<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=7395 project_image_fid=278194]</p>

<p><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.</p>

<p>"<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.</p>

<p>"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."</p>

<p>[smartcode_project:default project_id=7395 project_image_fid=278196]</p>

<p>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.</p>

<p>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.</p>

<p>"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;</p>

<p>"Every apartment was to feel considered, timeless, and highly functional."</p>

<p>[smartcode_project:default project_id=7395 project_image_fid=278195]</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>"Buyers are looking for spacious, house-like apartments that allow them to downsize without feeling like they are sacrificing comfort or functionality," Hyecorp noted.</p>

<p>"They value large kitchens, generous living areas, ample storage, quality finishes, secure parking, lift access, and low-maintenance living."</p>

<p>[smartcode_project:default project_id=7395 project_image_fid=278204]</p>

<p>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.</p>

<p>Juliet is currently more than 75 per cent sold ahead of its anticipated completion in late 2026.</p>

<p>[smartcode_project_cta:default project_id=7395]</p>


Joel Robinson

Juliet to sit quietly amid Roseville apartment boom

<p>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.</p>

<p><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.</p>

<p>The project will introduce a new retail and dining precinct at ground level, beneath 286 apartments.</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=370959]</p>

<p>“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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=370964]</p>

<p>“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.</p>

<p>“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.”</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=371430]</p>

<p>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.</p>

<p>Flourish Soleira will also feature the most extensive rooftop amenity offering ever delivered in Palm Beach.</p>

<p>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.</p>

<p>LPS Group is expected to start construction later this year.</p>

<p>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.</p>

<p>[smartcode_project_cta:default project_id=150017]</p>


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

<p>Are mortgage holders set to get a reprieve from the RBA in 2026?</p>

<p>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.</p>

<p>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.</p>

<p>“The next move in the cash rate is likely to be down, but the timing is uncertain," Dr Auld said.</p>

<p>"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.</p>

<p>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.</p>

<p>“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.”</p>

<p>Dr Auld said inflation risks and labour market outcomes would be important to watch.</p>

<p>“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.”</p>

<p>She said tighter financial conditions are expected to weigh on housing and activity.</p>

<p>“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.”</p>


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

<p>A local downsizer has splashed $6.5 million on a penthouse in Perifa's Alex &amp; Willow development in Crows Nest.<br />
&nbsp;<br />
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>.<br />
&nbsp;<br />
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.<br />
&nbsp;<br />
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.</p>

<p>[smartcode_project:default project_id=6680 project_image_fid=371325]<br />
&nbsp;<br />
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.<br />
&nbsp;<br />
“This is an exceptional outcome and a clear reflection of sustained buyer demand for premium, well-located downsizer product,” Mansour said.</p>

<p>“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.”<br />
&nbsp;<br />
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.<br />
&nbsp;&nbsp;<br />
Fabrizio Perilli, Managing Director of Perifa and Versatile Group, said the sale marks a defining moment for the project.<br />
&nbsp;<br />
“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;<br />
&nbsp;<br />
“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;</p>

<p>[smartcode_project:default project_id=6680 project_image_fid=338516]<br />
&nbsp;<br />
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;</p>

<p>Completion is slated for early 2027.</p>

<p>[smartcode_project_cta:default project_id=6680]</p>


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

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p><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" /></p>

<p>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.</p>

<p>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.</p>

<p>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."</p>

<p>"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.</p>

<p>"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.</p>

<p>"The design proposal responds to its specific site conditions, acknowledging the vegetation, climate, wind conditions and solar access of the site."</p>

<p>The architecture responds directly to the site's position between Wollongong's urban core and its natural landscape setting.</p>

<p>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.</p>

<p>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.</p>

<p><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" /></p>

<p>Urban Property Group secured the 11,000 sqm Smith Street site in 2022 and has since progressed plans for the broader Keira Place precinct.</p>

<p>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.</p>

<p>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.</p>

<p>"Today's groundbreaking is about turning approvals into homes and moving quickly to deliver much-needed housing in Wollongong's city centre," Elias said.</p>

<p>"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."</p>

<p><em>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></em></p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>


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

Property market

<html><body>
<p><span>It never ceases to amaze me just how little some “property experts” actually know about real estate machinations to the point they constantly make fools of themselves with dumb commentaries.</span></p>
<p><span>For example, one commentator earlier this week declared on Twitter “Auction clearance rates crumbling Melbourne 66.3% 2yr low Sydney another crash just 57.5% 3yr low” – well, that may be true as west of Sydney is performing badly. I then reminded him that I thought he is the worst property commentator in Australia. Last week, Sydney’s lower north shore recorded a bullish 80.4 % clearance rate up from 76.6 % the previous week – of course this was not mentioned.</span></p>
<p><span>It is also worth mentioning just like clockwork as soon as we hit the Melbourne Cup each year the market starts easing off which is exactly what we are presently witnessing – buyers are tired. Having said that, we will see property sales recorded right up to Christmas and what we are presently witnessing is no different to last year, the year before that and so on.</span></p>
<p><span>The common denominator is that we are seeing fewer properties on the market. In 2013 Mosman had 100 or more houses on the market in a given week on 33 occasions, in 2014 Mosman could only break the 100 mark on just 11 occasions. In 2015 it never made it to 100 with the highest being on March 12 with 84 and the lowest on July 2 with 42.</span></p>
<p><span>There are points that we need to make about many Sydney markets. Firstly, with Chinese buyers we have only just seen the “tip of the iceberg” where we expect in 2016 and beyond that they will be the main driving force behind Sydney property prices. We can also expect that the Foreign Investment Review Board (FIRB) and Australian Taxation Office (ATO) will be pushed to the limit with overseas buying applications.</span></p>
<p><span>Six weeks ago I suggested that we were hearing that many investors both local and overseas were getting very nervous and now we hear that one in three off – the – plan buyers are in trouble. This is a major problem for Sydney’s newly created “investor market” as if these properties were to flood the markets prices would capitulate.</span></p>
<p><span>It will be most interesting going into 2016 to watch what strategy developers, and more particularly the banks funding these developments, decide to adopt. Will this see the Australian Prudential Regulation Authority (APRA) forced into relaxing the newly introduced LVR’s? The off – the – plan feeding frenzy saw entire developments sold in a minimum of hours. Well I predict it will take months and months to see these properties find new owners. Will the developers offload apartments to parties that are already owners at discounted prices? That would be a sensible option to avoiding adverse publicity.</span></p>
<p><span>How many properties will the ATO force back onto the market in the form of Divestment Orders for parties that acquired real estate illegally? If this is as big as some believe (myself included) the Sydney property markets could not sustain these two forces combined – Divestment Orders and Off – The – Plan purchases.</span></p>
<p><span>We do need to be clear here in that the newly created “investors’ market” should not be confused with the homeowner markets – although some areas that contain these newly created high density developments will naturally affect the homeowner markets.</span></p>
<p><span>The absolute no-brainer here is when the Rudd government moved the ratio for overseas buyers buying off – the – plan from 50 % to 100 % in December 2008. This needs to be reduced back to 50 % as a matter of urgency.</span></p>
<p><span>Strange isn’t it how some want to bellow about clearance rates and others want to look at our property market machinations in greater detail. I know what I find the more interesting to discuss.</span></p>
<p><span>Historically when property markets start correcting then fewer properties go to public auction. Makes one ponder what some commentators would then be left to bellow about?</span></p>
<h5>MOSMAN – 2088</h5>
<p>• Number of houses on the market this time last year – 114</p>
<p>• Number of houses on the market last week – 74</p>
<p>• Number of houses on the market this week – 65</p>
<p>• Number of apartments on the market this time last year – 76</p>
<p>• Number of apartments on the market last week – 71</p>
<p>• Number of apartments on the market this week – 60</p>
<h5>CREMORNE – 2090</h5>
<p>• Number of houses on the market this time last year – 14</p>
<p>• Number of houses on the market last week – 13</p>
<p>• Number of houses on the market this week – 15</p>
<p>• Number of apartments on the market this time last year – 31</p>
<p>• Number of apartments on the market last week – 16</p>
<p>• Number of apartments on the market this week – 18</p>
<h5>NEUTRAL BAY – 2089</h5>
<p>• Number of houses on the market this time last year – 10</p>
<p>• Number of houses on the market last week – 8</p>
<p>•Number of houses on the market this week – 8</p>
<p>• Number of apartments on the market this time last year– 42</p>
<p>• Number of apartments on the market last week – 36</p>
<p>*Number of apartments on the market this week – 33</p>
<p> </p>
<p><span> </span><em><span>ROBERT SIMEON</span> is a director of </em><em><a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> </em><em>and has been selling residential real estate in Sydney since 1985. <br>He has also been writing real estate blog </em><em><a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> </em><em>since 2000. </em></p>
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robertsimeon-hRNTwJyXkQ

Why off the plan can be a deadly market: Robert Simeon

<html><body>
<p>The latest event in the evolution of the Brisbane market is the strong emergence of the Moreton Bay Region in the far north of the city.</p>
<p>It has joined Logan City in the far south as the precinct with the most momentum in the Greater Brisbane area. Meanwhile, Ipswich City in the south-west is putting its hand up as well.</p>
<p>Most national commentators misunderstand what’s happening with the Brisbane market. They look at that single figure which apparently describes the whole Brisbane metropolitan area and conclude not much is happening. Australian Property Monitors says Brisbane prices rose 5% last year while CoreLogic RP Data says 4%.</p>
<p>But beneath that one generalised (and highly misleading) figure, there has been lots of activity in precincts which have recorded double-digit annual growth in median house prices.</p>
<p>Markets in the Greater Brisbane area have been on the move for about two years. The inner-city suburbs were busy a couple of years ago and then the middle-ring suburbs on the northside surged. Many of them had annual growth in the 13% to 15% range. The middle-ring suburbs on the southside joined the party 12-18 months ago.</p>
<p>Now it’s the outer-ring areas that are leading. There are still rising suburbs in those northside and southside middle-market precincts, but it’s the cheaper areas on the outskirts that have the greatest activity and momentum.</p>
<p>In this regard, Brisbane is displaying the same pattern we have seen over the past three years in Sydney and Melbourne – the upturn started in the near-city areas and gradually gravitated outwards from the centre. The Ripple Effect is alive and well in residential real estate.</p>
<p>In Brisbane, Logan City (which is the urban bridge between Brisbane and the Gold Coast) has been  the market leader in terms of sales volumes for the past 12 months or so. But now it’s counterpart in the north, the Moreton Bay Region local government area (which is the urban bridge between Brisbane and the Sunshine Coast) has mounted a challenge.</p>
<p>Like Logan City, Moreton Bay Region is all about affordability, transport infrastructure and jobs nodes. Many of the suburbs of Moreton Bay Region – including Caboolture (the capital suburb), Morayfield and Deception Bay – have median prices in the $300,000s, while Burpengary and Narangba are in the low $400,000s.</p>
<p>These are high-volume housing markets: Caboolture, Deception Bay, Morayfield and Narangba have each recorded over 340 house sales in the past 12 months. Some have seen median prices rise 6-7% in the past year – but, in terms of price growth, they’re just getting started.</p>
<p>Median rental yields are an attraction for investors, ranging from 5.2% to 5.6% in most of the suburbs of the Moreton Bay Region.<span style="line-height: 1.3em;"> </span></p>
<p>The LGA includes the Redcliffe Peninsula, which has heightened appeal because the long-awaited Moreton Bay Rail Link will be completed this year.</p>
<p>The overall region has improved amenity through the evolution of the North Lakes master-planned community, which includes major retail (and will soon include an Ikea superstore).</p>
<p>The region also has good proximity to Brisbane Airport, the Port of Brisbane and the Australia Trade Coast industrial precinct, which means plenty of jobs are handy to the suburbs of Moreton Bay Region.</p>
<p class="Body"><em> </em></p>
<p class="Body"><em>Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a></em></p>
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terryryder-YECXbqmri2

Brisbane's Moreton Bay gaining strength: Terry Ryder

<html><body>
<p>Real estate offices and real estate agents will diminish by 20 percent-30 percent in the next year.</p>
<p>With property (for-sale) listings, so low and a phenomenon never experienced before in parts of Sydney; how can real estate agencies survive? </p>
<p>For a large number of Real Estate Offices (REOs), sale of property commissions, makes up to 60 percent-80 percent of their revenue. Some rely purely on sales commission, to keep their doors open for business.</p>
<p>After recently, reading numerous articles and LinkedIn discussions about low property numbers that are on the market for sale I began to reflect on discussions I held as far back as 12-15 months ago with industry colleagues.</p>
<p>At the time I made the following prediction, and that it would eventuate by end of financial year 2016. </p>
<ul>
<li>We will see at least 20 percent of REOs close down.</li>
<li>These will be made up of REOs that rely on pure sales to keep their doors open.</li>
</ul>
<p>One brand I have been particularly observant of is McGrath Real Estate. This brand even listed on the ASX and mostly due to its success accredited to: reported high sales figures. How will they cope in a changing landscape where sales become scarce?</p>
<p>The crux of the discussions with colleagues, were in relation to the shrinking property market, due to various market forces:</p>
<p>1)     Property-Marketing companies on the one hand ramping up sales of property; and</p>
<p>2)     The financial institutions on the other, also selling real estate.</p>
<p>Both sectors moving into the real estate sales due to high commissions, paid out directly by developers. I can say, even in the good times, the average real estate selling agent missed out on listings. Most listing of new developed property went, has gone to and is still going to property-marketers. The local Real Estate Agents miss out.</p>
<p>Property that is new to the market, where commissions can be inflated, became attractive for “direct sales campaigns” to unsuspected investors. In essence, the typical local real estate office has lost 30-40% of sales due to “marketeers and the financial sector invasion.”</p>
<p>Now, add to the invasion of our industry, the current low numbers in secondary stock sales as evidenced in article/photo below. Also as reported across the media and journals.</p>
<p>I refer to historical low number of sales listings in Sydney. </p>
<p>These are established properties that have almost disappeared overnight. Parramatta alone has had an attrition of up to 47 percent less property on market. These figures were calculated across June-to-August. The number of agents has not changed however.</p>
<p>Parramatta, has 176 registered real estate offices according to the Yellow Pages. According to Domain, there are 172. Either way, it is a concern that should not be taken lightly. Specially when we can safely say that there are 2.5 selling real estate agents in each office.</p>
<p>A concerning trend also witnessed across the face of Sydney metropolitan area.</p>
<p>Some agents are commenting on a 30 percent drop in numbers across the Lower North Shore and other areas. These numbers are generated by comments on LinkedIn, made by agents that have worked in these areas for 10-20 years.  </p>
<p>Only last week, I sat with a colleague from Blackktown and she informed me and was troubled by the fact that her office only had two properties for sale. She doesn’t have a small operation, and runs a well-established brand.</p>
<p>In the same area, other brand-name agencies have reduced their local paper advertising from 3 pages down to half a page. They just don’t have any property listings for-sale in their books. What they do have is 5 selling agents in their office.</p>
<p>Notably, the above becomes the recipe or the ideal conditions for an attrition of selling agents and very tangibly, offices that only rely on sales to survive.</p>
<p>It will be a hard fall for many, and for others that place a lot of trust in property-sales-offices. Another call, another prediction; all in a day as I share my thoughts over a coffee with friends.  </p>
<p><strong>Warning to the industry</strong></p>
<p>Keep an eye on other Industry-Disruptors such as Purplebricks RE. Don’t underestimate what they are doing and focus on how you can best serve the diminishing clientele base you have. That is, if you want to survive the for-sale listing famine.</p>
<p>If you want to stand out from the many agencies in your patch; do something different. Offer a level of service that others will find hard to match. Again, only if you want to stay in the industry past EFY 2016 and not be a casualty of the changing face of real estate.</p>
<p><em><span>EDWIN ALMEIDA</span> is licensee in charge of <a href="https://www.just-think.com.au/" target="_blank">Just Think Real Estate</a>.<a href="https://www.just-thin.com.au/"><br></a></em></p>
<p><em>He is also the creator of <a href="https://www.youtube.com/user/JustThinkProperty" target="_blank">Oz Real Estate.TV</a> and a presenter for <a href="https://propertyinvestingvault.com/" target="_blank">propertyinvestingvault.com</a>.</em></p>
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Real Estate offices closing down in Sydney

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<p>The Australian Prudential Regulation Authority (APRA) released its June 2016 quarter property exposures data earlier this week. </p>
<p>The data looks at exposure to the property market by Australian Authorised Deposit-taking Institutions (ADI).  It’s valuable because it provides deeper insight into lending from mortgage lenders which isn’t available from the Australian Bureau of Statistics (ABS) monthly housing finance data.</p>
<p><a href="/images/2016/09/05/Chart-1-3-580x206.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/09/05/Chart-1-3-580x206.jpg" alt=""></p>
<p>At the end of the June 2016 quarter, across all Australian ADI’s, there was $1.437 billion in outstanding residential mortgages to households. </p>
<p>The value of outstanding mortgages has increased by 8.1 percent year-on-year, which is the slowest year-on-year growth rate since the June 2014 quarter. </p>
<p>Outstanding mortgages include $930.4 billion outstanding to owner occupiers and $506.3 billion outstanding to investors. </p>
<p>The value of owner occupier mortgages has increased by 14.8 percent year-on-year, its largest rise since March 2010. </p>
<p>The value of investor mortgages outstanding has fallen by -2.4 percent year-on-year, its greatest decline on record. </p>
<p>To put the investor lending slowdown into perspective, 12 months ago investor mortgage credit had increased by 12.7 percent.</p>
<p><a href="/images/2016/09/05/Chart-2-3-580x204.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/09/05/Chart-2-3-580x204.jpg" alt=""></p>
<p>Taking a look at potentially higher risk forms of lending, in June 2016 there was $557.0 billion in outstanding mortgage credit for interest-only mortgages, $2.753 billion for reverse mortgages, $24.7 billion for low-documentation mortgages and $1.0 billion in other non-standard mortgages. </p>
<p>Almost two-fifths of the value of outstanding mortgages (39.3 percent) is for interest-only mortgages. </p>
<p>Year-on-year there have been increases in the value of mortgage credit for interest-only (+7.7 percent) and reverse mortgages (+1.8 percent) while credit for low-documentation (-16.2 percent) and other non-standard loans (-8.5 percent) has fallen.</p>
<p><a href="/images/2016/09/05/Chart-3-3-580x203.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/09/05/Chart-3-3-580x203.jpg" alt=""></p>
<p>The average outstanding mortgage balance was $252,100 which was 4.5 percent higher over the year to June 2016. </p>
<p>Across the different mortgage types the average outstanding balances were recorded at: $308,000 for loans with an offset, $335,200 for interest-only loans, $97,400 for reverse mortgages, $191,000 for low-documentation loans and $191,900 for other non-standard loans.    </p>
<p>The average balances have increased over the year for loans with an offset (+4.4 percent), interest-only mortgages (+4.6 percent) and reverse mortgages (+2.7 percent) and fallen for low-documentation loans (-1.2 percent) and other non-standard loans (-2.2 percent).</p>
<p><a href="/images/2016/09/05/Chart-4-1-580x210.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/09/05/Chart-4-1-580x210.jpg" alt=""></p>
<p>Looking at new lending over the June 2016 quarter, there was $98.4 billion in new mortgage lending, $64.4 billion of which was for owner occupiers and $34.0 billion for investors.  It was a record quarter with the value of lending 20.7 percent higher over the quarter and 2.1 percent higher year-on-year. </p>
<p>Over the quarter the value of lending to owner occupiers rose by 15.2 percent while investor lending jumped 32.5% to its highest level since June 2015. </p>
<p>Year-on-year owner occupier lending is 16.2 percent higher while investor lending is -16.9 percent lower. While investment lending has certainly increased of late, it is difficult to know exactly how much is being driven by more volume and how much is being driven by borrowers taking out larger mortgages.</p>
<p>No data was available this quarter on new low-documentation lending however, there was $35.6 billion in interest-only lending, $136 million in other non-standard loans, $47.4 billion in loans from a third part source $3.5 billion worth of loans approved outside of serviceability. Although new interest-only lending is -19.1 percent lower year-on-year, it increased by 25.1% over the quarter which is in line with the significant jump in new lending to investors. </p>
<p>It was also the largest quarter since June 2015 for other non-standard loans. The $3.5 billion of loans approved outside of serviceability was the lowest since the March 2015 quarter.</p>
<p><a href="/images/2016/09/05/Chart-5-1-580x210.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/09/05/Chart-5-1-580x210.jpg" alt=""></p>
<p>Looking at the loan-to-value ratios (LVR) on new mortgages over the quarter it is clear that lenders and or borrowers are becoming more conservative and using larger deposits.  Over the quarter, a record-high 78.0 percent of mortgages had an LVR of less than 80% (meaning the borrower had a deposit of at least 20 percent). </p>
<p>Over the quarter the value of lending increased across each of the LVR bands shown however, year-on-year the value of lending for LVRs of less than 60 percent is up 19.2 percent, for LVRs between 60 percent and 80 percent it is -1.1 percent lower, for LVRs between 80 percent and 90 percent it is 6.1 percent higher and for LVRs above 90 percent it is -20.7 percent lower.  Encouragingly, just 8.3 percent of all new mortgages had an LVR of more than 90 percent which is a record-low.</p>
<p>Overall the data shows that there has been a rebound in new lending to investors and a commensurate increase in interest-only lending over the past quarter.  After annual investor housing credit growth has slumped to well below APRA’s 10%pa speed limit it is clear that some lenders have scope to dial-up their lending to investors.  It also shows that despite historically weak rental markets and record low rental yields that there remains demand from the investment segment of the market.</p>
<p>While investment lending has lifted over the past quarter, the data is showing there is a more conservative approach to high LVR lending. The ongoing declines in lending with an LVR above 90 percent is encouraging because it should lead to reduced risk.</p>
<p>Over the coming quarters we’ll be closely watching how much higher investment lending lifts.</p>
<p>Keep in mind that despite record low yields, the returns are still superior to putting money in a term deposit, especially once you factor in the recent capital growth as well. Interest-only lending trends will also be important to watch with APRA already having raised concerns about that particular type of lending.</p>
<p><em>Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></p>
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New lending to investors and interest-only lending jumps over June quarter

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<p>Rental growth was flat at just 0.6 percent over the year to March 2017, according to the ABS inflation figures.</p>
<p>This is the equal lowest annual percentage growth since 1994, largely reflecting the new supply of apartments hitting the capital cities on the east coast.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/04/27/A6.jpg" target="_blank">Click to enlarge </a></p>
<div id="post-body-3862946038801712568" class="post-body entry-content">
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/27/A6.jpg" alt=""></div>
<br><div>The national figure obscures contrasting fortunes around the capital cities.</div>
<div> </div>
<div>Sydney recorded annual growth in its rental CPI of 2.5 percent. </div>
<div> </div>
<div>In Melbourne rental price growth has been picking up over the past five quarters, although only to 1.7 percent year-on-year according to the ABS series (there has been considerably stronger growth in asking prices). </div>
<div> </div>
<div>Hobart recorded the fastest annual growth of the capital cities at 4.2 percent. </div>
<div> </div>
<div>In Canberra there has not been much to see in aggregate, but anecdotally there is a view that the annual land tax has turned investors away from houses leading to a shortage of detached rental stock (though as in most capitals there is clearly no shortage of new apartments, which has compensated tenants for now).</div>
<div> </div>
<div>In Darwin rents declined by 7.4 percent year-on-year, although this actually represents an improvement on the preceding quarter's drop.</div>
<div> </div>
<div>And in Perth, rents were down by 7.3 percent year-om-year, having now dropped by 12.1 percent from their peak. </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/04/27/A4.jpg" target="_blank">Click to enlarge</a></div>
<br><div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/27/A4.jpg" alt=""></div>
<br><div>In Brisbane nominal rents remain positive, but there's no doubt that inner city apartments rents are set for a tumble, as evidenced by the "for lease" banners strewn around the inner city.</div>
<div> </div>
<div>This from yesterday...</div>
<br><div class="separator"><a href="https://3.bp.blogspot.com/-PotrGvJHDlc/WQDxsUvwVtI/AAAAAAAAjbQ/tUknpxnVbnQqjWV1PrKg-ApGxG14UBZPgCLcB/s1600/IMG_1655.JPG"><img src="https://3.bp.blogspot.com/-PotrGvJHDlc/WQDxsUvwVtI/AAAAAAAAjbQ/tUknpxnVbnQqjWV1PrKg-ApGxG14UBZPgCLcB/s640/IMG_1655.JPG" width="640" height="480"></a></div>
<br><strong><span style="text-decoration: underline;">Benign inflation</span></strong><br><div> </div>
<div>The above figures feed in to the benign inflation picture.</div>
<div> </div>
<div>Moreover, while dwelling construction is expected to remain strong for some time in Sydney, new apartment projects are now being shelved or scrapped practically by the week in Melbourne and Brisbane.</div>
<div> </div>
<div>As each new Brisbane apartment project completes this will leave a small hole in the economy, which cumulatively will act as a drag on growth.</div>
<div> </div>
<div>For this reason the government will be looking to loosen the purse strings to pave the way for infrastructure projects to plug the hole, which can be achieved through borrowing without unnecessarily crippling the budget.</div>
<div> </div>
<div>A final point, the Sydney market has seen rents outpace CPI by a factor of two over the past ten years to rise by 56 percent.</div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/04/27/A5.jpg" target="_blank">Click to enlarge </a></div>
<br><div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/27/A5.jpg" alt=""></div>
<br><div class="separator"> </div>
<div>This reflects that Sydney's construction boom was still addressing an inherent undersupply until recently, but stay alert because the balance is about to swing sharply in favour of tenants over the next couple of years. </div>
<div> </div>
<div>
<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank"><span class="s2">blogger</span></a>.</span></p>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
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pwargent-M4siyDbqQY

Rental growth at two-decade low: Pete Wargent

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<p>GUEST OBSERVER</p>
<p>Across house sales over the past 12 months, Tasmania recorded the highest proportion of stock turning over with 5.6% of all houses in the state selling. Conversely, Western Australia saw the lowest proportion of turnover with just 4.0% of all houses selling over the past year. </p>
<p>The current lower volume of housing stock turnover highlights why caution should be taken when interpreting median sale prices. </p>
<p>With such a small fraction of housing actually transacting over a given period, median prices can be biased. Furthermore, median prices may not be reflective of the whole market. When making a comparison between periods they may compare two very different bundles of housing types and quality.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/08/24/Screen%20Shot%202017-08-24%20at%2011.17.14%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/08/24/Screen%20Shot%202017-08-24%20at%2011.17.14%20AM.png" alt=""></p>
<p>Concerned about housing stock levels, REINSW President John Cunningham said, “The results signal warning bells for the housing industry. It shows just how little has been transacted over the past year.”</p>
<p>“We know from a variety of property data sources that stock levels are steadily declining and a key reason why the affordability issue presents a bigger picture problem, particularly for Sydney and Melbourne.</p>
<p>“When we have stock on market, it keeps the property market competitive and in balance. Without stock we see less vibrancy and activity across the market and much more buyer competition taking place as opposed to activity between properties.” Ultimately, he said, “the knock-on effect damages the supply and demand chain.”</p>
<p>Lower housing turnover is being influenced by a variety of factors. “Advertised stock levels remain low across those cities where capital gain conditions are strong. Additionally, high transactional costs, which are based on a percentage of the selling/purchasing price, have become a larger disincentive across those markets where values have shown a material rise.”</p>
<p>Highlighted in the adjacent tables, it shows the five suburbs in each state which have seen the greatest turnover of houses over the past year. Only those suburbs that have at least 500 houses have been included on the list.</p>
<p>Zuccoli in Darwin had the highest proportion of stock turning-over across the country with 38.5% of all houses in the suburb selling over the past year. Clyde North in Melbourne had the second- highest level of turnover with 17.6% of all houses in the suburb selling over the past year.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/08/24/Screen%20Shot%202017-08-24%20at%2011.18.58%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/08/24/Screen%20Shot%202017-08-24%20at%2011.18.58%20AM.png" alt=""></p>
<p>While the data shows the suburbs with the greatest turnover of houses, each of the suburbs listed have seen substantially less than half of all houses selling.</p>
<p>Another characteristic of note is that most of the suburbs shown are in areas where there is, or has been over recent years, a substantial injection of new housing stock; average hold period data which shows that in new housing estate areas housing stock tends to turnover with greater regularity.</p>
<p>Overall, housing turnover in any given year reflects only a small proportion of the total housing stock. It further highlights that taxes on transactions such as stamp duty are heavily reliant on collection from only a small pool of overall housing stock.  </p>
<p><span>Cameron Kusher is research analyst for CoreLogic. You can contact him </span><a href="https://blog.corelogic.com.au/about/" target="_blank">here</a><span>.</span></p>
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Housing turnover remains low despite strong selling conditions in Sydney & Melbourne: Cameron Kusher

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<div>I went to Surfers Paradise on Friday on the Gold Coast.</div>
<div> </div>
<div>Being a holiday destination, it's one of Australia's most volatile and cyclical housing markets.</div>
<div> </div>
<div>It's not too hard to see why, with few height restrictions on building and apartment towers stretching almost as far as the eye can see. </div>
<div class="separator"> </div>
<div>The Gold Coast apartment market was one of Australia's hardest hit housing market sectors through the financial crisis - with a spectacular drop in prices - although apartment prices have been rising again steadily since early 2014. </div>
<div> </div>
<div>The detached housing market at Surfers Paradise is now performing very strongly, with a combination of a lower dollar (which encourages tourism), interest from China, and the upcoming Commonwealth Games all being factors working in the region's favour.</div>
<div> </div>
<div>The Gold Coast is also now a growing city and employment hub in its own right, with the region seeing population growth of 12,280 in FY2016.</div>
<div> </div>
<div>The risk in such markets is that when prices rise apartment construction can go crazy leaving the market highly susceptible to corrections, with the ensuing oversupply amplifying the downturn.</div>
<div> </div>
<div>To date median apartment prices are in many cases still below their 2009 levels, and have not risen far enough to result in widespread overbuilding, although there are some sites under construction.</div>
<div>Indeed, after accounting for the highly seasonal nature of the market, reported vacancy rates are clearly in a multi-year downtrend. </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/04/10/SQM2.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/10/SQM2.jpg" alt=""></div>
<div><em><span style="text-decoration: underline;">Source: SQM Research</span></em></div>
<div><em><span style="text-decoration: underline;"> </span></em></div>
<div>An extremely speculative market, the fundamentals suggest a rising markets over the next couple of years or so until the next construction cycle delivers new supply in earnest (at which point it might be a good time to bail). </div>
<div> </div>
<div>
<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank"><span class="s2">blogger</span></a>.</span></p>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
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Surfers Paradise fundamentals suggest a rising market over the next couple of years: Pete Wargent

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<p class="BodyCopy">A curious feature of residential real estate is the way we keep building bigger and more costly dwellings, in defiance of trends with household sizes and concerns about affordability.</p>
<p>ABS data shows that the market-share of dwellings containing four bedrooms or more increased by 1.9 percentage points between the 2011 and 2016 Censuses, while three-bedroom dwellings fell by 2.4 percentage points.</p>
<p>Homes with four or more bedrooms represent 32% of total dwellings, up from 30% in 2011. Those with three bedrooms or fewer still predominate, but have fallen from 68% to 66% of the total.</p>
<p>Some three-bedroom houses are disappearing as older places are knocked down and replaced with new high-rise developments.</p>
<p>Yet the typical Australian family - a couple with two kids - remains largely unchanged, while the number of lone-person households has increased from 22.9% of the total in 2001 to 24.4% in 2016.</p>
<p>These numbers hardly suggest a need for an increase of the number of big homes with additional bedrooms. But there are other possible explanations for the rise in the number of four- and five-bedroom dwellings.</p>
<p>Blended families, where children from previous marriages live with step-siblings from a newer relationship, are becoming more common. A spare bedroom may be reserved for visits by step-siblings or children in a custody arrangement.</p>
<p>Another reason is more people are working from home, necessitating a home office. About 1.3 million people say they work from home to enjoy a better work–life balance. </p>
<p>Inter-generational households are common with immigrants, who provide the bulk of Australia’s population growth, especially in Melbourne and Sydney.</p>
<p>Indian and Asian immigrants in particular may have three generations living in one household: grandparents, parents and kids – and the Census shows that, increasingly, migrants to Australia are coming from these sources.</p>
<p>One of the Census findings was that the number of single-family households has decreased from 75% in 1991 to 69% in 2016 – while group households have increased from 3.7% of households in 2011 to 4.3% in 2016. We may see more of this trend if our migrant patterns remain the same.</p>
<p>Louise Lucas of The Property Education Co. suggests all may not be as it seems with four-bedroom houses.  The “McMansions” that are being produced by developers are not necessarily larger, but they are promoted as having four bedrooms although the fourth bedroom is likely to be much smaller than the others and only be useful as a study, she says.</p>
<p>But, one way or the other, the trend towards larger homes for a multitude of reasons is continuing.</p>
<p>Brisbane analyst Michael Matusik suggests we need to rethink the style of the stand-alone houses we’re producing and make allowances for more than one generation, including elements such as home offices, flexible spaces, smarter storage and energy efficiency.  </p>
<p> </p>
<p><span>Terry Ryder is the founder of </span><a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a><span>. You can </span><a href="mailto:%20%3Cscript%20type='text/javascript'%3E%20%3C!--%20var%20prefix%20=%20'ma'%20+%20'il'%20+%20'to';%20var%20path%20=%20'hr'%20+%20'ef'%20+%20'=';%20var%20addy38821%20=%20'ryder'%20+%20'@';%20addy38821%20=%20addy38821%20+%20'hotspotting'%20+%20'.'%20+%20'com'%20+%20'.'%20+%20'au';%20document.write('%3Ca%20'%20+%20path%20+%20'/''%20+%20prefix%20+%20':'%20+%20addy38821%20+%20'/'%3E');%20document.write(addy38821);%20document.write('%3C//a%3E');%20//--%3E/n%20%3C/script%3E%3Cscript%20type='text/javascript'" target="_blank">email him</a><span> or follow him on </span><a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a></p>
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Bigger, more costly homes defy trends with household sizes, affordability

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<p>Up until now it’s very clear that federal and state politicians do not want a debate on property markets as they well know that a major overhaul is what’s required – consumers would be much better off and government revenues would be significantly reduced.</p>
<p>This would explain why the last significant taxation review in Australia, happened back in 2000, with the introduction of the goods and services tax (GST).</p>
<p>In 2008, the then Rudd Government commissioned the Henry Tax Review which was then published in 2010 – this was supposed to be Australia’s tax system reforms for the next ten to twenty years. Sadly, this review was binned and never saw the light of day as it threatened the longevity of a politician’s career. More recently, Ken Henry had another attempt to shed light on Australia’s housing affordability woes – the recommendations were immediately muted.</p>
<p>In December 2016, the Turnbull government completed its 20-month inquiry into home ownership in Australia. The conclusion was that Australia had no structural problem with housing affordability! This would have to be the most embarrassing finding over the last decade of Australian politics.</p>
<p>Australia urgently needs a property inquiry that does not include politicians or banks – this must be independent with the findings released six months before the next federal election. Then constituents can decide who they will vote for based on these findings, and the logical person to head this is Ken Henry, although our elected politicians would cringe at such a thought.</p>
<p> </p>
<p>The Turnbull Government sixteen months ago agreed to implement many of the findings from the Murray recommendations relating to bank competition – to this day the legislation has been ignored despite publicly agreeing to act. Much like the Turnbull Government announcing that the Productivity Commission would formally investigate an inquiry into bank competition- this too, has mysteriously disappeared.</p>
<p>Treasurer Scott Morrison indicated this week that the government was working on a housing affordability package in the May federal budget although he has effectively ruled out most of the solutions available that must be included.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/10/House-Prices-since-GFC.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/03/10/House-Prices-since-GFC.png" alt=""></p>
<p>Australia’s big banks testified at a parliamentary inquiry into banking this week and all found to much amazement that Australia’s property prices aren’t over-inflated. Of course, they are going to say that because if they said they hold grave fears (which they all do) then there would be a huge sell-off of their respective shares. Like just what are these inquiries supposed to achieve? Maybe a lie detector would be an intelligent start – where this graph has the banks not remotely concerned.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/10/Mortgage-Nation.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/03/10/Mortgage-Nation.png" alt=""></p>
<p>Again the Reserve Bank of Australia (RBA) left the cash rate at 1.50 per cent which takes me to a topic that I have written about – why does Australia have a one fit cash rate that fits all property markets? SGS Economics principal Terry Rawnsley announced that they found if interest rates were presently set for each state and territory that there would be massive variations across Australia. Sydney would currently be at 3.75 per cent, Melbourne would be 3.50 per cent, Adelaide, Brisbane and Hobart at 0.25 per cent and Perth at 0.5 per cent. Why is the RBA not looking at these models? For example, if Sydney was at 3.75 per cent then the variable rate would be at 7.05 per cent – but we all know that this would not be good for the economy and the government’s economic standing in the global economy. I can tell you one thing, if Sydney had a variable rate of 7.05 per cent clearance rates would be half of where they sit today.</p>
<p>These are just a few of the discussions we should be having today, although a fair and true representation can only occur when vested and conflicted parties are not involved in the debate. Rather make the findings, and then have the much-overdue debate.</p>
<p>Although Canberra would rather let you know that they are steering Australia to absolute greatness. In less than a month, April 1 (and this is not an April Fool’s joke) Australia will lay claim and become the titleholder for the longest economic expansion ever recorded before once it posts our 104th quarter of economic growth.</p>
<p>Yep – there is a valid argument why Australia must not have any economic reform and this would explain why economic paralysis has spread so fast and wide in Canberra. They will also tell you this planning and research has enabled Sydney to post the strongest annual growth in house prices since 2003.</p>
<p>My-bad, I am obviously barking up the wrong tree.</p>
<p class="p1"><span class="s1"><em>ROBERT SIMEON is a director of </em><a href="https://www.rwm.com.au/"><span class="s2"><em>Richardson Wrench Mosman and Neutral Bay</em></span></a><em> and has been selling residential real estate in Sydney since 1985. </em></span></p>
<p class="p1"><span class="s1"><em>He has also been writing real estate blog </em><a href="https://www.rwm.com.au/news/"><span class="s2"><em>Virtual Realty News</em></span></a><em> since 2000.</em></span></p>
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The three p’s of property are now political, paralysis and persuasion: Robert Simeon

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<p class="post-title entry-title">EXPERT OBSERVER</p>
<p class="post-title entry-title">There are 3 key drivers of property prices.</p>
<div>
<strong>(i) Supply</strong> - the rate of construction and the properties listed for sale on the market;</div>
<div> </div>
<div>
<strong>(ii) Interest rates</strong> - the cost of borrowing; and</div>
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<div>
<strong>(iii) Population growth</strong> - immigration, natural population growth (births minus deaths), and interstate migration.</div>
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<div>Or, as depicted in his infographic:</div>
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<div class="separator"><img src="https://1.bp.blogspot.com/-JfAMyhsEwDU/XsC1SuAaGqI/AAAAAAAA1xE/oWHfOVu6Wt4Dg29nArHLDV26HjXIy8SaACNcBGAsYHQ/s640/FIN.jpg" width="640" height="360" data-original-height="445" data-original-width="791"></div>
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<div><em>Source: Tim Boyle, Finalytics</em></div>
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<div>People often state that the unemployment rate is critical, but this argument isn't backed up by any hard statistics.<br><br>In fact the last couple of times the unemployment rate spiked housing prices soared the following year, as pointed out by Stuart Wemyss of ProSolution, <em>Game of Mates</em> author Dr. Cameron Murray, and others:</div>
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<div class="separator"><img src="https://1.bp.blogspot.com/-mGeIhomU-Rw/XsDARe3SG3I/AAAAAAAA1xg/AF7pCtVj6yImNusAc2_soCsN-9f2dwlHQCNcBGAsYHQ/s640/A3.jpg" width="640" height="366" data-original-height="423" data-original-width="738"></div>
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<div>There's also an enormous fiscal stimulus washing through, comfortably dwarfing anything we've seen in recent decades. </div>
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<div class="separator"><img src="https://1.bp.blogspot.com/-SwOd64SloIQ/XsDAdNa9cVI/AAAAAAAA1xk/IA2iutyq4sE-ulOJVokqdP6KWZMNVqNCwCNcBGAsYHQ/s640/Stim.jpg" width="640" height="638" data-original-height="738" data-original-width="739"></div>
<p class="post-body entry-content"><br><strong>Boyle's 3 drivers today</strong><br><br>In that context, here's what's happening with Boyle's 3 key drivers today.<br><br>Supply is extremely tight at the moment.<br><br>Dwelling construction is plunging towards 70-year lows and vendors aren't listing either.<br><br><img src="https://1.bp.blogspot.com/-ituPSwbTdvU/XrNkMZcBltI/AAAAAAAA1lM/lSj4XGqL1Gcc-lP5wKWKzjVlXG5YWXJ-gCNcBGAsYHQ/s640/CL2.jpg" width="640" height="386"><br><br></p>
<div><em>Source: CoreLogic</em></div>
<p class="post-body entry-content"><br>Lending rates, meanwhile, are at the lowest level in modern history.<br><br><img src="https://1.bp.blogspot.com/-HHbGid402-g/XrNlXdwQxnI/AAAAAAAA1lc/Fd54mmUYX1kJWedMT-5JdHyEbCZFOZD3ACNcBGAsYHQ/s640/CL3.jpg" width="640" height="398"><br><br></p>
<div>This effectively allows borrowers to take on bigger mortgages, as I showed in my recent post on lending trends.<br><br>ANZ have just noted the same thing:<br><br><div class="separator"><img src="https://1.bp.blogspot.com/-bGysfQwD18o/XsDAo9GSxRI/AAAAAAAA1xs/Vx2-pm8vZHE32TUM-20dz-8UmDRRD4DyQCNcBGAsYHQ/s640/ANZ1.jpg" width="640" height="448" data-original-height="801" data-original-width="1143"></div>
<br>The big unknown factor at this stage is <strong>population growth.</strong>
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<div>My base case expectation or scenario is that within the next few months the powerful interests such as the Property Council, Australia's universities, the airlines, Tourism Australia, and big business at the top end of town will have forced the government's hand to reopen the borders, albeit with a period of enforced quarantine.</div>
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<div>As for the thesis that things will be totally different after COVID-19...well as a gallant but struggling home-schooler I reckon that's total garbage!<br><br>People can't wait to get back and out to spend, socialise, travel, go to work, and holiday again.</div>
<p class="post-body entry-content"><br>It's just the way we're designed, we're pack animals.<br><br></p>
<div class="separator"><img src="https://1.bp.blogspot.com/-r9TZrsC6zMw/XsC1SYxsobI/AAAAAAAA1xA/_k9XLZBNywgB_0ApBK_96zfH9-jzlSPNACNcBGAsYHQ/s640/JT.jpg" width="640" height="308" data-original-height="361" data-original-width="747"></div>
<div> </div>
<div>And moreover, Australia will likely be seen as one of the safest and most desirable countries on earth in which to live.</div>
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<br><strong>PETE WARGENT</strong><em> is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em>
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