<p>The residential transformation of St Kilda Road is set to continue into with more new apartment plans for the sought-after boulevard.</p>

<p>Wing Tai Asia has lodged plans for a major residential tower at 464-466 St Kilda Road, replacing the former VACC House with an 18-storey mixed-use development designed around a retained heritage podium and a sculpted contemporary tower.</p>

<p>The proposal, prepared under Victoria’s Significant Residential Development with Affordable Housing pathway, would deliver 325 apartments and ground-floor retail across the prominent 4,653 sqm boulevard site in Melbourne’s St Kilda Road North Precinct.</p>

<p>The project centres on the adaptive reuse of the site’s heritage-listed VACC Building, an eight-storey office designed by Bernard Evans that has occupied the address for decades. Planning documents state the development would involve “carefully dismantling and conserving off-site the original metal fabric of the podium visible from St Kilda Road,” before reinstating it as the defining frontage of the new scheme.</p>

<p>Above the restored podium, Wing Tai is proposing a curvilinear residential tower. The scheme includes 172 one-bedroom apartments, 63 two-bedroom apartments, 66 three-bedroom apartments, and 24 four-bedroom apartments, alongside two ground-floor food and beverage tenancies fronting St Kilda Road.</p>

<p>The tower has been designed with substantial articulation and variable setbacks to minimise perceived bulk and maintain view corridors along the boulevard. Urbis, which prepared the planning report, said the design “has been significantly articulated through a curvilinear design” with “an interplay with materials, façade expression and depth” to create visual separation and visual interest.</p>

<p>The proposal also includes 254 basement car spaces, landscaped pedestrian links connecting St Kilda Road and Queens Lane, and a biophilic landscape strategy featuring canopy trees, raised planters, cascading greenery and a glass oculus pool overlooking the eastern frontage.</p>

<p>Planning documents confirm the $270.1 million development will contribute 3 per cent of project costs to the Social Housing Growth Fund as part of the application process.</p>

<p>Wing Tai acquired the St Kilda Road property in 2018 alongside Abacus Property Group for $95.38 million, before later consolidating ownership of the site. The property previously served as the Victorian Automobile Chamber of Commerce headquarters for around 60 years.</p>

<p data-end="345" data-start="110">The transformation of the St Kilda Rd boulevard is already beginning to materialise, with a number of high-profile projects recently completed, launched, or approaching launch as developers continue to back the long-term appeal of the precinct.</p>

<p data-end="689" data-start="347">Among the most notable recent completions is Louise by Samuel Property Group, just off the strip on Queens Lane, the same pocket Hirsch &amp; Faigen recently launched The Queensbury. Mirvac is too on the same street with The Albertine, which is approaching completion.</p>

<p data-end="689" data-start="347">Dexus recently secured approval for its slice of St Kilda Road, while Gurner also has approved plans for the precinct.</p>


Joel Robinson

Wing Tai unveils 325-apartment St Kilda Road tower on former VACC House site

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p><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" /></p>

<p>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.</p>

<p>“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.</p>

<p>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.</p>

<p>“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.</p>

<p><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" /></p>

<p>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.</p>

<p>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.</p>

<p>The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.</p>

<p>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.</p>

<p><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" /></p>

<p>“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.</p>

<p>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.</p>

<p>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.</p>

<p>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>.</p>

<p><em>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></em></p>


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

<p><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.</p>

<p>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.</p>

<p>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.</p>

<p><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" /></p>

<p>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.</p>

<p>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.”</p>

<p>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.</p>

<p><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" /></p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p><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" /></p>

<p>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.</p>

<p>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.</p>

<p>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.</p>


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

<p>Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;</p>

<p>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;</p>

<p>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;</p>

<p>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;</p>

<p>Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;</p>

<p>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;</p>

<p>“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;</p>

<p>“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."</p>

<p>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;</p>

<p>"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;</p>


Bottega House secures landmark riverfront site in St Lucia 

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<p data-end="157" data-start="0">The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.</p>

<p data-end="459" data-start="159"><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.</p>

<p data-end="459" data-start="159">[smartcode_project:default project_id=112661 project_image_fid=359603]</p>

<p data-end="651" data-start="461"><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.</p>

<p data-end="950" data-start="653">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.</p>

<p data-end="1081" data-start="952">“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.</p>

<p data-end="1081" data-start="952">[smartcode_project:default project_id=112661 project_image_fid=355935]</p>

<p data-end="1307" data-start="1083">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.</p>

<p data-end="1522" data-start="1309">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.</p>

<p data-end="1522" data-start="1309">[smartcode_project:default project_id=112661 project_image_fid=361052]</p>

<p data-end="1714" data-start="1524">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.</p>

<p data-end="1945" data-start="1716">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.</p>

<p data-end="1945" data-start="1716">[smartcode_project:default project_id=112661 project_image_fid=359607]</p>

<p data-end="2220" data-is-last-node="" data-is-only-node="" data-start="1947">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.</p>
</section>
</section>

<p>[smartcode_project_cta:default project_id=112661]</p>


SIERA kicks off construction at Northcliffe tower Exhale

Property market

<p>The Brisbane unit market is showing consistent growth,&nbsp;according to CoreLogic&#39;s Monthly Hedonic Home Value Index.</p>

<p>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.</p>

<p>The quarterly performance, up 4.6%, is the highest in the country for the unit market.</p>

<p>The median apartment value in Brisbane is now $488,393. At the start of 2021, it was just over $390,000.</p>

<p>[smartcode_project:default project_id=109830 project_image_fid=184164]</p>

<p>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.</p>

<p>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.</p>

<p>&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.</p>

<p>[smartcode_project:default project_id=13276 project_image_fid=80720]</p>

<p>&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.</p>

<p>&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.</p>

<p>&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;</p>

<p>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.</p>

<p>[smartcode_project:default project_id=27815 project_image_fid=192735]</p>


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

<p>Melbourne&#39;s unit market has continued to hold firm despite a cooling off in the house market.</p>

<p>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.</p>

<p>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.</p>

<p>The median apartment value in Melbourne is now $630,671.</p>

<p>[smartcode_project:default project_id=1260 project_image_fid=177634]</p>

<p>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.</p>

<p>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;</p>

<p>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.</p>

<p>[smartcode_project:default project_id=2806 project_image_fid=175415]</p>

<p>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.</p>

<p>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</p>

<p>&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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=253 project_image_fid=52822]</p>

<p>&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.</p>

<p>&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;</p>

<p>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.</p>

<p>[smartcode_project:default project_id=3281 project_image_fid=46048]</p>

<p>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.</p>

<p>&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.</p>


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

<p>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.</p>

<p>Brisbane&rsquo;s median house price increased by 10.7 per cent to $890,000 in the March quarter, according to research by Colliers.</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=100681 project_image_fid=162779]</p>

<p>&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.</p>

<p>&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;</p>

<p>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.</p>

<p>However, Roubicek said the impacts of the cost increases and external pressures had a far wider reaching implications than the construction sector alone.</p>

<p>[smartcode_project:default project_id=100681 project_image_fid=162782]</p>

<p>&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.</p>

<p>&ldquo;It&rsquo;s left homebuyers utterly upset and disgruntled, particularly in what has become such a competitive market.</p>

<p>&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.</p>

<p>&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.</p>

<p>[smartcode_project:default project_id=25721 project_image_fid=157090]</p>

<p>Roubicek said the economic impact of interest rate increases would further impact on housing affordability, forcing buyers back into the apartment market.</p>

<p>&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.</p>

<p>&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;</p>


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

<html><body>
<p>A record two thirds of Australians say now is a good time to buy property, according to the latest research from comparison website Finder.</p>

<p>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.</p>

<p>It was 42 per cent in April.<br><br>
Graham Cooke, insights manager at Finder, said that the recent uptick in buyer confidence is a good sign for the economy. <br><br>
“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.<br><br>
“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.  </p>

<p><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"></p>

<p>“Now we're seeing that house values in every capital city bar Melbourne are higher than they were compared the same time last year. <br><br>
“This trajectory looks set to continue, with 86% of economists telling Finder* that they expect prices to fully recover nationally this year,” Cooke said. </p>

<p>Nearly 19 per cent of Australians expect house prices to "significantly increase" in their area. That was just five per cent in September.<br><br>
Those who expect property values to "somewhat increase" has jumped to 44% from a low of 18% back in April. </p>
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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

<html><body>
<p class="Body">Media coverage of the Westpac decision to lift mortgage rates 0.2 percentage points has been typically sub-standard.</p>
<p class="Body">Many articles, inspired by economists suffering from limelight deficit syndrome, have portrayed this as a death knell for property markets.</p>
<p class="Body">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.</p>
<p class="Body">Economists and journalists, with their simplistic thought processes, tend to believe that <em>low interest rates = property boom</em>, and <em>rising interest rates = property decline</em>. This contradicts both common sense and historical precedent.</p>
<p class="Body">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.</p>
<p class="Body">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.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">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.</p>
<p class="Body">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.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">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.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">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.</p>
<p class="Body">It would have happened whether the official interest rate was 2%, 4% or 6%.</p>
<p class="Body">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.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">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.</p>
<p class="Body">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.</p>
<p class="Body">To suggest that a 0.2 percentage point rise by one lender will kill the (Sydney) boom shows a low level of understanding.</p>
<p class="Body">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.</p>
<p class="Body">And Westpac’s tiny nudge to interest rates will have no bearing on the situation.</p>
<p class="Body"> </p>
<p class="Body"><em>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></em></p>
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Interest rates usually are irrelevant: Terry Ryder

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<p>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%.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>Again we are talking about thousands and thousands of transactions where many will now end up with Divestment Orders.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<h5>MOSMAN – 2088</h5>
<p>• Number of houses on the market this time last year – 104<br>• Number of houses on the market last week – 61</p>
<p>• Number of houses on the market this week – 64</p>
<p>• Number of apartments on the market this time last year – 65</p>
<p>• Number of apartments on the market last week – 59</p>
<p>• Number of apartments on the market this week – 60</p>
<h5>CREMORNE – 2090</h5>
<p>• Number of houses on the market this time last year – 19</p>
<p>• Number of houses on the market last week – 9</p>
<p>• Number of houses on the market this week – 10</p>
<p>• Number of apartments on the market this time last year – 32</p>
<p>• Number of apartments on the market last week – 23</p>
<p>• Number of apartments on the market this week – 22</p>
<h5>NEUTRAL BAY – 2089</h5>
<p>• Number of houses on the market this time last year – 7</p>
<p>• Number of houses on the market last week – 13</p>
<p>•Number of houses on the market this week – 10</p>
<p>• Number of apartments on the market this time last year– 51</p>
<p>• Number of apartments on the market last week – 32</p>
<p>*Number of apartments on the market this week – 33</p>
<p> </p>
<p><em><span>ROBERT SIMEON</span> is a director of </em><em><a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> </em><em>and has been selling residential real estate in Sydney since 1985. <br>He has also been writing real estate blog </em><em><a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> </em><em>since 2000. </em></p>
<div> </div>
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robertsimeon-hRNTwJyXkQ

Concerns about upcoming Divestment Orders: Robert Simeon

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<p>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.</p>
<p>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.</p>
<p><strong>The factors that hinting at a market peak (and outlined in further detail below) include:</strong></p>
<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>
<p>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.”</p>
<p><strong>Mature growth cycle</strong><br>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.</p>
<p><a href="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.04.03%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.04.03%20AM.png" alt="" width="790" height="598"></p>
<p><strong>Dwelling values do fall.</strong><br><span>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.</span></p>
<p><a href="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.05.26%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.05.26%20AM.png" alt="" width="836" height="614"></span></p>
<p> </p>
<p><strong>Auction results are moderating but remain historically high</strong><br>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.</p>
<p>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.</p>
<p>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).</p>
<p>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.</p>
<p><a href="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.07.10%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.07.10%20AM.png" alt="" width="880" height="1011"></p>
<p><strong>Listing numbers are rising</strong><br><span>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.</span></p>
<p><a href="/images/2015/10/26/8-580x378.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/26/8-580x378.jpg" alt=""></span></p>
<p> </p>
<p>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.</p>
<p><strong>With listing numbers rising in some markets, ‘months of supply’ is also rising</strong></p>
<p>‘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.<br>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.</p>
<p><a href="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.12.39%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.12.39%20AM.png" alt=""></p>
<p><strong>Investment demand appears to be moderating</strong><br><span>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.</span></p>
<p><br><span>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.</span></p>
<p><a href="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.14.16%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/26/Screen%20Shot%202015-10-26%20at%2011.14.16%20AM.png" alt=""></span></p>
<p> </p>
<p><strong>Mortgage related activity has eased from historically high levels across CoreLogic mortgage platforms</strong></p>
<p>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.</p>
<p><a href="/images/2015/10/26/15-580x301.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/10/26/15-580x301.jpg" alt=""></p>
<p><strong>Weekly rents are hardly moving and gross rental yields have pushed to record lows</strong><br><span>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.</span></p>
<p><span>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.</span></p>
<p><span>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.</span><br><span>for investors at a time when the growth cycle has been running for almost three and half years.</span></p>
<p><a href="/images/2015/10/26/16-580x152.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/26/16-580x152.jpg" alt=""></span></p>
<p> </p>
<p><strong>Costs of debt are rising out of cycle with the cash rate</strong></p>
<p>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.</p>
<p><a href="/images/2015/10/26/17-580x227.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/10/26/17-580x227.jpg" alt=""></p>
<p> </p>
<p><strong>Supply levels are set to increase further</strong></p>
<p>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.</p>
<p>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.</p>
<p><a href="/images/2015/10/26/18-580x202.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/10/26/18-580x202.jpg" alt=""></p>
<p><em>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>.</em></p>
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tlawless-5VLUrbAk9s

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

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<p>CoreLogic-RP Data<span> reported a rebound in preliminary auction clearance clearance rates, with increases in Sydney (to 72.8%), Melbourne (74.1%), and Brisbane (59.4 %).</span></p>
<p><a href="/images/2015/10/12/A1.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/12/A1.jpg" alt=""></span></p>
<p><span>The trend in Brisbane improved slightly from 59.1% last week and 48.8% one year ago.</span></p>
<p><a href="/images/2015/10/12/A2.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/12/A2.jpg" alt=""></span></p>
<p><span> </span></p>
<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>
<p><a href="/images/2015/10/12/A3.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/12/A3.jpg" alt=""></span></p>
<p> </p>
<p><span>The real blockbuster sales this weekend, however, were seen on the lower north shore, specifically </span>in Chatswood<span>, with the previous suburb record being swept away...twice.</span></p>
<p><span><em>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>.</em><br></span></p>
<p><em>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>.</em></p>
<p><span> </span></p>
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Auctions on the rebound: Pete Wargent

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<p>Ipswich, once the capital growth leader for the Brisbane metropolitan area and a favourite target for property investors from around Australia, is mounting a comeback after three years in the doldrums.</p>
<p><span>Up until 2013, Ipswich City dominated the growth rankings for Greater Brisbane. In a report early in 2013, I wrote: “</span><span>I</span>pswich City is the capital gains star of the Brisbane metropolitan area. The municipality which encompasses the south-western fringe of the Greater Brisbane area has the top five suburbs for long-term capital growth. It has eight of the top 10 - and 15 of the top 25 suburbs.”</p>
<p>At that time, virtually every suburb of Ipswich had a long-term growth rate (average annual growth in median prices over the previous 10 years) above 10% per year. It had attracted home-buyers in large numbers and investors seeking affordable prices and above-average rental yields.</p>
<p>Today, after three down years, the same suburbs have long-term growth averages in the 4-5% range.</p>
<p>But the comeback has started, with the first compelling evidence seen in the latest quarterly figures. Hotspotting analysis of sales volumes shows that Ipswich City has belatedly joined the overall positive trend in the Brisbane market. The LGA now has eight suburbs with clear growth trajectories – double the number in the previous survey three months ago.<span style="line-height: 1.3em;"> </span></p>
<p>Brisbane’s real estate sector has been behaving quite differently to that in Sydney, where for much the past 2-3 years there has been double-digit price growth right across the metropolitan area.</p>
<p>In Brisbane, there has been growth in individual sectors, but it has not been widespread and the generalised growth figure for the city overall has been moderate at best. </p>
<p>The Brisbane North precinct was the first to get on a growth path about two years ago and many suburbs in that area recorded double-digit annual growth in median prices.</p>
<p>That market is no longer pumping to the same degree – sales activity has tapered off in most of those suburbs which were previously the market leaders of Greater Brisbane.</p>
<p>Now the southside has taken over. In our survey three months ago, Brisbane South was the market leader, with Logan City alongside. Now Logan City (the affordable urban bridge between Brisbane City and the Gold Coast) is the clear leader, with 18 growth suburbs, followed by Brisbane South with 13.</p>
<p>And starting to mount a challenge, well behind these other sectors in the cycle, is Ipswich City.</p>
<p>There was an inevitability about the Ipswich revival because this precinct ticks all the boxes. It is a perfect fit the “power combination” of factors that drives real estate markets – affordability plus infrastructure plus jobs nodes.<span style="line-height: 1.3em;"> </span></p>
<p>This area has a good supply of suburbs with median house prices in the $200,000s, ample land for future development, big government spending on infrastructure of all kinds, an ambitious and proactive council, and billions in investment from the private sector. </p>
<p>Many big businesses with major warehousing needs are based out there because the land is cheap and the transport links are good.</p>
<p>Entities involved in key current projects across Ipswich City include Mirvac, GPT, TNT Express, Devine, Lend Lease, Ramsay Health Care, the State Government, the Ipswich City Council and an array of major Asian companies.</p>
<p>As well as cheap entry prices, the area offers solid rental yields, typically in the 5.5% to 6% range.</p>
<p>Goodna is a fairly typical offering. It’s a modest but well-connected suburb, located on the Ipswich Motorway and the rail line to central Brisbane, close to multiple jobs nodes and not far from the extensive facilities of the Springfield master-planned community. It recorded 120 houses sales in the past year at a median price of $290,000 and median yield a little below 6%.<span style="line-height: 1.3em;"> </span></p>
<p>As the overall Ipswich City market rises, some suburbs are starting to deliver the kind of price growth that made Ipswich a capital growth star in the past. The suburbs of Ipswich, East Ipswich, Woodend and Yamanto have all had double-digit growth in median prices in the past 12 months, while others have grown between 5% and 10%.<span style="line-height: 1.3em;"> </span></p>
<p>I suspect it’s poised to return to the status that made it popular among bargain-hunting investors in the past.</p>
<p><span style="line-height: 1.3em;"> </span></p>
<p><em>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></em></p>
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Brisbane's Ipswich mounting a property comeback: Terry Ryder

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<div>Total construction work done in Australia has declined by 3.7% over the past year in seasonally adjusted terms. Let's take a look in two short parts at what this actually means.</div>
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<strong><span style="text-decoration: underline;">Part 1 - Total construction</span></strong><br><strong><span style="text-decoration: underline;"><br></span></strong>
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<div>Total construction work done in the third quarter of 2015 declined by 3.7% to $49 billion on a seasonally adjusted basis. </div>
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<div>Despite a lift in residential building work done (+2.0%), there was a decline in non-residential building (-1.9%), and as widely expected engineering construction fell sharply (-7.3%) to be -11.7% lower over the year.<br><br>The green shaded area which records construction work done in chain volume measures terms shows that the unwinding of the resources construction boom has a way to run yet. </div>
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<div>Quarterly engineering construction work done has declined from a peak of $34 billion to around $25 billion, but given the weakness in commodity prices - and given that in the same quarter a decade ago activity was just $13 billion - the decline surely has a long way to go.</div>
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<div>The decline in engineering construction this quarter was driven by an overdue reversal in Western Australia, and to a lesser extent a decline in Queensland, as mega-projects begin to wind down. </div>
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<div>Activity in the Northern Territory continues to track at a historically exceptionally high level of $2 billion, accounted for primarily by the massive Ichthys LNG project.</div>
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<div>While non-residential building and major renovations have contributed little of significance to the rebalancing of the economy, new house building and "other residential" building (apartments, units, townhouses) have effectively done everything that could have been expected of them in response to low interest rates.</div>
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<div>Total building work done of $24 billion represents a solid 6.4 per cent increase over the year, with no thanks to the non-residential sector.</div>
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<div>These high level numbers should present an idea of some of the challenges facing the economy given that housing starts are projected to decline from pretty much now, while the decline in engineering construction may only be half way done. </div>
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<div>Even now I'm still not sure anyone really has a satisfactory answer for what is going to fill this gaping hole while commodity exports ramp up. Given the expansion of Australia's population the obvious answers should come under the heading of "infrastructure" but if there's a coherent plan for that being discussed anywhere I haven't heard of it.</div>
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<div><strong><span style="text-decoration: underline;">Part 2 - Building work by state</span></strong></div>
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<div>Victoria has been the king of building work through this cycle, with New South Wales following in second place, these states being home to the two capital cities with the strongest dwelling price gains.<br><br>Indeed, Melbourne is a fine illustration of why it is important for market analysts to pay close heed to both demand and supply factors when forming their views. The Victorian capital has been building both houses and units like billy-o since 2010 - the source of a thousand crash predictions - yet vacancies and stock on market are both falling, and the market seems to be gathering momentum again.</div>
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<div><span>While there has been a reasonable response from the house building sector since 2012, approvals data shows that this market is running out of puff for the cycle, and has probably all but peaked already.</span></div>
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<span>On the other hand the "other residential" sector continues to surge to record heights (this has been visible in the largest cities to anyone with a working pair of eyes...always knew those gauges were dodgy!), the new high rise building boom being the defining dynamic of this market cycle.</span><br><br><span>Building work in this sector is at historical highs in Victoria, New South Wales, Queensland, and Western Australia, with over-building of high rise apartments evident in parts of Brisbane and Melbourne.</span>
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<div>If you've been following this blog for the last couple of years, you will appreciate that the systemic risks in the housing market are obviously apparent and buried within this final chart. Would-be market shorters should dig deeper here.</div>
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<div>There have long been indicators of overbuilding in the high rise markets of inner city Melbourne and Brisbane, with a high proportion of new build sales being made offshore, especially to China.</div>
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<div>The storm clouds were gathering for off-the-plan buyers well before APRA's intervention, but recent tightening measures to lending procedures could well be the factor which nails on the correction for this sector. </div>
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<div>How many buyers who put down trifling holding deposits will fail to settle if lenders demand a 20 per cent deposit prior to completion? Perhaps up to a third could be in trouble, and will be juggling personal finances as we speak. </div>
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<div>Could get messy. </div>
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<p><span><em>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>.</em><br></span></p>
<p><em>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>.</em></p>
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