<p>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.</p>

<p>The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.</p>

<p>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.</p>

<p>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.</p>

<p>“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.</p>

<p>“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.”</p>

<p><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" /></p>

<p>GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.</p>

<p>“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.”</p>

<p>Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.</p>

<p>“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.</p>

<p><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" /></p>

<p>&nbsp;</p>

<p>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.</p>

<p>Green praised local policy settings.</p>

<p>“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.”</p>

<p>One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.</p>

<p>“The way we will be able to achieve economies of scale is through size,” Green added.</p>


Joel Robinson

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

<p>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.</p>

<p>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.</p>

<p>Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be</p>

<p data-end="683" data-start="511">"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.</p>

<p data-end="882" data-start="690">"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."</p>

<p data-end="882" data-start="690">[smartcode_project:default project_id=134646 project_image_fid=6109]</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6110]</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6116]</p>

<p data-end="247" data-is-last-node="" data-is-only-node="" data-start="0">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.</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project_cta:default project_id=134646]</p>


WM Residences fills gap in Mordialloc townhouse market

<p>&nbsp;</p>

<p>Developer GURNER™ Group has revealed $1.65 billion in residential sales nationally across the 12 months to December 2025, driven largely by the continued momentum of its Docklands wellness-focused precinct, Elysium Fields.</p>

<p>The sales result was generated across seven projects in Victoria and New South Wales, headlined by Elysium Fields, GURNER™’s $2.75 billion mixed-use precinct planned for Harbour Esplanade in Docklands.</p>

<p>The project has recorded more than $500 million in sales across the first three towers, equating to around 580 apartments sold.</p>

<p>The first tower, Helios, has now sold out of its 240 private residences, with GURNER™ preparing to release a premium penthouse collection comprising 15 three-bedroom penthouses in coming weeks.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370975]</p>

<p>Elysium Fields is being developed on the long-held 20,000 sqm Docklands site at 208-226 Harbour Esplanade, which had remained undeveloped for more than two decades prior to GURNER™ taking over the project around four years ago.</p>

<p>Construction has now commenced across four towers ranging between 18 and 30 storeys, with Hamilton Marino and Maxcon appointed as builders.</p>

<p>Once complete, the precinct is expected to comprise around 1,100 residences, alongside retail, hospitality and public realm uses integrated throughout the site.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370981]</p>

<p>Designed by Fraser &amp; Partners in collaboration with GURNER™ Design House, the project has been positioned around the developer’s broader focus on wellness-led residential living.</p>

<p>“We don’t sell apartments. We create a true luxury lifestyle that simply doesn’t exist elsewhere in the market today,” Founder and Executive Chairman Tim Gurner said.</p>

<p>“To deliver that requires an extraordinary level of detail, coordination and discipline across multiple verticals, from design and hospitality through to wellness and service.”</p>

<p>“We’ve always believed that living extends far beyond the physical residence. It’s about how you feel the moment you arrive, how you live day-to-day, and the ecosystem that supports that.”<br />
[smartcode_project:default project_id=144441 project_image_fid=370977]</p>

<p>The project’s design places a heavy focus on landscaping, wellness amenities and biophilic design principles.</p>

<p>Plans include around 3,700 sqm of landscaped gardens and open space throughout the precinct, alongside a retail and dining offering spanning approximately 5,000 sqm.</p>

<p>The broader public realm strategy centres around what GURNER™ describes as the “Path of Life”, an urban forest and landscaped pedestrian environment intended to connect the various buildings and wellness spaces across the precinct.</p>

<p>The apartments themselves will incorporate a range of wellness-focused inclusions, including purified air and water systems, circadian lighting, antimicrobial surfaces, and optional in-home wellness upgrades.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370980]</p>

<p>Gurner said the company’s experience through its Saint Haven wellness clubs had directly informed the residential offering now being incorporated into Elysium Fields.</p>

<p>“We’re seeing a clear global shift toward longevity, performance and proactive health,” Gurner said.</p>

<p>“Our role is to deliver that in a way that feels seamless, highly private and beautifully resolved within the environments we create.”</p>

<p>A large component of the wellness offering is planned through the resident amenity and health facilities proposed within the precinct.</p>

<p>That includes plans for bathing and recovery facilities spread throughout the towers, incorporating mineral pools, saunas, steam rooms, flotation therapy, red light therapy and wellness lounges.</p>

<p>The developer is also seeking approvals for what it describes as a “reverse ageing medical clinic” within the precinct.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370978]</p>

<p>According to project information released by the group, the proposed facility would include cryotherapy, IV infusion therapy, infrared and dry saunas, PEMF beds, MRIs, DEXA scans, brain scans and blood analysis services.</p>

<p>Within the first tower, Helios, residents will also have access to a dedicated amenity offering known as the Sky Private Club.</p>

<p>The upper 15 levels of the building will include private lounges, dining spaces, rooftop amenities and optional private wellness studios integrated within residences.</p>

<p>The Helios tower itself comprises 260 apartments ranging between 60 sqm and 300 sqm, including a collection of penthouses.</p>

<p>That includes a planned two-storey penthouse spanning around 600 sqm with uninterrupted bay views.</p>

<p>The Elysium Fields precinct is being delivered in partnership with Digital Harbour Holdings, a consortium that includes the Liberman family, which controls the development rights across the Docklands site.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370979]</p>

<p>The sales result comes as GURNER™ continues expanding its national development pipeline beyond Victoria.</p>

<p>“We have a strong pipeline across Australia and are now focused on scaling into key markets including New South Wales and Queensland, while continuing to build on our Melbourne base,” Gurner said.</p>

<p>“We currently have more than $3 billion in the market, growing to over $5 billion by October, and expect to materially outperform last year in the 2026 calendar year.”</p>

<p>The result also reflects the continued strength of the upper-end apartment market in Melbourne, particularly for owner-occupier-focused product with large-scale amenity and lifestyle offerings.</p>

<p>[smartcode_project_cta:default project_id=144441]</p>


Record result anchored by the Group’s “utopian” Elysium Fields precinct – defying market headwinds in Docklands.

Elysium Fields drive Gurner to $1.65 billion in apartment sales over 2025

<p>National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.</p>

<p>The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.</p>

<p>Multiplex has been appointed the builder, and construction is now underway.</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365784]</p>

<p>Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.</p>

<p>Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.</p>

<p>“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.</p>

<p>He said NAB’s early support was instrumental in helping establish the company’s development model.</p>

<p>“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.</p>

<p>“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365771]</p>

<p>Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.</p>

<p>Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.</p>

<p>Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.</p>

<p>Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.</p>

<p>The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365768]</p>

<p>Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more international and domestic flights.</p>

<p>Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.</p>

<p>Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.</p>

<p>[smartcode_project_cta:default project_id=108274]</p>


NAB funds $1 billion Surfers Paradise apartment development, Palmera

<p>Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.</p>

<p>The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.</p>

<p>The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.</p>

<p data-end="792" data-start="529"><img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" /></p>

<p data-end="1040" data-start="794">According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”</p>

<p>The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.</p>

<p>The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.</p>

<p>Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.</p>

<p>“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.</p>

<p>The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.</p>

<p>The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”</p>

<p><img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" /></p>

<p>The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.</p>

<p>While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.</p>

<p>“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.</p>

<p>According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.</p>

<p>“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.</p>

<p>“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”</p>

<p>The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.</p>

<p>Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.</p>

<p>&nbsp;</p>

<p>The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.</p>

<p><img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" /></p>

<p>St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.</p>

<p>Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.</p>

<p>The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.</p>

<p>More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.</p>


First look: Aqualand joins St Leonards apartment party

Apartment Construction

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<p>Residents had repeatedly told Bayside Council and the building manager that their Mascot Tower apartments were shaking during excavation work at the neighbouring Peak Towers block.</p>
<p>Residents also told how the basement carpark was flooded during the Peak Towers excavation.</p>
<p>Engineers at Mascot Towers are investigating whether the groundwater level just 1.5m below the basement carpark may have added to the damage at the crack-ridden apartment complex.</p>
<p>Owners were told on the weekend that engineers would be assessing Mascot Towers for at least five to seven days.</p>
<p>Real estate agent John Higgins, who sold most of the Mascot Towers apartments on their 2006 off the plan listings, and has been since involved since, told the Sunday Telegraph he believes the 11-storey Peak Towers, still under construction, may be responsible.</p>
<p>There is also an issue around a faulty support beam potentially causing the cracks that forced hundreds of residents to evacuate the complex on Friday evening.</p>
<p>The eight storey, 122 apartment Bourke Street was completed in 2008 above the railway line.</p>
<p>Higgins said cracks had also been found in the industrial building two doors down.</p>
<p>The building is adjacent to the site where an 11-storey apartment block is being built.</p>
<p>Documents show the NSW Office of Water approved­ the development after being satisfied that works dealt with the groundwater issues across the site at depths from 1.4m-1.6m below natural ground level.</p>
<p> </p>
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j.ballantyne1990-6AQqhLzZaK

Mascot Towers residents await causes of cracking 

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<p>EXPERT OBSERVER</p>
<p>The volume of new apartment building is smaller than at any time since July 2012. </p>
<p>Just released figures from the ABS show that new home building approvals lost another 8.4% during December 2018.</p>
<p>Detached house approvals were down by 2.1% but approvals for new apartments/units dropped by 18.6% during the month.</p>
<p>Today’s ABS figures complete the full 12-month picture for 2018. For the year overall, the volume of new home building approvals was pretty strong with over 212,000 permits issued for new dwellings.</p>
<p>This was down only modestly (-5.6%) compared with the 2017 total.</p>
<p>More worrying is the pace at which approvals have been falling back over more recent months.</p>
<p>During the final three months of 2018, total approvals were 23.7% lower than a year earlier – with apartment approvals suffering a 40.1% reduction over this period.</p>
<p>Faltering new home building activity has been occurring against the backdrop of falling house prices, the Royal Commission’s work and uncertainty about what housing policy will look like after May’s Federal Election.</p>
<p>Clearing up some of these uncertainties would help get the housing market back on its feet.</p>
<p>During December, new dwelling approvals increased in three markets including South Australia (+5.6%), the Northern Territory (+1.7%) and Western Australia (+1.1%).</p>
<p>The largest reduction in approvals hit Tasmania (-24.3%) followed by the ACT (-21.3%). The volume of approvals also declined in New South Wales (-8.6%), Victoria (-8.1%) and Queensland (-5.8%).</p>
<p><em><strong><em>Shane Garrett </em></strong><em>is </em>Master Builders Australia’s Chief Economist</em></p>
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New apartments volumes weakest since mid 2012: Shane Garrett

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<div>
<p>Sydney has the nation's most evenly distributed new apartment market which puts it at less risk of inner city oversupply, the 2018 UDIA State of the Land Report suggests. </p>
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<p>Sydney accounted for 28% of total market supply in 2017 with 37,740 lots/multi-units completions, which reflected a similar production output to 2016 but a 48% uplift on 2014 </p>
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<p>Just over a fifth of new Sydney unit completions (apartments, townhouses and terraces) were within five kilometres of the city centre in 2017.</p>
<p>It compared to almost half of all Melbourne unit completions.</p>
<p data-gtm-vis-first-on-screen-7770372_137="2971" data-gtm-vis-total-visible-time-7770372_137="4000" data-gtm-vis-has-fired-7770372_137="1">In Adelaide and Brisbane almost two-thirds of new unit completions were within their respective five kilometre inner rings.</p>
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<p>Population growth, or lack of it, is the primary driver of demand for new dwellings, the report noted.</p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/3/23/UDIA%201.jpg" alt=""></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/3/23/UDIA%202.jpg" alt=""></p>
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<p>The UDIA said a third of new Sydney units were within 5 to 10 kilometres of the CBD, 28 per cent of completions were 10 to 20 kilometres out and 18 per cent of completions were as far as 50 kilometres from the centre of town, according to data compiled for the report by CoreLogic.</p>
</div>
<div>
<div id="article-inline-ad">The UDIA report also found that new multi-unit completion (10 units or more) hit a record 77,365 in 2017, up 8 per cent on 2016 and 64 per cent higher than three years ago.</div>
</div>
<div>
<p>Most of this growth was due to a 25 per cent rise in Melbourne unit completion which reached 25,900 last year, just below the 28,300 units completed in Sydney.</p>
<p>It noted the heighted levels of new residential supply being delivered had been led by Melbourne which recorded a total production of almost 49,000 lots/multi-units in 2017, which was up 96% on 2014.</p>
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<p>Melbourne’s total market output accounted for 37% of the combined capital city lots/multi-unit production in 2017. </p>
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<p data-gtm-vis-recent-on-screen-7770372_137="9975" data-gtm-vis-first-on-screen-7770372_137="9975" data-gtm-vis-total-visible-time-7770372_137="4000" data-gtm-vis-has-fired-7770372_137="1">Brisbane's unit market fell 3 per cent over the year to 11,900 completions while Perth slumped 38 per cent to just under 5000 completions.</p>
<p>Among the smaller unit markets, Adelaide completed 2130 units, up 39 per cent, with Canberra's new unit market doubling to 4100 units last year.</p>
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<div>
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<p>Residential supply from Perth has retracted sharply over the last three years, with the 2017 output of 11,900 lots/multi-units representing 9% of national capital city supply, down from the 16% national market share with 17,900 lots/multi-units in 2015. </p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/3/23/UDIA%203.jpg" alt=""></p>
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<p> </p>
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UDIA says spread of Sydney apartment construction would reduce oversupply risks

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<p>The Rich List property developer Paul Little has quit multi-unit Melbourne apartment construction.</p>
<p>He will instead start construction on hotel and student accommodation projects.  </p>
<p>Little was last year ranked 64th on the <em>Financial Review Rich List</em> with an estimated wealth of $927 million.</p>
<p>Little Projects will continue to develop smaller townhouse projects targeted at owner-occupiers.</p>
<p>But Little told the AFR he was being "very cautious" in the residential area and unlikely to start larger projects.  </p>
<p>"We've effectively removed ourselves from the high-rise market currently and focussed on areas such as a hotel in the city and student accommodation," Little said.  </p>
</div>
<div class="cq-article-content-media section">Little noted investors were now "effectively walking away" and Asian buyers were looking to places other than Australia. </div>
<div class="cq-article-content-paras section">
<p>"Our change in direction occurred probably 12 months ago," Mr Little said.</p>
<p>"It was pretty obvious the residential market was going to become more difficult and we changed our strategies around different products".</p>
<p>"Developers that haven't changed their 'sweet spot' are probably going to be doing very little or struggling."</p>
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Paul Little confirms he's out of Melbourne apartment high rise construction

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<div>A range of factors have come together to kill the apartment construction boom in its tracks.</div>
<div> </div>
<div>These have included:<br><br>-tighter capital controls in China<br>-a stamp duty surcharge for non-resident buyers<br>-a 'vacancy tax' for unoccupied dwellings not made available for rent<br>-changes to the foreign resident capital gains tax regime<br>-significant limits to depreciation deductions<br>-travel costs for landlords being disallowed as a deduction<br>-changes to the CGT main residence exemption for foreign buyers &amp; temporary residents<br>-considerably tighter lending criteria Down Under</div>
<div> </div>
<div>And some other stuff.<br><br>The truth is Australian residents finance the purchase of relatively few new apartments in the larger developments, so if investors aren't buying then it's difficult for developers to secure enough pre-sales to get projects off the ground.</div>
<div> </div>
<div>At the last official count we saw that there were still around 152,000 attached dwellings under construction for the July to September 2017 period.</div>
<div> </div>
<div>But that was months ago, and this is now.<br><br>By today in February 2018 the number of apartments under construction might already have nosedived by about 20 per cent, as a swathe of Sydney completions has hit the market. </div>
<div> </div>
<div>And the latest building approvals figures suggest the downtrend is now locked in.</div>
<div> </div>
<div>This may prove to be a plus for landlords as rental markets tighten, while Alex Joiner of IFM Investors notes an eyebrow-raisi<span>ng <span>~</span>45,000 Airbnb</span> listings in Melbourne and its surrounds, representing huge growth, which may in turn help to explain vacancy rates in the Victorian capital having nudged multi-year lows in 2017. </div>
<div> </div>
<div>Meanwhile macroprudential measures may well mean that interest rates stay lower for longer (if construction employment begins to fall hard, the next move in rates may even be down, for the Reserve Bank of Australia is already missing both its inflation target - for more than two years now - and its full employment mandate). </div>
<div> </div>
<div>Let's look briefly at the latest building approvals trends. </div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Apartment construction to slow</span></strong></div>
<div><strong> </strong></div>
<div>Attached dwelling approvals dropped sharply by 39 per cent in seasonally adjusted terms in December 2017, from 11,247 to just 6,849, although this was partly a reversal of a record spike in Melbourne in the preceding month. </div>
<p> </p>
<div class="separator"><img src="https://2.bp.blogspot.com/-jbFm6bMEzbc/Wnatet_AWHI/AAAAAAAAoKc/7IyLSytQdbASKTMc6St0CdspdGC4u0XRACLcBGAs/s640/A1.jpg" width="640" height="388" data-original-height="813" data-original-width="1338"></div>
<p> </p>
<div>While Melbourne and Sydney apartment approvals will likely continue a downtrend from here, confidence in the maligned Brisbane apartment sector finally seems to have found a more sustainable base. </div>
<div> </div>
<div>Melbourne attached dwelling approvals fell from a manic 6,304 in November to 2,766 in December, overwhelmingly accounting for the monthly decline. </div>
<div> </div>
<div>Across calendar year 2017 Sydney and Melbourne accounted for the strong result in attached dwelling approvals at just under 36,000 and 32,000 respectively.</div>
<p> </p>
<div class="separator"><img src="https://2.bp.blogspot.com/-iBUymPPAG8o/Wnate9sty4I/AAAAAAAAoKg/-N-TNG0FkSwUA6UgVdxEQbc0aYIfFde0QCLcBGAs/s640/A2.jpg" width="640" height="380" data-original-height="810" data-original-width="1363"></div>
<p> </p>
<div>Meanwhile the trend in Brisbane house approvals is now the strongest in the country, alongside sprightly Hobart.</div>
<p> </p>
<div class="separator"><img src="https://4.bp.blogspot.com/-bBG8InIxZcc/Wnate_gk-sI/AAAAAAAAoKk/Uu9uSRI269wpiNfnkwyMR8l2rpUEUO_ngCLcBGAs/s640/A3.jpg" width="640" height="388" data-original-height="824" data-original-width="1355"></div>
<p> </p>
<div>Hobart's housing market has been booming, and an overdue supply response is now reluctantly taking shape.</div>
<p> </p>
<div class="separator"><img src="https://4.bp.blogspot.com/-jleMak-OHd0/Wnatg3ylE_I/AAAAAAAAoKw/VTkisyEuAV0REE9Xs7A_-M8SE7yo6pOlQCLcBGAs/s640/A5.jpg" width="640" height="388" data-original-height="804" data-original-width="1321"></div>
<div> </div>
<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div> </div>
<div>Overall 2017 was a stronger than expected year for approvals with more than 219,000 dwellings awarded a green tick, but the trend in high-rise approvals may well now resume its slide.</div>
<div> </div>
<div>The townhouse sector of the market looks to be an increasingly solid performer, on the other hand.</div>
<p> </p>
<div class="separator"><img src="https://1.bp.blogspot.com/-2pwS0ldSwH8/WnatgONjOkI/AAAAAAAAoKo/540xndVwVMUeoyTrKHF1OjvrOPJyrAewwCLcBGAs/s640/A4.jpg" width="640" height="374" data-original-height="804" data-original-width="1371"></div>
<div> </div>
<div>Despite the fall in residential building approvals, the impact on the economy may not be as great as once feared, with the trend in monthly non-residential approvals for New South Wales hitting its highest ever level at $1.3 billion in December, while Victoria's result was even higher still. </div>
<div> </div>
<div class="separator"><img src="https://3.bp.blogspot.com/-97uMk0P1oUM/Wnatg_84KUI/AAAAAAAAoKs/yJsaLCGeNAkYn6NasIY8we1kzrT8EpBNwCLcBGAs/s640/A6.jpg" width="640" height="380" data-original-height="817" data-original-width="1375"></div>
<p> </p>
<div>Non-residential approvals have been tracking at record levels, then, overwhelmingly driven by Sydney and Melbourne.</div>
<div> </div>
<div>Nevertheless, the apartment construction slowdown will be the real trend to watch this year. </div>
<div> </div>
<div>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</div>
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pwargent-M4siyDbqQY

Eight factors kill the apartment construction boom in its tracks: Pete Wargent

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<h3 class="post-title entry-title"> </h3>
<div id="post-body-183755154986059073" class="post-body entry-content">
<div>New South Wales stamp duty and land transfer receipts were back up to $9.4 billon over the year to January 2017.</div>
<div> </div>
<div>The rolling annual number of transactions is down from previous heights, though remains high with so many apartments being constructed.</div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/02/21/NSW.jpg" target="_blank">Click to enlarge </a></div>
<div> </div>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/21/NSW.jpg" alt=""></div>
<div> </div>
<div>
<div><span>With a record construction boom and rising Sydney dwelling prices, it shouldn't be a surprise that stamp duty and transfers paid rose to record highs in FY2016.</span></div>
<div><span> </span></div>
<div><span>In fact, the NSW state budget surged into a massive $4.7 billion surplus in 2015-16.</span></div>
<div><span> </span></div>
<div><span>This result was miles ahead of forecasts and left the state government with net debt of less than zero.</span></div>
<div><span><br>Yes, the state government moved into a cash positive position for the first time ever.  </span></div>
<div><span> </span></div>
<div><span>To complete the virtuous circle, billions of these funds need to be rolled into urgently required infrastructure projects, not least to plug the hole in the economy that will be left by declining housing construction from 2018 forth. </span></div>
</div>
<div><span> </span></div>
<div><span>Plenty more where this came from in 2017 as apartment completions hit the market (recall too that the 2016 NSW Budget introduced a 4 per cent surcharge purchaser duty on the acquisition of residential real estate by foreign persons from June 21, 2016.).</span></div>
<div><span> </span></div>
<div><span>It's important to recognise that the record windfall represents a surge in pre-sold apartments as much as any recent increase in market liquidity, as stock on market levels to date remain relatively low.</span></div>
<div><span> </span></div>
<div>
<div><span>The number of transactions jumped to above 25,000 in November 2016, and total receipts seared to an unprecedented $1.78 billion in the month.</span></div>
<div><span> </span></div>
<div><span>Just to put that number in context, the prior year equivalent figure had been only $729 million, and the previous record for any individual month was just $1.2 billion.</span></div>
<div><span> </span></div>
<div><span>The November number was so much higher than the prior year that it seemingly defies logic, although there had been a change in purchase duties for non-residents, and then there was the $16 billion Ausgrid sale.</span></div>
<div><span> </span></div>
<div><span>In January 2017 there were 17,473 transactions, a slightly lower figure than in the prior year.</span></div>
</div>
<div> </div>
<div>
<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/"><span class="s2">blogger</span></a>.</span></p>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
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NSW stamp duty boom continues in 2017: Pete Wargent  

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<div>No data release seems to create quite as much confusion as the building activity figures.</div>
<div> </div>
<div>Construction work in the residential sector is always apparently either booming or crashing, depending on who you believe, or commonly it's both. </div>
<div> </div>
<div>Still, where there is discord may we bring harmony, by breaking it all down into three simple parts, starting with...</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Part 1 - Commencements ease back</span></strong></div>
<div> </div>
<div>Commencements fell again by 2.8 percent to 55,070 in the September 2016 quarter, following a 7.2 percent decline in the June quarter. </div>
<div> </div>
<div>Dwelling starts fell in most states, even in New South Wales where the appetite for building is strongest, although the 'trend' figures still show NSW arcing higher. </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/01/19/A3.jpg" target="_blank">Click to enlarge</a></div>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/19/A3.jpg" alt=""><br><br></p>
<div>Following on from sharp falls in unit and apartment approvals, it's no surprise that it was declines in this sector which have led the fall in commencements, particularly in Melbourne.</div>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/19/A5.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/19/A5.jpg" alt=""></p>
<div> </div>
<div>This in part represents nervous developers backing away from flooding the apartment markets further, as well as a failure to secure pre-sales in some cases. </div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Part 2 - Completions</span></strong></div>
<div class="separator"> </div>
<div>Despite the huge boom in building work done over recent times, completions still hadn't run too high by the end of September, with 51,070 completions in the quarter, split between 27,773 houses and 22,666 units. </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/01/19/A2.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"> </div>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/19/A2.jpg" alt=""></div>
<div class="separator"> </div>
<div class="separator">The main reason for this is simply that it takes considerably longer to build a block of apartments than it does a detached house. </div>
<div class="separator"> </div>
<div>Despite this, apartment completions are starting to flow through in the most populous states, particularly in New South Wales and Queensland, although Victoria dropped back in the quarter as some developers reportedly moved into a "go slow" mode. </div>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/19/A4.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/19/A4.jpg" alt=""></div>
<p> </p>
<div><strong><span style="text-decoration: underline;">Part 3 - The pipeline</span></strong></div>
<div> </div>
<div>The most important thing to note from this release is that although the appetite for commencing new developments has cooled substantially, there were still more than 221,000 dwellings under construction as at the end of Q3 2016, including more than 150,000 units, townhouses, and apartments. </div>
<div> </div>
<div>Although some small inroads had been made into the apartment construction pipeline, the bulk of multi-unit project completions had yet to hit the market. </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/01/19/A1.jpg" target="_blank">Click to enlarge</a></div>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/19/A1.jpg" alt=""></p>
<div> </div>
<div>Given the sheer scale of the pipeline, perhaps it shouldn't be a surprise than an unprecedented number of approvals have not yet seen a shovel lifted in anger, with 42,591 approvals sitting in housing market Limboland.</div>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/19/A6.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/19/A6.jpg" alt=""><br><br></p>
<div>Of course, there will always be some approvals waiting in this phase, yet 42,500 is just way, way above the historic norm. These are not normal times! </div>
<div> </div>
<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div> </div>
<div>Overall, the market does seem to be correcting itself gradually with developers pulling back on new project commencements, and slowing the rate of completions in some cases to allow capital city population growth to play catch up.</div>
<div> </div>
<div>What the figures do show is that the full impact of the high rise boom had barely even begun to take shape by September 2016, so watch out for weakening apartment rents and and prices as 2017 rolls on. </div>
<div> </div>
<div>The value of residential work done in Q3 declined, contributing to an awful negative GDP print for the quarter, and the sector is likely to become a headwind for the economy as the year progresses. </div>
<div> </div>
<div><em><span>PETE WARGENT </span>is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. </em></div>
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High rise boom has barely begun so watch out for weakening apartment rents and and prices in 2017: Pete Wargent

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<h3 class="post-title entry-title"> </h3>
<p>In some markets and circumstances, declining dwelling commencements can be a fair indicator that prices may be about to follow suit.</p>
<p>I don't want to generalise too much here, because there are of course different sub-markets and sectors.</p>
<p>Nevertheless, note how in Western Australia the dwelling price index peaked in Q1 2014, stalled in Q2 2014, before losing its mojo and beginning to decline in the third quarter of that year, by which time dwelling starts were already on their way down as builders had anticipated the downturn. </p>
<p><span style="color: #333333; font-family: Tahoma, Helvetica, Arial, sans-serif; font-size: 12px;"><a href="/images/2016/10/17/BA1.jpg" target="_blank">Click to enlarge</a></span></p>
<p><img src="/images/2016/10/17/BA1.jpg" alt=""></p>
<div id="post-body-7273343903178272230" class="post-body entry-content">
<br><div>Why does this happen? </div>
<div> </div>
<div>Predominantly because developers have become aware that demand is fading, and are understandably reluctant to commence a project if the sale of the end product for an acceptable profit is in doubt. </div>
<br><div><strong><span style="text-decoration: underline;">House commencements robust</span></strong></div>
<div> </div>
<div>Detached houses on average take 6 to 8 months from commencement to completion, although sometimes a bit less than six months in the sprawling greenfield sites of Queensland and the Northern Territory. </div>
<div> </div>
<div>In Western Australia, detached house commencements peaked in the middle of 2014 as it became increasingly clear that the resources sector was slowing significantly and demand for housing was dropping.  </div>
<div> </div>
<div>Elsewhere commencements for detached homes remain fairly robust in trend terms, while in Victoria sentiment appears to be positively serene. </div>
<div> </div>
<div>This is not without reason: population growth in Victoria is tracking at close to 115,000 per annum with inbound interstate migration heading to record highs.</div>
<div> </div>
<div>With variable rate home loans available from well under 4 per cent buyers for new homes in Melbourne should be sourced reasonably comfortably over the next few quarters.</div>
<br><div class="separator"><a href="/images/2016/10/17/BA2.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/10/17/BA2.jpg" alt=""></div>
<br><div>Progressively through the cycles, Sydney is increasingly struggling to provide new build houses at affordable prices - the successive peaks in new house construction are falling - except out towards the western and south-western city fringes where infrastructure is painfully sparse and demand for housing inherently lower. </div>
<br><strong><span style="text-decoration: underline;">Other dwellings - units</span></strong><br><br>The dynamic for the market in attached dwellings is markedly different!<br><br><div>This construction cycle has seen the approval of more high density and 'high rise' apartments than ever before. </div>
<div> </div>
<div>A unit or apartment project might take 15 to 21 months on average to be completed from the point of commencement, which in part explains why completions have taken so long to have an impact through this cycle.<br><br>In Sydney and Melbourne it is usual for apartment projects to take more than 24 months to complete on average, largely due to brownfield site remediation challenges (the figure is much lower in Queensland, for example, at around 19 to 20 months). <br><br>With lead times for new apartments so much longer, developers are often required to ensure a certain percentage of pre-sales before project financing can be secured. </div>
<div> </div>
<div>Commencements of attached dwellings remain strong in New South Wales. </div>
<div> </div>
<div>Overall, in fact, we should expect attached dwelling commencements to remain higher than their long run averages in Sydney (on average, through the cycle), since over the last three decades fewer houses are being constructed, while population growth today is typically higher. For now at least.<br><br><strong><span style="text-decoration: underline;">Concentration risk</span></strong>
</div>
<div> </div>
<div>The Reserve Bank of Australia (RBA) provided some useful analysis of how many inner city apartments are expected to be completed in the next two years.</div>
<div> </div>
<div>In Sydney the number is 10,000, representing a relatively low share of the established dwelling stock when compared to other cites.</div>
<div> </div>
<div>Sydney's construction boom is quite widely dispersed, although as usual there will only be a comparatively small increase in the dwelling stock in the beachside eastern suburbs or the treasured garden suburbs of the lower north shore. </div>
<div> </div>
<div>In LGAs such as Parramatta, on the other hand, there are still thousands more apartment completions expected, and the north west is another region that is expected to suffer from oversupply. </div>
<div> </div>
<div><a href="/images/2016/10/17/RBA.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/10/17/RBA.jpg" alt=""></div>
<div class="separator"> </div>
<div class="separator"><em><span style="text-decoration: underline;">Source: Reserve Bank</span></em></div>
<div> </div>
<div>In Melbourne (16,000) and Brisbane (12,000) the number of expected inner city apartment completions is both higher and more concentrated, and as such will also represent a greater percentage increase in the dwelling stock.</div>
<div> </div>
<div>This has been well enough known for some time, not least by developers with their ears to the ground. </div>
<div> </div>
<div>Sure enough, total attached dwelling commencements are now in decline in Victoria and Queensland, while in Western Australia they peaked all the way back in 2014. </div>
<div> </div>
<div><a href="/images/2016/10/17/BA3.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/10/17/BA3.jpg" alt=""></div>
<br><div>In the southern states the figures for attached dwellings are relatively immaterial, and thus are not included for discussion here. </div>
<div> </div>
<div>In both Melbourne and Brisbane it is easily possible to find plenty of examples of apartments being resold for less than they were initially bought for 'as new', a sure sign of the impending downturn.<br><span><br></span><strong><span style="text-decoration: underline;"><span>The wrap</span></span></strong><br><span><br></span><span>Attached dwelling commencements are likely to decline further through 2017 as developers fear that new off-the-plan purchasers are at risk of not settling, particularly those based offshore. </span><br><span><br></span><span>To date, non-settlements have reportedly remained low, and material losses to banks have not yet resulted.</span><br><span><br></span><span>In theory - at least in areas and property types that people actually want to live in! - while credit remains available markets should be self-correcting in time as dwelling commencements fall, and buyers sensing bargains populate the newly supplied markets. </span><br><span><br></span><span>The Reserve Bank took a detailed look at the apartment sector in its bi-annual Financial Stability Review, and concluded:</span><br><em><br></em><em>"Any oversupply in Australia would be more localised to certain geographic areas, and potential price falls tempered as the population moved to absorb the new (and cheaper) supply of housing in these areas over time."</em><br><em><br></em><span>Of course, central banks rarely predict catastrophes, for fear that they may become self-fulfilling. </span><span>Be vigilant!</span>
</div>
<div><span> </span></div>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Demand is fading, let the apartment downturn commence: Pete Wargent

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<p>GUEST OBSERVER</p>
<p>Despite repeated warnings around apartment oversupply and settlement risk, the number of dwellings being approved for construction across the capital cities remains unquestionably strong.</p>
<p>In July 2016, there were 17,380 capital city dwelling approvals which was the highest number of approvals since October 2015.  It was also the third highest monthly number of capital city dwelling approvals on record.  Despite a recent slowdown in capital city dwelling approvals there was a substantial rebound in July 2016.</p>
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<h3>Monthly and 6 month average number of capital city house and unit approvals</h3>
<p><a href="/images/2016/10/04/2016-09-26--image1.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/2016-09-26--image1.png" alt=""></p>
<h3>6 month average number of capital city dwelling approvals</h3>
<p><a href="/images/2016/10/04/2016-09-26--image2.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/2016-09-26--image2.png" alt=""></p>
<p>Looking at the split between houses and units over the month, there were 6,482 houses and 10,898 units approved for construction across the combined capital cities.  There have now been more units approved for construction than houses across the combined capital cities for 22 consecutive months.  Over the 12 months to July 2016, 57.9% of all capital city dwelling approvals were for units.</p>
<h3>6 month average number of capital city house approvals</h3>
<p><a href="/images/2016/10/04/2016-09-26--image3.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/2016-09-26--image3.png" alt=""></p>
<h3>6 month average number of capital city unit approvals</h3>
<p><a href="/images/2016/10/04/2016-09-26--image4.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/2016-09-26--image4.png" alt=""></p>
<p>Over the past year, there have been 76,356 capital city houses and 104,835 capital city units approved for construction.  In each of: Sydney, Melbourne, Brisbane and Canberra there have been more units than houses approved for construction over the past year.</p>
<p><strong>Sydney</strong> - there were 54,667 dwelling approvals over the past year which is 7.3% higher than the previous year.  This figure comprised of 16,360 house approvals (+3.2% yoy) and 38,307 unit approvals (+9.1% yoy).</p>
<p><strong>Melbourne</strong> – over the year to July 2016 there were 57,428 dwellings approvals which was -0.2% lower over the year.  25,880 of these approvals were for houses and 31,548 were units, with the year-on-year changes recorded at +11.2% and <br>-7.9% respectively.</p>
<p><strong>Brisbane</strong> – The 30,901 dwelling approvals over the past year consisted of 11,210 houses and 19,691 units.  Overall approvals are 4.0% higher over the year with house approvals -1.4% lower and unit approvals 7.4% higher. </p>
<p><strong>Adelaide</strong> – there were 6,119 houses and 3,899 units approved over the past year resulting in 10,018 total approvals.  Over the past year, dwelling approvals are 10.9% higher with house approvals up 9.3% and unit approvals 13.5% higher.</p>
<p><strong>Perth</strong> – the number of annual dwellings approvals fell by -24.3% over the year to 20,963.  Over the year, the 14,202 house approvals were -26.7% fewer than the previous year and the 6,761 unit approvals were -18.6% less than a year ago.</p>
<p><strong>Hobart </strong>– there were only 989 new dwellings approved for construction over the year, 799 of which were houses and 190 units.  House approvals were -22.7% lower year-on-year and unit approvals were down -10.8%.</p>
<p><strong>Darwin</strong> – there were 1,304 dwelling approvals over the past year which was -12.7% lower year-on-year.  Over the year, the 657 house approvals was -22.8% lower than the previous year and the 647 unit approvals were 0.6% higher than the previous year.</p>
<p><strong>Canberra</strong> – there were 1,129 houses and 3,792 units approved for construction over the past 12 months.  There were -8.1% fewer house approvals than over the previous year while unit approvals were 24.7% higher over the year.</p>
<p>Despite policy makers and analysts (including CoreLogic) voicing concerns about the level of housing construction currently underway, particularly for units, approvals in capital cities generally remain unquestionably strong.  From here it will be interesting to see how many of these approvals immediately progress to commencement and ultimately through to a completion.  Tighter lending conditions for both developers and purchasers for off-the-plan units is likely to result in a larger proportion of approvals that don’t proceed through to a finished product.  The data also reiterates why purchasers of off-the-plan units in major capital city housing markets should be very selective with regard to the types of units they purchase.</p>
<p>Importantly, oversupply concerns are most visible across specific and well defined geographic areas and product types. CoreLogic’s Settlement Risk Report identifies the Melbourne inner city and Brisbane inner city as the two markets where the largest amount of unit supply is likely to be delivered over the next 24 months.</p>
<p><em>Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></p>
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ckusher-ujnxiKuFQs

Capital city dwelling approvals rebounding: Cameron Kusher

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<p>GUEST OBSERVER</p>
<p>With a record-high number of units currently under construction nationwide, the capital growth performance of units is weaker than houses in certain cities and we anticipate that this trend will continue.</p>
<p>The CoreLogic Home Value Index shows that over the 12 months to August 2016, combined capital city house values have increased by 7.2 percent compared to a 5.5 percent rise in unit values.</p>
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<h3>Rolling annual change in house and unit values, combined capital cities</h3>
<p><a href="/images/2016/09/13/2016-09-12--image1.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/09/13/2016-09-12--image1.png" alt=""></p>
<p>The first chart shows the annual change in combined capital city house and unit values over time.  The chart shows that typically the change in house values is greater than units.  What is interesting though is that during the past two instances of value declines nationally, house values have actually recorded greater annual falls than units.</p>
<p>While the rate of annual growth for units has been only slightly lower than that of houses across the combined capital cities, across individual cities the trends vary significantly.  Hobart and Darwin are the only two capital cities in which the change in unit values over the past year has been greater than the change in house values. </p>
<h3>Annual change in individual capital city house and unit values 12 months to August 2016</h3>
<p><a href="/images/2016/09/13/2016-09-12--image2.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/09/13/2016-09-12--image2.png" alt=""></p>
<p>In Melbourne, Brisbane, Adelaide and Canberra, the change in unit values over the past year has been less than half that of houses.  This in itself is interesting, particularly when you consider that Melbourne and Brisbane in particular are currently experiencing historic high levels of new unit construction.  The fact that in many of these cities substantial increases in unit stock is expected over the coming years, it is reasonable to anticipate that the gap between the annual change in house and unit value will persist and potentially grow larger.</p>
<p>Taking a longer-term look at the change in house and unit values since December 2008 shows clearly that overall value growth has been much stronger in Sydney and Melbourne than anywhere else.  Over the period, both house and unit values are higher across each capital city however, houses have outperformed units in all cities except Hobart and Darwin.  In Brisbane, Adelaide, Perth and Canberra, the cumulative growth in unit values has been less than half that of houses over the period.</p>
<h3>Total change in house and unit values, December 2008 to August 2016</h3>
<p><a href="/images/2016/09/13/2016-09-12--image3.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/09/13/2016-09-12--image3.png" alt=""></p>
<p>The data shows that we’re already seeing the growth in unit values generally underperforming houses values.  Of course, over recent years the overall supply of units, particularly in inner city areas has increased substantially with even more new stock to come.  The most recent data from the Australian Bureau of Statistics (ABS) showed that nationally there were 152,449 units under construction at the end of the March 2016 with an additional 41,548 units approved for construction to July 2016, many of which would have already commenced construction.</p>
<p>While demand for inner-city housing, particularly units, has increased significantly over recent years the heightened level of unit construction has the potential to create problems for the housing market.  While an increase in housing supply is important, much of the new unit stock to-date has been targeted at an investor market.  From an investors perspective units offer higher yields and lower prices than houses however, in many cities recent growth has underperformed while the rental market is the weakest it has been in more than two decades.  With additional unit stock under construction, there is the potential as this stock enters the market the rental market will become even more depressed.</p>
<h3>Quarterly number of houses and units under construction, National</h3>
<p><a href="/images/2016/09/13/2016-09-12--image4.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/09/13/2016-09-12--image4.png" alt=""></p>
<p>Over the coming years we anticipate that the performance of houses and units could diverge even further.  While units offer a much more affordable purchase price than houses, as the supply of units relative to houses increases, we would expect demand for detached houses to hold-up much better than demand for units.  Especially considering much of the new unit stock has to-date been one or two bedrooms, of a similar internal size and design and very much targeted at a similar market segment.</p>
<p>For those people who are looking to purchase a unit at a time when supply levels are moving through record highs, projects which are differentiated from the broader market, based on their location, design, owner mix or quality of the developer may provide some safe haven from the weaker unit market conditions.</p>
<p><em>Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></p>
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