The new <a href="https://www.apartments.com.au/new-apartments/yarraville-green-42-stephen-street-yarraville-vic-3013">Yarraville Green</a> development in Melbourne's inner west is showing that landscaping can be just as influential as architecture, with buyers responding strongly to the garden-first approach adopted from the outset by developer Excelon Projects and the project's design team.

Excelon appointed Six Degrees Architects and landscape architects SBLA to work collaboratively on the development, with a brief to create "a sustainable, design-led building with a focus on community."

That approach has resonated with buyers. According to Next Chapter Director Tom Hirini, who is leading the sales campaign, the landscaped communal garden has become one of the project's defining features, alongside its boutique scale and European-inspired cluster housing concept.

Local downsizers, right-sizers and established families already living in Yarraville and surrounding suburbs have accounted for the majority of purchasers.

[smartcode_project:default project_id=144913 project_image_fid=297740]

Yarraville Green will comprise 53 homes, including apartments and townhomes, arranged around the shared central garden to maximise connections to the landscaped open space. Parking has been moved underground, allowing the ground plane to be dedicated to greenery, pedestrian movement and communal spaces.

The landscape extends well beyond passive planting. Productive garden beds, a pergola, communal gathering spaces, garden sheds and a pet wash have all been integrated into the masterplan, creating spaces designed to encourage everyday interaction between residents.

[smartcode_project:default project_id=144913 project_image_fid=297741]

The interiors continue Excelon's focus on craftsmanship, incorporating bespoke elements by Melbourne artisans including leadlight detailing by Adadaz, hand-turned timber hardware by Auburn Woodturning and blown-glass lighting by Ruth Allen.

Sustainability has also been embedded throughout the project, with Yarraville Green targeting an average 7-star NatHERS energy rating through passive design principles, rooftop solar servicing common areas and rainwater harvesting for landscape irrigation.

[smartcode_project:default project_id=144913 project_image_fid=297735]

Construction continues to progress at Yarraville Green, with structural works well underway and framing works approaching completion under builder Balmain &amp; Co. The project remains on track for completion in mid-2027.

Apartments at Yarraville Green are currently priced from $625,000, while townhomes start from $1.4 million.

[smartcode_project_cta:default project_id=144913]

Joel Robinson

Garden-led design drives buyer demand at Yarraville Green

National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.

Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.

[smartcode_project:default project_id=145922 project_image_fid=373556]

The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.

Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.

"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.

"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.

"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."

[smartcode_project:default project_id=145922 project_image_fid=373559]

Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.

The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.

[smartcode_project:default project_id=145922 project_image_fid=373583]

Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.

Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.

[smartcode_project:default project_id=145922 project_image_fid=373571]

Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.

Completion of Crest &amp; Walker is slated for late 2028.

[smartcode_project_cta:default project_id=145922]

Fortis expands Brisbane pipeline with launch of Crest & Walker in Newstead

The enormity of delivering a true skyscraper in Australia's new development market is often overlooked.

It has taken the best part of a decade since plans for Chevron One were first unveiled, but the 41-storey tower is now complete, with residents collecting their keys and moving into what has become one of the Gold Coast's most recognisable new landmarks.

Rising 127 metres above Chevron Island, Chevron One stands almost twice as high as any other building on the island. Its scale places it alongside the trio of towers at Jewel, arguably the last truly significant addition to the central Gold Coast skyline when they were completed around six years ago.

While there are several developments underway around a similar height to Chevron One, they are more concentrated within clusters of the highest towers in the city. The fact Chevron One sits within a developing precinct, looking back at the other high-rise developments in Surfers Paradise and Broadbeach, makes it a different proposition altogether. It will certainly become a reference point on the Gold Coast skyline.

[smartcode_project:default project_id=6515 project_image_fid=68833]

Developer Bensons Property Group is behind the 41-storey tower, which has 229 apartments, along with an exhaustive list of resident amenity spread across what is the largest development site ever assembled on Chevron Island.

The tower has been the talk of the town for years, says Ray White Projects Gold Coast agent Caitlin Rosenboom, who is selling the remaining apartments.

"People have been watching Chevron One go up for years," Rosenboom says, adding that many prospective buyers have been surprised by the scale of the views once they step inside.

"It's only when they walk through a completed apartment that they truly understand the position of the building," Rosenboom says.

"The views are jaw-dropping. Whether you're looking east over the ocean, across Surfers Paradise, along the river systems or out to the hinterland, every level offers something different but equally impressive."

[smartcode_project:default project_id=6515 project_image_fid=360215]

One of Chevron One's defining advantages is its location on the eastern side of Chevron Island on Stanhill Drive, a position which protects the views forever.

"There's only one row of houses between Chevron One and the water, and the height restrictions along the river means views from Chevron One can never be built out,"&nbsp;Rosenboom says.

While new apartment developments continue to emerge across the Gold Coast, Rosenboom says opportunities to secure a completed apartment with this level of outlook are becoming increasingly rare.

"The size of the site is something that would be incredibly difficult to replicate today," she says.

"That's allowed Chevron One to deliver the sort of amenity, open space and resident facilities that very few projects can offer. There are not many completed apartment buildings on the Gold Coast right now that can compete with the combination of scale, quality and amenity."

[smartcode_project:default project_id=6515 project_image_fid=68839]

There's around 2,000 sqm of amenity solely for the use of residents of Chevron One. Club One features a uniquely shaped swimming pool that mirrors the footprint of the building itself, set within a extensively landscaped gardens. There's also an indoor pool and spa, a fully equipped gym with a Pilates room, a yoga garden, a bookable private dining area and lounge that can host up to 30 people, and a 24-hour concierge service.

As for the buyers, Rosenboom is fielding enquiry from everywhere: Sydneysiders and Melburnians looking at the new and off-the-plan market following the changes in the Federal Budget, as well as those looking to relocate, through to South East Queenslanders seeking either a permanent home or a weekender bolthole.

"The Gold Coast lifestyle continues to resonate with people relocating from the southern states, and when they see the views and the quality of what's been delivered at Chevron One, it becomes very easy for them to understand the appeal," Rosenboom says.

A diverse mix of one, two and three-bedroom apartments remain available, with each offering "something a little different", be it the orientation and views, configuration, or level, to suit a wide variety of buyers.

The remaining apartments are ready to inspect in person, by appointment.

[smartcode_project_cta:default project_id=6515]

A decade in the making: Residents to move into Chevron One as construction wraps up

A general rule of thumb in new apartment developments is that the penthouses get the rooftop.

It's a formula that's become commonplace across Australia's apartment market. Residents might have access to a pool, gym or barbecue facilities on a dedicated lower level, but the most desirable outdoor spaces are typically reserved for the highest-priced homes at the top of the building.

<a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> has taken the opposite approach.

Rather than dedicating the rooftop to a handful of buyers, the Gold Coast developer has made it the centrepiece of its Flourish collection, creating expansive shared spaces from the best vantage point in the building.

The philosophy has reached its most ambitious expression at <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> in Palm Beach, where two rooftop precincts connected by a skybridge will deliver one of the most extensive lifestyle offerings seen in a residential apartment project on the Gold Coast.

[smartcode_project:default project_id=150017 project_image_fid=374053]

"We're seeing a clear move toward developments that offer more than just an apartment," Sherpa Group founder Christie Leet said.

"People want spaces that support how they actually live, whether that's working from home, staying active, or spending time with family and friends.

"That's where amenity becomes critical. It's not just about what's included, but how those spaces are designed to be used every day."

[smartcode_project:default project_id=150017 project_image_fid=374052]

The breadth of amenity has already attracted buyers across multiple demographics. Younger first home buyers have been drawn to Soleira's one-bedroom apartments, a product rarely delivered in Palm Beach, while families have responded to practical inclusions such as the shallow children's pool adjoining the main lap pool and the extensive communal recreation areas.

Instead of a single rooftop, Soleira delivers two distinct lifestyle zones.

[smartcode_project:default project_id=150017 project_image_fid=372547]

The southern rooftop has been dedicated to wellness, featuring a gym, yoga and Pilates studio, work-from-home facilities, a wellness centre, spa, and hot and cold plunge pools.

The northern rooftop focuses on recreation and entertaining, incorporating a heated resort-style pool, private dining rooms, pizza ovens, barbecues, a golf simulator, children's recreation areas, and what is expected to be the Gold Coast's first rooftop basketball court, which will also double as a squash court.

[smartcode_project:default project_id=150017 project_image_fid=374054]

Beyond the rooftops, Soleira will introduce 1,500 sqm of curated retail beneath the towers, creating one of Palm Beach's first genuinely mixed-use lifestyle precincts where cafés, restaurants and convenience retail become part of residents' everyday lives.

Sherpa has also retained management rights across the development, allowing it to oversee the long-term operation of the building through a 24-hour concierge model. The developer is also exploring additional revenue streams within the precinct aimed at helping offset ongoing body corporate costs for residents.

[smartcode_project:default project_id=150017 project_image_fid=370962]

While Soleira is the largest project Sherpa has delivered, the rooftop-first philosophy has been evolving for several years.

It began with <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>, the first project released under the Flourish brand. Rather than competing at the ultra-luxury end of the market with oversized half-floor and full-floor residences, Sherpa focused on creating lifestyle-driven apartments supported by resort-style shared spaces.

Amargo introduced more than 800 sqm of rooftop amenity, combining wellness facilities, heated pools, entertaining areas, cabanas, pizza ovens and private dining spaces into what was designed as an extension of residents' homes rather than a facility used only occasionally.

[smartcode_project:default project_id=146527 project_image_fid=366550]

That approach continued with Flourish Oasis, where the same amenity-led philosophy was refined into a more boutique development. Strong demand from Sherpa's growing VIP database saw much of the project sold before it reached the broader market, reinforcing buyer appetite for apartment communities centred around shared lifestyle experiences.

Flourish Amargo is slated for completion mid-way-through next year, with Oasis to be delivered by late 2027. Flourish Soleira is expected to complete in 2030.

[smartcode_project_cta:default project_id=150017]

Sherpa takes amenity to the sky as Flourish Soleira captures booming Palm Beach demand

As apartment living continues to evolve across Sydney's growth corridors, the quality and distribution of shared spaces is increasingly shaping how residents experience home. Rather than functioning as add-ons, amenities are being embedded into the daily rhythm of a building, supporting everything from quiet retreat to social interaction, often within a single vertical community.

At <a href="https://www.apartments.com.au/new-apartments/aeris-melrose-park-nursery-street-melrose-park-nsw-2114">Aeris</a> in Melrose Park, this approach is resolved through a layered amenity offering that unfolds from ground level through to its upper podium. Developed by <a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> in partnership with Hankyu Hanshin Properties, the project introduces 468 apartments across two towers and a mid-rise building, positioned at the highest point of the broader masterplan.

[smartcode_project:default project_id=426 project_image_fid=359199]

The amenity experience begins at street level, where two courtyards sit within a landscaped setting that connects residents to the wider network of parks and green spaces. These green spaces are not isolated pockets but part of a wider pedestrian network that links Aeris to the surrounding <a href="https://www.apartments.com.au/developments/melrose-park-nsw-2114">Melrose Park</a> precinct, including Central Park, future schools, and the Town Centre opening in July 2026. The result is a transition that moves from public to private without abrupt boundaries, allowing residents to pass through shaded, tree-lined environments before reaching the building itself.

Moving upward, the focus shifts to the level five podium, where the primary communal facilities are concentrated. This space brings together a 16-metre swimming pool, outdoor seating areas, and a communal BBQ zone arranged to take advantage of elevated outlooks. Seating is positioned beneath pergolas, creating pockets of shade that extend the usability of the space throughout the day. The pool edge aligns with views toward the wider district, reinforcing the sense of elevation that defines the project’s positioning.

In the adjacent building, this is complemented by quieter, more contemplative spaces, including an outdoor cinema set within the same level. Positioned to operate primarily in the evening, it introduces a different tempo to the shared environment, shifting from daytime activity to after-hours use without requiring separate zones.

[smartcode_project:default project_id=426 project_image_fid=360299]

The podium also accommodates an intimate private resident gym. Located on the lower levels, it gives residents convenient access to fitness facilities without leaving the building.

Above, the elevated podium sky deck extends the amenity offering, providing additional open-air spaces with elevated outlooks across the surrounding landscape. While more restrained in program, this upper level reinforces the project’s vertical progression, from ground-level greenery to elevated outlook, allowing residents to move between distinct spatial conditions within a single address.

This distribution of amenities reflects a deliberate response to how residents use space across the day. Sekisui House Australia Sales and Marketing Director Peter Kalaf points to the role these shared areas play in shaping buyer demand. Aeris has been conceived as more than a collection of apartments, with the podium pool, gym and outdoor cinema forming part of a broader lifestyle offering that extends the home beyond each individual residence.

[smartcode_project:default project_id=426 project_image_fid=360300]

What distinguishes Aeris is not the inclusion of these elements individually, but how they are arranged in relation to one another. Active, social, and passive spaces are layered vertically rather than separated, allowing residents to choose between them without leaving the building or moving far from their apartment. This proximity supports both routine use, such as a morning swim or evening workout, and more occasional gatherings, whether around the BBQ area or within the cinema setting.

The amenity design also sits within a broader framework of connectivity across Melrose Park. The Melrose Park Town Centre, anchored by Coles and Dan Murphys, features a mix of retail, dining, health and lifestyle offerings, bringing everyday convenience closer to residents. By the end of the year, more than five hectares of parks and open space, equivalent to around seven football fields of green space on residents' doorstep, will further enhance the precinct, allowing the internal facilities at Aeris to operate as an extension of the wider neighbourhood rather than a substitute for it.

Construction at Aeris continues to gather momentum, with ground floor slabs expected to be completed in late 2026 before the first sections of the buildings begin to rise above ground.

[smartcode_project_cta:default project_id=426]

Elevated amenity anchors daily life at Aeris, Melrose Park

Rental market

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Rents are rising across Australia but slower than they were 12 months ago, according to the latest quarterly rental review by CoreLogic.
There has been a general slowdown in the rate of rental growth.
This trend is typical of the second quarter, which historically records a slower period for rental growth and appreciation than the seasonally strong first three months of the year.
CoreLogic research analyst Cameron Kusher said the first two quarters of 2018 have seen softer rental growth than the same two quarters of last year highlighting the slowing rental growth across the nation.
"With rental stock continuing to rise as off-the-plan unit settlements continue, it is anticipated that the softening rental growth will continue over the coming months.”
Click here <a href="https://www.propertyobserver.com.au/images/2018/7/5/CL%20QRR%20Graph%201.JPG" target="_blank">to enlarge.</a>
<img src="https://www.urban.com.au/images/2018/7/5/CL%20QRR%20Graph%201.JPG" alt="">
Across the nation, rents were 0.3 per cent higher over the second quarter of 2018 and 1.8 per cent higher over the 12 months to June 2018, less than half what it was over the same period in 2017, when rents climbed by 0.7 per cent.
Rental growth over the second quarter is slightly higher in the combined regions (+0.4 per cent) than in the combined capital cities (+0.3 per cent), and over the past 12 months, regional rents climbed 3.1 per cent compared to 1.4 per cent growth across the capitals.
In the second quarter, rents climbed in all capital cities except for Darwin (-1.0 per cent) and Sydney (- 0.3 per cent).
Hobart reported the highest quarterly rental increase (+1.9 per cent), followed by Canberra (+1.3 per cent).
Hobart was, across all the capitals over the past 12 months, reporting the highest growth in rental rates (+10.7 per cent) and Canberra was the next strongest performer (+4.5 per cent).
Rents climbed higher in all capital cities except Perth (-0.2 per cent) and Darwin (-1.7 per cent) over the past 12 months.
Click here <a href="https://www.propertyobserver.com.au/images/2018/7/6/rental%20rates.JPG" target="_blank">to enlarge.</a>
<img src="https://www.urban.com.au/images/2018/7/6/rental%20rates.JPG" alt="">
Over the past 10 years, national weekly rents for both houses and units have increased by 25.7 per cent.
House rents increased by 1.9 per cent over the past 12 months, while units increased by 1.7 per cent. 
The national median rent is $429 per week ($427 for houses and $434 for units).
The median house rental in the capital cities is $464 compared to $458 for units, while across the regions, both houses and units averaged $356 per week. 
Sydney continues to be Australia’s most expensive capital city to rent in, with a median rent of $583, compared to Hobart, which has one of the lowest average rents across all the capitals at $418 per week.
Adelaide ($375) has the cheapest weekly rent out of all Australian capital cities.
Click here <a href="https://www.propertyobserver.com.au/images/2018/7/5/CL%20QRR%20Graph%2045.JPG" target="_blank">to enlarge.</a>
<img src="https://www.urban.com.au/images/2018/7/5/CL%20QRR%20Graph%2045.JPG" alt="">
Rental yields have increased nationally by 0.6 per cent over the past 12 months to 3.7 per cent.
The average rental yield is 3.4 per cent across the combined capitals (+0.1 per cent).
In comparison, yields across the combined regions fell slightly (-0.1 per cent) to 4.9 per cent.
Annual rental yields increased in Sydney (+0.1 per cent), Darwin (+0.3 per cent) and Canberra (+0.1 per cent).
Click here <a href="https://www.propertyobserver.com.au/images/2018/7/6/RENTAL%20rates%202.JPG" target="_blank">to enlarge.</a>
<img src="https://www.urban.com.au/images/2018/7/6/RENTAL%20rates%202.JPG" alt="">
Yields remained unchanged in Adelaide, Brisbane and Melbourne, and declined slightly in Hobart (- 0.2 per cent) and Perth (-0.1 per cent).
Darwin has both the highest growth in rental yields (+0.3 per cent) as well as the highest yield (+5.7 per cent).
Hobart has the second highest yield (+4.9 per cent) followed by Canberra (+4.6 per cent).
Melbourne (+3.0 per cent) has the lowest rental yields, followed by Sydney (+3.2 per cent).
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j.ballantyne1990-6AQqhLzZaK

Rental prices climb, slower than last quarter: CoreLogic

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GUEST OBSERVATION
The rapid growth of the giant online accommodation-sharing platform, aka Airbnb, is creating serious concerns about equity and the impacts on our cities and neighbourhoods as we know them. Our recent research shows that the patterns of Airbnb listings in Australia’s biggest cities are highly uneven. The findings suggest impacts on rental housing are likely to be biggest in high-end areas that appeal to tourists. Low-income areas are less affected.
Our research – focusing on the Sydney and Melbourne metropolitan regions – looked into three important questions:
<ul>
<li>Where are the listings?</li>
<li>Who is hosting Airbnb?</li>
<li>What are the impacts on rental markets?</li>
</ul>
Where are Airbnb listings located?
The maps below show the distribution of Airbnb offerings in the Sydney and Melbourne metropolitan regions. These also show the composition of listings: entire (house/apartment, shown in red) versus partial (room only or shared room, in blue).
<img src="https://cdn.theconversation.com/static_files/files/114/animation_Syd.gif?1526600665" width="100%">
In Sydney (shown above), Airbnb offerings are mostly concentrated in popular tourist areas. Interestingly, partial house/apartment listings spread out more to the middle and fringe suburbs. Entire house/apartment listings are more concentrated around the city centre and eastern beaches.
<img src="https://cdn.theconversation.com/static_files/files/116/animation_Mel.gif?1526600836" width="100%">
We see a similar pattern in Melbourne (above). Airbnb listings aggregate around the city centre but also extend beyond the inner core to the residential outskirts. However, the composition of listings (entire versus partial) has less effect on their distribution in Melbourne than in Sydney.
Interestingly, the cities have very different Airbnb market sizes. The populations of the two regions are almost on a par, but Sydney has almost twice as many Airbnb listings as Melbourne. The difference in entire house/apartment listings is even greater.
Who is hosting Airbnb?
To understand who is participating on the Airbnb platform as host and who is not, we analysed Airbnb listings data against the Australian Bureau of Statistics Census-based SEIFA, the most widely used nationwide measure of socioeconomic status.
SEIFA is a suite of four summary measures created from Census information. For each index, every geographic area is given a SEIFA score. This shows how that area compares with others in Australia.
All areas are ordered from lowest to highest SEIFA score. This ranges from the lowest 10% of areas, which are given a score of 1, up to the highest 10%, with a score of 10.
Our analysis showed the sheer scale of inequity of Airbnb listings distribution. Over 95% of all entire house/apartment listings and about 87% of partial house/apartment listings (room only or shared room) in Sydney are in the socio-economically best-off areas (SEIFA deciles 9 and 10).
Airbnb offerings in Melbourne follow a similar pattern. Over 80% of entire house/apartment listings and about 70% of partial house/apartment listings are found in the best-off areas.
Our data analysis establishes that Airbnb hosting mainly occurs in the most affluent pockets of both regions.
What are the impacts on the rental market?
We also looked at the ratio of the size of the rental market to the size of Airbnb listings with specific attention to the socioeconomic status (using SEIFA) of each local government area in Melbourne and Sydney. This produced a few interesting observations, which help illustrate how local long term rental housing stock is, or could be, lost by conversion to Airbnb short-term listings.
In Sydney, there are no low socio-economic areas (SEIFA scores of 1-5) with high numbers of rental dwellings that also have high numbers of entire house/apartment Airbnb listings. This means that, to date, Airbnb is not displacing the rental stock in the most disadvantaged pockets of the Sydney metropolitan region.
Nevertheless, in a small number of high socio-economic areas (SEIFA scores of 8-10), the Airbnb market (entire listing only) represents sizeable proportions of the rental market. For the beachside location of Waverley (decile 10), for example, the number of Airbnb entire listings is almost equivalent to a quarter of the number of rental dwellings. Similarly, in Manly and Pittwater (both 10), Airbnb entire home listings are about 20% of the rental market size.
In other words, considering the very small size of Airbnb in comparison to the total rental market in Sydney – less than 3.5% – the overall impact can be expected to be minimal. However, the impact is not equally distributed, either geographically or socio-economically.
Indeed, the impact of Airbnb on the rental market is of concern in a limited number of areas in Sydney, mainly strategic tourism locations such as beachside areas. Although these are at the highest end of socio-economic spectrum, there is a danger of some local residents being pushed out of the most sought-after areas so tourists can move in.
The pattern in Melbourne is slightly different or, in a sense, less intense than in Sydney. Again, the general trend of high Airbnb listings in high socio-economic areas is observed.
The Melbourne CBD, which has a SEIFA score of 8, has the most Airbnb entire house/apartment listings. These listings represent the highest proportion, about 8%, when compared to the size of the local rental market. The pressure on the rental market, then, is far less than what we see in popular Airbnb spots in Sydney, such as Waverley, Manly and Pittwater.
We also see in Melbourne that popular rental areas in lower SEIFA areas have low numbers of entire house/apartment Airbnb listings. This confirms the Sydney hypothesis that the loss of rental supply is not yet a major concern at the lower end of the rental market.
The patterns we observed suggest that the pressure Airbnb puts on the rental market – at least at this point of time – is limited to a small number of high-end areas, mainly locations that are attractive to tourists. This represents a concern in terms of rental supply in these areas, where some local residents in the long-term rental market might be losing out to the short-term tourism market.
Tooran Alizadeh, Senior Lecturer, Director of Urban Design, University of Sydney
Reza Farid, Adjunct Research Fellow, Griffith University
Somwrita Sarkar, Senior Lecturer in Design and Computation, University of Sydney
This article was originally published on <a href="http://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/airbnb-whos-in-whos-out-and-what-this-tells-us-about-rental-impacts-in-sydney-and-melbourne-95865" target="_blank">original article</a>.
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What is Airnbn's impact on rental markets?

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Perth rents increased by 1.7% over the March 2018 quarter however, they were -1.3% lower over the past 12 months, say CoreLogic. 
Rents in regional Western Australia were unchanged over both the quarter and the past 12 months. Gross rental yields currently sit at 3.92% in Perth and 5.64% in regional Western Australia, a year ago they were recorded at 4.00% and 5.43% respectively.
Although rents increased across each of Perth’s SA4 regions over the first quarter of this year, rents were also lower in most regions over the past year. The one exception was the Inner region. Mandurah is the only region in which rental yields were unchanged over the year, all other Perth regions have recorded a moderate fall in rental yields.
Two of the four regional SA4 regions recorded a fall in rents over the quarter while two regions recorded annual falls. Interestingly, the regions that recorded quarterly rental falls were not the ones to record an annual fall. In all regional markets except for Bunbury, where yields have softened over the year, rental yields have increased over the past 12 months.
<a href="https://www.propertyobserver.com.au/images/2018/4/18/WA%20.jpg" target="_blank">Click here to enlarge:</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/4/18/WA%20.jpg" alt="">
A Mandurah three bedroom house currently on the rental market is priced at $280 a week (pictured top).
<a href="https://www.realestate.com.au/property-house-wa-mandurah-423546478" target="_blank">Located at 12 Clarice Street</a>, the house features three bedrooms,  separate lounge, and  enclosed sun room to rear.
Opposite to the Forum Shopping Centre, it is close to train station and all amenities. 
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Moderate falls in Western Australia rental yields the norm: CoreLogic

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Rental rates in Brisbane increased by 1.1% over the first quarter of 2018 compared to a 1.2% increase in rents across regional Queensland.
Brisbane rents were just 0.6% higher over the past 12 months compared to a larger 2.8% increase across regional Queensland, CoreLogic noted.
Gross rental yields in Brisbane have moved marginally lower over the past year from 4.42% to 4.4%.
Outside of Brisbane, rental yields have increased from 5.24% a year ago to 5.27% currently.
Each SA4 region of Brisbane recorded a quarterly increase in rental rates, while over the past year, rents fell across two of the nine Brisbane SA4 regions.
Rental rates have increased at a similar pace to value which has resulted in seven of the nine Brisbane SA4 regions recording no change in rental yield over the past year while they reduced across the remaining two regions.
The housing market performance is much more mixed in regional Queensland however, values have only fallen over the quarter in two regions and in one region over the past year.
Of the 10 regional markets, six have higher yields than a year ago, two have unchanged yields and two have lower yields.
<a href="https://www.propertyobserver.com.au/images/2018/4/18/QLD%20.jpg" target="_blank">Click here to enlarge:</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/4/18/QLD%20.jpg" alt="">
A Brisbane inner city riverfront apartment on the rental market is priced at $520 a week (pictured below).
<a href="https://www.realestate.com.au/property-apartment-qld-brisbane+city-418063250" target="_blank">The 1604/100 Quay St apartment</a> features two generous bedrooms, modern kitchen and inground pool.
Extra features include ceiling fans, air conditioning and terrace balcony.
Within the walking distance to city, it is only a few minutes to the Palace boutique shopping and restaurant hub.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/4/18/quay%20st.jpg" alt="">
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Inner city Brisbane rents in mild decline: CoreLogic 

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Rental prices varied across Australia’s capital cities over the March quarter, with most showing either increased or flattened growth, according to Domain’s Quarterly Rental Report.
Sydney and Brisbane house rents, and Perth unit rents remained flat over the quarter.
Only Canberra house rents, and Darwin house and unit rents recorded a decline over the quarter.
“Stricter lending standards and varied economic activity within each capital city continued to produce different market conditions over the March quarter,” said Domain's Dr Nicola Powell. “Hobart was by far the stand-out city this quarter, delivering the only double-digit annual growth for both house and unit rents.
"Looking forward, as tighter lending conditions and serviceability requirements impact investors’ ability to secure finance, they may set their sights on more affordable markets.
"Regardless of where they fall on the affordability spectrum, tenants in most capital cities continue to face highly competitive rental markets.”
Click here <a href="https://www.propertyobserver.com.au/images/2018/4/11/Domain%20March%20Qtr%202018%20-%20House%20Rent%20Table_preview.jpg" target="_blank">to enlarge.</a>
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Gross rental yields for units increased in every capital city over the March quarter. Canberra was the only capital city to record a decline in gross rental yields for houses. Hobart was the top performer for house rental yields at 5.15%, followed closely by Darwin at 5.06%. Darwin and Canberra were the top performers for unit rental yields, at 5.89% and 5.84% respectively. Sydney and Melbourne continued to deliver the weakest gross rental yields for houses and units. 
Capital city markets 
<ul>
<li>Sydney</li>
</ul>
Median weekly house rents in Sydney remained stable over the March quarter at $550 per week. House rents also remained flat over the year.  Sydney unit asking rents increased 0.9% over the March quarter to $550 per week. While the final quarter of 2017 saw a rental price decline for units, median weekly unit rents are now back on par with house rents, a trend that first appeared in 2017. Sydney continued to record the highest weekly median house and unit rents of all capital cities over the March quarter. “Sydney’s unit rental growth over the March quarter is particularly noteworthy, although it may be a result of the season as students and professionals relocate for work and study. It may also indicate that some prospective investors are struggling to settle on off-the-plan purchases under current lending requirements. “Stricter lending standards could impact the market further, resulting in decreased investor activity and a tighter rental market. However, with building completions tracking to record highs, rental pressure may begin to alleviate in the coming months if the lending criteria is met by investors,” said Domain Data Scientist, Dr Nicola Powell.
<ul>
<li>Melbourne</li>
</ul>
Melbourne’s rental conditions continued to strengthen during the first quarter of 2018, with median weekly house and unit rents reaching record highs.  House rents increased 1.2% over the March quarter to reach $430 per week, an annual increase of 2.4%. Following two consecutive quarters of unchanged growth, median unit rents in Melbourne increased 2.5% over the quarter and 3.8% over the year, reaching $410 per week.  “Melbourne’s rental market continues to climb, likely a result of the city’s rapid population growth helping to create a fiercely competitive rental market. Although the value of building completions has been at record highs over the past few years, the faster than anticipated population growth has helped to absorb available rental supply. If investor activity continues to retreat in line with tightening lending requirements rental stock may further deplete,” said Domain Data Scientist, Dr Nicola Powell.
<ul>
<li>Brisbane</li>
</ul>
Median weekly house rents in Brisbane remained stable over the March quarter at $400 per week, a 1.2% year-on-year decline. Despite the lack of growth, Brisbane’s house rents delivered the third highest gross rental yields of all Australian capitals over the March quarter. Unit rents in the Sunshine State’s capital improved for the first time in a year, jumping 1.4% over the March quarter to reach a weekly median of $375. “Brisbane remains a tenant’s market, and the city’s increased unit stock is providing tenants with greater choice. This means tenants are likely to shift toward newer apartments and use bargaining power to negotiate lower rents. The added unit stock has had a strong impact on both unit and house rental conditions, as rental prices fall year-on-year. “While all signs point to a decrease in investor activity in the coming months, Queensland has the highest internal population flow in Australia, which may improve rental demand and help to turn the tide in favour of investors,” said Domain Data Scientist, Dr Nicola Powell.
<ul>
<li>Canberra</li>
</ul>
Following a record high achieved last quarter, Canberra’s median weekly house rents fell 1.9% to $530 over the March quarter, the first negative quarterly movement since September 2014. However, median house rents in Canberra recorded a 6% year-on-year increase, the second highest annual growth of all capital cities. Weekly unit rents in Canberra increased for the second consecutive quarter, reaching a median of $450, reflecting a 4.7% quarterly jump and an annual increase of 5.9%. Unit rents in Canberra achieved the highest gain of all capital cities over the quarter, and are now back on par with the city’s all-time high achieved in December 2011. “Units are the biggest sector of Canberra’s rental market, and the drop in house rents over the March quarter may be a reflection of the type and quality of rental stock leased in Canberra during the first quarter of the year. “Despite booming development activity, Canberra’s annual house and unit rental price movements have been on the incline since 2015, suggesting weakened investor activity and increased demand in the region. It remains to be seen whether rates and land tax increases, coupled with changes in lending standards and serviceability, will further tighten Canberra’s rental market this year,” said Domain Data Scientist, Dr Nicola Powell.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/4/11/Domain%20March%20Qtr%202018%20Rental%20Report%20-%20Asking%20Rents%20QOQ%20Graph_preview.jpg" alt=""> 
<ul>
<li>Hobart</li>
</ul>
Median house rents in Hobart reached a record high of $420 per week, a 6.3% increase over the quarter and a remarkable 15.1% year-on-year growth. This reflects Hobart’s highest annual growth on record for houses, as well as the highest annual increase of all Australian capitals this quarter. Likewise, Hobart’s unit rents also reached a record high median over the quarter, jumping 2.9% to reach $350 per week. Annually, median weekly unit rents in Hobart spiked 14.8%, the strongest annual performance of all capital cities. Hobart was the only capital city to deliver double-digit annual growth for both houses and units. “Surging population growth across Tasmania has driven strong economic performance in Hobart and contributed to another impressive quarter of rental market activity. Annually, unit rents in the Tasmanian capital have been on the uptick since December 2013, and median house rents are now only $10 behind Melbourne. “Further rental growth in Hobart is dependent on a rise in supply, as recent building approvals and affordable housing proposals offered by the Tasmanian government start to take shape. The availability of affordable rental stock is key to loosening Hobart’s rental market,” said Domain Data Scientist, Dr Nicola Powell.
<ul>
<li>Perth</li>
</ul>
The median weekly house rent in Perth grew 1.4% to $355 over the March quarter, marking the first quarterly growth in almost five years. However, house rents in Perth fell 4.1% year-on-year and have continued to decline annually since 2014, although the rate of fall has eased. Weekly unit rents in Perth remained flat over the quarter and over the year, sitting at a median of $300 per week. This follows four consecutive quarters of no price movement for the Western Australian capital.  “Following a prolonged period of price declines and a rise in listings, the rental market in Perth is showing signs of stability.  “Perth remains the most affordable rental market for houses and one of the most affordable rental markets for units, and its recent rise in gross rental yields may start to entice investor activity in the coming months,” said Domain Data Scientist, Dr Nicola Powell. 
<ul>
<li>Adelaide</li>
</ul>
Following two quarters of consecutive growth, median house rents in Adelaide jumped 1.4% over the March quarter to $375 per week, a record high in the South Australian capital. This reflects an annual increase of 4.2%. Weekly unit rents reached $300 for the first time over the March quarter, following a quarterly and annual increase of 1.7%. “Adelaide continues to show consistent rental market growth over the March quarter. While economic conditions in Adelaide are softer than other markets, the affordability and gross yield potential may entice investor activity in 2018,” said Domain Data Scientist, Dr Nicola Powell. 
<ul>
<li>Darwin</li>
</ul>
The median weekly rental price for houses in Darwin fell 3.6% both over the March quarter and over the year, dropping to $530. Despite the decline, weekly house rents in Darwin are the second highest of all capital cities after Sydney, and on par with Canberra. Weekly unit asking rents in Darwin also decreased over the March quarter, falling 1.2% to $410, a 2.4% annual decline.  “As in previous quarters, Darwin’s rental market continues to deliver strong yields for both houses and units, with Darwin’s unit market yields the highest of all capital cities this quarter. “Rental stabilisation depends on the overall economic health of the region. Darwin’s rental market continues to be affected by the local economy, shifts in investments, and population changes, which is reflected in the capital city’s decline in median rental price,” said Domain Data Scientist, Dr Nicola Powell.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/4/11/Domain%20March%20Qtr%202018%20Rental%20Report%20-%20Asking%20Rents%20YOY%20Graph_preview.jpg" alt="">
 
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Sydney and Melbourne weakest for gross rental yields: Domain Rental Report

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Rental markets appear to be easing, with weekly rents rising 1.1% over the March 2018 quarter compared with a growth rate of 1.5% over the March 2017 quarter. 
This slowing trend in rental growth is evident across five of the eight capital cities including Sydney, Melbourne, Adelaide, Darwin and Canberra, according to CoreLogic.
 On an annual basis, Sydney is the only capital city where weekly rents are increasing at a slower rate relative to the same period a year ago. 
CoreLogic's Tim Lawless attributes the slowdown in rental conditions to the combination of record levels of new dwelling construction over recent years, higher than average levels of investment which supports the introduction of rental stock, and diminished rental demand as more first home buyers become active in the housing market.
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He said with dwelling values slipping lower across most cities, and rents gradually tracking higher in most markets, rental yields have seen some upwards pressure - albeit from a low base in some cities. 
Darwin remains the highest yielding capital city.
Despite a 1.6% fall in weekly rents across Darwin over the past twelve months, gross rental yields (5.8%) remain the highest of any capital city due to the fact that dwelling values are falling at faster rate than weekly rents. Hobart is also showing a high gross rental yield profile, averaging 5.0%. 
Weekly rents were up 11.7% across Hobart over the past twelve months, which is a slightly lower rate of growth than housing values; as a consequence, Hobart yields remain high but have trended lower over the year.
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The lowest gross rental yields remain in Melbourne at 2.93%; only marginally higher than the record low of 2.88% set in November last year. With the 3.9% fall in Sydney dwelling values since July last year, gross rental yields have slowly pushed higher to reach 3.2% at the end of March, up from a recent record low of 3.0% in July 2017. 
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Rental market rises appear to be easing: CoreLogic

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Hobart continues to take the baton from Sydney and also Melbourne as the nation's hottest housing market. 
The Sydney median unit rental price has dropped back from its peak, falling back below median house rental prices for the first time in six months.
House rental prices in Melbourne were up 1.2 per cent over the quarter, hitting a new high.
But Hobart has had the  strongest annual growth in house rental prices on record, surging 12.9 per cent.
Both unit and house rental prices rise in Canberra and Hobart. House rental prices remain steady over the quarter in Sydney, Brisbane and Perth.
Canberra, Darwin, and Hobart deliver strongest unit yields for investors.
Brisbane, Darwin, Hobart deliver strongest house yields for investors.
Domain December Rental Report <img src="https://gallery.mailchimp.com/b16c0b957ea98f662ab985606/images/c061336a-9e53-4b7b-92b0-d1702698537a.png" width="600" height="597">  
Rental prices for the December quarter demonstrated that Australia’s capital city markets are operating on different property cycles, as Sydney unit rental prices ease slightly, while Canberra and Hobart markets continue to grow, according to Domain’s quarterly Rental Report.
"Prices in Australia's rental market are mixed, with varying levels of population growth, residential construction and investor activity producing different market conditions across the nation's capital cities.
“There were diverse changes in median rental prices across the capital cities over the quarter. While many markets held steady, there were also capitals with a growth in median asking rental prices. Canberra and Hobart, two cities at opposite ends of the affordability spectrum, saw the greatest price growth. Even though there’s a distinct gap in their median rental prices, it’s clear that tenants in both cities are facing a competitive rental market,” said Domain Data Scientist, Dr Nicola Powell. 
Rental yields
For investors, Hobart continues to provide the best gross rental yields for houses with 5.34 per cent recorded over the December quarter. Sydney and Melbourne continue to record the lowest gross rental yields for houses of all capital cities, sitting at 3.08 per cent and 3.20 per cent respectively.
Canberra is the top performer for gross unit rental yields, recording a result of 5.80 per cent over the quarter, closely followed by Darwin at 5.67 per cent and Hobart at 5.52 per cent.  
Capital city markets  
Sydney
Median weekly rental prices for units in Sydney’s competitive rental market decreased over the quarter, with median rental prices falling 0.9 per cent to $545 per week. The $5 drop makes unit rental prices lower than house rental prices for the first time in two quarters. Despite the quarterly decline, median unit rental prices are 4.8 per cent higher than the same time last year.
Median house rental prices remained steady over the quarter at $550 per week. House rental prices have seen no price movement for three quarters and have grown only 1.9 per cent year-on-year.
“If investor activity continues to decline in Sydney it could tighten the rental market in 2018. However, the value of building completions is reaching a high, providing a boost to unit rental stock.
“The trend is likely to continue over the coming months, as stock from off-the-plan sales comes onto the market. This could provide tenants with a greater choice in certain pockets of Sydney,” said Domain Data Scientist, Dr Nicola Powell.  
Melbourne
Median weekly house rental prices gained 1.2 per cent over the December quarter and 3.7 per cent year on year, to a new record high of $425 per week.
Median unit rental prices in Melbourne have increased 5.3 per cent annually to $400 per week, and remained steady over the quarter. A difference of $25 now exists between house and unit rental prices, with price gains growing more rapidly for unit rental prices than house rental prices. If this rate continues, prices may eventually be on par, mirroring the trend previously seen in Sydney.
“As the impact of tighter investor lending continues to unfold it is likely to drive competition for available rental stock. The capital’s soaring population, spiked by all three population drivers (natural increase, overseas and interstate migration) and less available rental stock will put additional pressure on rental prices,” said Domain Data Scientist, Dr Nicola Powell.  
Brisbane
Brisbane house rental prices remained stable at $400 per week over the December quarter. It was the only capital city market with no change to house rental prices both over the quarter and over the last 12 months.
Median unit rental prices decreased 1.3 per cent over the year, however prices held steady over the quarter at $370 per week.
“It has been roughly half a decade since investors in Brisbane saw a significant growth in rental prices. Prices in the capital have continued to be impacted by high levels of unit development giving landlords little ground to raise rental prices,” said Domain Data Scientist, Dr Nicola Powell.  
Adelaide
Adelaide’s median house rental prices grew 2.8 per cent over the December quarter and the year, reaching $370 per week. The quarterly growth was the first gain for Adelaide house rental prices following three quarters of prices holding steady.
Median unit rental prices in Adelaide remained flat over the December quarter, at $295 per week. Adelaide is the most affordable rental market of all the capital cities, despite a 1.7 per cent gain year-on-year.
“Adelaide continues as a relatively steady market, with units delivering stable returns for investors in the market. Available house stock has now tightened for three consecutive quarters providing a short term pressure and growth in median rental prices,” said Domain Data Scientist, Dr Nicola Powell.
 
Perth
Median house rental prices in Perth held steady this quarter at $350 per week. The median rental price fell 5.4 per cent over the year, but the rate of decline is now easing.
Median unit rental prices were also stable over the December quarter, at $300 per week. The median has now held flat for four consecutive quarters, which is the longest period of quarterly stability in Perth’s rental price history (recorded since 2004).
“Perth continues to be one of the nation’s most affordable rental markets and was the only capital city with an annual decline in house rental prices.
“While falling rental prices have become the norm over recent years, the rental market has begun to show signs of transitioning conditions, with hefty declines in rental prices no longer being recorded in Perth’s unit market. Investors in the capital have also seen an annual growth in rental yields for houses,” said Domain Data Scientist, Dr Nicola Powell.  
Canberra
House rental prices in Canberra increased 5.9 per cent over the quarter to reach a new record of $540 per week. Prices are 8.0 per cent higher than this time last year, making the nation’s capital the second strongest market for house rental prices growth.
Canberra was one of the two capital cities with growth in median unit rental prices over both the quarter and year, up 2.4 per cent to $430.
“The healthy quarterly gain in Canberra has helped to push up gross rental yields for units to 5.80 per cent, the highest yielding output of all the capital cities.
“Affordability remains a key issue for Canberra tenants. It is the third most expensive capital city for house rental prices and second for units. If stricter investor lending hits rental stock in the year ahead, it could lead to a further growth of rental prices in an already expensive market,” said Domain Data Scientist, Dr Nicola Powell.  
Hobart
Over the December quarter, Hobart median house rental prices had the highest rate of growth on record for the city. House rental prices increased 6.8 per cent over the quarter and 12.9 per cent year-on-year to $395 per week. This is an astounding $45 increase compared to the same time last year.
Hobart was the only capital city to reach double-digit annual growth in house and unit rental prices. Median unit rental prices grew 6.3 per cent over the quarter and a whopping 13.3 per cent annually, to $340 per week.
“Hobart currently has strong levels of migration and not enough rental supply to keep pace. Investors are reaping the highest gross rental yields for houses out of all the capital cities at 5.34 per cent and the third best for units at 5.52 per cent, falling just behind Canberra and Darwin,” said Domain Data Scientist, Dr Nicola Powell.  
Darwin
Darwin’s rental market had a strong quarter of growth in house rental prices, with an increase of 5.8 per cent, setting median weekly rental prices at $550. This growth makes Darwin, alongside Sydney, the most expensive city in which to rent a house in Australia.
Median unit rental prices grew 3.8 per cent over the quarter to $415, with units in Darwin producing the second highest rental yields of all the capital cities at 5.67 per cent.  Overall, unit rental prices for the capital city have fallen, decreasing 5.7 per cent over the year.
“Economic health, investment and population fluctuations have a large impact on the Darwin rental market. This quarter, house rental prices had the strongest growth rate in five years. Units continue to provide high yielding outputs for investors and in the year ahead, it’s likely we will see unit supply levels continue to affect unit values and gross yields,“ said Domain Data Scientist, Dr Nicola Powell.
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jonathanchancellor-7SQnKwU6yx

Sydney median unit rental prices drop below median for houses: Domain rental report

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Established world city real estate markets are going to see lower capital growth in the next decade as interest rates rise, so income will be the key reason for investing, according to a new report from Savills.
The real estate firm has identified cities which are resource rich, young and fast-growing, economic powerhouses or at low risk of natural disasters as ones to watch for the next decade.
According to its maiden publication, report, Impacts: the future of global real estate, Savills says the ability of cities to attract people and talent pools will be a key indicator of income security in the next 10 years.
Savills has analysed rental growth in different real estate sectors in world cities and plotted where each stands on the new Savills rental wave.
It identifies cities and sectors which investors may want to take look at more closely for security of income and potential rental growth.
<ul>
<li>Prime office growth has been highest in San Francisco (+99%), Shenzhen and Beijing (both +71%) and London West End (+69%) since 2008. This leaves these city sectors near the top of the rental curve: in late upswing, on a high plateau or in early downswing.</li>
<li>In Singapore, double digit falls have been seen in prime offices (-26%), residential (-25%) and prime retail (-15%), leaving these sectors in or near the trough of the rental wave.</li>
<li>Hotels in Shanghai, prime industrial in Melbourne and Shenzhen residential are examples of early-stage rental growth in the current cycle suggesting further potential, but investors may face tough competition and high prices for assets in these markets.</li>
<li>Shenzhen has experienced the most rental growth in residential since the end of 2008 (+82%).</li>
<li>New and growing economic powerhouse Jakarta is near the end of the late downswing phase of the cycle and potentially offers high rental growth, but with the greater risk of a young market in an emerging economy.</li>
<li>Established investment classes in world cities, e.g. prime offices in cities like London, Tokyo and San Francisco are at the top of the wave but may offer a safe harbour for investors as rents could remain on a ‘high plateau’ for some time.</li>
</ul>
“If the 50 years of real estate investment before 2007 were about capital growth and the post GFC decade about survival and riding the recovery, the next ten years and beyond will be about security of income in a low interest rate world, with investors increasingly shifting their focus towards rental markets in world cities,” says Yolande Barnes, head of Savills World Research.
“Whether investors are looking for capital growth or stable income streams, the behaviour of rental markets is key”, says Barnes. “Rents don’t lie; they’re a function of two market fundamentals: occupier demand – put simply, where people want to be - and supply conditions. In many global investment markets, there is very little scope for further yield compression so capital growth can only come with rental growth.”
Investment funds are increasingly focused on how to pay pensions to ageing populations in advanced countries. This is a permanent shift, made more urgent in a low inflation, low interest rate era, and increases focus on the quality of income, says Savills.
By contrast, in more emerging economies, notably across China, investors are still in the phase of needing to grow portfolios, so can take advantage of growth opportunities in riskier markets. Investors need to understand the risks posed by economic trends, new technology, social change, natural threats and resource scarcity, and how these impact different real estate sectors at a city, as well as world region, level.
<a href="https://www.propertyobserver.com.au/images/2017/12/4/SavillsRentalWatch.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/12/4/SavillsRentalWatch.png" alt="">
<h3 class="p1">Understanding where cities sit in the rental cycle</h3>
The report introduces the Savills Rental Wave, which describes all possible stages of rental growth. Cities in the ‘early upswing’ are described as ones for investors to watch as they have scope for further rental growth, but Savills warns that intense competition for stock may lead to yield compression and high prices in some locations, while others are difficult for international investors to access.
On the basis of rental growth alone, Singapore appears poised for investment in many sectors, Jakarta and Perth in prime offices, Shenzhen for residential and prime retail, Shanghai for hotels, and Melbourne for prime industrial, but some of these cities are expensive and some sectors have already seen heavy investor activity pushing yields down.
In Melbourne, Savills Industrial Director for the South-East suburbs, Lynton Williams said there was an expectation that the market would start to show signs of rental growth as the significant rise in land values was factored into new developments.
“Industrial land values have doubled throughout the past five years, and rent levels for new buildings in the size range of 1,500sq m to 4,000sq m are moving up to between $95 and $100 per sq m,” he said.
“For larger buildings, particularly existing buildings more than 5,000sq m, the rental growth will be more muted until the current supply is leased up.”
Singapore prime office rents are still on average -26% below their 2007 level, says Savills, but Chinese investor demand for Singaporean assets has continued to suppress yields.Investor appetite reflects the expectation that the city could potentially become the region’s lead economic powerhouse.
Many core, world city residential real estate markets are heavily concentrated in the ‘late upswing’ phase, including London mainstream, Berlin, Sydney, Melbourne, Beijing and Tokyo, while Frankfurt and Shanghai are on the cusp of a ‘high plateau’. In this group, the highest residential rental growth of the past ten years has been in mainstream residential lettings in Shanghai (59%) and Sydney (57%) while European listings have also been strong since 2008, with Berlin up 53% and Frankfurt up 42%.
<h3 class="p2">Australia’s Property Market – front and centre on the world radar</h3>
According to Paul Craig, CEO, Savills Australia and New Zealand, Australia is very much on the world radar when it comes to property investment, with unique global drivers that are sometimes better understood by overseas investors than their domestic counterparts.
“While the price of Sydney CBD office assets, for example, has reached a level that is concerning to some, it must be remembered that Australia’s population is expected to grow by 8 per cent in the coming five years, according to the IMF, a level circa triple the average of developed peers,” he said.
“When these drivers are coupled with inherent supply restrictions, the drivers for outperformance are apparent to many.”
Throughout the past decade, the assets of Australian superannuation funds has doubled, the population in Sydney’s inner region has grown 26 per cent yet office stock in the CBD core has decreased by 4.3 per cent.
Craig said this is one example of a demand and supply dynamic that is almost without peer globally so it can appreciated why there has been a material uplift in demand from overseas purchasers in recent years.
“With Savills having three significant CBD campaigns in Melbourne and Sydney in the past few weeks, the capital expressing interest in the Australian market is becoming even more geographically diversified, signally a very wide global interest,” he said.
“While lacking the supply hindrances evident in Sydney, Melbourne’s demand drivers at present are a standout on the world stage, with population up more than 2.4 per cent over the past year, with employment rising 3.1 per cent and GDP growth of 3.9 per cent. Such demand drivers also cement the Melbourne market as a hotspot on the global stage.”
A high plateau positioning should not necessarily discourage investors, Savills says. The combination of economic stronghold and relative economic and political stability can augur well for those more concerned with stable and secure incomes than rental-driven capital growth in sectors such as prime offices in London, Tokyo and San Francisco or budget hotels and retail in Tokyo.
Savills Melbourne’s director for CBD &amp; Metro Sales, Clinton Baxter, said nowhere was this trend more pronounced than in Australia, or more specifically, in Melbourne.
“Throughout the past 10 years, Melbourne has benefitted from a phenomenal flight of capital from Asia seeking economic, political and capital stability, plus the benefit of competitive income returns,” he said.
“Melbourne protects the income and capital of global investors by a unique combination of stability supported by ongoing massive population growth resulting from its liveability, ongoing ‘Asianisation’, and first-class education and employment opportunities.”
Baxter said that as an ever-increasing number of foreign investors sought to invest in Melbourne’s growth story, values had increased and yields had correspondingly sharpened as a result of the incredible buying power of such investors, particularly those from Asia. 
“We only need a small increase in percentage terms of foreign buyers to have a profound positive impact on pricing and values in our markets,” he said.
“Areas favoured by Asia-based investors include the Melbourne CBD, Box Hill, Doncaster and Glen Waverley, where values of all forms of real estate have increased dramatically in the past five years due almost entirely to the impact of huge volumes of foreign capital.”
By contrast, high rental growth prospects likely come with far greater risk, for example Jakarta (where the metro population is forecast to exceed Tokyo’s by 2027, but whose real estate markets are still small and relatively immature on the world stage) or Shenzhen which is relatively inaccessible to many foreign investors but one of the most youthful and fast growing cities in the world.
“To correctly understand real estate risk, it’s imperative that investors understand markets at a city, and even a neighbourhood level and how that applies to each individual real estate sector. Rental growth prospects do not necessarily indicate a ‘buy’ status, particularly if the price is too high, or if an injection of new supply could tip a sector into oversupply and a rental double-dip,” continues Barnes.
<h3 class="p2">Youthful cities tipped for growth</h3>
Understanding social change is essential. Cities with youthful populations are more likely to be centres of higher education, magnets for skilled migration and catalysts for innovation and economic growth. Rental growth will follow, Savills says.
The firm has earmarked key cities in each world region where the Gen Z (15-34 year olds in 2027) to Gen X (50-69 year olds in 2027) ratio is forecast to be highest within the next decade, which include Shenzhen, Jakarta, Auckland and Austin.
<h3 class="p2">Savills cities to watch – measuring future occupier risk</h3>
Cities which rank as ‘economic powerhouse’ or ‘youthful’ are likely to offer a substantial variety of future opportunities for investors, says Jeremy Bates, head of Savills Worldwide Occupier Services. “The biggest asset in any nation’s economy is its people. But competition is intense for talented workforces in developed countries with ageing populations, while emerging economies are nurturing an increasing number of young people.
“New generations will drive occupier demand for certain types of buildings and locations. This will potentially lead to a shift in what constitutes a quality ‘covenant’ with buildings let on short leases to a deep pool of small local businesses potentially finding the most favour with investors as sources of reliable income.”
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Savills on rent watch as world city risk changes 

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Most rental markets in regional Queensland saw a general tightening in the September quarter as more job opportunities arise, while Brisbane LGA and Greater Brisbane eased slightly, according to the REIQ’s latest vacancy rate data.
Overall, Brisbane LGA moved from 3.3 per cent to 3.6 per cent, just crossing into weak territory. The Brisbane inner ring (0-5km) edged over from a healthy 3.5 per cent last quarter to a weak 3.7 per cent this quarter. The middle ring (5-20km) eased from 3.1 per cent to 3.4 per cent, which is still a healthy rental market. 
REIQ chief executive Antonia Mercorella said the Brisbane LGA rental market was easing slightly, as expected supply levels come online. 
“Brisbane has undergone an incredible transformation, with unprecedented levels of apartment supply coming onto the market in the inner and middle rings over the past few years,” said Mercorella.
“We are starting to see the impact of that supply as it finally catches up to high levels of pent-up demand.
“We are confident that this will be brief because Queensland’s population is continuing to grow, particularly in the southeast corner, and growing population means growing demand for housing.” 
In regional Queensland, the number of weak markets fell to six from 10 in the previous quarter. 
“These markets are showing the green shoots of recovery and there is reason to be optimistic about the future of the property market in regional Queensland,” she said.
<a href="https://www.propertyobserver.com.au/images/2017/10/25/REIQ.png" target="_blank">Click to enlarge</a>
 <img src="https://www.urban.com.au/images/2017/10/25/REIQ.png" alt="">
Gold Coast’s vacancy rate eased by 0.2 percentage points to 1.9 per cent. This market remains in the tight range with demand for rental accommodation outstripping supply. 
The Sunshine Coast SD (incorporating Noosa and the Sunshine Coast LGA) is a similarly tight market, at 1.4 per cent. Caloundra Coast is the tightest market in the state, with vacancies at just 0.6 per cent. 
“Tenants may struggle to secure rental accommodation in this region and it is fair to say this area would benefit from additional supply being built to help improve market conditions,” she said. 
The Fraser Coast also tightened to 2.2 per cent. 
Regional markets of Mackay and Rockhampton experienced the largest improvements, with vacancies falling 1.7 percentage points each. 
Mackay has moved from the weak range, with vacancies at 4.5 per cent last quarter, into the healthy range this quarter with vacancies at 2.8 per cent. 
“This is a reflection of generally improving conditions in Mackay, and local agents have been telling us all year that this market is on the move. We are seeing evidence of this in rental data and also with the recent quarterly sales data,” Ms Mercorella said. 
“We see confidence returning to the market and this is encouraging. We’re optimistic these improving conditions will continue,” she said. 
Rockhampton has reported its second consecutive quarterly fall to reach 5.5 per cent. This market is still operating in weak conditions, however, the trend is positive. 
“We are hoping to soon see signs that this market is stabilising. It is encouraging to see vacancies falling and local agents reporting improving levels of demand for rental properties,” Mercorella said. 
Livingston is reporting similar vacancy levels, at 5.6 per cent. Apart from Gladstone, which has vacancies of 5.7 per cent, Livingston has the highest vacancy rate in Queensland. 
“The good news is that in one quarter, Livingstone has fallen from 9.3 per cent to 5.6 per cent, which is a remarkable improvement,” Mercorella said. “This market has shown the single biggest improvement this quarter of all the markets we monitor.”
The Townsville market has reported its fourth consecutive fall in vacancies, to reach 4.3 per cent, its lowest level since September 2013.
“Other property experts share our view that the Townsville market is poised to move into recovery phase,” Mercorella said. 
“Technically the rental market is still weak, with vacancies at 4.3 per cent, but there is a clearly established positive trend of four quarterly falls. We are hopeful that the sales market will soon echo the rental market’s positive direction,” she said. 
The tourism-based city of Cairns tightened from 1.8 to 1.7 per cent. This is the tightest this market has been since 2012. 
“Domestic visitor numbers are up in this region, which of course creates jobs and this drives demand for housing, so when the tourism industry is thriving, the property market is doing well also,” Mercorella said. 
“This market attracts workers who will typically stay in rental accommodation before they make a longer term decision about living in Cairns permanently.”
With tourism numbers up and tightening vacancy rates, REIQ expects the Cairns market will benefit from additional housing supply coming online soon. Landlords have a steady level of demand for rental accommodation. 
She added that investors in Cairns benefit from some of the best gross rental yields in the state, which is an added incentive to buying an investment property.
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Brisbane rental markets soften as regional Queensland shines: REIQ

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Rental bidding apps such as Rentberry, Liveoffer and Rentwolf, which aim to implement the property auction process to renting, could soon face a crackdown in Victoria.
The announcement was part of the Labor government’s policy push to make “renting fair” through a package of tenancy reforms.
Victoria’s Minister for Consumer Affairs Marlene Kairouz said that as more people are renting than “ever before and for longer – that’s why tenants need a fairer deal”.
“These changes will crack down on rental bidding, make it easier and faster for renters to get their bond back, and will better hold landlords and agents to account for their actions,” Kairouz added.
Academic Garrick Small from CQUniversity Australia had noted recently in The Conversation that in a market already tilted in favour of landlords, renting apps could further push up rents.
Small summarised each of the apps: Live Offer, Rentberry and Rentwolf
"Live Offer asks prospective tenants to fill out forms and these are then ranked for the landlord to choose," Small said.
"The prospective tenants can see where they are in the rankings, in real time.
<img src="https://www.urban.com.au/images/2017/10/18/LiveOffer.png" alt="">
"Rentberry is more of a real-time auction site.
"Prospective tenants submit bids, can see what the current highest bid is and how many bids there have been. 
 <img src="https://www.urban.com.au/images/2017/10/20/Rentberry.png" alt="">
"With Rentwolf, prospective tenants set up extensive profiles, as they would with AirBnB, and then apply for properties through the marketplace."
<img src="https://www.urban.com.au/images/2017/10/20/Rentwolf.png" alt="">
Domain reported earlier this year that the controversial Silicon Valley start-up, Rentberry that lets tenants bid against each other for rental properties will launch in Australia this year.
Elite website editor Sarah Bell recently listed some ‘thinking points’ about rent bidding apps in the Elite Agent.
While she said that the apps encourage a free and open system, rewarding those who compete and are bold, a roof over our heads is a basic necessity and bidding will only increase the stress of renting.
Also, the ‘market price’ for rentals won’t necessarily be dependent on the features of the accommodation as much as it will turn on the availability of the accommodation. 
Bell suggested making available data on recently leased comparable properties so that tenants can make an informed decision about market value, as opposed to market value being whatever a tenant is prepared to pay. 
Rental bidding creates an uneven bargaining power between tenant and landlord, she said.
“There is a danger that as the economy cycles and rental accommodation becomes more scarce, the non-property owning class – some of whom are the most vulnerable people in our society – will feel the impact most sharply.”
The rental bidding apps should try to address the imbalance of power between landlord and tenant. 
The highest possible market price could punish a tenant through the term of a lease and the hassles involved where a tenant cannot afford and ceases to pay rent can dwarf a theoretical windfall from an inflated rent bid.
Limits on bidding based on affordability were needed to protect those most vulnerable to over-bidding, she suggested.
Bidding simply makes price the most important factor in choosing a tenant, rather than other factors such as the tenant’s rental history, stability and others that make a good tenant.
Rental bidding can eventually backfire if tenants feel it is unfair. Collectively, tenants could vote with their feet and simply refuse to rent properties in a rent-bid scenario – essentially driving their corrective action on a perceived power imbalance, she says.
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