Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

Joel Robinson

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

[smartcode_project:default project_id=112661 project_image_fid=355935]

Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

[smartcode_project:default project_id=112661 project_image_fid=361052]

Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

[smartcode_project:default project_id=112661 project_image_fid=359607]

More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
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[smartcode_project_cta:default project_id=112661]

SIERA kicks off construction at Northcliffe tower Exhale

Local Little Bay residents, along with buyers from premium postcodes across Sydney’s affluent Eastern Suburbs, have dominated purchases in developer-builder Urban Property Group’s first Eastern Suburbs apartment development, <a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a>.

The $250 million coastal project, one of the first new developments in the area in several years, has proven particularly popular with downsizers, especially those from Coogee and Bondi. One Double Bay downsizer paid $4.7 million for a four-bedroom penthouse, setting a new local apartment price record in the process.

Buyers have been attracted to the combination of coastal tranquillity, premium design and amenity-rich neighbourhood living. The walkable village setting, along with proximity to three of Sydney’s leading golf courses, New South Wales Golf Club, St Michael’s Golf Club and The Coast Golf Club, has also been a key drawcard.

[smartcode_project:default project_id=112343 project_image_fid=352689]

Built across two low-rise buildings designed by <a href="https://www.apartments.com.au/architects/hill-thalis-architecture-urban-projects-pty-ltd">Hill Thalis</a> and set along a lush, landscaped green spine, designed by leading landscape architect <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>, ESTE Little Bay offers a collection of one, two, three and four-bedroom residences with interiors by Richards Stanisich.

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> Sales Director, Tom McIvor said the response to ESTE has been "nothing short of extraordinary."

“Buyers have been quick to recognise ESTE as a rare opportunity to invest in a coastal sanctuary that offers both seclusion and connectivity to the heart of Sydney,” McIvor said.

[smartcode_project:default project_id=112343 project_image_fid=352687]

<a href="https://www.apartments.com.au/project-marketer/srm-residential">SRM Residential</a> Senior Director, <a href="https://www.apartments.com.au/project-marketer/srm-residential">Clayton Ross</a> said the local market has responded incredibly well, driven by ESTE’s exceptional location and the rarity it offers.

“We’ve seen strong interest from a variety of buyer groups, all of whom are drawn to the exclusivity and quality of the build and construction by the 4.5-star iCIRT-rated builder / developer, Urban Property Group. There’s truly nothing else like it along Sydney’s coastline.”

[smartcode_project:default project_id=112343 project_image_fid=352690]

The project also includes robust buyer protections, including Resilience Insurance’s Latent Defects Insurance, providing 10 years of structural cover, and an independent iCIRT-rating of the developer.

“The iCIRT-rating adds another layer of confidence,” Ross added. “Buyers see it as a safeguard for their investment and their lifestyle.” A highlight of ESTE’s offering is its exclusive wellness amenities, including a heated rooftop infinity pool and outdoor heated spa, a state-of-the-art Technogym fitness centre, and a sauna.

<a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a> is topped out and is on track to complete towards the end of 2026, with residents moving in before Christmas.

[smartcode_project_cta:default project_id=112343]

Eastern Suburbs buyers snap up ESTE Little Bay apartments

Knight Frank

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The main story from this quarter’s data is of slowing growth. 
Overall, the index increased by 5.1% year-on-year compared with 6.3% last quarter, so the index’s lowest rate of annual growth since the start of 2016. 
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Although nearly nine in every ten of the countries tracked by our index recorded positive annual price growth in the year to September 2017, almost half saw their rate of annual growth decline compared with the previous quarter. 
The shift was most evident at the top of the rankings table. Thirteen of the 15 strongest- performing housing markets around the world registered a slowdown in their rate of annual growth in the year to September.
But Australia was placed seventh in Knight Frank’s Global House Price Index for the September quarter, surging 25 places from 2016.  
The global index tracks housing market performance across 56 countries worldwide.
Click here <a href="https://www.propertyobserver.com.au/images/2017/12/7/figure1.jpg" target="_blank">to enlarge.</a>
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Iceland leads our annual rankings with average prices ending the year to September 20.4% higher, down from 23.2% last quarter. Iceland has now topped our annual rankings for four consecutive quarters. 
Hong Kong has clung on to second place but data from the Hong Kong Ratings and Valuation Department shows price growth equated to only 1.7% in the three months to September. 
Estonia, Hungary and New Zealand have dropped out of the top ten this quarter. New Zealand slipped from 10th place to 27th as annualised price growth declined from 10.4% to 5.2%. Tighter lending conditions and plans to introduce a ban on foreign investors in 2018 have potentially reduced some of the speculative activity in the market.
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This quarter marks the inclusion of Saudi Arabia within the index for the first time. Latest data shows prices slipped 5.4% on an annual basis meaning it is second only to Ukraine as the weakest-performing market. The oil-dependent Saudi economy is struggling to gain traction, which along with the recent introduction of a levy on expatriate workers is stifling housing demand.
The US and the UK are following different trajectories, mirroring their economic performance. Average prices in the US accelerated 6.2% over the 12-month period, up from 5.8% last quarter whilst the UK has incurred a marginal dip from 2.8% to 2.6%. The UK market remains highly localised with affordability a key concern in many markets.
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China has slipped from 12th to 19th position in our rankings. House prices are now rising at their slowest rate for five quarters, up by 6.5% on an annual basis according to the National Bureau of Statistics.
European housing markets are firmly back in the spotlight. On average, the region recorded 5.6% annual price growth in the year to September, up from 2.3% three years ago. The good news for Europe doesn’t end there. Greece (0.7%) may finally see price growth reach positive territory over the next quarter after nine years of negative annual growth.
Despite Europe’s recent recovery, analysis over a five and 10-year period underlines the extent to which countries within Asia Pacific still rank amongst the highest performers. (Figure 4).
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The Knight Frank Global House Price Index, established in 2006, allows investors and developers to monitor and compare the performance of mainstream residential markets around the world. The index is compiled on a quarterly basis using official government statistics or central bank data where available. The index’s overall performance is weighted by GDP on a Purchasing Power Parity basis and the latest quarter’s data is provisional pending the release of all the countries’ results. 
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jrobinson-rf4aSBido9

Australia surges to 7th place in weakening Global House Price Index: Knight Frank

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Knight Frank’s Global House Price Index: Q3 2017, which tracks housing market performance across 56 countries worldwide, has found that Australia defied the global trend by moving up to 7th position, maintaining 10.2 percent growth over the past quarter.
They move from 11th in the last quarter, also with a growth of 10.2 percent.
Overall, global house prices have increased by 5.1 percent in the year to September 2017. This is down from 6.3 percent growth the previous quarter.
The 5.1 percent growth represents the index's lowest rate of annual growth since the beginning of 2016.
Iceland leads the index for the 4th consecutive quarter, but its rate of growth has slowed.
European housing markets averaged 5.6% price growth in the year to September, up from 2.3% three years ago, while China has slipped from 12th to 19th position in the rankings as tighter macro-prudential regulations bite.
Knight Frank Australia's head of residential research Michelle Ciesielski noted Australia's strengthened position.
“The Global House Price Index has weakened, and now represents the lowest increase since the start of 2016. However, Australia’s annual price growth has been maintained at 10.2% in Q3 2017," she said.
“Interestingly, with weaker growth across the global marketplace, our ranking has moved up four spots to seventh place – we are also one of just seven cities tracked globally still performing with double-digit growth.
“Over the past five years to Q3 2017 the Asia Pacific region has dominated price growth led by India (76.1%), Hong Kong (60.1%) and New Zealand (56%).
“Australia was fifth in the region over this time, with total growth of 45.9%.” (See figure 4 below).
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/12/7/Figure4.jpg" alt="">
Sarah Harding, Head of Residential at Knight Frank Australia said that other capitals are making up for the Sydney drop.
"Although some of the heat has been taken out of the Sydney residential market of late, Melbourne, Hobart and Canberra are thriving – driving up total annual growth," Harding said.
“Additionally, the worst appears to be behind Perth’s residential markets and this is also contributing positively to the overall Australian performance.
“As investors find it increasingly harder to obtain finance, we’re experiencing more enquiries from owner-occupiers, including those looking to downsize, and we’re starting to see the return of first-time buyers to the market."
 
 
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Australia defies global trend in Global House Price Index: Knight Frank

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Richard Klein has been appointed Knight Frank's NSW head of project marketing.
Klein will work with Michael Robinson, head of project marketing for Australia.
He was previously senior sales and strategy consultant on project marketing in Victoria.
He has been promoted internally, moving to Sydney to assume his new role.
With over 15 years’ experience in the residential development sector, having worked for established consultants and for developers in Sydney, Melbourne, London and Dubai, Klein hails from Knight Frank in London.
According to Richard Horne, Knight Frank’s managing director, NSW, it was an exciting appointment for the Sydney business.
“With a population growth of 1.8 million people in the next 15 years and unparalleled infrastructure spending, Sydney is now a true global city and represents a massive opportunity for our project marketing and residential businesses,” Horne said. 
It expands on the firm’s prior leadership placements within the national residential team with the Sydney-based appointments of Sarah Harding, head of residential, Australia, and Deborah Cullen, head of prestige residential sales, Australia.
 
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Richard Klein appointed as Knight Frank NSW head of projecting marketing

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Real estate firm Knight Frank has set up a Prestige Residential division in Australia after its recently released Wealth Report found that the country is one of the most important markets for the richest across the globe.
In addition, it has internally appointed Sarah Harding as the new head of Residential, Australia in a newly-formed role for the firm based in the Sydney office. 
She is currently Knight Frank’s Head of Residential for APAC and will move back to Sydney for the role. Harding has worked within the residential property business for close to 20 years. Over half of this time was spent working in London, handling all aspects of residential prime and new-build markets. 
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Sarah will also oversee the prestige division, said Knight Frank Australia CEO Stephen Ellis.
“While Sarah will oversee the national business, her day-to-day focus will be building Residential Project Marketing – particularly at the prestige end – and from a top level overseeing our new Prestige Residential division, for which we recently brought Deborah Cullen on board to lead as Head of Prestige Residential, Australia,” he said.
Cullen has been brought in from Colliers International’s Lifestyle Estates team to head Prestige Residential Sales, Australia. She also brings from her previous team Richard Sholl, who joins Knight Frank as Sales Executive, Australia for the Prestige Residential Sales division.
Cullen has been in the prestige and luxury lifestyle market in Australia for 15 years. 
Her team will focus primarily on prestige Australian residential sales of more than $3 million. 
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Knight Frank’s global head of Residential, Lord Andrew Hay, said, “Deborah joins Knight Frank’s global network of prime agents positioned in key markets around the world. These agents are positioned to act as a global team, passing investors and product around the network to give our clients access to the very best in the market.”
Lord Hay said that Australia is an increasingly important market globally for the world’s richest. “Our latest annual edition of The Wealth Report has found that Sydney and Melbourne are in the top 10 list of most important cities globally for the wealthiest to invest. 
“While the value of the world’s leading prime residential markets recorded slower growth in 2016, at 1.4% in comparison with 1.8% in 2015, the top-tier of price growth is being driven by Australia, China, New Zealand and Canada.
He said Australia’s politically stable environment and quality of life, are expected be the drivers of strong growth over the next decade in the populations of super-rich.
In Sydney, Knight Frank’s Asian Markets team recently closed three high-end residential transactions to the value of over $35 million. In Hobart, resent sales include “Sentosa” at 650 Sandy Bay Road, Sandy Bay for $6.5 million; 11 Ellington Road, Sandy Bay for $3 million; 15 Grange Avenue, Taroona for $2 million; and 21 Grange Avenue, Taroona for $1.925 million.
Knight Frank’s chief executive officer, Australia, Stephen Ellis said the establishment of a Prestige Residential Sales division in Australia is a strategic move for the business – and that there has never been a better time.
The team has strong connections in Asia Pacific, the UK, Africa, and throughout Europe and the Middle East, Knight Frank is partnered with Douglas Elliman Fine Homes in the US.
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jonathanchancellor-7SQnKwU6yx

Knight Frank set up Australian prestige residential department to cater to super rich

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Rents for skyscraper offices in Australian cities are rising faster than those in any other global city, according to the latest Skyscraper Index from Knight Frank.
The report examines the rental performance of commercial buildings over 30 storeys across the world.
Melbourne and Sydney grew the fastest among the cities surveyed at 11.0 percent and 10.1 percent respectively in the six months to Q4 2016, amid tightening vacancies and limited new supply.
In Sydney, stock withdrawals to accommodate the new Metro line and residential conversions are reducing the overall supply, while Melbourne had the strongest level of net absorption in 2016.
David Howson, head of office leasing at Knight Frank said Sydney’s office vacancy is at 6.2 percent, and is forecast to go as low as 3.5 percent in the next two years, with the current low vacancy and prospect of even lower vacancy driving rental increases now.
“The withdrawal of stock for Sydney is a major factor, with 239,057 sqm of stock removed from the market during 2016 for either refurbishment or permanent withdrawals – largely for conversion to residential or hotel use, and recycling of sites to future office developments," he said.
"An example of this is 301 George Street, in which 11,500 sqm is being demolished to make way for the Wynyard Place development.
"The Metro project will also trigger significant withdrawals of space, mostly in 2017, accounting for some 62,000 sqm along, and this will be a major contributor to the further 102,289 sqm of Sydney CBD office stock to be withdrawn this calendar year.
"While recent new supply has been high, largely driven by the Barangaroo developments, this has been largely balanced by the withdrawals.
"The next two years of supply is only modest, and the total stock of the CBD is expected to decline over this period.
"However, there is a very strong supply cycle building for 2020 and beyond.Net absorption of office space in the CBD is also high driven by buoyant financial and construction sectors.
“In Melbourne, the vacancy rate is at 10-year lows at 6.4," Mr Howson added.
"Unusually for Melbourne in recent years, the level of new stock additions will be lower in the next 24 months at 113,242 sqm or 1.3 percent stock growth per annum.
"This is well below the long term average of 3.6 percent per year.
"The Victorian economy is currently the strongest in Australia, and is supported by high population growth into Melbourne of 2 percent, which is boosting the underlying demand for office space.
"With the vacancy rate expected to head towards 4 percent in the next year, the upwards pressure on rents will remain.
"However it should be remembered that across the market as a whole, there is still a large price gap between the Sydney and Melbourne markets with gross effective prime rents in Sydney currently at a 60% premium to those in Melbourne."
Knight Frank’s latest research shows rents in Hong Kong’s skyscrapers continue to be the highest in the world by some margin, reaching $302.67 per sq ft in H2 2016.
New York retains its second position, where skyscraper rents are currently $159.00 per sq ft.
In Europe, skyscraper rents in London have remained stable at $104.56 per sq ft in the second half of 2016.
Of the North American cities, Toronto saw the highest rental growth at 4.7 percent.
In many Southeast Asian markets such as Shanghai, Singapore and Seoul, rents have trended down by 2.0 percent, 4.2 percent and 4.8 percent respectively, highlighting heightened economic uncertainty and a cautious business outlook.
Dan Gaunt, head of Knight Frank's city agency said despite uncertainty following the Brexit-vote, rents in London’s skyscrapers remain significantly higher than those in other major European cities.
"Demand for space in the Capital’s landmark tall buildings shows little sign of diminishing and we see rents remaining at their current level through 2017,” he said.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/11/TheShard_REM2.jpg" alt="">
James Roberts, Knight Frank's chief economist said the strong performance for Melbourne and Sydney reflect local market factors.
"If we set those cities to one side, the general picture from the latest Skyscraper Index is flat growth, which reflects the nervousness in most office markets in the second half of last year over political risks, like Brexit and the US election," he said.
"However, in 2017 the tone of global economic news is improving, and both Brexit and the Trump government have not had the negative impact on growth that was initially feared.
"When we compile the next skyscraper index in the summer, I expect to see more cities reporting rental growth in tower buildings.”
<table border="1" cellspacing="0" cellpadding="0" align="left"><tbody>
<tr>
<td valign="top" nowrap width="50">
Ranking
</td>
<td valign="top" nowrap width="127">
Prime office rents for upper floors in skyscrapers
</td>
<td valign="top" nowrap width="107">
Rent (US$ / sq ft / per annum)
</td>
<td valign="top" nowrap width="99">
% growth in six months to Q4 2016*
</td>
<td valign="top" width="147">
Rent (US$ / sq m/ per annum)
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
1
</td>
<td valign="top" nowrap width="127">
Hong Kong
</td>
<td valign="top" nowrap width="107">
$302.67
</td>
<td valign="top" nowrap width="99">
0.6%
</td>
<td valign="top" nowrap width="147">
$3,257.93
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
2
</td>
<td valign="top" nowrap width="127">
New York (Manhattan)
</td>
<td valign="top" nowrap width="107">
$159.00
</td>
<td valign="top" nowrap width="99">
0.6%
</td>
<td valign="top" nowrap width="147">
$1,711.46
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
3
</td>
<td valign="top" nowrap width="127">
Tokyo
</td>
<td valign="top" nowrap width="107">
$134.39
</td>
<td valign="top" nowrap width="99">
1.1%
</td>
<td valign="top" nowrap width="147">
$1,446.57
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
4
</td>
<td valign="top" nowrap width="127">
San Francisco
</td>
<td valign="top" nowrap width="107">
$113.00
</td>
<td valign="top" nowrap width="99">
0.0%
</td>
<td valign="top" nowrap width="147">
$1,216.32
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
5
</td>
<td valign="top" nowrap width="127">
London (City)
</td>
<td valign="top" nowrap width="107">
$104.56
</td>
<td valign="top" nowrap width="99">
0.0%
</td>
<td valign="top" nowrap width="147">
$1,125.51
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
6
</td>
<td valign="top" nowrap width="127">
Sydney
</td>
<td valign="top" nowrap width="107">
$97.34
</td>
<td valign="top" nowrap width="99">
10.1%
</td>
<td valign="top" nowrap width="147">
$1,047.78
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
7
</td>
<td valign="top" nowrap width="127">
Boston
</td>
<td valign="top" nowrap width="107">
$77.00
</td>
<td valign="top" nowrap width="99">
0.0%
</td>
<td valign="top" nowrap width="147">
$828.82
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
8
</td>
<td valign="top" nowrap width="127">
Shanghai
</td>
<td valign="top" nowrap width="107">
$67.81
</td>
<td valign="top" nowrap width="99">
-2.0%
</td>
<td valign="top" nowrap width="147">
$729.92
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
9
</td>
<td valign="top" nowrap width="127">
Singapore
</td>
<td valign="top" nowrap width="107">
$63.64
</td>
<td valign="top" nowrap width="99">
-4.2%
</td>
<td valign="top" nowrap width="147">
$684.97
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
10
</td>
<td valign="top" nowrap width="127">
Chicago
</td>
<td valign="top" nowrap width="107">
$61.00
</td>
<td valign="top" nowrap width="99">
3.4%
</td>
<td valign="top" nowrap width="147">
$656.60
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
11
</td>
<td valign="top" nowrap width="127">
Beijing
</td>
<td valign="top" nowrap width="107">
$59.84
</td>
<td valign="top" nowrap width="99">
-1.3%
</td>
<td valign="top" nowrap width="147">
$644.10
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
12
</td>
<td valign="top" nowrap width="127">
Paris (La Défense)
</td>
<td valign="top" nowrap width="107">
$53.83
</td>
<td valign="top" nowrap width="99">
0.0%
</td>
<td valign="top" nowrap width="147">
$579.46
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
13
</td>
<td valign="top" nowrap width="127">
Frankfurt
</td>
<td valign="top" nowrap width="107">
$52.85
</td>
<td valign="top" nowrap width="99">
5.9%
</td>
<td valign="top" nowrap width="147">
$568.92
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
14
</td>
<td valign="top" nowrap width="127">
Mumbai
</td>
<td valign="top" nowrap width="107">
$52.67
</td>
<td valign="top" nowrap width="99">
0.0%
</td>
<td valign="top" nowrap width="147">
$566.98
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
15
</td>
<td valign="top" nowrap width="127">
Melbourne
</td>
<td valign="top" nowrap width="107">
$50.89
</td>
<td valign="top" nowrap width="99">
11.0%
</td>
<td valign="top" nowrap width="147">
$547.74
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
16
</td>
<td valign="top" nowrap width="127">
Toronto
</td>
<td valign="top" nowrap width="107">
$49.74
</td>
<td valign="top" nowrap width="99">
4.7%
</td>
<td valign="top" nowrap width="147">
$535.41
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
17
</td>
<td valign="top" nowrap width="127">
Los Angeles
</td>
<td valign="top" nowrap width="107">
$46.00
</td>
<td valign="top" nowrap width="99">
0.0%
</td>
<td valign="top" nowrap width="147">
$495.14
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
18
</td>
<td valign="top" nowrap width="127">
Dubai
</td>
<td valign="top" nowrap width="107">
$43.55
</td>
<td valign="top" nowrap width="99">
0.0%
</td>
<td valign="top" nowrap width="147">
$468.79
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
19
</td>
<td valign="top" nowrap width="127">
Taipei
</td>
<td valign="top" nowrap width="107">
$38.59
</td>
<td valign="top" nowrap width="99">
0.0%
</td>
<td valign="top" nowrap width="147">
$415.39
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
20
</td>
<td valign="top" nowrap width="127">
Madrid
</td>
<td valign="top" nowrap width="107">
$36.41
</td>
<td valign="top" nowrap width="99">
0.0%
</td>
<td valign="top" nowrap width="147">
$391.92
</td>
</tr>
<tr>
<td valign="top" nowrap width="50">
21
</td>
<td valign="top" nowrap width="127">
Seoul
</td>
<td valign="top" nowrap width="107">
$29.93
</td>
<td valign="top" nowrap width="99">
-4.8%
</td>
<td valign="top" nowrap width="147">
$322.19
</td>
</tr>
</tbody></table>
 
 
 
 
 
 
 
 
 
 
 
 
 
 Source: Knight Frank, Newmark Grubb Knight Frank, Sumitomo Mitsui Trust Research Institute          
* Excludes exchange rate effects; conversion to US$ based on 31 December 2016 rates                   
Note: Upper floors is defined as above the regular skyline, thus offering panoramic views, but excluding the very top floors.                           
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Australian markets have witnessed the fastest rental growth for offices in skyscrapers

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The results of The Wealth Report Attitudes Survey, which this year are based on responses from almost 900 of the world’s leading private bankers and wealth managers, offer an window on the issues that are influencing UHNWI investment and lifestyle decisions, according to Knight Frank’s latest report.
According to the Attitudes Survey, only 15 percent of UHNWIs use private aviation for the majority of their business and personal flights.
However, the pattern varies widely around the world.
Latin America’s wealthy residents, perhaps worried about the risk of kidnapping, are the biggest users, with 40 percent opting to go private.
Just 4 percent of Australasian UHNWIs regularly choose to take a private jet, and in Asia their usage still lags behind the region’s rapid rise in wealth creation – only 9 percent of UHNWIs routinely travel on non-commercial flights.
<a href="https://www.propertyobserver.com.au/images/2017/03/1/Screen%20Shot%202017-03-01%20at%201.26.30%20pm.jpg" target="_blank">Click to enlarge</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/2017/03/1/Screen%20Shot%202017-03-01%20at%201.26.30%20pm.jpg" alt="">
In-depth data supplied by industry analysts JETNET and WINGX, confirm these broad patterns, but also reveal some striking emerging trends.
While the US (12,717), Mexico (950) and Brazil (786) are the top three nations by some margin when it comes to fleet size, JETNET’s figures show numbers are rising fast in Asia.
Hong Kong (+535 percent), Taiwan (+367 percent), China (+347 percent) and Macau (+300 percent) all feature in the top 10 list of locations where growth has been fastest over the past 10 years. China, with 277 jets, now claims eighth position in overall ownership levels.
In terms of flight numbers America dominates – over 75 percent of the world’s 1,000 busiest routes are within the US.
“Business aviation is deeply embedded as a complement to and in some cases a replacement for scheduled airline services,” says Richard Koe, Managing Director of WINGX.
“It wouldn’t be unusual for a firm with a turnover of US$50m to have its own plane,” confirms Hardy Sohanpal of international operator Global Jet Concept.
<a href="https://www.propertyobserver.com.au/images/2017/03/1/Screen%20Shot%202017-03-01%20at%201.26.43%20pm.jpg" target="_blank">Click to enlarge</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/2017/03/1/Screen%20Shot%202017-03-01%20at%201.26.43%20pm.jpg" alt="">
As our data shows, geopolitics can have a major impact on private aviation. Traffic between Cuba and the US, for example, has taken off sharply since 2012, while the opposite is true of flights between Russia and Ukraine.
Looking ahead, the Chinese market is set to see strong growth, says Mr Koe.
“The government is starting to see the importance of business jets as a competitive tool to support corporations in pursuit of regional trade opportunities.”
There is also the potential for growth in the US depending on how the new administration’s policies play out, adds Mr Sohanpal.
“We have had a number of enquiries recently from construction and finance companies.”
But growth in Latin America is likely to be more muted, particularly in oil-dependent countries like Venezuela, he notes.
“There are a lot of aircraft being put up for sale at the moment and now is the perfect opportunity to trade up or buy first time.”
<a href="https://www.propertyobserver.com.au/images/2017/03/1/Screen%20Shot%202017-03-01%20at%201.26.58%20pm.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/1/Screen%20Shot%202017-03-01%20at%201.26.58%20pm.png" alt="">
Globally, however, private jet numbers are likely to rise as the desire to travel efficiently with maximum privacy becomes more of a priority for corporations and private individuals, says Mr Sohanpal.
“The introduction of new apps and charter models that are competing to become the Uber of the airways is also likely to attract those who shuttle frequently between cities travelling first or business class.”
Definition: UHNWI: Ultra-high-net-worth individual – someone with a net worth of over US$30m excluding their primary residence and HNWI: High-net-worth individual – someone with a net worth of over US$1m excluding their primary residence.
 
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Private jet numbers likely to soar for corporations and private individuals: Knight Frank

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The movement of private wealth across the world is critical in driving the performance of asset markets and, in particular, property, according to Knight Frank’s latest Wealth Report.
Some movements in wealth take the form of temporary investments while others, like migration, are more permanent.
And as these shifts grow in both frequency and magnitude, so too do their impacts and the extent of the reaction to them.
As with most global trends these days, if you want to understand the scale of wealth flows there is no better place to start than China, where a heady mix of stellar wealth creation and political and economic volatility has led to rising capital movement.
Capital outflows from China have been a constant since early 2014, prompted by a slowdown in the domestic economy, instability in local asset markets, a desire for diversification and the need for a hedge against depreciation as China sells dollars to support the yuan.
Property remains a substantial target for this outbound capital.
This is borne out by the findings of The Wealth Report Attitudes Survey, which confirm that 32% of UHNWIs will invest in offshore real estate in the next two years.
Chinese investment in US residential property, for example, has risen from barely US$300m in 2006 to over US$30bn in 2015, and now accounts for nearly one in every five foreign purchases.
As money moves at a faster rate, so government efforts to control its movement also gain momentum.
Once again, by way of illustration we need look no further than China where wealthy investors – officially limited to US$50,000 a year in offshore transfers – have become adept at maximising opportunities for converting money into other currencies.
The Chinese government reacted in 2016 by regulating access to casinos in Macau, a classic route for moving money, and limiting credit for card- holders travelling abroad.
In 2017 the authorities went further by tightening the rules regarding acceptable investments for offshore transfers – with property explicitly excluded.
Further restrictions seem likely, either formally via policy announcements, or informally through administrative processing.
But China is not unique in its efforts to restrict movement. Examples abound.
Foreign companies with direct property holdings in Russia are now obliged to file details with the authorities.
Since the start of 2016, Brazil has required the identification of natural persons who are the ultimate beneficial owners of newly registered entities.
And, as The Wealth Report went to press, the UK government was consulting on similar moves for foreign companies, mirroring rules introduced in 2016 for UK registered companies.
<a href="https://www.propertyobserver.com.au/images/2017/03/1/Screen%20Shot%202017-03-01%20at%201.07.39%20pm.jpg" target="_blank">Click to enlarge</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/2017/03/1/Screen%20Shot%202017-03-01%20at%201.07.39%20pm.jpg" alt="">
This growth in regulatory activity based on understanding where private wealth sits globally will surge further in 2017, ahead of the introduction of the OECD’s Common Reporting Standard (CRS).
The CRS is set to have a critical impact on wealth migration, heralding as it does the sharing of unprecedented amounts of financial data on foreign citizens between governments.
As we explore overleaf, this new reality is raising some searching questions on data and personal security and even potential investment and residency patterns.
Even money already held in offshore centres is not immune from greater oversight.
These are significant wealth pools: at the end of 2016, the store of private wealth held in offshore financial centres totalled around US$10 trillion.
Although only 1% and 6% of private wealth from the US and UK respectively is held in these centres, for the Middle East and Latin America the total is closer to 25%.
While the rate of growth in wealth held in centres such as Hong Kong and Singapore has averaged 10% annually in recent years, a rash of tax amnesties in preparation for CRS is persuading some investors to repatriate funds.
The Indonesian tax authorities’ amnesty on undeclared tax liabilities arising from foreign assets ran from July 2016 until March 2017, and is predicted to result in an outflow from Singapore in particular.
The Greek government has put forward plans for a tax amnesty covering funds held in Switzerland which would tax, legitimise and potentially lead to the repatriation of hitherto undeclared funds.
The Greek proposal comes in the wake of a similar amnesty announced by Italy in 2015, and is intended to discourage the flow of funds from Switzerland to other offshore jurisdictions ahead of the introduction of the CRS.
The past 12 months have also seen a rash of new rules that aim to control the destination of investment flows.
Three Australian states – Victoria, New South Wales and Queensland – have introduced an additional stamp duty surcharge for foreign buyers of residential property, in addition to the new 10% withholding tax on sales by foreign residents of high-value Australian property.
<a href="https://www.propertyobserver.com.au/images/2017/03/1/Screen%20Shot%202017-03-01%20at%201.07.46%20pm.jpg" target="_blank">Click to enlarge</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/2017/03/1/Screen%20Shot%202017-03-01%20at%201.07.46%20pm.jpg" alt="">
Elsewhere, we see a new capital gains tax for short-term property investments in New Zealand, the additional rate of stamp duty on high-value property purchases in the UK, and a new empty homes tax in Vancouver.
Clearly, the expansion of so-called “cooling measures” designed to control international wealth flows into property shows no sign of easing.
As The Wealth Report confirmed in 2016, migration of wealth can also take more enduring forms, with 16% of UHNWIs considering a permanent move overseas.
The latest data from Henley &amp; Partners indicates that the world’s wealthy spend over US$2.4bn each year acquiring new nationalities.
Demand is highest from China, Russia and the Middle East, with around four-fifths of US EB-5 visas going to Chinese nationals.
The cost varies considerably, from a few hundred thousand dollars in some Caribbean islands to US$1m and more for citizenship in Cyprus and other European locations.
In the context of continued rising demand for overseas property, the fact that such schemes offer property as an investment route is a powerful draw.
Even here though, pressure from regulators is for rule change to reduce or even prohibit demand for property altogether (see reforms in the UK and Singapore by way of example).
Inevitably, this will have a dampening effect on demand for these particular schemes.
The overriding impression left by any analysis of global wealth flows is one of flux.
Nevertheless, there are two constants: first, ever growing demand from the wealthy to move their money into safe havens; and second, the corresponding determination of governments to exercise control over that process.
Evidence to date suggests that while wealth flows can successfully be corralled and redirected, they will not be curbed.
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Movement of wealth becoming crucial in the property market: Knight Frank

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The value of the world’s leading prime residential markets recorded slower growth in 2016, according to Knight Frank’s unique Prime International Residential Index (PIRI), which tracks the value of luxury homes in 100 key locations worldwide.
On average, values rose by 1.4 percent in 2016, compared with 1.8 percent in 2015.
However, the PIRI 100 also reveals a huge gap of 49 percentage points between the top and bottom ranking, up from 45 in 2015.
The top tier is dominated by cities in China, New Zealand, Canada and Australia, while oil-dependent markets such as Moscow and Lagos bring up the rear.
Of the locations tracked by PIRI, 61 percent recorded flat or rising prices in 2016, down from 66 percent the year before.
Along with the slight drop in average price growth already noted, this suggests a marginal slowdown in the performance of global luxury residential markets.
That said, there are several outstanding performers that will raise an eyebrow among even the most experienced investors.
China’s cities have catapulted themselves up our rankings with Shanghai, Beijing and Guangzhou claiming the top three slots, all exceeding 26 percent year-on-year growth.
Last year’s front-runner, Vancouver, was once again a top performer, but it was a year of two halves for Canada’s third most populous city.
Sales volumes grew ever higher leading up to the summer, before cooling off and then retreating after British Columbia imposed a 15 percent tax on foreign buyers in August.
Prime prices ended the year 15 percent higher, notably lower than the 25 percent increase recorded in 2015.
<a href="https://www.propertyobserver.com.au/images/2017/03/1/Screen%20Shot%202017-03-01%20at%202.23.54%20pm.jpg" target="_blank">Click to enlarge</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/2017/03/1/Screen%20Shot%202017-03-01%20at%202.23.54%20pm.jpg" alt="">
London, where many of the world’s super-rich have a home, slipped down the PIRI rankings with prime prices declining by 6.3 percent year-on-year.
The data shows it was the 3 percent hike in stamp duty for additional homes, introduced in April 2016, rather than the UK’s decision to leave the EU that helped to rein in demand.
But the tail end of 2016 saw an uptick in sales volumes and improved sentiment as the market readjusted to the new tax burden.
And what of the world’s other big-hitting financial hubs? New York had its challenges in 2016.
The strong US dollar negated some overseas interest and the delivery of a large number of new luxury projects helped inflate supply. But while volumes slowed, prices proved resilient.
With President Trump expected to embark on a programme of fiscal stimulus, reduced regulation and infrastructure investment, there is potential for stronger growth in 2017.
For its part, Hong Kong, which has languished in the bottom half of our PIRI rankings since 2014, has started to drift upwards, recording annual growth of 2.1 percent in 2016.
The increase would be higher were it not for the extension of a 15 percent rate of stamp duty that now brings Hong Kong residents (who previously paid 8.5 percent) in line with non-residents.
This latest tax change is just one of a raft of measures introduced since 2010 to keep a lid on price inflation in one of the world’s least affordable housing markets.
Given Hong Kong’s currency peg to the US dollar, some further relief may be proffered by the Federal Reserve if it restarts its rate-lifting campaign in 2017.
However, it will have to go some way to counter the demand from buyers based in mainland China, eager to hold a US dollar-linked asset.
Over the coming months, all eyes will be on policymakers in China as they attempt to reign in prices in the largest cities.
The wider mainstream market, where price growth of 30 percent year-on-year is not uncommon, continues to overshadow the luxury sector.
New cooling measures, including higher deposit rates and home purchase restrictions, have already been introduced in some cities in the hope of both slowing the rate of growth and deterring speculative demand.
<a href="https://www.propertyobserver.com.au/images/2017/03/1/Screen%20Shot%202017-03-01%20at%202.24.09%20pm.jpg" target="_blank">Click to enlarge</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/2017/03/1/Screen%20Shot%202017-03-01%20at%202.24.09%20pm.jpg" alt="">
By the final quarter of 2016, these were beginning to take effect.
While some of our strongest performers, such as Auckland, Sydney and Berlin, appear to have become permanent fixtures at the top of the rankings, a number of our newer prime movers, such as Guangzhou, Seattle and Amsterdam, can attribute their sudden ascent to the fact that their prime prices are rising from a low base.
Guangzhou, for example, now finds itself sitting alongside Shanghai in the rankings, having recorded 27 percent annual price growth.
Yet in real terms, prime prices here are half those found in China’s financial capital. Seattle and Amsterdam are also rising from a low base, but in both cases this can be considered a price correction following falls of 29 percent and 18 percent respectively post-Lehman.
Meanwhile, Europe continues to send out mixed messages. Of those locations recording a fall in prices in 2016, 50 percent were located in Europe.
A year earlier this figure was 65 percent, suggesting that the continent’s recovery is gaining traction. Amsterdam, Gstaad, Munich, Berlin and Barcelona were Europe’s top performers in 2016, but second home markets such as Ibiza, Mallorca, the Western Algarve and Lake Como also rose up the rankings.
A breakdown of the PIRI 100 by world region shows that Australasia (+11.4 percent), Asia (+5.1 percent) and North America (+4.5 percent) are the key engines of growth.
Europe and the Caribbean sit firmly “mid table”, recording moderate shifts of 0.5 percent and -0.3 percent respectively. Latin America (-2.7 percent), the Middle East (-3.3 percent), Africa (-3.4 percent) and Russia/CIS (-5.5 percent) all recorded negative growth, due to a combination of weak currencies, slowing economies, rising inflation, low oil prices and growing political risk.
Wealth creation and resulting cross-border flows have continued to shape prime property markets in 2016, with security concerns, currency movements, education and even healthcare also emerging as influential market drivers.
However, this year’s PIRI results highlight two key points.
<a href="https://www.propertyobserver.com.au/images/2017/03/1/Screen%20Shot%202017-03-01%20at%202.25.42%20pm.jpg" target="_blank">Click to enlarge</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/2017/03/1/Screen%20Shot%202017-03-01%20at%202.25.42%20pm.jpg" alt="">
First, local economic activity has a strong bearing on price performance (all of this year’s top 10 rankings report 3 percent or more in annual GDP growth).
And second, economic growth is firmly concentrated in the world’s cities (22 of the top 25 PIRI rankings are occupied by cities).
A breakdown of the PIRI results by property type also confirms this latter point.
Based on results from 2016, the value of a city-based luxury home increased by 2.4 percent on average, a ski home by comparison saw 1.9 percent growth, and a beach or coastal property slipped marginally by 0.5 percent.
The long-held “safe haven” narrative still has its place, but with strong capital growth eluding the world’s top financial capitals, we expect secondary markets across Europe and the US to come under the spotlight.
Cities that offer the potential for attractive margins, where prices are rising from a low base and where any risk is tempered by a level of transparency and good governance (Paris, Berlin, Madrid, Dublin, Chicago and Seattle) look likely to perform well.
Definition: UHNWI: Ultra-high-net-worth individual – someone with a net worth of over US$30m excluding their primary residence and HNWI: High-net-worth individual – someone with a net worth of over US$1m excluding their primary residence.
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Sydney out of top 10 leading prime residential markets: Knight Frank Wealth Report

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Greater Brisbane has shifted to better priced options compared to Sydney or Melbourne, according to Knight Frank's latest residential development report.
When Sydney and Melbourne were experiencing significant growth in turnover and value in higher density development sites in 2013/14, Brisbane was seen as a viable option for local and foreign investors priced out of these markets.
Since this time, the southern market has shifted with better priced options available in Australia’s two largest capital cities.
Brisbane CBD saw $16.1 million worth of residential sites suitable for higher density sold in the year to 30 June 2016, with an average indicative rate of $90,000 per apartment.
By 2022, Queen’s Wharf accommodating the new Brisbane Casino, and integrated resort, will breathe new life into the George Street sector of the CBD.
Together with the North region, a total of 29,280 apartments are projected until the end of 2019, with 9,560 currently under construction, 5,885 being marketed and further 13,840 were sitting with DA Approval as at 30 June 2016 (Figure 14).
<a href="/images/2016/12/01/Figure%2014.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/12/01/Figure%2014.jpg" alt="">
The North region not only dominated the number of apartments projected, but development site sales volume in the year to 30 June 2016.
A total of $513.4 million was sold, with the average rate ranging from $40,000 to $105,000 per apartment (with an indicative average of $70,000 per apartment).
The region will benefit from proposed infrastructure such as the redevelopment of the Herston Quarter, an estimated $1.1 billion mixed-use precinct for health, residential, commercial and recreational activity due for completion by 2027.
The South region saw total sales volume reach $42.1 million in 2015/16 with an average sales rate per apartment of $30,000 to $95,000 (indicative rate of $60,000 per apartment).
<a href="/images/2016/12/01/Figure%2015.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/12/01/Figure%2015.jpg" alt="">
Approximately 2,845 apartments are under construction in the South region whilst 1,535 are being marketed, potentially completed by December 2019.
Two key infrastructure projects in Greater Brisbane are the Qld Government’s Cross River Rail and Metro Brisbane projected by 2025. Both will play a critical role in ensuring rail and bus networks can meet the city’s future public transport needs.
Once the allocation of key sites along the route is determined and access to funding is sourced, both projects will provide a good injection of stimulus into the Greater Brisbane economy.
<a href="/images/2016/12/01/Brisbane%20high%20density.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/12/01/Brisbane%20high%20density.jpg" alt="">
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Greater Brisbane's better priced property options for developers: Knight Frank

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Knight Frank has published its third Chinese Outbound Real Estate Investment Report titled Changing Currents, Rising Tides.
Riding on last year’s strong momentum, the waves of Chinese outbound capital continued in major real estate markets around the world in H1 2016, with more to come through the rest of the year.
Global gateway locations have seen undiminished interest from Chinese investors, who are driven by Chinese economic and policy factors and are attracted by favourable local market conditions in gateway cities.
China’s capital outflow control has been a push factor so far, but it could prove to be a double-edged sword.
Stringent requirements have made it difficult for some investors to secure foreign exchange clearance.
According to Knight Frank’s Head of Research and Consulting, Australia Mr Matt Whitby, “The volume of Chinese investment in Australia is down considerably year-on-year because of a lack of mega-deals in the first half, as large deals such as the Investa portfolio dragged the 2015 number higher.
“Amid competition from other Asian buyers, however, there is a strong Chinese appetite for en-block commercial properties in both Sydney and Melbourne, attracted by rental growth supported by strong tenant demand and a supply shortage,” said Mr Whitby.
<ul>
<li>Chinese capital outflow continued strongly in H1 2016, with a total of US$10.7 billion invested. Although showing a 13.6 percent drop compared to H1 2015 this should be considered in the context of some of the biggest real estate deals in Chinese outbound investment history early last year, such as the US$1.9 billion purchase of New York’s Waldorf Astoria Hotel. While overall investment is somewhat softening, we saw strong growth of Chinese capital inflow in a number of key gateway cities.</li>
</ul>
<ul>
<li>
In Australia, with the absence of mega-deals such as last year’s CIC’s record breaking purchase at US$1.8bn for an office portfolio, the volume of office deals dropped 65 percent and hotel deals dropped 42% YoY. Investment in development sites stabilised. Nonetheless, Chinese and other Asian capital remain drawn mainly to Sydney and Melbourne’s office markets given their short supply and rental growth prospects. One important observation is that Chinese developers are now looking to diversify into income producing properties.</li>
</ul>
<ul>
<li>In Australia, Chinese investors and developers spent US$1.7bn in Australia in 1H 2016 – a 37 percent decline year-on-year. With the absence of mega deals, such as CIC’s record-breaking purchase at US$1.8bn for an office portfolio (AUD2.45bn), the volume of office deals dropped 65% and hotel deals dropped 42% year-on-year. Meanwhile, investment in development sites stabilised.</li>
</ul>
<ul>
<li>Chinese outbound investment as a whole was gaining momentum as we crossed the half-year mark, with the biggest push coming from the Chinese economy itself. Global gateway locations have seen undiminished interest from Chinese investors, helped by favourable local market conditions like market depth, rental growth prospects, and in the case of London, a cheaper UK pound.</li>
</ul>
<ul>
<li>However there are challenges ahead. China’s capital outflow control was designed to prevent the erosion of the country’s vast foreign exchange reserves, but its stringent requirements have made it difficult for some investors, mainly smaller ones, to obtain foreign exchange clearance. Some sizeable investors have invested through overseas subsidiaries, but these subsidiaries may run out of funds if the grip on foreign exchange reserves is not loosened.</li>
</ul>
According to Knight Frank’s Head of Asian Markets, Australia Dominic Ong, “Chinese and other Asian capital continues to be drawn mainly to the office markets in Sydney and Melbourne. Tenant demand from various sectors remains strong, but lack of supply has caused rents in both cities to rise and vacancies to fall. Yields, meanwhile, have been tightening, but are still above long-term bond yields.
“Fewer buying opportunities, coupled with the positive rental outlook, have already attracted large Chinese private developers such as Poly Group and Shanghai Shenglong to the office market. Since June there have been a number of major deals in the making, which will underpin the investment market outlook for 2016.
“Activity has picked up in the past few months. Some of the most recent transactions in Australia from Chinese buyers include 15 Help Street, Chatswood which sold for AUD43.8m to One Pro Investment Group; 20 Bridge Street, Pymble which sold for AUD78m to YuHu; 210 George Street, Sydney sold for AUD160m to Poly Group; and 61 Lavender Street, Milsons Point sold to Aqualand for AUD110m,” said Mr Ong. <a href="/images/2016/10/19/Chinese%20investment%20in%20major%20gateway%20cities.jpg" target="_blank">Click to enlarge</a>
 <img src="/images/2016/10/19/Chinese%20investment%20in%20major%20gateway%20cities.jpg" alt="">
Mr Whitby said, “The US is now firmly established as the most important destination for Chinese capital, having attracted US$5.1 billion worth of Chinese investment in H1 2016, up 21 percent year-on-year (YoY).
“The Australian market meanwhile showed a 37% YoY decline due to the absence of mega-deals we saw last year.”
Paul Hart, Executive Director, Greater China at Knight Frank said, “Meanwhile, Chinese investment in the UK showed an impressive YoY increase of 75 percent in H1. The interest in the British capital has not diminished even after the Brexit vote as the market saw a number of major transactions taking place since then. Closer to home, Hong Kong saw US$1.68 billion worth of Chinese investment in H1, a minor volume drop YoY. However we have seen a number of large deals since July which will enhance the whole year result.”
<ul>
<li>In the US, New York attracted 80% of Chinese investment in the US. A large share of this (62 percent) was in office deals, as Chinese institutional capital continued to chase trophy assets. Major hubs on the west coast, such as San Jose and Seattle, also drew interest from Chinese investors. As the Fed-led low interest-rate environment persists, Chinese investors will continue to favour tangible assets such as real estate.</li>
</ul>
<ul>
<li>In the UK, the economy’s perceived stability and London’s status as an international financial centre contributed to the UK’s 75 percent YoY increase in Chinese investment before Brexit. Private banks and conglomerates became a key part of the investment landscape, which was previously dominated by large insurance companies. Chinese investors’ interest in the city seemed unabated after Brexit, with a number of major office transactions completing since July.</li>
</ul>
<ul>
<li>Hong Kong has attracted Chinese investors thanks to increased financial cooperation and its position as the international financial centre closest to China mainland. Currency and stock connect schemes between Hong Kong and the Mainland attracted new investor and tenant demand. Owning office space is an attractive option due to Hong Kong having the world’s highest office rents. Meanwhile, the city’s residential land market also offers better value than some hotly-contested Chinese markets.</li>
</ul>
<ul>
<li>Feeling the pressure from the RMB’s steady devaluation against the US dollar, Chinese investors, particularly private conglomerates, have tended to invest aggressively in hard assets. The demand for real estate has coincided with strong appetite in other investments.</li>
</ul>
Bunny Wang, Senior Director, Head of International Capital Markets and International Project Marketing, China, Knight Frank, believes that Chinese investors will continue to be interested in the traditional gateway markets.
She notes that the buying spree that resulted from the RMB’s steady devaluation against the US dollar bodes well for gateway markets, at least in the short term.
Furthermore, despite talk of a prolonged slowdown, China’s GDP growth has stabilised at above 6.5 percent.
She believes one of the main ways the central government will achieve its GDP growth target is through infrastructure investment and real estate market-led consumption.
Given the highly competitive domestic real estate market, many investors and developers are keen to diversify their investment overseas.
David Ji, Director and Head of Research and Consultancy, Greater China at Knight Frank, believes that China’s capital outflow control could present some risks.
Stringent requirements for foreign exchange clearance aside, he believes that the prospect of high land prices in the country’s major cities would encourage the seeking of overseas opportunities.
But the complicated processes and planning issues in gateway markets could diminish the willingness of Chinese investors to explore those markets more deeply.
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