The edge of Double Bay village is set for a new apartment building designed by one of Sydney's most sought-after architects.

<a href="https://www.apartments.com.au/architects/luigi-rosselli-architect">Luigi Rosselli </a>is behind the designs of the latest plans on the desk of the Woollahra Council for a new block of 20 apartments across two adjoining sites at 351 and 353 New South Head Road, on the slope down towards the village from the south.

Levels one and two of the new eight-storey building will be dedicated affordable housing.

<img alt="Rosselli" data-entity-type="file" data-entity-uuid="805cc105-6ad9-4536-92f0-3e43e2a25965" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-11-18%20at%203.17.03%E2%80%AFPM.png?VersionId=DFNnNxe1BFFHq919FK.Q5tSXZPkWkAwO" />

The unit mix incorporates one-, two-, and three-bedroom configurations. Each apartment will be provided with private open space through balconies or terraces. A communal rooftop terrace is also planned.

Architecturally, the design is informed by a desire to bridge the transition between the commercial character of New South Head Road and the lower-scale residential areas behind. The proposal steps back from the street with landscaped setbacks and features a refined material palette.&nbsp;

“The architectural character of the building is contemporary in style and articulated to provide visual interest and respond to the surrounding context,” the Design Statement notes.

<img alt="Rosselli" data-entity-type="file" data-entity-uuid="4316870c-4332-43e6-9424-2787fbba2cd4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-11-18%20at%203.17.44%E2%80%AFPM.png?VersionId=heNnpHYL1xAj7dtWLBDkSQBrx.noZQ3l" />

The project includes basement parking with 23 car spaces, including two accessible bays and dedicated spaces for affordable housing units.

The site sits near significant heritage items, including the State Heritage-listed Overthorpe building next door. Dating back to the early 1900s, Overthorpe was initially&nbsp;part of pastoralist and politician&nbsp;Sir John Hay's garden before being converted into apartments.

Double Bay Village is undergoing a transformation with several new developments, both commercial and residential, under construction and in the pipeline. The most notable is the <a href="https://www.apartments.com.au/news/nsw/1-billion-intercontinental-hotel-double-bay-approved-for-mixed-use-redevelopment">$1 billion redevelopment of the InterContinental Hotel</a> into a&nbsp;new&nbsp;mixed-use lifestyle destination on Cross Street.

&nbsp;

Staff Writer

First look: Luigi Roselli designs latest plans for Double Bay Village 

<a href="https://www.apartments.com.au/developers/mosaic-property-group">Mosaic Property Group</a> has brought forward construction on Madeline by Mosaic, its $270 million, 37-level ultra-luxury tower in Broadbeach, after securing more than $175 million in pre-sales in just three months, the strongest off the plan result recorded on the Gold Coast this year.

Designed in collaboration with Fraser &amp; Partners and built by Mosaic’s in-house construction arm, <a href="https://www.apartments.com.au/new-apartments/madeline-by-mosaic-22-mary-avenue-broadbeach-qld-4218">Madeline</a> will comprise 59 whole- and half-floor residences, several spanning more than 400 sqm, on a site that secures one of Broadbeach’s last remaining protected ocean-view corridors. &nbsp;An extensive suite of health and wellness amenities, conceived to rival a five-star hotel, will further enhance the resident experience.

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Mosaic has rapidly expanded its Gold Coast presence, with <a href="https://www.apartments.com.au/new-apartments/madeline-by-mosaic-22-mary-avenue-broadbeach-qld-4218">Madeline</a> marking its 13th luxury project in just six years, an unprecedented run of delivery in one of the nation’s most competitive markets.

Marella by Mosaic in <a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> was completed earlier this year, with Lily by Mosaic, also in Broadbeach, on track for completion in late 2025. Sophia by Mosaic in Palm Beach and Isabel by Mosaic in Burleigh Heads are both advancing their building programs, taking Mosaic’s active Gold Coast construction portfolio to more than $800 million in combined project value. All projects are either sold out or nearing sell-out.

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Beyond the Coast, Mosaic is advancing a South East Queensland pipeline worth more than $2 billion, while already having delivered projects valued at over $2 billion.

Founder and Managing Director Brook Monahan said the success of Madeline is a testament to Mosaic’s ability to consistently meet the market through discipline, evolution, a commitment to quality and a customer-first mindset.

&nbsp;

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“Our entire model is built on delivering extremely high quality, assurance and certainty," Monahan says.

"We listen, we adapt, and we learn, and that is why our homes resonate so deeply, why our customers return and refer, and why our projects continue to sell out well ahead of completion. Something we continue to work hard towards maintaining and will never take for granted.

“Madeline brings together rare fundamentals, a prime, protected ocean-view site, generously scaled exquisite residences, no more than two per floor, and genuine design integrity. with the confidence that Mosaic will deliver exactly what we promise.”

Monahan acknowledged that while demand is strong, the construction environment remains highly challenging.

“There is no denying that costs, labour, and capacity are still under real pressure. But our integrated model gives us visibility and control across every stage of delivery, and that is how we continue to navigate those headwinds without compromise to quality or certainty for our customers.”

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He stated that in this environment, trust is a crucial factor for buyers.

“With so many projects delayed or withdrawn, buyer confidence has been shaken, and they are making a flight to certainty by rewarding developers with a track record of delivery. Madeline’s success is proof that when people trust the developer, they’re prepared to commit early and with conviction. We’ve never gone back to purchasers asking for more money, and that consistency, built on trust, integrity, and authenticity, is what sets Mosaic apart.”

Monahan, who was recently appointed Chairperson of Queensland’s Residential Tenancies Authority, said Mosaic’s growth has never been about chasing volume but about discipline and clarity of purpose.

“We don’t chase every site or every opportunity, we focus only on those that allow us to deliver enduring value. That discipline is why we’ve been able to grow without compromising quality. We don’t overpromise, we don’t cut corners, and we don’t walk away after completion. That consistency gives our buyers confidence, and it’s why they continue to back us.”

Madeline by Mosaic is expected to be completed in early 2028, with remaining residences priced from $3.5m.

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Joel Robinson

Mosaic fast-tracks construction of Madeline by Mosaic after $175m sales blitz

PQD, a joint venture between Pomeroy Pacific and Quattro Corp, has unveiled <a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-148-152-riversdale-road-hawthorn-vic-3122">Kooyongkoot</a>, an exclusive collection of just 18 luxury residences, offering resort-style living on a scale rarely seen in boutique developments.&nbsp;

Located on Kooyongkoot Road within <a href="https://www.apartments.com.au/developments/hawthorn-vic-3122">Hawthorn</a>’s prestigious Scotch Hill precinct, Kooyongkoot brings together a mix of wellness and lifestyle amenities.&nbsp;Residents will have access to a private wellness centre, including infrared and traditional saunas, a massage and therapy room, cold therapy shower, a yoga and pilates studio, and a fully equipped gym.&nbsp;

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Beyond wellness, <a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-148-152-riversdale-road-hawthorn-vic-3122">Kooyongkoot</a> features a curated suite of lifestyle amenities, from an immersive golf simulator with its own guest viewing lounge to a residents’ retreat designed for entertaining. Additional conveniences include a professional-grade car wash, dog wash station, 24/7 parcel lockers, and expansive private storage rooms for every resident.&nbsp;

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"Kooyongkoot represents a shift in how boutique developments are imagined," said Mark Pomeroy, CEO of Pomeroy Pacific.

"We listened closely to what downsizers actually want – not just beautiful interiors, but lifestyle-enhancing amenities without the compromises of high-density living. This is not a project that was simply drawn and delivered. It is the product of dedication, discipline and a desire to create something truly enduring in Hawthorn’s most coveted precinct.”&nbsp;

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Designed by award-winning studio <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a>, the building blends sculptural architecture with refined materiality. Residences feature oak timber floors, natural stone finishes, V-Zug appliances, and extensive custom detailing throughout. Penthouses elevate the experience further, with private lift lobbies, three-meter ceilings, and rooftop terraces with private pools and panoramic views.&nbsp;

Light and airflow were central to the building's design. A four-storey central garden lightcourt draws natural light and fresh air into every corridor, creating openness and calm throughout. The 18 residences span four floors, with two dedicated lift cores providing discreet access and reinforcing a sense of privacy and exclusivity.

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"Designing Kooyongkoot was about achieving intimacy without sacrificing luxury," said Chris Stribley, founding partner at Cera Stribley. "We’ve created spaces that feel expansive, serene, and meaningfully connected to daily life. Wellness, convenience and calm were essential design principles from the beginning.”&nbsp;

Positioned within walking distance of parklands, private schools, Auburn Village and Camberwell Junction, Kooyongkoot offers a rare opportunity to reside in one of Hawthorn’s most tightly held residential enclaves, with the ease and amenity of true resort-style living.&nbsp;

The project is currently under construction, with registrations of interest now being accepted.

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PQD unveils Kooyongkoot, resort-style living in the heart of Hawthorn

Builder–developer Deicorp has unveiled yet another new apartment development in Greater Sydney.

This time, they’re breaking into the booming Lower North Shore market for the first time with the launch of <a href="https://www.apartments.com.au/new-apartments/falcon-alexander-crows-nest-8-alexander-street-crows-nest-nsw-2065">Falcon &amp; Alexander</a>&nbsp;in Crows Nest.

Named after its location on the corner of Falcon and Alexander Streets, and within walking distance of the Crows Nest Metro, the development has been designed by Turner and will comprise around 212 apartments above a ground-floor retail precinct and a hotel, the latter increasingly forming part of Deicorp’s strategic development mix.

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The one-, two-, and three-bedroom apartments positioned around a central atrium and landscaped internal gardens. Higher-level residences will take in views toward Sydney Harbour, while interiors are framed by floor-to-ceiling glazing and finished with a mix of stone, timber and custom joinery.

In addition to the 140 private residences, 48 apartments will be delivered as part of an affordable housing component. A 100-room hotel will occupy the southern corner of the site, with residents accessing a private rooftop garden, dining room, and wellness spaces. Ground-floor activation will include space for cafés and small-scale retail.

[smartcode_project:default project_id=135323 project_image_fid=351927]

Deicorp founder Fouad Deiri said the project marks a new step for the group’s portfolio.

“This is a community we deeply respect, and we’re proud to contribute with a project that reflects the character, energy, and potential of <a href="https://www.apartments.com.au/developments/crows-nest-nsw-2065">Crows Nest</a>,” Deiri said.

“This is an iconic location, and a great location deserves a great design. With Falcon &amp; Alexander, we’re delivering more than just apartments; it will be a new landmark for Crows Next that not only delivers housing but will benefit the community with an activated retail offering."

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Deicorp went through several design iterations for Falcon &amp; Alexander, clearing hurdles with both the local council and State Government to get the project to where it is now.

The builder–developer has already commenced construction on the building, one of several Deicorp is delivering across Sydney. The company currently has more than 2,000 apartments under construction, with plans for thousands more in the pipeline.

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Deicorp launches Falcon & Alexander, Crows Nest apartments

Gold Coast developer <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Group</a> has made a strong market debut in Brisbane by selling nearly three-quarter of its recently launched South Brisbane apartment development, Symphony.

Sherpa fielded over 3,000 expressions of interest for the development which forms part of Sherpa's burgeoning Flourish brand, aimed at offering a more affordable entry point for first home buyers than what else is on the market.

<a href="https://www.apartments.com.au/new-apartments/symphony-south-brisbane-21-23-cordelia-street-south-brisbane-qld-4101">Symphony</a>, proposed for a prime 1,366sqm site at 21–23 Cordelia Street in <a href="https://www.apartments.com.au/developments/south-brisbane-qld-4101">South Brisbane</a>,&nbsp;will deliver 138 apartments across 25 levels, with 25 of the apartments priced under $1 million.

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“The affordability that Symphony presents to residential property buyers has created a remarkable level of enquiry for what we believe is a standout project for the South Brisbane market,” said Sherpa Group founder Christie Leet.

“The Flourish brand has been highly successful for us on the Gold Coast, and it’s evident that Brisbane buyers are equally drawn by the quality and amenity that Symphony offers in one of the most vibrant inner-city locations.”

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Sherpa Group has been among the most prolific developers on the Gold Coast in recent years, undertaking 15 projects since 2018.

The company has currently seven projects in Palm Beach, with four of them under the Flourish brand that is delivering affordable beachside luxury for one of the most undersupplied markets on the Gold Coast.

Symphony, which is positioned at the junction of South Bank, West End, and Fish Lane, is located in the heart of Brisbane’s entertainment, dining and leisure precinct. The location also offers exceptional walkability to QPAC, galleries, riverside parklands, the CBD, major universities, hospitals, and transport hubs.

“As our first development for the Brisbane market, we saw this precinct as a strategic location for Sherpa to deliver attainable housing in one of Brisbane’s most connected and culturally vibrant neighbourhoods,” added Leet.

“Our vision for each project is always founded on a sense of community, which is why we have ensured that locals who already know and love this area were prioritised during the early release of Symphony residences.”

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Symphony has attracted strong interest from a range of buyers, including first home buyers, downsizers, local owner-occupiers, and investors.

Building on a solid reputation where 100 per cent of projects have been successfully delivered on the Gold Coast, Sherpa Group enlisted architectural firm HAL to design Symphony - envisaging an "architectural gem with activated street frontage and an array of amenities to rival five-star resorts."

Symphony features an expansive rooftop wellness and recreation area spanning more than 1,400 sqm across two levels, with all amenities designed to foster community, connection and wellbeing among residents.

The rooftop will comprise a heated pool, steam room, saunas, and hot and cold plunge pools; work from home spaces, private treatment room, pool deck cabanas and private outdoor BBQ areas; a private dining room and residents’ lounge; a fully equipped gym and yoga studio; and panoramic views of the Brisbane skyline and Mt Coot-tha.

Symphony buyers are given access to a full-time concierge service to provide off the plan assistance and construction updates; hard-hat tours during construction; and post-settlement move-in and appliance induction support.

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Sherpa locks in $240m of sales at debut Brisbane apartment development Symphony

Property market

The Brisbane unit market is showing consistent growth,&nbsp;according to CoreLogic&#39;s Monthly Hedonic Home Value Index.

Values jumped 1.4%, following the 1.6% gains in March and 1.5%&nbsp;over February. Values are now 6% up over 2022 already, well on their way to matching the 14.4% growth over 2021.

The quarterly performance, up 4.6%, is the highest in the country for the unit market.

The median apartment value in Brisbane is now $488,393. At the start of 2021, it was just over $390,000.

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Following the RBA&#39;s first interest rate rise in nearly 12 years at the May meeting,&nbsp;the Real Estate Institute of Queensland (REIQ) said the&nbsp;resilient Queensland market the higher rate forecasts.

REIQ CEO Antonia Mercorella said given the level of inflation, this may not be the last interest rate rise we see, but it was important to recognise that many market conditions and external factors remain favourable in Queensland.

&ldquo;We know that consumer confidence is key, and this move by the RBA will certainly make people stop and think more carefully about how much they are prepared to borrow, because it&rsquo;s a timely reminder that interest rates can and do go up,&rdquo; she said.

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&ldquo;While on the face of it, it&rsquo;s not an insignificant rise, in the grand scheme of things interest rates have been at historic lows for some time and are still very low.

&ldquo;This is also where our relative affordability is an advantage, as our average home loan rate is much lower than in capital cities like Sydney and Melbourne, and so the impact will be felt less here.

&ldquo;We remain confident in the resilience of the Queensland market because the need and demand for housing is irrespective, and an interest rate rise simply causes people to rethink what they are prepared to spend and how big of a loan they are prepared to enter into.&quot;

Total advertised inventory of both houses and apartments&nbsp;is more than 20 per cent below levels from a year ago in Brisbane, and around 40 per cent lower than the previous five-year average.

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The median apartment value in Brisbane is now $488,393. At the start of 2021, it was just over $390,000

Brisbane apartment market insights: What happened over April

Melbourne&#39;s unit market has continued to hold firm despite a cooling off in the house market.

CoreLogic&rsquo;s national Home Value Index pegged the Melbourne-wide apartment growth at 0.4% over April, the third consecutive month growth in the unit market has outstripped growth in the house market.

The Melbourne unit market (which incorporates both units and townhouses), is now 0.2% since the start of 2022, after posting 0.2% growth across March and 0.1% in Feb. Values started the year poorly, going backwards -0.4% in January.

The median apartment value in Melbourne is now $630,671.

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The growth in unit values is a stark contrast to the house market, which is sliding due to the affordability factors brought to more of a head following the RBA&#39;s interest rate hike in May, and expectation of further rate hikes.

Houses Melbourne-wide, on average, have remained flat since the start of 2022, but that was mainly due to a strong start in January. The rolling quarterly growth is now -0.5% after a 0.2% decline across April, CoreLogic data found.&nbsp;

CoreLogic&rsquo;s Research Director Tim Lawless&nbsp;says the weakening state of the market has taken the rolling quarterly trend into negative territory across Melbourne for the first time since these cities were in the midst of extended lockdowns in mid-to-late 2020.

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Advertised inventory, at a national level, is tracking almost 30 per cent below the previous five-year average however, in weaker markets like Melbourne, advertised supply levels have normalised, with listings in Melbourne 8.2%&nbsp;higher.

Higher stock levels across these markets can be explained by an above average flow of new listings coming on the market in combination with a drop in buyer demand

&ldquo;With higher inventory levels and less competition, buyers are gradually moving back into the driver&rsquo;s seat. That means more time to deliberate on their purchase decisions and negotiate on price,&rdquo; Lawless says.

Rental markets are also showing multi-speed conditions, with most of the capital cities experiencing an upward trend in rental growth in 2022. Nationally, rents were up 2.7% over the three months to April, taking the annual change in national rents to 9.0%. A year ago, the annual change in national rents was 4.9 per cent. Based on the annual change, house rents (+9.1 per cent) are rising faster than unit rents (+8.7 per cent), however this trend is changing sharply as demand for unit rentals increases.

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&ldquo;On a rolling quarterly basis, we are now seeing unit rents rising faster than house rents especially in Melbourne where rental conditions across the unit sector were previously much softer,&rdquo; Lawless says.

&ldquo;The shift in rental demand towards units reflects both rental affordability pressures, which are deflecting more demand towards the &lsquo;cheaper&rsquo; unit sector, and the return of overseas migrants and visitors. Rental demand from overseas arrivals tends to skew towards inner city and higher density precincts.&rdquo;

In Melbourne, unit rents are 3.6 per cent higher over the past three months compared with a 1.2 per cent rise in house rents. Higher yields and long-term prospects for capital growth could see investors comprising a larger portion of housing market activity.

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With the cash rate set to move through a rapid tightening cycle, CoreLogic expect this trend towards a gradual softening in the growth rate will become more pronounced over the coming months, before the national index starts to trend lower.

&ldquo;Although we are expecting the housing market to move into a downturn through the second half of the year, it is important to remember the context of the recent growth phase,&rdquo; he says.

Melbourne's unit market has continued to hold firm despite a cooling off in the house market


alisonwarters@gmail.com

Melbourne apartment market insights: What happened over April

As Brisbane&rsquo;s median house price skyrockets, the gap to the median apartment price widens, but it&rsquo;s set to be short-lived with Colliers research showing the apartment market tipped is for a dramatic price increase.

Brisbane&rsquo;s median house price increased by 10.7 per cent to $890,000 in the March quarter, according to research by Colliers.

The gap between the median house price and the median apartment price is at 49 per cent, the greatest differential Brisbane has seen in two decades.

However, Colliers Director Residential Queensland Andrew Roubicek believes the city is in for a significant price increase in the apartment market as we move into the second half of 2022, with compounding pressures on the construction sector forcing developers of new stock to lift prices.

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&ldquo;Working closely with developers, builders and architects as part of the project marketing arm of Colliers, and selling more than 5,000 apartments annually, we have seen first-hand the impact of labour and material shortages,&rdquo; Roubicek said.

&ldquo;Costs are rising by up to 30 per cent, and recent floods and COVID-induced issues are intensifying the problem and causing significant delays on construction timeframes.&rdquo;

The impact of cost increases as a result of compounding environmental factors has had a dramatic impact on the construction sector, with several builders entering voluntary administration of falling into receivership.

However, Roubicek said the impacts of the cost increases and external pressures had a far wider reaching implications than the construction sector alone.

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&ldquo;There have been several examples of new developments achieving presale requirements of around 80 per cent, only to have developers refund deposits and tear up contracts because building costs have escalated to a point that the development is financially unviable,&rdquo; he said.

&ldquo;It&rsquo;s left homebuyers utterly upset and disgruntled, particularly in what has become such a competitive market.

&ldquo;As a consequence, developers who are looking to acquire new development sites are forced to increase their projected sale prices by around 20 per cent in their feasibilities. Just 18 months ago a two-bedroom apartment in Brisbane might have sold off the plan for $9,000 per square metre.

&ldquo;But, to build that apartment today the developer would need to achieve a sale price of $11,000 per square metre for the project to stack up. That&rsquo;s a 20 per cent price increase passed directly onto buyers,&rdquo; he added.

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Roubicek said the economic impact of interest rate increases would further impact on housing affordability, forcing buyers back into the apartment market.

&ldquo;Buyers may see better value in the established apartment market in the short-term, as opposed to buying new off the plan. However, this will be a short-lived alternative as supply dries up and investors stake advantage of rental vacancy rates.

&ldquo;We expect surge in demand from investors as the rental vacancy rates continue to fall to less than one per cent and rental yields approach five per cent. This increase in demand will have a significant impact on the second hand apartment pushing up prices reflecting the price of a new apartment.&rdquo;

The gap between the median house price and the median apartment price is a staggering 49 per cent, the greatest differential Brisbane has seen in two decades.



Why Brisbane apartments are set to see significant price growth: Colliers International Australia

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A record two thirds of Australians say now is a good time to buy property, according to the latest research from comparison website Finder.

Having surveyed over 20,000 respondents in their Consumer Sentiment Tracker nationally, 67 per cent believe now is a good time to buy, an all-time high since Finder began tracking the stat in May 2019.

It was 42 per cent in April. 
Graham Cooke, insights manager at Finder, said that the recent uptick in buyer confidence is a good sign for the economy.  
“This rebound in buyer confidence is indicative of increased economic activity over the past few months, along with an optimistic outlook for 2021," Cooke says. 
“Not only did the Australian government do a better job than most at restricting the spread of COVID-19, but federal and state economic support measures helped prop up the property market.  

<img alt="" height="738" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/finder_survey_january.jpg" width="1200">

“Now we're seeing that house values in every capital city bar Melbourne are higher than they were compared the same time last year.  
“This trajectory looks set to continue, with 86% of economists telling Finder* that they expect prices to fully recover nationally this year,” Cooke said. 

Nearly 19 per cent of Australians expect house prices to "significantly increase" in their area. That was just five per cent in September. 
Those who expect property values to "somewhat increase" has jumped to 44% from a low of 18% back in April. 
</body></html>

Graham Cooke, insights manager at Finder, said that the recent uptick in buyer confidence is a good sign for the economy.

A good time to buy property? A record high number of Aussie's think so

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Media coverage of the Westpac decision to lift mortgage rates 0.2 percentage points has been typically sub-standard.
Many articles, inspired by economists suffering from limelight deficit syndrome, have portrayed this as a death knell for property markets.
As someone who has studied the relationship between interest rates and price movements, I can tell you that this is a not a reasonable conclusion.
Economists and journalists, with their simplistic thought processes, tend to believe that low interest rates = property boom, and rising interest rates = property decline. This contradicts both common sense and historical precedent.
Falling interest rates usually coincide with subdued property markets. The RBA cuts interest rates when the economy is struggling, consumer confidence is low and unemployment is rising – i.e. conditions which are least likely to produce property booms.
This is why most of Australia does not have booming property markets. Only Sydney, which is the centre of the one economy (NSW) that is really pumping, has had a boom. Melbourne, the capital of a state with an okay economy, has displayed some buoyancy but nothing approaching the dizzy heights of Sydney. 
Most of the state and territories have struggling economies and their capital city property markets – Perth, Hobart, Canberra, Darwin, Adelaide – have been stuck in neutral or reverse. Years of very low interest rates have been utterly irrelevant in all of these places.
Regional Australia is dotted with markets that have dropped sharply and others that have gone nowhere in terms of price movements. The exceptions are relatively few and most of them are located amid that one strong state economy, New South Wales. 
The bottom line is that interest rates usually are irrelevant. Economists appear to think they’re the only thing that matters and the sole determinant of outcomes in real estate. In truth, they have little or no bearing. 
Other factors have much greater influence. Sydney had its boom because a change of State Government in 2011 returned sanity and competence to governance, the economy started pumping again and infrastructure spending was revitalised. Money started circulating, businesses started spending, consumers started feeling good about things and the property market, which had been largely dormant for a decade, burst to life.
It would have happened whether the official interest rate was 2%, 4% or 6%.
Conversely, interest rates are most likely to be rising when the national economy is strong, with lots of jobs being created, confidence high and businesses spending big. These are the conditions that drive property booms – and the RBA will lift interest rates to dampen things down. 
Often it requires a long period of multiple rises to quell the buoyancy. Therefore, genuine national property booms – unlike what we have at the moment - usually coincide with periods of high or rising rates.
In the late 1980s, interest rates were lifted repeatedly without dampening the boom - and mortgage rates went as high as 17% before the bull run ended.
To suggest that a 0.2 percentage point rise by one lender will kill the (Sydney) boom shows a low level of understanding.
The reality is that the one major boom in the nation, Sydney’s, has been slowly deflating since the start of the year. APRA didn’t need to take action because the market was taking care of the situation without any interference from self-important bureaucrats.
And Westpac’s tiny nudge to interest rates will have no bearing on the situation.
 
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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Interest rates usually are irrelevant: Terry Ryder

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It didn’t take long for some property commentators to start declaring that the Sydney market was crashing when last week clearance rates came in at 65.1%.
The fools have been released from the asylum when you closely scrutinise this data where Sydney consists of approximately 700 suburbs, so are they all crashing? I looked up Mosman’s clearance rate for last week and it came in at a respectable 87.5% which is hardly crashing as some would have you believe. Don’t get me wrong it is clear that the Sydney real estate market is correcting rather than crashing – this is not a bad thing either.
The problem for some is that intellectually they can’t differentiate between the strong investment market over the owner occupier market, with the investment market cooling at a much more rapid pace due to lending restrictions and consumer sentiment adjustments – which are long overdue.
Many consumers who are chasing investment properties should be quite concerned about what’s around the corner and I’m not referring to banks increasing their respective lending rates. The Reserve Bank of Australia (RBA) can stand aside for the moment because on Melbourne Cup day should it decide to lower the cash rate the major banks won’t be following suit with Westpac, CBA, NAB and ANZ hiking their rates just in the last week. As soon as one moves inevitably the others will all follow although it would be highly unlikely that Westpac will be the next to increase rates.
All eyes should now be on the Australian Taxation Office (ATO) who have now taken over the responsibility of being Australia’s property watchdog. In 39 days the amnesty period for illegal property acquisitions expires and then we will start to see how many have deliberately broken the laws by purchasing Australian real estate – my tip is this will be huge where we can expect 2016 to be the year of the Divestment Order.
This may surprise you that there is a much larger property investigation that will have a significant impact on Australia’s property industry. That being Student Visa Holders who are allowed to purchase a property whilst completing their tertiary studies on the proviso that when they have completed their degrees the subject property must then be sold. The only problem is that Australia’s Foreign Investment Review Board (FIRB) who are entrusted to monitor such acquisitions have never actually followed through so we now have no idea how many thousands of properties this includes.
To make matters worse on 18 December 2008, the Rudd Government changed the policy where Student Visa Holder residents in Australia are no longer subject to a $300,000 limit on the value of an established dwelling as their residence. This then saw some students acquiring multi – million dollar residences. Also temporary residents were not required to notify FIRB of any intended acquisitions for established dwellings that were to be their principal place of residence.
Again we are talking about thousands and thousands of transactions where many will now end up with Divestment Orders.
The RBA this week declared in its biannual Financial Stability Review that “Recent investigations by regulators have revealed that standards were somewhat weaker than had originally been thought.” In that case any significant increase in property volumes onto the market would see prices coming down as these are established properties, so unlike off–the–plan properties where 100% can be sold offshore to non-Australian residents.
We are now seeing the housing price growth at its slowest pace since 2012 – which explains why the ATO have a duty of care when they start issuing Divestment Orders. We can also expect to see many households fixing interest rates on their respective mortgages.
A positive sign for those renting, when last Friday the Australian Bureau of Statistics finally got around to updating Australia’s housing occupancy data (the last release was in 2013), the proportion of those renting has edged up to 31.4% with 63.4% of Australians renting being under 35. To further identify just how big the investment market for real estate in Australia is, 1.5 million households now own investment properties on top of their principal place of residence.
Whilst the finger is clearly pointed at negative gearing (I will address that next week) when it was introduced in the late 1990’s, approximately 40% of houses were owned outright with only 28% renting.
The issues are clear in that we have problems with policy making, and that requires urgent attention although this has not been helped with actual mortgage interest rates falling from 7.1% to 4.7% over the past five years.
Property is all about supply vs demand – supply is what we need to be paying closer attention to, so watch the ATO with great interest. Who would have ever thought the ATO would play a central position with Australia’s property markets.
<h5>MOSMAN – 2088</h5>
• Number of houses on the market this time last year – 104 • Number of houses on the market last week – 61
• Number of houses on the market this week – 64
• Number of apartments on the market this time last year – 65
• Number of apartments on the market last week – 59
• Number of apartments on the market this week – 60
<h5>CREMORNE – 2090</h5>
• Number of houses on the market this time last year – 19
• Number of houses on the market last week – 9
• Number of houses on the market this week – 10
• Number of apartments on the market this time last year – 32
• Number of apartments on the market last week – 23
• Number of apartments on the market this week – 22
<h5>NEUTRAL BAY – 2089</h5>
• Number of houses on the market this time last year – 7
• Number of houses on the market last week – 13
•Number of houses on the market this week – 10
• Number of apartments on the market this time last year– 51
• Number of apartments on the market last week – 32
*Number of apartments on the market this week – 33
 
ROBERT SIMEON is a director of <a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> and has been selling residential real estate in Sydney since 1985.  He has also been writing real estate blog <a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> since 2000. 
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Concerns about upcoming Divestment Orders: Robert Simeon

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There are mounting signs that Australia’s housing market may be moving through the peak of the cycle, however it is important to remember that strong housing market conditions have been evident in Sydney and Melbourne while every other capital city has shown relatively sedate conditions.
CoreLogic’s September indices results, released two weeks ago, showed that Sydney dwellings values remained flat over the month and other data flows are also pointing to a moderation in growth conditions across Australia’s largest city and the broader housing market.
The factors that hinting at a market peak (and outlined in further detail below) include:
<ul>
<li>Auction results have been consistently moderating, especially in Sydney where clearance rates have been sub 70% consistently over the past five weeks</li>
<li>Listing numbers are rising, which is normal during the Spring season, but a higher than normal number of homes are being added to the market in Sydney which is contributing to higher stock levels than a year ago and rising months of supply.</li>
<li>Investment demand is moderating due to both tougher lending from the banks as well as market disincentives such as low yields, affordability constraints and a mature growth cycle.</li>
<li>Mortgage related activity has fallen across CoreLogic platforms. Although activity remains higher than a year ago, mortgage related events are down from heights seen over the first half of 2015 and aren’t seeing their normal spring bounce.</li>
<li>Rents are hardly moving which has pushed rental yields to historic lows in Sydney and Melbourne. Paying a landlord is likely becoming more affordable than paying a mortgage despite the low interest rate setting.</li>
<li>The cost of debt is rising outside of any upwards movement in the cash rate. Higher debt servicing costs can only act as a disincentive.</li>
<li>Supply levels are set to rise further as the pipeline of approvals moves through the commencement phase and onto completed housing product. Inner city apartment markets are most exposed to higher supply.</li>
</ul>
While conditions may be starting to slowdown, particularly in Sydney, the coming months will provide further clarity about housing market conditions. Picking the turning point in the housing market is easy in retrospect, but as the market evolves it can be hard to separate short term movements from the beginnings of a longer term trend.   The coming months of data flows through to the end of the year will provide a great deal more perspective.”
Mature growth cycle The current growth cycle broadly commenced in June 2012, with dwelling values shifting almost 32% higher since this time across the combined capital cities. The rate of capital gains has been led by Sydney where values are almost 50% higher, and Melbourne where dwelling values have shifted 35% higher over the cycle to date. Brisbane has seen the third highest rate of value growth over the period at a comparatively modest 14.5% showing the multi-tiered nature of the capital city housing market at present.
<a href="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.04.03%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.04.03%20AM.png" alt="" width="790" height="598">
Dwelling values do fall. Capital city dwelling values retreated by 7.2% over the previous down phase which lasted from October 2010 through to the end of May 2012, and previously during the GFC period of 2008 capital city dwelling values shifted 6.1% lower.
<a href="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.05.26%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.05.26%20AM.png" alt="" width="836" height="614">
 
Auction results are moderating but remain historically high The auction market peaked over the last week of April this year with a combined capital city clearance rate of 82%. Since that time, clearance rates have been consistently falling, with weekly clearance rates holding below the 70% mark over the past five weeks.
Sydney has shown a similar trend, with clearance rates peaking at 90% over the last week of April. Sydney’s clearance rate was recorded at 63% last week, the lowest clearance since March 2013. The lower clearance rate comes on substantially higher volumes compared with a year ago. The Spring season to date has seen 7,193 auctions held across Sydney which is 1,609 (29%) higher than over the same period a year ago.
The slump in clearance rates hasn’t been as sharp in Melbourne where the weekly clearance peaked at 87% over the last week of April and has consistently reduced to the current level of around 73%. Melbourne clearance rates haven’t slipped below 70% since February this year. Auction volumes across Melbourne are at roughly the same level as a year ago, with 7,394 auctions held so far this Spring (7,381 at the same period a year ago).
Outside of Sydney and Melbourne, auction sales are only a small proportion of all sales. Over the year to date, Sydney and Melbourne account for 84% of all auctions held across the capital cities.
<a href="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.07.10%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.07.10%20AM.png" alt="" width="880" height="1011">
Listing numbers are rising While it’s normal for listing numbers to ramp up during the Spring season, the number of new listings being added to the Sydney housing market is now 4.4% higher than last year and total listing are nearly 6% higher than a year ago suggesting new advertised supply isn’t being absorbed as fast as a year ago. The same trend of higher listing numbers has been evident for some time in the weakest housing markets of Darwin and Perth where total listing are roughly 12% higher compared with a year ago.
<a href="/images/2015/10/26/8-580x378.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/26/8-580x378.jpg" alt="">
 
Listing numbers haven’t seen the same escalation in Melbourne where the housing market doesn’t appear to be slowing at the same pace as the Sydney market. Listing numbers remain lower than a year ago in Brisbane, Adelaide and Hobart as well, where value growth has been much more moderate compared with Sydney and Melbourne.
With listing numbers rising in some markets, ‘months of supply’ is also rising
‘Months of supply’ provides an indication about how long it would take, based on the current rate of sale, the market to absorb all the homes currently being advertised for sale. Sydney is still showing the months of supply reading at 2.4 months, however, we have seen the first rise in this reading since 2012. At the same time, months of supply is holding firm in Melbourne but reducing in Brisbane, Adelaide and Hobart. Where housing market conditions are weaker (Perth, Darwin, Canberra) the monthly of supply readings are rising, providing better buying conditions for prospective purchasers.
<a href="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.12.39%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.12.39%20AM.png" alt="">
Investment demand appears to be moderating The value of investment related housing finance commitments has reduced over three of the past four months and owner occupiers have once again overtaken investors as being the most active segment of the housing market based on the value of new loans being committed to.
 The slowdown in investment related mortgage activity has been evident across every state, but has been most felt in New South Wales, where investors have reduced from comprising nearly 63% of the market in May this year to a much lower (but still high from a historical perspective) 54.9% in August. It’s likely investment activity has reduced further over recent months due to the premium being placed on investment mortgage rates and a requirement for larger deposits, as well as natural disincentives such as record low rental yields and affordability and affordability constraints.
<a href="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.14.16%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.14.16%20AM.png" alt="">
 
Mortgage related activity has eased from historically high levels across CoreLogic mortgage platforms
CoreLogic facilitates more than 90% of all mortgage related valuation instructions, which provides one of the timeliest indicators of mortgage activity available. While mortgage activity is approximately 4% higher than at the same time last year, activity has moderated from the highs recorded earlier in the year.
<a href="/images/2015/10/26/15-580x301.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/26/15-580x301.jpg" alt="">
Weekly rents are hardly moving and gross rental yields have pushed to record lows Across the combined capital cities, weekly rents have increased by only half a percent over the past twelve months. At a time when capital city dwelling values have increased by 11.0%, the sluggish pace of rental movements has pushed rental yields to the lowest level on record.
Gross rental yields are the lowest in Melbourne and Sydney at just 3.0% and 3.3% respectively (lower for detached houses and slightly higher for apartments) and also sit at record low levels. Accounting for holding costs such as vacancy, property management fees, maintenance etc, the net rental yield in these cities likely to be around the low to mid two percent mark.
The low yield scenario is likely to act as another disincentive for investors at a time when the growth cycle has been running for almost three and half years. for investors at a time when the growth cycle has been running for almost three and half years.
<a href="/images/2015/10/26/16-580x152.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/26/16-580x152.jpg" alt="">
 
Costs of debt are rising out of cycle with the cash rate
In July this year Australia’s largest banks placed a premium on investment related mortgage rates of between 27 and 29 basis points. More recently, Westpac has announced additional premiums on mortgage rates for both owner occupier and investment loans outside of any movement in the cash rate.
<a href="/images/2015/10/26/17-580x227.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/26/17-580x227.jpg" alt="">
 
Supply levels are set to increase further
Dwelling approvals appear to have peaked earlier this year after an unprecedented boom in the number of dwellings approved for construction. As the pipeline of approvals migrates to project commencements and ultimately completions, we can expect the supply of new housing, particularly apartments, to provide a further easing in price upwards price pressures.
The majority of new supply set to hit the market will be in Melbourne and Sydney where population growth has remained the strongest, however Brisbane and Perth have also seen a substantial influx of new housing approvals. In last week’s Financial Stability Review the Reserve Bank warned of the risk of a potential housing over-supply in inner city areas of Melbourne and Brisbane due to the large boom in new apartment construction.
<a href="/images/2015/10/26/18-580x202.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/26/18-580x202.jpg" alt="">
Tim Lawless is head of 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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tlawless-5VLUrbAk9s

The seven signs that the property market may be peaking: Tim Lawless

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CoreLogic-RP Data reported a rebound in preliminary auction clearance clearance rates, with increases in Sydney (to 72.8%), Melbourne (74.1%), and Brisbane (59.4 %).
<a href="/images/2015/10/12/A1.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/12/A1.jpg" alt="">
The trend in Brisbane improved slightly from 59.1% last week and 48.8% one year ago.
<a href="/images/2015/10/12/A2.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/12/A2.jpg" alt="">
 
<div>Sydney's preliminary clearance rate of 72.8% from an elevated number of 1,141 auctions remained strong, but the market is clearly now a two-speed affair with the western suburbs, north west and south west all having slowed in recent weeks.</div>
<div> </div>
<div>The northern beaches recorded the strongest clearance rate this weekend (88%), with the eastern suburbs (85.5%) and city &amp; inner south (81.9%) all recording strong results.</div>
<div> </div>
<div>The eastern suburbs have proven to be particularly strong performers of late.</div>
<div> </div>
<div>Most properties with a Bondi tagline continue to sell well, while Bronte, Clovelly, Coogee, Darling Point, Maroubra etc. also remain rock solid...</div>
<a href="/images/2015/10/12/A3.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/12/A3.jpg" alt="">
 
The real blockbuster sales this weekend, however, were seen on the lower north shore, specifically in Chatswood, with the previous suburb record being swept away...twice.
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. 
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.
 
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Auctions on the rebound: Pete Wargent

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Now, if you are not a believer in being prepared and you don't feel that the property market will drop; put that coffee mug away. Click back to your Facebook page. Danger, read this at your own peril.
For the rest of us, it's time to pour ourselves a fresh cup of coffee, and look at the property market trends. Trends that we have been discussing for over 12 months now, and have been preparing our readers for: i.e. the changes in market forces.
Here we are, moving into 2016 and again, economists with invested interest in the property market continue to spruik the “steady property growth” in Sydney and the “she’ll be right” lines.
Our readers, followers and clients, on the other hand have been preparing for the reality of what is about to “slap” many economists in the proverbial face and a lot of investors, rip holes in their back pockets.
Sydney Property Snapshot: Auction Result Saturday 30 January 2016
There are a number of key take-aways from the transaction report or “on the market history” shown above (Source CoreLogic RPData). I will concentrate on three of these as follows.
<ul>
<li>Vendor's &amp; Agent's Expectations:</li>
</ul>
We may on the one hand say, vendor’s expectations were being fueled by the main-stream-media’s property reports, coupled with the crazy prices being paid by our friendly Chinese investors and home grown investors wanting to jump on the "Gravy Train".
Expectations also adding to real estate agent's promises of achieving high prices.
Prices again being fueled by buyer's fear of missing out, coupled with the notion of huge under-supply as well as beliefs of  “not enough land”. Then there are the ongoing beliefs of: high migration intake and that "interest rates won’t go up anytime soon: therefore, commit now". My favorite "HUGE rental squeeze".
The above mentioned beliefs as you well guessed, primed the market and created a foundation for this property bubble. A foundation that supported the comparable sales in the area, in most instances; prices that reflected the initial “Above $730K” prices being advertised i.e. the prices being paid at the height of the market.
<ul>
<li>Agent’s Marketing &amp; Sales Strategy:</li>
</ul>
The main strategy I want to review, is the one carried out by the second agency. In simple language: “what the hell were they thinking in taking the property to auction” and for a second time?
I can only say; yes, I’m sure the vendor is now conditioned and perhaps even bullied into being a “motivated vendor”.
<ul>
<li>Drops and Market Conditions:</li>
</ul>
However, we can see on the surface by the evidence presented in the recent auction reports, vendors are moving into very precarious territory when taking property to auction on an agent’s ‘whim’. And, you have to be careful who you appoint as the real estate agent and the auctioneer, if that is the method you are told is the best way to sell your home.
Again, the table above shows two key points: the first, the drop in asking to highest bid value and the second, the number of days on the market.
The passed-in bid, is reported to be $650,000 by the second agent. A significant drop and contrary to the first agent's initial asking price which was for: offers above $730,000. WOW ...
We can see a significant drop of willingness for people to commit now. A difference of almost -12% from the height of the market in 2015, to now. But, there is more room for a further drop.
I point out; we are only a month into 2016.There will be more carnage to come. Carnage that will take out many vendors that are not vigilant.
For Now: Is it a matter of...
<ol start="1">
<li>Signs of the times?</li>
<li>Real Estate Agent's flawed marketing strategy?</li>
<li>Auctioneer's ignorance? OR</li>
<li>All of the above?</li>
</ol>
More than ever before, I urge you as vendors and agents; do your homework. Ask yourselves as agents, the fundamental question which is pertinent to obtaining the best price for your client: is an auction campaign still the best way forward, for your vendor?
Vendors, again more than ever, be proactive and ask the agent about the number of registered bidders leading up to the auction day. If none are registered then ask whether you should still be going to auction. Meet the auctioneer and ensure they go through the property, days before the actual auction date that is.
Most of all vendors, do not be afraid to question the agent's reasoning for the marketing strategy they want you to embark on. It may well cost you 10's to 100's of thousands of dollars, if you don't.
EDWIN ALMEIDA is licensee in charge of <a href="https://www.just-think.com.au/" target="_blank">Just Think Real Estate</a>.<a href="https://www.just-thin.com.au/"> </a>
He is also the creator of <a href="https://www.youtube.com/user/JustThinkProperty" target="_blank">Oz Real Estate.TV</a> and a presenter for <a href="https://propertyinvestingvault.com/" target="_blank">propertyinvestingvault.com</a>.
 
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Predictions to rip a hole in your back pocket: Edwin Almeida

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Entering the property market is a tough gig for first home buyers, especially when faced with competition from buyers who hold larger buying budgets, some of which has been accrued from property equity earned as a result of recent strong capital gains.  
While home value rises have been moderate over recent years outside of Sydney and Melbourne, it provides little comfort for first home buyers in the two largest cities who struggle to compete with those that already own homes.
In 2008, combined capital city home values fell by -6.1 percent in the space of 9 months. By the end of the year, home values had reached and began to climb further thereafter. 
<a href="/images/2016/05/25/Screen%20Shot%202016-05-26%20at%203.35.10%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/05/25/Screen%20Shot%202016-05-26%20at%203.35.10%20PM.png" alt="">
The growth drivers largely came from two forms of stimulus: aggressive interest rate cuts and a boost to the First Home Owners Grant (FHOG). Since the removal of the FHOG boost and scaling back and complete removal of others, first home buyers have continued to languish at near record-low levels.
The increase in home values across each capital city from December 2008 to April 2016 can be seen in the first of the adjacent charts. Another way to think about this is that if in December 2008 you owned a home worth $500,000 it is now worth $758,418 which is $258,418 more than in December 2008. Looking at this same calculation across each capital city, the increases in value over that time based on a $500,000 home owned in December 2008 are: Sydney ($400,825), Melbourne ($338,866), Brisbane ($73,417), Adelaide ($81,029), Perth ($64,096), Hobart ($11,263), Darwin ($109,293) and Canberra ($126,262).
The data clearly shows that the value property for home owners has undergone some massive rises, the increase in inflation and wages has been comparatively more sedate. 
Although combined capital city home values have increased by 51.7 percent between December 2008 and April 2016, inflation has increased by a significantly lower 17.1 percent over the period. CPI has increased by a greater amount than values in Brisbane, Adelaide, Perth and Hobart indicating ‘real’ home values have fallen. Meanwhile in Sydney, Melbourne, Darwin and Canberra CPI growth has lagged that of home value growth. 
Looking at wages growth between December 2008 and March 2016, the data shows that nationally, and in New South Wales, Victoria and the ACT, it has lagged value growth across the capital cities; wages are now growing at their slowest pace in at least 18 years. 
While the increases highlighted include strong wage increases in the latter part of the mining boom, nonetheless, it shows that in NSW and Vic wages are increasing at a much slower pace than home values in Sydney and Melbourne are. 
The last chart shows the change in the value of new lending (excluding refinances) to investors, owner occupier first home buyers and subsequent buyers between December 2008 and March 2016, and highlights how the value of lending to owner occupier first home buyers is now lower than it was in December 2008 across each state and territory. 
This has occurred despite the increase in home values over the timeframe.
While lending to owner occupier first home buyers has fallen, lending to investors and subsequent buyers has increased in most states and territories with substantial rises in NSW and Vic.
Outside of Sydney and Melbourne home values have increased below or at a similar pace to inflation and wages, however, it is a very different story in the two largest capital cities where existing Sydney and Melbourne home owners have seen significant increases in the ‘real’ value of their home.
Those that do not yet own a property will struggle to compete with investors and upgraders who have been active in the market and where significant equity has been acquired.
<a href="/images/2016/05/25/Screen%20Shot%202016-05-26%20at%203.36.10%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/05/25/Screen%20Shot%202016-05-26%20at%203.36.10%20PM.png" alt="">
The simple answer for first home buyers, particularly in Sydney and Melbourne, is to look to buy properties outside of these cities however, that may seem a little simplistic given jobs creation has not been as strong outside of Sydney and Melbourne and for many moving interstate, employment opportunities are generally a big decision.
Even buying outside of Sydney in nearby regional cities may not be attractive because transport infrastructure does not provide quick and efficient access to Sydney and Melbourne from nearby regional cities. 
Whatever the outcome, we certainly don’t advocate for the return of grants for first home buyers as they have tended to just push up the cost of housing.
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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