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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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Politicians, policymakers, urban planners, real-estate developers and corporate executives pay close attention to city liveability rankings. The global urban elite sees these as measures of the metropolitan “good”. Yet, as noted in The Conversation, “what makes a city liveable is complex and constantly evolving”.
In The Economist’s Global Liveability Ranking 2015, Dhaka moved up one spot: war-torn Damascus fell below it to become the world’s least liveable city.
This perhaps says more about the failings of simplistic global standards than about Dhaka itself. Far from being uninhabitable, it is one of the fastest-growing cities in the world. Bringing significant benefits to an emergent middle class, its cultural, economic, environmental and political landscapes are being rapidly but unevenly transformed.
At the same time, as Shahadat Hossain notes, this is placing extreme and conflicting pressures on Dhaka’s infrastructure and its residents. Displacement via land leasing, existing laws of inheritance, modernisation of agriculture and changing climate are driving rural-urban migration. Many migrants become the new urban poor, working in “low-paid peripheral economic activities”.
As in much of the global south, previous development policies in Bangladesh:
"have maintained a rural bias in policy and programs on poverty reduction, weakening the conceptual tools for imagining urban poverty reduction."
International media only occasionally highlight the difficulty of these conditions in fast-growing cities like Dhaka. The focus on the fatalities from the Rana Plaza factory blaze drew attention to the appalling working conditions, low wages, gender inequality, child-welfare issues and transnational corporate irresponsibility.
Dhaka is the centre of the ready-made garment industry in Bangladesh, the world’s second-largest manufacturer of textiles. It’s the nation’s largest export earner by far.
Yet the benefits of garment production are unevenly distributed. The highly active NGO industry in Dhaka speaks to the ongoing role for donors and agencies. They deliver essential services and humanitarian relief, as well as funding and producing urban innovations.
Shamsul Haque has described how the interrelationship between NGOs and the government originated in the late 1970s when “rudimentary forms of NGO at the grassroots level” responded to the conflict and instability of successive military regimes and elected governments. Today, the complexity of these relations stems from decreasing formal state power and NGOs’ increasing legitimacy, expansion and financial independence.
Marginalisation of government raises concerns “for the rights or entitlements of citizens to basic services”.
In place of state institutions, organisations like Bangladesh Rehabilitation Assistance Committee (BRAC) operate numerous critical service delivery programs. These include providing prenatal and postnatal care via text messaging, administering legal centres and training people for jobs and self-employed income generation.
<h2>Kolorob: connecting communities and services</h2>
Kolorob is a project run by Save the Children Bangladesh, in partnership with Save the Children Australia. It is developing a mobile app to help Dhaka’s low-income communities locate and provide feedback on local services, such as schools, clinics, legal firms and government offices.
The app, a localised variation of Yelp, features services submitted by community volunteers in the city’s Mirpur district, to the north of the CBD.
Since the project begun in mid-2015, we have provided remote technical and logistical support. We were fortunate to be in Dhaka when the app was launched in early 2016.
The app is an example of just how complex it can be to make cities more liveable. The name Kolorob (meaning “clamour” or “noise”) is provocative, and speaks to this complexity. “Clamour” can be a friendly or hostile public demand. It can move and influence – so to whose benefit?
The project has employed a co-designing, participatory process toward “inclusive urbanisation”. Low-income communities' voices, expertise and values become central – rather than peripheral – to such initiatives.
A number of those involved in Kolorob expressed hopes that such projects might eventually become autonomous social enterprises. For all the excitement about the potential of technological devicies and apps, genuine community enhancement also involves social innovation and skills. Improving the conditions of urban life requires multi-sectoral collaboration, capacity-building and awareness of the “political economy of urban poverty”.
<h2>New models for city-making?</h2>
Kolorob is one example of the many mapping projects that have become more popular in recent years as a way of giving voice and visibility to poor urban communities.
Since the 1970s, Slum Dwellers International has pioneered large-scale participatory slum mapping and enumeration. In the last ten years, its transition to more sophisticated databases and mapping systems has enabled more powerful analysis of this information.
Two other examples are the Ushahidi platform, developed to map post-election violence in Kenya in 2008, and the Mapping Kibera Project in the world’s largest slum in Nairobi.
Participatory mapping and open-source software hold great potential for collective ownership of intellectual property, low-cost access to information and democratised urban innovations. As a missing piece in the master plan to begin legitimising informal settlements, such tools can present powerful arguments to city planners.
Such mapping also fosters new modes of knowledge sharing:
"Over time, young boys and girls from local neighbourhoods have become the teams that enter and manage data, further demystifying the computer process and helping their elders feel comfortable about this data."
Yet this new visibility also raises concerns. Existing power structures and relationships can gain further, and sometimes problematic, legitimacy through a kind of digital imprimatur. Data can be of variable reliability.
While mapping Dhaka’s “highly pluralistic health system” can help to visualise the diversity of formal and informal health providers, for example, it also raises questions about quality of care, accountability and regulation.
Further, the market rhetoric of microfinancing, revenue-raising and entrepreneurial start-ups poses concerns that the relationship between the state, NGOs and low-income communities has standardised dependency and ingrained neoliberal agendas. As Devine notes:
"It is crucial that the endeavour to secure organisational sustainability be built more about the needs of the poor than the organisations themselves."
Drawing on lessons from the corporatisation of microfinance, Varottil has highlighted the need to understand the social as much as the financial aspects of project governance and outcomes.
Opening up participatory initiatives – like Kolorob – is a way to heed the needs, concerns and aspirations of marginalised communities. The urban poor need to be able to co-produce innovations that voice and support their preferred models for practice and interdependence.
NGOs continue to be vital in this regard, and for brokering dialogue between the state and urban poor. A preliminary analysis of commercial enterprise data by the World Bank makes recommendations for market entry and exit, and for how NGO businesses can make the transition toward community management and control – for example, by establishing registered autonomous trusts.
A more radical take would be to consider extending co-production of innovation to co-ownership. As Terranova has argued, innovation must involve not only new technological services, but “a better distribution of wealth” and “time and energy freed from work”.
<h2>Listening to the city</h2>
Kolorob may not increase Dhaka’s liveability ranking any time soon. Far more vital is the role such projects play in expanding our sense of what urban life might be.
“Innovation” here is not a proxy for a familiar story of “catch-up” to Western ideals. Instead, it is an opportunity to learn from an example of the “constant evolution” of cities.
Exploring “mobile entrepreneurial models” will help us understand how the interplay between innovation, technology and low-income communities is by no means a seamless or quiet solution. The associated challenges raise questions that go beyond market-based innovations:
<ul>
<li>
Do sustainable market-based social interventions – still requiring forms of capital and finance for participation – exclude the poorest in the city?
</li>
<li>
Is the rhetoric of innovation painting over root causes of urban poverty and inequity?
</li>
<li>
How might innovation extend beyond an obsession with technology to encompass new forms of organisation, distributions of social justice and practices of civic empowerment?
</li>
<li>
What are the roles for institutional actors – governments, NGOs, companies – in developing and sustaining such innovation?
</li>
</ul>
We need to listen more closely to the “makeshift city”. The question of what constitutes the “good city" and an “urban ethic” is an ongoing call for attention to how the city is stitched and sounds.
These rhythms are a call for different patterns of property ownership and profit distribution of the artefacts that increasingly make up the digital city.
Teresa Swist is postdoctoral research fellow, Western Sydney University and can be contacted <a href="https://theconversation.com/profiles/teresa-swist-172271" target="_blank">here</a>.
David Sweeting is institute associate, Institute for Culture and Society, Western Sydney University and can be contacted <a href="https://theconversation.com/profiles/david-sweeting-265851" target="_blank">here</a>.
Liam Magee senior research fellow, Digital Media, Western Sydney University and can be contacted <a href="https://theconversation.com/profiles/liam-magee-227430" target="_blank">here</a>.
All are authors for The Conversation.
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jchancellor-FAypfDUnLy

Signals from the noise of urban innovation in the world’s ‘second-least-liveable’ city

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The ratings agency S&amp;P said there would not be a sharp price correction in Australian housing.
S&amp;P analysts Craig Parker and Graeme Ferguson had a cautious view on Australian housing.
"We don't anticipate a sharp correction in house prices in the near term," the analysts said ahead of S&amp;P's annual property outlook event in Sydney today.
"However, a scenario of the early 1990s where unemployment reached 11 percent would place households under severe financial stress.
"The degree of severity would depend on the speed and depth of the downturn."
Mr Parker pointed to the increase in total consumer credit as a percentage of total household assets as a major reason behind the rapid house price appreciation in Australia warning that could be a risk. 
"The rising household debt has lowered the headroom if the economy were to deteriorate or when interest rates rise."
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jonathanchancellor-7SQnKwU6yx

Consumer credit growth poses housing risk if rates rise: S&P

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There's been much comment about the nature of the property market both in Melbourne and nationally of late. It could be reasonably argued that the sector is subject to certain trends like any other; the dominance of Asian-based buyers in Melbourne's property market in recent years is a prime example.

So what is the current direction of the property market and in particular Melbourne apartment market? It's been well publicised that discerning buyers have swung to more bespoke or intimate projects, shying away from larger inner city investor-driven stock.

But what of the influence of the growing band of buyers emanating from Sydney and whay have they risen to prominence here in Melbourne?

Urban.com.au posed a series of questions to three prominent players in the Melbourne apartment market, with the following answers provided:

<h2>Future Estate Founder &amp; Managing Director, Ben Anderson</h2>

How strong is the interest from Sydney and has there been a discernible increase in interest over the last year?

We have definitely witnessed a large increase in the number of Sydney-based purchasers buying into our projects; particularly over the last few years. The feedback we have received is that, given the affordability constraints of the Sydney market, investors are being forced to look elsewhere, with Melbourne and Brisbane logical alternatives.

Melbourne, being the next biggest city in Australia, boasts a significantly larger, much more diverse economy with a broader range of employment opportunities than Brisbane, so naturally it is the most popular choice. Investors can appreciate and understand the inherent benefits of a city of this size and scale.

What is the conversion rate of interested Sydneysiders to sales contracts?

Very few reservations we receive from our Sydney clients drop away; they are currently the most active purchasers across our projects.

Are Sydneysiders buying in Melbourne skewed toward owner occupiers or investors, and if the latter what apartment size and layout are they requesting?

Over the last 12 months, we have noticed that Sydneysiders buying in Melbourne have predominately been doing so for investment purposes, however, this is an ever evolving trend.

Recognised as the world’s most liveable city for the fifth year in a row, it is no wonder that more and more people are migrating from NSW to Melbourne. Something to consider on this note is, with each property cycle, affordability plays an important role, especially when it comes to interstate migration.

People will naturally move away from an unaffordable location and seek out residence in a cheaper area, that we know, the obvious limiting factor here is employment opportunity. Thus, when comparing the size, strength and diversity of the Melbourne economy with Sydney, a city with similar income potential, property price becomes the prime motivation.

Melbourne housing is far more affordable, it is as simple as that, which is why Future Estate are focusing our attention on this market.

Typically we like to see 30%-35% (max) of a household’s income going to mortgage repayments. The rationale behind this is that house price growth can only continue long-term if people can afford to buy. If, however, affordability is too constrained, as is the case in many parts of Sydney where 50% of a household’s income goes to mortgage repayments, then the prospects of sustainable capital growth are far lower and the risk of a price correction, far higher.

Hence Melbourne’s reputation as a smarter investment opportunity and Sydney’s a high-risk, low-reward market.

<h2>Cameron Clarke, Founder &amp; Principal of My Real Estate Mate</h2>

Why are Sydney investors drawn to Melbourne?

The feeling of 'value' in Melbourne is more discernible. Sydney entry prices are high for prospective buyers and investors, and there is strong competition from Asian-based and backed buyers across all sectors of property.

Having missed out or feeling that they will, Melbourne is the next logical step in their quest to purchase property.

Define the typical buyer from Sydney.

Couples are saying lets move to Melbourne feeling that Sydney is at its peak, with entrepreneurial types and sole investors also present. They're attracted to stamp duty savings and depreciation over buying established property in Sydney.

There is also a degree of an 'I own an investment property interstate' mentality, with accounts for many of the client referrals we receive.

What's the typical property Sydneysiders have in mind when purchasing in Melbourne?

Enquiries from Sydney-based prospective clients have doubled since January 2016, with the trend really cementing itself during June 2015. Product-wise a single bedroom apartment in Sydney is roughly the same as a two bedroom, 2 bathroom in Melbourne so this is preferred product, with or without a car park. Melbourne's public transport system is well regarded and understood by those who are seeking properties without the intention of owning a vehicle..

Budgets for prospective Sydney buyers range from $400,000-$600,000; clients are happy looking at marketing and plans over email and will generally come to Melbourne once they have genuine intent on a particular property...bottom line is that with $600,000 a Sydney resident will achieve far more in Melbourne than the Harbour City.

<h2>Bradley Dean, Director of off the plan sales and marketing company Eton Property Group</h2>

How strong is the interest from Sydney and has there been a discernible increase in interest over the last year?

We have seen a huge increase in the interest in Melbourne properties from Sydney buyers in the last 12 months.

With the Sydney market reaching record heights, buyers are now looking to Melbourne for the cheaper alternative. Buyers are quick to move, understanding that if they want the best choice of apartments they need to act quickly, as has been the case with one of our projects in North Melbourne, Reflections, where demand from Sydney investors has been particularly strong.

What is the conversion rate of interested Sydneysiders to sales contracts where possible?

We have found, given the quality of the projects we are currently marketing, 20-30% of Sydney registrations are converting into sales, most of whom are buying, sight unseen.

What we are also noticing is a shift in the locations they are favouring, with many Sydneysiders shifting their focus from CBD &amp; Southbank projects to inner fringe areas of Melbourne. This can be put down to the growing realisation that Melbourne’s CBD and Southbank are becoming over-developed and locals would in fact prefer to live on the outskirts of the inner city, where they have access to superior public transport links, schools, cafés, eateries, amenities and leisure facilities.

Beyond location, these buyers are becoming savvier and know to seek out those projects offering luxury inclusions, better quality fixtures and fittings, and limited communal facilities, to ensure body corporate costs are kept at a minimum.

Are Sydneysiders buying in Melbourne skewed toward owner occupiers or investors, and if the latter what apartment size and layout are they requesting?

The Sydneysiders we are dealing with are mostly investors.

Melbourne is such a competitive market, here you can pick up a one-bedroom apartment for under $450,000 and a two-bedroom apartment for under $650,000. For those interstate investors, it is almost like bargain buying; for the price of one, one-bedroom apartment they can double down in Melbourne and buy two.

Interestingly, however, we have had a couple of instances where young couples are relocating their lives and migrating south to start a fresh in Melbourne where it is so much more affordable.

Lead image: Tommy Miller
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silvermb

Sydney property buyers seek solace in Melbourne

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Australia’s housing stock is not meeting the demands of older Australians, according to a new report released by the Bankwest Curtin Economics Centre (BCEC).
The report features findings from a BCEC Housing Affordability Survey, which captures the housing experiences and affordability perceptions of more than 4,300 people across New South Wales, Western Australia and Queensland.
Older householders aged 55 years or over were asked a series of questions relating to downsizing, including motivations and barriers. Around 16 percent of those aged 55 to 64 and one-quarter of those aged 64 or over reported they had already downsized. The most commonly cited reasons for downsizing, as shown in the figure below, were to live in a smaller house that is easier to maintain and to reduce housing costs.
Older Australians want options that allow them to downsize in areas that suit their lifestyle. This includes being close to family and friends while having access to quality amenities.
Main reasons for downsizing
<h4><a href="/images/2016/06/14/image-20160606-26003-1j0d161.PNG" target="_blank">Click to enlarge</a></h4>
<img src="/images/2016/06/14/image-20160606-26003-1j0d161.PNG" alt="">
<h2>A growing mismatch between housing stock and demand</h2>
Among those aged 55 years or over who had not downsized, more than 80 percent said they would certainly do so in the future. However, around 40 percent of those who had not downsized felt there weren’t enough suitable or affordable housing options in the areas where they would choose to downsize.
Perceived barriers to downsizing
<h4><a href="/images/2016/06/14/image-20160606-26010-10q9jmn.PNG" target="_blank">Click to enlarge</a></h4>
<img src="/images/2016/06/14/image-20160606-26010-10q9jmn.PNG" alt="">
This identifies a mismatch between demand and existing housing stock. And it’s likely to get worse, with the proportion of older and lone-person households <a href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/3236.0Main%20Features42011%20to%202036?opendocument&amp;tabname=Summary&amp;prodno=3236.0&amp;issue=2011%20to%202036&amp;num=&amp;view=">set to increase significantly</a> over the next 20 years.
Most of Australia’s dwelling stock is made up of separate houses with at least three bedrooms. Small dwellings with one or two bedrooms are still relatively scarce.
According to the 2011 Census, three-quarters of the nation’s dwelling stock is made up of separate houses, compared to just 14 percent flats, units or apartments. There are, however, some stark differences across cities.
Census data show that more than 25 percent of Sydney’s housing stock is made up of flats, units and apartments. Other cities lag behind. In Melbourne, only 15 percent of the housing stock are flats, units and apartments, in Brisbane 12 percent and in Perth only 9 percent.
Semi-detached, row or terraced houses provide smaller alternatives to the detached house. Yet, with the exception of Perth, the proportion of such dwellings is even lower than flats, units and apartments.
The lack of housing diversity compels older Australians to continue living in larger dwellings than they would prefer, and often for longer than they would prefer.
In Western Australia, where four out of every five dwellings are separate houses, more than one-quarter of households aged 55 years or over live in dwellings with three or more spare bedrooms.
<h2>So, what housing solutions are possible?</h2>
As population ageing drives a long-run demand for smaller dwellings, the mismatch between preferences and housing supply will grow unless a significant shift in the diversity of dwellings happens across the country.
This does not simply mean delivering more one-bedroom apartments. Increasing dwelling diversity takes time, planning and commitment. Strategic planning documents across the country recognise the need for change, yet the housing market in its current form appears unable to deliver diverse, affordable housing options on anything close to a sufficient scale.
The lack of suitable homes is not the only factor that discourages older Australians from downsizing. The BCEC Housing Affordability Survey shows that 58% of would-be older downsizers thought the costs of downsizing – such as stamp duty and real estate agent fees – were simply too high to make downsizing worthwhile.
Making downsizing less costly is likely to be “doubly beneficial”. This is because it would free up existing housing stock for younger families, thus revitalising an ageing housing stock, while allowing older households to reduce their housing costs. Stamp duty reforms targeted at older Australians, such as those already implemented in Victoria and the ACT, would remove a significant barrier to downsizing and potentially deliver benefits to the economy.
However, tax reforms must be accompanied by flexible housing solutions. These need to increase the supply of diverse housing forms, not just in terms of house type but also tenure, in the locations where older people want to live.
Older Australians want innovative solutions that offer more than traditional retirement housing options. Vertical villages, which offer activated internal corridors, flexible living spaces and areas to entertain the grandchildren, are starting to appear.
Alternative tenure options such as the “land rent” model create housing solutions in which costs are reduced because the occupant does not need to buy the land. Such models represent forward thinking, but existing policy settings present major challenges to such innovation.
Governments need to work with industry to deliver solutions that meet the housing needs of older Australians. These solutions are required now more than ever.
 
Rachel Ong is deputy director, Bankwest Curtin Economics Centre, Curtin University and can be contacted <a href="https://theconversation.com/profiles/rachel-ong-113482" target="_blank">here.</a>
Alan Duncan is director, Bankwest Curtin Economics Centre and Bankwest Research Chair in Economic Policy, Curtin University and can be contacted <a href="https://theconversation.com/profiles/alan-duncan-100759" target="_blank">here</a>.
Steven Rowley is director - Australian Housing and Urban Research Institute - Curtin Research Centre, Curtin University and can be contacted <a href="https://theconversation.com/profiles/steven-rowley-201914" target="_blank">here</a>.
All are authors for The Conversation. 
The authors would like to thank Amity James, of Curtin University, for her contributions to the administration and analysis of the BCEC Housing Affordability Survey.
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Lack of housing choice frustrates would-be downsizers

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GUEST OBSERVER
The Housing Industry Association urges the Federal Government and Opposition to commit to actions targeting housing supply constraints in their election platforms. 
Providing affordable homes to house our growing, ageing and increasingly diverse population requires more than one line references about increasing supply.
Providing affordable homes that cater for families large and small, in capital cities and regional centres, in city centres and their suburbs requires vision and planning.
We don’t have a national housing plan.
Successive Federal Governments have failed to coalesce the roles, responsibilities and endeavours of state, territory and local governments. Governments at all levels, and their well-intentioned agencies, work outside of a national housing strategy. They don’t act in unison, towards a national goal.
It’s like attempting to piece together a jigsaw puzzle without knowing the image or landscape.
With an ageing workforce and mounting pressure on publicly funded services, the Federal Government cannot simply dismiss housing affordability as a supply problem for the states to solve.
An incoming Federal Government must do better. It needs to provide national leadership and vision, and the resources to support better targeted initiatives to increase the supply of both private and public housing.
Committing to a dedicated Federal Minister for Housing, within Cabinet, and establishing a national land planning council to provide national monitoring and reporting of land supply across each stage of the supply pipeline are high on the HIA’s list of imperatives. 
Instigating a holistic inquiry into the added cost of housing caused by taxes, excessive regulations and delays in planning assessments is also a priority for the housing industry. 
Graham Wolfe is chief executive industry policy and media, HIA and can be contacted <a href="https://hia.com.au/en/about.aspx" target="_blank">here</a>. 
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New housing fuels affordability: HIA's Graham Wolfe

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Consumer regulators across Australia are launching a national video campaign against spruikers, who run get-rich-quick seminars.
<a href="https://www.youtube.com/v/srb0wYnyyWI" target="_blank">The national campaign</a>, has been promoted by the likes of Consumer Protection WA.
Its director of property industries Stephen Meahger said spruikers must comply with Australian consumer law.
"We always are concerned in any spruiking when you see a big, glossy ad or a full page ad in the paper that says that it's a free seminar," Mr Meahger told the ABC.
WA spruikers often teach their students how to set up rent-to-buy housing deals, which offers people who do not have a home deposit the option of purchasing a home after paying above-market rent for a set period of time.
Miles Larbey from the Australian Securities and Investments Commission (ASIC) said unscrupulous operators had been put on notice.
"ASIC assesses every report of misconduct it receives about such operators and there are serious consequences for property spruikers who break the law by providing unlicensed financial or credit advice," he said.
"ASIC strongly supports the campaign warning investors about property spruikers."
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Video warning about property spruikers 

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

Cash grab or about affordability? Terry Ryder

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<h2>GUEST OBSERVER</h2>
In the resource regions – Western Australia and the Northern Territory – property values continue to fall.
Even though quarterly growth continues to be in negative territory in the Perth and Darwin house markets, the figures were slightly better in the April quarter compared to the March quarter, suggesting an ease in the fall of growth. Annual growth for these markets is presented in Graph 3.
Graph 3: Annual Growth Rates – Perth and Darwin
<a href="/images/2016/06/03/Graph_3.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/06/03/Graph_3.jpg" alt="">
Source: Residex
The graph shows that property values have been falling in these areas throughout much of 2015 up to today. It has been established that movements in commodities can be closely tied to economic and housing market performance in WA and the NT. Despite a small rally in the commodity price index in the first quarter of 2016, iron ore is still less than one third of what it was worth when it peaked at US$180 in February 2011.
Additionally, profits from the mining sector are not as widely spread throughout the states, as the operational phase of the mining boom employs less labour than the construction period. Interestingly, it seems that the Queensland labour market is suffering a higher unemployment rate (6.5%) in response to mining divestment. This could be because of the tighter labour markets in WA and the NT, where workers have higher mobility in response to mining and construction projects.
Across the country, the transition from the mining to service industries is overstated in its ability to absorb lost jobs and income. The official Australian unemployment rate was 5.7% in April (seasonally adjusted), unchanged from the previous month. However, April saw the loss of 9,300 full time jobs and an increase in 20,000 part time positions. Despite the official statistics, employment is being picked up through more precarious work.
Given that part time and casual work has been linked to reduced bargaining power for pay increases, it is no surprise that increases in Australia’s annual wage growth reached a historic low of 2.1% in the March quarter. Low wages may also be contributing to low inflation, which is in turn fuelling expectations of further cash rate cuts this year.
Moving forward, I would expect modest falls in house values in the major east coast cities, while units and resource market dwellings adjust to changed conditions in demand. Low interest rates and falling dwelling prices may present opportunity in certain markets across the country, but purchasers should look for strong and diverse economic fundamentals in the markets they choose to buy in.
Eliza Owen is the market analyst for Onthehouse.com.au. She can be contacted <a href="https://www.onthehouse.com.au/" target="_blank">here.</a>
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Value declines in resource regions show signs of easing: Eliza Owen

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If actions do indeed speak louder than words, then politicians don’t give a damn about housing affordability.
Often you’ll see their lips moving, and they appear to care about the cost of housing, but then they’ll take actions that cause costs to rise and affordability to worsen.
Victoria’s 2016-17 State Budget provides another example of why housing is so expensive in this country and why affordability is an enduring issue (although not nearly as serious as mainstream media would have us believe, especially outside of Sydney). 
The Victoria Government has added to the taxation burden on the industry that creates new homes for families. The Property Council is right to be “deeply worried about the Government's unwillingness to deal with its property tax addiction” and to ask for a cap on property tax increases. 
Governments at all levels treat the Australian housing industry as a cash cow and in every budget they milk it more. And the cost of providing housing keeps rising, while politicians point the finger of blame at innocent parties such as foreign investors and negatively-geared Australian investors. 
“Land tax is up 28 percent, foreign investor taxes have been tripled and stamp duty is forecast to exceed $6 billion for the first time,” says the Property Council, in the wake of Victoria’s State Budget. “Melbourne cannot expect to remain Australia's most competitive city for property investment when its property tax haul is surging.
“Another area which concerns the property industry is the stockpiling of Growth Area Infrastructure Contributions (GAIC). Property developers are paying more than their fair share. It is time for the Government to provide full disclosure on where the money is being spent.”
The so-called clampdown on foreign investors is, sadly, another ploy by politicians to give the appearance of doing something about housing affordability while finding new ways to milk the property industry of revenue.
It’s a little like the Federal Government lifting the tax on cigarettes – they claim it’s to discourage smoking but in reality it’s a grab for revenue. If they were serious, they’d ban smoking altogether, just as they would ban foreign buyers if they truly believed they were the prime cause of high house prices in Sydney and Melbourne. 
Victoria has introduced new taxes to slug foreign buyers and NSW is gearing up to do the same, while pretending it’s really a clampdown on illegal activity which allegedly pumps up prices.
The NSW Government is introducing new rules from July. Buyers and sellers of real estate will have to prove their residency and citizenship status before a sale is completed. A land tax certificate showing whether any money is owed must be supplied to a home-buyer by the vendors. The vendors must disclose their residency status and nationality when applying for the certificate. Foreign buyers will have to provide citizenship and visa details, plus FIRB clearance, through the stamp duty process.
The NSW Office of State Revenue will collect the new information on buyers' nationality. This will be passed to the ATO for inclusion in a national register of foreign ownership of land titles, which begins on July 1. The ATO will match data to ensure foreign buyers have paid a $5,000 fee for any property sold for less than $1 million, and $10,000 for properties over $1 million.
The process paves the way for the NSW Government to follow Victoria in imposing foreign buyer surcharges on land tax and stamp duty in the future.
How these moves address housing affordability is a mystery.
Here’s one way it may make it worse. Deterring foreign investment, upon which many major high-rise apartment projects depend, makes it likely many projects will not be built. The reduction in supply adds to the pressures which causes prices to rise.
NSW executive director of the Property Council Jane Fitzgerald says: “Turning investors away by imposing a huge new tax is one way to ensure it doesn’t get any better. There are international investors right now considering whether to build in NSW. If they choose to go elsewhere our housing affordability crisis will worsen.”
Well, exactly. But politicians, generally inept at seeing beyond the end of their noses, haven’t thought it through to that degree.
Rather than seeing foreign investment as being part of the solution (helping to lift the supply of dwellings), they choose to see them a problem – or perhaps, more correctly, as an unpopular minority to blame without losing votes.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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Politicians don’t give a damn about housing affordability: Terry Ryder

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<div>The housing affordability crisis is now one of the biggest issues in Australia, causing widespread social, political and economic implications, and according to Douglas Driscoll, chief executive of real estate group Starr Partners.</div>
<div> </div>
<div>Housing affordability is not just a problem for the young generation, it impacts other echelons of the Australian population.</div>
<div> </div>
<div>Over time, Australia has started to view property as a business opportunity as opposed to merely somewhere to live, and it is now a national obsession. In fact, Australia has the highest number of residential mortgages per capita in the world, with house prices having risen at a rate that far outperforms that of household income and rents.<a href="https://outlook.office.com/owa/?realm=propertyobserver.com.au#_ftn1"></a> </div>
<div> </div>
<div>He said he is perplexed by the Government’s restraint and says it needs to move beyond deploying election tactics because inactivity is no longer an option.</div>
<div> </div>
<div> “There’s a lot of conversation but little action being undertaken to reach a resolution. You don’t need to be a professor of economics to see that we need a levelling of the playing field. We require immediate and prudent Government intervention that will protect the interests of future generations, not just win votes at the next election,” he said.</div>
<div> </div>
<div>“If you simply just tried to give first home buyers more of an edge this will prove counterproductive and might have disastrous consequences; it could simply add more fuel to what is already a roaring inferno and see property prices artificially increased to a whole new level. </div>
<div> </div>
<div>"Resultantly, investors will just end up outbidding owner-occupiers and paying even more. </div>
<div> </div>
<div>"Conversely, I don’t think it’s fair that we simply hone in on the wealthy.</div>
<div> </div>
<div>"In my opinion, this issue can only be resolved by pincer movement, applying tactics on both sides of the spectrum is the only way we can begin to reach a more level playing field."</div>
<div> </div>
<div>
He believes affordability could be addressed on a state-level.
</div>
<div> </div>
<div>“We are so obsessed with our own little patch of Australia, but at the end of the day we need to remember that regional Australia and even other capital cities are not faced with the crippling prices we have in Sydney," he said.</div>
<div> </div>
<div>"The matter is met with incredible complexity; if we change legislation, what does that mean for the other eighteen million Australians living outside of the harbour city?”</div>
<div> </div>
<div>Looking abroad, less than 50 percent of residents in Germany own their home. Tax regulations, stable prices, availability of housing and risk-averse banks make renting the more attractive option<a href="https://outlook.office.com/owa/?realm=propertyobserver.com.au#_ftn2"></a>. </div>
<div> </div>
<div>Contrastingly, the UK Government has a number of options for buyers under affordable home ownership schemes. Shared ownership is a scheme that allows UK residents to buy a share of their home and pay rent on the remaining share.<a href="https://outlook.office.com/owa/?realm=propertyobserver.com.au#_ftn3"></a> </div>
<div> </div>
<div>DOUGLAS OFFERS SIX SOLUTIONS TO THE HOUSING AFFORDABILITY CRISIS:</div>
<div> </div>
<div>1.       DISCOUNTED MORTGAGE RATES FOR FIRST HOME BUYERS. Subsidies already exist for students, with the availability of extremely competitive low-interest rate loans and study assist loans, so why can’t something similar be offered to first home buyers? The role and responsibility of any Government is to serve society and create opportunities for the people it represents. Unlike education, home ownership is not a democratic right, but it is certainly something that a government should help encourage and financially facilitate.</div>
<div> </div>
<div>2.       LIMIT NEGATIVE GEARING. Negative gearing looks as if it is going to be front and centre of the political debate for the upcoming Federal election. Contrary to some reports, negative gearing is not necessarily the domain of the wealthy, but it is certainly not something that the working class always benefit from. I don’t subscribe to the theory that negative gearing is responsible for driving property prices up, but it is definitely a contributing factor, and unlike a lot of my peers, I believe that some form of prudent intervention is now needed. I have to question why the Government ruled out changes to negative gearing in the recently announced Federal Budget, because something needs to give. Regardless of their recent manifesto, I still believe it’s a case of when, not if. The two main political parties seem to be diametrically opposed on this matter, but personally I believe that the solution lies somewhere between the two standpoints. Rather than abolish negative gearing altogether, it could perhaps be less generous or capped to a certain number of properties, for example. This would only apply to new transactions with any existing investments being grandfathered. </div>
<div> </div>
<div>3.       ABOLISH STAMP DUTY ON FIRST TIME PURCHASES. Historically, the Government has tried to entice younger generations into buying property by offering grants, but this is fundamentally flawed in my opinion and has never really worked. Instead, first home buyers should be made exempt from having to pay the exorbitant cost of stamp duty.</div>
<div> </div>
<div>4.       ALLOW FIRST HOME BUYERS TO PURCHASE USING THEIR SUPERANNUATION. In theory, this isn’t a bad idea, but most first home buyers probably don’t have enough money in their super to pay the deposit for a property, especially if they are hoping to buy in Sydney. Rather than simply being able to take the money from their superannuation fund, it should be structured as an interest-free loan, with repayments being made over a long-term period with the full amount needing to be settled before the maturation of the fund.</div>
<div> </div>
<div>5.       SIGNIFICANT INVESTMENT IN REGIONAL TOWNS. One of the key contributing factors of the affordability crisis is the migration of the masses to metropolitan areas; meaning that we all want to live in the same areas and are often left fighting over the same scraps. Many rural locations are deemed by some city dwellers as antiquated outposts. What if there was considerable investment in these areas that would breathe life back into them and make them more attractive to buyers? Over the past few years, the NSW State Government has spent billions of dollars on macro projects within the confines of Sydney, such as large-scale urban regeneration and new or upgraded transport infrastructure. –Imagine what would happen if they spent similar sums on areas such as Maitland, Wollongong and Bathurst. Would they become viable alternatives for people looking to buy a home? The introduction of high-speed rail connections to these areas would certainly enhance their desirability. Another enticement could be to offer incentives to outer-city locations on an exclusive basis</div>
<div> </div>
<div>6.       SHARED OWNERSHIP. The UK’s version of this flexible scheme helps subsidise the purchase price and allows the homeowner to buy bigger shares as and when they can afford to. I think a similar model would work here in Australia. We have to be mindful from a socioeconomic view that property doesn’t just become the reserve of the rich.</div>
<div> </div>
<div>DOUGLAS DRISCOLL is chief executive officer of real estate agency <a href="https://www.starrpartners.com.au/" target="_blank">Starr Partners</a>.</div>
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