The new <a href="https://www.apartments.com.au/new-apartments/yarraville-green-42-stephen-street-yarraville-vic-3013">Yarraville Green</a> development in Melbourne's inner west is showing that landscaping can be just as influential as architecture, with buyers responding strongly to the garden-first approach adopted from the outset by developer Excelon Projects and the project's design team.

Excelon appointed Six Degrees Architects and landscape architects SBLA to work collaboratively on the development, with a brief to create "a sustainable, design-led building with a focus on community."

That approach has resonated with buyers. According to Next Chapter Director Tom Hirini, who is leading the sales campaign, the landscaped communal garden has become one of the project's defining features, alongside its boutique scale and European-inspired cluster housing concept.

Local downsizers, right-sizers and established families already living in Yarraville and surrounding suburbs have accounted for the majority of purchasers.

[smartcode_project:default project_id=144913 project_image_fid=297740]

Yarraville Green will comprise 53 homes, including apartments and townhomes, arranged around the shared central garden to maximise connections to the landscaped open space. Parking has been moved underground, allowing the ground plane to be dedicated to greenery, pedestrian movement and communal spaces.

The landscape extends well beyond passive planting. Productive garden beds, a pergola, communal gathering spaces, garden sheds and a pet wash have all been integrated into the masterplan, creating spaces designed to encourage everyday interaction between residents.

[smartcode_project:default project_id=144913 project_image_fid=297741]

The interiors continue Excelon's focus on craftsmanship, incorporating bespoke elements by Melbourne artisans including leadlight detailing by Adadaz, hand-turned timber hardware by Auburn Woodturning and blown-glass lighting by Ruth Allen.

Sustainability has also been embedded throughout the project, with Yarraville Green targeting an average 7-star NatHERS energy rating through passive design principles, rooftop solar servicing common areas and rainwater harvesting for landscape irrigation.

[smartcode_project:default project_id=144913 project_image_fid=297735]

Construction continues to progress at Yarraville Green, with structural works well underway and framing works approaching completion under builder Balmain &amp; Co. The project remains on track for completion in mid-2027.

Apartments at Yarraville Green are currently priced from $625,000, while townhomes start from $1.4 million.

[smartcode_project_cta:default project_id=144913]

Joel Robinson

Garden-led design drives buyer demand at Yarraville Green

National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.

Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.

[smartcode_project:default project_id=145922 project_image_fid=373556]

The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.

Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.

"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.

"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.

"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."

[smartcode_project:default project_id=145922 project_image_fid=373559]

Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.

The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.

[smartcode_project:default project_id=145922 project_image_fid=373583]

Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.

Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.

[smartcode_project:default project_id=145922 project_image_fid=373571]

Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.

Completion of Crest &amp; Walker is slated for late 2028.

[smartcode_project_cta:default project_id=145922]

Fortis expands Brisbane pipeline with launch of Crest & Walker in Newstead

The enormity of delivering a true skyscraper in Australia's new development market is often overlooked.

It has taken the best part of a decade since plans for Chevron One were first unveiled, but the 52-storey tower is now complete, with residents collecting their keys and moving into what has become one of the Gold Coast's most recognisable new landmarks.

Rising 127 metres above Chevron Island, Chevron One stands almost twice as high as any other building on the island. Its scale places it alongside the trio of towers at Jewel, arguably the last truly significant addition to the central Gold Coast skyline when they were completed around six years ago.

While there are several developments underway around a similar height to Chevron One, they are more concentrated within clusters of the highest towers in the city. The fact Chevron One sits within a developing precinct, looking back at the other high-rise developments in Surfers Paradise and Broadbeach, makes it a different proposition altogether. It will certainly become a reference point on the Gold Coast skyline.

[smartcode_project:default project_id=6515 project_image_fid=68833]

Developer Bensons Property Group is behind the 52-storey tower, which has just shy of 250 apartments, along with an exhaustive list of resident amenity spread across what is the largest development site ever assembled on Chevron Island.

The tower has been the talk of the town for years, says Ray White Projects Gold Coast agent Caitlin Rosenboom, who is selling the remaining apartments.

"People have been watching Chevron One go up for years," Rosenboom says, adding that many prospective buyers have been surprised by the scale of the views once they step inside.

"It's only when they walk through a completed apartment that they truly understand the position of the building," Rosenboom says.

"The views are jaw-dropping. Whether you're looking east over the ocean, across Surfers Paradise, along the river systems or out to the hinterland, every level offers something different but equally impressive."

[smartcode_project:default project_id=6515 project_image_fid=360215]

One of Chevron One's defining advantages is its location on the eastern side of Chevron Island on Stanhill Drive, a position which protects the views forever.

"There's only one row of houses between Chevron One and the water, and the height restrictions along the river means views from Chevron One can never be built out,"&nbsp;Rosenboom says.

While new apartment developments continue to emerge across the Gold Coast, Rosenboom says opportunities to secure a completed apartment with this level of outlook are becoming increasingly rare.

"The size of the site is something that would be incredibly difficult to replicate today," she says.

"That's allowed Chevron One to deliver the sort of amenity, open space and resident facilities that very few projects can offer. There are not many completed apartment buildings on the Gold Coast right now that can compete with the combination of scale, quality and amenity."

[smartcode_project:default project_id=6515 project_image_fid=68839]

There's around 2,000 sqm of amenity solely for the use of residents of Chevron One. Club One features a uniquely shaped swimming pool that mirrors the footprint of the building itself, set within a extensively landscaped gardens. There's also an indoor pool and spa, a fully equipped gym with a Pilates room, a yoga garden, a bookable private dining area and lounge that can host up to 30 people, and a 24-hour concierge service.

As for the buyers, Rosenboom is fielding enquiry from everywhere: Sydneysiders and Melburnians looking at the new and off-the-plan market following the changes in the Federal Budget, as well as those looking to relocate, through to South East Queenslanders seeking either a permanent home or a weekender bolthole.

"The Gold Coast lifestyle continues to resonate with people relocating from the southern states, and when they see the views and the quality of what's been delivered at Chevron One, it becomes very easy for them to understand the appeal," Rosenboom says.

A diverse mix of one, two and three-bedroom apartments remain available, with each offering "something a little different", be it the orientation and views, configuration, or level, to suit a wide variety of buyers.

The remaining apartments are ready to inspect in person, by appointment.

[smartcode_project_cta:default project_id=6515]

A decade in the making: Residents to move into Chevron One as construction wraps up

A general rule of thumb in new apartment developments is that the penthouses get the rooftop.

It's a formula that's become commonplace across Australia's apartment market. Residents might have access to a pool, gym or barbecue facilities on a dedicated lower level, but the most desirable outdoor spaces are typically reserved for the highest-priced homes at the top of the building.

<a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> has taken the opposite approach.

Rather than dedicating the rooftop to a handful of buyers, the Gold Coast developer has made it the centrepiece of its Flourish collection, creating expansive shared spaces from the best vantage point in the building.

The philosophy has reached its most ambitious expression at <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> in Palm Beach, where two rooftop precincts connected by a skybridge will deliver one of the most extensive lifestyle offerings seen in a residential apartment project on the Gold Coast.

[smartcode_project:default project_id=150017 project_image_fid=374053]

"We're seeing a clear move toward developments that offer more than just an apartment," Sherpa Group founder Christie Leet said.

"People want spaces that support how they actually live, whether that's working from home, staying active, or spending time with family and friends.

"That's where amenity becomes critical. It's not just about what's included, but how those spaces are designed to be used every day."

[smartcode_project:default project_id=150017 project_image_fid=374052]

The breadth of amenity has already attracted buyers across multiple demographics. Younger first home buyers have been drawn to Soleira's one-bedroom apartments, a product rarely delivered in Palm Beach, while families have responded to practical inclusions such as the shallow children's pool adjoining the main lap pool and the extensive communal recreation areas.

Instead of a single rooftop, Soleira delivers two distinct lifestyle zones.

[smartcode_project:default project_id=150017 project_image_fid=372547]

The southern rooftop has been dedicated to wellness, featuring a gym, yoga and Pilates studio, work-from-home facilities, a wellness centre, spa, and hot and cold plunge pools.

The northern rooftop focuses on recreation and entertaining, incorporating a heated resort-style pool, private dining rooms, pizza ovens, barbecues, a golf simulator, children's recreation areas, and what is expected to be the Gold Coast's first rooftop basketball court, which will also double as a squash court.

[smartcode_project:default project_id=150017 project_image_fid=374054]

Beyond the rooftops, Soleira will introduce 1,500 sqm of curated retail beneath the towers, creating one of Palm Beach's first genuinely mixed-use lifestyle precincts where cafés, restaurants and convenience retail become part of residents' everyday lives.

Sherpa has also retained management rights across the development, allowing it to oversee the long-term operation of the building through a 24-hour concierge model. The developer is also exploring additional revenue streams within the precinct aimed at helping offset ongoing body corporate costs for residents.

[smartcode_project:default project_id=150017 project_image_fid=370962]

While Soleira is the largest project Sherpa has delivered, the rooftop-first philosophy has been evolving for several years.

It began with <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>, the first project released under the Flourish brand. Rather than competing at the ultra-luxury end of the market with oversized half-floor and full-floor residences, Sherpa focused on creating lifestyle-driven apartments supported by resort-style shared spaces.

Amargo introduced more than 800 sqm of rooftop amenity, combining wellness facilities, heated pools, entertaining areas, cabanas, pizza ovens and private dining spaces into what was designed as an extension of residents' homes rather than a facility used only occasionally.

[smartcode_project:default project_id=146527 project_image_fid=366550]

That approach continued with Flourish Oasis, where the same amenity-led philosophy was refined into a more boutique development. Strong demand from Sherpa's growing VIP database saw much of the project sold before it reached the broader market, reinforcing buyer appetite for apartment communities centred around shared lifestyle experiences.

Flourish Amargo is slated for completion mid-way-through next year, with Oasis to be delivered by late 2027. Flourish Soleira is expected to complete in 2030.

[smartcode_project_cta:default project_id=150017]

Sherpa takes amenity to the sky as Flourish Soleira captures booming Palm Beach demand

As apartment living continues to evolve across Sydney's growth corridors, the quality and distribution of shared spaces is increasingly shaping how residents experience home. Rather than functioning as add-ons, amenities are being embedded into the daily rhythm of a building, supporting everything from quiet retreat to social interaction, often within a single vertical community.

At <a href="https://www.apartments.com.au/new-apartments/aeris-melrose-park-nursery-street-melrose-park-nsw-2114">Aeris</a> in Melrose Park, this approach is resolved through a layered amenity offering that unfolds from ground level through to its upper podium. Developed by <a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> in partnership with Hankyu Hanshin Properties, the project introduces 468 apartments across two towers and a mid-rise building, positioned at the highest point of the broader masterplan.

[smartcode_project:default project_id=426 project_image_fid=359199]

The amenity experience begins at street level, where two courtyards sit within a landscaped setting that connects residents to the wider network of parks and green spaces. These green spaces are not isolated pockets but part of a wider pedestrian network that links Aeris to the surrounding <a href="https://www.apartments.com.au/developments/melrose-park-nsw-2114">Melrose Park</a> precinct, including Central Park, future schools, and the Town Centre opening in July 2026. The result is a transition that moves from public to private without abrupt boundaries, allowing residents to pass through shaded, tree-lined environments before reaching the building itself.

Moving upward, the focus shifts to the level five podium, where the primary communal facilities are concentrated. This space brings together a 16-metre swimming pool, outdoor seating areas, and a communal BBQ zone arranged to take advantage of elevated outlooks. Seating is positioned beneath pergolas, creating pockets of shade that extend the usability of the space throughout the day. The pool edge aligns with views toward the wider district, reinforcing the sense of elevation that defines the project’s positioning.

In the adjacent building, this is complemented by quieter, more contemplative spaces, including an outdoor cinema set within the same level. Positioned to operate primarily in the evening, it introduces a different tempo to the shared environment, shifting from daytime activity to after-hours use without requiring separate zones.

[smartcode_project:default project_id=426 project_image_fid=360299]

The podium also accommodates an intimate private resident gym. Located on the lower levels, it gives residents convenient access to fitness facilities without leaving the building.

Above, the elevated podium sky deck extends the amenity offering, providing additional open-air spaces with elevated outlooks across the surrounding landscape. While more restrained in program, this upper level reinforces the project’s vertical progression, from ground-level greenery to elevated outlook, allowing residents to move between distinct spatial conditions within a single address.

This distribution of amenities reflects a deliberate response to how residents use space across the day. Sekisui House Australia Sales and Marketing Director Peter Kalaf points to the role these shared areas play in shaping buyer demand. Aeris has been conceived as more than a collection of apartments, with the podium pool, gym and outdoor cinema forming part of a broader lifestyle offering that extends the home beyond each individual residence.

[smartcode_project:default project_id=426 project_image_fid=360300]

What distinguishes Aeris is not the inclusion of these elements individually, but how they are arranged in relation to one another. Active, social, and passive spaces are layered vertically rather than separated, allowing residents to choose between them without leaving the building or moving far from their apartment. This proximity supports both routine use, such as a morning swim or evening workout, and more occasional gatherings, whether around the BBQ area or within the cinema setting.

The amenity design also sits within a broader framework of connectivity across Melrose Park. The Melrose Park Town Centre, anchored by Coles and Dan Murphys, features a mix of retail, dining, health and lifestyle offerings, bringing everyday convenience closer to residents. By the end of the year, more than five hectares of parks and open space, equivalent to around seven football fields of green space on residents' doorstep, will further enhance the precinct, allowing the internal facilities at Aeris to operate as an extension of the wider neighbourhood rather than a substitute for it.

Construction at Aeris continues to gather momentum, with ground floor slabs expected to be completed in late 2026 before the first sections of the buildings begin to rise above ground.

[smartcode_project_cta:default project_id=426]

Elevated amenity anchors daily life at Aeris, Melrose Park

Housing Affordability

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EXPERT OBSERVER
As housing affordability begins to impact more Australians, it’s crucial that we understand what our government is doing to address the rising cost of housing. A return to government provides continuity around some policy items as well as a platform for new initiatives.  
It’s important to note that housing affordability affects people differently and the government will need a range of approaches in order to help more Australians. Here are some of the Coalition Government’s policy items around housing affordability – both existing and new.
The most publicised policy lauded as an attempt to lower housing prices and address housing affordability by getting more buyers into the market has been the launch of the First Home Loan Deposit Scheme, which is capped at 10,000 borrowers.
This scheme allows some borrowers to bring forward their purchase of a home, without having to pay mortgage insurance and using a deposit as low as 5 per cent. While this policy will have a significant impact on housing affordability for some buyers it’s not without risk.
Borrowers need to be careful that they can repay the loan when interest rates rise and that they don’t get themselves into financial stress by taking on too much debt, lured by a scheme that may not make housing cheaper or more affordable.
The government’s announcement of the Hon Michael Sukkar MP as Minister for Housing – while not a policy as such – is good news for housing affordability. We now have a portfolio dedicated to housing, which we haven’t seen in recent governments. 
It certainly helps that Sukkar is also our Assistant Treasurer. By combining these roles, we see a potential acknowledgement that housing plays an important economic role in Australia, for individuals but also for the economy.
The Australian Housing and Urban Research Institute recently commissioned work around this issue, as have others. So there’s a growing awareness that housing is a much broader economic influence. 
The appointment of the Hon Luke Howarth MP as Australia’s first Assistant Minister for Community Housing and Homelessness is particularly to be applauded. It may signal a focus on the crucial roles played by community housing providers (CHPs) and specialist homelessness services in the housing affordability puzzle.
In its previous term, the Government launched the National Housing Finance and Infrastructure Corporation (NHFIC). This entity enables CHPs to access loans at a discounted rate in order to build affordable and social housing.
It’s encouraging to see the NHFIC is being continued in this term. Yet, while allowing easier borrowing for CHPs is a positive step, this won’t make it easier for them to compete for land on the private market.
That’s where the Government’s recent announcement that more Commonwealth land, including defence land will be released for housing development holds great promise for CHPs and Australians who rely on access to affordable housing. 
If the government can release land for housing development with a higher proportion set aside for affordable housing – up to 30 per cent – then more Australians will be able to access more affordable rental properties.
It’s crucial that this is required by the Commonwealth when they’re selling the land. It has to be part of the release – as opposed to simply selling to the highest bidder in the market. Minister Sukkar has already flagged that he is expecting sales of Commonwealth land to include social and/or affordable housing – a very welcome direction.
This requirement would also help to forge more partnerships between CHPs and developers. By working together to develop more affordable and market housing on the same site – through tenure blind design to ensure all housing is built to the same quality – this initiative could have a very real impact on areas experiencing affordable housing shortages.
We know that supporting people into great housing helps them stabilise their lives and means we save on all sorts of costs further down the line. These initiatives are promising and to be encouraged if the Government is committed to making housing more affordable. 
Another policy to be applauded is the government’s City Deals initiative, a three-way arrangement between Federal Government, the relevant State Government and local government in an area that’s in need of economic development.
It’s important that the City Deals recognise housing as a critical piece of infrastructure in the same way as roads and hospitals. This is another policy level which could help to address housing affordability in earnest.
Finally, in 2018 the government launched The National Housing and Homelessness Agreement, which requires all signatory states and territories to have their own housing strategy. This act alone shows we’re starting to see a more combined effort on housing, which is essential if we’re to ensure all Australians can live in safe and affordable housing. 
Rachel Trigg is a director at Urbis.
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jrobinson-rf4aSBido9

Housing affordability – the government’s stance and implications for all Australians

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GUEST OBSERVATION
Housing in Australia is broken. Across the country, <a href="https://anglicare-ras.com/" target="_blank">only 2% of private rentals are affordable for a person on the minimum wage</a>. Less than 1% are affordable for a single person on the pension. There are 650,000 households who can’t afford housing at market rates in Australia right now and this figure is projected to reach <a href="https://cityfutures.be.unsw.edu.au/documents/522/Modelling_costs_of_housing_provision_FINAL.pdf" target="_blank">over a million by 2036</a>.
The abject failure to meet the housing needs of lower-income households is partially due to <a href="https://theconversation.com/australia-needs-to-reboot-affordable-housing-funding-not-scrap-it-72861" target="_blank">decades of underfunded social housing</a> by government. Since the 1960s, the proportion of public housing in Australia has almost <a href="https://www.propertyobserver.com.au/https://www.tandfonline.com/doi/abs/10.1080/08111149608551610" target="_blank">halved from 8% </a><a href="https://www.aihw.gov.au/reports/housing-assistance/housing-assistance-in-australia-2018/contents/social-housing-dwellings">to 4.6%</a> of total housing stock.
Scott Morrison’s newly re-elected government made no election statements relevant to social housing. That suggests this situation is unlikely to change soon.
Leaving it to the private sector
As governments have stepped away from directly delivering affordable housing, more emphasis has been placed on the private sector and market forces to deliver this social good. Internationally, policies like <a href="https://www.ahuri.edu.au/policy/ahuri-briefs/Understanding-inclusionary-zoning" target="_blank">inclusionary zoning</a> require developers to provide a portion of affordable housing in return for planning permission.
For example, in San Francisco inclusionary zoning has been in place since 1992. This policy has <a href="http://default.sfplanning.org/legislative_changes/inclusionary_affordable_requirements/Section_415_amendments_Case_Repost_adoption-042717_FINAL.pdf" target="_blank">generated 4,600 permanently affordable units since 2002</a>. Developers received no incentives in return for being required to deliver this housing.
<a href="https://www.churchilltrust.com.au/media/fellows/Hodyl_L_2014_Social_outcomes_in_hyper-dense_high-rise_residential_environments_1.pdf" target="_blank">In Vancouver</a>, developers wishing to build above a 3:1 plot ratio (for example, three storeys on 100% of the site, or six storeys on 50% of the site) in the CBD must provide social housing or other community amenities.
In contrast, the state of Victoria has very few regulations that encourage or enforce affordable housing or other community benefits in return for development permissions. The rezoning of Fisherman’s Bend for development is <a href="https://www.theage.com.au/national/victoria/lowend-buyers-shut-out-of-fishermans-bend-20141101-11fh5p" target="_blank">one particularly egregious example</a> in Melbourne.
Victoria’s plan for negotiations
In 2018, the Victorian government took some initial steps towards involving private developers in providing affordable housing. It <a href="https://www.planning.vic.gov.au/policy-and-strategy/affordable-housing" target="_blank">changed the Planning and Environment Act 1987</a> to designate affordable housing as a valid planning objective and created a mechanism for negotiated affordable housing agreements.
Local councils can now ask for affordable housing as part of planning approval processes. While these negotiations will inevitably generate a wide range of outcomes through a variety of arrangements, one likely permutation is shown below.
The local council and developer will enter into a negotiation and decide on a “reasonable” affordable housing contribution. In this instance, the developer will sell, “gift” or lease a number of units to a not-for-profit housing provider, which will manage the units and ensure eligible, low-income households occupy the home.
<a href="https://images.theconversation.com/files/274240/original/file-20190514-60560-1xpbo4n.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/274240/original/file-20190514-60560-1xpbo4n.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
A negotiated path to delivering affordable housing. Author provided
The difference between many international examples and Victoria is that these negotiations are voluntary. The argument is that voluntary negotiations avoid a one-size-fits-all solution and allows for flexibility and creativity in negotiations.
On the other hand, <a href="https://rsa.tandfonline.com/doi/abs/10.1080/02697459.2015.1008793#.XOd5qogzaUk" target="_blank">international research</a> suggests voluntary programs often generate uncertainty and inequitable outcomes. They tend to generate less affordable housing than mandated systems. And they do so in <a href="https://www.lincolninst.edu/sites/default/files/pubfiles/thaden_wp17et1_0.pdf" target="_blank">more opaque ways</a>.
Think about it: why would a developer voluntarily give up potential profit by selling or renting a property at a below-market rate? Such contributions would need to be enforced and/or incentivised.
What can negotiation theory tell us?
<a href="https://journals.sagepub.com/doi/abs/10.1177/0739456X07311074" target="_blank">Negotiation research</a> can help us to understand the likely outcomes of these arrangements. It offers insights into stakeholder interests, the potential for mutual gains, and access to knowledge.
Stakeholder interests
Interests are the underlying values and priorities that motivate stakeholders’ demands or positions in negotiations. Interests in this context relate to the degree to which state government, local councils, or developers feel it is their responsibility to provide affordable housing. It relates to views on “valid” profit margins for developers and concerns about reputation.
It also relates to the priorities and strategies of the community housing providers, who are most likely to own and manage the housing delivered through these negotiations.
We know most developers don’t feel it is their responsibility to deliver affordable housing. Similarly, while some councils have <a href="http://www.portphillip.vic.gov.au/councils-role-affordable-housing.htm" target="_blank">explicit statements on affordability</a>, this is not the case across Victoria.
Mutual gains
In places like San Francisco where affordable housing is required in all developments over a certain size, these requirements are built into feasibility calculations from the outset. Therefore, no incentives are included.
This also creates an even playing field for all developers in the consideration of land and development. As there is no negotiation or incentive that could shift the profit margin, the required approach places everyone on the same starting line. Further, the cost considerations are the same for all, when considering the purchase of a site and undertaking an analysis of the feasibility of a proposed project.
Voluntary negotiations only work when the parties at the negotiating table are interdependent – they must have something to gain and something to contribute in the negotiation or they wouldn’t be there. In places where negotiations are voluntary, incentives are often “bundled together” as sweeteners to offer to developers in the negotiation process. Possible incentives include car park waivers, increases in permissible developable area (i.e height or density bonuses) and fee reductions or waivers.
In Victoria, key incentives like allowing an increase in the floor area of a development – so-called <a href="/news">floor area uplift</a> – are difficult to implement in most local government areas. And expedited planning approvals are politically contentious and have limited impact on developers.
Inconsistency between councils may also allow developers to “shop around”. They are likely to avoid local government areas with a reputation for pursuing contributions.
As negotiations take place across Victoria the capacity for mutual gains for local communities and developers will be a key component in deciding how much affordable housing is provided and at what cost.
Access to knowledge
In negotiations, money and knowledge is power. Stakeholders are likely to hide or manipulate information in negotiations to support their own arguments and interests. This is particularly likely when there is little established trust between parties. Not only does this lead to undemocratic decisions made in a “black box”, it also creates opportunity for exploitation.
Negotiations will centre on trade-offs to achieve economically feasible developments that also include affordable housing. To engage in such discussions, a high degree of knowledge about development economics is required to allow for informed debate. While this is the bread and butter for developers, local councils are often far less resourced to engage in these discussions. There is work to be done in building the capacity of local councils in this area.
Acknowledging this, the authors of this article have <a href="https://msd.unimelb.edu.au/research/projects/current/transforming-housing/affordable-housing-tools/affordable-housing-calculator" target="_blank">built a calculator </a> to help communicate many of the basic premises behind development economics and affordable housing trade-offs.
Have your say on affordable housing
We don’t know yet enough about interests, mutual gains or access to knowledge to fully understand the landscape of this change to Victorian housing policy. And that is why we are surveying the affordable housing industry to gather this feedback.
If you are a private developer, local or state government representative with involvement in residential development or affordable housing policy, a not-for-profit housing provider, or consultant to the housing industry, then we want to hear from you.
Please <a href="https://melbourneuni.au1.qualtrics.com/jfe/form/SV_br4iiTkcQ0CYCnr" target="_blank">click here</a> to take the survey.<img src="https://counter.theconversation.com/content/116829/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
Katrina Raynor, Postdoctoral Research Fellow, Transforming Housing Project, University of Melbourne
Georgia Warren-Myers, Senior Lecturer in Property
Matthew Palm, Postdoctoral Research Fellow, University of Toronto
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/if-its-voluntary-for-developers-to-make-affordable-housing-deals-with-councils-what-can-you-expect-116829" target="_blank">original article</a>.
Main photo: The City of Port Phillip is unusual in having an explicit position on the council’s role in providing affordable housing. City of Port Phillip
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j.ballantyne1990-6AQqhLzZaK

If it’s voluntary for developers to make affordable housing deals with councils, what can you expect?

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Housing affordability is now at its best levels since 2016, the inaugural Housing Affordability Report from CoreLogic and ANZ has found.
The report, produced with figures from the December 2018 quarter, has noted housing affordability over the last two years has been improving much faster than it had declined over the past decade.
Sydney is described as being "overwhelmingly" the least affordable market to buy in, the report notes, followed by Melbourne. Darwin is the most affordable capital city.
Regional New South Wales is also the least affordable regional market across the country due to the strong value growth over recent years.
For the first time, Hobart is the least affordable capital city to rent.
To enlarge, <a href="https://www.propertyobserver.com.au/images/2019/6/6/Affordability1.jpg" target="_blank">click here</a>.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/6/Affordability1.jpg" alt=""> 
CoreLogic's head of research for Australia Cameron Kusher says the end of the housing downturn has had to be adjusted.
“The recent drop in property values follows a long period where prices increased at a much faster pace than household incomes," Kusher noted.
“We predict that price falls will settle later this year, followed by modest price growth starting from 2020,” Mr Kusher said.  
Kate Gibson, ANZ's home owners lead, says some areas it is more affordable to buy than rent. 
“Buying a home is an aspiration for many Australians and for the first time, we’re seeing suburbs and towns in every state where it is more affordable to buy than rent.
“This shift, combined with record low interest rates, is driving more first home buyers to look at entering the market.
"For the first time in fifteen years most buyers are not chasing a rising market,” Gibson said.
Albury in regional New South Wales is one of the areas where it is more affordable to buy than rent.
Some 26.8% of household income goes on a rental home, however to service the repayment of an 80% LVR mortgage is only 25.4% of household income.
Broken Hill and the Far West area has one of the biggest gaps between rental and mortgage repayments.
Some 25.9% of a household income goes on a standard rental, whereas only 9.2% of household income would go on servicing a mortgage.
In regional Victoria, Glenelg and the South Grampians cost 24.3% of household income to afford to rent, as opposed to the 19.4% repayments on a mortgage.
It is cheaper in Gippsland East, Latrobe Valley, Loddon, Maryborough, Mildura, Moira, Murray River, Shepparton and Wellington to repay a mortgage than to rent.
There are no areas in Sydney and Melbourne's CBD ring that it is cheaper to pay off a mortgage than rent, however there are a number in Brisbane.
Beenleigh, Caboolture Hinterland, Ipswich Hinterland and the Springwood Kingston region are all more affordable to have a mortgage than rent.
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Cheaper to buy than rent as housing affordability back to 2016 prices: CoreLogic/ANZ report

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GUEST OBSERVATION
Growing numbers of Australians are <a href="https://theconversation.com/moving-on-from-home-ownership-for-generation-rent-71628" target="_blank">locked out of home ownership</a> or struggling in insecure and <a href="https://www.anglicare.asn.au/our-work/research-reports/the-rental-affordability-snapshot" target="_blank">unaffordable private rental</a> markets. There are concerns about <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-05-02/negative-equity-on-the-rise-as-house-prices-continue-to-fall/11061780" target="_blank">home owners drowning in debt</a>. And for lower-income earners, high housing costs mean that paying for food, energy bills and health costs is an ongoing challenge.
It is time for a new way of talking about housing in Australia. The housing crisis is quickly turning into a crisis of care.
We call on the newly re-elected Morrison government and new Housing Minister Michael Sukkar to recognise that the value of housing is not just economic. Housing is an infrastructure of care. Australian governments need to ask: is this a housing system that cares?
A location for essential care
Houses are hubs of care practices and relations. They are places of everyday care, of cooking, cleaning and washing, of care between household and family members. Houses are where we care for children, elders, partners and ourselves.
Houses are also anchors for community and neighbourhood-based care. We keep an eye on neighbours’ homes, support older neighbours to <a href="https://theconversation.com/for-australians-to-have-the-choice-of-growing-old-at-home-here-is-what-needs-to-change-91488" target="_blank">age in place</a>, and care for pets.
This care work is what keeps us alive.
Even though care is not always done well, it is an essential practice that is connected in fundamental ways with housing. Without housing it can be very difficult to meet basic needs.
The care work of housing
But housing is more than just a place where care takes place. Housing systems – through housing policy, markets and design – organise the distribution of care and the ability of people to give and receive care.
<a href="https://www.tandfonline.com/doi/abs/10.1080/02673037.2019.1612038" target="_blank">In our research</a> this drives us to ask: how does the housing system support or limit the capacity of households to care?
We argue that housing is a care infrastructure and call for this understanding of housing to be at the centre of housing reform.
Home owners benefit
In Australia we value housing as an individual investment and asset. The <a href="https://rgs-ibg.onlinelibrary.wiley.com/doi/pdf/10.1111/geoj.12213" target="_blank">economic values of housing</a> (how much we can buy, sell or otherwise leverage housing for) are at the heart of how housing is usually discussed.
For affluent households housing markets can work very well as a care infrastructure. This is because these households can more readily afford housing that meets household care needs. They are also more able to invest in housing to cover the costs of care in later life and to support the needs and ambitions of children. For home owners housing is a private welfare net for funding care needs.
Australian housing and related policies create and reinforce the value of home ownership. Subsidies for first home owners, the proposed First Home Loan Deposit Scheme (<a href="https://www.liberal.org.au/latest-news/2019/05/26/ministry" target="_blank">which will be a focus of efforts by the new housing minister)</a>, preferential treatment for owner occupation in pension tests and tax breaks for investor landlords underpin the value of home ownership as an infrastructure of care.
However, for the growing numbers of households not in a position to own a home the picture is less rosy. In many cases housing becomes an infrastructure that inhibits access to necessary care. As <a href="https://theconversation.com/home-ownership-foundations-are-being-shaken-and-the-impacts-will-be-felt-far-and-wide-91664" target="_blank">increasing numbers of households rent for longer periods</a>, we risk a housing system that only cares for some.
Housing affordability
Housing affordability is a central concern. Lower income earners have less ability to choose to live in places that are well serviced or where family-based care networks are located. Less affluent areas often have <a href="https://theconversation.com/down-and-out-in-australia-the-new-way-to-define-poverty-1812" target="_blank">less access</a> to public and private care services like doctors and other specialists.
Housing affordability also shapes the ability to afford other care resources like quality food and electricity. Households that face high housing costs are often forced to compromise in these areas.
In <a href="https://rgs-ibg.onlinelibrary.wiley.com/doi/full/10.1111/tran.12306" target="_blank">Emma’s</a> and <a href="https://theconversation.com/hunger-in-the-lucky-country-charities-step-in-where-government-fails-90017" target="_blank">other</a> <a href="https://www.publish.csiro.au/book/7269/" target="_blank">related research</a> older retirees in the private rental market depended on local food charities for nutritious food. And in winter they restricted their use of heating to avoid bill blow-outs.
There are also connections between paid work, caring capacity and housing affordability. High-cost housing markets can drive people to work longer hours and multiple jobs, or require multiple income earners within a household. This can reduce the ability of individuals and households to meet domestic care responsibilities.
<h2>Tenure and care</h2>
Non-home owners also face restrictions around their use of private rental properties. For a start, <a href="https://theconversation.com/rental-insecurity-why-fixed-long-term-leases-arent-the-answer-73114" target="_blank">rental housing is notoriously insecure</a>. There are also <a href="https://theconversation.com/for-renters-making-housing-more-affordable-is-just-the-start-76263" target="_blank">restrictions</a> on the ability of renters to make a house into a home.
Private rental legislation typically does not require landlords to agree to property modifications to meet the needs of a person with disability or ageing body, even when tenant-funded.
Women in <a href="https://rgs-ibg.onlinelibrary.wiley.com/doi/full/10.1111/tran.12306">Emma’s research</a> reported losing bonds to cover costs associated with removing modifications that had been agreed to during a tenancy. In <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/1745-5871.12058">Kathy’s research</a>, the fear of eviction meant private renters found it difficult to ask for and be granted repairs that would make their homes habitable. They endured leaking roofs and mouldy walls that made housing unsuitable for meeting basic care needs.
Such policies reinforce the value of owned homes as powerful care infrastructures for home owners, while undermining the caring capacity of households that don’t own their homes. While social housing <a href="https://search.informit.com.au/fullText;dn=763478754874546;res=IELHSS" target="_blank">enhances the caring capacity of many households</a>, social housing is <a href="https://theconversation.com/australia-needs-to-reboot-affordable-housing-funding-not-scrap-it-72861" target="_blank">chronically underfunded and undersupplied</a>.
Diversity helps meet different needs
As growing numbers of households find themselves locked out of home ownership and face difficulties securing affordable housing in our <a href="https://www.anglicare.org.au/about-us/research-advocacy/advocacy/rental-affordability-snapshot/" target="_blank">expensive private rental markets</a>, Australia badly needs housing reform.
The care work of housing must be at the centre of housing policy. The new government and minister for housing must ask: first, is this a housing system that cares? And, second, who does this housing system care for?
Historically, this question has been answered with calls to increase home ownership. But there is value in a diverse housing system because different households have different needs.
Further, those who invest in housing are dependent on the people who will rent that housing. These people in turn have the right – and need – for housing that supports their care needs. Affordable housing is only the starting point.<img src="https://counter.theconversation.com/content/117311/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/emma-power-250930" target="_blank">Emma Power</a>, Senior Research Fellow, Geography and Urban Studies, <a href="http://theconversation.com/institutions/western-sydney-university-1092" target="_blank">Western Sydney University</a> and <a href="https://theconversation.com/profiles/kathleen-mee-739854" target="_blank">Kathleen Mee</a>, Associate Professor of Geography, <a href="http://theconversation.com/institutions/university-of-newcastle-1060" target="_blank">University of Newcastle</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/is-this-a-housing-system-that-cares-thats-the-question-for-australians-and-their-new-government-117311" target="_blank">original article</a>.
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Is this a housing system that cares? That’s the question for Australians and their new government

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Happy Valley has topped a survey of Adelaide's liveability and affordability.
The lower median house prices of Adelaide’s north-east has helped boost the first home buyer appeal of suburbs including Modbury North, St Agnes and surrounding areas, while to the south, proximity to the city and low crime rates have helped drive Glenalta and nearby Hawthorndene to the top of the list, People’s Choice Credit Union Chief Executive Officer Steve Laidlaw said.
“It’s one thing to be able to afford to live somewhere – you also have to want to live there,” Laidlaw said.
“For the first time, People’s Choice has looked at Adelaide’s suburbs to determine whether a couple on average incomes are likely to be able to get finance for a median-priced home, and then assessed those suburbs for their affordability and their liveability.
“Liveability can mean different things to different people, so we’ve looked at abroad range of factors that go behind the costs of buying a home: public transport links, driveability, crime rates, schools and economic prospects.
“The first results show the real estate market in a different way. Of course, we can’t find your perfect home – that’s up to you – but People’s Choice can give youa better idea of where you may find it.”
<a href="https://www.propertyobserver.com.au/images/2019/4/16/peoples%20choice%201%20.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/16/peoples%20choice%201%20.jpg" alt="">
Source: People's Choice of Housing 
While the suburb of Adelaide captures the highest rank for public transport links, its high median house price puts its beyond the scope of many couples on ordinary incomes, pushing it out below the top 100 suburbs identified by the People’s Choice of Housing.
Other suburbs such as Golden Grove have reached into the top 50 for the first time due to extensive bus connections to the city and recent changes in median home prices.
The April issue of the People’s Choice of Housing is available for <a href="https://peopleschoicecu.com.au/housing-report" target="_blank">download here</a>. 
The next edition will be released in October 2019.
<a href="https://www.propertyobserver.com.au/images/2019/4/16/peoples%20choice%202.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/16/peoples%20choice%202.jpg" alt="">
Source: People's Choice of Housing  
Photo: Windebanks Rd, Happy Valley and Aberfoyle Park, South Australia <a href="https://www.propertyobserver.com.au/https://creativecommons.org/licenses/by-sa/4.0" target="_blank">CC BY-SA 4.0</a>
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Happy Valley tops Adelaide housing for liveability and affordability

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GUEST OBSERVATION
Housing affordability for new mortgage borrowers in Australia, which improved over the year to March 2019, will continue to improve over the next 12 months, because of declining housing prices, according to Moody's Investor Service.
More affordable housing reduces the credit risks of newly originated mortgages, which is positive for new residential mortgage-backed securities (RMBS) backed by such loans.
The latest report noted the proportion of household income needed to meet repayments on new Australian mortgages - our measure of housing affordability - declined to an average 26.5% in March 2019, from 28.7% a year earlier.
Affordability improved because housing prices declined, while average incomes also increased modestly. We expect housing prices to continue to decline moderately over the next year, driving further improvements in housing affordability.
It noted that housing affordability improved in most cities. Housing affordability improved in Sydney, Melbourne, Brisbane and Perth over the year to March 2019, but deteriorated in Adelaide. The biggest improvement in housing affordability was in Sydney, where housing prices declined 10.7% over the year to March.
Sydney is the most sensitive to housing price, income and interest rate changes. We tested the impact of changes to housing prices, incomes and interest rates on housing affordability. Of all Australian capital cities,
Sydney is the most sensitive to changes in the three variables.
Housing affordability for new mortgage borrowers in Australia, which improved over the year to March 2019, will continue to improve over the next 12 months, because of declining housing prices.
More affordable housing reduces the credit risks of newly originated mortgages, which is positive for new RMBS backed by such loans.
Over the year to March 2019, the proportion of household income needed to meet mortgage repayments - our measure of housing affordability - declined on average in Australia, driven in large part by declining housing prices.
Australian households with two income earners taking out an 80% loan-to-value (LTV) mortgage needed an average 26.5% of their monthly income to meet monthly mortgage repayments in March 2019, down from 28.7% in March 2018 and below the 10-year average of 28.7%.
Median housing prices declined by 6.5% over the year to March 2019, while incomes increased an average 2.8%, improving the affordability of new mortgages. Average headline mortgage interest rates increased slightly to 5.4% in March 2019 from 5.2% a year earlier, but this was outweighed by declining house prices and rising incomes.
We expect housing prices to continue to decline moderately over the next year, reflecting reduced credit supply by the banking sector and a seeming reduction in demand from households.
Accordingly, we expect housing affordability to continue to improve over the next year.
Housing affordability improved in Sydney, Melbourne, Brisbane and Perth over the year to March 2019, but deteriorated in Adelaide.
In Sydney, the proportion of household income needed to meet mortgage repayments declined 4.7 percentage points to 33.2% over the year to March 2019, the biggest improvement of any capital city, though Sydney remains the least affordable city for housing in Australia.
Median housing prices declined 10.7% in Sydney over the year to March 2019. We expect housing prices in Sydney to continue to decline and for housing affordability in the city to continue to improve over the next year.
In Melbourne, the proportion of household income needed to meet mortgage repayments declined to 29.4% in March 2019 from 31.6% a year earlier. Housing prices in Melbourne declined 5.3% over the year to March 2019, while average weekly incomes increased 3.2%. We expect housing prices in Melbourne to continue to decline over the next year, which is positive for housing affordability.
In Brisbane, the proportion of monthly income needed to meet monthly mortgage repayments declined by 1.3 percentage point to 22.5% over the year to March 2019. Housing prices declined 1.2% over the year.
In Perth, the proportion of income needed for mortgage repayments declined, albeit marginally, to 19.4% in March 2019, from 19.7% a year earlier. Perth is the most affordable capital city for housing in Australia.
In Adelaide, the proportion of household income needed to meet mortgage repayments increased moderately by 1.3 percentage point to 23.1% over the year to March 2019. Median housing prices in the city increased 4.6% over the year.
On average across Australia and in each capital city, housing affordability in March 2019 was better than the respective 10-year averages (Exhibit 1).
<a href="https://www.propertyobserver.com.au/images/2019/4/15/exhibit%201%20.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/15/exhibit%201%20.jpg" alt=""> 
The affordability of both houses and apartments improved in all cities except Adelaide, where the affordability of both types of dwelling deteriorated over the year to March 2019 (Exhibit 2).
<a href="https://www.propertyobserver.com.au/images/2019/4/15/exhibit%202a.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/15/exhibit%202a.jpg" alt="">
 
<a href="https://www.propertyobserver.com.au/images/2019/4/15/exhibit%202b.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/15/exhibit%202b.jpg" alt=""> 
Sydney most sensitive to housing price, income and interest rate changes
We tested the impact of changes to housing prices, incomes and interest rates on housing affordability. Of all Australian capital cities, Sydney is the most sensitive to changes in the three variables.
Sensitivity test 1: Housing price changes
Our sensitivity test shows that for every 10% change in housing prices, the percentage of household income needed to meet mortgage repayments changes by 2.6 percentage points on average in Australia.
In Sydney, the least affordable city, a 10% change in housing prices results in a 3.3 percentage-point change in the percentage of household income needed to meet mortgage repayments, the most of any Australian city.
Exhibit 3 shows the impact on housing affordability of (1) a 10% increase in median housing prices and (2) a 10% decrease in median housing prices.
<a href="https://www.propertyobserver.com.au/images/2019/4/15/exhibit%203.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/15/exhibit%203.jpg" alt=""> 
Sensitivity test 2: Income changes
Our sensitivity test shows that if average household income decreases by 5%, the percentage of household income needed to meet mortgage repayments increases by 1.4 percentage point on average across Australia. If average household income increases by 5%, the percentage of household income needed to meet mortgage repayments decreases by 1.3 percentage point.
In Sydney, a 5% decrease in household income results in a 1.7 percentage point increase in the percentage of household income needed to meet mortgage repayments, the most of any Australian city. A 5% increase in household income in Sydney results in a 1.6 percentage-point decrease in the percentage of household income needed to meet mortgage repayments.
Exhibit 4 shows the impact on housing affordability of (1) a 5% decrease in household income and (2) a 5% increase in household income.
<a href="https://www.propertyobserver.com.au/images/2019/4/15/exhibit%204.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/15/exhibit%204.jpg" alt=""> 
Sensitivity test 3: Interest rate changes
Our sensitivity test shows that for every 0.25 percentage point change in mortgage interest rates, the percentage of household income needed to meet mortgage repayments changes by 0.7 percentage point on average across Australia.
In Sydney, a 0.25 percentage point change in interest rates results in a 0.8 percentage point change in the percentage of household income needed to meet repayments, the most of any Australian city.
Exhibit 5 shows the impact on affordability of (1) a 0.25 percentage point interest rate increase, (2) a 0.25 percentage point interest rate decrease and (3) mortgage interest rates rising to the 10-year average of 6.1%.
<a href="https://www.propertyobserver.com.au/images/2019/4/15/exhibit%205.jpg" target="_blank">Click here </a>to enlarge: 
 <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/15/exhibit%205.jpg" alt="">
Housing prices, income and interest rates drive affordability
We measure housing affordability based on three inputs — median housing prices, average household income and standard variable mortgage interest rates (Exhibit 6).
<a href="https://www.propertyobserver.com.au/images/2019/4/15/exhibit%206.jpg" target="_blank">Click here</a> to enlarge: 
 <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/15/exhibit%206.jpg" alt="">
Median housing sales prices decreased
Median housing prices decreased by 6.5% on average across Australia over the year to March 2019 (Exhibit 7). Median prices declined in Sydney (-10.7%), Melbourne (-5.3%), Perth (-5.3%) and Brisbane (-1.2%). Median prices increased in Adelaide (+4.6%).
<a href="https://www.propertyobserver.com.au/images/2019/4/15/exhibit%207.jpg" target="_blank">Click here </a>to enlarge: 
 <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/15/exhibit%207.jpg" alt="">
Household income increased
Average weekly incomes increased moderately by 2.8% on average across Australia over the year to November 2018 (Exhibit 8).2 Incomes increased in all cities except Perth.
<a href="https://www.propertyobserver.com.au/images/2019/4/15/exhibit%208.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/15/exhibit%208.jpg" alt=""> 
Alena Chen is Vice President at Moody’s.
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Housing affordability rises in Australia as prices continue to fall: Moody's Alena Chen

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EXPERT OBSERVATION
While the budget speech referenced housing a few times, in the sense that falling housing prices represent a downside risk to budget forecasts, there was in fact very little in the budget directly focussed on the housing sector. With the performance of the housing and household sector so critical to the Government achieving their forecasts and planned surplus, there is certainly an argument that more could have been provided in the budget to support these sectors.
<ul>
<li>The Government expects wages to rise only modestly, with growth forecast to rise from 2.1% to 2.5% in 2018/19 before ticking higher to 2.75% in 2019/20, supported by lower unemployment and jobs growth of around 2% per annum. Based on these forecasts, and their potential to undershoot as they have over previous years, we can’t rely on a material improvement in household incomes to boost spending and stave off a higher rate of saving.</li>
<li>On the positive side, household income and consumption should find some support from personal income tax cuts for low to middle income workers (those earning $126,000 or less) and cost of living relief to pensioners. With income growth slow additional cash in people’s pockets each week is positive and could be moderately stimulatory from a consumer expenditure perspective. For example, those that earn between $48,001 and $90,000 will gain an additional $1,080 over a year.</li>
<li>The Treasurer reiterated that housing affordability was a key priority for the Government, but it looks like the Government is content to see housing affordability improve ‘organically’ via lower housing prices that could act as a contagion to weaker household consumption and a sharper than expected fall in residential construction. While this may seems a bit passive, it’s clear that housing affordability has improved substantially since the last budget due to lower housing values in the most expensive cities as well as the lowest mortgage rates since the 1960s and a subtle rise in incomes. </li>
</ul>
Arguably, the state and local governments have more ability to tackle housing affordability than the federal government, with factors such as stamp duty payments, allocation of the first home buyers grant, land release, development charges and town planning all falling outside of the federal government arena. 
Perhaps the most substantial area of the budget related to housing is a reiteration of the strong infrastructure spend and the City Deals, which will provide stimulus for specific regions of the country and help to cushion the downturn in residential construction. 
Infrastructure spending is up 25% on last year, with a record level $100 billion spend over the next ten years. While the allocation of this spend is short on detail (likely to be trickle fed to the market via election announcements), it seems much will be dedicated to improving transport infrastructure in an effort to ease congestion and better manage population growth. Major projects included funding of $2 billion for the fast rail between Melbourne and Geelong, a quadrupling of the urban congestion fund to $4 billion and detailed assessments for additional fast rail corridors. These additional fast rail corridors are: Sydney to Wollongong, Sydney to Parkes, Melbourne to Albury/Wodonga, Melbourne to Traralgon and Brisbane to the Gold Coast. Sticking with a public transport theme, the Budget committed $500 million from the Urban Congestion Fund to provide better park and ride facilities.
The City Deals are nothing new, however the budget reaffirms commitment of $5.7 billion of funding delivered in Townsville, Launceston, Western Sydney, Darwin, Hobart, Geelong and Adelaide, as well as the announcement of a recent deal for South East Queensland. The Government has also announced a roll out of regional deals for Barkley NT, Hinkler Qld and Albury Wodonga NSW/Vic.
No doubt the strong infrastructure spend and investment in improving the key areas of Australia’s cities will be stimulatory for housing markets that benefit from the improvements. Tackling congestion and improving access to essential amenities should indirectly support housing affordability by making the most affordable regions of the cities more accessible and liveable. Questions remain as to whether $100 billion is actually enough to tackle the infrastructure deficit however, expenditure up materially which is encouraging.
Overall, the Budget didn’t really focus on housing however, some of the associated issues such as household incomes and infrastructure investment are being addressed which is positive to see.
TIM LAWLESS heads up the CoreLogic RP Data research and analytics team and can be contacted<a href="https://blog.corelogic.com.au/author/timlawless/" target="_blank"> here.</a>
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What does the budget mean for Australia’s housing sector? CoreLogic's Tim Lawless

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GUEST OBSERVATION
There’s no shortage of talk about house prices. How much further will they fall? When will the market stabilise? Is it time to get in? 
What we know is national capital city dwelling prices have fallen 6.8% since peaking in October 2017, led by Sydney and Melbourne following strong prior price booms. 
But how much has affordability actually improved? 
It’s an important question, not just for potential buyers and nervous sellers. That’s because with the price adjustment in Sydney and Melbourne continuing and demand from property investors unlikely to return soon, an eventual stabilisation of the market depends heavily on the response of owner occupiers to improving affordability – and it seems there’s more to do to generate a lift in demand. 
There is little doubt that housing affordability and consumer sentiment towards housing are closely linked. Our previous research established a particularly close relationship between the “time to buy a dwelling” index and an affordability measure that incorporates both deposit requirements and mortgage repayments.<img src="https://www.westpac.com.au/content/dam/public/wbc/news/images/article/2019/03/TimetoBuy%20(002).png" style="font-size: 12.16px;">
<a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/February/WestpacHousingPulseFebruary2019.pdf" data-s-object-id="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/australia/2019/february/westpachous_1">Latest readings on both measures show</a> buyer sentiment lifting a little in response to some easing in affordability pressures, although the gap to long run averages indicates affordability is still not back to “normal”. After hitting a seven-year high of 23.3% in late 2017, the proportion of average household income required to finance the purchase of a median priced dwelling has declined to just below 22% in early 2019 to be near the levels seen in late 2016. 
That’s partly because many factors feed into affordability with price moves, mortgage rates and incomes key. 
In other periods of price corrections, namely the late 1980s and early 1990s, the GFC and the 2011–13 interest rate tightening cycle, falling rates and income growth helped restore affordability.
In contrast, this adjustment is expected to see much less assistance from rates and is occurring against a backdrop of weak income growth, implying that price declines will need to do most of the “heavy lifting” to generate an improvement in affordability. 
And there’s likely more lifting to do, even though Westpac now expects the RBA to cut rates help affordability too. 
<img src="https://www.westpac.com.au/content/dam/public/wbc/news/images/article/2019/03/AusdwellingPrices%20(002).png">
Using some indicative estimates of how much further prices may need to move by looking at the price change required to return affordability to its 20-year average points to about a further 5% decline required nationally. In NSW and Victoria, more substantive moves in the 5-10% range are likely to be required, while other states should require milder moves.
While the picture differs across cities, and between houses and units in most cases, price adjustments in the key Sydney and Melbourne markets still look to have some way to run. 
That will be disappointing for those hoping for stabilisation to emerge but will be encouraging for those looking to get into what were previously very expensive markets.
MATTHEW HASSAN is a Senior Economist for Westpac
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How much more affordable is housing now? Westpac's Matthew Hassan

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GUEST OBSERVATION
Not long ago Australia’s housing boom was in full swing. Investors were betting on rising property values, which <a href="https://www.domain.com.au/product/state-of-the-market-report-june-2017/" target="_blank">rose by 13% in Sydney and 15% in Melbourne</a> in the year to mid-2017. Now the withdrawal of overseas buyers and prudential restrictions on loose lending to local investors have revealed how hollow the boom was.
Throughout the boom, politicians and property pundits consistently claimed the supply being delivered would improve affordability. As we are now seeing, when the price a property can fetch drops, so too does the desire to build it. It was rampant price growth that underpinned developers’ pleas to add supply, <a href="https://www.linkedin.com/pulse/opinion-housing-need-cannot-fully-met-market-tim-williams/" target="_blank">not a desire to make housing more affordable</a>.
We are now seeing rapid declines in approvals and building starts as speculative investor demand, and the money it brought to the market, <a href="https://www.smh.com.au/business/the-economy/sydney-and-melbourne-house-values-fall-back-to-2016-levels-20190301-p5114v" target="_blank">has fallen away</a>.
Ironically, <a href="https://theconversation.com/why-falling-house-prices-do-less-to-improve-affordability-than-you-might-think-111267" target="_blank">falling prices will not improve affordability for people locked out of the market</a>. Banks are tightening lending practices and stagnant wage growth limits the buying capacity of those <a href="https://www.afr.com/real-estate/rental-affordability-worse-for-lowpaid-workers-and-negative-gearing-is-to-blame-20181128-h18fya" target="_blank">trapped in the low-income economy</a>. True, falling prices are welcome for some first home buyers who now find a purchase possible. But the rapid inflation of house prices long ago far outstripped the capacity of most lower-income households to buy a home.
<a href="https://cityfutures.be.unsw.edu.au/research/projects/filling-the-gap/" target="_blank">Our analysis for the NSW Community Housing Industry Association (CHIA NSW) and Homelessness NSW</a>, building on <a href="https://www.propertyobserver.com.au/https://www.ahuri.edu.au/research/final-reports/306" target="_blank">recent AHURI research</a>, shows that the market cannot meet around 12% of all households’ needs. Only one-third of those are housed outside the market in public or community housing. The rest are in overcrowded homes, rental stress or even homeless.
In the face of a housing market downturn, those same property pundits are now <a href="https://www.smh.com.au/money/investing/why-labor-s-housing-policy-is-self-defeating-fraught-with-peril-20190228-p510u8" target="_blank">sternly warning against action</a> that would further dampen speculative investment in housing. However, this is precisely the moment to tackle the problems that have been building over many years and to set the dynamics of the housing system on a more affordable track.
Winding back speculative activity by cutting negative gearing and capital gains tax discounts, cracking down on inappropriate lending practices, and increasing regulation on unacceptable building practices should all be followed through in earnest across all levels of government.
Delivering the housing we need
The bigger question that remains then is: what is the future of the housing supply system across Australia?
History has shown us private sector investment alone cannot provide the needed housing, especially for the most vulnerable. Neither can it produce consistent supply through its boom-and-bust cycles. So now is also the moment for a renewed conversation about how to deliver the housing that’s most needed, and who ought to do it, especially for <a href="https://theconversation.com/housing-costs-are-actually-the-same-as-in-1993-but-renters-still-struggle-95286" target="_blank">those facing chronic rental stress</a>.
Markets have never delivered housing affordable to those on low incomes without subsidy from governments. In fact, a mountain of subsidies and tax breaks have been thrown at the private market to support such an aim. These range from <a href="https://www.dss.gov.au/housing-support/programmes-services/commonwealth-rent-assistance" target="_blank">Commonwealth Rent Assistance</a> to support private rental and grants to first time buyers, to negative gearing and capital gains tax relief for investors and home owners, but have had no discernible effect on affordability.
Faith in the markets has prevailed for the past 30 years. As a result, alternatives have been ruled out of play.
To cover the backlog of unmet need and future need, <a href="https://cityfutures.be.unsw.edu.au/research/projects/filling-the-gap/" target="_blank">our new research commissioned by CHIA NSW and Homelessness NSW </a> predicts that, over the next 20 years, two in ten new homes would need to be for social housing and a further one in ten for affordable housing. Just shifting this third of construction to not-for-profit housing providers, either the community sector or government, would reduce delivery costs – by losing the 20% developer markup at a stroke.
More broadly, the funds needed to support a sustainable affordable housing program could easily be offset by the savings from scrapping current inefficient and inflationary tax subsidises to private investors.
The challenge of such a task cannot be underestimated. Yet this presents a considerable opportunity to resolve a range of interrelated problems with how housing is provided in Australia. Here are four of the biggest.
1. Stabilise the construction labour market
Social and affordable housing development would underwrite the construction industry with a steady stream of funding for building homes over the long term. Building industries mobilise considerable workforces. Stable streams of work would smooth out the dramatic drop in employment that comes with housing downturns.
<a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-02-07/construction-decline-accelerates-amid-falling-prices-and-job-lo/10788782" target="_blank">Recent reports</a> have noted the accelerated decline in the construction industry. The <a href="https://www.smh.com.au/business/the-economy/house-price-falls-are-not-the-economy-s-biggest-worry-20190227-p510gk" target="_blank">Reserve Bank is warning</a> that shocks to wages and employment present a threat to the economy.
2. Support planning for a predictable supply
The planning system would benefit from having a large portion of projected housing needs met and supplied more predictably. The uncertainty of boom-bust housing cycles makes it near impossible to plan sensibly for population growth and implement strategic planning objectives across our cities and regions.
Planning for major infrastructure, such as hospitals, schools and transport, relies on new housing arriving in a timely manner. Blanket <a href="https://www.ahuri.edu.au/policy/ahuri-briefs/Understanding-inclusionary-zoning" target="_blank">inclusionary zoning</a> policies and discounted public land sales to support land supply for affordable homes need to be prerequisites.
3. The benefit of investing in affordable housing
If government spending on housing can be invested in the assets themselves (for example, through an equity share in the development), the expenditure will be retained both for an enduring social purpose and as a positive contribution to the accumulated asset base of government.
A properly designed, large-scale, not-for-profit program could mean investing in new housing becomes a positive for state and national balance sheets. This requires a shift in behaviour and mindsets of some Treasury officials who often see social housing as a liability.
4. Drive broad productivity dividends
<a href="https://cityfutures.be.unsw.edu.au/research/projects/strengthening-economic-cases-housing-productivity-gains-better-housing-outcomes/" target="_blank">Other recent research</a> for CHIA NSW shows investment in suitably located social and affordable housing has much wider economic benefits. These include travel time savings for lower-income workers currently pushed into the outer suburbs, as well as human capital uplift resulting from long-term positive impacts on household incomes.
Similarly, <a href="https://www.propertyobserver.com.au/https://www.ahuri.edu.au/research/final-reports/265" target="_blank">government budgets benefit from reducing demand on social services</a>.
In short, the evidence-based economic case for government investment in social and affordable housing is strong. Given the impending fallout of a property bust following the largest property boom in Australian history, now is the time to act and reshape the nation’s housing system for the long term.
But do we have governments capable of conceiving of the necessary policy shifts or with the courage to enact them? Time, and the next election, will tell.<img src="https://counter.theconversation.com/content/113113/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Laurence Troy, Research Fellow, City Futures Research Centre, UNSW
Bill Randolph, Director, City Futures Research Centre, Faculty of the Built Environment, UNSW
Ryan van den Nouwelant, Lecturer in Urban Management and Planning, Western Sydney University
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/build-social-and-affordable-housing-to-get-us-off-the-boom-and-bust-roller-coaster-113113" target="_blank">original article</a>.
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Build social and affordable housing to get us off the boom-and-bust roller coaster

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Housing affordability supposedly ranks as a top-three Federal election issue, after the cost of living and healthcare and ageing, according to a survey by the Housing Industry Association.
Affordability ranked ahead of immigration and the environment, concluded the JWS Research survey of 1500 people.
"The importance of home ownership to Australians couldn't be clearer. Now more than ever, home ownership matters," the Housing Industry Association chief economist Tim Reardon noted.
It comes as first home buyers have been more active in the market with Sydney housing around 10% more affordable than this time last year.
A typical Sydney dwelling now costs $789,000, below the $884,000 it was early last year, according to CoreLogic. The biggest Sydney declines have been in the municipalities of Ryde and Canterbury-Bankstown.
Of course, it is not just those aspiring to first home ownership that worry about affordability, as separate polling research in Tony Abbott's seat of Warringah on Sydney's Northern beaches indicated.
The concerns of Warringah voters focused around infrastructure, especially roads and traffic congestion, population growth, environmental concerns, but also housing affordability for their children.
The focus groups, sponsored by the University of Canberra’s Democracy 2025 project and conducted by Landscape Research, suggested older Warringah voters were more engaged, more readily able to discuss issues in federal politics, while younger voters have largely tuned out, feeling powerless.
Reardon said the Australian dream of owning a home was "still embedded in the psyche of Australians". He adds with a federal election imminent, it was important to recognise that 71% of people believe governments have an important role in helping Australians achieve their dream.
Interestingly, the HIA research found that home ownership was viewed as especially important to achieving financial stability in retirement.
This comes as there's continuing debate about whether first home buyers should be allowed to access their superannuation.
It flared again recently after a key recommendation from Kenneth Hayne's Financial Services Inquiry.
Hayne says superannuation should be solely to look after Australians in retirement, not first home purchases.
Any incoming Federal Labor Government will accordingly phase out the Coalition government's First Home Super Saver Scheme that allows first timers to access their super accounts.
The scheme, which enables first time buyers to access extra savings put into their superannuation account, was introduced in the 2017 budget by then treasurer Scott Morrison. He argued it would help young people accelerate their savings to buy into markets.
Between the start of the program on July 1 last year and February this year, around 2400 people have made requests to access their super top-up.
That equated to around 4% of the first home buyers who'd secured a home loan over the period.
They have sought the release equating to a helpful $12,000 per person.
Labor voted against the scheme when it was created, but assures current users of the scheme they will not be affected by their policy. 
It is one of many housing schemes ditched by governments in recent times as they come and go.
We have seen off the National Rental Affordability Scheme and the First Home Saver Account schemes too.
I'd suggest one reason for the young voter feeling powerless was this constant changing tides with policy.
Navigating the housing market with confidence, for any age, requires policy consistency from our federal leaders.
This article first appeared in The Daily Telegraph. 
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