<p data-end="587" data-start="368">Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.</p>

<p data-end="778" data-start="589">The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.</p>

<p data-end="907" data-start="780"><a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.</p>

<p data-end="1052" data-start="909">The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.</p>

<p data-end="1311" data-start="1054">The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.</p>

<p data-end="1451" data-start="1313">The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.</p>

<p data-end="1676" data-start="1453">MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.</p>

<p data-end="1908" data-start="1678">Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.</p>

<p data-end="2142" data-start="1910">The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.</p>

<p data-end="2142" data-start="1910"><img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" /></p>

<p data-end="2308" data-start="2144">MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.</p>

<p data-end="2648" data-start="2310">"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.</p>

<p data-end="2797" data-start="2650">"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."</p>

<p data-end="2938" data-start="2799">The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.</p>

<p data-end="3216" data-start="2940">Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.</p>

<p data-end="3325" data-start="3218">Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.</p>

<p data-end="3442" data-start="3327">"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.</p>

<p data-end="3662" data-start="3444">"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."</p>

<p data-end="3818" data-start="3664">MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.</p>

<p data-end="4076" data-start="3820">"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.</p>

<p data-end="4375" data-start="4078">"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."</p>

<p data-end="4503" data-start="4377">Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.</p>

<p data-end="4741" data-start="4505">"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."</p>

<p data-end="4910" data-start="4743">The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.</p>

<p data-end="4951" data-start="4912">MAYD is targeting an early 2027 launch.</p>


Joel Robinson

First look at MAYD's North Kirra mixed-use precinct

<main data-perf-region="main">
<p data-end="600" data-start="394">Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.</p>

<p data-end="733" data-start="602">But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.</p>

<p data-end="970" data-start="735">Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.</p>

<p data-end="970" data-start="735">[smartcode_project:default project_id=152737 project_image_fid=377679]</p>

<p data-end="1159" data-start="972">The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.</p>

<p data-end="1357" data-start="1161">It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.</p>

<p data-end="3400" data-start="3216">[smartcode_project:default project_id=152737 project_image_fid=377675]</p>

<p data-end="3400" data-start="3216">Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.</p>

<p data-end="1664" data-start="1517">Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.</p>

<p data-end="1826" data-start="1666">Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.</p>

<p data-end="1826" data-start="1666">[smartcode_project:default project_id=152737 project_image_fid=377685]</p>

<p data-end="2045" data-start="1828">Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.</p>

<p data-end="2269" data-start="2047">"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.</p>

<p data-end="2430" data-start="2271">A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.</p>

<p data-end="2606" data-start="2432">It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.</p>

<p data-end="2724" data-start="2608">At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.</p>

<p data-end="2892" data-start="2726">Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.</p>

<p data-end="2892" data-start="2726">[smartcode_project:default project_id=152737 project_image_fid=377680]</p>

<p data-end="3004" data-start="2894">Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.</p>

<p data-end="3214" data-start="3006">"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.</p>

<p data-end="3400" data-start="3216">The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.</p>

<p data-end="3400" data-start="3216">More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.</p>

<p data-end="3670" data-start="3538">&nbsp;</p>

<p data-end="3670" data-start="3538">[smartcode_project_cta:default project_id=152737]</p>

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>


Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

<p>A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.</p>

<p>Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.</p>

<p>Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374005]</p>

<p>The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.</p>

<p>Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.</p>

<p>Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374010]</p>

<p>Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.</p>

<p>The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.</p>

<p>“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374002]</p>

<p>“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”</p>

<p>The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.</p>

<p>[smartcode_project_cta:default project_id=150999]</p>


Maréa Residences brings parkside apartments to Coolangatta

<p data-end="535" data-start="324">Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.</p>

<p data-end="717" data-start="537">The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.</p>

<p data-end="918" data-start="719">The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.</p>

<p data-end="1131" data-start="920">PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.</p>

<p data-end="1131" data-start="920"><img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" /></p>

<p data-end="1318" data-start="1133">Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.</p>

<p data-end="1433" data-start="1320">The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.</p>

<p data-end="1658" data-start="1591">A significant component of The One will be its residential amenity.</p>

<p data-end="1864" data-start="1660">More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.</p>

<p data-end="2011" data-start="1866">The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.</p>

<p data-end="2011" data-start="1866"><img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" /></p>

<p data-end="2191" data-start="2013">The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.</p>

<p data-end="2365" data-start="2193">PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.</p>

<p data-end="2473" data-start="2367">“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.</p>

<p data-end="2775" data-start="2475">“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”</p>

<p data-end="2943" data-start="2777">The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.</p>

<p data-end="3145" data-start="3001">PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.</p>


PDG secures approval for $1.5bn Southbank apartment development, The One

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


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

Rental market

<html><body>
<p class="legacy"><strong>EXPERT INSIGHT</strong></p>

<p>Many Australians whose jobs were decimated by the COVID business shutdowns will soon be waking up to new income shocks and the prospect of rental stress. This is because people whose employers can’t afford to keep them on will suddenly lose more than A$300 per week when the <a href="https://www.ato.gov.au/general/jobkeeper-payment/">JobKeeper</a> scheme <a href="https://www.ato.gov.au/General/JobKeeper-Payment/JobKeeper-key-dates/">ends on March 28</a>. Worryingly, this income shock will happen just days before the payment to people on the <a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/jobseeker-payment">JobSeeker</a> benefit is effectively <a href="https://www.ideas.org.au/blogs/jobkeeper-jobseeker-what-has-changed#:%7E:text=The%20JobSeeker%20Payment%20replaced%20the,This%20was%20announced%20in%20November.">cut by $100 per fortnight</a>.</p>

<p>At that point, all income support recipients – more than 2.6 million people – will be below the poverty line and many will face extreme rental stress.</p>

<p>This income shock has been anticipated for some time, but what does it means for rates of rental stress, particularly in Victoria? Despite <a href="https://www.theage.com.au/politics/federal/victoria-s-economic-recovery-to-outstrip-all-other-states-as-nation-bounces-back-20210115-p56ufo">promising signs of recovery</a>, Victorian jobs lost in the COVID-induced recession, such as in the hard-hit <a href="https://www.theage.com.au/national/victoria/business-tourism-on-its-knees-as-covid-19-casts-long-shadow-over-events-20210203-p56z2j">business tourism</a> and <a href="https://www.theguardian.com/culture/2021/feb/22/more-job-losses-ahead-for-australian-live-music-industry-operators-warn">live music industries</a>, have not bounced back at the same rate as others.</p>

<p><strong>What will happen to rental affordability?</strong></p>

<p>To illustrate this point we have modelled housing affordability for single people who were on either the full-time or part-time JobKeeper rate. In this scenario, they could also get JobSeeker payments at a part-rate because of the temporary increase in the <a href="https://www.propertyobserver.com.au/https://www.servicesaustralia.gov.au/individuals/topics/income-test-jobseeker-payment/29411">income-free threshold to $300</a>. This made them eligible for <a href="https://www.dss.gov.au/housing-support/programmes-services/commonwealth-rent-assistance">Commonwealth Rent Assistance</a> too.</p>

<p>The chart below shows the impacts on income and rental affordability when JobKeeper and <a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/coronavirus-supplement">Coronavirus Supplement</a> payments end. Their incomes and the amount of rent they can afford are roughly halved.</p>

<p><img alt="" height="278" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/jobkeeper_poverty.jpg" width="754"></p>

<p>Full-time and part-time single workers were able to afford weekly rent of $265 and $245 respectively before the withdrawal of JobKeeper. Afterwards, affordable rent goes down to $115 per week. That’s about $110 less than the <a href="https://www.dhhs.vic.gov.au/sites/default/files/documents/202011/DHHS%20Rental%20Report%20September%20quarter%202020.docx">$450 median rent</a> ($225 per person) for a two-bedroom share house in Melbourne.</p>

<p>Based on <a href="https://theconversation.com/city-share-house-rents-eat-up-most-of-newstart-leaving-less-than-100-a-week-to-live-on-123772">our earlier calculations</a>, this leaves these renters with only $17.57 per day to meet basic costs. They have a lavish $3.57 per day more than they did before the pandemic to pay for food, utilities and job-seeking costs such as mobile phone plans and travel cards (A$4.40 a day in Melbourne).</p>

<p>What is different now than for pre-COVID unemployment was that business shutdowns thrust people who had reliable earnings – and accompanying high rents and mortgages in metropolitan areas – onto JobSeeker and JobKeeper payments.</p>

<p>The chart below shows the change in rental affordability for a number of household types before the pandemic and during the Coronavirus Supplement stages (i.e. payments of $550, then $250, then $150).</p>

<p><img alt="" height="391" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/jobkeeper_poverty_2.jpg" width="754"></p>

<p>For example, when their income was highest during the $550 stage, two singles sharing could afford rent of $430 per week. Once the supplement ends and is replaced by the <a href="https://www.smh.com.au/politics/federal/it-breaks-my-heart-jobseekers-hit-back-at-25-a-week-dole-increase-20210225-p575p9">$25-a-week increase in JobSeeker</a> payment, affordable rent declines to only $230 per week or $115 each.</p>

<p>Rental affordability for single-parent households is notable here because the COVID Supplement was payable to one person only. Once the supplement is withdrawn, they will again be disadvantaged relative to other households because they will not be receiving the increase in the JobSeeker payment.</p>

<p><strong>What sort of job losses can we expect?</strong></p>

<p>It is hard to predict exactly how many people will lose their jobs when JobKeeper ends. What we do know is the economic recovery in Victoria has lagged behind the other states. We also know that at the end of December 2020 <a href="https://theconversation.com/victorians-struggle-to-exit-jobkeeper-as-the-schemes-end-looms-155288">1.55 million people</a> were on JobKeeper and a large proportion of them (626,000) were in Victoria.</p>

<p>Economist Jeff Borland <a href="https://drive.google.com/file/d/1kE4f5qxNQwdh5Xp_6l2Cu-HrjiZvfkrB/view">conservatively estimates</a> national job losses could range between 125,000 and 250,000. It is reasonable to expect as many as half of these could be in Victoria.</p>

<p>Our analysis also shows there are worrying signs that the economic recovery celebrated in the January labour force data was not sustained in February. The latest data provided to a <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/COVID-19/COVID19">Senate inquiry</a> into COVID-19 show JobSeeker recipients increased by 7,267 between <a href="https://www.aph.gov.au/DocumentStore.ashx?id=60c91b42-dde2-415f-9f9b-7d5fd3935cb6">January</a> and <a href="https://www.aph.gov.au/DocumentStore.ashx?id=9c1805cb-fe51-419b-8a7b-61315c64c302">February</a>. The increase in Victoria could be attributed to the temporary Christmas retail boom, but in states like New South Wales and Queensland claims decreased slightly.</p>

<p>While <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2021-03-17/jobkeeper-end-will-hit-these-postcodes-hardest/13242400?nw=0">fewer people</a> will lose their jobs in other states than in Victoria when JobKeeper is withdrawn, they are not immune to this income shock. We created the chart below to show the overall scale of the coming problem of rental stress when the fortnightly $150 Coronavirus Supplement disappears and is replaced by the $50 JobSeeker increase.         </p>

<p>Once the supplement reduced to $250 per fortnight, singles and single parents with two children were below the poverty line.  When it was reduced to $150, the number of household types in poverty increased again. From April 1, all income support recipients – covering more than 2.6 million people including children – will be waking up to poverty and the prospect of extreme rental stress.</p>

<p><strong>What can be done to avoid this?</strong></p>

<p>So how can governments prevent people from falling off the rental cliff? It is unlikely to be achieved by introducing <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2021-03-10/tourism-coronavirus-pandemic-assistance-package-cheap-flights/13235432">cut-price flights</a> to Far North Queensland.</p>

<p>A new range of strategies will be needed. These include options <a href="https://www.acoss.org.au/wp-content/uploads/2021/03/Strengthening-Income-Support-Bill-2021.pdf">advocated by ACOSS and others</a> to increase the maximum rate of Commonwealth Rent Assistance by 50%, increase the JobSeeker base rate above the poverty line and introduce rental stress grants targeted at individuals who need help.</p>

<p>Over the longer term, there is also a need to adopt strategic approaches to increase the supply of affordable rental housing such as those <a href="https://www.ahuri.edu.au/housing/policy-analysis/increasing-affordable-rental-supply">recommended by researchers</a> at the Australian Housing and Urban Research Institute (AHURI).<img alt="The Conversation" height="1" jamjgoj="" src="https://counter.theconversation.com/content/157244/count.gif?distributor=republish-lightbox-basic" tblrv1n7b="" width="1"></p>

<p><span><a href="https://theconversation.com/profiles/simone-casey-130516">Simone Casey</a>, Research Associate, Future Social Service Institute, <em><a href="https://theconversation.com/institutions/rmit-university-1063">RMIT University</a></em> and <a href="https://theconversation.com/profiles/liss-ralston-295934">Liss Ralston</a>, Adjunct associate, <em><a href="https://theconversation.com/institutions/swinburne-university-of-technology-767">Swinburne University of Technology</a></em></span></p>

<p>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/at-least-2-6-million-people-face-poverty-when-covid-payments-end-and-rental-stress-soars-157244">original article</a>.</p>
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Many Australians whose jobs were decimated by the COVID business shutdowns will soon be waking up to new income shocks and the prospect of rental stress

At least 2.6 million people face poverty when COVID payments end and rental stress soars

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<p>Rental conditions across the Melbourne and Sydney unit markets have been characterised as having weak demand and high supply. It is driving a sharp drop in rents. Demand for inner city unit rentals has been significantly impacted by stalled overseas migration, especially from lower overseas student numbers, according to the latest data from CoreLogic.</p>

<p>Weak demand for inner city unit rentals has been exacerbated by a recent history of high rise apartment construction in Melbourne and Sydney, with the pipeline of new units that are still under construction remaining well above the decade average. Melbourne unit rents are down -7.6% over the calendar year and Sydney unit rents are down -5.7%.</p>

<p>The CoreLogic report posited that Weak rental conditions across the unit sector are likely to persist until overseas migration starts to ramp up and the higher levels of supply are absorbed.</p>

<p>Rental yields have been under some mild downwards pressure through the COVID period, with the gross yield across the combined capitals region reducing from 3.51% at the end of 2019 to 3.42% in December 2020, while yields across the combined regional areas have reduced from 5.03% last year to 4.83% this year. Despite the lower yield profile, with interest rates likely to remain at record lows for some time yet, the opportunity for positive cash flow properties is becoming more prevalent.</p>

<p>Opportunities for positive cash flow properties along with the potential for capital gains is likely to see investment activity consistently lift through 2021, CoreLogic noted.</p>

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/jan_4_rents_1.jpg" rel="gallery-all"><img alt="" class="image-article-full-width-580px" height="327" src="/s3/files/styles/article_full_width_580px/public/pictures/article-images/jan_4_rents_1.jpg?itok=RQIFTQP6" width="580"></a></figure><p>However rental conditions have diverged substantially in 2020 from both a geographical perspective and across the housing types. From a geographical perspective, the annual change in rents has been strong in Perth and Darwin where house rents are up around 10% in both cities and unit rents are 6.8% higher in Perth and 7.6% higher in Darwin.</p>

<p>CoreLogic Research Director Tim Lawless attributes the strength in Perth and Darwin rentals to both strong demand and a recent history of minimal supply additions.</p>

<p>“Both Perth and Darwin have recorded below average levels of investor activity since housing market conditions started to cool in mid-2014 which has led to a shortage of rental stock. More recently, with stronger interstate migration driving housing demand, rental rates have been under substantial upwards pressure as demand for rentals outweighs supply,” he said.</p>

<p>Although rents are surging higher in Perth and Darwin, the longer term trend highlights the weak rental conditions that persisted prior to the recent upswing. Perth rents remain -10.4% lower than the previous peak in May 2013 and Darwin rents remain almost -20% below their 2014 peak.</p>
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Melbourne unit rents are down -7.6% over the 2020 calendar year and Sydney unit rents are down -5.7%

urban.com.au

Melbourne and Sydney unit rents are down over five per cent

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<p class="Body">Friday last week encapsulated all that’s wrong in the reporting of real estate in Australia. “Rental prices continue to soar” screamed one headline, while “Rental prices in Australia are going backwards” shouted another.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">How did different media outlets come to such different conclusions? One published the press release on The Domain Rental Report and the other published the handout from the CoreLogic Rental Index.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">As is so often the case, the statistics from one research source are different from those on the same subject from a competing source. Newspapers and other forms of media report each in isolation, often running the press release pretty much verbatim, without applying any journalistic oversight.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">No one looks at the material on the one subject from all sources and analyses it to make some sense of it for readers.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">Sometimes the numbers from two different sources aren’t that different. It’s just that one research entity will choose to place a negative slant on the figures and media will go with that, while another researcher will emphasise the positive.</p>
<p class="Body">The lack of genuine journalism on these matters is quite alarming. The content and tone of the press release is re-cycled to the public as news.</p>
<p class="Body">The result is confusion and misinformation, the curse of real estate consumers trying to figure out what’s really going on and make good decisions on investment.</p>
<p class="Body">So what can we make of the national rental data published by two major sources on the same day recently?</p>
<p class="Body">The reality is that they’re not actually so different. One chose to take a negative stance and the other decided to paint a brighter picture.</p>
<p class="Body">Here’s where Domain agrees with CoreLogic:</p>
<ul>
<li>Both see rents going seriously backwards in Darwin. The annual decline in rents is in double digits, according to both sources.</li>
<li>Rents in Perth are still falling, though not as much as in Darwin, according to both.</li>
<li>Both sources see only moderate growth in rents in Sydney.</li>
<li>Both sources see minor growth in Melbourne, around 2-3 percent in annual terms.</li>
</ul>
<p class="Body">And here’s where they don’t agree.</p>
<ul>
<li>Domain records 2-3 percent growth in Brisbane, but CoreLogic reports a marginal fall.</li>
<li>Domain sees minor growth in Adelaide, but CoreLogic has rents down 1 percent annually.</li>
<li>CoreLogic reports essentially no change in Hobart, but Domain reports a 6 percent annual rise in house rents and a 2 percent rise in apartment rents.</li>
<li>CoreLogic records a 1.2 percent rise in its Canberra Rental Index but Domain sees bigger increases in rents in the capital.</li>
</ul>
<p class="Body">It basically comes down to this: while there are a number of similarities, Domain’s figures overall are more positive than CoreLogic’s and it chose to take an optimistic outlet.</p>
<p class="Body">“Rents in most capital cities continue to rise, with falling vacancy rates indicating an ongoing shortage of rental properties,” said Domain chief economist Andrew Wilson.</p>
<p class="Body">“Despite the recent influx of home building, we can expect to see upward pressure on both houses and unit rents in most capital cities continuing in the foreseeable future.”<span style="line-height: 1.3em;"> </span></p>
<p class="Body">But the CoreLogic analysis said the “annual capital city rental change is in decline and is now the lowest since 1996”.</p>
<p class="Body">My take on all this, having observed the quarterly rental data coming from all the usual suspects over the past 2-3 years, is that capital city rental growth has been consistently low over that period. While there are occasional exceptions, the capital cities have failed to deliver strong growth in rentals for years – and, in the case of Perth and Darwin, rents have dropped substantially.</p>
<p class="Body">Domain has chosen to be upbeat on its latest figures, but really they show very little in the way of strong, meaningful growth in rents.</p>
<p class="Body">It provides further evidence that the “housing shortage crisis” consistently claimed by the developer lobby is another of real estate’s enduring myths.</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

Housing shortage crisis an enduring myth: Terry Ryder

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<p>The release of the 2013/14 financial year taxation statistics by the Australian Taxation Office (ATO) will no doubt add further fuel to the ongoing debate over the who, what, where, and why of rental property ownership.</p>
<p><span>Since I work in the industry and view properties more or less all the time, I don't need to look at any stats to know that investment properties are owned by a wide range of Australian income earners, largely "middle Australia". </span></p>
<p><span>I know, because these people include my clients, because I can see it for myself every time I go to viewings, and most significantly, because I'm a property market insider.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>The genuinely wealthy generally have better things to do with their cash then invest in low-yielding residential property.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>Nevertheless, I would hopefully call out others on their useless anecdotes, so I shall do so on myself. </span></p>
<p><span>Here are the headline numbers!</span></p>
<p><a href="/images/2016/03/29/ATO1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/03/29/ATO1.jpg" alt=""></p>
<p><span>The figures show that 15.7 per cent of those lodging a tax return or 2,033,973 individuals owned a rental in FY2014, with the vast majority owning only one or two properties.</span></p>
<p><span>The long run numbers speak for themselves, with rental property ownership becoming increasingly popular and accessible, and showing a fivefold increase since 1980, or a near-fourfold increase as a share of the total number of taxpayers. </span></p>
<p><span>So much for rentals only being for the rich - there are now, quite literally, millions of landlords.</span></p>
<p><span>Happily for landlords, fewer of them declared a net rental loss in financial year 2014. </span></p>
<p><span><strong>Rental market trends - how much?</strong></span></p>
<p><span>Adding a bit more texture on what happened to the rental markets and negative gearing deductions in financial year 2014, the ATO Taxation Statistics for 2013/14 showed that net rental income losses fell by more than half from $7.9 billion to $3.7 billion over the last two years. </span></p>
<p><a href="/images/2016/03/29/NG.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/03/29/NG.jpg" alt=""></p>
<p><span>The total rental loss claimed fell from $12.04 billion to $10.97 billion, but remember that negative gearing losses are a timing difference only, and as such these are not amounts which could be "saved" from the budget.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>The share of those 2.03 million folk who own a loss-making investment property fell from 64 percent to 62 percent.</span></p>
<p><span>OK, so that's the summary data. </span></p>
<p><span>But what does it actually mean?</span></p>
<p><span>In terms of what this means in reality for the typical individual owning a property, the average rental loss has declined from well over five grand at $5,096 in the 2008 tax year to just $1,828 by FY2014, a whopping decline of more than 64 percent. </span></p>
<p><a href="/images/2016/03/29/NG2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/03/29/NG2.jpg" alt=""></p>
<p><span>Furthermore, with the cash rate falling several times further since 1 July 2013, average net rental loss will decline for the next two or three tax years to come (just ask any capital city based landlord about their 2015 tax returns).</span></p>
<p><span><strong>Rental market trends - who?</strong></span><span style="line-height: 1.3em;"> </span></p>
<p><span>The Tax Office also served up some interesting data on who is recording net rental losses. </span></p>
<p><span>In terms of additional investors in the financial year, the numbers of individuals with a rental interest and a taxable income between $37,000 and $80,000 increased, if only moderately, with those within this taxable income bracket racking up a total of 707,000 taxpayers with a net rental interest. </span></p>
<p><span>However, the greatest increase in volume of overall investors was reflected in an extra 42,400 individuals in the taxable income bracket of $80,001 to $180,000.</span></p>
<p><span>By way of contrast there were only an additional 9,000 individuals with an interest in the $180,000 to $250,000 taxable income bracket, and an additional 5,000 individuals in the $250,000 to $500,000 bracket.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>Looked at another way by income, 767,000 of those declaring a taxable income of under $80,000 accounted for 61 per cent of total net rental losses.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>With the largest increase in net rental interest over the year, and it does confirm that to a substantial extent "middle Australia" is buying into residential investment property, and so doing is not only "for the rich".</span><span style="line-height: 1.3em;"> </span></p>
<p><span>It is worth highlighting here, however, that the "taxable income" declared on tax returns is reduced by negative gearing losses. </span><span style="line-height: 1.3em;"> </span></p>
<p><span>Thus for example it should be acknowledged  that a person declaring a net rental interest and taxable income of under $80,000 could theoretically have income of $81,828 before an average net rental loss is deducted.</span></p>
<p><span>The overwhelming majority of landlords continue to only own one or two rental properties. </span></p>
<p><span>Naturally when analysing the figures by age younger investors remain the most likely to rely upon negative gearing, with 82 per cent of all property investors aged between 18 and 29 declaring a net rental loss.</span></p>
<p><span>As the population ages it is little surprise to discover that more than one fifth of investors are now aged over 60, a share that will likely increase over time.</span></p>
<p><span>It goes almost without saying that the top 20 percent of income earners owe the bulk of investment housing debt, a point highlighted by the Reserve Bank of Australia as favourable for economic stability, since these investors are also best placed to service their debt. </span><span style="line-height: 1.3em;"> </span></p>
<p><span>Finally, one other interesting trend was the surge in sundry rental deductions, suggesting that with the rental market softening and becoming more competitive landlords have had an increasing propensity to spend on property improvements, which has been of significant benefit to the trades sector. </span></p>
<p><span><strong>The wrap</strong></span><span style="line-height: 1.3em;"> </span></p>
<p><span>Overall, the figures again showed that rental properties are owned by a broad range of Australians by income, comprising a total of well over two million taxpayers.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>The good news from a budget repair perspective is that net rental losses have declined by well over half over the past two tax years alone.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>What's more, with interest rates since falling to record lows, we can look forward to seeing further declines over the next few years of data.</span></p>
<p><span> </span></p>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
<p><span> </span></p>
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pwargent-M4siyDbqQY

New rental market trends: Pete Wargent

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<div>The ABS Consumer Price Index figures confirmed that rental growth nationally has continued to be slow - and slowing - of late, as should generally be expected at this stage in the construction cycle. </div>
<div> </div>
<div>It's important to recognise, though, that the property market is cyclical. Always has been the case, and always must be! </div>
<div> </div>
<div><a href="/images/2016/08/02/8.3%20PROPERTY%20CONSTRUCTION%20CYCLE.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2016/08/02/8.3%20PROPERTY%20CONSTRUCTION%20CYCLE.jpg" alt=""></div>
<div> </div>
<div>With annual rental growth declining to +0.7 percent nationally, this was the slowest result in nominal terms since 1994. </div>
<div> </div>
<div>One of the outcomes we can expect to see in an era of low inflation and low interest rates is that things will actually decrease in value from time to time!</div>
<div> </div>
<div>Something that was of course far less likely in say the early 1980s when inflation was blazing along at 10 to 12 percent and interest rates were much, much higher (the typical home loan rate back then was an eye-watering 12 to 14 percent - yowsers). </div>
<p><a href="/images/2016/08/02/A1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/08/02/A1.jpg" alt=""></p>
<p><br><span>The plus side for property investors in this era of lower inflation is that mortgage debt has never been so cheap, with ING releasing a record low variable rate product at just 3.79 percent last week. </span><br><br></p>
<div><strong><span style="text-decoration: underline;">City by city</span></strong></div>
<div> </div>
<div>The soft annual result was driven largely by sharp declines in the resources capitals. In Perth, annual rental growth declined by -5.2 percent over the year to June. </div>
<p><a href="/images/2016/08/02/A2.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="/images/2016/08/02/A2.jpg" alt=""></div>
<div class="separator"> </div>
<div>And in Darwin, annual rental growth declined to -6.4 percent. Of the smaller capital cities, Hobart and Canberra have both been somewhat soft rental markets in recent years, but both seem to have turned a bit of a corner, with rental growth in Hobart now picking up in response to tight vacancy rates. </div>
<div> </div>
<div><a href="/images/2016/08/02/A4.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2016/08/02/A4.jpg" alt=""></div>
<p><br><strong><span style="text-decoration: underline;">Reality check</span></strong><br><br></p>
<div>Slow rental growth seems to cause a good deal of excitement and sometimes hyperbole in reporting, but it is worth stressing that cyclical rental markets are an integral part of the property market and construction cycles. </div>
<div> </div>
<div>Moreover, although there are many ways to present data to show it in its most unfavourable light (such as cherry picking start dates, dodgy y-axis selection, adjustments for "inflation", or simply focusing on decreasing annual growth rates) over the long term generally rents do increase in areas where there is the strongest demand for housing.</div>
<div> </div>
<div>In fact, despite what you'd think from most articles on the subject, rents are actually at all-time highs in Sydney, Melbourne, Brisbane, Adelaide, and Hobart (even if you must adjust for inflation in the case of the two largest cities). </div>
<div> </div>
<div>Historically nominal rents have rarely declined since inflation was was generally stronger, but this may change in future cycles.<br><br>Plotted below are the rental CPI numbers indexed back to 1972. </div>
<div> </div>
<div class="separator"><a href="/images/2016/08/02/A3.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/08/02/A3.jpg" alt=""></div>
<p> </p>
<div>Naturally enough city-wide figures mask diverging underlying trends. After taking a bit of a look around Sydney last week - see <a href="https://petewargent.blogspot.com.au/2016/07/traffic-traps-and-infrastructure-gaps" target="_blank">here</a> - I'm fairly sure that off-the-plan unit rents are struggling in the Parramatta LGA, for example. </div>
<div> </div>
<div>On the other hand, if you excitedly confronted renters in Manly with a 'good news story' about weak rents you'd likely be met with a hollow laugh.</div>
<div> </div>
<div>Another point worth acknowledging is that due to the compounding effect, small increases in rent in the short term tend to stack up to become very large increases over time. </div>
<p><a href="/images/2016/08/02/a5.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/08/02/a5.jpg" alt=""></p>
<p> </p>
<div>While I've personally been a fan of the idea of "rent-vesting" - renting and investing in multiple properties - I've also often furrowed a brow when media articles suggest that young folk should just forget buying a home and rent instead.<br><br>This might have worked if reporters were good at timing market cycles and people were good at saving, but generally speaking they haven't been, and they aren't. </div>
<div> </div>
<div>Ultimately home ownership is an effective means of forced saving, and should form an important part of a retirement plan. </div>
<div>
<br><strong><span style="text-decoration: underline;">The wrap</span></strong>
</div>
<div> </div>
<div>Broadly as expected, rental growth remains sluggish.<br><br>Looking at the pipeline of properties under construction this seems dynamic appears likely to continue for the next couple of years at the capital city level. </div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
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Rental market cyclically sluggish: Pete Wargent

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<p class="p1"><span style="font-size: 12.16px;">Some interesting trends from </span><em style="font-size: 12.16px;">SQM Research</em><span style="font-size: 12.16px;"> and its asking rents index.</span></p>
<p class="p3"><span class="s1">In Perth house rents have declined by 24 percent over the past three years, before staging something of a bounce of late. </span></p>
<p class="p4"><a href="https://www.propertyobserver.com.au/images/2017/02/09/SQM.jpg" target="_blank">Click to enlarge</a></p>
<p class="p4"><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/2017/02/09/SQM.jpg" alt=""> <span style="font-size: 12.16px;"> </span></p>
<p class="p3"><span class="s2"><em>Source: SQM Research</em></span></p>
<p class="p3"><span class="s1">In Darwin the median asking rent for houses is also down by 22 per cent over three years.</span></p>
<p class="p5"><a href="https://www.propertyobserver.com.au/images/2017/02/09/Darwin.jpg" target="_blank">Click to enlarge</a></p>
<p class="p5"><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/2017/02/09/Darwin.jpg" alt=""> </p>
<p class="p3"><span class="s2"><em>Source: SQM Research</em></span></p>
<p class="p3"><span class="s1">Over three years Sydney (11 percent) and Melbourne (9 percent) have recorded moderate increases.</span></p>
<p class="p3"><span class="s2"><strong>Residex monthly update</strong></span></p>
<p class="p3"><span class="s1">In other news, <em>Residex</em> released its <span class="s3">January market update</span>, which showed quarterly gains for Sydney houses and units. </span></p>
<p class="p3"><span class="s1">Now a <em>CoreLogic</em> company, <em>Residex</em> has opted to no longer publish median prices for the cities.</span></p>
<p class="p3"><span class="s1">While mildly annoying for those of us that like to chart the figures, it may not be entirely unexpected.</span></p>
<p class="p4"><span style="font-size: 12.16px;">The Reserve Bank of Australia ditched median prices from its Chart Packs some time ago in favour of reporting the year-on-year change in prices. </span></p>
<p class="p3"><span class="s1">Median prices have not always been a useful contributor to the housing affordability debate, the inference often being that new entrants to the market should be able to afford a median priced house (whereas in the most expensive markets such as Sydney most of us entered through buying an apartment, often priced well below the median). </span></p>
<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/"><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"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
<p class="p3"><span class="s1"> </span></p>
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Rents down in resources capitals: Pete Wargent

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<h3 class="post-title entry-title"><span style="color: #333333; font-family: Tahoma, Helvetica, Arial, sans-serif; font-size: 12.15999984741211px;">SQM Research reported that vacancy rates fell across most capital cities in the month of August 2017.</span></h3>
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<div>The national vacancy rate of 2.2 per cent was marginally lower than the 2.3 per cent seen at the same time in the prior year. </div>
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<div>Melbourne (1.7 per cent) and Hobart (0.4 per cent) in particular are seeing sharp increases in median asking rents, while the vacancy rate in Adelaide was down to just 1.6 per cent from 1.9 per cent a year earlier.</div>
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<div>In fact, Hobart has the lowest vacancy rate on record for any capital city, and both rents and prices are exploding higher.  </div>
<br><div class="separator"><a href="https://www.propertyobserver.com.au/images/2017/09/21/SQM1.jpg" target="_blank">Click to enlarge</a></div>
<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/2017/09/21/SQM1.jpg" alt=""></div>
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<div>Vacancy rates ticked down from July in Brisbane (3.1 per cent) and Perth (4.6 per cent) in August.</div>
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<div>The rental market Perth needs to improve for landlords - median asking rents are some 34 per cent lower than at their peak according to SQM's asking rents index. </div>
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<div>Meanwhile Darwin has recorded seven consecutive declines in its vacancy rate, suggesting that the rental downturn may finally be over in the Northern Territory. </div>
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<div>Smoothing the last 6 months of figures suggests that the rental market is not deteriorating significantly in most capital cities. </div>
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<div><a href="https://www.propertyobserver.com.au/images/2017/09/21/SQM2.jpg" target="_blank">Click to enlarge</a></div>
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<span><br></span><span>Dwelling completions are expected to peak in early 2018, while immigration has picked up a notch.</span><br><span><br></span><span>SQM's Managing Director, Louis Christopher, noted:</span><br><div><strong> </strong></div>
<div>"We believe rents will likely rise at a faster pace 2018 than what has been recorded in 2017, thus far. </div>
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<div>We now have mounting concerns for significant rental shortages in 2019 in Sydney and Melbourne”.<br><br><span style="text-decoration: underline;">The delinquents</span><br><strong><span><em><br></em></span></strong>There is some correlation here with the performance in mortgage delinquencies.<br><br>Moody's reported that, by the month of May, 30 plus day delinquencies in Melbourne had declined to just 1.35 per cent, and in booming Hobart arrears had fallen very sharply to just 1.45 per cent.<br><br>In Sydney, the 30-plus delinquency rate was as low as 0.84 per cent, which is as low as we will ever see for Sydney as a city of more than 5 million persons, while the ACT had a reported delinquency rate of just 0.90 per cent.<br><br>On the other hand delinquency rates increased to 2.20 per cent in Adelaide, 2.66 per cent in Perth, and 2.82 per cent in Darwin.<br><br>And helping to tick 30-plus arrears slightly higher year-on-year from 1.50 per cent to 1.62 per cent, delinquencies were higher in the regional markets of all of the resources states and territories, including South Australia.</div>
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<a href="https://www.propertyobserver.com.au/images/2017/09/21/MOODYS.jpg" target="_blank">Click to enlarge</a><br><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/2017/09/21/MOODYS.jpg" alt=""></div>
<br>Despite these increases, thanks to the Sydney and Melbourne weighting nationally delinquency rates remain well below the levels seen in 2011 and 2012 of 1.87 per cent and 1.81 per cent respectively.</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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SQM sees rental shortages by 2019 

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<p>SQM Research released its latest vacancies and asking rents figures up to October 2015, which showed vacancy rates steady across much of the east coast but rising in the resources capitals. <br> <br>Reported vacancy rates were steady in Brisbane (2.6%) and Adelaide (1.9%), while Canberra (2.1%) saw a slight decline.<br> <br>The vacancy rate in Sydney declined to 1.6%, which has been reflected in moderately rising asking rents for houses (+1.9%) and units (+3.1%) over the year, although the rents figures may mask divergent trends at the sub-regional level.<br> <br>While both Melbourne (2.4%) and Hobart (1.1%) saw vacancy rates ticking up in October, over the past year both have recorded declines, and as such asking rents have been rising solidly in these cities too. </p>
<p>Click to enlarge</p>
<p><img src="/images/2015/11/18/Screen%20Shot%202015-11-19%20at%2010.43.38%20AM.png" alt=""></p>
<p>Resources woes</p>
<p>On the other hand vacancy rates rose further still in Perth (3.8%) and Darwin (3.5%).</p>
<p>Asking rents for houses in Darwin have tanked by more than 20% over the past year according to SQM, with Darwin set for a significant price correction.</p>
<p>Asking rents are down for houses in Perth too (-6.4%), albeit by a less dramatic margin.</p>
<p>Perth has reportedly seen the price of premium property fall sharply this year, although prices at the bottom end of the market have not shifted too much to date.</p>
<p>Perth will become an attractive buyers' market again in time, but most data - including the iron ore price which was walloped by another 4.5% overnight to be down by a stonking 76% since 2011 and 36% this calendar year alone - suggests that this time is not yet upon us!</p>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Vacancy rates a mixed bag: Pete Wargent

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<div>It's quite commonly argued that if dwelling prices aren't rising then investors will rush to the exits in order to sell their properties, particularly those recording net rental losses. </div>
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<div>It was a popular but flawed argument in 2011 too, come to think of it.</div>
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<div>However, while a significant number of new negatively geared investors in Sydney and Melbourne <em>are</em> making painful losses right now - some of them by design, even! - most investors are not, particularly in the prevailing low interest rate environment. </div>
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<div>This is partly because cash flows on investment property generally improve over time, with only a small share of the total number of investment property owners having bought their asset in the past year.<br><br>It is also partly because the losses reported by the Australian Taxation Office (ATO) include non-cash costs, which aren't incurred annually by the owner.<br><br><strong><span style="text-decoration: underline;">Reported losses</span></strong>
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<div>Superficially it would appear that a high proportion of investors are losing a good deal of cash, with more than 1.25 million taxpayers claiming net rental losses in FY2014, the most recent tax year for which detailed figures are available to date. </div>
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<div><a href="/images/2016/05/25/NG4.jpg" target="_blank">Click to enlarge</a></div>
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<div>However, all is not quite as it first appears.</div>
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<div>One of the reasons for this is that non-cash costs (specifically capital works and depreciation allowances) account for a goodly chunk of the reported losses. </div>
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<div>Indeed through increased awareness capital works claimed have increased substantially by 42 per cent since FY2011 to $2.7 billion.</div>
<p><a href="/images/2016/05/25/NG2.jpg" target="_blank"> Click to enlarge</a></p>
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<div>This has been one of the contributing factors in reducing the average net rental loss by 64 percent since 2008, although of course the predominant influence has been falling interest rates. </div>
<p><a href="/images/2016/05/25/NG3.jpg" target="_blank">Click to enlarge</a></p>
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<br><strong><span style="text-decoration: underline;">Example</span></strong><br><br>As an example of why most informed investors for whom cash flow is a key consideration need not consider selling even if house prices are stagnant for a period of time - or even falling - refer to the below hypothetical example of a two year old house bought recently by an investor in Brisbane.</div>
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<div>After the mortgage interest repayments and other cash holding costs the investor is making a small loss of a couple of hundred bucks in the first year. </div>
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<div>Yet because the house is relatively new the depreciation and capital allowances deductions are generous, allowing him or her to record a significant loss on their lodged tax return, thereby saving significant tax at their marginal rate.<br><br>Note that since tax is saved at the marginal rate, this strategy is particularly beneficial to higher rate taxpayers. </div>
<p><a href="/images/2016/05/25/NG1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/05/25/NG1.jpg" alt=""><br><br><span>The depreciation and capital allowances are clearly beneficial to the investor in this example.</span></p>
<div>Although the land component does not qualify for a capital works or a decline in value deduction, the total capital works and plant and equipment deduction claimable over 40 years might be around half of the total purchase price of the property (in th<span>is case, <span>~</span>$360,000). </span>
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<div><span>The ATO provides a detailed list of depreciable items in its Rental Properties Guide document.</span></div>
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<strong><span style="text-decoration: underline;">Observations</span></strong><br><br>This is rarely well understood in market analysis, in all likelihood because much of the commentary railing against negative gearing is naturally enough undertaken by folk that have never owned a rental.</div>
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<div>The above example highlights a few things to me. </div>
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<div>Firstly, for investors wanting a strong cash flow or to reduce their tax liability, nearly new or newly renovated properties can be attractive for their depreciation benefits, particularly houses. </div>
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<div>Secondly, even if house prices are flat or fall for a period of time the investor in the example above is unlikely to be motivated to sell, particularly having already paid a lump sum of stamp duty and when considering the other entry and exit transaction costs. </div>
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<div>And thirdly, it seems obvious to me that (although I'm not campaigning for them myself) if it were deemed necessary there are a raft of potential avenues to tweak tax legislation to make property investment less attractive without taking a sledgehammer to the market. </div>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Property investor average net loss reduced by 64 percent since 2008: Pete Wargent

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<p>Vacancy rates declined in January, after December's seasonal spike, according to SQM Research.</p>
<p class="p3"><span class="s1">All of the capital cities recorded a drop in January, not unusually for the time of year. </span></p>
<p class="p3"><a href="https://www.propertyobserver.com.au/images/2017/02/17/SQM.jpg" target="_blank"><span class="s1">Click to enlarge</span></a></p>
<p class="p3"><span class="s1"><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/2017/02/17/SQM.jpg" alt=""></span></p>
<p class="p3"><span class="s1">Nationally the vacancy rate of 2.4 percent was the same as one year previously.</span></p>
<p class="p3"><span class="s1">The tightest market was Hobart at 0.7 percent, the Tasmanian capital recording strong gains in median asking rents, while the highest vacancy rate was in Perth at 4.8 percent. </span></p>
<p class="p3"><span class="s1">Although the figures aren't seasonally adjusted, below I've smoothed them on a 4mMA basis to give some kind of feel for the trend. </span></p>
<p class="p3"><a href="https://www.propertyobserver.com.au/images/2017/02/17/SQM2.jpg" target="_blank"><span class="s1">Click to enlarge</span></a></p>
<p class="p3"><span class="s1"><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/2017/02/17/SQM2.jpg" alt=""></span></p>
<p class="p3"><span class="s1">Perth and Darwin have continued to record declining rents, while SQM noted that inner city apartments in Brisbane have seen declines of 2.5 to 5 per cent in asking rents, something I can confirm from having witnessed it first-hand. </span></p>
<p class="p3"><span class="s1">To date the Sydney and Melbourne apartment markets appear to be holding up better, with the reported vacancy rate in Melbourne actually lower than a year ago, and median asking rents higher in both of the most populous capital cities. </span><span style="font-size: 12.16px;"> </span></p>
<p class="p3"><span class="s1">After some truly diabolical declines in dwelling prices ranging anywhere from 50 to 90 per cent in some cases, SQM notes that the bust in some mining towns may now finally be bottoming out. </span><span style="font-size: 12.16px;"> </span></p>
<p class="p3"><span class="s1">Vacancy rates are down in a range of resources towns from a year previously.</span></p>
<p class="p3"><a href="https://www.propertyobserver.com.au/images/2017/02/17/SQM-1.jpg" target="_blank"><span class="s1">Click to enlarge</span></a></p>
<p class="p3"><span class="s1"><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/2017/02/17/SQM-1.jpg" alt=""></span></p>
<p class="p3"><span class="s2"><em>Source: SQM Research</em></span></p>
<p class="p3"><span class="s1">No, still not a buy, before you ask! </span></p>
<p class="p1"><span class="s1"><em>PETE WARGENT is the co-founder of </em><a href="https://allenwargent.com/"><span class="s2"><em>AllenWargent</em></span></a><em> property buyers (London, Sydney) and a best-selling author and </em><a href="https://petewargent.blogspot.com/"><span class="s2"><em>blogger</em></span></a><em>. </em></span></p>
<p class="p3"><span class="s1"> </span></p>
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