Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

Sydney

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The venture capitalist John Grant has finally sold his Queens Avenue, Vaucluse residence, with eight person lift.
It fetched $12.85 million when bought by Point Piper's Julina Lim.
It was the dress circle avenue's first sale since 2010. Julina Lim is from the<a href="https://oceaniaproperty.com.au/about-us.php" target="_blank"> </a>Oceania Property Corporation.
<a class="cboxelement" href="https://images3.multiarray.com/ViewImage.aspx?id=36e6333d-54a1-4d6e-acd3-167c4ffe33d8&amp;width=800&amp;height=600&amp;db=RealEstateManager2&amp;resize=" rel="urlSlideshow"><img src="https://images3.multiarray.com/ViewImage.aspx?id=36e6333d-54a1-4d6e-acd3-167c4ffe33d8&amp;width=740&amp;height=555&amp;db=RealEstateManager2&amp;resize=crop" alt=""></a>
<div class="thumbs">John Grant downsized to the nearby Rose Bay Wintergarden waterfront complex from the cul de sac location that houses just 16 homes.</div>
The home was initially listed in 2013 with $16 million hopes, indicating despite the SMH headlines that there is still a big gap between expectation and recovery among trophy home offerings.
Lim sold her knock-down-rebuild on Point Piper's Wolseley Road earlier this year for $28 million to Qinglin Wang.
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Queens Avenue, Vaucluse dress circle sale to Lim family

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The Sydney prestige market has shown very early signs of market recovery, according to valuers, Herron Todd White.
It was evident in a "minor increase in both buyer interest and transaction activity." 
"We would consider this is reflective of a general perception that the bottom of this market has been reached, combined with improvements in the share market, the implementation of the Significant Investor Visa and cheaper Australian dollar," the HTW May report noted.
"Confidence in the prestige market is slowly re-emerging with moderate signs of a market recovery," it said.
They tip increased demand from overseas purchasers, including expat purchasers.
According to the valuaion firm, Herron Todd White, tthe prestige residential market in Sydney for both units and houses was properties with values in excess of $3 million. 
Prestige houses tend to be located either within the eastern suburbs and eastern beaches, lower and upper North Shore, northern beaches, some waterfront localities in the southern suburbs and the larger rural residential estates to the north-west of Sydney. 
It wasn't an interest rate driven market, they noted.
"More significant drivers of the prestige market include the state of the equities market, stability in global economic conditions, levels of business and consumer confidence and overall business conditions and the value of the Australian dollar," the report said.
"Over the past six to eight months, the market for prestige dwellings has shown early signs of strengthening, with increased sales activity and selling agents indicating ongoing strengthening in demand.
Combined with the impact of the weakened Australian dollar, there appears to be early signs of market strengthening flowing into the prestige apartment market. 
But before the latest $40 million plus Point Piper sale the report noted market activity for 2015 was yet to reach the records of 2014.
It noted demand for premium apartments was largely driven by overseas buyers and empty nesters seeking to downsize from the family home which is typically also from within recognised prestige locations. 
"With the weakness in the prestige dwelling market during post GFC and up until early 2013, these empty nesters had been unable to secure a premium price for their existing prestige homes and there was a subsequent reduced demand in the prestige apartment market.
"Demand from overseas investors for off the plan property that complies with overseas investor requirements and a general recovery has seen an improvement in the prices achieved for prestige units. 
HTW noted highlights of this market include the sale through Savills of <a href="https://www.elizasydney.com/" target="_blank">a penthouse in Elizabeth Street</a> with north views over St Mary’s to the park and the main harbour, with four bedrooms, five bathrooms, private pool, terraces and four car accommodation at $12,365,000 in late 2014. 
"Given there has been some gathering momentum in transaction volumes in the prestige market sector with a corresponding reduction in stock levels and an array of super prestige trophy homes transacting, we would expect that 2015 should show a maintained cautious optimism and confidence in the prestige market and further tempered recovery," it concluded.
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Tempered recovery ahead as Sydney prestige bouncing off the bottom: HTW

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It was inevitable that Sydney would run out of puff eventually and the most likely time for it to happen was in the third year of price growth – which means some time this year. It’s rare for major markets to sustain a boom for any longer than that.
I’ve just finished the research for the latest edition of The Price Predictor Index, examining market activity in suburbs and towns across the nation, and it indicates Sydney has begun a gradual fade. 
The number of suburbs with rising sales activity has dropped and the number of what we call “consistency markets” has risen. This is because suburbs that previously had growing sales volumes have now tapered off at those higher levels or have dropped a little below the peak.
It provides quite a stark contrast with Melbourne. It’s clear from the research that Melbourne is out-pointing Sydney on sales activity, if not on price growth. 
Melbourne now has almost double the number of growth suburbs as Sydney. Melbourne has 134 suburbs classified as rising markets, compared to 72 in Sydney.
As further evidence of the Sydney fade, regional New South Wales now has (slightly) more growth suburbs than does Sydney.
Melbourne continues to produce upwardly-mobile markets across the metro area. According to our ranking system, it has seven Rising Fast, 127 Rising Steadily and 100 Consistency markets, which is an improvement on the results three months ago and represents a general strengthening of the Melbourne residential sector.
Two things stand out in the latest analysis: “middle Melbourne” is still strong and new areas are emerging with strong markets, especially locations on the outskirts of the metropolitan area.
The Whitehorse LGA, east of the Melbourne CBD, remains the No.1 precinct. It has more suburbs with forward momentum than any other precinct in the city. Whitehorse includes Nunawading (median price $700,000), Burwood East ($800,000) and Blackburn South ($800,000). 
Other middle market area of prominence include Monash City, where Mt Waverley ($960,000), the Oakleigh suburbs (around $750,000) and Chadstone ($805,000) are doing well, and the Kingston LGA, which includes Cheltenham ($695,000) and Parkdale ($750,000).
But increasingly, strong markets are popping up on the periphery of Greater Melbourne. The charge is being led by the Frankston and Mornington Peninsula LGAs in the far south: Frankston has eight ranked suburbs and the Mornington Peninsula has 13. Rosebud sales have risen from 117 to 134 to 175 per quarter, while Rye has improved from 91 to 120 to 155.
The Casey LGA in the south-east has two Rising Fast suburbs, five that are Rising Steadily and seven that are ranked as Consistency markets. 
Whittlesea in the north remains a serious contender: it has two Rising Fast suburbs and four Rising Steadily markets. Epping sales have been 77, 113, 107 and 130 in the past four quarters. Also in the affordable north, the Hume LGA is a new challenger, with six Rising Steadily markets, including Roxburgh Park ($400,000) and Westmeadows ($415,000). 
The Brimbank LGA in the western suburbs is a regular standout. It has now has nine Rising Steadily suburbs and six Consistency markets, a marked improvement on three months ago. Wyndham City in the far south-west is another of the big improvers. And Yarra Ranges in the far eastern suburbs, which has not featured previously, now has eight ranked suburbs.
Upmarket areas such as the Boroondara LGA (including Balwyn and Kew and the Glen Eira LGA )  (including Caulfield North and Bentleigh East) feature, each with six or seven growth markets, but most of the standouts are middle market and bottom end suburbs.
TERRY RYDER is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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Inevitable Sydney would run out of puff: Terry Ryder

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GUEST OBSERVER
With interest rates at record lows, investors have flooded the market wanting to take advantage of lower rates, particularly those who can’t afford to buy to live, are buying cheaper properties as an investment. 
But what if you don’t have a hefty deposit?
Most banks need borrowers to have at least a 10% deposit for the property, which means your deposit could be as low as $27,000 if you want to buy an apartment in Hobart or as high as $85,000 if you want to buy a house in Sydney (based on latest median property prices from CoreLogic RPData). 
My advice is that it’s never too early to start thinking about investing and the first thing to do is start saving – you don’t need an investment plan – just get saving. Not only is it building up your deposit but it’s a good look when you go to apply for a loan. Banks like to see a solid history of saving as well as paying bills on time, etc. 
If you want a more affordable investment property, perhaps it’s best to look outside your own capital city or in outlying suburbs.  Research suburbs which are under development or new land allocations where good deals could be found for newly built homes. 
Apartments are often the most affordable way to get onto the property ladder. Plus, you can always progress to investing in a free-standing house, down the track.
Investing in a suburb with good transport links and infrastructure, schools and shopping facilities will always be an advantage – even if it’s a new suburb. Look for suburbs next to those experiencing a boom, that’s where the bargains will still be found.  
Investors often think they’ll get guaranteed good returns, but it’s not without risks. Investing can be a drain on your finances when you have to maintain the property, take out landlord’s insurance and pay capital gains tax, but it has its benefits too. 
Downsides of having a small deposit:
<ul>
<li>Banks can be a lot tougher with their lending requirements if you only have a small deposit </li>
<li>Unless you have a 20% deposit, you’ll need to pay mortgage insurance - which can be in the tens of thousands of dollars </li>
<li>It can make it harder to refinance down the track - you may be stuck with your loan for longer</li>
</ul>
STEVE JOVCEVSKI is a property investment and home loan negotiator at <a href="http://propertyobserver.com.au/forward-planning/tools/ebooks-and-webinars/42368-get-loan-savvy-expert-tips-for-a-first-time-investment-or-refinancing-loan-in-a-free-ebook" target="_blank">Mozo.com.au</a>.
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How to invest with a low deposit: Mozo's Steve Jovcevski

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I may stand-alone here, but Sydney’s done – there I said it!
Normally, locations go flat when they become unaffordable or major infrastructure projects are abandoned but this time it may be at the hands of the banks, the governing bodies and the ATO.
Now making a statement like this is bold. Firstly, you need fundamental facts to back it up and these are the things I research – knowing where and when to invest, along with when to stop investing in an area. And lastly, we need an alternative place to invest. So, here we go:
The first sign for me that Sydney was on the cusp of a change was on April 23rd. A fundamental bank policy change that two major banks announced was the reason. This change stated that effective April 24th at 5pm, all Non-Resident lending Loan to Value Ratios (LVR) would be reduced from 80% of purchase price to 70%. Meaning borrowers must have another 10% cash to put towards the purchase.
One of those banks was the biggest lender to Chinese borrowers. The myth that the Chinese are all paying cash for houses is simply not true. The best Business Development Manager (BDM) that this bank employs has seen an immediate drop of 25% in mortgage volume since this change. Now that’s one BDM, for one bank, in one district of Sydney.
There is no question the overseas buyers are pushing our prices up but it’s not just the Chinese. They accounted for $27.7 billion in property transactions last year but the USA purchased $17 billion, Canada $15 billion and Malaysia $7.2 billion. The falling Aussie dollar has made our property much more attractive to them along with a buoyant property market.
But like usual, when there is money, there are Sharks looking for loopholes. So bringing sunshine to my eyes, are the ATO. Yeah, you won’t hear me say that too often. They are currently investigating 150 cases of unlawful purchases from overseas buyers. The loophole is done through trusts and companies. There appears to be a loophole in the FIRB’s (Foreign Investment Review Board) approval process for developers too. The great thing is that the ATO are a big enough player to bring this behavior to a halt and prosecute those offenders. Watch this space!
With the rate drop in May, one would think this would fuel more buyers to pay more. The funny part is that even though interest rates dropped, as a borrower your borrowing capacity hasn’t increased. wHy?
Banks are servicing your loan application at the 7% mark. This is a protection mechanism to safeguard you when interest rates rise in the future. This 7% mark hasn’t shifted in the last 3-5 interest rate drops. So no matter how much the rates still go down, your ability to service more debt will not increase unless your income does.
Banks must now also hold more funds in managed accounts per mortgage they approve. Meaning for every $300k mortgage the bank must hold $600k in managed funds. This has doubled in recent years. Hence we’ve seen Managed Funds increase to 3.05% in May when interest rates decreased. This was done to attract more consumers to invest their money. Consequently, this reduced the banks profits by another 0.25%. So it comes as no surprise that in mid May the interest rate war between the banks ended. One major bank no longer discounts interest rates for investment loans. The others will follow.
The governing body for mortgages, APRA (Australian Prudential Regulation Authority), have also told the banks that if their investment portion of their portfolio has increased by over 10% this year, then they must hold another $500 million in managed funds. Meaning banks will now be reluctant to pass this level and reduce interest rate discounts on investment loans.
The Median house price in Sydney has topped $900k. Insane, I know. Now according to the ABS, the Median income is $80,048 per annum. So a couple with two children, who each earn $80k, have a maximum borrowing capacity of between $800k – $1 mill. They have reached their cap.
So to summerise:
<ul>
<li>The banks are slowing up lending to Non Residents</li>
<li>The ATO are stopping illegal overseas transactions, plus reversing illegal purchases</li>
<li>Interest rates have dropped, but you can’t borrow any extra funds</li>
<li>The banks are stopping interest rate discounts to investors</li>
<li>The Sydney property market has seen fantastic capital growth for over 2 years</li>
<li>Property prices are unaffordable</li>
</ul>
Now given that investment loans now account for 50% of all mortgages written, the above corrections will see a drastic decrease in investor activity. This decrease will significantly impact consumer confidence across the board. And the end of the Sydney property cycle will be here.
Think about it… You have been inspecting houses for the past 2 months and you’re used to a high volume of purchasers inspecting and turning up to auctions. Then, the next week the volume is halved. Would that get you thinking? Is there something going on that I don’t know about? Your consumer confidence has just been shot.
So, after all this doom and gloom, wHere and wHat do we invest in?
The key to investing, is buying in great locations in the low part of the property cycle. Where consumer confidence is at its lowest. wHere is this the case?
South East QLD is an emerging market where those who get in RIGHT now will benefit. If you wait until Christmas, you have missed the boat. But the market to really focus on right now is Perth. Currently Perth is on the “No Go” list, which is exactly why I am there. With no-one buying, consumer confidence is non-existent. Hence, we have seen some significant price decreases. This makes for some great buying.
But why is Perth not performing currently?
The reason is that most people consider Perth as purely driven by mining, like it’s a giant mining town. I laugh when I hear this, as Perth is a capital city with over 2 million people. The same size as Brisbane, yes that’s right!
Sure, Perth has mining influence (as does Brisbane) but it has a whole bunch more too. The fall of the mining boom has made for some great buying though. Discounts off list price we have not seen in a few years. In fact, we are buying most of the properties at pre 2006-07 prices.
There are two points to be wary of though. Firstly, the rental market is also seeing a correction with rents dropping around 10% in the last year. Do your numbers with a low 5% yield not 5.7%+ and adjust your purchase price accordingly.
Secondly, Perth is winning across the country in the ‘smallest residential blocks’ award. They are down to 200m2. No, that’s not a typo! Stick to blocks over the 400m2 and above, as these will be the properties to see land value growth in the years to come.
So, I will be monitoring the property market in Sydney over the coming months, as property data is all past tense. And a change now won’t be reflected for another 3-6 months. But one thing I know for Sydney is – get ready for a significant correction, the writing’s on the wall.
TODD HUNTER is buyer’s agent, director and location researcher for Sydney-based <a href="https://www.wheregroup.com.au/" target="_blank">wHeregroup</a>.
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thunter-umjjMzoT8b

Sydney's insane - where to next? Todd Hunter

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Melbourne currently has ten thousand more homes on the market than Sydney as Sydney listings slide 21.4% when compared to last year, according to new figures released from CoreLogic RP Data.
Melbourne has 28,726 homes for sale as of the week ending May 17, a decline of 10.2% annually.
Sydney has suffered a 21.4% decline in home listings since 2014, with 17,173 homes currently on the market.
<img src="/images/2015/05/18/Screen%20Shot%202015-05-18%20at%201.53.56%20PM.png" alt="" width="674" height="396">
 
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May new Sydney listings slide, Melbourne holds strong: CoreLogic RP Data

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Australian Property Monitors (APM) has released a list of results from 556 listed auctions in Sydney for the weekend of 16 May. The clearance rate was 84.4%.
<a href="https://www.homepriceguide.com.au/saturday_auction_results/Sydney.pdf" target="_blank">Click here</a> for the auction results, and click on each street address to see the property's marketing.
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APM's Sydney auction results for May 16 weekend

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UrbanGrowth NSW has denied claims of plans for a 32 storey apartments towers on the public foreshore surrounding the Sydney Fish Market.
“We do not have secret plans for 32 storey towers or anything else,” UrbanGrowth NSW chief executive, David Pitchford said in response to the Sun Herald report.
UrbanGrowth NSW has categorically denied claims that there was any sort of “done deal” regarding the transformation of The Bays Precinct site.
“There are currently no plans for any part of The Bays Precinct – what we have is a discussion paper that we are releasing to the people of Sydney this weekend for their comment over the next six weeks,” said David Pitchford.
The sensational article co-incided with weekend community consultation sessions, with live streaming, discussing the future for the Bays Waterfront Promenade, Bays Market District, White Bay Power Station, and White Bay Cruise Terminal. There were over 1000 registrations to attend.
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“The Call for Great Ideas is not a procurement process,” he said.
"UrbanGrowth NSW does not know who will or will not make a bid to redevelop Blackwattle Bay, but the fact is that the time for bids of any sort is some time away, and when there is a call it will be a transparent and open public process.
<div><img src="https://pbs.twimg.com/media/CE8XbGHUkAAX9e6.jpg" alt="Embedded image permalink" width="880" height="440"></div>
"The priority for UrbanGrowth NSW this year is the development of the Transformation Plan which will guide and direct the development of The Bays Precinct over the next 20 to 30 years," he said.
The Sun Herald article said the Baird government's land development agency, Urban Growth, expected to put a proposal to build 32-storey apartment towers on the public foreshore surrounding the Sydney Fish Markets to the NSW government for approval by July.
A Chinese fishing and real estate conglomerate, which already has a 25 per cent stake in the Sydney Fish Markets and owns the Bidvest site in Pyrmont, was behind the assumed plans, the article suggested.
The bays precinct summit <a href="/news/nsw/bays-precinct-sydney-harbour-summit-welcomed-after-years-of-stagnation-udia">consultation was welcomed by the developer lobby, the Urban Development Institute of Australia</a> when it was announced last year. 
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No 32-storey bay apartment plans for Sydney Fish market precinct

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The Surry Hills, Sydney warehouse abode of Kay Lanceley, widow of the late Australian artist, Colin Lanceley, has been listed with $4.2 million plus hopes.
The listing follows the death in January of 77-year-old Colin Lanceley who paid $450,000 for the Esther Lane warehouse in 1992.
<a href="https://www.realestate.com.au/photogallery_new.ds?id=119798979&amp;theme=rea.buy" rel="photos" data-id="119798979"><img src="https://i2.au.reastatic.net/800x600/5254f577100eab51c113d3ff6d35df3cd4495a03c9908eb47ea046f6b41ed149/image19.jpg" alt="2 Esther Lane, Surry Hills" title="2 Esther Lane, Surry Hills" data-index="18"></a>
It was bought from their friend, the art dealer, Ray Hughes, who had purchased the rustic warehouse from the estate of another art dealer, Rudy Komon.
Listing agent <a href="https://www.bresicwhitney.com.au/buy/2-esther-lane-surry-hills-11169" target="_blank">Ivan Bresic of BresicWhitney</a> has the 468 square metre holding up for June 13 auction. 
Its marketing suggests it is located at the epicenter of cultural diversity, eclectic art, fashion and food.
<a href="https://www.realestate.com.au/photogallery_new.ds?id=119798979&amp;theme=rea.buy" rel="photos" data-id="119798979"><img src="https://i4.au.reastatic.net/800x600/76802122e7e59d22fae89ce3108a3c46f2590d849d13fb8e6b2f0ddb8a53ad58/image9.jpg" alt="2 Esther Lane, Surry Hills" title="2 Esther Lane, Surry Hills" data-index="8"></a>
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Will long line of artistic bohemia continue? Colin Lanceley's Surry Hills warehouse listed

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The Sydney real estate market is nothing short of idiotic…
So-called experts, along with the media, are hyping up the situation, stating that Sydney is still affordable to the average punter.
What a load of bollocks…
The median income being around $75,000 does not equate to being able to afford the Sydney median house price now, at over $900k.
Even if a couple were earning $75,000 each, it still doesn’t mathematically work.
Unless my calculator is broken?
So, when does all this mayhem start to correct itself?
Well, today I stand-alone and say the change started from last week…
But why you ask?
There was a fundamental bank policy change that took affect on April 24th. The change in policy affects non-residents trying to borrow in Australia.
Where Non-Residents were able to borrow up to 80% of the purchase price, this has now been reduced by 2 major banks down to 70%.
The statistic’s published by the FIRB this week show that the Chinese have taken over as the major buyers of real estate in our country – no surprise there!
But how much are they actually buying? Well we can only work out these numbers based on the approvals they have. I say that as many are buying properties without approval.
Joe Hockey forced the sale of the $39 million Sydney mansion recently that has now been sold… but this is happening on a much larger scale. We recently had a client call us who wanted to invest. This lady had a large home mortgage on a property already but wanted to buy an investment property with cash that she was receiving from her mother from overseas.
We rightly refused the business, but I am sure they managed to buy a property using another property company.
By using the approval figures published, let’s number out the volume of purchases. The stats say that the Chinese have spent 27.7 Billion on property this year alone. The majority of these sales would be in Melbourne and Sydney.
Using the new median in Sydney of $900k, this would equate to 30,777 property transactions.
Monthly this equates to 2,564 deals per month.
If we say that one third were in Sydney, one third in Melbourne and one third for the remainder of Australia, then the number now looks more like 855 sales per month in Sydney.
That number doesn’t look that big now does it???
But, we need to add in the other major players too. The US spent $17 Billion, Canada $15 Billion and Malaysia $7.2 Billion.
So the volume now becomes more substantial…
Everybody is saying though that the Chinese are paying cash for all these houses?
Are they? – I think not!
If they were, why have 2 banks reduced their LVR for those borrowers?
<ul>
<li>Could be that they are over exposed to overseas borrowers.</li>
<li>Could be APRA now have a close eye on them.</li>
<li>Overseas borrowers are much harder to chase, should the properties go into mortgagee in possession.</li>
</ul>
But think about it like this… wHy would these two banks broadcast this through a major announcement for no reason?
Simply because they want to curb the volume of mortgage applications that come in!
Even the banks Business Development Managers (BDM’s) are nervous as they know the exact volume of loans that do come in from Non-Residents. They are nervous as they are paid on volume and they know the volume will now reduce.
The effective date of this change was April 24th and it was effective immediately as well. Now usually banks will allow a grace period for those loans already pre approved to still proceed under the old policy, for a period of around 2 months. That didn’t happen here. Any loans that had not found a property within 24 hours of the notice would now fall under the new policy.
Now call me skeptical, but that seems very definite to me!!!
So what does all that have to do with the Sydney Property Market?
Consumer confidence…
What Sydney has at the moment is a massive consumer confidence problem. This is fuelled by the media and the hype of overseas buyers, along with investors paying more for houses than what owner occupiers can afford. There is a huge fear of missing out and consequently people are paying way too much for a property.
After two solid years of capital growth in Sydney, not only do overseas buyers now have to pay another $200k more for the same property, but they now must also put another 10% – $90k cash towards the purchase. The new extra $5k tax they pay won’t affect things but it all adds up.
So, if you take the sting out of the market, you take away consumer confidence and markets begin to turn…
Why would this occur when we have the lowest interest rates we have ever seen? Even after interest rates were cut this week?
Low interest rates will not save the market. They may prolong it a little, but not save it.
APRA have stopped the banks and consumers hanging themselves for a while. When you apply for a loan, the bank will assess the deal at 7.1% even though interest rates are almost hitting 4%, after this week’s announcement.
APRA forced them to do this to stop potential future mortgagee possessions. But what it has meant, is that for the past 4-6 interest rate cuts, your borrowing power has not increased in the eyes of the banks. Sure your actual repayments have but they wont allow you to borrow any more than what you can afford at 7.1%.
But those house prices continue to rise… meaning that there comes a point where your affordability in a mortgage wont allow you to pay anymore for a property.
The other interesting point to make here is, if the interest rates stay low for ten years, will this market continue?
No Chance!!!
We already have low interest rates in Perth and the market there is dead. Why? Because the vast majority believe that Perth is a mining town. That’s not the case… Perth is a major city of two million people… the mining is a mere blimp in their overall economy.
But this perception has knocked the wind out of people’s Consumer Confidence.
Canberra, until very recently, had the same problem too. The government announced 16,000 public servants to be retrenched and consumer confidence flew out the window in the ACT. It never happened, but this lack of confidence took control and dictated what the market did.
Greece, Spain, Japan, USA all have extremely low interest rates and their property markets are terrible.
So, I make the stand and say, I believe from today we will see the start of a change. Many less overseas buyers, far less affordability and a strong property market where many buyers who have already purchased are out of the market, will see a turn towards slowing down.
I guess we will have to go back and check in six months or so, as this is how long it takes for property data to take affect. The deals being pre approved in May, might buy in June. Which then settle in August. The banks bulk stamp transfers these days around twice a month which would take the data into September… ready for reporting by Christmas.
Time will tell…
TODD HUNTER is buyer’s agent, director and location researcher for Sydney-based <a href="https://www.wheregroup.com.au/" target="_blank">wHeregroup</a>.
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