<p>For most new apartment buildings, the Owners Corporation starts life with little more than a bank account and the first quarterly strata levies.</p>

<p>At <a href="https://www.apartments.com.au/buildings/9-gay-street-castle-hill-9-gay-street-castle-hill-nsw-2154">9 Gay Street</a> in <a href="https://www.apartments.com.au/developments/castle-hill-nsw-2154">Castle Hill</a>, it starts with around $7 million in reserve.</p>

<p>It's an unusual legacy of what was once one of Sydney's highest-profile apartment remediation projects. When the development, originally known as Skyview and built by disgraced developer Top Place, came under scrutiny by then NSW Building Commissioner David Chandler, an $11 million remediation bond was negotiated to ensure any building defects could be fully rectified.</p>

<p>The building underwent an 18-month remediation program, during which around $4 million of that bond was spent bringing the building up to the standard it should have been in from the outset.</p>

<p>After extensive inspections, all active rectification orders have been lifted. What's more, around $7.2 million remains secured for the Owners Corporation for the next 15 years.</p>

<p>In a twist few would have predicted, what began as a significant concern for purchasers has left the building with something almost unheard of in the apartment market: a multi-million-dollar financial reserve from day one.</p>

<p>[smartcode_project:default project_id=147685 project_image_fid=359136]</p>

<p><a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a> Executive Chairman Greg Huxley said the structure offers buyers a level of certainty that is difficult to replicate.</p>

<p>"The $11 million bond established for the Skyview Castle Hill development represents exceptional value, providing genuine financial security for purchasers," Huxley said.</p>

<p>"Unlike a standard insurance policy, this bond consists of real funds held in trust for the Owners Corporation, offering a tangible layer of protection and added peace of mind."</p>

<p>The apartments themselves have been designed with a focus on practical, contemporary living. Interiors feature Smeg appliances, stone benchtops, tiled living areas, carpeted bedrooms, 2.7-metre ceilings, floor-to-ceiling glazing, and ducted heating and cooling throughout.</p>

<p>Residents also have access to a range of shared amenities, including two rooftop barbecue areas, a swimming pool, children's playgrounds, secure building access, storage cages, and visitor parking.</p>

<p>The location continues to be one of the project's strongest drawcards. Castle Hill Metro Station sits virtually on the doorstep, providing direct connections across Sydney's expanding Metro network, while Castle Towers offers extensive retail, dining, entertainment, and service amenities within walking distance.</p>

<p>[smartcode_project:default project_id=147685 project_image_fid=359127]</p>

<p>The building, now named after its location at 9 Gay Street, comprises a diverse mix of one-, two-, and three-bedroom apartments starting from just under $600,000.</p>

<p>Equitifund National Sales Director Ben Hamblett said demand in the Hills District continues to be driven by buyers seeking convenience and connectivity.</p>

<p>"Interest from both owner-occupiers and investors in Castle Hill remains exceptionally strong, with buyers consistently prioritising developments in close proximity to the Metro station and Castle Towers Shopping Centre," Hamblett said.</p>

<p>"There is a clear trend in the market, with purchasers seeking convenient access to transport and lifestyle amenities that support a seamless, low-maintenance way of living."</p>

<p>On top of the long-term protection afforded by the remaining $7.2 million bond, Equitifund is offering a limited-time stamp duty rebate on selected apartments.</p>

<p>Eligible purchasers can also secure finance options, including a 3.99 per cent two-year variable rate, loan-to-value ratios of up to 90 per cent, and interest-only lending options through EquitiCredit.</p>

<p>[smartcode_project_cta:default project_id=147685]</p>


Joel Robinson

Why this Castle Hill apartment building starts with a $7 million advantage

<p>For much of the past few years, conversations about Australia's property market have centred on the rapid growth seen in Sydney, Brisbane, Gold Coast, and Perth. <a href="https://www.apartments.com.au/developments/melbourne-vic-3004">Melbourne</a> has followed a different trajectory.</p>

<p>That relative underperformance is now encouraging some buyers to reassess the city, particularly those willing to look beyond short-term market movements and focus on quality property in established locations, along with the long-term growth prospects of a city expected to overtake Sydney as Australia’s most populous.</p>

<p>John Bekiaris, Research &amp; Market Insights at <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Projects by Equitifund</a>, said Melbourne's current position is attracting increasingly sophisticated purchasers.</p>

<p>"Melbourne continues to present one of Australia's strongest long-term investment stories," Bekiaris says.</p>

<p>"While other capital cities have experienced stronger recent growth, that relative underperformance is exactly what's attracting sophisticated counter-cyclical investors."</p>

<p>[smartcode_project:default project_id=1979 project_image_fid=363268]</p>

<p>Equitifund isn't just commenting on Melbourne's property market, it's investing in it.</p>

<p>The Sydney-headquartered capital partner has taken over the remaining apartments at <a href="https://www.apartments.com.au/buildings/victoriana-melbourne-20-queens-road-melbourne-vic-3004">Victoriana</a>, the recently completed glass-encased development opposite Albert Park Lake in Melbourne's tightly held St Kilda Road precinct.</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> and built by <a href="https://www.apartments.com.au/builders/hickory">Hickory</a>, Victoriana places residents between one of Melbourne's most recognised parklands and the CBD, offering oversized two and three-bedroom apartments aimed at owner-occupiers seeking a genuine alternative to a traditional family home.</p>

<p>The development comprises 232 completed residences alongside a suite of resident amenities, including a 25-metre indoor swimming pool, gymnasium, landscaped entertaining areas, resident lounges, EV charging, secure basement parking and a concierge-style arrival experience.</p>

<p>[smartcode_project:default project_id=1979 project_image_fid=363229]</p>

<p>The apartments have been designed with owner-occupiers firmly in mind.&nbsp;Open-plan living and dining areas flow onto generous balconies framing views across Albert Park Lake, Fawkner Park, the Royal Botanic Gardens and the Melbourne skyline.</p>

<p>Kitchens feature Gaggenau appliances, stone benchtops and generous preparation space. Bedrooms include built-in robes, while bathrooms feature full-height textured tiling. Hardwood flooring and ducted air conditioning complete residences designed for long-term living.</p>

<p>Rothelowman's architecture takes its cues from the landscape opposite the site. Sweeping horizontal glazing references the movement of Albert Park Lake, while generous balconies and expansive glazing strengthen the connection between the apartments and the surrounding parklands. The result is a building designed to deliver the scale and amenity expected of luxury apartment living, while offering the larger floorplans increasingly sought by owner-occupiers.</p>

<p>[smartcode_project:default project_id=1979 project_image_fid=363284]</p>

<p>The location is one of Victoriana's defining characteristics. Positioned on Queens Road, residents are directly opposite Albert Park Lake and within easy reach of Fawkner Park, the Royal Botanic Gardens, South Melbourne, St Kilda Road and the CBD. With few comparable development opportunities remaining in the precinct, buyers are increasingly placing value on outlooks that are unlikely to be interrupted by future construction.</p>

<p>Greg Huxley, Founder of Equitifund, believes those qualities become even more valuable over time.</p>

<p>"Premium real estate has always rewarded buyers who take a long-term view," Huxley said.</p>

<p>"Victoriana represents the kind of asset that's increasingly difficult to recreate today, particularly in an established location like Queens Road."</p>

<p>He said rising construction costs are also changing the way buyers assess completed developments.</p>

<p>"When you combine an irreplaceable location with thoughtful architecture and premium finishes, you create something that becomes increasingly difficult to reproduce as construction costs continue to rise."</p>

<p>[smartcode_project:default project_id=1979 project_image_fid=363228]</p>

<p>According to National Sales Director Ben Hamblett, enquiry has been driven largely by Melbourne downsizers and buyers upgrading from smaller apartments.</p>

<p>"Interest in Victoriana continues to build, with strong buyer focus on the larger owner-occupier residences within the development," Hamblett says.</p>

<p>"Enquiry is increasingly driven by local buyers who recognise the rarity of what's on offer: park-facing apartments in an established neighbourhood where new development opportunities are becoming increasingly scarce. At Victoriana, the view is not just a feature; it's an appreciating asset in its own right."</p>

<p>He said interstate enquiry has also strengthened as buyers reassess Melbourne's position within the national property cycle.</p>

<p>"Melbourne currently stands as the most compelling entry point of any major Australian capital, and discerning buyers are beginning to recognise what those who move early always understand: the best opportunities are taken before the price rise confirms them."</p>

<p>[smartcode_project_cta:default project_id=1979]</p>


Why now is the time to buy in Melbourne's premium apartment market

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


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

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

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


Sherpa sells out Flourish Oasis in booming Palm Beach

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


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

Business Confidence

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<p>EXPERT OBSERVER</p>
<div>Consumer confidence rose +1.2 per cent last week to 93.5, according to ANZ-Roy Morgan, a 13-week high.</div>
<div> </div>
<div>However, confidence levels remain well below the monthly average since 1990 of 112.6, and even still a reading of 93.5 is equivalent to what Australia experienced through the financial crisis. </div>
<div> </div>
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<div><em>Source: ANZ-Roy Morgan</em></div>
<div> </div>
<div>On March 29 the COVID shock saw consumer confidence reading hit the lowest level in half a century at 65.3, but it has since rebounded by 43 per cent. </div>
<div> </div>
<div>Curiously confidence levels in Melbourne have picked up this week to a level 'a touch below neutral' -  possibly on optimism of restrictions being eased - and confidence levels in Melbourne are now higher than in Sydney. </div>
<div> </div>
<div><strong>RBA update</strong></div>
<div> </div>
<div>The RBA put out some state level payroll jobs figures this week which showed that jobs have been steadily picking up elsewhere, but not in Victoria. </div>
<div> </div>
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<p>However, the payrolls recovery has stalled this week, and indeed it cannot really take hold until the Victorian economy sees restrictions broadly eased. </p>
<div>Separate analysis from UBS highlighted how small businesses have disproportionately felt the pain this year, and this is reflected in hiring figures relative to large businesses. </div>
<div> </div>
<div>This has raised the prospect of a potential further reduction of interest rates, as discussed today by the RBA’s Guy Debelle.</div>
<div> </div>
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<div> </div>
<div>The RBA has now expanded its balance sheet significantly, almost doubling from from $170 billion in February to $300 billion, through its various policy measures. with a further 'decently large' expansion to come. </div>
<div> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-eZwzPLcqlyc/X2pXB4dYxNI/AAAAAAAA4bM/NlqwEXKdq9kb8vc71h7seJLE4R86aD6QACNcBGAsYHQ/s1457/RBA1.jpg"><img src="https://1.bp.blogspot.com/-eZwzPLcqlyc/X2pXB4dYxNI/AAAAAAAA4bM/NlqwEXKdq9kb8vc71h7seJLE4R86aD6QACNcBGAsYHQ/w640-h370/RBA1.jpg" width="640" height="370" data-original-height="843" data-original-width="1457"></a></div>
<div> </div>
<div>In the money markets swap rates are now at record lows. </div>
<div> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-AKO7Q4wvkD8/X2pXNbrruuI/AAAAAAAA4bQ/IAE0kGoX9707mn1loIZ6287W93v30zTawCNcBGAsYHQ/s733/MMR.jpg"><img src="https://1.bp.blogspot.com/-AKO7Q4wvkD8/X2pXNbrruuI/AAAAAAAA4bQ/IAE0kGoX9707mn1loIZ6287W93v30zTawCNcBGAsYHQ/w640-h506/MMR.jpg" width="640" height="506" data-original-height="580" data-original-width="733"></a></div>
<div> </div>
<div>Banks are now allowing their offshore funding to roll off, which has reduced the share of offshore bonds funding, and this has been replaced by take-up of the cheaper Term Funding Facility (TFF). </div>
<div> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-vkhXbLlb_gc/X2pXYv07m7I/AAAAAAAA4bc/1pVnirXTDuIVglV83BEDWOKOTZE1jK0fgCNcBGAsYHQ/s728/Funding.jpg"><img src="https://1.bp.blogspot.com/-vkhXbLlb_gc/X2pXYv07m7I/AAAAAAAA4bc/1pVnirXTDuIVglV83BEDWOKOTZE1jK0fgCNcBGAsYHQ/w640-h536/Funding.jpg" width="640" height="536" data-original-height="609" data-original-width="728"></a></div>
<div> </div>
<div>It's interesting to note that the Chinese economy has come surging back from its 10 per cent decline in the March 2020 quarter, to the extent that its output is now greater than it was at the end of 2019, as targeted stimulus measures have successfully bolstered production.</div>
<div> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-jeC3WSFTzHg/X2pYjntse5I/AAAAAAAA4bs/iHzmFr0r8tYHBi3sWl4iY4StaSvbA_LSACNcBGAsYHQ/s761/GDP.jpg"><img src="https://1.bp.blogspot.com/-jeC3WSFTzHg/X2pYjntse5I/AAAAAAAA4bs/iHzmFr0r8tYHBi3sWl4iY4StaSvbA_LSACNcBGAsYHQ/w640-h344/GDP.jpg" width="640" height="344" data-original-height="410" data-original-width="761"></a></div>
<div> </div>
<div>Australia has gone down a different route, focusing instead on income support, to the extent that household income actually <em>increased</em> over the previous quarter, which is a very unusual outcome for a recession.</div>
<div> </div>
<div>This was driven by a range of factors including lower interest rates, super withdrawals, mortgage and rent deferrals, and all of the various government stimulus measures (including JobKeeper payments, and JobSeeker). </div>
<div> </div>
<div>No wonder them Harvey Norman shares have come roaring back! </div>
<p><strong>PETE WARGENT</strong><em><span> </span>is the co-founder of AllenWargent property buyers and a best-selling author and blogger </em></p>
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pwargent-M4siyDbqQY

Consumer confidence hits three month high: Pete Wargent

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<p><span>The 2019 March quarter ANZ-</span><span>Property Council survey shows that confidence in Australia’s housing </span><span>sector has fallen further than in 2018 and is now at its lowest level since the survey commenced in 2011.</span></p>
<p>It is not surprising given that many indicators are around their worst levels in many years.</p>
<p>"Housing prices, credit, auction results, days on market and vendor discounts are all weak," the report noted adding there is little sign of improvement.</p>
<p>"The ANZ-Property Council survey is consistent with these other indicators and suggests we are set for an extended period of weakness in the housing sector," it noted.</p>
<p><img src="https://www.urban.com.au/images/2019/1/10/ANZ-Prop%20Counc%20G1.JPG" alt=""></p>
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<p>NSW's property industry confidence has dropped to one of the lowest in the nation, according to the latest ANZ/Property Council Survey.</p>
<p>The largest decline in confidence came in Queensland.</p>
<p><a href="https://www.propertyobserver.com.au/subscribe" target="_blank"><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/2019/1/Subscriber%20strip%20ad.jpg" alt=""></a></p>
<p>Property Council NSW Executive Director Jane Fitzgerald said sentiment is down.</p>
<p>"With a state and federal election just around the corner, I don’t think we will see it rebound in the short term despite stronger results in some sectors," she said.</p>
<p>“The industry is facing a lot of uncertainty and change, particularly over the past twelve months.</p>
<p>"We have seen the introduction of Special Infrastructure Contributions, increasing 7.11 levies, the changing of key policies such as the Medium Density Housing Code, the updating of Local Environmental Plans, and the review of approaches to planning in areas such as Ryde – that’s a lot of change for an industry."</p>
<p>“With a flat residential market, there is a real risk that this moving feast of policy changes will have a detrimental effect on economic growth and jobs. The 400,000 people who work in the property industry in NSW rely on a healthy industry for their economic wellbeing," she concluded.</p>
<p>David Plank, the ANZ Head of Australian Economics, said the survey gives a softer reading on the health of Australia’s property sector.</p>
<p>"Survey respondents report that the availability of finance will worsen further over the coming year, which is a central feature of our housing outlook.</p>
<p><img src="https://www.urban.com.au/images/2019/1/10/ANZ-Prop%20Counc%20G2.JPG" alt=""></p>
<p>"In turn, respondents also expect housing prices and construction activity will continue to ease.</p>
<p>"We think prices will fall through to 2020, and expect to see declines <a href="/expert-insights/buying/anz-revise-forecast-upwards-to-20-percent-house-price-declines-in-sydney-and-melbourne">around 15–20% peak to trough</a> for Sydney and Melbourne.</p>
<p>"We also think the decline in housing construction will accelerate through 2019 and 2020, as the current backlog of work is gradually completed.</p>
<p>"The survey also suggests that firms expect the next interest rate movement to be higher, though the conviction in this expectation has dropped from the last survey.</p>
<p>"With risks around global trade tension and questions over the sustainability of domestic household spending, we think any RBA move is still some time off.</p>
<p>"Overall, though, the forward work schedule is solid and employment intentions are holding up.</p>
<p>"But clearly sentiment in the property sector is being challenged by a number of significant headwinds.," Plank said.</p>
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j.ballantyne1990-6AQqhLzZaK

Little sign of optimism in the residential sector as confidence falls to lowest levels: ANZ/Property Council

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<p>Business confidence in the WA property sector has climbed to its highest level since 2014, according to the ANZ/Property Council Survey for the June quarter 2017, which revealed a 20-percentage point increase in the confidence index.</p>
<p>“These results point to an economic turnaround in WA led by proposed investments by non-mining businesses,” Property Council WA Executive Director Lino Iacomella said.</p>
<p>“The improvement in industry confidence is due to expectations that improved national economic growth will flow to WA, and a lift in forward work schedules and staffing numbers. </p>
<p>A raft of major projects is proposed in WA, including shopping centre expansions, hotels and new infrastructure such as the Forrestfield-Airport Link.</p>
<p>The retail and retirement living sectors continue to lead the way with continued growth expectations.</p>
<p>Other sectors in the property industry are continuing to show declining growth expectations, however the outlook has improved with house price growth expectations close to stabilising. </p>
<p>The property industry is looking forward to working with the new McGowan state Government to progress economic reforms, fast-track infrastructure planning and cut red-tape to ensure the major construction projects proposed for WA get off the ground,” Mr Iacomella said.</p>
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Confidence returning to WA property industry

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<p>GUEST OBSERVER</p>
<p>The December NAB business survey showed business confidence remaining reasonable at +6 and businessconditions improving significantly to a strong reading of +11.</p>
<p>The bounce in conditions reflected strength in trading, profits and new orders.</p>
<p>Business continues to remain more confident than are consumers, but the rebound in business conditions adds to confidence that the September quarter downturn in GDP reversed in the December quarter.</p>
<p class="x_MsoNormal"><a href="https://www.propertyobserver.com.au/images/2017/02/01/image006.png" target="_blank">Click to enlarge</a></p>
<p class="x_MsoNormal"><img src="https://www.urban.com.au/images/2017/02/01/image006.png" alt=""></p>
<p class="x_MsoNormal">Source: Westpac, NAB, AMP Capital</p>
<p class="x_MsoNormal">Meanwhile, private credit rose a stronger than expected +0.7 percent <span id="0.6023802033159882" class="highlight">in</span> December or 5.6 percent year on year. </p>
<p class="x_MsoListParagraph">The <span id="0.19327247748151422" class="highlight">bounce</span> <span id="0.08058031392283738" class="highlight">in</span> credit growth from +0.5 percent mom <span id="0.4836013962049037" class="highlight">in</span> November was driven by stronger <span id="0.4131828281097114" class="highlight">lending</span> <span id="0.2442040389869362" class="highlight">to</span> <span id="0.799539064290002" class="highlight">business</span>es, which is potentially a good sign. </p>
<p class="x_MsoNormal">While housing credit growth was unchanged at 0.5 percent/mom or 6.3 percent/yoy <span id="0.3568573796655983" class="highlight">in</span> December, what is concerning is a continued deceleration <span id="0.41784490551799536" class="highlight">in</span> owner occupier housing credit (<span id="0.5229188892990351" class="highlight">to</span> +0.4 percent/mom) relative <span id="0.9022720851935446" class="highlight">to</span> <span id="0.7141850041225553" class="highlight">in</span>vestor credit (which rose +0.8 percent/mom). Over the last three months <span id="0.3730766784865409" class="highlight">in</span>vestor housing credit rose at an annual rate of 9 percent <span id="0.8393944983836263" class="highlight">and</span> is now rapidly approaching APRA’s 10 percent threshold.</p>
<p class="x_MsoNormal">It is <span id="0.8709192702081054" class="highlight">in</span>creasingly clear that the dampening impact of APRA’s 2015 macro prudential tightening has worn off <span id="0.09559610136784613" class="highlight">to</span> a significant degree. With household <span id="0.3539372014347464" class="highlight">in</span>come growth <span id="0.7710073834750801" class="highlight">in</span> the economy running well below 10% yoy <span id="0.07574582751840353" class="highlight">and</span>the Sydney <span id="0.6721861795522273" class="highlight">and</span> Melbourne <span id="0.8575597342569381" class="highlight">property</span> markets <span id="0.7601068657822907" class="highlight">continuing</span> <span id="0.8739038927014917" class="highlight">to</span> run <span id="0.9272325034253299" class="highlight">to</span>o hot <span id="0.6534713262226433" class="highlight">in</span> the face of ultra-low <span id="0.46389276324771345" class="highlight">in</span>terest rates there remains a case for APRA <span id="0.7982982180546969" class="highlight">to</span> further lower the 10 percent growth threshold for <span id="0.04621078143827617" class="highlight">property</span> <span id="0.7070795088075101" class="highlight">in</span>vestor credit.</p>
<p class="x_MsoNormal"><a href="https://www.propertyobserver.com.au/images/2017/02/01/image009.png" target="_blank">Click to enlarge</a></p>
<p class="x_MsoNormal"><img src="https://www.urban.com.au/images/2017/02/01/image009.png" alt=""></p>
<p class="x_MsoNormal"> </p>
<p class="x_MsoNormal"><em><span><a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a></span> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds.</em></p>
<p class="x_MsoNormal"> </p>
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