<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.

A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.

Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360965]

“The apartment floors deliver a collection of homes that embrace controlled outlook via a series of bay windows deliberately framing moments of view,” Rothelowman Director Kim Lowman said.

From outside, those projecting forms contribute to the tower’s faceted profile. Strong horizontal and vertical elements establish its proportions, while the changing position of the sun alters the light, shadow and reflection across the façade throughout the day.

The same attention moves inside the apartments, where the material palette combines warm timber, natural stone, metallic detailing and softer curved forms. Kitchens sit within the main living zone, with stone island benches, integrated joinery and European appliances, before the living areas extend towards the glazing and the outlook.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360981]

Three genuine bedrooms provide room to accommodate family and guests, while two secure car spaces and storage address some of the practical considerations that can become more noticeable when moving from a larger home. Feedback from the display suite has centred on the warmth and restraint of the interiors, with buyers commenting that the residences feel like homes rather than conventional coastal apartments.

A limited collection of half-floor penthouses occupies the upper levels, increasing the scale of the living spaces and adding private balconies and elevated finishes. From this position, the outlook extends between the ocean and hinterland.

Outside the private residences, The Eveleigh separates its shared spaces between the podium and rooftop. The podium is centred on wellness, with subtropical landscaping surrounding a swimming pool and pool terrace, yoga garden, private gymnasium, sauna and hot and cold plunge facilities. Landscaped retreats and pavilions provide additional places to sit away from the main recreation areas.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360966]

Higher in the building, a rooftop pavilion and private dining suite sit alongside resident lounge, barbecue and outdoor dining areas, opening towards panoramic views across the ocean, city and hinterland.

“Buyers are no longer just looking for an apartment, but a lifestyle where they can relax, reset, and enjoy a balanced way of living,” Hirsch &amp; Faigen Director of Sales Matt George said.

Interest to date has come from established owner-occupiers and interstate lifestyle purchasers, including buyers planning a future move to the Gold Coast. Many are coming from larger homes and want to reduce ongoing maintenance without giving up space for family and guests, privacy, two car spaces or the ability to entertain at home.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360969]

Much of that daily life can also take place beyond the building without requiring a drive. Kurrawa Beach and Pratten Park are an easy walk from Surf Parade, while Pacific Fair, Oracle Boulevard, The Oasis, restaurants, cafés, entertainment and public transport are also within walking distance.

The Eveleigh is Hirsch &amp; Faigen's fourth Gold Coast development since entering the market in 2021, following The Hemingway at Palm Beach, The Emerson at Kirra and Yves at Mermaid Beach. Each of the preceding projects sold out before completion.

“Broadbeach had been on our radar throughout our time operating on the Gold Coast,” the developer said. “Following our projects in Palm Beach, Kirra and Mermaid Beach, Broadbeach represented the natural next step for the business.”

The Surf Parade site brought together proximity to the beach, protected coastal outlooks and walkability to dining, shopping and recreation. Hirsch &amp; Faigen also identified the street as an emerging premium residential address, with enough separation from Broadbeach's busier destinations to retain a quieter environment at home.

The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.

[smartcode_project_cta:default project_id=149670]

Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

A long-stalled Campbelltown development site is back in play, with new plans for 139 apartments set to supersede a mixed-use scheme approved almost a decade ago but never built.

The new proposal for 28 Cordeaux Street would deliver 116 market and 23 affordable apartments in a part 14-storey building, bringing a substantial new project into a Campbelltown market where new apartment supply remains limited.

Plans have been filed over the 3,092 sqm corner site at Moore-Oxley Street, around 600 metres from Campbelltown Railway Station and the city-centre retail core.

The site already carries a mixed-use residential approval dating to 2016. Doroch Architects has now been engaged on a larger replacement scheme, which is progressing as a State Significant Development Application following a Housing Delivery Authority determination in August 2025.

The apartment mix comprises 39 one-bedroom, 72 two-bedroom and 28 three-bedroom residences. Two-bedroom apartments make up just over half of the project, while three-bedroom homes account for 20 per cent.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="136dd5b9-3791-4da6-9e31-76f533f5b4de" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da2.png?VersionId=LgOSy9nwf5u.MGswBBwaGGxuX8QpHSl_" />

Of the 139 apartments, 23 will be delivered as affordable housing under the in-fill affordable housing provisions of the Housing SEPP. The affordable component represents 15 per cent of the residential gross floor area and will be managed by a registered Community Housing Provider.

Doroch has sought to break the scale of the building into two distinct elements, with a masonry podium of around four storeys establishing the street edge before the residential tower steps back above.

The corner position has shaped that approach. Cordeaux Street faces toward the commercial and civic centre, while Moore-Oxley Street leads into the lower-scale residential neighbourhood to the south, and the design verification report describes the site as "bridging the commercial core to the north and established residential areas to the south."

The podium will be expressed predominantly in face brick, while the upper levels shift to brushed and grooved concrete cladding with darker metal detailing. Recessed sections, deep balcony edges and landscaping break down the upper form, with an approximately 11.8-metre setback to the northern boundary addressing the adjoining St Peters Anglican School.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="c8b3d2d3-c561-4bfc-a5d9-a68c0c10dac1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da1.png?VersionId=AeAEyJU02Gk2k5noUj2StziCvdQ7fW4B" />

Campbelltown has been starved of new residential developments in the last decade.

The only other notable development set to come to market this year is ALAND's Queen Square, a mixed-use precinct on over two hectares that will comprise apartments above a vibrant ground-level retail and hospitality dining precinct.

First look: New 139-apartment plans revive long-stalled Campbelltown city centre site

First Look: Sherlock Construction pitches apartments for low-rise Deception Bay

Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

First look at MAYD's North Kirra mixed-use precinct

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Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

&nbsp;

[smartcode_project_cta:default project_id=152737]

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>

Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

Bubble

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Spare a thought for property writers in Australia; it has become increasingly obvious that the pressure of having little to write about is taking its toll.
The cash rate together with the inner workings of Australia’s Reserve Bank (RBA) has always remained a fascination for many, although with the next rate rise possibly not until sometime in 2016 – a new search for a property headline has begun in earnest.
Enter the rise and rise of the ‘property bubble’ – although I am quite sure in my 30 years of working in the real estate industry, I am mystified. I have never seen a ‘property bubble’, although I have seen plenty of booms. When a bubble bursts it simply disappears so what can we then expect with a ‘property bubble’? The simple truth when I advance this line of questioning is "well you know what I mean". Well, sorry I don’t, because there is no such thing as a ‘property bubble’ and if you knew anything about the intricacies of property machinations you wouldn’t be writing that in the first place.
We need to go back to find where this recent illusion otherwise known as a ‘property bubble’ emerged from. It has made cameo appearances for over a decade now in Australia despite never bursting. Australia’s mortgage market currently sits at around the $1.3 trillion mark with the Big Four banks holding approximately 80% of the book value. The Murray financial system inquiry has created plenty of argy bargy between the RBA, the Australian Bankers’ Association and the smaller lending institutions as to exactly what is the best practice that Australia needs to adopt – the final recommendations will be delivered to the federal government in November this year.
We can’t ignore Lindsay David’s thought ‘bubbles’ either, who recently penned a book Australia: Boom to Bust, where he warns that Australia has three shaky pillars which he believes are all in a state of collapse – real estate, resources and our banks.
No housing bubble, is the big bank economists’ conclusion which is exactly where I sit given collectively when you have 80% market share their internal data would provide them with the most accurate positioning – over those who are simply speculating.
To further this train of thought I looked at <a href="https://www.roymorgan.com/" target="_blank">Roy Morgan Research</a> who are constantly drilling down and probing the Australian property markets.
<img src="https://www.rwm.com.au/files/2014/08/27-08-2014-4-15-20-PM.jpg" alt="27-08-2014 4-15-20 PM">
"In July the satisfaction level of the personal customers of the banks remained close to the record high of 82.2% set in June, falling only marginally to 82.1%."
If the borrowers were having problems with their lenders the approval ratings would be plummeting not increasing. Although we need to put this into greater perspective – given there are too many property commentators distorting the truth – their anger and resentment is at an unprecedented level.
<img src="https://www.rwm.com.au/files/2014/08/27-08-2014-4-22-33-PM.jpg" alt="27-08-2014 4-22-33 PM">
Back to Roy Morgan Research – “Over the last four years the number of investment loans in Australia has grown by 37% compared to an increase of only 4% in the number of owner occupier loans. In 2010, just under a million (954,000) Australians [aged] 18 plus had an investment property loan compared to 1.31 million as at March 2014. This growth represents an increase of 37%. Over the same period the number of Australians with an owner – occupied home loan increased from 4.66 million to 4.83 million, an increase of only 4%.”
Based on this information the ‘property bubble’ must be our Baby Boomers running amok by boosting their self-managed superannuation funds care of a very generous federal government who encourage investment in Australian properties by offering substantial tax relief via negative gearing. Then of course we must not forget that old chestnut that Australian property holdings can be approximately divided into thirds – one third rent, the next third own with a mortgage and the final third own without a mortgage.
As recent sales have clearly proven there is no shortage of people wanting to invest in Australian real estate – both local and overseas. So then apply the 'KISS theory' (keep it simple stupid) – when you see an oversupply of properties on the market then market conditions are moving from a vendor to a buyers’ market.
RWM Research started recording the number of properties on the market weekly back in mid-2011, so it’s interesting to see what the highest number of properties on the market since then have been:
<ul>
<li>Mosman Houses – 168 on 10 November 2011. Today 69.</li>
<li>Mosman Apartments – 138 on 10 November 2011. Today 51.</li>
<li>Cremorne Houses – 24 on 16 December 2011. Today eight.</li>
<li>Cremorne Apartments – 44 on 3 November 2011. Today 15.</li>
<li>Neutral Bay Houses – 22 on 1 March 2012. Today five.</li>
<li>Neutral Bay Apartments – 101 on 17 November 2011. Today 31.</li>
</ul>
It is very clear that based on the current numbers the banks should have absolutely no concerns given it is very clear that what we have today is very much a vendors market.
</body></html>

robertsimeon-hRNTwJyXkQ

 For my next trick: The great property 'bubble' illusion

<html><body>
Australia’s four leading bank economists, Bill Evans from ­Westpac, Alan Oster from National ­Australia Bank, Michael Blythe from Commonwealth Bank of Australia and Warren Hogan from ANZ, recently met up with The Australian Financial Review.
The four declared during their discussion there was no housing bubble 
Evans, who has been chief economist at Westpac since 1991 said that if you look at the growth in incomes over the past 15 years, “it’s sort of kept pace with the growth in house prices. I think you get ­bubbles when house prices run well ahead of income growth we just haven’t seen that”.
Alan Oster – chief economist at NAB since 1992 – was deemed equally unequivocal: “no bubble”. He thinks the problem with Australia, should one emerge, will lie in unemployment. “If unemployment in our models gets to around 8 or 9% then you get the same problem as you’ve got everywhere else but we’re undersupplied, interest rates are low, we think unemployment’s gone up but nowhere near 9%, so no bubble.”
“Certainly no bubble,” said Warren Hogan. “The perceived expensiveness of our property market is, as much as anything, a social issue – affordability issues. We simply don’t have the speculative credit element there to describe it as a bubble. Low-income earners getting heavily ­leveraged was the problem in the United States we don’t have that issue here,” Hogan added.
Michael Blythe, who has been at the CBA since 1995, said that for it to be a real bubble you’d need to see increase in prices being driven by debt, but that’s not happening.
“No bubble. Housing credit’s running at the bottom end of the range the past 30 years. You need to see banks easing their lending standards as they chase more dubious borrowers that’s certainly not happening and you need a general expectation that house prices are going to keep rising forever. Now there is an element of that I think.”
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jchancellor-FAypfDUnLy

No housing bubble: The big bank economists' conclusion

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It gets rather tiring reading the commentary on UK house prices from people who have clearly never been here, less still have a modicum of ability to interpret data.
The latest angle has been that London prices have 'crashed' due to a monthly movement in Rightmove's asking price index.
Well, no.
For one thing, even Rightmove themselves warned that their asking price index is volatile and treated with caution, and particularly so in August historically, (not to mention that the very same index increased by well over 10% in October, which should tell you everything you need to know about its reliability on a month to month basis). 
In short, we see the London market cooling back a little over the next 12 months. 
Investors who want to outperform should look at a couple of our recommended suburbs including a couple of those set to benefit from the construction of the Crossrail project.
Away from London the market has never really gotten that hot post financial crisis, and in many areas is actually still very flat, with stock turnover very slow.
Anyway, back in the real world, here's the latest data from the <a href="https://www.ons.gov.uk/ons/rel/hpi/house-price-index/june-2014/stb-june-2014" target="_blank">Office for National Statistics</a> (click chart):
<img src="https://3.bp.blogspot.com/-qWQbQphzoEw/U_bqbsfrLAI/AAAAAAAAPTU/hfcpKOmMhSM/s1600/ONS%2BHPI.jpg">
London is denoted by the red line, recording the highest growth in the nation. 
Key points:
<ul>
<li>"UK house prices increased by 10.2% in the year to June 2014, down from 10.4% in the year to May 2014.</li>
<li>"House price annual inflation was 10.7% in England, 3.5% in Wales, 6.0% in Scotland and 4.9% in Northern Ireland.</li>
<li>"House prices are increasing strongly across most parts of the UK, with prices in London again showing the highest growth.</li>
<li>"Annual house price increases in England were driven by an annual increase in London of 19.3% and to a lesser extent increases in the South East (9.7%) and the East (7.9%).</li>
<li>"Excluding London and the South East, UK house prices increased by 6.3% in the 12 months to June 2014.</li>
<li>"On a seasonally adjusted basis, average house prices increased by 0.5% between May and June 2014."</li>
</ul>
Northern Ireland to reinflate a housing bubble?
The ONS data for Northern Ireland (NI) shows that its house prices are up 4.9% on a year ago raising the interesting question of whether the country will repeat any of the same mistakes of the last decade. It seems unlikely that price will be allowed to run upwards unchecked as they were through to 2007. At the peak of the bubble in June 2007, NI house prices had increased by 55.9% in only a year before eventually reversing.
The worst year in NI was the year to June 2009 when prices fell by 23% in only 12 months, before falling further through 2010 to 2012.
 <img src="https://1.bp.blogspot.com/-Y27_XtDuFJ0/U_bzwrhFSvI/AAAAAAAAPTk/yCbsZfbASeY/s1600/ONS%2BIreland.jpg">
Despite claims to the contrary, London is a very different proposition. 
Quite apart from being a major international financial centre, with a population of more than 8.3 million the ratio of new housing stock to established in such a large city remains immaterial and thus limited in its impact on the market.
The population of Belfast by contrast is only 280,000, so a boom in levels of construction can have a marked impact on housing market economics.
Ireland experienced a perfect, self-perpetuating housing bubble storm of full employment, booming prices and massive overbuilding. 
London has the opposite problem after years of woefully inadequate construction despite rapid population growth.
UK property 'bubble'
I've been back in my home city of Sheffield in Yorkshire the past couple of days.
Listening to some overseas commentary about the UK market, you'd think the property market across Britain was apparently in a bubble. 
Yet surely only someone who doesn't know the meaning of the word could describe the ex-London UK housing market as a bubble.
Speculative mania? Uncontrollable credit growth?
Prices have gone absolutely nowhere for more than seven years - backwards in many cases - and this through a period when inflation has been romping along at a 5% pace at times. In real terms, prices are way down in regional markets across England.
<img src="https://3.bp.blogspot.com/-J_yxXhZKh4I/U_fLUZ53MvI/AAAAAAAAPUY/OfNyv7rNqF4/s1600/UKHPIexlondon.jpg" style="line-height: 1.3em;">
The truth of the matter is that away from London and the south-east most housing markets remain painfully slow. Much of the same housing stock which was for sale when I was over here a year ago and the year before that still remains for sale.
This is a key reason why I don't invest in regional markets. Property is an illiquid enough asset as it is without compounding matters by investing in thin markets where demand is low.
Australia will get a sharp downturn one day, and when we do illiquid, depreciating assets will prove to be very painful for some investors who want to sell.
Being back in Sheffield in northern England it has been very notable how developments like the Hallam Tower have not progressed one iota in more than 10 years, and this is a site with the most spectacular views across the city.
The <a href="https://www.theguardian.com/artanddesign/the-camera-eye/2014/mar/05/park-hill-sheffield-utopian-estate-left-to-die" target="_blank">Park Hill redevelopment</a> has progressed a little over the past decade but much of it is still derelict.
A property bubble? Hardly. Britain's housing market is very much a case of London and the south-east versus the rest.
Article continues on the next page. Please click below.
<hr class="system-pagebreak">
Sydney property market...bazinga
We've been suggesting for a couple of years now that low interest rates will keep property investors hammering the Sydney property market, and it's certainly been the case that interest rate cuts have had a marked effect on market activity through recent cycles. 
The chart below shows the correlation between the first rate cut of the most recent easing cycles and auction clearance rates. Through September and October 2008 the official cash rate was cut from 7.25% to 6%. And then in November 2011 the cash rate was cut to 4.50%, heralding the beginning of the latest cycle. You can see below the reaction of Australia's major property markets.
 <img src="https://pbs.twimg.com/media/BvMWrGmCQAA3V24.jpg:large">
For months commentators have been suggesting that the market is fading, but we have had to agree to disagree. Au contraire, with the cash rate now at only 2.50%, demand from investors in particular is exceptionally strong and rising. If you have been following the data, you will know that investor finance in New South Wales is going through the roof.
<img src="https://2.bp.blogspot.com/-HDjRCgTH1rU/U_j2UpeZ7SI/AAAAAAAAPUo/2O_S4n_uoBM/s1600/Lending%2BFinance.jpg">
There is also a theory that investors in the Sydney market have been "pulled forward" and therefore the market has been overdue to reverse. 
Perhaps yes to some extent, but in reality rising dwelling prices in Sydney have created more equity for redraw, low interest rates have led household savings higher allowing potential investors to employ more leverage...and if the Aussie dollar slides further then more foreign capital may find its way into the Sydney and Melbourne markets too.
Weekend - auctions booming
Anyways, it was an absolute rip-snorter of a weekend of auctions despite the rain.
 <img src="https://2.bp.blogspot.com/-pTJtvcW1wYY/U_j49q5WbUI/AAAAAAAAPU0/H43d2jWt1Qk/s1600/BRAD.jpg">
Australian Property Monitors recorded a thumping preliminary auction clearance rate of 83.4%, with the trend over the past five weeks one of a strengthening market as we move towards spring.
<img src="https://1.bp.blogspot.com/-TnANmsToDuw/U_kXfUHs2yI/AAAAAAAAPVQ/simOIqaMAKk/s1600/AU1.jpg">
Source: Australian Property Monitors.
RP Data, which typically records a lower result, came in at 75.8%.
No slowdown there. As for where the market is really firing...one of our favourite suburbs of the past five years just keeps on going, recording a perfect 100% clearance rate this weekend...
<img src="https://1.bp.blogspot.com/-ZRRJ6sETWA4/U_j604fYMgI/AAAAAAAAPVA/knswQxUc8G8/s1600/ERKO.jpg">
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
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>' .
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pwargent-M4siyDbqQY

What we can learn from the UK property 'bubble'

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GUEST OBSERVATION
These days everyone has an opinion on the state of the Australian property market – and the louder and more panic-inducing, the more attention their comments are likely to receive.
In early 2012, those already invested in the Australian property market may have been made to feel slightly uneasy by commentary predicting prices would fall by up to 60% in 2013. Individuals focusing on other investment markets may have breathed a sigh of relief, happy to now wait until the decline had passed before entering the market at a better time.
As we now know, 2013 actually saw a strong recovery in the Australian property market, with values finishing the calendar year 9.8% higher and property values in Australia currently sitting 16.1% higher than the start of the current growth cycle which started in June 2012.
The important thing to remember is that if you predict a market collapse every single year, one year you are bound to be right. This can encourage people to continually try to predict movements in markets they may not have relevant insight into; to one day be able to say ‘I told you so’.
Another thing to consider is the context and timing of when data appears and to remember that data is often historical and doesn’t necessarily represent a picture of where the market will go.
This is not at all to say that informative websites such as the Australian Bureau of Statistics or RP Data are providing incorrect statistics. These sites are hugely useful and credible resources for looking at pricing information and property trends, which might then be used in guiding more informed purchasing and selling decisions.
Another limitation of the data is that it is affected by a range of operational factors in addition to the movement of the market. For example, Christmas is a period of downtime for many Australian businesses – and the analytics industry is not immune to this. This is why traditionally the January/February periods often records low levels of activity, while March can appear to experience a slight uptick. Such fluctuations are not necessarily caused by what’s happening in the market but are rather impacted by the low levels of data provided during quieter periods.
Instead of paying too close attention to these often conflicting opinions and data points, it’s best to focus on doing your own research, talking to agents and listening to reliable commentators and forming your own thoughts about events in the property market.
Charles Tarbey is chairman and owner of <a href="https://www.century21.com.au/" target="_blank">Century 21 Australasia</a>.
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ctarbey-W47GL9jwxa

Take property market doomsday predictions with a grain of salt, do your own research

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A story that caught my eye this week proclaimed a building boom in the City of Blacktown in Sydney’s west.
My first reaction was gratification, because for years I’ve promoted Blacktown as one of Sydney’s underrated growth markets – and in recent times it has delivered on its promise, with state-leading population growth and capital growth right up with the best in Sydney. A lift in development approvals makes sense.
My second reaction was concern, because the level of building approvals in the past two financial years raises the prospect of the greatest risk hovering above property markets around Australia – oversupply.
While building and developer groups continue to peddle their political catchcry of shortage, unsupported by any evidence, the reality is that the opposite problem is the greatest threat to residential markets.
There is no bubble in Australian real estate and the chances of prices collapsing for this reason are zero.
But there is a risk of serious decline in major markets because of oversupply.
We have some stark recent examples of what can happen to markets when developers build too many dwellings.
One is provided by Gladstone, which has the most compelling demand factors ever visited on a regional city in Australia. Sixty billion dollars in major construction projects and tens of thousands of new jobs and yet the market has crashed. Oversupply can override the most powerful of growth drivers.
Another example is the Gold Coast. This wacky theme park for overseas tourists and property speculators has just emerged from five years of declining values for a single reason: oversupply created by developers who let their egos do the decision-making. In most locations values are still below those of five years ago (although that is set to change as the Gold Coast moves into a growth phase).
The next big surplus scenario is now being enacted in downtown Melbourne, with a looming market disaster being facilitated by Australia’s worst ever planning minister, Matthew Guy. I can envisage a time when property owners in inner-city Melbourne mount a class action to sue Guy for destroying their property values by not only approving but encouraging the greatest apartment glut since federation.
But Melbourne is likely to have plenty of company. Every CBD and near-city market in capital city Australia has an existing oversupply or is heading towards one. The Gold Coast has finally absorbed a five-year surplus of highrise units but developers are already working feverishly on the next one, in the apparent belief that the Commonwealth Games and Chinese investors will cover their butts.
This spotlights an issue many investors overlook when considering a location. They’ll examine many factors but fail to check out the vacancy rate. Even those that do are at risk, because few think about future supply.
Investors must check current vacancies but also examine building approval figures. A major uplift in residential approvals in the most recent financial year can provide a clue to future over-supply.
A case in point is Rockhampton in Queensland. I’m a fan of this place because it has economic diversity, less reliance on resources than neighbouring Mackay and Gladstone, lots of affordable dwellings and strong rental yields. There’s plenty of infrastructure and development happening.
Rockhampton has a strong future. But my one nagging concern has been the level of recent building approvals. Recently those high levels of new dwellings have started to push up residential vacancies.
Back to the City of Blacktown, where close to $1 billion in new developments was approved by the council in 2013-14. In each of the 2011 and 2012 financial years, dwelling approvals numbered around 1,400. In both the 2013 and 2104 financial years, approvals have been around 2,100 – with a particularly big increase in approvals for apartments.
In the past couple of years, development approvals for the Blacktown LGA have been the highest in Sydney metropolitan area, except for Sydney City. Blacktown has been well ahead of Parramatta and Penrith.
This reflects Blacktown’s status as the population growth leader in NSW, as well as a centre for good infrastructure, transport links, new development and jobs growth. It will probably attract plenty of benefits from the Badgerys Creek airport development.
But investors would be wise to keep on eye on dwelling supply. Currently the vacancy rate for the Blacktown postcode is just 1.2%, according to SQM Research. But that could change – and quickly.
You can contact Terry via  <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email</a> or on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>.
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terryryder-YECXbqmri2

Greatest risk hovering above the market isn't a bubble, it's oversupply

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The Commonwealth Bank has pinpointed five reasons why house price bubble signs are not evident in Australia.
<div class="page" title="Page 152">
<div class="section">
<div class="layoutArea">
<div class="column">
It listed the five factors that typically characterise a house price bubble.
It then gave their reasons why they are not evident in Australia. 
</div>
</div>
</div>
</div>
<div class="page" title="Page 152">
<div class="section">
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<li>
Unsustainable asset prices, but the current situation is: Prices supported by the excess of demand over supply Australia’s population continues to grow at above average rates Supply-side responding – lift in construction underway 
</li>
<li>
Speculative investment artificially inflates asset prices, but the current situation is: Investor interest is a rational response to low interest rates, rising risk appetite and the pursuit of yield. 
</li>
<li>
Strong volume growth driven by relaxed lending standards, but the current situation is: Already stringent standards tightened through GFC Minimal “low doc” lending Mortgage insurance for higher LVR loans Full recourse lending 
</li>
<li>
Interaction of high debt levels and interest rates, but the current situation is: A high proportion of borrowers ahead of required repayment levels Interest rate buffers built into loan serviceability tests at application Housing credit growth remains subdued – at the bottom end of the range of the past three decades.  
</li>
<li>
Domestic economic shock – trigger for price correction, but the current situation is: Respectable Australian economic growth outcomes Relatively low unemployment, high quality lending, low arrears
</li>
</ol></div>
<div class="column">
Source Commonwealth Bank June 2014 results presentation
</div>
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</div>
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The five reasons why there is no Australian house price bubble: CBA

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Every week there’s more evidence disproving the notion of a national property boom and the even more fanciful theory of a bubble fit to burst.
You really don’t need to go much beyond the price figures, which show wide variations in the results from different capital cities, with growth ranging from negative to low to moderate to strong to boom.
But given the steady flow of bloopers from economists whose five-second media grabs last longer than the research they do - and the plaintive cries from the industry about the “exodus of first-home buyers” because of the affordability crisis caused by the housing shortage they’ve spent years fabricating – here’s some more information.
The Home Buyers Index from the Commonwealth Bank and RP Data suggests that most markets around the country favour buyers. In other words, most markets are not booming.
According to this index, when you look at things from a statewide perspective the ACT is the only jurisdiction with a sellers’ market. Four states have a “balanced market”, two others have a “buyers’ market” and one (Tasmania) has an “extreme buyers’ market”.
So there are four different situations across the eight states and territories – and only one has a market strong enough to be classified as a “sellers’ market”.
When they examine the situation in each capital city, there are three cities deemed to have sellers’ markets, three with balanced markets and two with buyers’ markets. Eight cities with three different scenarios.
I could spend all sorts of time critiquing the methodology and wondering how on earth they managed to perceive Canberra as a strong market when all other indications suggest it’s struggling – and noting that it’s based on March quarter data and we’re now in the September quarter, so it’s dated even before they publish it.
But the bottom line is that the report has found a whole range of different scenarios happening nationwide and only a small number of locations have a market worthy to be called boom. In fact, the national top 10 list of the strongest markets includes only four locations rated as sellers’ markets. The other six on the top 10 list are merely balanced markets.
A graph in the HBI report shows that markets have overwhelmingly favoured buyers over the past four years. Only four out of the past 50 months have been classified as sellers’ markets. This would tend to harm the case of those arguing for a price bubble.
Also recently published was Australian Property Monitors’ Rental Report for the June quarter, which found that only one capital city recorded growth in house rentals. On an annual basis, three cities recorded significant decreases in rentals, one city had no change, three had growth between 1.5% and 2.6%, and the best in the land was a 5.6% annual rise in Melbourne.
It’s a similar situation with apartment rents.
I can’t see any evidence there of a booming market, nor anything to support the strident claims of a dwelling shortage from developers who seek to use the fictional shortfall as ammunition to coerce politicians into making their lives easier, faster and cheaper.
Turning to those persistent claims about our dwellings being over-priced, Cameron Kusher <a href="/expert-insights/buying/inflation-adjusted-home-values-are-still-lower-than-their-previous-peak">wrote recently on Property Observer</a> that only Sydney among the capital cities has price levels (adjusted for inflation) higher than the previous peak.
In real terms, Sydney’s market is only 4.3% above the previous peak, which was 10 years ago. All other cities remain in deficit – most of them by more than 10%.
All cities have shown some kind of growth recently, according to these figures, but not enough to lift values to the levels of the previous peaks (the timing of which varies from city to city) and anywhere close to them
You have to work really hard to concoct a bubble out of this situation.
You can contact Terry via <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email</a> or on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>.
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You have to work very hard to concoct a property bubble when we're nowhere near a boom

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While some commentators have been discussing a slowdown in the significant rate of property price growth in some Australian cities, HSBC Global Research has suggested that this is not the case.
In fact, they’re expecting double digit growth to be realised by year end with the risk of a bubble increasing in cities such as Sydney.
“We expect housing prices to rise by around 10% this year, supported by low mortgage rates,” their research summary explains.
However, they went on to say that they remain of the view that Australia does not have a housing bubble “but the risk that a bubble forms is rising, particularly in the Sydney market”.
“Signs of exuberance are most acute in Sydney, where housing prices are already rising at twice the pace of elsewhere and the investor share of market has reached record new highs in recent months,” their research explains.
Prudent action on behalf of the Reserve Bank was also said to be becoming more critical with the risk of leaving interest rates too low for too long having the potential to drive excessive risk taking in the housing market.
With this in mind, they also suggested that further rate cuts would not be materialising – with hikes to contain growth the more likely scenario.
They noted that in May, there were indeed signs that activity in the housing market is slowing down. However, subsequent activity in June and July have proven this to be a temporary lull with auction clearance rates and prices bouncing back over this month and seasonality perhaps being part of the reason for the slowing.
Despite their overall view that it’s not crisis mode yet, and no bubble has yet been inflated, they did call Sydney’s market “worrisome”.
“The current pace of housing price growth in Sydney seems likely to be unsustainable. Over the past year, Sydney’s housing rices have risen by 15 year on year, while the weighted average of the other capital cities has increased byonly 7% year on year,” they noted.
The pick up in Sydney was attributed to some fundamental factors, including slower supply response and restrictions on land release, but also noted that there are more worrying signs as well.
“In this regard, Sydney’s housing market is starting to show signs that the merely the expectation of rising housing prices may be starting to drive housing price gains, which is worrisome,” they explained.
“One such sign is the investor share of new housing loan approvals, which has reached a new record high in recent months, exceeding the levels reached during Sydney’s 2002-03 housing boom.”
They also pointed to the proliferation of property buying seminars, particularly those aimed at SMSF property purchasing, as a worrying sign.
In 2002/2003, the boom saw Sydney race past Australia’s national growth averages, and after this a significant increase in mortgage defaults was seen.
“It is fair to say that if any part of the national market had the characteristics of a bubble in 2002-03, it was the Sydney market,” they noted.
However, they said there are clear differences this time round. For instance, in 2002/2003, exuberance had spread from housing to the broader economy, housing credit growth was running at over 20% annually and equity withdrawal was a significant driver of household consumption.
At present, signs this exuberance is spreading beyond the housing market are limited.
YOU MIGHT ALSO WANT TO READ
<a href="/expert-insights/buying/how-can-investors-cope-with-a-property-bubble-q-a-with-philip-soos">How can investors cope with a property bubble? </a>Q&amp;A with Philip Soos
Pessimism threatening further price growth: July state of the market analysis
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jduke-EHk3XBmHkn

Sydney bubble risk increases as house prices expected to boom by 10%: HSBC

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There are few topics that cause as much debate among property pundits and housing economists as Australia’s potential property bubble.
It’s a divisive topic. Those who say that we are experiencing a housing bubble are often labelled scaremongers, while those who consistently deny the presence of a bubble are accused of spruiking.
Philip Soos is an economist and post graduate candidate at Deakin University. He has recently co-authored <a href="https://www.worldeconomicsassociation.org/files/Bubble_Economics_Egan_Soos.pdf" target="_blank">Bubble Economics: Australian Land Speculation 1830-2013 </a>with Paul D Egan.
Property Observer asked Soos to explain past bubbles in Australia’s economy and how Australian investors can cope with a potential bubble.
<img src="/images/2014/07/29/soos-profile.jpg" alt="" style="float: right;">
What is your new book about?
The book provides a conclusive answer to the debate that has been raging in Australia for the last decade – is there a bubble in the housing market? Paul D. Egan and I used a fairly conventional approach to investigate this possibility.
We examined the work of the small number of economists who identified the US housing bubble and predicted the GFC, analysed past real estate bubbles in Australia’s history going back to the 1830s, and used a paper published by the RBA in 1999 (<a href="https://www.rba.gov.au/publications/rdp/1999/pdf/rdp1999-06.pdf" target="_blank">Two Depressions, One Banking Collapse</a>) as a template for the book.
What we found is that Australia’s history is littered with real estate bubbles (really, land market bubbles) that later collapsed, pummelling the banking and financial system and repeatedly sending the economy into recession or depression. The stock market has often bubbled over as well, but the effects weren’t nearly as bad.
What is the difference between a bubble and a normal business cycle peak?
Every capitalist economy experiences fluctuations or business cycles, especially given its dynamic and chaotic nature. Business cycles are driven by a number of factors, particularly rapid industrialisation and urbanisation, mining and manufacturing booms, and the rise and fall of speculative asset bubbles. The former are typically based on fundamental movements in the domestic and world economy, but the latter is caused by irrational exuberance.
Due to the reasons mentioned below, mainstream economists pay little attention to the cycles in stock and land markets. If they did, they would notice that many business cycles throughout history have been strongly influenced by real estate booms, financed by private debts the banking and financial system extends to speculators. Controlling the regular pattern of asset bubbles would considerably tame the business cycle.
What are some big bubbles Australia's property market has seen?
The first land market bubble occurred during the 1830s. Speculators purchased enormous amounts of government-owned land, holding them in the hopes that prices would always rise. But fall they did, resulting in Australia’s first depression in the early 1840s, which the economy promptly recovered from.
The second bubble was insane, developing during the 1880s. Bank and non-bank lenders provided credit to everyone who wanted it, underpinning a period of mass speculative fervour, primarily in commercial CBD real estate. There were reports of Melbournian city blocks doubling in price within the space of several months in 1887. The bubble collapsed in the early 1890s, resulting in the worst depression on record, relatively worse than the ‘Great Depression’ of the 1930s.
The next bubble formed during the 1920s, though this was muted compared to the two previous bubbles. Banks were more cautious and adopted <a href="https://www.philipsoos.com/private-debt/">prudent lending standards</a> which ended up saving them during the depression. The movement in real estate prices were smaller relative to the previous land market cycle. The banks favoured lending to the business sector rather than households during these three bubbles.
The mid-1970s saw a commercial bubble, feeding into a smaller residential bubble which peaked in 1974. Both were financed by a sharp rise in lending by the banking and financial sector and eventually burst, bringing about a recession. The high rate of inflation and wage growth did, however, help to mitigate the large private sector debt burden.
During the late 1980s, another commercial bubble developed, centred in Melbourne, Sydney and Perth. After peaking in 1989, commercial real estate prices collapsed by 60% through to 1993, a thorough blood-letting. This produced the early 1990s recession and, to date, Australia has escaped a further recession.
The latest, and easily the largest, land market bubble in post-WW2 history began in 2001. This time around, the commercial property market is playing a backseat role, with the housing market severely overpriced by a range of <a href="https://www.philipsoos.com/housing-valuation">fundamental indictors</a>, indicating severe trouble will occur when it collapses. The illiquid, over-leveraged, under-capitalised, highly concentrated, foreign-funds addicted, and heavily over-compensated banking and financial sector is eerily reminiscent to that of the 1880s.
Article continues on the next page. Please click below.
<hr class="system-pagebreak">
Are any markets in Australia currently in a housing bubble?
All capital city housing markets have experienced a <a href="https://www.philipsoos.com/housing-prices/">surge in prices</a> since the mid-1990s, with Melbourne posting the largest gain between the low in 1996 and apparent peak in 2010. Perth has also boomed, with prices doubling in a couple of years after 2004, peaking in the March quarter of 2007.
According to our <a href="https://theconversation.com/property-bubble-thats-the-theory-anyway-16814">preferred measure</a>s of a housing bubble - rising real (inflation-adjusted) prices, accelerating mortgage debt and aggregate net rental income losses - all capital city markets are in the bubble zone, though some are larger than others. Darwin has the <a href="https://www.philipsoos.com/rents-and-yields/">highest yields</a>, so it appears to have the smallest bubble.
What is the relationship between purchasing for capital gains and housing bubbles?
The crazy race for capital gains (paper gains or phantom wealth) is the cause of the bubble. Property investors accumulate huge debts to speculate on the future movements of housing prices, expecting continual rises. Fundamental metrics like household incomes, rents and yields are dismissed, as rapidly rising prices become the new norm.
To protect themselves from a crash, should investors be seeking rental returns rather than purely capital growth?
Yes! The fundamental value of a property is based on the income it produces, not what prices could be next year or the year after. Gross yields were around 7% during the mid-1990s, falling to 4% today. Those who have focused on positive cash flows rather than capital gain will come out ahead.
Housing prices can only rise so far given the staggering burden of household debts, currently around <a href="https://www.bis.org/statistics/credtopriv.htm">110% of GDP</a> as of 2013. This is a historical high and aligns with other nations having experienced a bubble: Ireland, Denmark and the Netherlands. Unfortunately, 67% of investors are negatively-geared as of 2012, up from 51% in 1994, indicating they are focused on capital gains, not rental income.
Why do you believe economists "get it wrong" when it comes to bubbles?
There are two primary reasons why the economics profession as a whole always fail to identify real estate bubbles and predict the subsequent economic downturns.
The first is the theory taught and practised is a <a href="https://www.amazon.com/Debunking-Economics-Revised-Expanded-Dethroned/dp/1848139926/ref=sr_1_1?s=books&amp;ie=UTF8&amp;qid=1405987428&amp;sr=1-1&amp;keywords=debunking+economics&amp;dpPl=1">pseudo-science</a> (neoclassical economics). It imagines a world where people can see into the infinite future, know all information and always make rational decisions. Furthermore, banks, debt and time do not play any role in these models. Economists assume housing and land markets operate efficiently by definition; therefore bubbles can’t exist by this logic. It’s a religious-like belief, but with <a href="https://theconversation.com/time-to-stop-rewarding-economists-for-bad-behaviour-5836">very dangerous consequences</a>, especially for middle and low-income earners.
The second reason is due to vested and conflicts of interest. It is almost impossible to gain the honest opinion of an economist, researcher or analyst into matters of real estate and banking. Economists, particularly those in senior and executive roles within government and industry, are unwilling to jeopardise their incomes and privileged status by pointing out the obvious. If they did, they would be kicked to the curb by their employers by the end of the day.
It’s also the reason why our book has been suppressed by the mainstream media, echoing the experience of other published authors who have come to the same conclusion, such as Australian businessman Lindsay David (<a href="https://www.australiaboomtobust.com/" target="_blank">Australia: Boom to Bust</a>). Our two books have a combined 1,000 plus pages of the most in-depth research on real estate, banking and mining available, but no mainstream journalist or reporter will review or cover them. This is to be expected, however, given the irrationality of the times we live in.
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jrichardson-uRX5hFdKfN

How can investors cope with a property bubble? Q&A with Philip Soos

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Australia's big housing worry is that its house price-to-income ratio is rising, according to Australian Financial Review columnist, Chris Joye.
The RBA data has it at 5.1 times in March 2014, a touch below the 5.2 records in 2007 and 2010, he noted. 
After these prior records, prices fell 6% to 8% he added.
"My analysis suggests the ratio has crept further since March as national prices continue to outstrip incomes," with Joye warning of a possible vulnerability from an interest rate, income or unemployment rate shock.
"With Australian home values in absolute terms and compared to incomes now at, or near, multi-decade peaks, there is a case that we have an emerging bubble. 
"While Glenn Stevens has been reluctant to mention the “b-word”, the RBA’s latest research lends weight to the notion valuations are getting stretched.
"Speculative mania and/or rapid credit growth are only portents, not conditions, precedent to a bubble existing.
"RBA officials claim they are not worried about a bubble because credit growth is low.
"This is muddle-headed for two reasons: first, housing credit growth is outpacing incomes, which is the key criterion; second, credit growth is only meaningful in respect of the light it sheds on changes in the level of household leverage and the probability of borrowers defaulting.
"Low leverage combined with strong credit growth is a sign of dangerous conditions ahead.
"But RBA data shows that historically and internationally lofty leverage has already arrived: Australia’s 150 per cent household debt-to-income ratio is approaching its pre-financial crisis apogee.
"All we need now is an interest rate, income or unemployment rate shock to crush house prices and send leverage into uncharted territory.
"And contrary to RBA rhetoric, house prices are hardly “cooling”.
Joye noted in the first seven months of 2014, prices have inflated at a 9.5% annualised national pace (triple wages growth) with Melbourne values appreciating more rapidly than Sydney, with both realising strong double-digit gains this year.
"Many pundits were fooled by the winter seasonal slowdown, which has been reversed.
"With banks promoting the cheapest mortgage rates ever, I suspect Australia’s nascent housing bubble will get bigger."
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