is better placed to weather the storm for longer, but Sydney, hampered by long-term underdevelopment, needs action. The only long term solution to the city’s affordability problem is to increase the supply of housing.
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"There are a number of things that need to be done to improve this.
"This includes amalgamation of councils to improve planning systems and changes to NSW strata laws.
"Better relationships between state government and developers should be a priority, in order to partner investment in public infrastructure such as roads, schools and shops with new developments. This has led to a lot of success in Melbourne which despite being an expensive city, is far more affordable than Sydney.
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"Sydney's lack of affordability is an economic issue.
"If it’s too expensive to live in the city, people will begin to move to more affordable regions and cities. The first to move will be those in essential services, such as nurses, doctors, teachers, pharmacists, plumbers, police, who don’t necessarily need to live in a large expensive city to secure work.
"Any changes to bank lending rates this month will determine demand levels for February. The Reserve Bank of Australia is expected to keep rates stable, or even decrease them this month, however there is no guarantee that banks will follow suit.
"Conditions remain highly challenged in Western Australia and Northern Territory where demand continues to fall, while Tasmania remains a stand out, continuing to perform above expectation.
"High levels of apartment development across the country are leading to demand levels increasing at a slower pace than housing and, despite very high demand for housing in the major Victoria and New South Wales markets, demand for apartments is stabilising in both states."
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Housing affordability crisis looms for Melbourne, Sydney: REA Group

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National Australia Bank has raised its expectations for house price growth in 2017 while also saying that apartment values will likely fall less than expected as further rate cuts will continue to support the market.  
The country’s fourth-largest mortgage lender said the strength of the Sydney and Melbourne markets continue to surprise and predicted solid albeit much slower, growth in prices.
NAB has raised its expectations for house price growth this year to 3.4 percent, while narrowing the loss it expects on apartment prices to 0.8 percent from 1.6 percent, citing improved sentiment from real estate professionals in its latest NAB Residential Property Index and expecting a continuation of last year's rate cut-driven demand. 
It dismissed the idea of sharp or sudden falls in prices, saying these would only happen if unemployment or interest rates surged, which it said was unlikely. However, even the revised figures represent a cooling from last year's capital city average of 11.6 per cent growth for houses and 5.9 per cent growth in apartment prices. 
The Reserve Bank of Australia is expected to cut the benchmark cash rate from the current record-low 1.5 per cent to 1 per cent by year-end as it fights weak inflation and as housing construction, which buoyed the economy last year, slows. 
"Most market commentators have been surprised by the strength in the Melbourne and Sydney property markets in the second half of 2016," said Riki Polygenis, NAB's head of Australian economics. "Because momentum is so strong, that's coming through in the survey in terms of the broad index that measures sentiment within the survey. We're still expecting a moderation in house prices going into 2017 but it is a modest revision upward from where we were".
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The revised forecasts were part of the bank's latest quarterly survey of 250 property industry professionals. While the overall survey of sentiment left the headline Residential Property Index unchanged at a reading of 15 from the September quarter, underlying that was a weakening of sentiment in NSW, Queensland and WA, and a strengthening of sentiment in Victoria and (to a lesser extent) SA and NT. 
"Sydney and Melbourne will both see solid, albeit much slower, growth in prices, while Brisbane and Adelaide are forecast to cool a little," the report said. "Perth will remain very weak as house prices decline by another 2.7 percent this year, as the market continues to feel headwinds from the mining sector, slower population growth and ample housing supply."
Sydney, Adelaide and Hobart would be the best performers for units, the report said. Unit prices would fall 2.7 percent in Melbourne and 1.8 percent in Brisbane as a result of oversupply of new apartment product in the market, but the worst performance would still be in Perth, where apartment prices would likely fall 3.8 percent, it said. 
"Prices are generally expected to be fairly weak for apartments across the country in 2017," it said. "The record pipeline of apartment construction in Sydney naturally presents a significant downside risk to the forecast, but substantial pent-up demand for housing should support the market, while the relative affordability of apartments (in the country's most expensive market) could also trigger a shift in demand by some buyers."
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Housing affordability remained the largest constraint on new housing development in Victoria, Queensland and SA/NT. In NSW, affordability and tight credit were seen as the biggest hurdles. In WA, the ability of price gains to be sustained was regarded as the biggest constraint.  
Separate figures from data provider Domain on Tuesday showed affordability worsened for buyers in Sydney, where the median house price topped $1.1 million. 
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The fourth quarter also marked the first increase in foreign buyers' share of the residential market in a year. 
In the three months to December, foreign buyers accounted for 10.9 percent of all new property purchases, up from 10.2 percent in September and the highest level since the three months to March. In established housing markets, their share rose to 7.6 percent from 6.4 percent in the September quarter and the highest level since the last quarter of calendar 2015, NAB said.
While the apparent boost in demand from foreign buyers, particularly Chinese ones, reflected the improved sentiment in the local residential market, the true extent of foreign demand was hard to measure, Ms Polygenis said. 
"It's very difficult to square up with reports that Chinese authorities are cracking down on capital outflows by households out of China," she said. "It's very difficult to know how exactly the figures from this survey translate through to actual demand on the ground. The official data we get from [the official Foreign Investment Review Board] is very delayed."
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NAB forecasts 3.4 percent price growth for houses in 2017, with falls in units less likely 

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GUEST OBSERVER
The CoreLogic Home Value Index of capital city home prices rose by 0.7 percent in January and was up 10.7 percent over the year.
Prices rose in seven of the eight capital cities with Hobart up the most (up 1.4 percent).
Regional house prices rose by 1.1 percent in December. 
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The Performance of Manufacturing index fell by 4.2 points to 51.2 in January. A reading above 50.0 indicates that the sector is expanding.
Home price data is important for retailers, especially those focussed on consumer durables. The manufacturing data provides guidance for companies in the Industrials sector.
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What do the figures show? 
Home prices 
The CoreLogic Home Value Index of capital city home prices rose by 0.7 percent in January and was up 10.7 percent over the year.
In regional Australia, house prices rose by 1.1 percent in December and were just 2.8 percent higher than a year ago. (Regional prices cover just houses and data is up to the end of December). 
Across regional Australia, house prices in NSW were up by 7.2 percent over 2016 with South Australia up 2.8 percent, Victoria and Queensland up 1.2 percent. In Western Australia, regional home prices were down 10.7 percent in 2016.
In capital cities, house prices rose by 0.5 percent in January while apartment prices rose by 2.2 percent. House prices were up 11.1 percent on a year ago and apartments were up by 8.0 percent. 
The average Australian capital city house price (median price based on settled sales over quarter) was $636,000 and the average unit price was $530,000.
Dwelling prices rose in seven of the eight capital cities in January: Hobart (up 1.4 percent), Sydney (up 1.0 percent), Melbourne (up 0.8 percent), Adelaide (up 0.5 percent), Canberra (up 0.4 percent), Perth (up 0.2 percent), and Brisbane (up 0.1 percent). Prices fell in Darwin (down 1.7 percent).
Home prices were higher than a year ago in six of the eight capital cities. Prices rose most in Sydney (up 16.0 percent); followed by Melbourne (up 11.8 percent), Hobart (up 7.8 percent); Canberra (up 6.7 percent); Adelaide (up 4.8 percent) and Brisbane (up 4.4 percent). Prices fell in Perth (down by 3.2 percent) and Darwin (down 0.7 percent).
Total returns on capital city dwellings rose by 14.4 percent in the year to January with houses up 14.7 percent on a year earlier and units up 12.5 percent.
Performance of Manufacturing
The Performance of Manufacturing index fell by 4.2 points to 51.2 in January. A reading above 50.0 indicates that the sector is expanding. The PMI has only fallen below 50 twice in the past 19 months.
AIG notes “Three of the seven seasonally-adjusted manufacturing sub-indexes expanded in January with two sub-indexes stable and two contracting. In a positive indicator for near term growth, new orders continued to expand (53.7 points). Exports expanded (54.1 points) and stock levels (56.0 points) built up over the month. Production (49.9 points) and employment (49.6 points) were stable while deliveries (47.0 points) and sales (47.6 points) contracted.”
“Comments from manufacturers in January show new orders are picking up across many sub-sectors at the start of the year. While demand appears to be patchy, some construction projects are helping activity and pockets of growth in agriculture and mining (due to some recovery in commodity prices) are lifting activity for manufacturers. As with much of 2016, exports continue to spur growth mainly due to the continued lower Australian dollar. Recently, inventories look to have built up for most manufacturers and this may impact production in coming months. Energy costs and reliability remain prominent issues for manufacturers with higher prices in particular impacting the profitability of many manufacturers.” 
What is the importance of the economic data?
The CoreLogic Hedonic Australian Home Value Index is based on Australia’s biggest property database. Unlike the ABS Index, which excludes terraces, semi-detached homes and apartments, the CoreLogic Hedonic Index includes all properties. Home prices are an important driver of wealth and spending.  
The Australian Industry Group compiles the Performance of Manufacturing Index (PMI) each month. The Australian PMI is the Australian equivalent of the US ISM manufacturing gauge. The PMI is one of the timeliest economic indicators released in Australia.
The PMI is useful not just in showing how the manufacturing sector is performing but in providing some sense about where it is heading. The key ‘forward looking’ components are orders and employment.
What are the implications for interest rates and investors?
CoreLogic continues to note that investors are driving key housing markets such as Sydney and Melbourne. But CoreLogic also continues to highlight the risks, with investors relying on expected capital appreciation for returns on their investment rather than rising rents. More apartments are being built, supply will catch up to demand and growth of home prices will ease over the next few years. Investors need to be aware of the risks including further actions by regulators to slow housing demand.
The broad-based health of Australian housing markets reduces the potential for further rate cuts. While fixed-term lending rates have lifted, it is still too early to canvas possible rate hikes from the Reserve Bank.
Housing is far from homogeneous and investors need to carefully do their homework on the states, suburbs and streets that are on their radar screens.
Activity in the manufacturing sector is encouraging especially the lift in new orders that has been identified in recent months. All the published data and anecdotes indicate that business conditions have markedly improved since the flat spot recorded for the economy in mid-2016. 
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Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx">CommSec</a>.
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cjames-5S2v74qSNK

Persistently firm growth in city home prices: Craig James

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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.
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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.
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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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GUEST OBSERVER
The appointment of Gladys Berejiklian as NSW Premier and her suggestion to review all options to address housing affordability should provide some optimism for a generation of young Australians who have a very real fear that owning their own home is fast (if not already) slipping beyond their reach.
As it stands, in Sydney the average home costs 12 times the average household income (20 years ago this was only four times), stamp duty tax has increased by a jaw-dropping 750 per cent over that same period in NSW and while building approvals in metropolitan areas is on the rise, lower interest and strong population growth have combined to increase demand for property faster than we can supply them. Throw this all into a melting pot and what we are left with is; a housing affordability crisis.
So in search of answers, LJ Hooker conducted a survey of more than 2,600 property owners which found that stamp duty was a major factor in the decision making process for those looking to sell and buy property.
The survey found that 51 percent of home owners that received an appraisal by a real estate agent but did not subsequently list their property for sale, would, in fact, do so if stamp duty was lower. This figure rose to 61 per cent if stamp duty was abolished altogether.
These numbers highlight the chokehold the current stamp duty tax has on the secondary market; Australians families would like to sell, move and relocate but cannot afford the cost of transacting. According to our data the reduction or removal of stamp duty will see more properties come onto the market, which in turn will help balance the current supply and demand issue.
But solving housing affordability is not a one-step process, nor is there one bandaid answer. Instead, state and federal governments should work together to look at a number of solutions which could elevate housing stress, so our children’s children will be able to afford property in all the major cities across Australia.
Here at LJ Hooker, we think these changes to the below three policy areas will help the likes of Premier Berejiklian, and her kin across Australia solve housing affordability issues:
1. Affordable housing
Recent strong price growth across our capital cities has seen low-income and essential service workers such as teachers, nurses and emergency service workers priced out of most inner city markets. However, these areas still require the services that these workers provide.
The provision of affordable housing for these low and middle-income families is required to ensure a diverse range of households have access to housing across all areas of our capital cities. 
However, at present, it has not been feasible for developers to provide affordable solutions. The government, therefore, needs to step in with incentives to ensure the delivery of affordable housing can occur. After all having nurses live near hospitals, and teachers live near schools just makes sense.
2. Removal of stamp duty
The high cost of selling, buying and moving home has reached a point where people are reconsidering and/or delaying their next property move. Recent strong price growth, and the fact that stamp duty is calculated on the value of the property, means that it has reached a point where it is having a big impact on the budgets of property buyers.
The scrapping of stamp duty would directly assist housing affordability by helping increase the mobility of the population and encourage owner-occupiers to upsize and downgrade into a property that suits their changing needs without being slogged with an exorbitant tax. This will insure more properties become available for sale, helping balance supply with demand and insuring more families get to grow up in their home of choice.
3. Regionalisation and decentralisation of government services and businesses
The growing population across all capital cities and the increasing cost of providing infrastructure to the masses mean that decentralisation of businesses, households and government departments is becoming essential.
With more than 90 per cent of the Australian population living in capital cities, there is a need to incentivise businesses to relocate, or start-up, some or all, of their business in our major and minor regional centres.
This regionalisation will boost the economies of these smaller regions and provide employees access to more affordable housing in these areas. It will also elevate some stress and demand on infrastructure, services and housing in capital cities.
We look to our politicians and decision makers to take these policies under consideration. Inaction will only perpetuate the issues faced by Australian families. Their needs to be decisive structural change to make the long-held Australian dream of home ownership a reality for all Australian families and individuals. 
Grant Harrod is chief executive officer of JL Hooker and can be contacted <a href="https://about.ljhooker.com.au/leadership-team" target="_blank">here</a>.
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