Developers and apartment buyers have a narrowing window of opportunity before Brisbane's Olympic infrastructure pipeline begins competing directly with residential construction, pushing up costs, tightening labour supply and making new projects increasingly difficult to deliver.

While Brisbane's apartment market continues to benefit from strong population growth and limited housing supply, industry research suggests the years leading up to 2027 could prove to be the most important period for developers looking to secure builders and buyers hoping to purchase before the next wave of price increases.

A new Colliers report, Brisbane 2032 Olympic and Paralympic Games: Creating Solutions, highlights the scale of the challenge. While thousands of new homes are planned across South East Queensland, the Brisbane Olympic Athletes Village alone will deliver more than 10,500 beds during the Games before being converted into around 1,750 to 2,000 apartments. Equivalent to almost two years of typical inner-city apartment supply, the project will also absorb a significant share of the construction workforce and building materials.

The broader construction pipeline paints an even clearer picture.

Construction Skills Queensland's Horizon 2032 report forecasts Queensland's annual construction pipeline will average $69 billion over the coming years before peaking at $75 billion in 2027-28. Demand for construction workers is expected to increase by 17 per cent to almost 150,000 people, with the industry facing an annual shortfall of around 19,000 workers that could blow out to as many as 35,000 during the peak construction period.

The Olympic venues, athletes village and supporting infrastructure will account for billions of dollars worth of work across South East Queensland through to 2032, creating intense competition for labour at a time when Australia's residential construction sector is already under pressure.

[smartcode_project:default project_id=150489 project_image_fid=373834]

Colliers Queensland Residential Director Andrew Scriven said the convergence of these projects is creating a clear window of opportunity for both developers and buyers.

"From 2027 onwards, the market will shift dramatically," Scriven said.

"Labour will increasingly be locked into government-led infrastructure and Olympic projects, which means private residential developments will face higher costs and tighter margins. The developers who move now are the ones most likely to get projects off the ground."

Scriven said the same dynamic would also affect buyers, with fewer apartment projects expected to launch once construction capacity tightens.

"If you're looking to change your lifestyle over the next five years, now is your window of opportunity to buy."

[smartcode_project:default project_id=150713 project_image_fid=373827]

Developers are already positioning themselves ahead of that window.

Following the success of Monarch at Toowong, Consolidated Properties is preparing to launch two new Brisbane apartment projects in the second half of 2026. They include <a href="https://www.apartments.com.au/new-apartments/gloriette-30-bedivere-street-yeerongpilly-qld-4105">Gloriette</a> at Yeerongpilly Green, a 25-storey tower within one of Brisbane's key Olympic precincts, and <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, a recently approved 25-storey riverfront development at 47 Skyring Terrace in Newstead.

Hutchinson Builders will deliver both projects, with early works already underway at Yeerongpilly and Newstead expected to commence later this year.

The timing comes as Brisbane's fundamentals continue to strengthen, with strong interstate migration, population growth and vacancy rates remaining below 1.5 per cent.

Colliers Queensland researcher Pragya Sharma said Greater Brisbane is forecast to require around 40,000 new apartments between 2021 and 2031.

"There's a real mismatch emerging between when housing is needed and when it will be feasible to build," Sharma said.

"As a result, the period leading up to 2027 presents a key window of opportunity for developers to secure approvals, funding and construction capacity, while buyers will have greater choice before supply constraints intensify."

Colliers research outlines a critical pre-2027 window to start residential projects before labour squeeze: now is the time to buy

Joel Robinson

Developers, buyers on watch in South East Queensland ahead of construction crunch: Colliers

It's taken less than nine months for developer Sherpa Property Group to sell out all 51 apartments in its <a href="https://www.apartments.com.au/new-apartments/flourish-oasis-palm-beach-7-9-sixth-avenue-palm-beach-qld-4221">Flourish Oasis</a> development in <a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a>, over a year before its anticipated completion.

&nbsp;

Located at 7-9 Sixth Avenue, the $67 million development has resonated strongly with both local owner-occupiers and downsizers seeking high-quality apartments within walking distance of the beach, dining precincts and everyday amenities.

[smartcode_project:default project_id=151449 project_image_fid=357458]

Christie Leet, Founder of <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Group</a>, said the sell-out reflected both the strength of the Palm Beach market and the success of Sherpa's community-first approach to development.

"The sell-out of Oasis is a fantastic outcome and reinforces the strong demand we're seeing for thoughtfully designed apartments in lifestyle locations," Leet said.

"From the outset, our vision was to create a development that genuinely enhanced the Palm Beach community while providing residents with exceptional homes and wellness-focused amenities.

"We've been incredibly encouraged by the level of local support throughout the campaign, 72.5 per cent of buyers are locals, with a significant proportion of purchasers choosing Oasis as their future home rather than an investment."

[smartcode_project:default project_id=151449 project_image_fid=357463]

Construction is now progressing following development approval, with trusted builder LPS Group delivering the project and completion anticipated in Q3 2027.

Oasis forms part of Sherpa Group's successful Flourish collection, which has become recognised for its focus on wellness, community and elevated coastal living.

[smartcode_project:default project_id=151449 project_image_fid=357469]

Residents will have private access to a rooftop amenity space featuring a pool, gym, sauna, steam room, hot and cold plunge pools, spa and barbecue facilities.

"The success of Oasis demonstrates that buyers continue to prioritise quality, location and lifestyle," Leet said.

"We are proud to have delivered a project that has resonated so strongly with the market and look forward to bringing Oasis to life for our future residents."

Sherpa recently launched <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a>, its third instalment of the Flourish brand in Palm Beach following Flourish Oasis and <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>.

[smartcode_project_cta:default project_id=151449]

Sherpa sells out Flourish Oasis in booming Palm Beach

Urban Property Group's <a href="https://www.apartments.com.au/new-apartments/la-vera-macquarie-park-94-talavera-road-macquarie-park-nsw-2113">La Vera</a> is leading the next phase of Macquarie Park's residential evolution, with the new apartment development set to become the first of several new apartment projects in the precinct to complete.

The 169-apartment building has now topped out ahead of its scheduled completion in the third quarter of 2026, as new residential investment continues to reshape one of Sydney's largest employment hubs into a true mixed-use precinct.

[smartcode_project:default project_id=134951 project_image_fid=368645]

Cox Architecture has designed La Vera to capture the best of its unique positioning on Talavera Road, orienting the building towards Lane Cove National Park.&nbsp;The building features a sculpted northern façade with flowing curves inspired by the surrounding landscape, while its city-facing elevation adopts a more structured architectural expression to maximise skyline views.

"The vision for the project was to conceive a building that adopted an organic and curvilinear form to the northern portion that faces the Lane Cove National Park," <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a> Director Felipe Miranda said.

"The residents that reside in the northern portion of the building benefit by having beautifully crafted curved balconies that speak to the natural context and heighten the relationship of their internal living spaces to the external balconies."

[smartcode_project:default project_id=134951 project_image_fid=358802]

La Vera offers a diverse mix of one, two, three, and four-bedroom configurations, with prices currently starting from $740,000. Buyers so far have been a mix of Sydney-based investors,&nbsp;metro commuters, owner-occupiers and downsizers from surrounding North Shore suburbs.

Both investors and owner-occupiers have been drawn to La Vera's proximity to Macquarie University, Macquarie University Hospital, Macquarie Centre and the Sydney Metro, infrastructure that supports both strong rental demand and a convenient lifestyle for residents.

The apartments feature full-height glazing, timber flooring throughout living areas, stone kitchen benchtops, SMEG appliances, floor-to-ceiling bathroom tiling and ducted air conditioning.

Residents will have access to a rooftop recreation level featuring a swimming pool, sauna, barbecue facilities and landscaped relaxation areas, complemented by additional communal space at ground level. Many apartments enjoy uninterrupted views across Lane Cove National Park, reinforcing the project's connection to its natural setting.

[smartcode_project:default project_id=134951 project_image_fid=364551]

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a>, a family-owned developer and builder with nearly four decades of experience, holds a 4.5-star iCIRT rating and was Australia's first developer to introduce 10-Year Latent Defects Insurance (LDI). La Vera is the first apartment development in <a href="https://www.apartments.com.au/developments/macquarie-park-nsw-2113">Macquarie Park</a> approved to offer the additional insurance protection, alongside a five-year warranty on SMEG appliances.

Urban Property Group CEO Patrick Elias said the additional protection reflects changing buyer expectations in the off the plan market.

"Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been. Having LDI is a tool to portray the confidence that we have in our product, and a confidence we want buyers to share," Elias said.

Following completion of the building later this year, buyers will move into their apartments well before Christmas.

[smartcode_project_cta:default project_id=134951]

La Vera closes in on completion as Macquarie Park continues residential transformation

Brisbane developer Red &amp; Co's decision to include dual key apartments in its debut Gold Coast apartment development, <a href="https://www.apartments.com.au/new-apartments/como-varsity-lakes-22-lake-street-varsity-lakes-qld-4227">COMO Varsity Lakes</a>, is proving to be one of the project's biggest drawcards, with buyers quickly snapping up the flexible residences.

More than half of the project's 36 dual key apartments have already sold, helping drive COMO beyond the 50 per cent sold mark within the first month of launch.

The strong response highlights growing demand for apartment designs that can adapt to changing lifestyles, with buyers increasingly looking for homes that accommodate multi-generational living, provide rental income opportunities or simply offer greater flexibility over time.

Located on the shores of Lake Orr, COMO will deliver 156 apartments across 16 levels, with the dual-key residences forming a limited release within the broader development.

Each combines a primary two-bedroom apartment with a fully self-contained studio on a single title, connected by a shared foyer and lockable internal door. The design allows owners to house ageing parents, adult children or guests while maintaining privacy, or lease the secondary residence to generate additional income.

Just 17 of the original 36 dual key apartments remain available.

[smartcode_project:default project_id=135546 project_image_fid=367096]

The innovative configuration combines two fully self-contained residences on a single title, typically comprising a primary two-bedroom apartment alongside a separate studio residence, connected via a shared foyer and lockable internal door.&nbsp;

The model is proving particularly attractive to owner occupiers navigating changing family dynamics and the realities of the current housing crisis.&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363511]

<a href="https://www.apartments.com.au/project-marketer/npa">NPA</a>&nbsp;CEO Andrew Erwin said dual key living was resonating strongly with modern buyers because it delivered both financial flexibility and practical lifestyle benefits.&nbsp;

“The housing crisis and rising cost of living are fundamentally changing how Australians think about home ownership,” Erwin said.&nbsp;

“Dual key apartments provide a genuine solution for families who want to stay connected while maintaining independence. Parents can help adult children save for a future home, ageing parents can remain nearby without moving into aged care, and owners still retain privacy and flexibility.

“Importantly, buyers are also recognising the financial advantages. It creates the opportunity to generate additional income from part of the home without the holding costs associated with owning a separate investment property.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363509]

Unlike traditional dual occupancy arrangements, the residences operate under a single title, meaning owners only incur one set of body corporate fees, council rates and holding costs.&nbsp;

The secondary residence can also evolve over time - functioning as guest accommodation, a home office, creative studio or private retreat before later becoming an income-producing asset.

<a href="https://www.apartments.com.au/developers/red-co">Red &amp; Co</a>&nbsp;Director and Co-Founder David Laverty said the strong early sales reflected growing buyer urgency and changing priorities within the market.&nbsp;

“Securing more than half of COMO’s residences within such a short timeframe is an outstanding result and a clear endorsement of both the design and location,” Laverty said.&nbsp;

“Buyers are responding to the combination of location, connectivity and amenity, but ultimately it’s value relative to other East Coast markets that is driving enquiry.”&nbsp;

“We’re also seeing strong interest from owner occupiers looking for homes that can adapt with them over time. Flexibility has become one of the most important considerations for buyers in today’s market.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363515]

Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, COMO features a mix of one-, two- and three-bedroom residences with 2.7-metre ceilings and larger-format floorplans aimed at owner occupiers, downsizers and lifestyle-focused buyers.&nbsp;

The development will feature an extensive rooftop recreation and wellness offering including a 25-metre lap pool, sundeck, barbecue and dining areas, gym, sauna, plunge baths, landscaped gardens, wellness spaces and rooftop pickleball and paddleball courts.

The remaining dual key apartments range from 137 sqm to 167 sqm and include generous three-bedroom layouts with separate self-contained studio accommodation and dual parking.&nbsp;

Erwin said the dual key concept represented a broader shift in how Australians would live in the future.

“People want homes that can evolve with their lives,” he said.&nbsp;

“A dual key apartment can suit a family today, support an ageing parent tomorrow, and potentially generate income later on. That adaptability is becoming incredibly valuable in the current environment.”

Prices currently range from $2,115,750 to $2,583,000.&nbsp;

[smartcode_project_cta:default project_id=135546]

Inter-generational living drives demand for COMO’s dual key apartments as housing pressures reshape buyer priorities 

Builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/ceerose">Ceerose</a> has doubled down on its Leichhardt ambitions, lodging its second State Significant Development Application (SSDA) in the suburb in the last six months.

Their newest proposal seeks to transform a former industrial precinct into a new residential community centred around the adaptive reuse of one of the site's heritage warehouse buildings.

The new project, on a 6,930 sqm block at&nbsp;<a href="https://www.apartments.com.au/new-apartments/40-76-william-street-leichhardt-nsw-2040">40–76 William Street</a>, will bring more than 200 apartments to a suburb that has seen little to no new supply in recent years. It follows Ceerose's late 2025 SSDA for a mixed-use apartment project on nearby Parramatta Road, signalling the developer's growing investment in Sydney's Inner West.

Ceerose Founder Edward Doueihi told Apartments.com.au the developer’s long-standing presence in Leichhardt and the Inner West had given it a strong understanding of how the area has evolved and where its future opportunities lie.

“Ceerose has had a long-standing presence in Leichhardt and the Inner West, giving us a unique understanding of the area’s evolution and future potential,” Doueihi said.

“Having delivered projects throughout the region, we have witnessed the suburb’s transformation first-hand and understand the opportunities for its continued growth.”

Doueihi said that understanding also informed the planning process, with a comprehensive Stakeholder Engagement Outcomes Report prepared before the application was lodged.

The report identified the key issues and concerns raised by neighbouring residents and other stakeholders, allowing those matters to be considered and incorporated into the design where appropriate.

He said the delivery of additional housing would also play an important role in supporting the revitalisation of Norton Street and the Italian Forum.

“By increasing the local residential population, the development is expected to strengthen demand for local businesses, encourage further investment, and help restore the vibrancy that made the precinct a thriving destination in the early 2000s.”

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="7258c54c-8167-479e-8361-2d5fca9915b4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010B%20-%20CGI%20-%20View%202.jpg?VersionId=S9DQfxu_jpcB5LrAEYFUbyMzg5odW6i5" />

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, the redevelopment would involve the demolition of four existing industrial buildings while retaining and adaptively reusing the site's most significant warehouse. The retained structure would anchor a new residential precinct comprising five interconnected buildings arranged around a large central landscaped courtyard, with heights stepping from five storeys along the surrounding residential streets to 11 storeys at the William Street corner.

According to the Architecture Design Report by Woods Bagot, the proposal "seeks to create a residential village centred around a generous green heart while celebrating the site's industrial heritage through the adaptive reuse of the existing warehouse building."

The development would comprise 203 apartments, with 188 proposed as build-to-sell residences, alongside 15 affordable housing apartments.

Rather than treating the retained warehouse as a standalone heritage object, Woods Bagot has sought to weave the site's industrial history throughout the masterplan. The proposal retains the north and west facades of the landmark corner warehouse, while new buildings reinterpret the site's brick-and-steel industrial language through their material palette and architectural expression.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="9e8c64c2-881b-49e1-8c90-6b6acaaa45b6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010C%20-%20CGI%20-%20View%203.jpg?VersionId=Qm8_8H_Xrg_sc4Mdjc59vlAcKF_5wRTb" />

The design is organised around what Woods Bagot describes as a "green heart", a landscaped communal open space that reinstates the leafy character removed when the site became an industrial storage facility. A new pedestrian laneway running through the site would improve permeability between William, North and Francis streets, linking residents through landscaped public spaces while activating the ground plane.

Residents would have access to communal gardens and shared recreation areas distributed throughout the development. Sustainability has also been prioritised, with the project targeting an average 7.9-star NatHERS rating. Proposed initiatives include rooftop solar generation, rainwater harvesting, passive solar design, naturally ventilated lobbies, extensive cross-ventilation and the reuse of existing building fabric to reduce embodied carbon.

The adaptive reuse strategy became a defining feature of the application after heritage investigations found only one of the site's industrial buildings could feasibly be retained. The Heritage Impact Statement concludes that preserving the key warehouse façades while referencing the site's industrial character throughout the new development provides an appropriate balance between renewal and conservation.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="efffafdb-594f-4e2b-a067-921fd51c05e1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010D%20-%20CGI%20-%20View%204.jpg?VersionId=DPmE4.k16YRt0i27hEZVtJAffarpvUfx" />

"Retention and adaptation of the site buildings has been explored but found not to be feasible except for the tallest building, whose street facades will be retained," the heritage report states.

"The proposed building will interpret the brick and steel character of the subject site, including reuse of some components and construction of a large 'sawtooth' structure in the proposed open space."

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="3bfef2b5-83f5-40cd-9cab-767092f34266" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010E%20-%20CGI%20-%20View%205.jpg?VersionId=7asb3i_ql4ybbuJOUb5UHBEIy0Q9t.DF" />

The William Street site is located around 300 metres from Leichhardt North Light Rail station and a short walk to Norton Street's retail, dining and hospitality precinct. The surrounding area has increasingly become a focus for urban renewal given its proximity to public transport and the Parramatta Road corridor.

Doueihi founded Ceerose in 1998 and has grown the business to become one of Sydney's more active apartment developers in recent years, with completed projects including The Alex Collective in Alexandria, Abbie's Lane in Annandale, and the award-winning Munro House in Elizabeth Bay. They are currently delivering Belgravia, 17 luxury apartments in Potts Point.

First look: Ceerose doubles down in Leichhardt with adaptive reuse of former warehouse site

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<div>
The property data and analytics company, CoreLogic, has recruited Lisa Claes to be its next managing director for Australia and New Zealand.
Ms Claes is currently ING Direct's executive director for customer delivery.
She will start in August, taking over from Graham Mirabito, who is set to become the US-based group's international chief executive.
<div>Graham Mirabito said Ms Claes had 20 years experience in the mortgage, financial services and insurance industries, which well fitted the CoreLogic business.</div>
<div> </div>
<div>"ING Direct has been a leader in analytics," he said. "Lisa will bring a lot of capability to improve efficiency, engagement, and the on-line experience," he told The Australian Financial Review.</div>
</div>
<div> </div>
<div>In his years at the helm since October 2005, the Australian staff has grown from 75 to around 700 and its name changed from RP Data to CoreLogic RP Data to now just CoreLogic.</div>
<div>
The local operation is now a fully owned subsidiary of the US-listed, $4.6 billion, CoreLogic Inc, with much of the international expansion into China and Japan driven from Australia.
</div>
<div>Mirabito told Fairfax Media much of his international focus would be on Europe.</div>
<div> </div>
<div>RP Data adopted the sole name of its parent company, CoreLogic late last year.</div>
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jchancellor-FAypfDUnLy

Lisa Claes to replace CoreLogic's Graham Mirabito

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<div>
The national shortage of housing in Australia is nearly 250,000 dwellings, lower than previously estimated, but still a long way from being in structural surplus, according to ANZ Research's latest Economic Insight.
The study forecasts that housing construction and underlying housing demand will see a modest unwinding of the current housing shortage in coming years. This easing will, however, challenge the short-term support to dwelling sales and price growth from the underlying supply-demand imbalance in some markets.
Underlying housing imbalances don’t tend to be important in explaining short-term changes in dwelling prices. A strong increase in the national underlying housing shortage, however, has provided fundamental support to dwelling prices over the past decade, it says.
Foreign investment in Australian housing has increased sharply in recent years, providing a boost to new housing construction. However, the net impact of foreign investment on the supply of housing, and the housing market balance, is difficult to quantify due to limited reliable information about the number of unoccupied foreign investor dwellings.
</div>
Housing construction booming; population growth slowing
Australian housing construction is booming but population growth has slowed, prompting speculation by some commentators that Australia’s housing market has, or will soon, have a surplus of housing. The market and media are flooded with views on the state of ‘balance’ in the Australian housing market. These views conclude that housing is either in surplus, balance or shortage depending on whether ‘the market’ refers to: the mortgage/sales market; annual population and housing construction flows; or long-term housing requirements and housing construction, in other words, what we estimate as the underlying housing market balance.
Analysis of demographics and housing construction shows that in the 20 years to 2005 Australia’s annual population growth fluctuated modestly around 218,000 people (1¼% y/y on average). Between 2006 and 2008, however, annual population growth increased sharply, to a peak of 460,000 people (2.2% y/y) in December 2008. This was largely because of very strong net overseas immigration. Over the past ten years, Australia’s population has increased, on average, by around 360,000 people per year (1.65% y/y).
Dwelling construction has struggled to keep up with Australia’s housing requirements (Figure 2). Only recently has housing construction broken away from a long-term cyclical reversion to annual housing completions of approximately 145,000 dwellings. This has reflected a surge in construction of high-rise apartments, particularly in Sydney, Melbourne and Brisbane.
<img src="/images/2016/03/23/Screen%20Shot%202016-03-23%20at%203.08.01%20PM.png" alt="" width="499" height="283">
Consequently, until recently almost a decade of underbuilding has driven a sharp run-up in Australia’s underlying housing shortage. Assuming that the housing market was in long-term cyclical balance – that is, the market wasn’t maintaining a long-term cyclical surplus for a 20-year period to 2005 – housing construction levels have only recently ‘caught up’ to annual housing construction requirements. That is, the surge in higher-density housing construction has driven housing construction levels to match annual underlying housing demand for the first time since 1995.
Based on our expectations of housing construction levels easing moderately from recent all-time highs in the coming years (from 220,000 dwelling starts in 2015 to 205,000 in 2016 and 198,000 in 2017) and slowing population growth (from 1.35% in 2015 to 1.30% in 2016), Australia’s underlying housing market balance should moderate in 2016 and 2017 (Figure 3).
<img src="/images/2016/03/23/Screen%20Shot%202016-03-23%20at%203.11.40%20PM.png" alt="" width="450" height="274">
 
What does the market balance mean for Australian House Prices?
An underlying shortage of housing has little explanatory power for short-term price growth, which is largely a reflection of: housing affordability (ie house prices compared to household income and mortgage rates); housing market sentiment; home buyer preferences; and housing market policy/regulation.
For example, the underlying shortage of housing in NSW continued to increase strongly through the recent periods of falling house prices in 2008-09 and 2011-12. However, an underlying housing market shortage (or existence of pent-up unsatisfied housing demand) does provide significant support to the long-term level of house prices, offsetting the downside risk to prices from short-term/cyclical factors (Figure 1). Looking ahead, markets with significant unsatisfied housing demand, particularly Sydney, have limited downside risks to prices absent unexpected shocks to household incomes.
That said, short-term/cyclical factors that drive house prices lower are likely to have more amplified and longer-term impacts in housing markets with weaker supply-demand balance fundamentals. That is, housing markets currently experiencing strong growth in new housing completions (ie inner-CBD Melbourne apartments, Western Sydney housing) and/or sharply weaker population growth (ie WA and Queensland mining regions) are likely to be more exposed to cyclical price falls than other markets.
In addition, house prices in markets that are considered more-or-less ‘in balance’, such as Adelaide, Hobart and Canberra, have much softer fundamental support and are more exposed to regional economic conditions.
What's changed: Why is the housing market shortage lower?
The Australian housing market has experienced some significant changes in recent years, including an increasing gap between home deposit and mortgage servicing affordability, stronger consumer preferences for higher-density dwellings and a strong appetite for housing as an investment asset.
How do these changes impact on our estimation of the housing market balance? The main assumptions that have been impacted by these changes are household formation rates and demolition rates – both of which have lowered our estimates of underlying demand for housing.
Household formation rates: to reflect subdued first home buyer activity and difficult home deposit affordability we have revised our historical and projected household formation rates lower (ie increasing the notional number of persons per household) 
Demolition rates: the issue of urban congestion, or concentrated population growth in the major capital cities, has increased housing demolition rates. This has been reflected by a strong increase in higher-density dwelling (apartment and townhouse) construction in inner-city locations in recent years. 
Foreign investors and Australia's housing market balance
Foreign investment in Australian housing has increased sharply in recent years, raising some concerns about the impact of foreign purchases on domestic housing market conditions. Most notably, these concerns have centred on the impact this has had on price growth. A lack of reliable and timely data1 on foreign investor purchases of
Australian housing makes it difficult to draw evidence-based conclusions on the net impact of recent activity on house prices, with most views based on anecdotal information.
However, assuming that the majority of foreign purchases are compliant with existing policy (ie. each purchase adds at least one new dwelling to the housing stock) it is fair to conclude that foreign investment has provided a boost to the supply of new housing and likely had little direct impact on underlying demand (depending on the motivation for the foreign investor purchase).
While the net impact of foreign investment is likely to provide limited direct support to demand for housing through household formation and population growth, it could add to underlying demand through a higher proportion of vacant or unoccupied dwellings. Similarly, there is little reliable data on this impact, with some data indicating a strong prevalence of ‘ghost towers’ and some apartment developers of the view that most foreign investors are tenanting apartment purchases for rental yield as well as capital security.
Consequently, we haven’t built any assumptions about the impact of growth in foreign investment to the proportion of vacant new dwelling completions. However, the 2016 ABS Census will be an important source of current information on the impact of foreign investment on underlying housing demand and Australia’s housing market balance.
Our overall view though is that foreign investment is likely to have eased underlying market balance pressure in the major capital cities.
 
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jonathanchancellor-7SQnKwU6yx

Is there still a housing shortage in Australia? ANZ Research says about 250,000 dwellings

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The ANZ today announced that Shayne Elliott will become its chief executive officer on 1 January 2016 succeeding Mike Smith.
Mr Elliott, 51, is currently ANZ’s chief financial officer, originally from New Zealand.
Mr Elliott has over 30 years’ experience in international banking including in Australia, New Zealand, Asia Pacific and the Middle East. He joined ANZ as CEO Institutional in June 2009.
Mr Smith will step down after eight years as chief executive officer and as a Director on 31 December 2015. 
ANZ Chairman David Gonski said Mr Smith had transformed ANZ into Australia’s only international bank with a focus on Asia Pacific.  
"He has transformed ANZ into one of Asia Pacific’s leading banks with operations in 34 countries, delivering strong outcomes for our customers and for our shareholders."
Mr Smith, who has an invaluable understanding of and connections in Asia, will be retained as a non-executive advisor to the Board, initially for one year. 
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Shayne Elliott to succeed Mike Smith at ANZ

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Further changes to banks' capital requirements could increase the cost for first time buyer customers.
ANZ deputy chief executive Graham Hodges says further changes could be required after a review by the international Basel Committee on Banking Supervision.
"Proposals currently under consideration by the international Basel committee could lead to further significant changes to bank capital requirements applying to housing," Mr Hodges told a federal parliamentary inquiry into home ownership last week.
"This could have the effect of increasing the cost of finance particularly for those customers borrowing at a higher loan-to-value ratios," Fairfax Media reported.
"Over time this will likely disadvantage those buyers namely some first home buyers with smaller housing deposits."
The Australian Prudential Regulation Authority's new capital requirements for the big four banks and also Macquarie Group will require them to hold billions of dollars in extra capital against their mortgage books from July 1 next year.
Last week's comments are the first made by the bank on the matter.
“The potential consequences of the Basel IV proposals need to be carefully considered,” ANZ advised in its submission to the Murray inquiry report, which recommended regulators increase capital requirements for the banks so they are unquestionably strong globally.   “In the residential mortgage market, for example, the proposals may encourage authorised deposit-taking institutions to implement much greater differential pricing between customer groups than currently occurs in the Australian market, to reflect the wider spectrum of capital requirements.   “This may include higher pricing to customers with higher loan to value ratios.”
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ANZ warns low deposit first time buyers face further borrowing costs from 2016

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The ANZ submission to the House of Representatives Inquiry into Home Ownership suggests that achieving balance between government and private sector "can assist with managing demand uncertainty and responding to changes in consumer needs". 
"State governments and local councils have been slow to release land in response to the surge in migration from 2004. Natural geographic constraints to expanding the city fringe complicate this process in cities such as Sydney. 
"Adding to this bottleneck, the process for converting rural land to new dwellings can take six or more years in some cities.
"For suburban and inner-urban redevelopments, planning approvals from State government and local council are frequently subject to lengthy delays and policy changes are commonplace. This makes developing inner city properties more expensive and drives apartment prices up."
In the financial institution's view, in order to achieve higher funding availability, lower funding costs and earlier funding of projects, consumers should carry more of the risk.
"At present, buyers in all States except Queensland can pay a 10% deposit for an off-the- plan purchase with the remaining 90% paid on practical completion. ANZ’s experience is that this deposit has proven to be an inadequate pre-estimate of the loss that a developer suffers if a buyer does not complete a contract. 
"When a buyer fails to complete the purchase, a seller is exposed to: 
<ul>
<li>  Loss on sale price if the market has fallen; </li>
<li>  Additional legal expenses associated with the resale; </li>
<li>  Holding costs (including interest on debt, greater levels of land tax and local council rates, and higher insurance premiums); </li>
<li>  Marketing and agent commissions; and </li>
<li>  Costs of enforcement against a defaulting buyer or in claiming a disputed deposit. </li>
</ul>
"Housing demand has been driven over the last decade by rapid population growth, largely resulting from immigration. The acceleration in population growth was most concentrated in Sydney and Melbourne and was not matched by increasing construction of new residential dwellings. Demand is also affected by general economic conditions, including interest rates and labor market conditions. 
"ANZ expects subdued economic conditions in coming years and a higher unemployment rate will impact consumer confidence and the financial capacity of households (ie household income growth), despite an extended period of low interest rates. 
"In recent years, investors have been increasingly attracted to residential property as an asset class due to solid long-term risk-adjusted returns (including low downside volatility), the low cost of borrowing, and solid underlying market fundamentals. Investor's lending now accounts for 50% of total housing finance, slightly higher than peak in 2003-04. 
"We estimate that ‘realised’ foreign investment added around AUD12-18 billion to dwelling investment in 2013-14, and contributed to the increased supply of housing available for rent. 
The top 40% income earners accounts for four-fifths of investor housing debt. The increase in years to save for a deposit contributes to the decline in home deposit affordability.
"An ageing population will depend less on income and more on financial wealth to support home ownership choices. Figure 1 shows the most recent data on households by dwelling type, from 2011. It reveals a strong bias towards detached housing, particularly amongst age groups over 35 years. Higher-density housing is more common among under 35s (37%) and over 65s (23%). 
<a href="/images/2015/08/05/Screen%20Shot%202015-08-05%20at%205.19.16%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/08/05/Screen%20Shot%202015-08-05%20at%205.19.16%20PM.png" alt="">
"ANZ supports the supervision and measures now in place to monitor risks to financial stability posed by housing.  
"In net terms and absent the policy changes and other recommendations made here, we expect increasing home prices, weak household income growth, stable interest rates and increasing underlying pressure on the existing housing stock will continue to reduce housing affordability across all measures in coming years."
 
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ANZ blames metro Sydney and Melbourne price rises on supply mismatch

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The Today show money correspondent Ross Greenwood advised the full 25% rate cut savings was worth $3.34 billion in potential stimulus – money back in the economy.
But not all banks are passing on the full cash rate cut.
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With some $1.33 trillion in home owner and investor home loans, <a href="https://www.9jumpin.com.au/show/today/videos/4207691939001/" target="_blank">Greenwood </a>calculated that on all banks passing the rate cut on in full.
However the Commonwealth Bank is only passing on part of Tuesday's cut in official rates to its home loan customers, but has interestingly also taken the step of raising some deposit interest rates.
The country's biggest bank has lowered its standard variable mortgage rates by 0.20 percentage points to 5.45%.
CBA's group executive for retail banking, Matt Comyn, said the bank had considered the needs of deposit customers as well as borrowers in its decision.
"Lifting the rates for our deposit customers at a time when the cash rate is decreasing recognises the importance of savings income, particularly for retirees and young people."
The CBA move comes after ANZ earlier said it would lower its standard variable home loan rate by 0.25 percentage points to 5.38%, effective Friday.
NAB has copied Commonwealth Bank's move to keep some of the Reserve Bank's 0.25 per cent cut to the cash rate. 
NAB will cut its standard variable rate to 5.43 per cent, with its lowest fixed rate at 4.49 per cent for one year and 4.59 per cent for five years. 
 
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Full rate cut was worth $3.34 billion in potential stimulus: Ross Greenwood

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The housing market, in at least Sydney, Melbourne and Darwin, has seen growth recently, and it's causing a knock-on effect, according to the ANZ Research team, with developer confidence now picking up.
However, they also said that it would be the mining states that record the most pronounced growth rate for gross state product in the coming years.
All non-mining states saw growth rates strengthen in the second half of 2013.
Cherelle Murphy, Dyslan Eades, Tony Morris and Zoe McHugh, from ANZ Research, recently provided a market analysis that pointed to five factors lifting the growth rates and outlooks in all states and territories.
THE FIVE FACTORS
<ol>
<li>Improved global economic conditions 
</li>
<li>Low interest rates 
</li>
<li>The lower Australian dollar 
</li>
<li>Better business confidence 
</li>
<li>Better consumer confidence</li>
</ol>
"The mining states, which are on the cusp of an export expansion, will continue to record the strongest growth rates over the coming years in our view. But the non-mining states are expected to improve most compared to the growth rates recorded over the past few years," they recorded.
Interestingly, they also noted that the convergence in growth rates between the states is as expected.
"The mining states are coming off very strong economic performances as the resources construction pipeline dries up, while the non-mining states are steadily firming."
MINING STATES
Queensland: Major LNG projects still under construction, recording high activity levels.
Western Australia: More advanced through resources contruction work, seeing a more rapid slowdown.
Northern Territory: The exception, seeing a boost from INPEX Ichthys LNG Project.
NON-MINING STATES
New South Wales: The best performer, with trend unemployment falling to 10 month low (5.5%) in March. Business conditions have picked up.
Victoria, Tasmania: Sluggish but recently improving outlooks. More exposed to manufacturing, which continues to shrink. Business conditions have picked up.
South Australia: Sluggish but recently improving outlooks. More exposed to manufacturing, which continues to shrink.
Australian Capital Territory: Sturdy, but "will shortly bear the brunt of the not yet wholly known Commonwealth fiscal tightening."
All states, they noted, saw a sharp pick-up in housing market activity "related in part to the expansionary setting of monetary policy," they noted.
<blockquote>
FIVE FACTORS LIFTING GROWTH RATES
IMPROVED GLOBAL ECONOMIC CONDITIONS
LOW INTEREST RATES
THE LOWER AUSTRALIAN DOLLAR
BETTER BUSINESS CONFIDENCE
BETTER CONSUMER CONFIDENCE
</blockquote>
"Prices have bounced off their lows and have risen especially sharply in Sydney, Melbourne, and Darwin. This has translated to an improvement in developer confidence, with residential building approvals rising strongly, implying dwelling investment is likely to contribute solidly to growth going forward," they said.
Among all the non-mining dominated states and territories, the non-mining business investment is not forecasted to see any notable improvement until next year.
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