Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.

The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.

That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.

The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.

A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.

&nbsp;

Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.

Joel Robinson

First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

IN BRIEF

<ul>
	<li>
	Just three double-storey Sky Homes sit at the top of The Waterline, each with its own private marina berth and rooftop terrace.
	</li>
	<li>
	Construction on The Waterline is complete, with the first residents expected to move in from mid-October.
	</li>
	<li>
	Sky Homes range from 282 sqm to 367 sqm and are priced from $3.65 million.
	</li>
</ul>

<hr />
Lewis Land has opened the first completed sky home for inspection at Harbour Shores, giving buyers their first opportunity to step inside one of just three double-storey residences crowning The Waterline.

Each sky home comes with its own private marina berth, rooftop terrace and Broadwater views, combining the scale of a larger home with direct access to the boating lifestyle that underpins the wider <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> masterplan.

[smartcode_project:default project_id=113271 project_image_fid=366708]

Lewis Land Head of Development Michael Long said the inclusion of a berth with every Sky Home had become increasingly valuable as marina access across the Gold Coast tightened.

“Marina berths are becoming increasingly difficult to secure across the Gold Coast, so including one with every Sky Home makes this a genuinely rare offering,” Long said.

“The private 70-berth marina will accommodate boats up to 12 metres in length and is positioned just 2.5 kilometres from the Broadwater, placing the open ocean only 15 minutes away.

“Being able to step out of your home onto your boat is a rare luxury, and it’s something residents here can look forward to when it opens later this year.”

[smartcode_project:default project_id=113271 project_image_fid=366709]

The display opening comes as construction completes on The Waterline, with the first residents expected to move in from mid-October.

The three Sky Homes range from 282 sqm to 367 sqm and each feature three bedrooms, three bathrooms, multiple living zones, expansive kitchens with butler's pantries and large balconies taking in the Broadwater outlook.

Each residence also has three secure basement car spaces and additional storage.

“This is the first opportunity the Gold Coast has had to step into Harbour Shores and see, touch and feel what we’re bringing to life here,” Long said.

“There are only three Sky Homes within The Waterline, ranging in size from 282sqm to 367sqm, with each residence featuring three large bedrooms, three bathrooms, multiple living zones, expansive custom-built kitchens with butler’s pantry, and large balconies capturing Broadwater views.”

<img alt="Harbour Shores" data-entity-type="file" data-entity-uuid="bab65e10-4fab-45e1-92d8-fc56e2ab98ff" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%202.00.16%E2%80%AFPM.png?VersionId=XT8q76LsPkw3cYTsvN3JfFDaPLud90PN" />

Residents of The Waterline will have access to a private pool, along with Harbour Shores' wider collection of amenity including a lagoon pool, social clubhouse, tennis court, gym, yoga facilities and sauna.

Lewis Land partnered with Studio Collective to furnish the completed display, with the interiors designed to demonstrate how the residences could function as permanent homes rather than simply as show apartments.

Studio Collective Director Melissa Park said the surrounding waterways informed the interiors, but in a more restrained way than a traditional coastal scheme.

“We drew inspiration from the canals and coastal surrounds, but our approach was to interpret that subtly through layered materials and a grounded palette of earthy tones, rather than literal coastal references,” Park said.

“We introduced hero moments of green and teal to reference the surrounding waterways, while mirrored elements help reflect natural light.

“The result is a residence that feels elevated yet comfortable, somewhere buyers can genuinely imagine themselves living, entertaining and unwinding.”

Sky Homes are priced from $3.65 million.

Lewis Land is also offering private marina berths with The Residences, its limited collection of three and four-bedroom villas positioned directly along the Harbour Shores waterfront boardwalk.

Three-bedroom villas are priced from $2.99 million, while four-bedroom residences start from $3.19 million.

Harbour Shores is being marketed by Colliers International.

[smartcode_project_cta:default project_id=113271]

Lewis Land opens sky home display as The Waterline completes at Harbour Shores

St Vincent de Paul Society Housing Australia has filed plans for a major mixed-use housing precinct on the southern edge of the North Sydney CBD, adding another significant proposal to a pocket around North Sydn​ey Station that is quickly becoming one of the LGA's busiest development zones.

The State Significant Development Application covers a 5,990 sqm site at <a href="https://www.apartments.com.au/new-apartments/1-19-mackenzie-street-lavender-bay-nsw-2060">1-19 MacKenzie Street and 211 Blues Point Road in Lavender Bay</a>, immediately south of Nor​th Sydney Station and between the commercial core and the lower-rise Lavender Bay Heritage Conservation Area.

Designed by Wardle, the proposal would deliver a new residential tower comprising 88 build-to-sell apartments and 19 affordable apartments, alongside a separate co-living building with 57 rooms and a building manager's studio.

It would also see the significant restoration and upgrade of St Francis Xavier Catholic Church, the adaptive reuse of the former school building, new parish facilities, retail, a new public square and around 1,000 sqm of publicly accessible open space.

<img alt="Vinnies North Sydney" data-entity-type="file" data-entity-uuid="d5dd7f87-a617-463e-b577-17541e01f0e9" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.13%E2%80%AFAM.png?VersionId=4R8TsFN3P_LrrXO2HswTOIrx2blil8lh" />

The project is seeking a concurrent rezoning of the site to R4 High Density Residential and an increase in the maximum building height to allow a tower reaching RL120, or up to 20 storeys. The proposal was progressed through the NSW Government's Housing Delivery Authority pathway.

The build-to-sell component will be weighted toward larger apartments, with just six one-bedroom apartments compared with 31 two-beds, 43 three-beds and eight four-bedroom residences.

The 19 affordable apartments will comprise two studios, 15 one-bedroom apartments and two two-bedroom apartments, taking the total apartment component to 107 residences before the 58 co-living rooms are included.

<img alt="Vnnies" data-entity-type="file" data-entity-uuid="7d568ca5-cb90-4e18-96c6-d9795dba0c56" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.05%E2%80%AFAM.png?VersionId=GY2R5M9VtQh0EKy1vajaea19PSLOPuRD" />

Wardle's design for the Vinnies site has sought to negotiate that emerging high-rise context while retaining the lower-scale character of MacKenzie Street and the adjoining heritage conservation area.

The main building adopts a three-storey podium and tower arrangement, with the podium aligned to the ridgeline and front setback of St Francis Xavier Church.&nbsp;Wardle has designed the podium with colonnades, seating, recessed entries and active ground-floor frontages, with sandstone-toned precast concrete and face brick referencing the materiality of the existing church.

The tower then steps back eight metres to the south and six metres to the north before rising in a sculpted form comprising four interlocking quadrants. Wardle has also introduced rounded forms and chamfered corners to reduce the tower's perceived bulk and improve view sharing with neighbouring development sites.

Resident facilities and outdoor areas are planned at the separation between the podium and tower at Level 3, oriented toward Sydney Harbour and the CBD skyline.

The tower itself will feature a glass reinforced concrete facade, with recessed balconies and deep reveals used both to provide shading and privacy and frame views toward the harbour and city. The lower levels take a different architectural approach, using brick and sandstone-toned finishes intended to establish a stronger relationship with St Francis Xavier Church. The Church itself will be conserved and upgraded for its continued use, while the former school building will be adaptively reused as part of the co-living component.

<img alt="Lavendar Bay" data-entity-type="file" data-entity-uuid="2d4418ad-90aa-4d49-af93-c80b140aea80" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.09.47%E2%80%AFAM.png?VersionId=Kv4gzbsACaGvZSRuaqcfGC54jEJRXIDJ" />

&nbsp;

The proposal adds to an increasingly concentrated pipeline of residential development around Blue Street, MacKenzie Street and Lavender Bay.

Just west of the site, Central Element lodged plans earlier this year for one of the most significant residential developments proposed in Lavender Bay in recent years.

Central Element's SJB-designed scheme at 64-66 Lavender Street and 3-7 Middlemiss Street would deliver 163 apartments across two towers rising 23 and 32 storeys, replacing five existing apartment buildings containing 32 homes. The project also forms part of the Housing Delivery Authority pathway.

<a href="https://www.apartments.com.au/news/nsw/first-look-central-element-reveals-lavender-bay-apartment-plans?utm_source=chatgpt.com" rel="noopener" target="_blank">First look: Central Element reveals Lavender Bay apartment plans</a>

Immediately around North Sy​dney Station, another two significant proposals have emerged at 5 and 15 Blue Street.

Zurich Australian Insurance Properties is seeking to adaptively reuse its longstanding commercial building at 5 Blue Street, directly above North Sydney Station, rather than demolishing the structure.

Its SSDA proposes converting the building into a 14-storey mixed-use development with 62 apartments and 86 co-living rooms, together with ground-floor retail and a major refurbishment of Blue Street Plaza. The application is currently at the Response to Submissions stage.

<a href="https://www.apartments.com.au/news/nsw/first-look-zurich-targets-north-sydney-office-conversion-with-148-unit-proposal-above-metro-station">First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station</a>

&nbsp;

First look: Vinnies files for 20-storey Lavender Bay apartment tower as North Sydney housing pocket heats up

When the opportunity arose for South Australian developer Palumbo to return to Kent Town, where it had previously delivered East Park Apartments and the East 
Rundle Apartments, it wasn't one the longstanding developer-builder was going to pass up.

The decision was quickly vindicated, with more than 30 apartments sold within the first month of launching <a href="https://www.apartments.com.au/new-apartments/royal-apartments-kent-town-2-8-north-terrace-kent-town-sa-5067">Royal Apartments</a> to the market.

The 206-apartment development, which will bring significant new supply to Adelaide's tightly held eastern city fringe, also gives <a href="https://www.apartments.com.au/developers/palumbo">Palumbo</a> the opportunity to bring new life to one of Kent Town's most recognisable watering holes.

[smartcode_project:default project_id=6109 project_image_fid=376073]

Royal Apartments incorporates the historic Royal Hotel, a venue Palumbo Managing Director Daniel Palumbo said has a longstanding connection with the local community.

"Everyone in the area has history with the Royal Hotel," Palumbo told Apartments.com.au.

"It was quite an active pub and social gathering place for locals. We want to bring it back to its former glory."

[smartcode_project:default project_id=6109 project_image_fid=376072]

The wider development will comprise two residential towers alongside the restored hotel, sitting on North Terrace opposite the Adelaide Park Lands.

For Palumbo, the project also marks a return to familiar territory.

The developer completed East Park Apartments next door more than a decade ago and jumped at the opportunity to develop in Kent Town again when the Royal Hotel site became available.

"The opportunity emerged, and we moved to secure the site," Palumbo said.

"We were approached by the previous landowner, who said they had extensive commitments in Sydney and weren't in a position to deliver the project.

"We took over the site and within six months recut the design scheme to be more in keeping with the type of development we want to bring to Adelaide.

"Now we're on the market and those changes have really resonated with local buyers."

That has translated into a strong start to sales, with 33 apartments transacting in the project's first 35 days.

Palumbo said the early purchaser profile had been consistent with the group's traditional focus on owner-occupiers rather than investor-led apartment stock.

"Local owner-occupiers have always been our market," he said.

"There are always some investors, but we've never developed what would be called traditional development stock. Owner-occupiers are very much our market."

[smartcode_project:default project_id=6109 project_image_fid=376068]

The buyer mix has been diverse so far, with downsizers and younger professionals both accounting for a significant portion of early sales.

South Australia's current stamp duty settings, which allow&nbsp;eligible homeowners in South Australia aged 60 savings of up to $103,830 on stamp duty when they downsize to a new property valued at up to $2 million,&nbsp;have helped encourage downsizer activity, while younger buyers in their late 20s and early 30s have been attracted to the opportunity to live immediately outside the CBD while still being able to walk into the city.



Location has been a major part of the proposition for both buyer cohorts.

[smartcode_project:default project_id=6109 project_image_fid=376075]

Royal Apartments sits on North Terrace directly opposite the Adelaide Park Lands, with residents able to walk through the parklands toward the East End, Rundle Street and Rundle Mall.

Apartments have been positioned to capture views across the parklands, Adelaide skyline, Botanic Gardens and Adelaide Hills.

Palumbo believes the scarcity of developable land along this section of the Park Lands makes the site particularly difficult to replicate.

"There's very few allotments on that side that can be developed," he said.

"If this location was in New York and you were sitting on Central Park, you'd be talking about a $60 million apartments."

Royal Apartments will offer a broad mix of residences, ranging from one-bedroom apartments through to four-bedroom sub-penthouses and penthouses.

Current listings include one-bedroom apartments from $680,000, while larger three and four-bedroom residences are priced around $2.5 million.

Residents will have access to a swimming pool, gym, barbecue and recreation areas, residents' lounge and dining space, and a communal deck.

[smartcode_project:default project_id=6109 project_image_fid=376067]

The apartments will feature generous balconies, while secure parking, bicycle storage and storage cages will also be provided.

A porte-cochère-style arrival and drop-off area has also resonated with buyers, particularly those attracted to being able to walk into the CBD during the day while retaining secure vehicle access at home.

Palumbo is acting as developer, architect and builder on Royal Apartments, continuing the vertically integrated model it has used across its South Australian portfolio.

The group was also behind the $150 million Sofitel Adelaide, the 251-room five-star hotel and residential tower which opened in 2021.

Palumbo said Royal's launch had come at an interesting time for the broader Adelaide apartment market.

Buyer confidence had initially been impacted by uncertainty surrounding the Federal Budget and broader economic conditions, but Palumbo believes sentiment is beginning to improve against a backdrop of significant investment flowing into South Australia.

He pointed to increased activity across defence and resources, including Olympic Dam, as potential long-term drivers of the state's economy and housing market.

"Money is starting to flow into Adeliade, significant amounts as Adelaide bucks the trend of the rest of the country.," Palumbo said.

"There's a lot of activity in the economy over the next decade. I think more investment will come into this market."

Early works on Royal Apartments are expected to commence this year, with major construction activity and cranes anticipated on site from early next year.

[smartcode_project_cta:default project_id=6109]

Palumbo's return to Kent Town strikes early chord with buyers

Go-to builder-developer <a href="https://www.apartments.com.au/developers/graya">GRAYA</a> is continuing to bulk out its already impressive and diverse apartment portfolio across South East Queensland. Their latest milestone is securing development approval for Silk, its boutique riverfront apartment development in St Lucia.

The approval clears&nbsp;the way for the team to begin construction planning for the 22-residence project.

<a href="https://www.apartments.com.au/new-apartments/silk-st-lucia-16-18-sandford-street-st-lucia-qld-4067">Silk</a> will rise 15 levels from an 810 sqm site at 16-18 Sandford Street, occupying a prominent bend of the Brisbane River with a prized northern aspect across Orleigh Park toward the Brisbane CBD.

The approved scheme will comprise 16 split-floor and six full-floor residences, continuing GRAYA's move into larger-format apartment developments targeting Brisbane's prestige owner-occupier market.

The project has been designed around the site's broad river frontage and dual-direction views, with GRAYA prioritising larger residences, privacy and outlook over apartment yield.

<img alt="Silk St Lucia" data-entity-type="file" data-entity-uuid="aa5c2349-f96c-4914-a812-1f2cd6827af8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%208.25.44%E2%80%AFAM.png?VersionId=WY0vEU_7vYjeRJKQHiCwFdMxu8PvFh52" />

GRAYA Co-founder and Chief Executive Officer Rob Gray said the project had been shaped around local homeowners wanting to remain in St Lucia without maintaining a traditional family home.

"St Lucia is one of those suburbs people do not want to leave," Gray said.

"They know the river, the trees, UQ, the golf course, Toowong and Indooroopilly, and that familiarity is hard to replace.

"True riverfront opportunities here are exceptionally scarce. What we have designed at Silk is a way to stay in the suburb people love, with the scale and privacy of a private home and far less to maintain.

"This is not typical apartment product. It is a proper home on the river, and that is exactly what this market has been missing."

The approval comes as new apartment development continues to increase across the St Lucia and neighbouring Toowong corridor, although direct riverfront sites remain considerably more tightly held.

GRAYA Co-founder and Managing Director Andrew Gray said securing the approval had removed a significant element of development risk from Silk.

"Genuine riverfront sites of this quality in St Lucia are not something that comes up regularly," Gray said.

"The approval removes a substantial layer of execution risk, and the location underwrites demand in a way very few inner-city sites can.

"The fundamentals here are as strong as anything we have assessed in Brisbane."

<img alt="Silk St Lucia" data-entity-type="file" data-entity-uuid="d0f3d734-65e1-48e8-8ed3-2e0715ffcdd9" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%208.25.56%E2%80%AFAM.png?VersionId=sOLSs_jdHkXLWbBKzRyayf5BfTb2vPsD" />

Silk will see GRAYA return to a stretch of the Brisbane River where it already has recent construction experience. The vertically integrated group recently completed ARC in neighbouring Toowong as builder for developer Spyre, delivering the riverfront project on a constrained site.

GRAYA will take a different role at Silk, controlling the project from design and development through construction and aftercare under its vertically integrated model.

The development will include a gym and resident leisure areas at ground level, integrated with the river's edge.

Silk joins a growing pipeline for GRAYA across Brisbane and the Gold Coast, which includes Enclave, The Gallery, Coral and Ripple.

The developer-builder has also recently lodged plans for its largest project to date, <a href="https://www.apartments.com.au/new-apartments/the-silo-19-chester-street-newstead-qld-4006">The Silo</a>, a proposed <a href="https://www.apartments.com.au/news/qld/graya-buys-frasers-newstead-site-plans-the-silo-between-james-street-and-gasworks-precincts">$700 million mixed-use development</a> in Brisbane's James Street precinct.

Silk is expected to predominantly target local owner-occupiers and prestige buyers seeking a permanent riverfront home in Brisbane's inner west.

Registrations of interest are now open, with further details on the project and construction program to be released as it progresses.

<hr />
<h2>SILK PROJECT FACTS</h2>

Developer-builder: GRAYA

Project: Silk

Location: 16-18 Sandford Street, St Lucia

Apartments: 22

Built form: 15 levels

Site: 810 sqm riverfront holding

Mix: 16 split-floor and six full-floor residences

Status: Development approved

Next step: Construction planning underway

[smartcode_project_cta:default project_id=152168]

GRAYA greenlit for riverfront St Lucia apartment development, Silk

Property market

<html><body>
SQM's Louis Christopher thinks that dwelling price rises may materialise from the second half of the year as demand increases as a result of an expected improvement in confidence.
He added so far this year the national market this year has fallen by another 3.8 percent. 
"Our base case forecast, released in our 2019 Housing Boom and Bust Report back in November 2018, was for a total 2019 dwelling price fall of between 3 percent to 6 percent.
"It would be fair to say that up until this past weekend the market was heading towards the bottom end of that forecast." Christopher noted his 2018/19 Housing Boom and Bust report had a scenario 4 which followed a Liberal victory with interest rate cuts late in 2019. 
He anticipates the national housing market could record a price fall for this calendar year of between 1 percent to 4 percent.
"We believe the Liberal victory means increasing buyer confidence in the market which was severely lacking as a result of the anticipation of the change in negative gearing and capital gains tax by a Labor Government."
But Christopher considers an upside on his scenario 4 forecast which did not take into account additional loosening on credit lending with <a id="LPlnk285314" href="https://sqmresearch.us5.list-manage.com/track/click?u=9badbd870addb4af72206c2eb&amp;id=5823b4fe77&amp;e=0aab96dc54" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable">APRA</a> set to drop the 7 percent theoretical interest rate for banks to use when calculating serviceability by borrowers. 
"This move should mean that more loan applicants will qualify for a loan and/or their borrowing limits will increase." Following the May statement by the Reserve Bank, Christopher noted it appears a cut in the cash rate next month is almost a certainty. "Scenario 4 does not take into account an earlier than expected rate cut.  "If there was such a cut over the course of June, July and/or August, it is likely the market would respond and demand for residential property would increase over and above our scenario 4 forecast. "Needless to say a combination of loosening credit restrictions plus a cut in interest rates, increases the risk of another housing boom which I am sure that is not what the ‘powers that be’ would want, but they may well yet get."   Christopher noted the Australian housing market still contains headwinds which include:
<ul>
<li>The Sydney and Melbourne markets are still in overvaluation despite the price corrections that have occurred since mid-2017.</li>
<li>Ongoing restrictions on home lending in the form of a more conservative HEM and reduced purchasing power multiples on reported borrower net income.</li>
<li>Ongoing global trade tensions causing some economic uncertainty</li>
<li>Ongoing high housing Debt to GDP levels</li>
<li>Elevated rental vacancy rates, particularly for Sydney.</li>
<li>Elevated listings in Sydney and Melbourne</li>
</ul>
"These headwinds should initially prevent another rapid housing boom from developing.
"However, if we are to see a rate cut of 50 basis points or more over the next 2-3 months, combined with today’s announcement by APRA, all cards are off the table for 2020.  
"And for 2019, our scenario 4 estimates may well end up being too conservative with the risks plainly being on the upside.
SQM's initial forecast for 2019 was:
<a href="https://www.propertyobserver.com.au/images/2019/5/21/sqm%201.png" target="_blank">Click here</a> to enlarge: 
<img src="https://www.urban.com.au/images/2019/5/21/sqm%201.png" alt=""> Source: SQM Research
<div>
 
</div>
 
 
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jonathanchancellor-7SQnKwU6yx

Liberal win, APRA loosening and pending RBA rate cut sees SQM's Louis Christopher forecast price recovery

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GUEST OBSERVATION
The nation has breathed a sigh of relief that the Federal election is now over and we can all start to move forward with a greater degree of certainty. But exactly what does the continued Liberal government mean for the Australian property market and our investors?
Negative gearing remaining untouched is one of the most key policies for Australian investors. Fear-mongering in the media built up over the last few months with even Prime Minister Scott Morrison predicting that ALP’s proposed changes to negative gearing would result in a housing market crash.
ALP also proposed increasing capital gains tax which was another nail in its election campaign coffin in the eyes of the investment community along with the unpopular retiree tax which would have stung self-funded retirees.
Even the sweeteners weren’t enough to save ALP with Australians seeing through the thinly veiled attempts to support construction of new property with the proposal for negative gearing to only apply to brand new property.
Sentiment will almost instantly improve in the construction and development sectors safe in the knowledge that property will remain Australia’s preferred investment class and that investor appetite for property new and old, will continue unabated.
The message to the ALP was abundantly clear - hands off our investment property policy thanks very much!
We can expect the market to continue to hum along without the changes to negative gearing for investors – but what else is in store?
The Coalition campaign relied heavily on the words “strong economy” to get it across the line, but just how strong is the Australian economy right now and what does it need to get into place to bolster it?
According to the Reserve Bank of Australia (RBA) the economy may not be as strong as our politicians would have us believe.
RBA has scaled back its forecast for economic growth this financial year in its latest monetary policy statement to just 1.7%, over half a percentage point below its previous forecast.
In addition wages growth remains stagnant and according to commentators, has been weaker over the past six years than at any other time since World War II.
Property prices in many capitals have cooled after the period of unprecedented price hikes and inflation is at a historic low of just 1.3%, well below the RBA’s target range of 2 to 3% for more than three years.
Employment growth has been moderate but is driven by the public sector and community services while sectors considered key to driving the economy, such as manufacturing and retail, are shrinking.
While Morrison has played Mortgage Insurer for First Home Buyers, the finer details need to be fleshed out in order to deliver a great policy to stimulate the market.
ScoMo and his team really have their work cut out for him to get our domestic economy cranking.
But right now for Australian investors these conditions create a buyer’s market. Prices have come off the boil across many key markets and savvy investors can snap up some good deals that will show growth over the medium to longer term.
According to the latest HIA Affordability Index, housing affordability improved across the country by the fastest rate since September, 2013 – with the Index rising by 2.2% nationally in the March quarter. Interest rates remain low and are forecast to be reduced even further over the next 12 months.
With no changes to negative gearing policy properties both new and old will have appeal and offer different advantages for each investor’s unique circumstances.
The election is no longer looming over us all so after a “sit and wait” period over the last few months we can expect to now see greater activity in the property markets. All eyes will be on the Coalition to see if it can live up to its campaign promises now and keep the Australian economy strong.
JAMES NIHILL is the Managing Director of Patrick Leo, a Sydney based property advice and services company.
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j.ballantyne1990-6AQqhLzZaK

ScoMo and the Coalition have their work out to boost the domestic economy: James Nihill

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GUEST OBSERVATION 
The Royal Commission has sparked fresh discussions in Australia surrounding mortgages, in particular, what it means for homeowners who are currently paying interest only loans and how this will shape the Australian property market in years to come.
In-depth investigations during the commission put newfound pressure on Australian Financial Institutions to significantly improve their lending standards and reduce higher risk lending. Currently, approximately 200,000 Australians have interest-only loans but with the government removing the interest-only benchmark at the start of 2019, this figure is set to change drastically.
In the past, Australian banks offered interest-only mortgages to customers which could be renewed every five years. However, the removal of the benchmark now means that homeowners cannot renew interest-only loans and instead, must begin principal repayments as part of their mortgage repayments.
In addition to this, commissioner Kenneth Hayne proposed changes to the mortgage broker industry, whereby the consumer would be required to pay the mortgage broker’s commission, instead of the banks.
These proposed changes have the ability to drastically affect the landscape of the mortgage industry by potentially wiping out the whole mortgage broking system, leaving larger financial institutions with the freedom to set the interest rates however high they choose.
But who will be the most affected if these changes are confirmed? Unsurprisingly, it’s fairly widespread and will impact current Australian homeowners as well as those looking to borrow money, even impacting those in the rental market.
Homeowners will be paying more for their mortgages
There is approximately $360 billion worth of money wrapped up in interest-only mortgages. In the past, mortgage repayments have been dependant on interest rates, which fluctuate due to mortgage brokers and banks offering competitive rates.
But with the expiration of interest-only loans after three-years, homeowners will be required to fork out a lot more for their mortgage repayments, potentially increasing a massive 70%. An example of this is if you are currently paying $3,000 a month in repayments on interest only, interest and principal would escalate monthly repayments to $4,700.
The impact of requiring to pay principal will depend on the financial situation and lifestyle of the homeowner but those with a large property portfolio of interest-only will be hit the hardest.
This means having a buoyant property portfolio will only be available to those who are cashed up, which then leads to a flow on affect in the rental industry.
Tenants will likely experience an increase in rent
Even with the current market experiencing price declines, the prospect of purchasing a home will now seem even more daunting to prospective buyers due to these changes, driving one-third of Australians to rent instead.
Typically, most interest-only loans are covered by the rental income on an investment property. But with investors now set to be more out of pocket due to principal repayments, it’s only natural that this will affect how tenants are charged, with some landlords opting to charge more in rent in an effort to cover the difference.
Less money in the tenant's pockets means less money to put towards their own house deposit and this creates a vicious cycle. It’s unfortunate that salaries do not increase the same way houses do.
The fallout from the commission has led many people to debate how they should react but the truth is, it’s still a bit blurry. Once the new government is in place in May and the new budget is announced, things will start to cement.
But one thing that is certain is it going to be a lot tougher to borrow money, whether it be for investment or as an owner occupier. It’s not that banks don’t want to lend, more the Royal Commission has governed them to be more responsible when it comes to lending. We live in a society where it is very easy to shift the blame to others but at the end of the day, it comes down to each individual’s financial situation and the lifestyle they lead.
Bruce Oliver is the co-founder of Xynergy Realty, a Melbourne-based real estate agency.
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How the Royal Commission will affect the property market: Bruce Oliver

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Land Services SA has unveiled its upgraded digital land titles platform, designed to deliver better knowledge of the South Australian property market.
The revamp includes a new web portal, www.landservices.com.au, through which South Australians can research and access land transaction services.
There's been a rebranding including a new logo, and a refresh of the South Australian Integrated Land Information System (SAILIS). 
Land Services SA CEO Brenton Pike said the revamp illustrated the company investing and innovating since its commercialisation in October 2017. 
Land Services SA has also launched its SA Property Landscape Report in partnership with professional services firm BDO, revealing a snapshot of the wealth of historic property data.
<a href="https://www.propertyobserver.com.au/images/2019/2/21/SA%20data%201.jpg" target="_blank">Click here</a> to enlarge:
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Source: Land Services
“While our roots are in processing and recording property transactions and the provision of valuation services, we can add significant value by improving the accessibility and availability of property data to South Australia’s thriving start up and entrepreneurial ecosystem,” Pike said.
“Our investment in system upgrades, innovative solutions for the land services industry, and support for the innovation hub in Adelaide to foster local digital start-up ventures together with the South Australian Government, is creating value for our communities.” 
<a href="https://www.propertyobserver.com.au/images/2019/2/21/SA%20data%202.jpg" target="_blank">Click here</a> to enlarge:
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/2/21/SA%20data%202.jpg" alt="">
Source: Land Services 
Land Services SA has also partnered with South Australian AI start-up Daitum, which is part of the Lot Fourteen innovation hub located at the old Royal Adelaide Hospital site, to unlock the potential value in its property data, and understand how it can be more effectively utilised.
<a href="https://www.propertyobserver.com.au/images/2019/2/21/SA%20data%203.jpg" target="_blank">Click here</a> to enlarge:
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/2/21/SA%20data%203.jpg" alt="">
Source: Land Services 
The findings of the Land Services SA and Daitum initiative will be presented at the Lot Fourteen innovation hub to further promote collaborative innovation and testing. 
<a href="https://www.propertyobserver.com.au/images/2019/2/21/SA%20data.jpg" target="_blank">Click here </a>to enlarge:
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/2/21/SA%20data.jpg" alt="">
Source: Land Services
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Land Services SA reveals historic data on state's property market

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EXPERT OBSERVER
Here’s the dumbest question an investor can ask: is this a good time to buy real estate?
The question shows a fundamental and dangerous lack of understanding about property.
A much smarter question is: WHERE is it a good time to buy real estate? Because in a nation as large and as diverse as Australia, at any point in time it’s a good time to buy somewhere. The trick is finding those locations where it’s opportune to buy.
I find myself constantly explaining to consumers that there is no such creature as “the Australian property market”. People think there is because the media keeps telling them there is, aided and abetted by economists who see everything nationally.
The headlines keep proclaiming that “Australian property prices” are falling, because those who think nationally describe housing market growth or decline with a single figure to measure the entire nation.
It’s a ludicrous proposition and one that misleads and misinforms consumers.
So here we are again at the start of a new year and it’s opportune once again to tell people that the essence of success in property investment is understanding that we don’t have one market in Australia.
We have lots of markets and your objective is to avoid the ones which are in decline and locate the ones that are rising or will soon do so.
Fortunately, this is not difficult – so long as you can kick the newspaper reading habit and conduct proper research and acquire real knowledge.
If you’re willing and able to do that, you’ll be miles ahead of the herd and one of the relatively few who will succeed in this business.
If you’ve been searching for predictions on likely outcomes in 2019 – and you’ve been using mainstream media as your primary source – you’ll be massively confused and misinformed, because newspapers and other tabloid media like the ABC have featured only those who have forecast major and widespread price decline.
The vast majority of forecasters – the calm, sensible, rational ones like BIS, Domain, SQM Research, Propertyology and most of the major lenders – have predicted fairly optimistic outcomes in 2019 and 2020. But few of the major newspapers have published their forecasts.
A common theme among the credible forecasters is that Sydney and Melbourne will bottom out in the middle of 2019 and gradually return to moderate price growth, while the smaller capital cities will show growth this year ranging from moderate to strong.
Very few bother with the regions – which is a shame because the biggest price growth in 2018 was in regional areas and this is likely to be the case again in 2019.
One who does look at the regions as well as the capital cities and presents sensible forecasts based on research is Simon Pressley of Propertyology.
Like Louis Christopher of SQM Research, Pressley presents three scenarios in his forecasting, which relate to different outcomes with the lending environmental.
His scenario which assumes lenders returning to “sensible credit policies” in the first quarter of the year (which I think is likely) has Hobart again leading the capital cities on price growth, with rises of up to 10%.
He sees Perth making a solid recovery, with house prices up by between 4% and 7%. He also expects Canberra, Adelaide and Brisbane to be good markets with price growth up to 5-6%.
He expects Melbourne to bottom out during with the year, with only moderate price decline, and Sydney falling a further 3-6%.
I note that Domain published broadly similar forecasts for 2019 recently and I think Pressley is pretty much on the mark, although I think Adelaide will do better than he predicts and that Hobart growth will be less, because I think that market is past its peak. 
Propertyology believes regional centres in the resources states Western Australia and Queensland will be among the best-performing markets this year. Pressley suggests the Sunshine Coast and Cairns will lead in Queensland, with big improvement also in Townsville, Mackay, Rockhampton and Toowoomba.
In WA he likes Albany, Busselton and Margaret River, with Pilbara towns strong also. As always, I urge caution with any market where the mining sector dominates the local economy.
In regional NSW he likes Wagga Wagga, Armidale, Tamworth, Bathurst, Parkes and Muswellbrook, while in regional Victoria he favours Ballarat, Bendigo, Shepparton, Warrnambool and Bairnsdale.
I can’t disagree with much of that. Propertyology and Hotspotting use different methodologies but we often arrive at the same conclusions.
Terry Ryder is the founder of hotspotting.com.au
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Where is it a good time to be buying property in 2019: Hotspotting's Terry Ryder

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Values throughout the Ballina Shire stabilised throughout 2018 after strong increases throughout the 2016 and 2017 calendar years, according to the latest Herron Todd White residential report. 
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The report noted agents who actively market property throughout the Ballina Shire generally report lower numbers of enquiry. 
Some Ballina regions experienced declines in value on the back of weaker Sydney and Melbourne markets, although the lack of available stock generally prevented any notable falls in value throughout the sought-after areas of the shire, HTW noted.
A lack of stock did drive the market and buyers were seen moving out of the suburb of Byron Bay into the more affordable coastal resort town of Lennox Head which saw the market in Lennox Head climb in 2018.
"The overall market started slightly sluggishly in January and February, however lack of stock saw the market continue to surge throughout 2018. Early stages of flattening were evident throughout the October to November period," the valuation firm said.
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The buy in price point of $750,000 to $1.2 million did well throughout the year of 2018. Larger allotments located in Ocean Shores with future subdivision potential did particularly well with a spike in sales. In Lennox Head, sales also spiked with buyers wising up and moving away from the iconic town of Byron Bay towards a smaller township where their money could be spread further.
"At the beginning of 2018, it was predicted that the oversupply of vacant land in Lennox Head may be of some concern. 
"We have yet to see any signs of an oversupply of vacant land, with value levels within new residential estates remaining firm, however it would appear that the developer’s conscientious release of land without flooding the market could be partly responsible to this," the report noted.
The prediction for the Byron Shire market that was made all the way back in February was mostly correct.
A recent sale in Ocean Shores is a four bedroom which has been sold for $950,000. 
Sitting elevated on a 923sqm block, the house at <a href="https://www.realestate.com.au/sold/property-house-nsw-ocean+shores-128709658" target="_blank">18 Goondooloo Drive</a> (pictured above) comes with multiple living zones,four bedrooms, eat-in kitchen,  and double garage.
It's within walking distance to the Ocean Shores cafes and shops or a short hop to New Brighton, Brunswick Heads and Byron Bay.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/12/21/lennox%20head.jpg" alt="">
A two bedroom Lennox Head townhouse has been recently sold for $1.17 million.
Situated at <a href="https://www.realestate.com.au/sold/property-townhouse-nsw-lennox+head-128818454" target="_blank">1/43 Stewart Street</a> (pictured above), the beach house feautres two bedroom, sunroom, study, modern kitchen with stone benches, salt water plunge pool and high ceilings.
It's located within easy walking distance to Lake Ainsworth.
The report mentioned a large portion of the buyer demographic in this locality were people coming from Melbourne or Sydney. 
"The market was majorly influenced by investors and baby boomers looking for a sea change. More recently though we have seen buyers in the 30 to 50-year-old bracket with young families sustaining city job opportunities whilst living away from metropolitan areas." 
There continues to be renovation, renewal and gentrification activity occurring within established residential areas of Ballina and in particular the Ballina Island and East Ballina precincts, according to an earlier Herron Todd White (HTW) residential report. 
The report suggested this is due to requirements from both owner-occupiers and also from potential buyers, and there remains good demand for quality renovated product.
However, the majority of new development within the Ballina Shire is occurring in housing estates such as Epiq at Lennox Head, Ferngrove and Riveroaks at Ballina, Ballina Heights at Cumbalum and the new estates located to the north-west fringe of Wollongbar.
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"It is interesting to note that over the past five years, we have seen a significant increase in construction of self-contained flats and second dwellings of house lots, both in established residential areas and also in new housing estates." the HTW report noted.
The increased construction of self-contained flats and second dwellings can be attributed to the strong rental demand across the Ballina Shire coupled with the fact that there remains limited one and two-bedroom residential units being constructed within established suburbs. 
Subsequently properties which possess rear lane access and allow approval and construction of second dwellings in established residential localities have become more sought after, the report said. 
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"In the Byron Shire, home renovation and new construction in established areas are on the rise. We see the renovation aspect of this market evident in all suburbs within this locality. An example is Suffolk Park, where homes built in the 1960s and 1970s are being extended and externally remodelled to a more contemporary design," the valuation firm noted.
A Suffolk Park renovated beachfront home was on the market with the price guide of $1.1 million to $1.2 million. It sold in December at $1.1 million.
Set on a 922sqm, the<a href="https://www.realestate.com.au/property-house-nsw-suffolk+park-129206958" target="_blank"> 17/2 Alcorn Street </a>house comes with two bedrooms, open plan kitchen/dining/living, and study.
It has been recently renovated with the new kitchen and bathrooms. 
This is also evident in the township of Mullumbimby, where 1930 to 1940 built homes are being updated to compete with new builds occurring in the fringe Tuckeroo Estate.
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The majority of buyer types in this market within the Byron Shire are more of the owner-occupier variety rather than house flippers or spec builders. The suburb where they would achieve the most profit is isolated to that of Byron Bay. Buyers have been capitalising on the increased margin of the price point buy in for this particular coastal resort town.
There has also been an increase in the number of sales as well as price point within the prestige residential market for centrally located properties in close proximity to the Byron Bay CBD, beach and facilities. The increased sales activity in the $2 to $4 million price bracket for standard residential property has been occurring since 2014.
There is generally strong demand for Federation style dwellings which have been renovated to a very good standard and offer the owner a high quality of fitout that is also appealing to the holiday market.
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Evidence of first home buyers wanting to make quick equity can be seen in suburbs such as Ocean Shores within the price-points of $750,000 to $850,000. Other strategies for first home owners have been trending in the purchase of land, where dual occupancy is created, divided and sold.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/10/8/ocean%20shores%20.jpg" alt="">
An example is a Ocean SHores three bedroom house which has been listed for $770,000 (pictured above). 
Nestled on a 921sqm block, the house at <a href="https://www.realestate.com.au/property-house-nsw-ocean+shores-127957602" target="_blank">7 Rajah Road</a> include three bedrooms, renovated family bathroom, three spacious living areas and covered outdoor areas.
It's within walking distance to cafes, restaurants and Brunswick Heads.
Upgraders who want to stay put but need more space for a growing family are taking advantage of creating detached granny flats. This extra space caters for older kids who may still be at home saving for a deposit of their own, or for an ageing relative.
The buy-in price points for homes with upgrade potential in the below mentioned suburbs are as follows:
• OceanShores- $750,000 to $850,000
• ByronBay- $1million to $1.5million
• LennoxHead- $800,000 to $950,000
The suburban infrastructure that helps drive construction within these established areas include the proximity to local airports (both the Ballina/ Byron Bay Gateway Airport and the Gold Coast Airport). This has seen an increase in interstate buyers taking advantage of the versatility of living locally and in either Sydney or Melbourne to cater for their fly-in, fly-out occupations.
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Home renovation and new construction in established areas do have some guidelines and limitations. The biggest limitation we see home buyers face in the Byron Shire is the restriction on secondary dwelling sizes. Where there are dual occupancies on one title in one line, the secondary dwelling must not exceed a total floor area of 60 square metres.
There are changes in the town planning process that are encouraging new construction. The biggest change is seen in the reduced minimum lot sizes. Vacant land was once sold with an average land area of 700 to 800 square metres, however with each new estate that has been developed, we have seen a reduction to 450 to 500 square metre blocks being sold.
The market of home renovation and new construction within the Byron Shire may track a little differently in the future. The cost of building is rising at such a rate that it may have an effect on those speculating to be a part of this market.
"Even now we are seeing vacant land blocks within new estates being resold at a much higher price-point, which may affect the home buyer’s decision about what they can afford to build," the report said.
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Ballina Shire residential market remained steady through 2018: HTW residential 

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House prices will keep falling in the first half of 2019 before turning around and growing modestly, resulting in annual growth of about 1% over the year to December 2019, according to the latest Domain forecasts.
Domain predict house price growth will increase to 4% over the year to December 2020.
Overall this is a predicted fall of 7% from the 2017 price peak of $820,000 to a low of about $760,000 in mid-2019. At this low point, Australian house prices will be back at their 2016 levels.
Domain Economist, Trent Wiltshire said: "leading indicators of prices, such as low clearance rates, falling home loan approvals and a rising stock of listings suggest prices will continue to fall in the months ahead, with Australian house prices expected to fall by about 6% over the year to December 2018."
<img src="https://www.urban.com.au/images/2018/11/29/AUS%20forecast.JPG" alt="">
Source: Domain 
Australian unit prices are anticipated to grow by 2% in 2019 and 3% in 2020.
Unit prices are expected to bottom out in early 2019 after falling by 3% over the year to December 2018.
They are predicted to fall by approximately 5% from their peak of $568,000 in June 2017.
At this low point of about $540,000, unit prices will be back at their late 2016 level.
<img src="https://www.urban.com.au/images/2018/11/29/AUS%20forecast%202.JPG" alt="">
Source: Domain 
"We expect unit prices to be more resilient than house prices for two main reasons," Wiltshire said.
"First, there was a smaller run-up in unit prices in the boom period, so there is less market ‘froth’ to dissipate over the 2017-2019 period.
"Second, state government stamp duty concessions will hold up unit prices, particularly in Sydney and Melbourne."
Solid population growth, low unemployment and low interest rates will underpin Australian property price growth in the medium term.
More restrictive lending conditions will continue to weigh on prices in the immediate future.
"Eventually, borrowers will begin to adjust to this new normal (including having a better understanding of how much they can borrow and how long it takes to secure a loan) and lending will begin to grow again, although at a modest pace," Wiltshire said. 
Click <a href="https://www.propertyobserver.com.au/images/2018/11/30/Domain%20forecasts%201.JPG" target="_blank">here</a> to enlarge.
<img src="https://www.urban.com.au/images/2018/11/30/Domain%20forecasts%201.JPG" alt="">
Click <a href="https://www.propertyobserver.com.au/images/2018/11/30/Domain%20forecasts%202.JPG" target="_blank">here</a> to enlarge.
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Australian house prices to bounce back in 2019 and 2020: Domain

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EXPERT OBSERVER
Massive though it is, the property market isn’t a monolith – it’s a seething mass of individuals all trying to make their mark and make money from one of the most talked about assets there is.  
And whether you want to get into the property market, hate the property market or are already up to your neck in it, you’ll know that any notable movement in the market can cause a major shakeout and affect the rest of the economy.
As part of the annual Boom &amp; Bust Report for 2019, SQM Research will present a list of the real movers and shakers in the Australian housing market. 
These Top Ten people listed can impact either the demand for or supply of property or direction and sentiment in the market.  
These are the people we at SQM listen very closely to.
These influential individuals who have moved housing prices in 2018 and may well move them again in 2019 are listed below.  In our 2019 Boom &amp; Bust Report we will cover off what they could do next and how it will impact the property market. 
The Top Ten List:
10. Mark Steinert - Stockland CEO
9. Bill Shorten - Opposition Leader
8. Daniel Andrews- Premier of Victoria
7. Gladys Berejiklian - Premier of NSW
6. Donald Trump - US President
5. Scott Morrison - Prime Minister
4. Brian Hartzer - Westpac Bank CEO
3. Matt Comyn - Commonwealth Bank Australia CEO
2. Wayne Byres - APRA Chairman
1. Dr Philip Lowe - Reserve Bank of Australia
Louis Christopher is the <a href="http://sqmresearch.com.au/about-us.php" target="_blank">managing director at SQM Research.</a>
 
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The 10 people most likely to shape property prices: Louis Christopher

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EXPERT OBSERVER
Australian capital city home prices have fallen for 12 months in a row and are down 4% from their peak.
Most of the weakness relates to the previous boom time cities of Sydney and Melbourne but prices are continuing to fall in Perth and Darwin.
<img src="https://www.urban.com.au/images/2018/10/18/OLIVER%20G1.JPG" alt="">
This begs the questions: how far will prices drop? and what will it mean for the broader economy?
 High prices and high debt – how did it come to this? 
Real house prices started to surge in the mid-1990s. This has led to them being expensive relative to income, rents, their long-term trend and by global standards. On our valuation measures prices are around 30% overvalued. The boom since the mid-1990s has rolled through different cities at different times, eg, starting in Sydney &amp; Melbourne, then Perth, then Sydney &amp; Melbourne again more recently. 
As a result, affordability is poor and while interest rates may be low it’s become hard to save for a sufficient deposit.
The surge in home prices has gone hand in hand with a surge in household debt. See the next chart. This has taken the household debt to income ratio from the low end of OECD countries to the top end. The shift to overvaluation and high debt mostly occurred over the 1995-2005 period.
<img src="https://www.urban.com.au/images/2018/10/18/OLIVER%20G2.JPG" alt="">
It’s popular to blame negative gearing, the capital gains tax discount and foreign buying for high home prices and debt. However, the basic drivers are a combination of the shift from high to low interest rates over the last 20-30 years boosting borrowing power, along with a surge in population growth from mid-last decade and the inadequacy of a supply response (thanks to tight development controls and lagging infrastructure) to suppress the resultant rise in the ratio of prices to incomes.
Since 2006, annual population growth has averaged about 150,000 above what it was over the decade to the mid-2000s, which required roughly an extra 50,000 new homes per year, but dwelling completions have only recently caught up.
The tide has turned – expect more price falls
However, starting about a year ago it seems the tide has turned against property prices reflecting a range of factors.
Poor affordability - which has reduced the pool of buyers. 
A tightening in bank lending standards under pressure from regulators - particularly around tougher income and expense verification and total debt to income limits for borrowers. The latter will particularly impact cities like Sydney and Melbourne which have high price to income ratios necessitating high debt to income ratios. It will also impact property investors with multiple properties (with around 1.5 million properties held by investors with multiple properties) with banks cracking down on lending to such investors. This is all making it harder to get housing loans. 
A significant pool of interest only borrowers are scheduled to switch to principal and interest over the next few years resulting in a sharp rise in total debt servicing costs. 
Banks withdrawing from lending to Self-Managed Super Funds – reducing the pool of property investors. 
A cutback in foreign demand, partly due to Australian authorities making it more difficult. Chinese investment into Australian real estate has fallen by roughly 70% since 2015.
Rising unit supply – as the ongoing surge in unit construction completes and hits the market with Sydney and Melbourne most at risk. This risk is highlighted by Australia’s residential crane count of 528 cranes being way above the total crane count (ie residential and non-residential) in the US of 300 and Canada of 123! 
Out of cycle bank mortgage rate increases may also be playing a role – although a minor one as the moves have been small, mortgage rates remain near record lows and some banks have cut rates for new borrowers. • Falling price growth expectations in response to falling prices risks resulting in a negative feedback loop for prices – as the FOMO (fear of missing out) phenomenon of up until a year ago risks turning into FONGO (fear of not getting out), particularly for investors as they realise they are only getting very low returns from net rental yields of around 1-2%.
Expectations that negative gearing and capital gains tax concessions will be made less favourable if there is a change of government are likely also impacting and have the potential to become a major drag on prices. On their own some of these are not significant, but together they risk creating a perfect storm for the property market.
Home price outlook
For some time, we have been expecting top to bottom falls in Sydney and Melbourne prices of 15% spread out to 2020, implying price declines around 5% per annum. However, the risks are starting to skew to the downside – particularly around tighter credit and falling capital growth expectations made worse by fears of a change in tax arrangements.
Auction clearances in recent weeks have been running around levels roughly consistent with 7-8% pa price declines.
<img src="https://www.urban.com.au/images/2018/10/18/OLIVER%20G3.JPG" alt="">
As such we are now allowing for a 20% decline in prices in these cities, again spread out to 2020, which would take average prices back to first half 2015 levels.
<img src="https://www.urban.com.au/images/2018/10/18/OLIVER%20G4.JPG" alt="">
By contrast home prices in Perth and Darwin are either at or close to the bottom having fallen back to levels seen more than a decade ago, and prices are likely to perform a lot better in Adelaide, Brisbane, Canberra and Hobart along with regional centres as they have not seen anything like the boom in Sydney and Melbourne. But they will see some impact from tighter credit.
Overall, we now expect national average prices to fall nearly 10% out to 2020 which is a downgrade from our previous expectation for a 5% national average fall.
 A crash is a risk but remains unlikely
With prices now falling naturally the calls for a property crash are getting a lot of airing. But these have been wheeled out endlessly over the last 15 years or so. Our assessment remains that a crash (say a 20% or more fall in national average prices) is unlikely unless we see much higher interest rates or unemployment (neither of which are expected) or a continuation of recent high construction for several years (which is unlikely as approvals are falling) and a collapse in immigration.
Strong population growth is continuing to drive strong underlying demand for housing. While mortgage stress is a risk, it tends to be overstated: there has been a sharp reduction in interest only loans already; debt servicing payments as a share of income have actually fallen slightly over the last decade; a significant number of households are ahead on their repayments; and banks’ non-performing loans remain low.
Finally, while Sydney and Melbourne are at risk other cities have not seen the same boom and so are less vulnerable. However, the risk of a crash cannot be ignored given the danger that banks may overreact and become too tight and that investors decide to exit in the face of falling returns, low yields and possible changes to negative gearing and capital gains tax.
 The property cycle and the economy
The downturn in the housing cycle will affect the broader economy via slowing dwelling construction, negative wealth effects on consumer spending, less demand for household goods and via the banks as credit growth slows and if mortgage defaults rise.
This will provide an offset to strong growth in infrastructure spending and solid growth in business investment and will constrain economic growth to around 2.5-3% which in turn will keep wages growth and inflation low.
All of which is consistent with our view that the RBA won’t be raising rates until 2020 at the earliest and given the downside risks related to house prices it may have to cut rates. Housing weakness will also continue to constrain bank share returns.
<img src="https://www.urban.com.au/images/2018/10/18/OLIVER%20G5.JPG" alt="">
Implications for investors
Over the very long-term, residential property adjusted for costs has similar returns to Australian shares. So, there is a role for it in investors’ portfolios. However, now remains a time for caution regarding housing as an investment destination – particularly in Sydney and Melbourne where it remains expensive, prices are likely to fall further &amp; it offers very low rental yields. Best to look at other cities and regional areas that offer much better value.
Dr Shane Oliver                                                                              Head of Investment Strategy and Chief Economist AMP Capital
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Boom turns to bust - some home prices now set to fall up to 20 percent: Shane Oliver

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Spring fever in the ACT residential housing market is hitting, according to the lastest Herron Todd White (HTW) residential report.
The housing market in the ACT is somewhat driven by seasons as the winters are historically harsh. When winter begins, cold temperatures cause buyers to lose inspection motivation and as a result, sellers feel less inclined to list their properties.
The transition from winter to spring always occurs quickly in the ACT, with temperatures going from cold to warm in a short period of time.
"Once spring begins and the weather becomes warmer, buyers are motivated to inspect properties and the cycle picks up. The warm weather and blossoming of plants increases the marketability of properties. Houses generally look more spectacular and inviting to buyers," noted by the valuer. 
The spring cycle is typically short and usually begins in late August and stretches to November/early December. Given the employment profile of the ACT, December and January are quiet in the property market given that many employees choose this as the best time to take time off work, which results in lower market activity.
Overall housing market activity throughout winter 2018 has been steady to strong, which is expected to continue into the spring and summer.
A recent sale was a Forde four bedroom house situated at the base of Mulligans Flat Nature Reserve.
The single level residence at<a href="https://www.realestate.com.au/sold/property-house-act-forde-129061242" target="_blank"> 99 Blizzard Circuit</a> was sold at $745,000 on September 5 (picture above).
Built in 2012, the house comes with four bedrooms, multiple living areas, kitchen and established gardens.
It is close to Forde local schooling and shops. 
The valuation firm suggests that units in Canberra generally follow a different pattern to the housing market. Units usually don’t have as many marketable features that have an advantage in spring over winter.
The ACT still has an underlying problem with unit supply, so it is hard to judge the market activity increase from winter to spring.
Overall market activity over winter has been on a slight decline owing to the construction of multiple new residential complexes, which is expected to continue into the spring and summer.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/9/6/franklyn%20.jpg" alt="">
A Franklin two bedroom apartment has been recently sold for $401,000 (pictured above).
Situated opposite parkland, the northeast oriented apartment at <a href="https://www.realestate.com.au/sold/property-apartment-act-franklin-129048134" target="_blank">93/329 Flemington Road</a> comes with two bedrooms, open plan living and meals area, well-designed kitchen and large secure rear courtyard.
Additional features include the reverse cycle split system, family size laundry and linen cupboard to hallway.
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