<p>One of North Sydney's best-known commercial buildings could become hundreds of new homes, with insurance giant Zurich Australia lodging a State Significant Development Application (SSDA) to transform 5 Blue Street into a mixed-use residential development above North Sydney Station.</p>

<p>Rather than demolishing the existing building and starting again, Zurich is proposing an adaptive reuse project that would convert the landmark office building into a 15-level residential development delivering 62 apartments, 86 affordable co-living dwellings, activated retail and significant upgrades to the Blue Street Plaza.</p>

<p>The proposal reflects a growing trend of commercial property owners repositioning ageing office assets into residential housing as Sydney grapples with housing supply shortages and changing workplace demand.</p>

<p><img alt="Zurich" data-entity-type="file" data-entity-uuid="0bba7d12-06dc-4375-aad7-238c94b21ac5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.42.05%E2%80%AFAM.png?VersionId=NJl5oLAEBDGuPmY3RnyliKODjMc8lvRh" /></p>

<p>Located directly above North Sydney Metro and train station, the 3,051 sqm site occupies one of the most strategically positioned parcels of land on Sydney's Lower North Shore.</p>

<p>Designed by fjcstudio, the proposal seeks to retain and adapt much of the existing structure while creating a contemporary residential address that better connects with the public domain surrounding North Sydney Station.</p>

<p>The application proposes two basement levels, ground floor retail, affordable co-living accommodation across the podium levels, and apartments above, while preserving and enhancing the publicly accessible Blue Street Plaza.</p>

<p>Rather than pursuing maximum apartment numbers, Zurich has opted for a housing mix heavily weighted towards larger owner-occupier residences.</p>

<p>The proposal includes 62 build-to-sell apartments comprising 12 one-bedroom, 19 two-bedroom, 29 three-bedroom apartments and two premium penthouses. It also incorporates 86 affordable co-living dwellings, which would be managed in perpetuity by a Community Housing Provider.</p>

<p>That balance between traditional apartments and affordable housing reflects the NSW Government's push to increase housing diversity around major transport infrastructure.</p>

<p>The proposal has been lodged concurrently with a rezoning application, with Zurich arguing the site is ideally positioned to support additional housing given its immediate proximity to public transport, employment and services.</p>

<p>"The proposal aims to respond to the housing challenges facing Sydney through the delivery of diverse housing types in a highly accessible location," the design report by fjcstudio states. It also seeks to improve pedestrian amenity through upgrades to Blue Street Plaza while creating a high-performing residential building that responds to the surrounding context.</p>

<p><img alt="Zurich" data-entity-type="file" data-entity-uuid="36082e15-c636-4481-bb68-5a5f6443fe39" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.41.36%E2%80%AFAM.png?VersionId=5P6VD.fvmqjQfIG3TWWMRXxQWiQBjeFB" /></p>

<p>Rather than replacing the commercial building, fjcstudio has developed a design that works with the existing structural framework above the rail corridor, an approach that significantly reduces demolition while allowing the site to be repositioned as a mixed-use residential precinct.</p>

<p>The existing structural constraints have informed much of the building's design, including its relationship with Blue Street and surrounding public spaces.</p>

<p>The building has been designed as a slender tower rising above a clearly defined podium, with vertically expressed façades intended to reduce the perceived bulk while reinforcing North Sydney's emerging skyline.</p>

<p>According to fjcstudio, the architectural language responds directly to the surrounding commercial towers while maintaining a finer grain expression more closely aligned with the neighbouring Lavender Bay streetscape.</p>

<p>The tower incorporates articulated façade elements, landscaped podium edges and recessed upper levels to soften its appearance and improve pedestrian amenity below.</p>

<p>A significant component of the proposal is the revitalisation of Blue Street Plaza.</p>

<p>The existing public space has long served as one of the primary pedestrian connections between North Sydney Station, Greenwood Plaza and Blue Street, yet its role is expected to become even more important following the opening of Sydney Metro.</p>

<p>Zurich's proposal seeks to strengthen that role by improving landscaping, introducing new retail frontages, enhancing pedestrian permeability and creating more active edges throughout the day and evening.</p>

<p>Ground floor retail would wrap the plaza, while separate residential and co-living entries have been designed to improve wayfinding without reducing street activation.</p>

<p>Landscape design has been integrated throughout the podium and public realm, softening what is currently one of the most heavily urbanised parts of North Sydney.</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>fjcstudio has carefully oriented apartments towards Sydney Harbour and the CBD while using privacy blades and articulated façades to minimise overlooking between neighbouring buildings.</p>

<p>Large framed openings along the western elevation maximise harbour outlooks, while the eastern apartments have been angled towards the south-east to improve privacy from neighbouring development.</p>

<p>The project forms part of the continuing transformation of North Sydney from a predominantly commercial CBD into a genuine mixed-use city centre.</p>

<p>Since the completion of Victoria Cross Metro Station, developers have increasingly shifted their attention towards residential projects capable of leveraging the area's unparalleled transport connectivity.</p>

<p>&nbsp;</p>

<p>FiveX recently lodged plans for a 61-storey, 490-apartment tower that would become one of the tallest residential buildings in North Sydney if approved.</p>

<p>Aqualand continues to expand its Lower North Shore presence following the completion of AURA on Walker Street and its recent St Leonards and Roseville proposals.</p>

<p>Developers are also progressing projects throughout Walker Street, Miller Street and the Victoria Cross precinct as demand for well-located owner-occupier apartments continues to strengthen.</p>


Joel Robinson

First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station

<p>Busy developer Aqualand Prestige has formally taken the next step in its expansion across Sydney's Lower North Shore, lodging a State Significant Development Application (SSDA) for its long-held Archer Street site in Chatswood.</p>

<p>The application covers <a href="https://www.apartments.com.au/new-apartments/51-55-archer-street-chatswood-nsw-2067">51-55 Archer Street</a>, a 1,767 sqm amalgamated site on the eastern edge of the Chatswood CBD, where the developer is seeking approval for a 45-level mixed-use tower delivering 114 apartments, including a significant affordable housing component, alongside retail, commercial space and six basement levels of parking.</p>

<p>The SSDA marks the latest milestone for a project Aqualand has been quietly progressing over the past two years. The developer first secured the site for its Aqualand Prestige platform before undertaking an alternative design excellence process with PTW Architects, ultimately avoiding a formal design competition through the Housing Delivery Authority pathway.</p>

<p>The proposal has evolved considerably from Aqualand's original concept. The revised scheme has been designed around larger owner-occupier product, with an unusually high proportion of three and four-bedroom apartments, targeting the more affluent buyer profile, and downsizer, emerging across the North Shore.</p>

<p><img alt="Archer St" data-entity-type="file" data-entity-uuid="0171204c-5811-41b5-9b09-2335d1b7c3d0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%208.52.48%E2%80%AFAM.png?VersionId=6YTuxfq.puZo7k2wbfgemcO5K3QfXYGQ" /></p>

<p>The 114-apartment mix comprises six studios, 27 one-bedroom apartments, 18 two-bedroom apartments, 50 three-bedroom residences and 13 four-bedroom homes. A quarter of the building will be dedicated to affordable housing, well above the mandated 15 per cent&nbsp;</p>

<p>PTW has structured the building vertically, with affordable housing across levels one to six, premium apartments through levels seven to 31, duplex skyhomes on klevels 32 to 43, a penthouse on level 44, and a rooftop plant level above. Six basement levels will provide resident parking and servicing.</p>

<p>The tower is proposed to reach approximately 154 metres, placing it among a growing collection of residential high-rises transforming Chatswood's skyline.</p>

<p>Rather than competing purely on height, PTW says the design has been driven by creating a slimmer tower capable of delivering significantly larger apartments.</p>

<p>"The primary objective of this project was to create a distinctive building that stands out from the recently approved or built structures in the Chatswood area," the design report states, noting the structural efficiency allows greater investment into apartment quality and resident amenity.</p>

<p>Residents would have access to more than 450 sqm of communal open space including landscaped gardens, swimming pool, rooftop entertaining areas, fitness spaces, community gardens, children's play areas and barbecue facilities.</p>

<p>A major focus of the design has been the public domain.</p>

<p>The ground plane has been opened up through landscaped terraces inspired by Willoughby's sandstone ridges, with native planting, public seating, artwork, retail activation and a series of gathering spaces intended to soften what has traditionally been a hard commercial streetscape.</p>

<p>The landscape strategy references Blue Gum forests once common throughout the area, while incorporating Indigenous storytelling, public art and lighting installations to strengthen the connection to Country.</p>

<p data-end="239" data-start="66">Chatswood has been one of Sydney's busiest apartment markets over the past 12 months, with a steady pipeline of both new project launches and fresh development applications.</p>

<p data-end="442" data-start="241">Hyecorp recently launched Celine, a 122-apartment development just along Archer Street, while Changfa and Huirong Group are progressing The Anderson, an 84-apartment project on Anderson Street.</p>

<p data-end="661" data-start="444">Develotek recently secured approval for a 101-apartment tower on Pacific Highway, while Tian An LFD received the green light for Hammond Greens, its apartment development on the edge of the Chatswood Bowling Club.</p>

<p data-end="909" data-start="663">Commercial property developer FiveX is also making its move into the residential market. Last month it lodged plans for a 61-storey tower with 490 apartments, which, if approved, would become one of the tallest residential buildings in Chatswood.</p>

<p><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-targets-chatswood-skyline-with-61-storey-tower-after-north-sydney-plans">First look: FiveX targets Chatswood skyline with 61-storey tower after North Sydney plans</a></em></p>

<p data-end="1339" data-start="1019">Aqualand is also expanding its development pipeline following the launch of its luxury residential brand, Aqualand Prestige. The developer has delivered a string of high-end apartment projects across Sydney's affluent suburbs over the past decade, most recently AURA by Aqualand on Walker Street in North Sydney.</p>

<p data-end="1339" data-start="1019">[smartcode_project:default project_id=30959 project_image_fid=292863]</p>

<p data-end="1398" data-start="1341">It has since quietly assembled its next wave of projects.</p>

<p data-end="1805" data-start="1400">Earlier this year Aqualand launched Boronia in Roseville, a boutique 111-apartment development on Larkin Street. The project is one of the first significant apartment developments to launch in the suburb ahead of what is expected to become one of Sydney's most active new housing precincts under the NSW Government's Low and Mid-Rise Housing reforms, which allow greater density around train stations.</p>

<p data-end="1805" data-start="1400">[smartcode_project:default project_id=152095 project_image_fid=373685]</p>

<p data-end="1991" data-start="1807">The developer has also lodged plans for a two-tower, 413-apartment development on Herbert Street in nearby St Leonards, further strengthening its presence across the Lower North Shore.</p>

<p data-end="2303" data-is-last-node="" data-is-only-node="" data-start="1993">Beyond that, Aqualand remains behind the final stage of Barangaroo, where plans will deliver a five-hectare mixed-use precinct comprising new homes, retail, hospitality and community facilities, alongside a new Metro entrance and more than two hectares of public open space, completing the Barangaroo precinct.</p>

<p><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/central-barangaroo-development-takes-big-step-with-concept-proposal-approval">Central Barangaroo development takes big step with concept proposal approval</a></em></p>

<p><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-aqualand-joins-st-leonards-apartment-party">First look: Aqualand joins St Leonards apartment party</a></em><br />
&nbsp;</p>

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First look: Aqualand pushes ahead with Chatswood apartment tower as SSDA lodged for Archer Street

<p data-end="492" data-start="327">Mass timber is becoming an increasingly popular construction material in apartment developments, but Adelaide developer <a href="https://www.apartments.com.au/developers/otello">Otello</a> is taking the approach a step further.</p>

<p data-end="843" data-start="497">At its new <a href="https://www.apartments.com.au/new-apartments/flowe-bowden-18-gibson-street-bowden-sa-5007">Flowe Bowden</a> development, the exposed cross-laminated timber (CLT) structure isn't just about reducing the building's environmental footprint. It also forms the foundation of a broader wellness strategy, influencing everything from indoor air quality and natural materials to the way residents move through and experience the building.</p>

<p data-end="1109" data-start="848">The 115-apartment mixed-use development, designed by Melbourne-based architecture practice Fieldwork, will occupy a prominent island site opposite Bowden Village Reserve, combining one, two and three-bedroom apartments with retail and a dedicated wellness destination.</p>

<p data-end="1109" data-start="848">[smartcode_project:default project_id=152022 project_image_fid=375528]</p>

<p>Wellness isn't confined to a gym or shared resident facility at Flowe. Instead, Fieldwork embedded the concept into the building itself.</p>

<p>The development has been split into two residential wings connected by a naturally ventilated central breezeway, replacing traditional enclosed corridors with open-air walkways that improve natural light, encourage cross ventilation and create more opportunities for neighbourly interaction.</p>

<p>"Rather than treating wellness as something that only happens on the ground floor, our response integrates it throughout the building, which led us to ask what it really means to design a healthy building," Fieldwork Director Quino Holland said.</p>

<p>[smartcode_project:default project_id=152022 project_image_fid=375531]</p>

<p>The building's architecture also reflects Bowden's industrial heritage. The lower podium references the area's historic brick and sandstone buildings, while the upper levels transition to exposed CLT, allowing the timber structure to become a defining feature throughout the apartments and shared spaces.</p>

<p>The use of mass timber sits alongside a range of sustainability initiatives, including a fully electric, gas-free design, rooftop solar and a targeted 5 Star Green Star rating.</p>

<p>[smartcode_project:default project_id=152022 project_image_fid=375524]</p>

<p>Inside the residences, the focus remains on natural, durable materials. Blackbutt engineered timber flooring, exposed CLT ceilings, porcelain surfaces and warm timber joinery create a calming interior palette, while low-VOC finishes and responsibly sourced materials have been selected to improve indoor air quality.</p>

<p>Kitchens have been designed as the centrepiece of each apartment, featuring porcelain island benchtops, timber-look cabinetry and brushed steel tapware, with layouts that maximise natural light and ventilation.</p>

<p>[smartcode_project:default project_id=152022 project_image_fid=375530]</p>

<p>The more traditional interpretation of wellness comes in the form of Level Eleven, a two-storey wellness club spanning the ground floor, mezzanine and first floor.</p>

<p>The facility will include a gym, yoga and reformer Pilates studios, Finnish and infrared saunas, magnesium hot and cold plunge pools, and dedicated recovery spaces. Unlike many residential wellness facilities, Level Eleven will also operate commercially, allowing the broader Bowden community to access the venue while giving residents exclusive membership benefits.</p>

<p>The ground floor has also been designed around everyday living. A café overlooking Bowden Village Reserve will activate the street frontage, while a bike workshop with tool storage, co-working space and dog wash has been incorporated to support daily routines and encourage interaction between residents.</p>

<p>"Flowe brings together my two biggest passions, creating places and creating healthier lives," Otello founder Daniel Harris said.</p>

<p>"We wanted to create something Adelaide hasn't seen before, a genuinely healthy building, where the way you live is lifted without even trying."</p>

<p>Flowe is positioned directly opposite Bowden Village Reserve and within walking distance of Bowden Railway Station and the Adelaide Entertainment Centre, placing future residents just minutes from the Adelaide CBD while remaining connected to one of the city's most established urban renewal precincts.</p>

<p>[smartcode_project_cta:default project_id=152022]</p>


Otello launches wellness-focused Flowe Bowden with Adelaide-first mass timber apartment design

<p>Not all apartment amenities are immediately visible.</p>

<p>Swimming pools, gyms, rooftop terraces and residents' lounges have long featured on buyers' wishlists, but as the way Australians live has changed, so too have the features that make apartment living more convenient.</p>

<p>Increasingly, buyers are placing value on the practical aspects of day-to-day life. Fast internet, EV charging, secure bike storage, flexible workspaces and parcel management are becoming just as relevant as lifestyle amenities, reflecting changing habits and expectations.</p>

<p>Online shopping has been one of the biggest drivers of that shift.</p>

<p>Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally, making parcel deliveries a routine part of everyday life rather than an occasional convenience.</p>

<p>For apartment residents, however, receiving those deliveries isn't always straightforward.</p>

<p>Without someone home to accept a parcel, deliveries can be redirected to a nearby Post Office, left in building foyers or common areas, or require building management to temporarily store packages. As apartment living continues to grow across Australia's cities, parcel management has become an increasingly important consideration for both residents and developers.</p>

<p>Australia Post's Parcel Locker network is one response to that shift.</p>

<p><iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/KPZ9j5FRdsQ?si=Qztc1dNP3ZvEIUhb" title="YouTube video player" width="560"></iframe></p>

<p>Rather than relying on home delivery, eligible parcels can be directed to a nominated Parcel Locker, where they're securely stored until collected. Once a parcel arrives, residents receive a notification through the AusPost app or SMS and can retrieve it using a one-time code or QR code at a time that suits them.</p>

<p>The network has expanded to more than 1,500 locations nationwide, with Parcel Lockers positioned at Post Offices, shopping centres, supermarkets, transport hubs and, increasingly, within or alongside residential developments.</p>

<p>That growing presence reflects a broader change in how apartment buildings are being planned.</p>

<p>Developers are increasingly considering the operational side of apartment living alongside traditional lifestyle amenities. Just as secure mailrooms, bicycle storage and EV charging have become more common inclusions, parcel management is emerging as another feature that supports everyday convenience.</p>

<p>It also helps preserve the arrival experience within a building. Carefully designed lobbies and communal spaces can quickly become cluttered when deliveries accumulate, while secure parcel solutions reduce the likelihood of missed deliveries or parcels being left unattended.</p>

<p>For buyers comparing apartments, these everyday details are becoming part of the decision-making process.</p>

<p>Location, floorplans and finishes remain fundamental, but the features that simplify daily life are carrying greater weight than they once did. As online shopping continues to shape consumer behaviour, secure parcel delivery is increasingly becoming another amenity worth looking for.</p>


Parcel delivery is joining the apartment amenity checklist

<p data-end="471" data-start="164">Inca Property Group has lodged a State Significant Development Application (SSDA) for Dawn, a 53-apartment oceanfront development overlooking Mona Vale Beach.</p>

<p data-end="777" data-start="473">The proposal, at 35-39 Darley Street East, would replace an existing 18-apartment strata building with a new owner-occupier-focused development comprising 53 two and three-bedroom apartments, including nine affordable built-to-rent residences delivered under the State's infill affordable housing scheme.</p>

<p data-end="976" data-start="779">Positioned on a 2,679 sqm elevated site around 280 metres from Mona Vale Beach, the development has been designed to maximise panoramic ocean views while responding to the site's sloping topography.</p>

<p data-end="1119" data-start="978"><a href="https://www.apartments.com.au/developers/inca-property-group">Inca Property Group</a> Managing Director Josh Thompson said the State Significant pathway provided greater certainty for projects of this scale.</p>

<p data-end="1399" data-start="1121">"This State Significant pathway gives the team real certainty to progress <a href="https://www.apartments.com.au/new-apartments/dawn-35-39-darley-street-east-mona-vale-nsw-2103">Dawn</a> through to completion," Thompson said.</p>

<p data-end="1399" data-start="1121">"It allows us to acquire a one-off site, design it carefully and deliver the right offering for the suburb, assessed by the NSW Government's planning department."</p>

<p data-end="1605" data-start="1401">The project is one of the first developments in the area to be assessed under the NSW Government's Low and Mid-Rise Housing policy, with the site sitting on the edge of the policy's designated inner area.</p>

<p data-end="1852" data-start="1607">The proposal includes three basement levels providing 124 car spaces, alongside a range of resident amenities including a swimming pool, gym, sauna, wellness facilities and private plunge pools for selected ground-floor and penthouse apartments.</p>

<p data-end="1852" data-start="1607"><img alt="Dawn" data-entity-type="file" data-entity-uuid="fc1a1daf-0ce4-4f12-9076-b1fa553c7a91" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-21%20at%208.42.11%E2%80%AFAM.png?VersionId=4GZ9h.gpNkTljbxyAET8Jfhv51XUamDm" /></p>

<p data-end="2031" data-start="1854">Thompson said Dawn had been designed specifically for owner-occupiers and downsizers, a buyer profile that has driven demand across Inca's recent Upper North Shore developments.</p>

<p data-end="2299" data-start="2033">"The majority of buyers in our recent North Shore projects have been downsizers, and we are learning exactly what this market is looking for. Beyond the location itself, we have included resort-style amenities to deliver a genuine lifestyle offering," Thompson said.</p>

<p data-end="2588" data-start="2301">Located within walking distance of Mona Vale Beach, the town centre, Mona Vale Golf Club and the Royal Motor Yacht Club, Dawn represents Inca's first Northern Beaches project following the sell-out of Tara on Park in Waitara and Ellis Residences, currently under construction in St Ives.</p>

<p data-end="4143" data-start="3991">Construction will be undertaken by Inca's in-house construction arm, GOP Constructions.</p>

<p data-end="593" data-start="417">Dawn is the latest major apartment proposal for Mona Vale, with the suburb emerging as one of the key beneficiaries of the NSW Government's new Low and Mid-Rise Housing policy.</p>

<p data-end="789" data-start="598">New developer One Living, led by industry veteran Joseph Scuderi, recently secured a site on Mona Vale Road, on the border of Mona Vale and Pymble, where it is planning around 140 apartments.</p>

<p data-end="1053" data-start="794">IPM is also planning its third project in Mona Vale, significantly increasing the scale of its previous developments with an 82-apartment proposal at <a href="https://www.apartments.com.au/new-apartments/159-167-darley-street-west-mona-vale-nsw-2103">159-167 Darley Street West</a>, opposite Bayview Golf Course and less than 800 metres from Mona Vale town centre.</p>

<p data-end="4143" data-start="3991"><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/one-living-enters-sydneys-new-apartment-market-with-northern-beaches-site-acquisition">One Living enters Sydney's new apartment market with Northern Beaches site acquisition</a></em></p>

<p data-end="4143" data-start="3991"><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-ipm-plans-third-mona-vale-project">First look: IPM plans third Mona Vale project</a></em></p>


First look: Inca eyes Mona Vale with State Significant DA for Dawn apartments

rental properties

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<em>SQM Research</em>'s released its latest news and views on vacancy rates and asking rents in Australia - with capital city vacancy rates nationally ticking down from 2.4 per cent to 2.3 per cent in August.</div>
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<div>SQM found that vacancy rates have increased strongly in Darwin (+2.0 per cent to 3.5 per cent) and Perth (+1.1 per cent to 3.7 per cent) over the past year. </div>
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<div>However, SQM also found that vacancy rates ticked down slightly across most capital cities in August. </div>
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<div>Given the strength of the dwelling supply response one would be forgiven for thinking that vacancy rates might have increased in Sydney and Melbourne over the past year.</div>
<div> </div>
<div>Yet this has not played out in either case, with city-wide vacancy rates declining to just 1.7 per cent in Sydney and 2.2 per cent in Melbourne respectively (from 2.6 per cent one year ago in the case of Melbourne).</div>
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<div>SQM's data showed that while rents in the largest capitals had increased ahead of the headline rate of inflation over the past year, asking rents for houses in Darwin have crashed by -21.3 per cent, while asking rents for houses in Perth were also down by -8.1 per cent.</div>
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<br>Asking rents for houses were up strongly in Hobart (+6.7 per cent) as the market tightens, with vacancy rates in the Tasmanian capital now at just 1.1 per cent. </div>
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<div><strong><span style="text-decoration: underline;">Demographics</span></strong></div>
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<div>Despite very strong levels of approvals and construction, vacancy rates have actually decreased in Sydney and Melbourne over the past year.</div>
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<div>How so? One of the clues might be found in the ABS Population by Age &amp; Sex data which I analysed recently. </div>
<br><div>And that is that population growth has become increasingly focussed on the inner and middle ring suburbs of the largest capital cities, both cause and effect of the natrure of the supply response through this cycle, as well as emerging employment trends. </div>
<br><span>For example, see the headline 2009-2014 data for Greater </span>Melbourne<span>...</span>
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<span>...Greater </span>Sydney<span>...</span>
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<span>...and, to a somewhat lesser extent, Greater </span>Brisbane<span>.</span>
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<div>There is, however, still a high volume of apartment approvals in the pipeline in all three of largest capitals.</div>
<br><div>As the above charts show over the long run the population growth to absorb the new supply has been evident, while much of the new high rise stock isn't that appealing to homebuyers in any case. </div>
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<div>Meanwhile, driven by a Sydney economic boom the New South Wales economy has added a thumping +118,800 jobs over the past 12 months.</div>
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<div>It should therefore be little surprise that interstate migration away from the Premier State had recently declined to its lowest level on record. </div>
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<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
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<div>Overall, not much sign of rising vacancy rates in the two largest capitals in this release, but SQM's Louis Christopher does see vacancies rising over the year ahead.</div>
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<br>And I agree, With the strength of the dwelling construction cycle underway this must surely be the case.</div>
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<div>On a related note, dwelling construction surprisingly detracted from GDP growth in the second quarter, which would appear to be an anomalous result given the veritable forest of cranes on the city skylines.</div>
<div> </div>
<div>While I'm not in the business of issuing flash forecasts for GDP - a fool's errand if ever there was one - it wouldn't be a surprise to me to see dwelling construction and a positive reversal in net exports (and possibly, inventories) leading to a +0.5 per cent result for Q3, before quarterly growth of +0.7 per cent returning for the next few quarters thereafter. </div>
<div> </div>
<div>That said, whether or not household consumption and public/government investment can continue to produce the positive contributions that they did in Q2 is another question.</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>
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Vacancy rates tighten a little: Pete Wargent

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<p>Based on the CoreLogic May monthly rental review released today, while rents increased slightly by 0.1 percent in April, overall, capital city rental rates edged lower, falling 0.2percent over the past 12 months.</p>
<p><span style="line-height: 1.3em;">Rental rates are currently $490/week for houses and $467/week for units across combined capital cities;</span></p>
<p><span style="line-height: 1.3em;">Five of the eight capital cities saw a modest rise in rents over the past twelve months, including Sydney (1.4 percent), Melbourne (1.7 percent), Adelaide (0.5 percent), Hobart (1.1 percent) and Canberra (2.5 percent); </span></p>
<p><span style="line-height: 1.3em;">Perth (-8.9 percent) and Darwin (-12.6 percent) experienced large drops in rents &amp; have collectively pulled the combined capital average lower; </span></p>
<p><span style="line-height: 1.3em;">Brisbane rents dropped by -0.6 percent.</span></p>
<div>
<p><a href="/images/2016/05/11/2016-05-09--monthly-report-report.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/05/11/2016-05-09--monthly-report-report.jpg" alt=""></p>
<br><p>We anticipate that the weakness in the rental market will persist over the year and rents will continue to fall over the coming months. The annual change in rental rates continues to be at its slowest pace since before 1996.</p>
<p>At the same time last year, rental rates increased by 1.7 percent which indicates a sharp slowdown in rental growth over the past year.</p>
<p>Factors contributing to a slowing in rental growth include falling real wages, excess rental supply in certain areas and lower rates of population growth - all of which have impacted on demand for rental accommodation.</p>
<p>With dwelling approvals at recent record highs and construction activity set to peak over the next 24 months, accompanied by many new properties still to settle, we anticipate that the weak rental market conditions will persist with rental growth continuing to slow and, or, fall in most capital cities.</p>
<p>Based on current market conditions, landlords won’t be in a position to lift rental rates and may actually need to reduce rents in order to keep their tenants. We see renters as holding a stronger negotiation position and where they now have the potential to upgrade into higher grades of accommodation for a similar, or lower rents.</p>
<p>Canberra is the only capital city where the annual rental change is currently stronger than it was a year ago. Mr Kusher said this highlights the weakness in rental market conditions is being felt across all other capital city markets.</p>
<p>With rental rates increasing in some cities in April, rates in Sydney, Adelaide and Hobart are at record highs. In all remaining cities, rental rates are now below their highs with the declines recorded respectively in: -0.1 percent in Melbourne, -0.8 percent in Brisbane, -13.7 percent in Perth, -17.3 percent in Darwin and -5.4 percent in Canberra.</p>
<p>The results show that as rental changes outpace home value changes, gross rental yields have trended lower and have hit record lows of 3.3 percent for houses and 4.2 percent for units.</p>
<p>In our two largest capital cities, we’ve seen rental yields move to record lows of 3.1 percent for houses and 4.0 percent for units in Sydney and in Melbourne, rental yields are at a record low 2.9 percent for houses and 4.0 percent for units.</p>
<p>With home values continuing to grow and rental markets expected to soften further, don’t be surprised if we see a further compression of gross rental yields over the coming months.</p>
<p><em>Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></p>
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Weekly rents have continued to fall over the past year: Cameron Kusher

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<p>With recent record high levels of new housing construction and investor mortgage activity, the supply of housing stock available for rent is climbing and is expected to continue to increase.</p>
<p>Australia has a growing population and the people moving to Australia need to be housed somewhere.  </p>
<p>Over recent years the uplift in population growth has not been met with a commensurate rise in property sales. Rental advertisement counts suggest that the population growth is increasingly being housed via investment housing (rental accommodation) which aligns with the lift in investor housing finance commitments over recent years.</p>
<p>Over the 12 months to January 2017, there were 362,708 houses advertised for rent and 287,233 units advertised for rent nationally. </p>
<p>The number of rental advertisements over the past year was 8.7 percent higher for houses and 9.3 percent higher for units.  The rental market is currently seeing historic low rates of rental growth and with the amount of rental accommodation ramping up it is easy to see why.  Keep in mind this data is only those properties advertised for rent and not every rental property will be advertised for rent each year.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/14/2017-03-13--image1.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/03/14/2017-03-13--image1.png" width="571" height="187"></p>
<p>The two tables within this report highlight the council areas that have seen the greatest increases and decreases in rental advertisements over the past year.  Note that we have only included council areas that have had at least 1,000 rental advertisements over the 12 months to January 2017.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/14/2017-03-13--image2.png" target="_blank">Click to enlarge</a></p>
<p> <img src="https://www.urban.com.au/images/2017/03/14/2017-03-13--image2.png" width="561" height="508"></p>
<p>Western Australia council areas feature heavily on the list of regions that have seen the greatest increase in rental advertisements over the year, many of which are located in Perth.  Investor activity has been sluggish in WA so this may indicate that as the economy has weakened and people have migrated away from WA, perhaps home owners are looking to rent out their home rather than selling into weak market conditions. </p>
<p>A number of NSW regions are also featured on the list and this is probably more reflective of the ramping-up of housing supply purchased by investors.</p>
<p>Of those regions with at least 1,000 rental advertisements over the past year, only 17 council areas have actually seen a decline in rental advertisements over the year.  Two of the improving housing markets for value growth, Canberra and Hobart, are amongst these 17 council areas. </p>
<p>The areas with less rental stock advertised than a year ago also tend to be more slanted towards regional areas rather than capital cities.  </p>
<p>This is not surprising given that housing supply has largely been increasing in capital cities rather than regional markets.  Despite the housing construction boom in Sydney at the moment, Kogarah, Warringah and Manly have recorded fewer properties advertised this year compared to last year, signaling tighter rental conditions.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/14/2017-03-13--image3.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/03/14/2017-03-13--image3.png" width="564" height="506"></p>
<p>With a record high number of new dwellings still under construction, most of which are units and many of which have been purchased by investors, it is anticipated that the number of properties advertised for rent will continue to rise. </p>
<p>The impact of this is that rental growth is likely to remain dampened and those in the rental market in most regions will have an increasing number of properties to choose from.  For owners of investment properties and property managers should be mindful of their local rental conditions, and set their weekly rents accordingly to maximize their occupancy as well as income. </p>
<p>Landlords in areas where the supply of rental properties has shown a rise may find they need to hold their rents steady or in fact, provide a discount on their rental expectations in order to keep or attract tenants.</p>
<p>Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/" target="_blank"><span class="s2"><em>here</em></span></a></p>
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Rising rental listings signal ongoing softness across some rental markets: Cameron Kusher

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<p>GUEST OBSERVATION</p>
<p>How we fund retirement in an ageing century ought to worry all of us.</p>
<p>But one group of us should be much more worried than the rest.</p>
<p>In a new set of <a href="http://cepar.edu.au/resources-videos/research-briefs" target="_blank">research briefs</a> published by the Centre of Excellence of Population Ageing Research, we report that most people do well out of our retirement income system and that the living standard of retirees has improved over the past decade.</p>
<p>In international comparisons, our system <a href="https://www.mercer.com.au/our-thinking/mmgpi" target="_blank">ranks highly</a>, for good reason.</p>
<p><strong>Most retirees do well</strong></p>
<p>About 60% of older Australians can afford a lifestyle better than that deemed to be “modest” by widely used standards.</p>
<p>Households headed by baby boomers reaching retirement age between 2006 and 2016 did so with incomes 45% higher than those who retired a decade earlier.</p>
<p>Typical boomer households aged in their late 60s earn almost as much as they did when they were still working - only 20% less, that is, with about 80% of their working income maintained.</p>
<p>And their needs are lower. Lower spending in retirement is common because older households need to pay less for transport, less for working clothes, and have more time to cook.</p>
<p>Many continue to save while in retirement.</p>
<p>And they tend to spend less over time, rather than more over time as <a href="https://www.superannuation.asn.au/resources/retirement-standard" target="_blank">benchmarks publicised by the superannuation industry</a> assume.</p>
<p>When we included the value of living rent-free for the 80% or more of retirees who own their own home (about A$10,000 per year on average), we found older Australians live in no more poverty than working age Australians.</p>
<p><strong>But not renters</strong></p>
<p>The living standards of those who rent in retirement are very different. Only about 15% of older renters can afford a lifestyle better than “modest”.</p>
<p>Single renters are particularly badly off.</p>
<p>Among all older people only about 10% fall below the poverty line set at half the median income.</p>
<p>Among older Australians who rent, 40% fall below.</p>
<p>Among older Australians who rent alone, it’s more than 60%.</p>
<hr>
<p><iframe src="https://datawrapper.dwcdn.net/Oyddt/1/" frameborder="0" scrolling="no" width="100%" height="400"></iframe></p>
<hr>
<p>If that relative poverty measure seems too abstract, an absolute dollar figure might help.</p>
<p>Alarming research aired on the ABC in September found that, on average, aged care homes were spending <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2018-09-17/food-in-aged-care/10212880" target="_blank">$6.08 per day on food</a> per resident.</p>
<p>Our research finds that among pensioners who rent alone, one quarter spend <a href="http://cepar.edu.au/sites/default/files/retirement-income-in-australia-part2.pdf" target="_blank">even less than that</a> per day.</p>
<p><strong>And it’s getting worse</strong></p>
<p>The pension has always favoured home owners.</p>
<p>On the one hand it is insufficient for renters and on the other it doesn’t cut pension payments to the owners of very valuable homes, because the value of any home - no matter how big - is excluded from the pension means test.</p>
<p>Rental assistance, introduced to complement the pension in the 1980s, was meant to alleviate this, and to some extent it does.</p>
<p>But it climbs only in line with the consumer price index every six months, which usually fails to keep pace with rents.</p>
<p>Sydney rents have doubled over the past two decades. The consumer price index has climbed 68%.</p>
<p>As a result, rental assistance is less effective in reducing financial stress than it was when it was introduced, and is set to become even less effective if rents continue to climb more quickly than the price index.</p>
<p><strong>And more of us look set to rent</strong></p>
<p>Households headed by Australians aged 35 to 44 are now 10 percentage points less likely to own their own home than were households headed by people of the same age a generation earlier.</p>
<p>They might be merely postponing buying homes until they are older as more of what would have been their income is sequestered into super and they enter the workforce and retire later.</p>
<p>If so, they might end up owning and paying off homes by retirement at the same rate as boomer households did before them.</p>
<p>If not, more and more of them could end up in poverty in retirement.<img src="https://counter.theconversation.com/content/105840/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;"></p>
<p><em><strong>Rafal Chomik</strong>, Senior Research Fellow, ARC Centre of Excellence in Population Ageing Research (CEPAR), UNSW</em></p>
<p><em>This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/renters-beware-how-the-pension-and-super-could-leave-you-behind-105840" target="_blank">original article</a>.</em></p>
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Renters Beware: how the pension and super could leave you behind

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<p>Based on the Census 2017 data, CoreLogic has reviewed where renting property is most common, and, of the 30.9% of residential properties currently rented, who owns the lion's share.</p>
<p>The analysis shows the proportion of properties rented has been trending higher, increasing from 29.6% at the time of the 2011 Census and 27.2% at the time of the 2006 Census to reach 30.9% of all dwellings in 2016.</p>
<p>While the proportion of dwellings being rented is climbing, the proportion of properties owned outright has also been trending lower and the rate of home ownership is diminishing.</p>
<p>An interesting observation from the latest Census analysis is that those properties classified as ‘rentals’ are not all owned by private investors; almost 12% of rented dwellings are owned by state or territory housing authorities, and 2% are owned by community/church groups.</p>
<p>The vast majority of rentals are investor owned with 60% of these managed through a real estate agent, while 20% of rented dwellings are rented by individuals not living in the same household.</p>
<p>The CoreLgoic analysis has identified the top 50 areas most popular for renters.</p>
<p>Only nine of the 50 regions listed had a lower proportion of properties rented in 2016 compared to the proportion at the time of the 2006 Census.</p>
<p>Interestingly, three of these regions are the top three most rental-centric regions (Torres Straight Islands, East Arnhem and Nhulunbuy).</p>
<p>Note that the rental accommodation in these three regions is predominately provided by government.</p>
<p>Overall, the most rental-centric regions are generally located within mining and resource-related regions, and inner city areas where significant increases in housing density has taken place over recent years.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/07/27/Screen%20Shot%202017-07-27%20at%2010.08.22%20am.jpg" target="_blank">Click to enlarge</a></p>
<p><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/2017/07/27/Screen%20Shot%202017-07-27%20at%2010.08.22%20am.jpg" alt=""></p>
<p>Over the past 10 years some of these regions have seen a significant increase in the proportion of properties being rented.</p>
<p>Other areas to see significant increases in rental popularity are: Pimpama (located midway between Brisbane &amp; the Gold Coast) where the proportion of properties rented has increased from 29.9% in 2006 to 62.7% in 2016 and South Hedland in Western Australia’s Pilbara region, with significant increases for renting from 36.0% in 2006 to 65.6% in 2016.</p>
<p>By the time of the next Census is 2021, we anticipate that the proportion of properties being rented will increase further given a growing population and ongoing housing affordability pressures, particularly within the largest housing markets (Sydney and Melbourne).</p>
<p>Note: The table above shows the proportion of properties rented over the 2006, 2011 and 2016 Census.</p>
<p>Note that only regions with at least 1,000 total properties at the time of the 2016 Census have been included on the list.</p>
<p>The list provided in this report shows the SA2 regions of the country that had the highest proportion of properties rented at the time of the 2016 Census.</p>
<p>As an aside, and SA2 region, on average, is home to 10,000 residents and, according to the Australian Bureau of Statistics, the purpose of the SA2 region is to represent a community that interacts together socially and economically.</p>
<p>Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</p>
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Rented properties trending higher: CoreLogic's Cameron Kusher

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<h3> </h3>
<div id="post-body-3832523868372190237" class="post-body entry-content">
<div>
<p>With the future of Whyalla's steelworks remaining up in the air, the property market appears to be at risk of imploding.</p>
<p>With vacancy rates above 20 percent and rising, median asking rents appear to be dropping at a quite alarming pace. </p>
<p>Asking rents down by about 30 to 50 percent over the last three years, with the pace of the decline having accelerated over the past year, and more so over the last quarter.</p>
<p><a href="/images/2016/06/14/WHYALLA.jpg" target="_blank">Click to enlarge</a></p>
</div>
<div class="separator"><img src="/images/2016/06/14/WHYALLA.jpg" alt=""></div>
<br><div><em><span style="text-decoration: underline;">Source: SQM Research</span></em></div>
<br><div>This can be a pervasive risk for towns that are so heavily reliant upon one or two industries or firms for employment and for the local economy to thrive. </div>
<div> </div>
<div>The administrator's call for government assistance to support the Arrium steelworks was rejected by Prime Minister Turnbull.</div>
<div> </div>
<div>The Labor state government has pledged support in the form of a $50 million funding facility for the prospective new owner of Arrium - were such a deal to be found. </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>
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The Arrium collapse is not pretty for Whyalla property investors: Pete Wargent 

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<p>There was a time when a big infrastructure project was an economic gold mine for the local community.</p>
<p>The proponents hired local people and bought services from local businesses. Expert personnel brought in from outside rented local houses.</p>
<p>How quaint were those days. How very last century. </p>
<p>Today you fly everyone in from a distance and build a temporary camp to accommodate them. A town can have a $2 billion project happening 5km down the road without any change in the local unemployment rate or the residential vacancy rate.<span style="line-height: 1.3em;"> </span></p>
<p>In fact, the vacancy rate may well rise if developers build new dwellings in anticipation of increased demand. Gladstone’s influx of tens of thousands of new jobs coincided with its vacancy rate rising from near zero to 10%. Most of the worker stayed in camps on an offshore island.</p>
<p>If you live locally and want a job on the big new project that comes to town, you may need to migrate interstate because big companies prefer to fly their workers in from outside.</p>
<p>Most companies planning big mining projects put out press releases promising to hire local workers and services, but in most cases they’re lying.</p>
<p>And it’s not just resources projects using the modern-day scourge of FIFO workforces and temporary accommodation camps. Now, everyone’s doing it.</p>
<p>In Bundaberg in Queensland, a business that grows strawberries has received council approval for a nine-stage short-term accommodation development to house seasonal workers. The losers will be local landlords and owners of backpackers accommodation.<span style="line-height: 1.3em;"> </span></p>
<p>In Toowoomba, a 500-room workers camp was proposed by one of the companies hoping to become the preferred tenderer for the $1.3 billion Toowoomba bypass, also known as the Toowoomba Second Range Crossing. </p>
<p>As it happens the Rangelink consortium didn’t win the tender. But it demonstrates how the concept of mobile workforces and temporary workers camps is taking hold.</p>
<p>The PR for projects like this always put the number of jobs created up in lights. That used to mean local jobs and politicians would gush about the local benefits. Today it’s likely very few of those jobs will be people living locally.<span style="line-height: 1.3em;"> </span></p>
<p>It’s changed the way property investors need to assess locations worthy of their attention. A big infrastructure development may create some economic ripples in the local community but these events no longer create the property booms of the past.</p>
<p>Today, the big infrastructure projects are more likely to create ghost towns than boom towns. Regional Australia is littered with towns that once thrived from the presence of big industrial developments or mining projects – places where investors enjoyed double-digit rental yields.</p>
<p>Now the vacancy rates read like this: Mackay 7%, Port Hedland 8%, Emerald 8%, Newman 9%, Chinchilla 17%, Miles 24%.</p>
<p>Many would speculate that this is evidence of the end of the resources boom. It’s not. In most cases, it’s evidence of the proponents of major mining or infrastructure projects bypassing the local town and putting up their workers in temporary camps. <span style="line-height: 1.3em;"> </span></p>
<p>The property market in the WA town of Newman has crashed during the construction phase of the $9 billion Roy Hill iron ore mine. Seven thousand people are working on this project but Newman’s median price has dropped 24% in the past year and rents are about a quarter of their peak levels.</p>
<p>And the core message is that  this phenomenon is no longer just a resources sector scenario. It’s spread to other enterprises.</p>
<p><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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FIFO accommodation and the rental debacle: Terry Ryder

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<p>EXPERT OBSERVER</p>
<p>The onset of COVID-19 may be creating a two-speed rental market, with inner-city rents declining faster than those in the outer suburbs. CoreLogic data confirms that there is a positive correlation between changes in rent values and distance to the CBD. This means that the closer a region is to the CBD, the more likely it is that rent values have fallen.</p>
<p>CoreLogic rent values were analysed across SA3 regions of Brisbane, Sydney and Melbourne. For each region, the median property distance to the CBD was compared with the change in total rental market values from the end of March (which marked national, stage 2 restrictions) to the end of August.</p>
<p>The results are plotted below. Each graph shows the change in rent values for houses and units across the horizontal axis between March and August, and the distance to the CBD along the horizontal axis.</p>
<p><img src="https://www.corelogic.com.au/sites/default/files/2020-09/image_1_0.jpg" width="985" height="573"><img src="https://www.corelogic.com.au/sites/default/files/2020-09/image_2_0.jpg" width="986" height="561"></p>
<p><img src="https://www.corelogic.com.au/sites/default/files/2020-09/image_3_0.jpg" width="1143" height="683"></p>
<p class="red-title"><strong>Why have inner city markets been more affected?</strong></p>
<p>As has been noted in previous research from CoreLogic, there are several distinct factors of the COVID-19 downturn that have made inner city rental markets particularly susceptible to a decline in rental values.</p>
<p>These include the relatively high exposure to overseas migration as a source of housing demand. A summary of average net overseas migration alongside distance to CBD is presented by SA3 region below. </p>
<p><img src="https://www.corelogic.com.au/sites/default/files/2020-09/image_4.jpg" width="658" height="514"></p>
<p class="red-title"><strong>Where have rents increased?</strong></p>
<p>Of the 125 SA3 rental markets analysed, there were 63 regions where house rents increased, and 35 regions where unit rents increased, since the end of March to August. <br>Rental increases were most common across Sydney and Brisbane, where employment has been less affected by the pandemic, and social distancing measures have eased. The highest rental value increases were across Blue Mountains houses, rising 3.3%. </p>
<p>The reason for rental value increases in outer-suburban areas are less clear. On explanation may be that outer-city suburbs have been less exposed to the factors driving declines in demand, such as overseas migration. Anecdotal reports assert that a draw card for outer-city suburbs are relatively cheap rents, and low density along with remote working lessening the hurdle of travel times from areas located furhte form the largest employment nodes. This may have increased rental prices through higher demand. The analysed data set also revealed that rental value increases have occurred in cheaper rental markets. However, it is difficult to understand this trend without survey data, and internal migration data for the COVID period will likely not be available until April next year.</p>
<p>It may also be the case that added stimulus to low income households have added to rental demand in areas where rents are usually cheaper. The tapering of this fiscal support may lead to a more broad-based decline in rents over the next 6 months.</p>
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Properties closer to the city more likely to see rent decline: CoreLogic's Eliza Owen

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<p>EXPERT OBSERVATION</p>
<p>In August, reiwa.com data shows it took a median of 21 days to lease a property in Greater Perth which is 13 days less than the same time last year – making it the quickest time to lease since the construction phase of the last mining boom in February 2015.</p>
<p>Strong demand in the rental market continued into August which recorded improvements to the median rent price, listings volumes and days to lease.</p>
<p>From an individual suburb level, Maddington was the fastest suburb to lease in August, taking a median of seven days to lease, which was closely followed by Armadale with nine days, Coolbellup and Wanneroo with 10 days, and Secret Harbour with 11 days.</p>
<p>The median rent has remained stable at $360, however houses increased $10 per week to $380 and with Perth’s vacancy rate sitting at 1.6 per cent, we can expect to see continued upward pressure on rents in the coming months.</p>
<p>A closer look at the data shows four out of five Perth suburbs experienced an improved or stabilised median rent price, with Perth, Ellenbrook, Hamilton Hill, Bentley and Scarborough the top five performers.</p>
<p>The high demand for rentals has seen rental stock on reiwa.com fall 10 per cent on July, with 3,205 properties for rent on reiwa.com at the end of August and based on present levels of enquiry we expect stock levels to decline further in September.</p>
<p>Feedback from our members on the ground is that there is still only a limited number of investors in the market looking to buy investment property.</p>
<p>It’s important that we return confidence to investors and one way the State Government can lead is to significantly reduce the number of properties subject to the residential tenancies COVID-19 legislation. Unless we get investors confident enough to get into the market, the rental shortage will only get worse.</p>
<p><strong>Perth residential sales market</strong></p>
<p>CoreLogic’s latest home value index shows dwelling values in Perth stabilised in August.</p>
<p>Although overall prices had remained stable in the Perth region, reiwa.com data shows 45 per cent of suburbs experienced an increase in median sale price.</p>
<p>Kelmscott saw the biggest increase to its median in August with a 5.4 per cent increase to $320,000, which was followed by Riverton (up 3.9 per cent), Duncraig (up 3.7 per cent), Piara Waters (up 3.6 per cent), and Carramar (up 3.4 per cent).</p>
<p>Interestingly, three of the top five suburbs had a median sale price under Perth’s median of $475,000 and suggests people are taking advantage of properties in Perth that are priced at the lower end.</p>
<p>Listings for sale were also down in August with only 10,627 properties for sale on reiwa.com, which is 1.2 per cent lower than July and 23.2 per cent lower than this time last year.</p>
<p>In the last few months, sales activity has been particularly strong due to the various government bonus schemes, so it is only natural as the interest around the stimulus eased, we saw activity in August decrease compared to July.</p>
<p>The suburbs that saw the biggest improvement in sales were Stirling, Shenton Park, Fremantle, Bayswater and Iluka.</p>
<p>It certainly appears that Greater Perth, and in fact a large part of Western Australia, has escaped the COVID-19 induced property slowdown. Given the high levels of demand and limited supply, we may even see prices rise later in 2020.</p>
<p><strong>DAMIEN COLLINS</strong><em> is the REIWA President</em></p>
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WA rental properties leasing two weeks quicker in August: REIWA's Damian Collins

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<p class="legacy">In an apparent about face, the NSW government has halved land tax for developers of build-to-rent housing.</p>
<p>It came weeks after the the Treasurer Dominic Perrottet launched a report that called for a <a href="https://www.treasury.nsw.gov.au/draft-report" target="_blank">greater reliance on land tax</a> as a replacement for stamp duty.</p>
<p>The greater reliance on land tax is a long-term goal. At the moment family homes are exempt, along with boarding houses, caravan parks, retirement villages and farms. Most other users pay land tax, including <a href="https://www.revenue.nsw.gov.au/squiz-sandbox/land-tax/exemptions-and-concessions" target="_blank">landlords</a> and businesses.</p>
<p>The change will give developers who invest in build-to-rent schemes offering <a href="https://www.smh.com.au/politics/nsw/nsw-to-cut-land-tax-for-20-years-in-ambitious-build-to-rent-scheme-20200728-p55gbm.htm" target="_blank">long tenancies</a> a 50% discount on their land tax for 20 years.</p>
<h2>Why build-to-rent?</h2>
<p>Most Australian rental properties are owned by individuals, units in apartment blocks as well as free-standing houses. Half are owned by landlords with only one property; <a href="https://grattan.edu.au/wp-content/uploads/2018/03/901-Housing-affordability.pdf" target="_blank">three quarters</a> by landlords with only one or two properties.</p>
<p>If you want to rent from a corporation, or from someone with wide experience in owning and renting properties, you’ll find it hard.</p>
<p>It makes Australia unusual.</p>
<p><a href="https://images.theconversation.com/files/350346/original/file-20200730-17-1kp56wj.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/350346/original/file-20200730-17-1kp56wj.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" alt=""></a></p>
<p><span class="caption">Nails in walls can cause problems for tenants.</span></p>
<p>In other countries corporations rent out housing, <a href="https://theconversation.com/what-australia-can-learn-from-overseas-about-the-future-of-rental-housing-90401" target="_blank">big time</a>. America’s five largest corporate landlords own 420,000 properties. Germany’s largest landlord, Vonovia, owns more than 330,000.</p>
<p>Overseas experience suggests corporations provide more affordable housing, and in many ways they make better landlords.</p>
<p>Individuals who own just one property have put most of their eggs in one basket.</p>
<p>Because they can’t afford for anything to go wrong they check the condition of the property regularly.</p>
<p>They prohibit nails in walls and pets, and typically offer only short-term leases.</p>
<p>Corporations can play the law of averages.</p>
<p>Because they know most properties will be well maintained they are satisfied with less-frequent inspections. They allow modifications, and typically offer long-term leases.</p>
<p>They offer an experience pretty close to ownership, in return for rent.</p>
<p>It’s this that the NSW government wants to encourage.</p>
<p>To ensure it happens and to ensure built-to-rents don’t revert to the Australian pattern of individual investors owning individual units, it will specify that the apartments have at least 50 units and are managed under <a href="https://nsw.liberal.org.au/Shared-Content/News/2020/LAND-TAX-CUT-TO-DRIVE-BUILD-TO-RENT-REVOLUTION" target="_blank">unified ownership</a>.</p>
<h2>Tax makes it hard</h2>
<p>At the moment such developments are discriminated against when it comes to land tax. No tax is due if the land value is below a threshold.</p>
<p>Individual landlords are usually below the threshold (some spreading their portfolio between multiple states to ensure they don’t trigger each state’s threshold).</p>
<p>Wholly-owned apartment blocks are above the threshold and can’t escape it. University of Technology Sydney calculations suggest land tax on build-to-rent developments can consume up to 27% of the annual rent collected.</p>
<p>And they are subject to goods and services tax. They can reclaim some of it but not all.</p>
<p>The announcement comes at a time when the COVID crisis has cut stamp duty receipts and created an oversupply of vacant apartments, particularly around universities.</p>
<p>The initiative appears to have been crafted before the crisis and to be more forward looking. Many of the build-to-rent projects will take years to complete.</p>
<h2>It’s about changing the mix</h2>
<p>That said, any extra building activity will support the construction industry and extra stock will reduce home prices and rents.</p>
<p>The initiative doesn’t spell the end of mum and dad landlords. They will still predominate for a long time.</p>
<p>It’s about providing options and security for tenants that isn’t widely available and will become more important as a <a href="https://theconversation.com/the-edges-of-home-ownership-are-becoming-porous-its-no-longer-a-one-way-street-119995" target="_blank">greater proportion of Australians rent</a>.</p>
<p>Other states will be taking note.</p>
<p>For a government that wants to eventually make land tax universal, the 50% cut is a step in the wrong direction. It might have been better to remove the threshold for small landlords.</p>
<p>But there’s no sign the NSW government has given up on its longer term goal. It’s unlikely to be the last time land tax rules are changed.<img src="https://counter.theconversation.com/content/143594/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;"></p>
<p><span><a href="https://theconversation.com/profiles/harry-scheule-3573" target="_blank">Harry Scheule</a>, Professor, Finance, UTS Business School, <em><a href="https://theconversation.com/institutions/university-of-technology-sydney-936" target="_blank">University of Technology Sydney</a></em></span></p>
<p>This article is republished from <a href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/why-nsw-is-skewing-its-tax-system-toward-build-to-rent-apartments-and-away-from-mum-and-pop-landlords-143594" target="_blank">original article</a>.</p>
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