Roseville is poised for a wave of new apartment development following the NSW Government's rezoning of land around Roseville Station under its Transport Oriented Development program.

The new planning controls have unlocked significant development potential within walking distance of the station, with a number of sites expected to be amalgamated and redeveloped in the coming years as developers seek to take advantage of the increased density allowances.

One of the more restrained developments in the precinct, and set among the first to be delivered having commenced well before the recent changes, is Hyecorp's Juliet. The boutique apartment project is already well under construction and remains on track to welcome residents by the end of the year, offering a markedly different proposition to many of the larger-scale developments now likely to emerge across the suburb.

[smartcode_project:default project_id=7395 project_image_fid=278194]

<a href="https://www.apartments.com.au/new-apartments/juliet-roseville-64-pacific-highway-roseville-nsw-2069">Juliet</a> will comprise just&nbsp;34 one-, two-, and three-bedroom apartments opposite Roseville Station. For Hyecorp, which has delivered projects across Sydney's Lower North Shore for more than three decades, Roseville presented a rare opportunity to address a growing gap in the market.

"<a href="https://www.apartments.com.au/developments/roseville-nsw-2069">Roseville</a> has long been one of the North Shore's most tightly held and desirable suburbs, offering a unique combination of village charm, established greenery, excellent transport connections, and proximity to some of Sydney's best schools and lifestyle amenities," Hyecorp said.

"We recognised a growing demand from local homeowners seeking to downsize without leaving the community they have built their lives around. The location presented a rare opportunity to create homes that cater specifically to that buyer profile."

[smartcode_project:default project_id=7395 project_image_fid=278196]

The six-level development has been designed by <a href="https://www.apartments.com.au/architects/pbd-architects">PBD Architects</a> as a collection of residences that feel more like homes than apartments. The brief centred generous floorplans, abundant natural light, quality finishes, and strong connections to outdoor space.

PBD Architects drew inspiration from Roseville's established garden suburb character, creating a building that sits comfortably within its surroundings rather than dominating them. The architecture incorporates natural materials, soft forms, layered landscaping, expansive balconies, and generous setbacks to strengthen the connection between residents and the suburb's leafy environment.

"The focus was on designing spacious, house-like residences for discerning owner-occupiers and downsizers who wanted to remain on the North Shore without compromising on comfort, privacy, or design," PBD said.&nbsp;

"Every apartment was to feel considered, timeless, and highly functional."

[smartcode_project:default project_id=7395 project_image_fid=278195]

Inside, residences feature engineered timber flooring, stone kitchen benchtops and splashbacks, integrated Fisher &amp; Paykel appliances, ducted air conditioning, and large outdoor entertaining areas designed to take advantage of district and treetop views.

Residents will also have access to a rooftop barbecue and lounge area, alongside practical amenities including parcel lockers, EV charging capability, bicycle storage, a dog wash bay, and a basement car wash facility.

The majority of purchasers so far have been local owner-occupiers from Roseville, Lindfield, Chatswood, Killara, and the broader Upper North Shore, many of whom are transitioning from larger family homes.

"Buyers are looking for spacious, house-like apartments that allow them to downsize without feeling like they are sacrificing comfort or functionality," Hyecorp noted.

"They value large kitchens, generous living areas, ample storage, quality finishes, secure parking, lift access, and low-maintenance living."

[smartcode_project:default project_id=7395 project_image_fid=278204]

Juliet sits directly opposite Roseville Train Station and within walking distance of Roseville Village, while Chatswood's retail and dining precinct is only minutes away. The development is also surrounded by some of Sydney's most established schools, including Roseville College, Ravenswood, Pymble Ladies' College, and Knox Grammar, as well as nearby parklands and golf courses.

Juliet is currently more than 75 per cent sold ahead of its anticipated completion in late 2026.

[smartcode_project_cta:default project_id=7395]

Joel Robinson

Juliet to sit quietly amid Roseville apartment boom

Sherpa Property Group has unveiled the third instalment of its Flourish series, securing full approval for the two-tower, $500 million Flourish Soleira development in Palm Beach.

<a href="https://www.apartments.com.au/new-apartments/flourish-soleira-1150-1154-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> will rise from a prominent site in the commercial heart of Palm Beach, the long-time home of Cash Converters and a range of local retailers.

The project will introduce a new retail and dining precinct at ground level, beneath 286 apartments.

[smartcode_project:default project_id=150017 project_image_fid=370959]

“We’re very committed to not only providing affordable residential offerings that are much needed in Palm Beach, but also delivering a vibrant new commercial heart that complements the extraordinary growth of the southern Gold Coast,” Sherpa Property Group founder Christie Leet said.

The development will sit under Sherpa's Flourish brand, which is aimed at providing a pathway into the beachside suburb for locals, first-home buyers and downsizers. In a move designed to assist first-home buyers entering the market, Sherpa has reserved all one and two-bedroom, one-bathroom apartments exclusively for eligible first-home buyers.

[smartcode_project:default project_id=150017 project_image_fid=370964]

“Our vision through Flourish is to create a vibrant retail and lifestyle focal point within the Palm Beach centre zone, delivering thriving communities underpinned by lifestyle-rich locations,” Leet said.

“So far, Flourish has been an incredible success, and we hope to carry this momentum as we progress the next two Flourish projects in Palm Beach.”

[smartcode_project:default project_id=150017 project_image_fid=371430]

Located across 1150-1164 Gold Coast Highway and 3 Sixth Avenue, the development will comprise two towers. The northern tower will deliver 154 apartments, while the southern tower will add a further 132 residences, helping address ongoing demand for new apartments in the tightly held coastal suburb.

Flourish Soleira will also feature the most extensive rooftop amenity offering ever delivered in Palm Beach.

The two towers will be connected by a skybridge, with residents gaining access to a rooftop recreation deck featuring a full-width swimming pool, hot and cold plunge pools, wellness spaces, a gymnasium, private dining facilities, massage treatment rooms, barbecue areas, a basketball court, golf simulator, indoor and outdoor dining spaces, sun lounges and extensive landscaping.

LPS Group is expected to start construction later this year.

Sherpa is already well advanced on construction of its debut Flourish project, Flourish Amargo, located just around the corner from Soleira. Meanwhile, Flourish Oasis, positioned opposite Amargo, recently commenced construction and has nearly sold out its collection of 47 apartments.

[smartcode_project_cta:default project_id=150017]

Sherpa unveils $500m mixed-use Palm Beach precinct, Flourish Soleira

Are mortgage holders set to get a reprieve from the RBA in 2026?

Big Four bank NAB believes so. They are now expecting the next move from the RBA to be a cut, rather than a hike, which they had pencilled in for August. They are unsure of the timing of the cut however, they note in their latest&nbsp;NAB Economics RBA Watch.

NAB Chief Economist, Dr Sally Auld, said recent data suggests the economy has lost momentum and the outlook for rates has shifted, noting that the broader economic backdrop has changed since earlier in the year.

“The next move in the cash rate is likely to be down, but the timing is uncertain," Dr Auld said.

"In February, growth was above trend, the economy was operating above capacity and there was uncertainty over the restrictiveness of rates. None of these conditions exist today,” she outlined.

Dr Auld said recent data pointed to softer momentum across the economy while acknowledging that at the same time, uncertainty remains a key feature of the outlook.

“Both Q1 GDP data and the NAB business survey suggest momentum in the economy has slowed, meaning that growth has likely peaked for the cycle. That said, we are cognisant there is still considerable uncertainty around the outlook, both with respect to activity and inflation.”

Dr Auld said inflation risks and labour market outcomes would be important to watch.

“On the prices side, we are still forecasting above target core inflation through to mid-2027. Margins will compress and weaker labour market outcomes are a risk.”

She said tighter financial conditions are expected to weigh on housing and activity.

“Tighter financial conditions will be reflected in a slowing in house price growth and housing credit growth. In summary, we have greater conviction that the next move in rates is down, but less conviction on the timing.”

Mortgage relief? NAB forecasts RBA rate cut, not hike, after softer economic conditions

A local downsizer has splashed $6.5 million on a penthouse in Perifa's Alex &amp; Willow development in Crows Nest. 
&nbsp; 
The purchaser sold their long-held family home in the area before embarking on a six-month search for the right apartment. After inspecting a range of options across the Lower North Shore, the buyer returned to <a href="https://www.apartments.com.au/new-apartments/alex-willow-crows-nest-82-90-alexander-street-crows-nest-nsw-2065">Alex &amp; Willow</a>. 
&nbsp; 
The buyer profile reflects the project’s broader purchaser mix. <a>Alex &amp; Willow</a> has attracted predominantly local downsizers looking to transition from larger homes without compromising on space or quality, alongside a smaller cohort of upsizers and investors drawn to the project’s location and design credentials. 
&nbsp; 
The milestone sale comes as the project, developed by&nbsp;<a href="https://www.apartments.com.au/developers/perifa">Perifa</a>&nbsp;and delivered by <a href="https://www.apartments.com.au/builders/versatile-made-construction">Versatile Construction</a>, both part of Versatile Group, reaches 60 per cent sold.

[smartcode_project:default project_id=6680 project_image_fid=371325] 
&nbsp; 
Eddie Mansour, Managing Partner of <a href="https://www.apartments.com.au/project-marketer/ray-white-projects">Ray White Projects</a>, said the result demonstrates not only a headline price but also depth of demand. 
&nbsp; 
“This is an exceptional outcome and a clear reflection of sustained buyer demand for premium, well-located downsizer product,” Mansour said.

“We’re seeing a consistent pattern of local homeowners selling family residences and reinvesting into high-quality apartments that allow them to remain within their community. Alex &amp; Willow has resonated strongly with this group because it offers genuine scale, thoughtful design and immediate proximity to the village.” 
&nbsp; 
The sale reflects a broader and consistent trend of local downsizers actively seeking high-quality, low-maintenance residences close to established village centres. Agents report that demand for this product type has remained resilient, particularly where developments offer a rare combination of scale, design quality and walkable amenity. 
&nbsp;&nbsp; 
Fabrizio Perilli, Managing Director of Perifa and Versatile Group, said the sale marks a defining moment for the project. 
&nbsp; 
“The penthouse sale is a strong endorsement of the quality we have delivered, alongside our partners, and the clear demand from local downsizers for premium, boutique residences in this location,” Perilli said.&nbsp; 
&nbsp; 
“Most importantly, we’re proud to see the Alex &amp; Willow community beginning to take shape. As we move closer to completion, we’re looking forward to welcoming residents and seeing the project come to life.”&nbsp;

[smartcode_project:default project_id=6680 project_image_fid=338516] 
&nbsp; 
Designed by <a href="https://www.apartments.com.au/architects/nettletontribe">Nettleton Tribe</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/richards-stanisich">Richards Stanisich</a>, Alex &amp; Willow is a boutique collection of generously sized two- and three-bedroom residences in the heart of Crows Nest village.&nbsp;

Completion is slated for early 2027.

[smartcode_project_cta:default project_id=6680]

Alex & Willow, Crows Nest penthouse sells off the plan for $6.5 million

Fresh from launching the first stage of its Wollongong precinct, <a href="https://www.apartments.com.au/new-apartments/keira-place-wollongong-120-122-smith-street-wollongong-nsw-2500">Keira Place</a>, builder-developer Urban Property Group has unveiled plans for the next phase of the masterplanned community.

Now on public exhibition through the NSW Government's Housing Delivery Authority pathway is a State Significant Development Application for a further 657 homes on the prominent gateway site opposite Beaton Park.

The proposal comprises three buildings, including two build-to-sell towers rising 25 and 30 storeys, delivering 391 apartments, alongside a 12-storey co-living building with 266 residences, making it one of the largest co-living proposals currently planned in regional New South Wales.

Of the apartments proposed in the build-to-sell towers, the majority, 310, are two-bedroom dwellings. The balance comprises 44 one-bedroom apartments and 37 three-bedroom residences. Apartment sizes range from around 50 sqm for one-bedroom homes to approximately 90 sqm for three-bedroom apartments.

<img alt="Smith St" data-entity-type="file" data-entity-uuid="19347059-1612-41a0-9c74-b86a657237f8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-10%20at%2010.02.18%E2%80%AFAM.png?VersionId=sWXnaCcA.cIC6N8YT1dg5pJ2e1V3Z6z7" />

The submission says the proposal has evolved significantly from its original Housing Delivery Authority application following extensive consultation with the State Design Review Panel and Wollongong City Council.

The final scheme has been designed to align with the emerging vision for the Flinders Street Precinct, an area identified by Council as a future high-density mixed-use neighbourhood capable of accommodating substantial housing growth close to transport, employment and community infrastructure.

According to the design report prepared by COX Architecture, the development aims to "deliver a built outcome consistent with the future character of the Wollongong CBD while responding to the site's unique constraints and opportunities."

"Our vision for the next phase of the site evolution in Wollongong is grounded in three design pillars that guide the design response: place, natural environment and celebration," COX said.

"Inspired by its surroundings and grounded in the stories of place on Wodi Wodi Country, the design proposal acknowledges the established character of its setting while creating a unique and timeless identity that sits harmoniously within it.

"The design proposal responds to its specific site conditions, acknowledging the vegetation, climate, wind conditions and solar access of the site."

The architecture responds directly to the site's position between Wollongong's urban core and its natural landscape setting.

COX identified views towards Mount Keira and the Illawarra Escarpment as defining features of the site, while the upper levels of the towers will also capture expansive views across the city and out to the Pacific Ocean.

The design team has positioned the tallest buildings closer to the rail corridor, where overshadowing impacts can be better managed while establishing a landmark built form on the northern approach into the city.

<img alt="Smith St" data-entity-type="file" data-entity-uuid="79580d5b-500c-4ebf-9629-797146a4a694" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-10%20at%209.51.59%E2%80%AFAM.png?VersionId=WbTB1EKSG.KDfsfz0F3wp1QVa2oCMGR5" />

Urban Property Group secured the 11,000 sqm Smith Street site in 2022 and has since progressed plans for the broader Keira Place precinct.

Construction recently commenced on the first stage of Keira Place, which will deliver 150 apartments across two residential buildings, including 27 affordable housing apartments and 18 specialist disability accommodation dwellings, alongside activated ground-floor retail and commercial space.

Urban Co-CEO Patrick Elias said the commencement of construction marked a significant milestone for Wollongong and reflected the developer's long-term commitment to regional cities.

"Today's groundbreaking is about turning approvals into homes and moving quickly to deliver much-needed housing in Wollongong's city centre," Elias said.

"Keira Place will provide a diverse mix of homes close to jobs, transport and services, while setting a high benchmark for quality, durability and consumer protection."

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/groundbreaking-marks-start-of-construction-at-keira-place-in-wollongong-cbd">Groundbreaking marks start of construction at Keira Place in Wollongong CBD</a>

&nbsp;

&nbsp;

&nbsp;

Urban Property Group unveils trio of towers for next stage of new Wollongong precinct, Keira Place

Property market

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Nearly half of Chinese travellers on holiday over Chinese New Year 2017 will spend some time hunting for property, according to a new survey by Juwai.com.
<div>The survey of 120 Chinese consumers and more than 1209 international real estate agents found 26 percent of Chinese consumers plan to travel internationally during Chinese New Year 2017, and 42 percent say they will engage in property hunting during their trip.</div>
<div> </div>
<div>
<div>Charles Pittar, chief executive officer of Juwai.com said generally, he finds wealthier buyers are more likely to combine property hunting with tourism during Chinese New Year.</div>
<div> </div>
<div>“Overall, a majority of agents expect this year to be a busier holiday season than in 2016," he said.</div>
<div> </div>
<div>"Looking beyond just the holiday to all of 2017, almost half - or about 42 percent - of Chinese consumers say they will engage in property hunting during their trips abroad.</div>
<div> </div>
<div>"It's not always the case, but often we see a strong correlation between the countries they visit as tourists and the countries where they purchase property. Fifty-seven percent plan to purchase property in the country to which they are travelling. An additional 26 percent say they would consider doing so.</div>
<div> </div>
<div>"When it comes to immigration, 58 percent are considering immigrating to the country they are visiting."</div>
 </div>
<div> Key findings</div>
<div> </div>
<div>• 57 percent plan to purchase property in the countries to which they are travelling and another 26 percent say they may consider doing so.  </div>
<div>• 58 percent are considering emigrating to the country to which they‘re travelling, and another 16 percent say they may consider doing so.  </div>
<div>• More than 41 percent of Chinese who intend to purchase property in the countries to which they‘re travelling plan to meet with real estate agents over their Chinese New Year travel.</div>
<div> • When it comes to real estate agents, 43 percent say they will meet with real estate agents with whom they spoke before their trip, while 32 percent say they will meet with real estate agents with whom they haven’t yet spoken. </div>
<div> </div>
<div>How many agents expect this Chinese New Year will be busier than in 2016?</div>
<div>- 67 percent of international agents </div>
<div>- 52 percent of Australian agents (with 36 percent saying “the same” and 13 percent saying “less busy”)</div>
<div> </div>
<div> </div>
<div> </div>
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jonathanchancellor-7SQnKwU6yx

Half of travelling Chinese consumers plan to hunt for property during Chinese New Year 

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The investment management firm Auscap Asset Management has said that Australia's  reliance on past growth trends may be blinding us to certain risks that may adversely affect the property market in the future.
“Risks exist for every investment whether we acknowledge the risks or not. Risks that have not appeared for a long time can be ignored by investors or even assumed not to exist,” Tim Carleton and Matthew Parker, principals at Auscap, said.
The assumption that property inherently carries a low risk could be traced back to the fact that real estate has not experienced a broad decline since 1991, they said.
Risks exist for every investment whether we acknowledge the risks or not, their latest report noted.
"Risks that have not appeared for a long time can be ignored by investors or even assumed not to exist.
"To some extent we believe that the current thinking around the residential property market is illustrative.
"In Australia, residential property is considered the safest of all assets. Residential property prices have not experienced a broad decline since 1991.
"Because property has not fallen for such a long time, the risks involved in investing in property are often assumed to be low."
According to Carleton and Parker, risks most likely to impact the residential property market include:
<ul>
<li>Significant effects from interest rate rises over the medium-term given the current low interest rate environment</li>
<li>Unemployment rates which may increase from the current levels</li>
<li>Natural headwinds for domestic economic growth that overcome any tailwinds</li>
<li>High debt levels compared to historical household leverage ratios such that any deleveraging may negatively impact prices</li>
</ul>
In their opinion, the lack of a meaningful correction in property prices over such a significant length of time is more likely to imply that the risk might be quite high, because excesses in the system have been allowed to build for such a long period.
Similarly the fact that growth rates in house prices have exceeded growth in household income indicates to us that prospective residential housing returns will be significantly lower going forward. But many draw the opposite conclusion, that the historical growth rates are evidence that house prices should continue to grow at those rates in the future.
The inference is that past returns tell us something about future returns, they advised.
Their report said his extrapolation bias carries considerable risk.
National property price growth appears to have two main drivers, national household income growth and leverage.
Over the very long run we might assume that leverage levels oscillate within a range, dependent on the availability of credit and sharing an inverse relationship with the level of interest rates.
If that is true, then in the very long run property price growth should reflect growth in incomes, the report noted.
Adding but this has not been the case in the domestic residential market. Property prices have outstripped household income growth by a considerable margin for some time.
The probability that residential property prices are currently elevated appears to us to be quite high, based on a number of very favourable drivers that are present, including:
- Very low interest rates and therefore borrowing costs
- High debt levels (closely correlated with declining interest rates);
- Solid employment levels (the current unemployment rate is 5.7 percent)
- Strong long term historic growth (currently 1.8 percent and 25 years without a recession).
 
What the Auscap Report said:
 
The preconditions for high property prices are in place. Prices have risen to reflect the favourable macroeconomic factors. But like a stock that is pricing in the continuance of favourable conditions, this most likely means that the downside risks associated with investing in property are elevated.
Risks to the current residential property climate include:
- With global interest rates close to the zero bound, it is hard to envisage significantly better borrowing conditions than currently exist and the risk that interest rates rise over the medium term could be significant;
- Unemployment could rise from current levels
- Domestic economic growth probably has more natural headwinds than tailwinds over the medium term, especially when compared with recent history 
- Debt levels are high in the context of historical household leverage ratios and may fall over time, meaning that any deleveraging would most likely have a negative impact on prices.
We analysed the property market against the two factors we assumed would be the predominant factors affecting property prices, household incomes and debt levels. Below is a chart comparing property price growth against a composite index of the two factors.
<a href="https://www.propertyobserver.com.au/images/2017/01/23/Chart%201.jpg" target="_blank">Click here to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/23/Chart%201.jpg" alt="" width="467" height="269">
It appears that over the last 20 years the correlation between property prices and the composite index is very high, implying what would appear to be logical, that property prices are primarily a function of household income growth and growth in leverage. The short term moves in the composite index also mirror the short term growth rates in house prices, as shown below.
<a href="https://www.propertyobserver.com.au/images/2017/01/23/Chart%202.jpg" target="_blank">Click here to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/23/Chart%202.jpg" alt="" width="445" height="264">
 
The charts demonstrate visually what we know to be true, that property prices have grown by 7.4 percent per annum, a growth rate many take comfort from in making assumptions around future growth.
But the charts also imply that this has been a function of both growth in household income (which has been circa 3.7 percent pa) and the growth in household debt (which has been circa 3.3 percent pa).
Analysing this situation as though residential property prices were a stock, we would try to form sensible expectations around household income growth and growth in leverage in the future.
Household income growth is to a large extent tied to GDP growth, which we expect to be modest over the medium term. Recent growth rates have been lower than historical growth because of headwinds facing the economy that we expect will continue.
<a href="https://www.propertyobserver.com.au/images/2017/01/23/Chart%203.jpg" target="_blank">Click here to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/23/Chart%203.jpg" alt="" width="447" height="233">
On the other hand, leverage levels have risen as interest rates have fallen. We doubt that household borrowing costs can fall substantially from here, implying that growth in household debt levels may be limited.
<a href="https://www.propertyobserver.com.au/images/2017/01/23/Chart%204.jpg" target="_blank">Click here to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/23/Chart%204.jpg" alt="" width="411" height="208">
If this is the case, the best house price growth we might expect is for property prices to grow in line with historical household income growth. But there are a many downside scenarios that are also possible.
Household income might grow more slowly should Australia face periods of slower or even negative growth. The fact that there has not been a nationwide decline in GDP in 25 years implies the risk of such a scenario is elevated, not reduced.
It may not occur, but we can confidently propose that this scenario is not being considered or assessed by the majority of households in the same way it was in 1992, immediately after the last broad decline in Australian residential property prices.
Household leverage may need to decline should interest rates rise. If this were the case, falling leverage may drag on house price growth, rather than add to it as it has for the last 20+ years. If the decline in leverage is greater than growth in incomes, property prices may actually fall.
Certainly our conclusion would be that a continuation of the 7.4 percent per annum growth in household prices witnessed over the last 20 years seems extremely unlikely in the absence of borrowing costs continuing to fall, which we see as limited given where interest rates are currently, the report concluded.
 
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jchancellor-FAypfDUnLy

The risks in property in 2017 for Australia are getting higher

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Yes, those two words that keep trending every day on the 24-hour news cycle for 365 days each year – housing affordability.
So why can’t anyone come up with a logical explanation on how to fix this ever-growing Australian curse? Well first, nobody is really drilling down to find the precise definition and what will lead to the likely cure and allow me to tell you that massive new high density construction in the major cities is not going to fix the problem.
Sydney is a prime example although first we need to pin point a year when housing affordability really started to change for the worse and for me that year would be 1990 which is when the Australian economy embarked on its unprecedented 25 years of economic growth.
Yes house prices boomed in 1987 to 1989 which really was Sydney’s last massive housing boom which then was brought crashing down with the recession of the early 1990’s. In the late 1980’s our population was not really going anywhere, for example in Mosman in 1987 Cremorne Girls’ High School closed its doors to then see it acquired by SCEGGS Redlands.
In 1989, Balmoral Beach Infants’ School was closed and mysteriously sold to Queenwood Girls’ School the night before the site was due to go to public tender. Beauty Point Public School, Middle Harbour Primary School, Mosman Primary School and Mosman High School all were facing closure as attendance records were well below the Department of Education acceptable levels for operation requirements.
Today, all these schools are at maximum attendance levels. The closure of schools over this period was happening all over NSW – it was not an isolated event.
Back then property prices in Mosman were ten to fifteen times lower than where they find themselves today. The cash rate was sitting at 17.00 to 17.50 per cent on 23 January 1990 where today it sits at 1.50 per cent.
 
The “Baby Boomers” born the decade after World War II (now roughly aged 47 – 65) were all jumping into that family tradition of buying real estate. The problem here is that the strong concentration of the boomers all wanted to live in the Sydney CBD – which remains the same patterns that we see today. The missing link here in this housing affordability discussion is that transport infrastructure was frozen to the extent that 25 years later despite a massive upswing in our population we are still using the same archaic transport infrastructure.
For the past 25 years, our elected politicians have all been caught up in a transport infrastructure brain freeze where sadly today there is no big picture for Sydney, although we could name an abundance of other major cities around the world who have successfully addressed growing populations with transport infrastructure.
This explains exactly why we now have raging property prices today, which certainly would not be the case if we had a transport infrastructure where a 200-kilometre radius around Sydney was inter connected with state of the art fast train services. It really should not be that difficult to pinpoint the problem. Although it is very clear why so many have extreme difficulties when attempting to define housing affordability and what needs to be done to correct these huge problems facing so many Australians.
Exorbitant stamp duties payable on the purchases of properties have played a major role in seeing record low stock levels across Sydney, although there is another part of this mystery puzzle that keeps sailing under our property radars. Look again at the baby boomers who would be Australia’s largest property owners in the home ownership and investment portfolios. They are astute businesspeople who know that they will not get any returns with cash sitting in the bank where we now have the lowest cash rate on record. In recent years, they have been enjoying huge capital gains on their principle place of residence, so they have held – off selling for most obvious reasons.
This in turn has significantly impacted the supply side of the equation where such collaborative actions have driven prices higher, and in all probability this will continue in 2017. Although having said that all eyes will be on Trump, Brexit and how Europe reacts together with the goings – on in China and Russia. Of course, we can’t ignore this week’s unemployment rate which hit 5.8 per cent being the worst calendar year result since 2013.
It is hard to see the Reserve Bank of Australia lowering the cash rate further from the present 1.50 per cent so it would be fair to suggest that we are at the lowest possible rates.
So, in 2017, I will be closely watching the baby boomers simply because at the first sight of severe head – winds they will be first to cash – up which in turn would see stock levels increase significantly. In the meantime, we just sit back and observe the property market machinations with great interest.
Next week, NSW will appoint its seventh premier in 12 years – what does that tell you? No doubt the allergy to economic reform will remain in isolation.
ROBERT SIMEON is a director of <a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> and has been selling residential real estate in Sydney since 1985. 
He has also been writing real estate blog <a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> since 2000.
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Housing affordability and the ever-growing Australian curse: Robert Simeon

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The best decision to be made about buying during 2017 will be preceded by a close study of the performance of the local market chosen to buy or invest in, according to real estate television presenter Andrew Winter.
His forecast on capital cities stresses one element that he was absolutely sure about - our love affair of real estate, love it or hate it will not change.
He warned News Ltd readers they will have success buying and selling only by "knowing all the sales in the previous six months, every listing for sale right now, what is in demand, what is not so much and for all stock both established, new, and even land.
"Know the areas facts from schooling, to crime rates to employment to infrastructure changes etc. that’s why it is impossible to cover a wide area and still truly be informed sufficiently to make the right move," he said.
Looking at the capitals, here’s what he thinks:
SYDNEY: Limited stock to fuel growth
"Sydney, I genuinely believe some growth may still continue, fuelled by limited stock in prime areas, outer areas may see growth too as buyers are forced outwards for value," he said.
"The only areas that may see more flatlining will be the locations with an increasing housing stock such as those with considerable new land releases.
"However, prices may not falter even there if that stock is perceived as affordable relative to the market. Even the inner city new unit market may hang in there, noting this is often a market within a market, so play with this housing stock very carefully."
MELBOURNE: Oversupply a concern
"Melbourne has performed outstandingly but more recently in some areas, such as prime suburbs, stock levels have increased slightly which tends to put a halt to big value hikes," he said.
"Outer areas, many of which are quite accessible to the CBD and big employment centres are and should continue to see moderate growth, affordable and attractive to owner occupiers and investors, local and interstate alike.
"This city’s big issue is an oversupply of central new unit schemes, usually high rise. If supply continues at this rate ahead of demand, or in fact more units get sold and stand empty or add to an over supplied rental stock this does not bode well for this market sector."
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PERTH and DARWIN: Good time to buy?
"Perth and Darwin have struggled somewhat during 2016, however, you could argue that the softening of those markets was a natural pattern in the property cycle after many good years," he said.
"When larger sources of employment and investment such as the resources industries struggle it is of course going to impact a local housing market.
"These two cities are critically important geographic centres, so while values may be suffering a little 2017 may just see more of the same, but it can be argued the bad times are exactly when you buy, not when you sell."
CANBERRA: Steady and modest
"As for our nation’s capital, a city that has seen very modest growth in 2016, this is a steady market anyway and I don’t believe that will change in 2017," he said.
ADELAIDE: Employment issue might affect market
"Adelaide tends to be a fairly sensible player in the market, more steady than boom and bust. Major employment concerns will continue to impact this market," he said.
"This is an affordable city so you only need some good news on infrastructure and employment and demand will increase, so it could be one to watch."
BRISBANE: Room for growth
"Brisbane and southeast Queensland generally has seen a recovery in the last few years but that market adjustment and value rises are still relatively low taken over a decade so again this is an area I believe to watch," he said.
"There is room for growth in many areas, only prime inner city suburbs have seen the larger value rises recently. For interstate and local buyers there really is well located and quite affordable housing stock."
HOBART: Tricky to predict
"Hobart, very tricky to predict. While many areas of the state are struggling, the city and close by offer a certain lifestyle attractive to many and with very affordable price tags. I believe no noticeable change for 2017 will be evident," he said.
Winter purposely omits all median prices, generic stats etc. because in his words, “I predict for 2017 the best decision will be made about buying and selling when you study the performance of the market local to you or the areas you’ve chosen to buy or invest in."
"The median prices/recent sales performance and demand can and does vary massively, not only from suburb to suburb, but literally between street to street," he concludes.
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Study the market for best price places to buy in 2017: Selling Houses Australia's Andrew Winter

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GUEST OBSERVER
December saw a continuation of the recent trend of softer price growth in tier-1 cities and sustained price gains for tier-2 and 3. 
Of the 70 cities reporting, 46 responded that the price of new dwellings had increased in the month; similarly, 45 cities also saw monthly gains in the secondary market.
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While down from their respective peaks of 65 (April 2016) and 60 (September 2016), price growth for new and existing dwellings clearly remains robust and broad based. There has been an increase in the number of cities reporting price declines for new builds, but these remain well below the level seen in 2015. 
Over the year, price growth in tier-1 cities remains strong despite having moderated since April. For new builds, prices are currently up 24.9 percent/yr. Price growth in the existing market is a little stronger at 28.8 percent/yr. 
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As we have outlined on a number of occasions, much of the deceleration in annual price growth in tier-1 cities has come as a result of a material slowdown in Shenzhen, from 62.5 percent/yr in April to 23.5 percent/yr currently (for new homes). 
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In effect, Shenzhen has come back to the pack, with Beijing and Guangzhou seeing sustained annual growth circa 22 percent/yr over that time and Shanghai having slowed from 32.9 percent/yr (September 2016) to 26.4 percent/yr.
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Price growth in tier-2 and tier-3 cities was also very healthy in December, respectively at 12.0 percent/yr and 8.8 percent/yr for new builds. The outcomes for existing dwellings were similar albeit a little softer, at 9.6 percent/yr and 5.7 percent/yr. 
Authorities will be pleased that momentum has broadened outside of tier-1 in a sustained manner. Looking ahead, additional demand for domestic property is likely to build as a result of households being unable to (legally) invest abroad.
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Currently the construction and investment data is only available to November. Till then it is apparent that the inventory of unsold homes and current construction projects continued to be worked through. However, we are yet to see new project starts respond. 
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If confidence in the housing market and the broader economy is sustained, then a (likely modest) pick-up in starts is only a matter of time. 
Elliot Clarke is senior economist, Westpac and can be contacted <a href="https://www.westpac.com.au/" target="_blank">here</a>.
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New dwelling price increases for December in China

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GUEST OBSERVER
Respondents to the ANZ-Property Council Survey report a more optimistic outlook for the property sector in 2017.
Confidence rose to a two-year high, supported by stronger expectations of economic growth, capital values, and forward work schedules.
Sentiment is still strongest in New South Wales, while the outlook for Queensland’s property market looks to have bottomed, and is embarking on a tentative recovery.
Firms nationwide now expect interest rates to rise over the next 12 months. This likely reflects a combination of the RBA cutting cycle reaching an end, and recent increases in bond yields and retail interest rates – especially in the housing market.
Confidence in residential property rose significantly, in line with other positive data flow on the housing market in recent months, including price growth, auction results, and investor finance.
Commercial property sentiment remains elevated, especially in the tourism sector. The improvement in the outlook for commercial offices is also encouraging.
ANZ chief economist Richard Yetsenga said the first quarter ANZ-Property Council Survey shows a further increase in sentiment in the property sector, despite the sharp slowdown in economic growth prior to the survey.
"Nonetheless, we believe growth will continue to pick up through 2017, with most of the Q3 weakness proving to be only temporary," he said.
"Our solid outlook for the Australian economy in 2017 is broadly consistent with the strong tone to this quarter’s survey. Sentiment in New South Wales’, Victoria’s, and the ACT’s property markets sits around record levels, in line with the transition away from mining-led growth. A stronger non-mining economy means that we believe the RBA’s easing cycle is over, and we expect rates will remain on hold this year.
A noteworthy feature of this quarter’s survey is that businesses nationwide now expect interest rates to increase over the coming year. This reflects both the RBA being at the end of their easing cycle, as well as tighter funding conditions. But as of yet, there is little sign that the likelihood of higher funding costs is having an adverse impact on the property sector.” 
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The March quarter survey showed that firms are considerably more optimistic around the outlook for the property sector. Confidence reached a 2-year high, with 31 percent of respondents expecting conditions in the property market to improve over the next 12 months.
The outlook remains quite mixed across the states, with New South Wales still leading the way (Figure 1), while Western Australia continues to feel the negative effects of declining mining investment. Encouragingly, sentiment in Queensland appears to be showing some signs of a base.
Queensland tends to get lumped with Western Australia as a ‘mining state’, but the transition to growth outside the mining sector appears much more advanced in the eastern state. Recent GDP data show that Queensland’s business investment has increased for the past two quarters, and in annual terms is much less of a drag on the state economy compared to 12 months ago.
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Consistent with this result, ANZ-Property Council respondents in Queensland are reporting a more positive state economic outlook and generally rising capital values over the next year.
One trend that is consistent across the states is the expectation that interest rates will rise over the next 12 months. This is a significant turnaround from just 6 months ago, when respondents in all states expected rates to move lower (Figure 2).
We believe this changed outlook reflects two influences. First, it is increasingly likely that the RBA is now at the end of its easing cycle, after having cut rates again in August. Second, bond yields have been rising for the past few months, and even more recently housing investors have seen their interest rates increase. All in all, it appears highly unlikely that today’s record low interest rates will continue to fall.
Much of the improved outlook for the property market came from the residential segment, supported by improved expectations of capital price growth, forward work schedules, and construction activity (Figure 3). The stronger price growth expectations are largely in line with recent results in the housing market. House prices have returned to double-digit annual growth rates across Sydney and Melbourne, while auction clearance rates have steadily increased and now sit only a fraction lower than last year’s peak (Figure 4). Coupled with the returning presence of investors, it appears that demand for housing is reasonably steady at an elevated level.
 
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The recent improvement in work schedules and construction activity expectations is also a positive. While we expect dwelling investment to fall slightly through the second half of 2017 given the recent decline in building approvals, a significant backlog of work is likely to see construction remain around historically high levels. 
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Sentiment in the commercial property segment is still stronger than in residential property (Figure 5). The March quarter survey saw the outlook for commercial property rise to the second-highest level on record, driven by an ongoing improvement in commercial office sentiment, and still-elevated levels of confidence in the tourism industry. 
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Net confidence in the commercial offices segment has been steadily rising for nearly two years, reflecting an improving outlook for price growth and construction activity. This result is in line with ongoing absorption of office space as white-collar employment continues to rise across the major capital cities.
The outlook for the tourism industry remains very strong despite a small decline in the March quarter. A net 64% of respondents expect tourism-related construction activity will rise over the next 12 months, 52 percent believe their company’s forward work schedule will rise, and 39% forecast capital values to rise. This positive outlook is consistent with data showing the ongoing strength in Australia’s services exports, which includes tourism (Figure 6). 
Importantly, the resilience of the AUD over the past year does not appear to have had a dampening effect on tourist inflows and expenditure. This suggests the strength of the tourism sector is not solely dependent on the currency, and is supported by other factors such as the rapid wealth expansion of the Chinese middle class. This broadening of demand bodes well for the growth prospects of an increasingly key component of Australia’s economy. 
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Daniel Gradwell is economist, ANZ and Richard Yetsenga is chief economist They can be contacted <a href="https://www.anz.com/corporate/research/" target="_blank">here</a>.
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Property sentiment strengthens, despite higher rate expectations: ANZ Research 

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A defining feature of 2016 was that knowing where NOT to buy became as important as where to buy.
Until recently, for investors it’s simply been a matter of buying in the places where prices were rising, mainly Sydney and Melbourne.  For most of the past 3-4 years, it’s felt as if owning real estate anywhere in the two biggest cities was a guarantee of capital growth.
As we contemplate 2017, buyers need to be lot more particular about their choice of location. Now, more than any time in the past four years, there’s a real prospect of losing money if you choose badly. Next year my No Go Zones report will be as important as the Best Buys report.
And the key factor in that equation is oversupply, specifically for apartments in specific locations. Both Sydney and Melbourne, as well as other parts of Australia, have locations I classify as “danger markets”.
And it’s clear that people are already choosing badly.
CoreLogic has published a report which was designed as the most popular places to buy but which, inadvertently, served as a de facto No Go Zones report. It highlighted most of the worst places to buy in the nation.
The fact that these were the most popular places for buyers, based on the number of sales in the past 12 months, just shows how bad real estate consumers are when it comes to choosing location - and how little research some people do before committing big money.
According to CoreLogic, the most popular market in Australia is the Surfers Paradise apartment market (1,616 sales in the past 12 months), followed by the Melbourne CBD apartment market (1,296). 
I’m trying to think of a worse place to buy real estate in the major population centres of Australia, but there are few I can think of. The only real contenders would be the inner-city apartment markets in Perth and Brisbane.
The Brisbane CBD also makes the Top 10 list of most popular places to buy apartments in Australia, alongside the CBD, Southbank and South Yarra in Melbourne, four highrise locations on the Gold Coast, the Adelaide CBD and Dee Why in Sydney.
Not all of those locations are absolute duds but most of them are.
You have to wonder about the thought processes behind buying an apartment in Surfers Paradise. Of the major markets around Australia, there are few with a worse track record on capital growth. The median price today is lower than it was 10 years ago. Very few locations have a record so bad.
Of course, a poor past record doesn’t disqualify a location from the prospect of future growth – but there needs to be evidence that something has changed, or will change to turn the situation around.
But the situation with the high-rise suburbs of the Gold Coast is not changing. It’s situation normal – developers going overboard and building too many apartments. The Gold Coast economy is currently strong and there is growth to be found in the city’s real estate market – but not in the high-rise suburbs, where developers are determined to repeat history through overbuilding, in the belief they can make sales by marketing to poorly-researched investors interstate and overseas.
In the Melbourne CBD, the median apartment price is lower than it was a year ago and three years ago, and about the same as it was five years ago. Is anything set to change? Yes, but not for the better. Massive oversupply will cause vacancies to rise, with rents and property values falling.
Ditto near-city locations like Southbank.
So, as a guide for consumers on where to buy, this list is worse than useless – it’s dangerous.
There’s a different look about the list of Top 10 most popular places for house sales, but as a guide for buyers it also has little value. It consists of new suburbs on the periphery of Melbourne where lots of new homes are being built and three NSW regional cities which are treated as a single suburb, rather than being diverted into individual suburbs like most cities.
So, again, meaningless information of no value to serious investors.
Sadly, many investors employ the “me too” research method. If everyone’s doing it, it must be right. Right?
Those who apply that method after reading these lists, especially the Top 10 list for apartments, run the risk of losing serious money.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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Where not to buy property: Terry Ryder

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Respondents to a new survey from the Australian Property Institute believe residential property in Sydney and Melbourne is reaching the top of the property cycle and markets will remain in a similar position in Melbourne for a further 12 months and in Sydney for another two years.
The majority of respondents believe that interest rates will remain at similar levels for the next year, and be higher in 3 years. They also believe that foreign investment will be at similar levels for the six months, but uncertain of levels over the longer term.
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Mike Zissler, API chief executive officer, said a common view among respondents is that overall, demand is outperforming supply, ensuring residential markets remain strong.
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“Ninety-two per cent of survey respondents see low interest rates as a significant to very significant driver of Sydney residential property demand and prices," he said.
"The second most significant driver is supply, with 91 percent seeing it as significant to very significant.
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“In Melbourne, the two main drivers for residential property demand and prices are low interest rates (with 95 percent of respondents seeing them as a significant to very significant driver) and foreign investment (with 91 per cent of respondents seeing it as a significant to very significant driver).
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“Brisbane is similar to the Sydney market, with 95 percent of respondents seeing low interest rates as significant or very significant, and therefore the main driver of demand and prices in the city. Supply is considered the second most significant driver, with 80 per cent seeing it as significant to very significant.
“We also asked respondents about the drivers of demand in Perth. Low interest rates are again considered the most significant driver of demand and prices, however this view is not as strong as in the other cities, with 80 per cent seeing it as a significant or very significant driver.
“Results were split for Sydney, with 58 percent of respondents indicating residential property is in or is entering a bubble, while 42 percent indicate it is not in a bubble.
“Respondents were fairly certain of a bubble in the Melbourne market, with 86 percent of respondents indicating residential property is in or is entering a bubble, while 14 percent believe it is not in a bubble.
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“For Brisbane, 42 percent of respondents indicate that residential property is not in a bubble, 52 percent indicate that it is in or is entering a bubble and 5 per cent are unsure.
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"For Perth, respondents are more certain, with 90 percent indicating residential property is not in a bubble."
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Prices staying at top of property cycle: Australian Property Institute's property directions survey 

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GUEST OBSERVER
States like Tasmania have benefited from the end of the mining boom says Christopher Kent, speaking for the last time as the RBA Chief Economist.
Lower interest rates have boosted the housing markets, and a lower Australian dollar has made agriculture and services more competitive in these states. 
But the news isn’t all rosy. Deloitte Access Economics projects Tasmania experiencing low-but-stable growth, buffeted by demographic trends. The state is also struggling with workforce participation, employment growth, labour productivity and educational attainment. 
All of this will need to be addressed for Tasmania to realise the full benefit of the end of the mining supercycle. 
<h2>Tasmania suffered during the mining boom</h2>
From early 2000 onwards, the Australian economy split in two. While the resource-rich west and north of Australia did very well during the mining investment boom, it was not really an exciting time for Tasmania. Tasmanian economist Saul Eslake noted:
"Not only did Tasmania not benefit from the mining boom, but it was actually hurt by it."
The boom drove inflation, interest and real exchange rates to very high levels. This was not favourable nor profitable for an economy that is highly reliant on competitive industries such as tourism, agriculture, manufacturing, forestry and building. 
Tasmania was severely affected as exports make up around 19 percent of its Gross State Product (GSP). A higher Australian dollar made Tasmanian exports more expensive for others to buy. Higher interest rates made it more costly and harder to invest. 
This also manifested within Australia, as Tasmania must compete with other states in the domestic market, even with the ACT whose exports only make up about 4.6 percent of its GSP. 
During this era, Tasmania posted an average 0.3 percent and 0.27 percent annual average decline in GSP and employment growth respectively.
<h2>Some sectors are booming now</h2>
Though NSW and Victoria are leading the way, Tasmania is doing well since investment in the mining industry peaked a few years ago. 
Lower interest rates and fuel prices are breathing new life into the Tasmanian economy. Tasmania is leading the nation in both retail spending growth and housing finance growth. The latter, growing around 10.3 percent year on year, is a leading indicator for real estate activity and housing construction. 
Tasmania’s exports are also doing particularly well and tourism is a major driver of the growth in services exports. Tasmania recently topped the tourism growth league table, with international visitor numbers growing 19 percent year on year, boosted mainly by Chinese visitors. It looks like China is now impacting the Australian economy through tourism as well as mining.
The Tourism Investment Monitor 2016 report shows a 47 percent increase in Tasmania’s tourism investment last year, while the nation as a whole grew just 12 percent. In Tasmania, an unsurprising 66% of tourism investment was allocated for arts, recreation and business investment.
<h2>The way forward</h2>
But despite this growth in tourism and retail, Tasmania is still falling short in economic growth when compared to other states. It is at or near the bottom of national ranks on a number of different metrics - workforce participation, employment growth, labour productivity and educational attainment.
Further, as Deloitte highlighted, Tasmania is facing a demographic problem. The state government does have a target to grow the population to 600,000, but birth rates are low and immigration isn’t picking up the slack. Tasmania’s population is growing slowly. 
Tasmania’s low population growth, coupled with its high ageing population, could significantly affect the labour force participation rate. The working age population as a percentage of total population is declining over time. There will soon be fewer workers and consumers, leading to lower investment and demand for retail and consumer goods and services. The ageing population will also raise the costs of health care and pensions, further affecting the state budget. 
Australia’s near term growth prospects, if focused on securing stronger growth in non-mining sectors, is definitely welcome news for Tasmania. Tasmania should take advantage of the Asia-Pacific region’s increasingly dynamic environment to boost its production and innovative capacity.
But for Tasmania to have a credible continuing growth path it needs to have a realistic assessment of its own growth prospect. Tasmania needs to focus on long-term growth drivers such as population, participation and productivity. The declining labour participation rate needs to be supported through enhanced labour productivity or population growth. If not, it could lead to more anaemic growth.
Mala Raghavan is lecturer of Economics, University of Tasmania and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/mala-raghavan-213411" target="_blank">here</a>.
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There’s hope for Tasmania in the post-mining boom era

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Pinned to the wall beside my computer is a report I wrote in June 2015 entitled “Top 20 worst predictions about Australian property markets”.
It contains a stunning line-up of doomed forecasts from the previous six or seven years about our property markets. They all have two things in common: they all predicted massive price decline, and none of them was correct.
But they’re still out there and media never tires of them. Forecasts of price collapse are a dime a dozen in mainstream media. 
In many cases, I suspect, the forecasters don’t really believe their own statements. The objective is to generate publicity, truth notwithstanding. Apart from anything else, no one (apart from me) ever checks to see how the forecasts of the past have turned out, so the fallout for false prophets is zero.
So if American spruiker Harry S Dent pops up in Australia next year and predicts a 50 percent collapse in property values, he’ll get masses of free publicity for his seminar tour or book launch, despite having made that prediction twice before (in 2011 and 2014) and been proven wrong by subsequent events.
Predictions of real estate Armageddon in Australia have become common. One of the most recent was widely reported around Australia in early September. This headline appeared in The Australian: “Australia six weeks from a housing collapse, US report warns.” Time is well and truly up on that forecast and we do not appear to have a housing collapse.
The Washington-based International Strategic Studies Association said: “We estimate that Australia has about six weeks or so to turn this situation around, otherwise there would be a massive hit on property valuations and the building trades.”
Its president delivered quite a rant on the subject. You have to wonder why serious newspapers would report such nonsense, particularly given the failure of other similar predictions since the start of the century.
Here’s another example: in October 2015 the Sydney Morning Herald made a huge front-page splash with this headline: “7.5 percent - house prices tipped to slump.” The 7.5 percent was in huge type and dominated the page.
The article said “Australian house prices” would fall 7.5 percent in 2016 and the decline risked causing a recession. It quoted reports from several investment banks – Macquarie, Credit Suisse and Bank of America Merrill Lynch – which all made dire forecasts.
One said property investment in Australia was “riskier than the equity market”, especially in Sydney. Another said the RBA would be forced to lift interest rates in 2016 to tackle high inflation. How wrong did they get that?
When will media ever learn that economists are not real estate specialists and seldom get it right when they drift outside their comfort zones (getting it wrong on the economy) and delve into property prognostication? They regard Australia as a single property market and their understanding of the different market dynamics around Australia could be written on the back of a postage stamp – in crayon.
Other media outlets made big of the same material. The news.com.au website ran this headline: “Five months until property bubble bursts”. The article began: “FIVE months. That’s how long before house prices start to fall, according to the latest major investment bank to call the peak in Australia’s housing cycle. ‘Credit growth, auction clearance rates, house prices, settlement volumes and the dollar value of settlements are all showing signs of slowing, albeit from lofty levels,’ analysts from investment bank Macquarie said in a note today, The Australian reports.”
In November last year the Australian Financial Review ran a major article based on the forecasts of ANZ economists, who predicted that Australian house prices would fall in 2016 by “less than 10 percent”. There, again, we had that fatal formula for failed forecasts: economists, a perspective that Australia is a single market and a gloomy outlook based on a misreading of the signals.
Around the same time, the clown prince of failed forecasting Professor Steve Keen was at it again, still predicting a property crash – as he famously did in 2008 and every year since – and once gain getting it wrong.
Also around the same time, Smart Property Investment ran this headline: “Outer suburb markets could halve in value”, referring to the outer ring suburbs of Sydney. A year later, it’s pretty clear than suburban values have not dropped 50 percent.
In January this year the same magazine reported more dodgy predictions from economists under the headline “Investors warned about looming price declines”. Leading that particular charge was the man with worst record of all in real estate forecasting, AMP Capital chief economist Shane Oliver.
Oliver is probably the only guy who has made negative forecasts about housing prices than Steve Keen, and with an equivalent track record of success. It was Oliver who famously declared in 2005 that there would be no growth in Australian property prices any time in the next 10 years. Oh dear.
He’s made many similar statements over the years, with the same level of success. But he was back for more in January this year, stating that the Sydney market had become so stretched that prices were likely to fall. 
Also mentioned in that SPI article was Fitch Ratings, which claimed that “house price growth is set to decline significantly in 2016, with the possibility of entering negative territory …”
According to Fitch Ratings Australia managing director Ben McCarthy, the downturn would be caused by “reduced demand in Sydney and Melbourne as population growth declines and the market reaches limits of affordability and investor demand and interest recedes".
If there’s a group that has even less success at calling property market outcomes than bank economists, it’s the ratings agencies whose track record is just dismal – and whose motivations are particularly shallow.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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