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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GUEST OBSERVATION
More students are travelling overseas for their education than ever before. The numbers of international students have risen sharply over the last 15 years. In Australia, around 153,000 international students were enrolled in 2000, while in 2009 the number grew to 631,000.
However, since 2009, the Australian international education market has shrunk. International student numbers fell to almost 514,000 in 2012. Fewer international students has led to falling revenue, from A$16.4 billion in 2009 to A$14.5 billion in 2012.
In the current challenging circumstances, the Australian government is trying to reverse this decline by improving visa regulations for international students. On the other hand, the education budget to higher education has been cut.
But how much will the budget cut damage Australian education exports and how much will visa regulation improvements make up for it? Our recent study published in the Australian Journal of Education found efforts to improve visa processing were not as important as university rankings or affordability.
Where are they from and where do they go?
China is the top country of origin for international students in the world. In 2013, some 236,000 Chinese outbound students constituted nearly 29% of the global total of international students.
The number of international students from the second-ranked country of origin, India, was less than half that of China’s.
Chinese students mainly enrolled in the higher education sector (61.9% in 2013) in Australia. This sector also generated the biggest part of the education export profit, at 68.3% in 2013.
Other countries are also competing for Chinese students. At the higher education level, most Chinese students chose the United States: 27.6% went to the US while 11.5% chose Australia.
Destination country safety
Our recent study tried to determine which factors have been influencing international students’ decisions on where to study.
The results show that destination country safety is an important choice determinant. Chinese students are not necessarily limiting themselves only to countries with a high safety ranking, but they’re unlikely to choose a country with a very low safety ranking.
This suggests that it is important for a country seeking to attract Chinese students to maintain and/or enhance its perceived level of safety and to promote itself as much as possible as a safe place for Chinese students to study.
University ranking and educational quality
Another major factor in the decision-making process is the destination country’s university rankings and general standard of education. The study shows that Chinese students assign a relatively high value to university rankings compared to other factors.
In the context of the release of the 2014 Times Higher Education rankings, funding cuts to Australia’s higher education sector were associated with a negative effect on university ranking. This may discourage Chinese students from pursuing higher education in Australia.
Costs and scholarships
The study also indicated out-of-pocket expenditure was an important factor. This suggests the recent depreciation of the Australian dollar may help to attract foreign students into the international higher education sector. However, it is unlikely that exchange-rate-induced expenditure changes would be sufficiently large to result in major increases in Chinese student numbers.
The study suggests scholarships for university fees and living expenses would have a major positive effect on demand from Chinese students. The Chinese government provides scholarships for high-achieving domestic students to pursue Masters and PhD degrees abroad through the China Scholarship Council (CSC).
As an indication of the level of financial support, each CSC student enrolled at an Australian university receives a scholarship worth around A$20,000 a year to cover all expenses, including university fees and living expenses.
Retaining and fostering connections with the CSC, in order to increase the number of available scholarships, could provide an alternative to potentially dwindling Australian country-level or university-level scholarships.
Visas for international students
The study results indicated positive effects of a reduction in student visa processing time, an increase in the post-study visa duration and a decrease in immigration language requirements.
However, these effects were relatively small compared with destination safety, university rankings and study and living costs.
Hence, while the recently implemented streamlined visa process and the post-study work visa policies in Australia may have some positive effect on attracting more Chinese students, the study findings support the statement in the Knight review that Australia’s student visa program cannot solve all of the problems facing the international education sector.
Efforts to increase the attractiveness of Australia for higher education seem to revolve around the ease and speed of obtaining a student visa and a post-study work visa. While these are shown in the study to be important factors, the findings also point to the fact that visa policies would appear somewhat less relevant than other factors.
Efforts should be focused on more important factors such as safety, university rankings and scholarship conditions to attract more Chinese students.
Xue Gong is lecturer at the School of Economics and Management at Nanjing University of Science and Technology and can be contacted <a href="https://theconversation.com/profiles/xue-gong-187138" target="_blank">here</a>.
Twan Huybers is associate professor at UNSW Australia and can be contacted <a href="https://theconversation.com/profiles/twan-huybers-187819" target="_blank">here</a>.
Both are authors for The Conversation.
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jchancellor-FAypfDUnLy

What attracts Chinese students to Aussie universities?

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Housing co-operatives should be seen as a priority for expansion to assist in addressing housing affordability, suggested The Business Council of Co-operatives and Mutuals (BCCM) to the inquiry into Home Ownership.
Housing co-operatives are key players in the range of responses needed to address Australia’s housing affordability crisis, affirmed BCCM. 
"A report by the Co-op has revealed that nearly eight in ten Australians aged between 19 and 29 are concerned about the level of mortgage debt they may face in their lifetime, and the prospect of ever being able to own a home.
"The current speculative model of housing ownership cannot deliver affordable housing for all. It is time to consider alternative ownership models and co-operative housing has proven to be a very significant opportunity for housing market reform. 
"Co-operative housing can either be provided as rental housing or based on a wide range of co- operative ownership models. In general, co-operative housing provides long term, secure and affordable housing for people on low to moderate incomes." 
Member participation directly reduces cooperative housing management costs, asserted BCCM in the submission to the House of Representatives Standing Committee on Economics. 
"Recent benchmarking demonstrates that co-operative housing is the most cost effective form of social housing program. Community Equity New South Wales (CENSW) has estimated that housing co- operatives produce savings over ten years per 1000 properties of $4.07 million in comparison with other social housing sectors.
"Seed funding needs to be provided to specialist housing co-operative centres that can function as a central resource agency for housing co-operative development. 
"The role of the resource agency would be to refine documentation for the various models, promote models to potential consumers and provide advice services to developing co-operatives. 
"Existing co-operative housing providers could be funded to expand their educative role. 
"Funding for this initiative could come from sources not limited to government but include stakeholders with an interest and commitment to the provision of affordable housing such as trade unions, customer owned banks, consumer-focused mutuals, consumer interest groups and member-owned super funds.  
"Rental co-operative programs could be further expanded by capital funds being made available to develop new stock or alternatively through the transfer of existing social housing stock. 
"A source for this funding could be through a combination of government seeding grants and commercial loans from financial institutions with an interest in developing new lending products in the housing loans market place. 
"Collaborative partnerships are also possible with co-operative and mutual capital investment partners ranging from financial mutuals (another form of Co-operative) or member-owned super funds to community development finance institutions. 
"Financial mutuals can also assist with affordable housing through the provision of affordable housing loans and a range of other consumer/member focused products. 
"The financial mutual sector is a significant player in the provision of affordable housing finance. It is driven by member needs and concern for the community and will continue to support affordable housing in all its forms. 
"Housing co-operatives are the quiet achievers in the housing sector. They have been highly successful in Australia and many other countries." 
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Co-operative housing consideration for reform

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Four investors competed for a $327,500 Russell Lea studio, Sydney's cheapest weekend auction sale.
<a href="https://www.realestate.com.au/property-studio-nsw-russell+lea-120377129" target="_blank">The 7/275 Lyons Road studio</a> had last sold at $172,000 in 2005, so not quite doubling over the decade.
Its price growth was 6.6% annually.
Currently rented at $300 a week, it reflected a gross 4.7% rental yield.
<a href="https://www.realestate.com.au/photogallery_new.ds?id=120377129&amp;theme=rea.buy" rel="photos" data-id="120377129"><img src="https://i4.au.reastatic.net/456x342/70e8611bc74acd71afcb0f228fdc51747d6aa457fcccbdc5a29e9ae11bf7cf73/image3.jpg" alt="7/275 Lyons Road, Russell Lea" title="7/275 Lyons Road, Russell Lea" data-index="2"></a>   
Selling agent Rocky Mammone at Richardson &amp; Wrench Five Dock said the property was announced on the market at around $315,000 with competition from four investors.
"This is an ideal opportunity for the first home buyer to secure a property in this popular, vibrant Russell Lea precinct with easy access to the city," was his marketing suggestion.
<img src="https://i3.au.reastatic.net/456x342-resize/c66f50138028775e4fa465a14cde8fca783a5b77cc8a2f701414841d9e66592c/floorplan1.gif" alt="7/275 Lyons Road, Russell Lea" title="7/275 Lyons Road, Russell Lea" data-index="5">
The auction came ahead of data showing loans to property investors across Australia rose in July, according to figures released by the Australian Prudential Regulation Authority (APRA) monthly banking statistics.
It showed that $539 billion worth of loans to property investors were on the books in July this year, up 22 per cent on the $439 billion in July last year and up on June's $507 billion tally.   
<div class="domain-article-content-body">
But the breaks in investor lending are finally showing up after APRA introduced a 10 per cent annual growth limit on bank loans to property investors in December 2014.
Westpac, which has the largest investor loan book at $156 billion, was up just 0.3 per cent on its June level, or 3.6 per cent annualised.
Westpac's book is around a complying 9.5 per cent above the level of a year ago.  
</div>
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Four investors compete for Russell Lea studio, Sydney's cheapest weekend sale 

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Ensuring housing supply, dwellings that meet social and demographic demands and providing greater mobility across different tenure types are the minimum changes the Department of Social Services believes to be necessary should current housing policy be reformed.
Not seeking to outline any specific reforms, the Department of Social Services pointed out areas for improvement to the inquiry into home ownership.
"The Department does note that any future reforms should include a focus on improving the effectiveness of housing supply and the collaboration of jurisdictions with respect to the broader policy settings influencing the operation of Australia’s housing market. 
"In relation to improving housing supply, there are a number of avenues that could be explored. For example, in the context of the Reform of the Federation White Paper process there may be scope to examine the effectiveness of the NAHA in incentivising the states and territories to ensure housing supply is better able to respond to increases in housing demand. 
"With respect to better aligning the broader policy settings influencing housing supply and demand, this will require increased, and ongoing, collaboration by all levels of government. 
"Mechanisms to facilitate such collaboration may be looked at as part of the Reform of the Federation White Paper process, although increased informal collaboration may be just as effective as more formal mechanisms. 
"The roles and responsibilities of the Commonwealth and states and territories, in respect of housing assistance and homelessness services, are currently being examined as part of the Government’s Reform of the Federation White Paper process. 
"Potential reforms to the current roles and responsibilities of the Commonwealth and the states and territories, around the provision of housing assistance and homelessness services, may improve the alignment of current incentives in relation to housing demand and supply.  
"However, this process is unlikely to materially impact the broader policy responsibilities of either level of government in terms of their impact on housing supply and demand. 
"There have been over 25 inquiries and significant reports related to housing policy and planning since the last National Housing Strategy was completed in 1991. 
"The most comprehensive of these reports were the Productivity Commission’s Review into First Home Ownership in 2004, the 2008 Senate Inquiry on Housing Affordability in Australia, the Australia’s Future Tax System Review in 2010 and the 2015 Senate Inquiry into Affordable Housing.
"However, housing affordability, and with it the level of home ownership, across Australia, has continued to fall over this period notwithstanding the recommendations and findings of these reviews. 
"The limited impact of previous reviews underscores the proposition that, without reforms to existing structural policy settings, the current issues with housing affordability will not recede, and indeed are more likely to intensify given the current low interest rate environment. 
"This will likely lead to an increase in the number of Australians being excluded from owning their own home, which is likely to put further pressure on the private rental market and in turn community and public housing and CRA [Commonwealth Rent Assistance]." 
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Department of Social Services outlays minimum housing reform changes

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GUEST OBSERVER
Housing affordability is more than just house prices. It also includes ready access to public transport, schools, good road networks, and of course access to all the basic utilities. However, local governments don’t have the money to build all the infrastructure new housing estates need.
So developer charges were introduced as a “user pays” method of funding new urban infrastructure. These charges are levied on property developers by local authorities at the time of planning approval. Some think these costs are passed back to the original land owner by way of lower land prices.
But property developers claim these charges are instead added on to new house prices, with a negative impact to housing affordability. When new house prices increase, existing house prices are also dragged up, extending the housing affordability issue throughout the community.
However, new research by QUT has uncovered evidence that these costs are not merely passed on to homebuyers, but are passed on at significantly over-inflated rates.
In an Australian first, the study empirically examines the impact of developer charges on housing affordability, providing evidence that developer charges are passed on to all homebuyers in the community. So while policy makers think they are charging developers for the provision of infrastructure in new communities, the cost is really being borne by all homebuyers.
<h2>The research</h2>
This research applied a hedonic house price model to 4,699 new and 25,053 existing house sales in Brisbane from 2005 to 2011. Using diverse data sets on both housing supply and demand items, it tested the impact developer charges had on both new and existing house prices over this time.
This study has provided the first Australian evidence that developer charges are passed onto home buyers. But these charges aren’t passed on in a dollar-for-dollar fashion. Consistent with international evidence, there is evidence that suggests these charges are inflated on both new and existing homes by around 400%.
What does that mean? It means that $10,000 of developer charge adds about $40,000 to the price of both new and existing houses.
In Queensland, where developer charges are around $28,000 per new house, this one fee alone could be responsible for over $110,000 of the house price. Over the term of a 30 year mortgage, this could be costing homebuyers in excess of $338,000 or almost $1,000 per month extra mortgage payments.
This is not to say developers are profiteering. The competitive nature of the development industry ensures developer margins are kept within a range reflective of the risky nature of property development. Developer fees are a supply side cost that often aren’t locked in until many years after the land is first bought for subdivision.
Demand factors, such as low interest rates and limited supply force up prices and land owners quickly adjust their expectations, asking more for the undeveloped land that will help with supply. Holding costs, time delays, limited supply of serviced land and imperfect data and models are all thought to contribute to this problem.
<h2>All buyers pay</h2>
This price inflation affects new home buyers and also buyers of existing homes, resulting in increased mortgage repayments of close to $1,000 per month in Australia.
Thus this inefficient developer “tax” isn’t being paid by developers at all. It is being paid by all home buyers across the community, even though the actual infrastructure built only services the new developments.
These findings suggest that developer charges are not only an inefficient tax, but are a significant contributor to increasing house prices and reduced housing affordability.
It is inefficient and inequitable to expect the community to pay four times the cost of infrastructure that services only new housing estates.
In the current environment of resource constraints and declining housing affordability, it’s now time other infrastructure funding models were considered by policy makers.
 
Lyndall Bryant is lecturer in Property Economics at Queensland University of Technology and author for The Conversation. You can contact her <a href="https://theconversation.com/profiles/lyndall-bryant-178983" target="_blank">here</a>.
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Inefficient tax slugs all homebuyers

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The production rate of new housing will have to be ramped up to meet en expected housing deficit of a possible 200,000 homes by 2024.
In the submission to the House of Representatives Standing Committee on Economics, AECOM technical director Joe Langley noted the housing crisis in Sydney is the result of a group of factors that constrain land supply and housing production, adding part of the problem in Australia has to do with our inherent geographical and demographic conditions which restrict housing supply in certain areas and open up differences in regional housing affordability in others.
"Present governance and funding arrangements contribute to Sydney’s housing constraints by limiting the value that can be created by and captured from public transport projects."
Joe Langley points out how two international transport projects are delivered and funded that, in his opinion, addresses the housing constraints. "Improved governance arrangements within transport delivery authorities and the introduction value capture funding methods that tap into the value created by well-integrated transport and land use planning." 
"The Denver Union Station Project Authority (DUSPA) is an excellent example of a governance structure for a major transport project that embraces the concept of wider public and private sector engagement in decision-making. This US$550 million transit-oriented development is the centrepiece of Denver’s FasTRAKS program, a $5 billion transformation of Denver’s transport network. 
"Private sector partners, the Union Station Neighbourhood Company (USNC), were selected through a public tendering process that brought private commercial and residential development expertise and equity to the DUSPA board and the overall project.
"As a result, major transport projects such as DUSPA and FasTRAKS have enjoyed a high degree of public and political support, thereby avoiding the cancellation and financial failure of major transport projects as witnessed in the recent past in Queensland, Victoria and NSW."
Joe Langley brought up some important points to address housing supply shortages. These are recommendations according to recent research commissioned to the Property Council of Australia.
"More widespread release of urban land for medium density development (up to 6 stories), greater production of small lot housing opportunities in green field locations, a broad scale review of employment trends and new employment needs in conjunction with housing needs, and a new focus on the mechanisms of lot assembly to assist private developers in putting together development packages in preparation for future housing supply. 
"Part of the problem in Australia has to do with our inherent geographical and demographic conditions which restrict housing supply in certain areas and open up differences in regional housing affordability in others. 
"For example, Sydney is constrained by mountains to the west, the ocean to the east and national parks to the north and south, thereby pushing fringe development in a relatively narrow band to the northwest and southwest. 
"While the Property Council’s report paints a clear picture of the reasons behind the housing supply problem, it also points out that over half of the metropolitan Sydney councils surveyed either underperformed or grossly underperformed in meeting housing production targets set by the NSW Department of Planning and Environment between 2004 and 2014.
"Clearly, increasing the supply of housing is a key part of the solution, but Sydney’s ability to generate a “sustained increase” in the rate of dwelling approvals over the next decade can’t be relied upon given past performance. NSW will need to do things differently, and for a long time, if Sydney is to fix its housing affordability problem."
Moody’s Australian Housing Affordability Measure shows that Australian households with two income earners need to spend, on average, 27% of household income to make mortgage loan repayments.
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Possible housing deficit of 200,000 homes by 2024

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<div>
National Australia Bank has 40 postcodes across the country where it reckons business and personal loans are at higher risk of default.
These locations over rely on single industries for growth, have higher unemployment, and or property prices that have run too hard. 
The chief risk officer of National Australia Bank, David Gall, won't pinpoint any the locations among Australia's 2500 postcodes.
But admits there are 40 where NAB is conducting its more stringent assessment of loan applications, including increasing the amount of equity that its borrowers require.
"We do have higher-risk postcodes and we make calls on what we think is the appropriate loan-to-value [LVR] ratio in those higher-risk postcodes," Mr Gall told the Australian Financial Review.
</div>
<div>"One of the things that we definitely factor in is where there is actually higher unemployment, or a risk of higher unemployment, given the reliance on single industries for a town or region. </div>
<div>"We will also look very closely at areas that have had very dramatic increases in property values to consider what is the right ongoing LVR ratio as well."</div>
<div>
<h2>As NAB would not disclose what postcodes are on its watch list, Martin North, principal at Digital Finance Analytics, analysed susceptible postcodes for the AFR.</h2>
<h2>The highest-risk postcodes, according to DFA, are </h2>
<h2>2902 (Kambah in Canberra); </h2>
<h2>7017 (Grasstree Hill, Honeywood, Old Beach, Otago and Tea Tree in South Tasmania); </h2>
<h2>5731 (Leigh Creek and Lyndhurst in South Australia),</h2>
<h2>5134 (Cherryville and Montacute in Adelaide),</h2>
<h2>4128 (Shailer Park and Tanah Merah in Brisbane),</h2>
<h2>2334 and 2343 (various suburbs in the Hunter Valley, north of Sydney).</h2>
<h2>Darwin (909) also appeared on the DFA list, as does Gladstone Park and Tullamarine in Melbourne's north (3043).</h2>
</div>
<div>
David Gall said NAB supported existing customers in the 40 areas because while they might be higher risk, "many remained good customers."
NAB last week said its charge for bad and doubtful debts for the third quarter fell by 15 per cent to $193 million, adding that credit quality at NAB is controlled by applying interest rate serviceability buffers of at least 2 per cent higher than the current rate.
David Gall said the level of bad debts were likely to tick up in the future, although when was uncertain. 
"Whether we are at the low point or not, we must be pretty close to it," David Gall said. 
"When you look at a historical sense, these are very low levels of impaired assets and bad and doubtful debts that we are seeing at the moment.
"So my expectation is we are not going to see a further tick down or improvement.
"We are hoping for the current benign conditions to continue for some time.
"But ultimately, bad and doubtful debts will be a factor of the Australian economy and how it performs overall." 
Pressed further Martin North said postcodes in NSW that banks would be wary about include Blackville, Caroona, Colly Blue, Pine Ridge, Quirindi, Spring Ridge and Wallabadah (2343) in the state's north-west and Greta in the Hunter (2334).
He also pointed to Riverstone (2765), Mount Annan (2567), Auburn (2144), Blaxland (2774), Chipping Norton (2170), Berala (2141) and Bass Hill (2197) as being the highest risk suburbs for defaults in Sydney. 
In Melbourne, the postcodes North says are most at risk of default are Aberfeldie, Essendon and Essendon West (3040); Gladstone Park, Gowanbrae and Tullamarine (3043); Pascoe Vale (3044); Belgrave and Tecoma (3160); Mount Evelyn (3796); Endeavour Hills (3802); and Berwick and Harkaway (3806). 
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NAB won't pinpoint its list of Australia's 40 most vunerable property postcodes

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By <a href="http://theconversation.com/profiles/judith-yates-148000">Judith Yates</a>, <a href="http://theconversation.com/institutions/university-of-sydney">University of Sydney</a>.

The current <a href="http://www.aph.gov.au/HomeOwnership">parliamentary inquiry into home ownership</a> is in the midst of public hearings, questioning, among other things, the decline in home ownership among younger Australians.

This, however, is not a recent issue. For a long time young people have found it difficult to purchase their first home. Home ownership rates for households aged 25-34 began to decline close to 40 years ago; declines for those aged 35-44 followed a decade later.

<iframe allowfullscreen="allowfullscreen" frameborder="0" height="360" mozallowfullscreen="mozallowfullscreen" src="//datawrapper.dwcdn.net/GKLPh/2/" webkitallowfullscreen="webkitallowfullscreen" width="100%"></iframe>

Declines have been most dramatic among low to moderate income households; only younger households in the top quintile of the household income distribution have been (relatively) protected.

<iframe allowfullscreen="allowfullscreen" frameborder="0" height="400" mozallowfullscreen="mozallowfullscreen" src="//charts.datawrapper.de/50dB3/index.html" webkitallowfullscreen="webkitallowfullscreen" width="100%"></iframe><iframe allowfullscreen="allowfullscreen" frameborder="0" height="400" mozallowfullscreen="mozallowfullscreen" src="//datawrapper.dwcdn.net/08QYt/1/" webkitallowfullscreen="webkitallowfullscreen" width="100%"></iframe>

<h2>A 40-year problem</h2>

These declines date back to social, demographic and economic changes that began up to 40 years ago. Social change in the 1970s saw the number of both single adult and dual income households increase. This resulted in increasing disparities in household incomes. The increasing numbers of high income households increased housing demand and triggered pressures on the housing market that began to squeeze out lower income households.

These pressures have been maintained by ongoing household income inequality, which has been <a href="https://theconversation.com/senate-report-shows-why-australia-needs-to-talk-about-inequality-36121">increasing in Australia since the mid-1980s</a>, compounded by growing earnings inequality and the impacts of uneven economic growth.

The squeeze on lower income households was intensified during the 1980s by high inflation and high nominal interest rates that limited borrowing capacity and created significant deposit gaps for those already facing income constraints.

From the 1990s, younger households were additionally constrained by the burden of education debt and deterred from home ownership by the implementation of compulsory superannuation which slowed down earnings growth.

As inflation and nominal interest rates fell throughout the 1990s, financial liberalisation contributed to an increase in the availability and reduction in the cost of housing finance. This, along with associated changes in lending criteria, disproportionately benefited high income households, most of whom were already established home owners.

The willingness of established households to invest in both owner-occupied housing and investor housing was fuelled by changes in our tax system that made housing an extremely attractive investment. Tax benefits for owner-occupiers increased in 1985 when owner-occupied housing was exempted from the newly introduced capital gains tax. For housing investors (whether negatively or positively geared), benefits arose from the asymmetric treatment of income and expense. These tax benefits increased in 1999 for debt financed investors prepared to speculate on rising real house prices.

Demand pressures from established households in the past two decades (readily seen in <a href="https://www.propertyobserver.com.au/http://www.abs.gov.au/ausstats/abs@.nsf/mf/5609.0">housing finance data</a>) have reinforced ongoing pressures on urban land markets from population growth.

Declines in agriculture and manufacturing and the rise of the services sector have led to an increasingly urbanised population with jobs being concentrated in the centres of our capital cities. Increased demand has contributed to an increase in, and a steepening of, land price gradients in these cities. This is partly a result of the innate shortage of centrally located land in areas where job concentration is greatest, partly in response to state government strategic policies encouraging infill development, and partly in response to the inadequate investment in, and cost of, transport infrastructure.

In other words, increasing land values in urban locations are an inevitable outcome of the combined impact of:

<ul>
<li>the pressure of income and population growth;</li>
	<li>structural change which results in increasing urbanisation and concentration of (knowledge-based) employment in its central locations</li>
	<li>a failure to invest in rapid-transit transport infrastructure that facilitates cost-effective access to employment and essential services.</li>
</ul>
Quick fix solutions to the housing affordability problems that have led to declining home ownership rates often look to land release and urban planning policies. These might ease supply shortages driven by a growing population, but they are less likely to work when price growth is coming from increasing demand for bigger and better located dwellings. This demand is driven both by economic growth and by increasing inequality.

Higher housing prices arising from demand and supply pressures have had a number of effects. They have increased the wealth of established home owners and provided a platform for further increases in demand for housing, reflected in upgrading of existing homes, and in demand for second homes and investment dwellings. In so doing, they have excluded a growing proportion of younger households, and particularly low to moderate income households, from home-ownership. Some of this group can’t afford to buy, others would rather rent in a higher cost location closer to job opportunities than live on the outskirts of our metropolitan regions where housing may be more affordable.

<h2>The underlying issues</h2>

Short term cyclical factors are not enough to explain declining rates of home ownership amongst younger households. Underlying structural factors and changing institutional arrangements have been critical.

These include:

<ul>
<li>our system of housing finance that makes it relatively easier for better-off households to accumulate housing assets through debt finance;</li>
	<li>our income taxation system that provides these households with an incentive to treat property as a means of accumulating wealth ahead of its more essential role as providing shelter; and</li>
	<li>our system of property rights that ensures those who do own land are able to act as rent-seekers by expropriating for their own the increase in land values not of their own making.</li>
</ul>
These institutional arrangements reinforce existing housing and wealth inequalities.

If the decline in home ownership among younger households is not reversed, then ultimately Australia’s aggregate home ownership rate will fall. Whether this matters is an entirely different question. But it does suggest it’s time policy makers recognise the underlying structural drivers of current housing outcomes and consider which households will benefit from new policies that support property ownership.<img alt="The Conversation" height="1" src="https://counter.theconversation.edu.au/content/45716/count.gif" width="1">

<a href="http://theconversation.com/profiles/judith-yates-148000">Judith Yates</a> is Honorary Associate Professor at <a href="http://theconversation.com/institutions/university-of-sydney">University of Sydney</a>. This article was originally published on <a href="http://theconversation.com">The Conversation</a>. Read the <a href="http://theconversation.com/explainer-whats-really-keeping-young-and-first-home-buyers-out-of-the-housing-market-45716">original article</a>.

Lead image credit: <a href="https://www.flickr.com/photos/mugley/534456296/">Flickr</a> CC BY SA
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theconversation

Explainer: what's really keeping young and first home buyers out of the housing market

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The soon-to-come restrictions on lending on house and land packages for owner occupiers and investors is going to trigger unfortunate pain in Sydney's greenfield housing estates.
It will, ironically, put further pressure on prices by limiting the supply of new homes. 
The Commonwealth Bank of Australia has advised mortgage brokers that finance approvals for individual buyers of land lots would be delayed until all preliminary work on the project had been completed. 
That sounds okay, but currently many smaller developers actually have to pre-sell many of their lots before a bank will lend the money needed to start the earthworks and install water, sewerage and electricity services.
The Housing Industry Association understandably worries that the CBA decision restricting pre-sales - with undoubtedly other banks to follow - will have an adverse impact on the new housing sector across the outer suburbs of all Australia’s capital cities. 
"There is no justification for cutting off the credit tap for new residential development," Harley Dale, the HIA's chief economist argues.
"It would be very concerning at this point in time if it became more difficult for people to get into a new home, which is the end issue here."
Under the old policy the bank would commit to a loan with an assessment based on the development plan, as early as 12 months before a lot was accessible. 
Under the new policy it will need a valuation after an external valuer is physically able to identify the lot.
Banks turning down the financing tap is a yet another consequence of the recent APRA crackdown intended to stop any property bubble.
No one wants a bubble, but aren't we told the answer lies in doing everything possible to increase the supply of Sydney housing?
While safeguarding Australia’s financial system is obviously of paramount importance, the recent lending policy outcomes derived from APRA's intervention now risk obstructing not only new home building but damaging the economy’s rebound capacity. 
New detached home sales rose last financial year to 73,000, which was a four-year high for Australia. 
But just two states, NSW and SA are actually currently showing continued new home construction strength, warns the Housing Industry Association.
Compared with just 12 months ago, the number of owner occupier loans for the construction or purchase of new dwellings increased in New South Wales (+12.9 per cent), South Australia (+9.0 per cent) and the ACT (+0.5 per cent). Those in decline were Western Australia (-21.4 per cent), Tasmania (-20.8 per cent), the Northern Territory (-20.8 per cent), Queensland (-7.8 per cent) and Victoria (-4.8 per cent).
The HIA blame much of the decline on the lending outcomes that followed the initial December 2014 APRA crackdown.
Ofcourse these lending restrictions are against the backdrop of the unresolved, longstanding issue of local governments having increasingly onerous requirements and costings for infrastructure provisions in greenfields sites.
Economist Saul Eslake rightly says, there are two sides to this story, and he and I have a lot of sympathy with the desire of exisiting residents to prevent developments which detract materially from their quality of life.
But whatever perspective one might take on that debate, there is no doubt that planning laws and upfront costs have contributed to the mis­-match between our housing demand and housing supply.
Eslake argues it is time for revisit current models for financing the provision of infrastructure and services in greenfields housing estates by reducing upfront charges, replacing them instead with changes he suggests to the land tax regime.
But that idea is way too forward thinking in this knee-jerk world of now. 
This article was first published in The Saturday Daily Telegraph
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Pressure on prices and house and land supply in APRA greenfields fallout

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Moves to cap lending to housing investors would have a moderating effect in the short term, but the popularity of Sydney and Melbourne meant prices had further to run, the Commonwealth Bank CEO Ian Narev tips.
Ian Narev also pointed to limited supply as a factor in escalating property prices, after the nation's biggest lender for housing advised home loans balances rose 6.6% for the year from $400 billion to $423 billion. Brokernews.com.au reported broker-originated loans accounted for 45% of new business during the year, with brokers now making up 43% of the major bank’s entire home loan portfolio. The home loan lending growth of 6.6% in the year to June 2015 was behind overall lending system growth of 7.4%. 
The recent actions from the Australian Prudential Regulation Authority to cap the lending growth to housing investors would, Narev said, in the short term have a moderating effect on immediate investor demand, but the popularity of Sydney and Melbourne as places to live combined with limited supply suggested prices have further to run over the longer term.
"On the one hand, if you look year on year, the run-up in property prices in [parts of Sydney and Melbourne] feels like it's going to have to come off. But on the other hand, when you again look back on these fundamental forces of supply of demand, some of them might be around for quite some period of time yet," Mr Narev said in an Fairfax Media interview.
Ian Narev revealed CBA had lifted rates on investors loans by 27 basis point last month to avoid the rush of borrowers fleeing competitors, which would have pushed CBA above APRA's 10% growth limit.
"When others are taking action there is a flow effect of extra activity, you have got to be very careful that even without changing your own settings, you don't suddenly get to the point that by the virtue of others doing less, you get to the 10% barrier," he said.
"The pricing was a direct response to that risk and that is why we made that decision."
Commonwealth Bank of Australia (CBA) has reported a five per cent rise in profit to $9.14 billion for 2014-15 but its revenue increased only 1% in the second half while expenses rose 3%.
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