<p><a href="https://www.apartments.com.au/architects/bates-smart">Bates Smart</a> is one of Melbourne's longest standing architecture firms.</p>

<p data-end="421" data-start="0">Founded in Melbourne in 1853 by Joseph Reed, the firm began as Reed &amp; Barnes and has evolved through various partnerships before adopting the Bates Smart name in the 20th century. With a continuous presence spanning more than 170 years, the practice has played a pivotal role in shaping Melbourne’s architectural identity.</p>

<p data-end="826" data-start="423">In the 19th century, Bates Smart designed several of Melbourne’s enduring landmarks, including the Royal Exhibition Building (1880), a UNESCO World Heritage site, and the Melbourne Town Hall. The firm’s influence continued into the 20th century with notable works such as Ici House (1958), considered Melbourne’s first modern skyscraper and a milestone in post-war Australian architecture.</p>

<p data-end="1220" data-start="828">One of their landmark designs was&nbsp;The First Church of Christ, Scientist, at 336-340 St Kilda Road. The building, which is listed on the Victorian Heritage Register, was designed by Bates, Peeble and Smart with construction completed in 1922. Architecturally, the building is significant as a rare example of early twentieth century classicism applied to a religious building. Historically, the building is significant as the first church of the Christian Science movement.</p>

<p data-end="1220" data-start="828">Melbourne developer Time &amp; Place decided to bring Bates Smart back to the area to design their next residential apartment project, Park Modern.</p>

<p data-end="1220" data-start="828">[smartcode_project:default project_id=138453 project_image_fid=2138]</p>

<p data-end="1220" data-start="828"><a href="https://www.urban.com.au/new-apartments/park-modern-south-melbourne-1-middleton-lane-south-melbourne-vic-3205">Park Modern</a>, on one of the largest island sites on the Melbourne CBD fringe, bordered by Dorcas Street, Wells Street, and Middleton Lane, will comprise two sculptural towers. It is being positioned as a design-forward response to evolving owner-occupier preferences in the Domain precinct.</p>

<p data-end="1220" data-start="828">Tim Price, Director at <a href="https://www.apartments.com.au/developers/time-place">Time &amp; Place</a>, says&nbsp;Bates Smart have got a footprint on this city, probably like no other architect.</p>

<p>"It’s a really nice kind of next chapter story, that they created from a design perspective so long ago," Price told Apartments.com.au.</p>

<p>Park Modern will be the third time Time &amp; Place has worked with Bates Smart, having successfully designed and delivered Collins House and Opera on St Kilda Road together.</p>

<p>The brief focused on creating a built form that would feel contextually appropriate while offering a contemporary evolution of inner-city apartment living.</p>

<p>[smartcode_project:default project_id=138453 project_image_fid=2137]</p>

<p>The focus for Park Modern is squarely on owner-occupiers.</p>

<p>“It’s not always about downsizing," Price says.</p>

<p>"Sometimes it’s just about creating a space which is easily maintained, lock up and leave, reflecting people’s aspirations, whether they’re entertainers, big dining room spaces, big open terraces, they’re important parts of any design consideration.”</p>

<p>The building includes a mix of one, two and three-bedroom apartments, as well as penthouses, with layouts and floor plans designed to suit a broad demographic. The architecture has been shaped to capture&nbsp;view corridors to the Botanic Gardens, Port Phillip Bay and the CBD skyline.</p>

<p>Each apartment has been oriented to maximise natural light and provide a clear outlook, elements often cited by owner-occupiers as key criteria.</p>

<p>[smartcode_project:default project_id=138453 project_image_fid=351806]</p>

<p>Rather than defaulting to a generic luxury offering, the amenity strategy at Park Modern reflects specific insights into how residents want to live. The ground floor will include co-working areas, wellness facilities, and a concierge-led lobby that blends indoor and outdoor design cues.</p>

<p>“Wellness has become a more thoughtful consideration, not just gyms or lap pools, but things like magnesium plunge pools, saunas, daybeds, and studio spaces for Pilates and the regular cardio workout,” says Price.</p>

<p>One notable inclusion is a substantial porte-cochère, a covered vehicle drop-off zone integrated into the site plan. It’s a feature rarely seen in inner-urban developments and speaks to the team’s emphasis on ease of arrival and departure for residents and guests.</p>

<p>A display suite for Park Modern is now open by appointment, giving prospective buyers an early look at the project.</p>

<p>[smartcode_project_cta:default project_id=138453]</p>


Joel Robinson

100 years on, Bates Smart returns to South Melbourne's Domain Precinct to design Park Modern

<p>One of the most significant beachfront projects ever proposed for the small suburb of Miami on the Gold Coast, has taken a major step forward.&nbsp;Monaco Property Group has secured approval for <a href="https://www.apartments.com.au/new-apartments/nalu-miami-122-marine-parade-qld-4220">NALU</a>, a $500 million development comprising just 45 ultra-luxury residences on the iconic former Nobby’s Outlook site.</p>

<p>Acquired by <a href="https://www.apartments.com.au/developers/monaco-property-group">Monaco Property Group</a> in 2024 for $70 million, the rare 7,238 sqm Marine Parade parcel boasts more than 80 metres of uninterrupted ocean frontage.</p>

<p>With approvals now secured, Monaco Property Group will move NALU into its delivery phase. The project has been designed by&nbsp;<a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, who collaborated with&nbsp;<a href="https://www.apartments.com.au/landscape-architect/ldg-landscape-architecture">LDG Landscape Architecture</a> and <a href="https://www.apartments.com.au/interior-designers/tom-mark-henry">Tom Mark Henry Interiors</a>&nbsp;to create the low-rise building, its landscaping, and interiors.</p>

<p><img alt="NALU" data-entity-type="file" data-entity-uuid="3fdf578e-7cc4-4b17-bbc2-ba853522a5d8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/122_Marine_Parade_002.jpg?VersionId=zFhJWVzX0jmCO.5iIIxNELImHesTjWS4" /></p>

<p>Residences will range from 237 sqm layouts to beachfront homes exceeding 1,400 sqm.</p>

<p>At the heart of the project is a 2,200 sqm lifestyle precinct with a bathhouse, fitness centre and resort-style pool, elevated by a concierge service.</p>

<p>Jonathan Grasso, Co-Founder of Monaco Property Group, said the council approval marks an exciting milestone for NALU, which will launch in Q1 2026.</p>

<p>“The project will now progress toward construction, working alongside our world-class collaborators to bring NALU to life," Grasso said.</p>

<p>“Our vision is to create a legacy project for the Gold Coast, one that not only honours the history of the site but also elevates its future, setting a new standard for coastal living in Australia. NALU embodies the pinnacle of design and location and will stand as an enduring icon of prestige and liveability.”</p>

<p><img alt="NALU" data-entity-type="file" data-entity-uuid="6ae8545b-87ca-4dea-90ed-ac273ec6515d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Image7.jpg?VersionId=Wnmie4bu3x2WQonnG4Pwmh39NdZVKeOV" /></p>

<p>Originally developed in the 1970s as Nobby’s Outlook and later refurbished in 2019 as Nalu, the property has long held a place in the local community’s coastal identity. The new vision will build on this legacy, creating luxury residences that capture ocean views while fostering a lifestyle defined by wellness, connection, and ease.&nbsp;</p>

<p>Beyond its residential offering, NALU will deliver significant economic benefits to the Gold Coast through job creation and opportunities for local suppliers and contractors. Construction is anticipated to commence in early 2026, with completion expected in Q3 2028.</p>


Monaco Property Group approved for $500 million NALU apartments on Miami beach

<p>The most elevated residential tower in Palm Beach, <a href="https://www.apartments.com.au/new-apartments/corallo-palm-beach-5-palm-beach-avenue-palm-beach-qld-4221">Corallo</a>, has officially launched this week, however only a handful of buyers will have an opportunity to buy in to the 17-storey project.</p>

<p>The $200 million mixed-use project includes ground floor dining and retail and is considered so valuable its developer, <a href="https://www.apartments.com.au/developers/changfa-group">Changfa Group</a>, will be staging its release of one-, two- and three-bedroom apartments and penthouses to the market.</p>

<p>[smartcode_project:default project_id=112194 project_image_fid=806]</p>

<p><a href="https://www.apartments.com.au/project-marketer/colliers">Colliers</a> International, Director, David Higgins, said the development’s location just metres from the beach on the corner of Palm Beach Avenue and the Gold Coast Highway influenced the sculptural design by the acclaimed Plus Architecture studio.</p>

<p>“<a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a> locals understand the rare opportunity here at Corallo, particularly being the tallest building in the suburb and its proximity to the beach and local restaurants, and they’ve represented the bulk of pre-launch enquiries,” Higgins said.</p>

<p>“The orientation of the apartments captures views of the coastline from Surfers Paradise to Currumbin, and the diversity of floor plans and apartment types provide an exceptional level of choice.</p>

<p>“The first release includes just 59 one-, two and three-bedroom apartments and two half-floor penthouses, with flexible use designed to appeal to both owner-occupiers and investors."</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=112194 project_image_fid=799]</p>

<p>In addition to the ground floor amenity, residents will also have access to a private dedicated wellness level offering 734 sqm of resort-style amenities including a pool, cold plunge, wet deck, steam room, sauna, gym, day bed, fire pit, barbecue area, dining area and yoga/stretch deck.</p>

<p>The project is located within walking distance of Tallebudgera Creek, Burleigh Heads village, Currumbin Alley and Palm Beach Currumbin High School. The Gold Coast Airport is under 10 minutes away.</p>

<p>[smartcode_project:default project_id=112194 project_image_fid=814]</p>

<p>Higgins said Palm Beach remained a hotly contested suburb for home buyers, with prices doubling in the past five years.</p>

<p>“What makes Corallo so appealing to the local market is the diversity of apartment types and pricing, with one-bedroom apartments starting from $841,000 and two-bedroom apartments starting from $1.34 million,” he said.</p>

<p>“The ground floor retail and dining offering will further expand on Palm Beach’s village atmosphere and create a meeting place for locals, and those opportunities for connection are highly valued.”</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=112194 project_image_fid=807]</p>

<p>The on-site sales display, which includes a fully fitted kitchen, bathroom and bedroom, will be open until early works commence in Q1 2026. Each residence at Corallo will feature premium finishes including natural stone, artisanal brickwork, and warm copper accents.</p>

<p>Changfa Group has a two-decade history of delivering premium developments in Australia and internationally, having recently completed its collection of premium townhomes at Lyra, Hope Island, as well as apartment projects in Leichhardt, Carlingford, and Chatswood in New South Wales.</p>

<p>[smartcode_project_cta:default project_id=112194]</p>


$200 million Corallo Palm Beach launches with limited apartment release

<p>In a move that aligns with NSW's accelerated planning incentives for affordable housing, developer&nbsp;<a href="https://www.apartments.com.au/developers/the-one-collection">One Collection</a> has revised its Hills District apartment plans, and taken it to the NSW Government, to secure approval.</p>

<p>The developer, which is currently delivering Horizon Hurstville, is seeking to add 80 more apartments to its <a href="https://www.apartments.com.au/new-apartments/the-one-castle-hill-16-dawes-avenue-nsw-2154">Castle Hill development</a> near Castle Towers. They already have approval for 280 apartments across eight six-storey buildings.</p>

<p><img alt="One Collection" data-entity-type="file" data-entity-uuid="b3c298ba-1cc5-4db7-9872-607c75f8ceca" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-10-13%20at%2010.19.22%E2%80%AFAM.png?VersionId=wN9KpFIu5ENSGZLLsaZgXQHrXcwEO3Vd" /></p>

<p>Now on the desks of the NSW Department of Planning is 360 apartments, 48 of which will be dedicated to affordable housing.&nbsp;Affordable housing is to be “fully integrated within the building and visually indistinguishable,” according to the planning submission.</p>

<p>The 15,697 sqm block, an amalgamation of 16 sites, spans across Dawes Avenue, Hughes Avenue, and Camdan Crescent, sits 550m from Hills Showground Metro Station.&nbsp;</p>

<p>"The existing context is quickly changing from free-standing homes into residential flat buildings in line with the Hills Showground Precinct planning framework," Place Studio noted.</p>

<p><img alt="Castle Hill" data-entity-type="file" data-entity-uuid="3ec24948-c185-48fa-af8b-ed25adf302bf" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-10-13%20at%2010.19.04%E2%80%AFAM.png?VersionId=zNDX.IeRROX1RlDeYcS38xn8w_dqgU2t" /></p>

<p>They said the design was informed by the site's unique condition of having three street frontages and was developed to to respond sensitively to iots surrounding context.</p>

<p>"The design adopted a conventional perpendicular alignment to the primary street frontage. The massing of the development was carefully modulated to align with the evolving character of the neighbourhood. The design ensured that the scale was not excessive or out of context, but instead contributed to a cohesive urban form consistent with emerging developments in the area."</p>

<p><img alt="Castle Hill" data-entity-type="file" data-entity-uuid="f83ffdaa-f960-469d-b6fe-abcece57c9ef" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-10-13%20at%2010.19.09%E2%80%AFAM.png?VersionId=4oKlCyfaKes7jLi1_EMoqa46w2h_YvDZ" /></p>

<p>The apartment mix will be 46 one-beds, 168 two-bed apartments, and 146 three-bedroom units, with 631 parking spaces proposed.</p>

<p>Along the street frontages, the building heights are four storeys with a 7.5 metre setback, and eight storeys with an 11.5 metre setback. It should cost about $150 million to build.</p>

<p>One Collection works hand-in-hand with the respected development and construction firm Masscon, which has built a reputation for leveraging its expertise in the built environment to take on developments others can't. That's what they're achieving at Horizon Hurstville, having taken over the project to deliver it.</p>


First look: One Collection advances plans for Castle Hill apartments

<p>At Yarra’s Edge, <a href="https://www.apartments.com.au/developers/mirvac">Mirvac</a>’s newest tower under construction, <a href="https://www.apartments.com.au/new-apartments/trielle-at-yarra-s-edge-docklands-16-point-park-crescent-docklands-vic-3008">Trielle</a>, sets a new benchmark for elevated living. Rising 45 storeys, 12.5 metres from the Yarra River, the landmark building offers residents access to a private wellness retreat and spa, a resident-only golf simulator, and an elegant lounge, dining and bar complete with a self-playing piano, all without ever having to leave home.</p>

<p>Now, that sense of elevation has reached new heights with the Aerus Sub-Penthouses, a limited release of half-floor riverfront residences on the Collins St axis where the sought-after street meets the Yarra River.</p>

<p>Each Aerus Sub-Penthouse, located across levels 42 and 43, represents the most expansive offering within Trielle, aside from the yet-to-be-revealed crowning penthouses. Spanning between 269 and 301 sqm, these residences are designed to capture natural light and uninterrupted views of the city skyline, Yarra River, and Port Phillip Bay.</p>

<p>[smartcode_project:default project_id=114216 project_image_fid=3784]</p>

<p>Among the collection are three-bedroom sub penthouses, complemented by a media room, and expansive four-bedroom layouts. All include panoramic living areas and oversized master suites with luxury ensuites reminiscent of a five-star hotel, complemented by dedicated dressing rooms finished in timber and natural stone.</p>

<p>The interiors have been crafted by <a href="https://www.apartments.com.au/architects/mirvac-design">Mirvac Design</a>, the developer’s award-winning in-house architecture and design team. Every material has been chosen for quality and longevity, from sculpted stone island benches with feature soft wash LED lighting to bespoke joinery and chevron timber oak flooring.</p>

<p>Kitchens are fitted with a BORA induction cooktop with integrated downdraft extractor, alongside Gaggenau appliances, including a fridge, freezer, and wine fridge. The adjoining butler’s pantry incorporates the exclusive Gaggenau Minimalistic Series including oven, steam oven, microwave, coffee machine and warming drawer, all concealed behind handleless glass panels for a clean, integrated presentation. Bathrooms feature custom Apaisar freestanding baths and basins and natural stone benchtops, continuing Mirvac’s design emphasis on tactile, timeless materials.&nbsp;</p>

<p><img alt="Trielle at Yarra's Edge, Docklands" data-entity-type="file" data-entity-uuid="c00be724-b0f1-47c0-afed-54f829870704" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Aerus%20sub-penthouse.png?VersionId=Uktd61kpLSqNjwJeDFs7IaZ3xgLlDQmu" /></p>

<p>Michael Wiener, Design Director at Mirvac, says The Aerus Sub-Penthouse embodies the apex of Mirvac’s design ethos.</p>

<p>“Moving through your home is like walking on air - a private sanctuary where the craftsmanship is refined, the proportions generous, and the flow so effortless, you feel completely at ease in the sky,” Wiener says.</p>

<p>“In Aerus, we wanted to create a sense of weightlessness - a home that feels suspended in the skyline, full of light, grounded in luxury.”</p>

<p>[smartcode_project:default project_id=114216 project_image_fid=3777]</p>

<p>The Aerus Sub-Penthouses are expected to attract a mix of local and international buyers seeking a long-term residence of scale and quality in a riverfront setting, from returning expats to established families and business owners who value privacy, craftsmanship, and convenience within walking distance of the CBD.</p>

<p>With an unmatched suite of amenities, Trielle is the most extensively appointed development Mirvac has created to date at Yarra’s Edge. Within the tower will be The Oasis, a 900 sqm podium rooftop wellness retreat designed in collaboration with spa expert Naomi Gregory. Located seven storeys above the Yarra River promenade, it features a 25-metre lap pool, spa and sauna, hot magnesium spa, biophilic gym, yoga and Pilates studio, cold-pail contrast treatment, and day spa treatment rooms. Further amenities include a piano lounge, bookable dining room, cinema room, golf simulator studio, games room, teppanyaki bar, dog wash bay, and two flexible work hubs, The Biblioteca library and Mills Place office space, catering to residents’ evolving lifestyle needs.</p>

<p>Construction of the $350 million tower is underway through Mirvac’s in-house construction arm, with completion anticipated for mid-2027.</p>

<p>[smartcode_project_cta:default project_id=114216]</p>


Sky-high sanctuaries: Mirvac unveils The Aerus sub-penthouses at Trielle

Capital Cities

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<p><span>CoreLogic undertook analysis of the recent March 2018 quarter consumer price index (CPI) data which confirmed that in inflation adjusted terms, dwelling values are now lower in most capital cities.</span></p>
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<p><span>(Note: consumer price index (CPI), which measures inflation, increased by 0.4% over the March 2018 quarter to be 1.9% higher year-on-year. With the release of this data, it is also possible to look at inflation-adjusted or real changes in dwelling values across the capital cities. When looking at these figures, the inflation adjustment means that value growth is lower).</span></p>
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<p><span>The results showed that national dwelling values fell by -1.0% and </span>were -0.7% lower over the past 12 months, however, Hobart was the only capital city where real values increased over the quarter (+3.0%) with Sydney recording the largest quarterly fall (-2.2%).</p>
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<p><span>Over the past twelve months, only Melbourne (+3.4%), Hobart (+10.9%) and Canberra (+1.0%) have seen dwelling values outpace inflation. The largest decline over the year was recorded in Darwin (-9.3%) followed by Perth (-4.3%) and Sydney (-4.0%).</span></p>
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<p><span>Over the past decade, only Sydney (+43.3%) Melbourne (+38.7%) </span><span>and Hobart (+6.4%) have recorded ‘real’ growth in dwelling values.</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2018/4/26/corelogic%20expert%20obs%201.jpg" target="_blank">Click here</a> to enlarge</p>
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<p><span>These latest figures really highlight just how </span><span>narrow value growth has been in the national housing market over the past decade. It also highlights that low mortgage rates alone have not been the key driver of value growth - mortgage rates are </span>the same in Sydney as they are in Perth yet the former has recorded real growth of 43.3% while the latter has seen values fall by -25.0%.</p>
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<p><span>With dwelling values dropping over recent months, all capital cities, except Hobart, now have real values which sit below their previous peak. Nationally, values are -2.0% lower than their June 2017 peak and across the combined capital cities values are a slightly greater -</span><span>2.5% lower. Let’s take a look at how dwelling</span><span>values have tracked in inflation adjusted terms across each capital city.</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2018/4/26/corelogic%20expert%20obs%202.jpg" target="_blank">Click here</a> to enlarge</p>
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<p><span>Sydney </span><span>– </span><span>values are 5.3% lower than their June 2017 peak.</span></p>
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<p><span>Melbourne </span><span>– </span><span>after peaking in December 2017, values are currently -0.9% lower.</span></p>
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<p><span>Brisbane </span><span>– </span><span>values peaked back in March 2008 and are currently - 12.5% lower.</span></p>
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<p><span>Adelaide </span><span>– </span><span>values currently sit -7.4% below their June 2010 peak.</span></p>
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<p><span>Perth </span><span>– </span><span>the city has seen values fall by -28.5% from their peak in December 2006. dwelling </span><span>values.”</span></p>
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<p><span>Hobart </span><span>– </span><span>with values increasing a further 10.9% over the past year, it is the only city where real dwelling values are currently at their peak.</span></p>
<p><span>Darwin </span><span>– </span><span>real dwelling values peaked in March 2013 and have since fallen by -28.2%.</span></p>
<p><span>Canberra </span><span>– </span><span>dwelling values are -6.8% lower than their June 2010 peak.</span></p>
<p><span>Although the rate of inflation is quite slow and remains below the Reserve </span><span>Bank’s </span><span>target range of 2% to 3% annually, value growth is now broadly slower and is expected to remain that way over the coming quarters.</span></p>
<p><span>As </span><span>a result, when looking at inflation-adjusted dwelling values the expectation is that they will continue to fall over the coming quarters which means that as the cost of other items increase and inflation rises, relatively speaking, the cost of housing will reduce. </span><span>We’ve </span><span>seen this result occurring in most capital cities for a number of years but is a relatively recent development in Sydney and Melbourne.</span><span>”</span></p>
<p><span>The </span><span>flow-on effect of value falls remains to be seen, however, it may result in less expenditure elsewhere across the economy, particularly in Sydney and Melbourne which have had strong retail demand over recent years due to the wealth-effect of increasing dwelling values.</span><span>”</span></p>
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<p><span><em><span>CAMERON KUSHER</span> is head of research for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/"><span class="s2">here</span></a>.</em></span></p>
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ckusher-ujnxiKuFQs

Hobart the only capital city where real dwelling values sit at their peak

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<div>Like many getting-a-bit-long-in-the-tooth Sydneysiders, I've increasingly been having recurring daydreams about selling a place at Bondi or in the inner west and trading it for a mansion at Maroochydore (or sometime it's a mooring at Mooloolaba). </div>
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<div>Probably about once a fortnight I have these fantasises, on average, I reckon. </div>
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<div>And then reality bites.</div>
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<div>I wake up and find that Infrastructure Australia (IA) has released another report, which always brings me back to earth and reminds me why I invested in inner-Sydney property in the first place. </div>
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<div>As ever, IA's Future Cities report presents a range of scenarios.</div>
<div> </div>
<div>There's a decentralised scenario which incorporates acres of building and hundreds of thousands of new homes in the south-west.</div>
<div> </div>
<div>And then there's a centralised scenario where everyone crams like crazy into zones close to the Central Business District (CBD), and to a lesser extent Parramatta.</div>
<div> </div>
<div>And then there's the medium-density scenario, which is a realistic mixture of the two, incorporating population growth across the city and on balance the most likely outcome. </div>
<div> </div>
<div>The scenarios have one thing in common: none of them envisages a Sydney in 2046 with a population of under 7.34 million. </div>
<p> </p>
<div><img src="https://1.bp.blogspot.com/-PdMnCv6NaPM/WpCTHx3DIuI/AAAAAAAAoic/PKX5PyrObPwoXRjOHlN760TUpD5B47wUwCLcBGAs/s640/A3.jpg" width="640" height="240" data-original-height="500" data-original-width="1324"></div>
<p> </p>
<div>Although people are expected to live all over Sydney, the share of employment will remain heavily skewed to the CBD and city fringe, and to a secondary extent Parramatta. </div>
<p> </p>
<div><img src="https://1.bp.blogspot.com/-aHGJZcD-GmI/WpDsUCuGnlI/AAAAAAAAois/t4fM1LPGEfcej_ytStllHGeERXSVygGMgCLcBGAs/s640/A1.jpg" width="640" height="450" data-original-height="712" data-original-width="1010"></div>
<p> </p>
<div>And there's a great deal of consideration of how people will get around with millions of extra people in essentially the same amount of space (as an investor, I've always gone for train links to the City or walking distance from the Sydney CBD). </div>
<p> </p>
<div><img src="https://4.bp.blogspot.com/-nYjMyB370L0/WpDsgFvkAAI/AAAAAAAAoiw/tW2NMZ_pFIYAhZF5E69vfdV5TCOc_-q-ACLcBGAs/s640/A2.jpg" width="640" height="456" data-original-height="469" data-original-width="658"></div>
<p> </p>
<div>Nobody can predict the future, but one thing I will hang my hat on is a massive ongoing demand for rentals close to the middle of Sydney. </div>
<p>From the horse's mouth...</p>
<p>Between 2017 and 2046, Australia’s population is projected to increase by 11.8 million people. </p>
<div>That’s equivalent to adding a new city, roughly the size of Canberra, each year for the next 30 years. </div>
<div> </div>
<div>About 75% of this growth will occur in Sydney, Melbourne, Brisbane and Perth.</div>
<div> </div>
<div>Population growth is a central driver of this change. </div>
<div> </div>
<div>In the next 30 years, Sydney’s population is projected to increase by 2.4 million people, growing to be a city of 7.4 million. </div>
<div> </div>
<div>Over the same period, Melbourne is projected to grow by 2.7 million people, to be a city of 7.3 million. </div>
<div> </div>
<div>Between now and 2046, Brisbane is projected to grow by 1.6 million people and Perth by 2.2 million people, delivering cities of just under 4 million and 4.3 million, respectively.</div>
<div> </div>
<div>This means the Brisbane and Perth of tomorrow will become cities the size of Melbourne and Sydney today. </div>
<div> </div>
<div>While Melbourne and Sydney will become cities comparable to the current size of some of the world’s most significant urban economies, operating more like the Hong Kong, New York and London of today.'</div>
<div> </div>
<div>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</div>
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Brisbane and Perth of tomorrow will be cities the size of Melbourne and Sydney today: Pete Wargent

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<p class="post-title entry-title">EXPERT OBSERVER</p>
<div>Property transaction volumes have been crippled in recent months.</div>
<div> </div>
<div>But one key dynamic has not changed.</div>
<div> </div>
<div>The capital cities continue to create hundreds of thousands of the most favourable employment opportunities...and there still ain't any more well-located land.</div>
<div> </div>
<div>Capital city vacant land prices increased by a massive 16 per cent to a record high of $336,124 over the year to June 2018, as supply fails dismally to keep pace with demand. </div>
<div> </div>
<div>This was much faster than the 5 per cent increase for regional lot values. </div>
<div> </div>
<div>Sydney may still have the highest land price at $477,250 at the end of the June quarter.</div>
<div> </div>
<div>But Melbourne recorded faster growth, with the median land price per square metre exploding another 27 per cent higher higher over FY2018. </div>
<div> </div>
<div>Sydney's median vacant land price per square metre is now $1,100, ahead of Melbourne at $885.</div>
<div> </div>
<div>Price pressures are still strong in the residential land market, according to HIA.</div>
<div> </div>
<div>They found that the price and number of vacant residential lots sold increased across the state capital cities in the June 2018 quarter.</div>
<div> </div>
<div>The weighted median residential lot price for Australia's state capitals increased by 3.8% to $336,125 in the June 2018 quarter to be 15.5% higher over the year.</div>
<div> </div>
<div>Melbourne saw the strongest price surge with vacant residential land in Melbourne jumping 26.5% over the year to the June 2018 quarter.</div>
<p class="post-body entry-content">Tim Lawless CoreLogic' Research Director agreed with this sentiment stating upwards pressure on capital city land values will continue. </p>
<div>He found construction costs are also rising faster than inflation.</div>
<div> </div>
<div>And accordingly, the future price of new detached housing will be "inevitably higher" according to CoreLogic analysis.</div>
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Capital city land price boom continues: Pete Wargent

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<p>This week there were 2,103 capital city auctions held and the preliminary clearance rate was 76.3 per cent across 1,704 results.</p>
<p>This week’s clearance rate represents a small fall from last week (76.9 per cent) and auction volumes are lower (2,512). Last year, the final auction clearance rate was 70.8 per cent, indicating that conditions across the auction market still remain stronger than at the same time last year; however the gap between the clearance rate is no longer as large as we saw earlier in the year. At the same time last year, 1,569 auctions were held, significantly lower than the number held this week.</p>
<p><a href="/images/2015/08/17/20150817-Combined-capitals.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/08/17/20150817-Combined-capitals.jpg" alt="" width="779" height="588"></p>
<p><span>Across </span><strong>Melbourne</strong><span>, 902 auctions were held this week, with a preliminary clearance rate of 76.5 per cent. This week’s clearance rate for Melbourne is lower than last (78.5 per cent), but higher than one year ago (73.3 per cent). Similarly, the number of auctions is lower than last week (1,085) and higher than a year ago (727). This week, there was only one Melbourne sub-region where the clearance rate was above 80 per cent. Outer East Melbourne saw 86.4 per cent of the 59 reported results sell. Following on from this, the second highest clearance rate for the week was across South East Melbourne at 78.5 per cent.</span></p>
<p><a href="/images/2015/08/17/20150817-Melbourne.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/08/17/20150817-Melbourne.jpg" alt="" width="748" height="506"></span></p>
<p> </p>
<p><span>There were 907 </span><strong>Sydney</strong><span> auctions held this week and across the 702 reported results, 80.3 per cent were successful, pushing the cities clearance rate back above the 80 per cent mark for the first time in 5 weeks, so it will be interesting to see if the final results remain this high. Over the previous week, Sydney’s clearance rate was 78.3 per cent and 76.2 per cent last year. This week’s preliminary clearance rate for the city is 4.1 percentage points higher than one year ago, a much less significant difference than earlier this year when the gap between this year and last year’s clearance rate was consistently around the 10-15 per cent mark. So far, all of the 13 results reported to CoreLogic RP Data for the Outer South West region were sold; however there are still 9 results yet to be captured. The Inner West (86.6 per cent), City and Inner South (85.9 per cent) and North Sydney and Hornsby regions (85.1 per cent) were all strong contributors to Sydney’s strong preliminary result this week.</span></p>
<p><a href="/images/2015/08/17/20150817-Sydney.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/08/17/20150817-Sydney.jpg" alt="" width="746" height="512"></span></p>
<p> </p>
<p><span>This week, </span><strong>Brisbane’s</strong><span> preliminary clearance rate was 60.2 per cent across 93 reported results. There were 130 homes taken to auction across the city this week, compared to 147 last week and 98 at the same time last year. Last week, Brisbane’s clearance rate was 61.1 per cent, while one year ago exactly half of all the reported auctions were sold. So far this week, 23 </span><strong>Gold</strong><span> </span><strong>Coast</strong><span> auction results have been reported, with 15 sales, representing a success rate of 65.2 per cent.</span></p>
<p><a href="/images/2015/08/17/20150817-Brisbane.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/08/17/20150817-Brisbane.jpg" alt="" width="760" height="513"></span></p>
<p> </p>
<p><strong>Adelaide’s</strong><span> preliminary clearance rate is 71.2 per cent this week, falling from 77.4 per cent last week (the strongest result for the city since early April) and higher than one year ago, when 65.6 per cent of auctions recorded a sale.</span></p>
<p><a href="/images/2015/08/17/20150817-Adelaide.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/08/17/20150817-Adelaide.jpg" alt="" width="747" height="510"></span></p>
<p> </p>
<p>The clearance rate for <strong>Perth</strong> was just 23.1 per cent this week based on preliminary results. Last week 50.0 per cent of Perth auctions were successful, while one year ago the cities clearance rate was 40 per cent.</p>
<p>There were 50 <strong>Canberra</strong> homes taken to auction this week, with 77.4 per cent selling. Over the previous week, a 74.1 per cent clearance rate was recorded and one year ago 51.2 per cent of reported results were successful.</p>
<p>Across <strong>Tasmania</strong> 5 auction results have been reported this week, with 3 sales.</p>
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Combined capital city clearance rate remains steady: CoreLogic RP Data's Shana Miller

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<p>EXPERT OBSERVER</p>
<p>In previous instances when value growth has slowed or started to fall in Sydney and Melbourne the experience has often been that value growth has ramped-up in other capital cities. This makes sense given that as affordability deteriorates in certain areas of the country people start to turn their attention elsewhere.  </p>
<p>This week’s blog takes a look at the comparative value of housing in other capital cities and nearby markets relative to in Sydney and Melbourne.</p>
<p><img src="https://www.corelogic.com.au/sites/default/files/2018-07/2018-07-23-blogimg1.png" alt="Dwelling value premium in Sydney relative to other capital cities" width="584" height="191"></p>
<p> <br>Sydney is the nation’s most expensive capital city housing market currently with the median dwelling value in June 2018 recorded at $870,554. The premium for the median dwelling value in Sydney relative to the other national capital cities is: 21% for Melbourne, 76% for Brisbane, 98% for Adelaide, 89% for Perth, 99% for Hobart, 101% for Darwin and 48% for Canberra. With dwelling values in Sydney now falling, the premium is reducing however, the cost of housing in Sydney relative to other capital cities is generally significantly higher than the long-term averages. In fact only Melbourne (42%) and Hobart (103%) have a current differential which is lower than the long-term average.</p>
<p><img src="https://www.corelogic.com.au/sites/default/files/2018-07/2018-07-23-blogimg2.png" alt="Dwelling value premium in Sydney relatice to Regional NSW areas" width="592" height="194"></p>
<p> <br>Of course, people that potentially migrate out of Sydney don’t necessarily only choose to go interstate, they may also migrate intrastate. The above chart highlights the value differential over time between Sydney and those regions adjoining the city as well as the Capital Region (adjoining Canberra) and Richmond-Tweed (adjoining South-East Queensland). The premium for Sydney dwellings compared to those in the other regions highlighted is currently: 105% for Capital Region, 176% for Central West, 113% for Hunter Valley exc Newcastle, 29% for Illawarra, 52% for Newcastle and Lake Macquarie, 64% for Richmond-Tweed and 47% for Shoalhaven. Although values have increased in regional NSW over the past year, the rate of growth has slowed substantially, particularly within Illawarra, Newcastle and Lake Macquarie and Southern Highlands and Shoalhaven. These three regions have been seeing strong value growth over the past five years and they are also the only three regions in which the value differential is lower (substantially so) than the long-term average.</p>
<p><a href="https://www.corelogic.com.au/sites/default/files/2018-07/2018-07-23-blogimg3.png" target="_blank">Click</a> to enlarge</p>
<p><img src="https://www.corelogic.com.au/sites/default/files/2018-07/2018-07-23-blogimg3.png" alt="Dwelling value premium in Melbourne relative to other capital cities" width="590" height="193"></p>
<p> <br>Looking at the value differential between Melbourne and other capital cities, except Sydney, Melbourne’s median dwelling value of $716,774 is higher than all other capital cities. The premium for Melbourne is currently recorded at: 45% for Brisbane, 63% for Adelaide, 55% for Perth, 64% for Hobart, 65% for Darwin and 22% for Canberra. The value differential for Melbourne to all these capital cities is greater than the long-term average. In fact, notwithstanding the recent slight reductions due to Melbourne value falls, the value gap between Melbourne and Brisbane, Melbourne and Adelaide and Melbourne and Darwin is the largest it has ever been.  </p>
<p><img src="https://www.corelogic.com.au/sites/default/files/2018-07/2018-07-23-blogimg4.png" alt="Dwelling value premium in Melbourne relative to Regional Vic areas" width="590" height="193"></p>
<p> <br>The above chart looks at the dwelling value premium for Melbourne relative to the major regional areas adjoining the capital city. Melbourne retains a significant premium in terms of housing costs relative to these areas. What is very different to what was shown in the chart for Sydney and Regional NSW areas is that outside of Geelong, the housing cost premium in Melbourne remains well above the long-term average. This suggests that while value growth has been rippling out of Melbourne to Geelong for some time, it has only just started to spill-out into the other three regions recently.  The current premium for Melbourne dwellings relative to the other regions is: 99% for Ballarat (80% long-term average), 100% for Bendigo (74% long-term average), 29% for Geelong (40% long-term average), 123% for Latrobe-Gippsland (89% long-term average). </p>
<p>There are some explainable reasons why dwelling values in Sydney and Melbourne have risen so substantially over recent years. These include but are not limited to: strong rates of migration to the cities, dramatically increased foreign investors, low mortgage rates, increased demand from investors and much stronger economic conditions than elsewhere in the country. The latest data shows a pull-back in net overseas migration, slowing interstate migration to NSW and Vic, foreign investment has reduced, fewer local investors and reduced availability of credit for housing despite still low mortgage rates. Sydney and Melbourne still have comparatively strong economies but we have started to see the economic performance elsewhere improve. Sydney and Melbourne have also seen a dramatic reduction in housing affordability over recent years as dwelling values have increased much faster than household incomes. The value gap between Sydney and Melbourne and other regions doesn’t necessarily mean that value growth will pick-up elsewhere where dwelling values are much lower. However, if other areas of the country can improve their economic performance, the lure of much more affordable housing may be enough of a lure to see an increasing number of Sydneysiders and Melbournians to migrate away from these two cities to other areas of the country.</p>
<p><em>Cameron Kusher is a property research analyst for CoreLogic</em></p>
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Value differential of different capital cities in Australia over the years: Cameron Kusher

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<p>Nationally, rent values declined 0.3% in the month of June and 0.5% over the quarter, according to the latest findings from CoreLogic.</p>
<p>This was the largest quarterly fall in rents since September 2018, and the CoreLogic June 2020 quarterly rental review predicts a further downturn in the coming months.</p>
<p>Eliza Owen, head of CoreLogic’s research in Australia, said that the decline in rent values over the quarter came at a time when the rental market was already relatively weak.</p>
<p>“Annualised growth in national rent values was just 1.1% in the five years to June 2020, compared with annualised growth in the selected living cost index of 1.4% in the 5 years to March for employee households", Owen says.</p>
<p>"In other words, rents have generally seen softer growth than the growth in general cost of living for most households.</p>
<p>“Prior to the fall in rent values over the June quarter, growth in rents had seen some momentum building, with the national CoreLogic rental index recording consecutive increases between September 2019 and March 2020.</p>
<p>"These signs of rebounding rent values came as investor participation in the market was falling from 2017, and subsequently, the rate of new supply additions in rental properties had been falling.”</p>
<p>Capital city rental yields have been more profoundly and immediately impacted by the negative economic shock resulting from COVID-19.</p>
<p>Capital city rents fell 0.7% in the June quarter, compared with a 0.2% rise in rents across regional Australia.</p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/7/29/CL%20quarterly%20change%20in%20rents.jpg" alt=""></p>
<p>COVID-19 has pivoted the trajectory of rental market performance, with six of the capital city dwelling markets seeing a quarterly decline in rental values.</p>
<p>The Hobart rent market had the largest value falls in the June quarter at 2.3%, followed by Sydney at 1.3%.</p>
<p>Four of the eight capital cities saw no growth or falls in rent values over the year to June.</p>
<p>Perth and Adelaide still saw growth in rent values over the year, at 2.2%.</p>
<p>The narrow differential between Sydney and Canberra rents continue, despite the COVID-19 downturn.</p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/7/29/CL%20median%20rents.jpg" alt=""></p>
<p>Estimated median asking rents in Sydney fell 1.6% in the June quarter, against a 1.7% decline in Canberra rents.</p>
<p>Sydney remained the more expensive in terms of median asking rents, at $568 per week.</p>
<p>This was just $2 higher than the estimated median asking rent in Canberra.</p>
<p>Gross rental yields were 3.73% nationally in the June quarter, down 3 basis points over the March quarter and 41 basis points over the year.</p>
<p>In the 12 months to June, rental yields fell across seven of the eight capital city markets. Perth was the only exception, where yields increased a modest 3 basis points over the year.</p>
<p>In the June quarter of 2020, regional rental yields slipped 3 basis points to 4.93%.</p>
<p>The combined capital cities regions fell 2 basis points in the quarter to 3.44%.</p>
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j.ballantyne1990-6AQqhLzZaK

Capital cities hit hard as rental yields fall in June quarter: CoreLogic 2020 quarterly rental review

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<p>EXPERT OBSERVER</p>
<div><strong><span style="text-decoration: underline;">Demographic trends</span></strong></div>
<div> </div>
<div>A quick break from the Coronavirus news which is evidently usurping the planet!</div>
<div> </div>
<div>The ABS reported that the capital cities population of Australia increased by +303,100 in FY 2019.</div>
<div> </div>
<div>Greater Sydney, which includes the Central Coast, increased by +87,100 or +1.7 per cent, and remained the most populated city at 5.31 million.</div>
<div> </div>
<div>However, Melbourne grew at the fastest pace, up by +113,500 or +2.3 per cent to 5.08 million.</div>
<div> </div>
<div>As in previous years the densest locations included parts of inner-city Melbourne, Sydney's Potts Point-Woolloomooloo, and Ultimo-Pyrmont.</div>
<div> </div>
<div>Brisbane's population increased quickly too, at +2.1 per cent or +52,600, to increase to 2.51 million.<br><br>
</div>
<div class="separator"><a href="https://1.bp.blogspot.com/-YZHXmPmN8rA/XnsDFu-mUhI/AAAAAAAA04c/9nd1a1rjcTkeSzTb4O3YdWMvXjSkJ6pVwCNcBGAsYHQ/s1600/ABS.jpg"><img src="https://1.bp.blogspot.com/-YZHXmPmN8rA/XnsDFu-mUhI/AAAAAAAA04c/9nd1a1rjcTkeSzTb4O3YdWMvXjSkJ6pVwCNcBGAsYHQ/s640/ABS.jpg" width="640" height="346" data-original-height="361" data-original-width="665"></a></div>
<p> </p>
<div><span style="text-decoration: underline;"><em>Source: ABS</em></span></div>
<p> </p>
<div>Capital cities accounted for 79 per cent of population growth over the financial year, reported the ABS, and some 17 million Aussies now live in the capital cities.</div>
<p><br><span>Immigration will effectively be paused in 2020 due to the...well, you know what!</span><br><br><span><br></span></p>
<div class="separator"> </div>
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Capital cites population up 303,000 in FY2019, but paused in 2020: Pete Wargent

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<p>Figures released by SQM Research show a decrease in national residential property listings across all capital cities in December 2019. </p>
<p>National residential property listings across capital cities show an overall 12 per cent decline in 2019.</p>
<p>In December 2019, listings decreased by 14.8 per cent, declining from 338,971 in November to 288,966.</p>
<p>"The month of December traditionally records falls in properties listed for sale as it is the start of the festive and summer holiday period, whilst November shows a surge in listings as vendors are keen to sell before the holiday season approaches," explains Louis Christopher, managing director of SQM Research.</p>
<p>"The recent devastating bushfires in NSW, Canberra and Victoria could also result in declines in property listings and impact property values in these regions in the coming months."</p>
<p>All capital cities saw decreases in property listings over the month with the most significant decrease experienced in Sydney with 28.7 per cent, followed closely by Canberra with 28.1 per cent.</p>
<p>Property listings in Sydney fell from 32,101 in November 2019 to 22,888 in December while Canberra saw a decline from 4,998 to 3,595. </p>
<p><img src="https://www.urban.com.au/images/2020/1/9/N2_Market_Month.jpeg" alt="" width="790" height="202"></p>
<p>Year-on-year listings similarly show declines for all capital cities with Sydney showing a decline of 30.1 per cent, followed by Darwin with 25.2 per cent, and with Canberra only recording an overall 14.6 per cent decline. Meanwhile, Brisbane is revealed as declining the slightest with only 8.4 per cent. </p>
<p><img src="https://www.urban.com.au/images/2020/1/9/N1_Stock%20Market%20Table.png" alt="" width="796" height="263" style="caret-color: #000000; color: #000000;"></p>
<p>Stock on Market Table, SQM Research.</p>
<p> </p>
<p> </p>
<p> </p>
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Sydney vendors vacate market as December 2019 property listings decrease: SQM Research

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<p><strong>EXPERT OBSERVATION</strong></p>
<p>The CoreLogic Home Value Index of national home prices rose by 1.7% in November, the biggest increase since October 2003.</p>
<p>And capital city home prices rose by 2.0% – also the biggest lift in 16 years.</p>
<p>Regional home prices rose by 0.5% in the month. Sydney home prices lifted by 2.7% in November – the biggest monthly increase since October 1988.</p>
<p>Of the 88 SA4 regions across Australia, home prices were up on a year ago in 39 regions. Home prices in West and North-West Tasmania rose by 5.9% over the year.</p>
<p>The Australian Industry Group (AiGroup) Performance of Manufacturing Index fell from 51.6 points to a 3-year low of 48.1 points in November.</p>
<p>And the ‘final’ CBA/IHS Markit Manufacturing Purchasing Managers' Index fell from 50.0 points to a 31⁄2-year low of 49.9 points. Any reading below 50 indicates contraction in activity.</p>
<p><strong>What does it all mean?</strong> </p>
<p>Aussie home prices are booming. National property prices lifted by the most in 16 years in November. And in Australia’s most populous city – Sydney – home prices surged by 2.7%, posting the biggest monthly gain in 31 years.</p>
<p>Record-low mortgage rates and an easing in lending standards have seen a surge in demand.</p>
<p>In fact, preliminary ‘unadjusted’ auction clearance rates last weekend came in at 84.7% in Sydney and 78.3% in Melbourne, according to CoreLogic results.</p>
<p>And on the supply side, the limited pool of housing stock for sale is also supporting a surge in home price growth.</p>
<p>For combined capital cities, the number of new homes listed for sale is down by 15.3% over the year to November with Sydney listings down 23.1%, according to CoreLogic. Newly advertised listed stock is at the lowest level since 2007.</p>
<p>The rapid recovery in the property market since the Federal Election has seen national home prices post their first annual gain (up 0.1%) since April 2018. Still, in many regions, home prices are lower than a year ago.</p>
<p>In fact there were annual gains in home prices in only 39 of the 88 regions in November. But home prices in Tasmania’s West, North West and South East are up 5.3-5.9% over the year to November. And in Melbourne’s posh Inner East, annual gains are a nation-leading +8.0%. </p>
<p><em><a href="https://www.propertyobserver.com.au/images/2019/12/2/common%20sec%201.jpg" target="_blank">Click here</a> to enlarge:</em></p>
<p><strong> <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/2019/12/2/common%20sec%201.jpg" alt=""></strong></p>
<p><em><a href="https://www.propertyobserver.com.au/images/2019/12/2/commonsec%202.jpg" target="_blank">Click here </a>to enlarge:</em></p>
<p><strong><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/2019/12/2/commonsec%202.jpg" alt=""></strong></p>
<p><strong>What do the figures show? </strong></p>
<p><strong>Home prices</strong></p>
<p>The CoreLogic Home Value Index of national home prices rose by 2.0% in November, the biggest increase since October 2003. Home prices are 0.1% higher over the year. </p>
<p>In capital cities, prices rose by 2.0% – the biggest lift in 16 years – to be up 0.4% over the year to November. House prices rose by 2.1% and apartment prices lifted by 1.6%. House prices were up 0.1% on a year ago and prices of apartments increased by 1.4%. </p>
<p><em><a href="https://www.propertyobserver.com.au/images/2019/12/2/commonsec%203.jpg" target="_blank">Click here</a> to enlarge:</em></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/12/2/commonsec%203.jpg" alt=""></p>
<p>In regional areas, home prices rose by 0.5% with houses and apartment prices also both up by 0.5%. Regional home prices are down 1.2% on the year to November. </p>
<p>The average Australian capital city house price (median price) was $652,446 and the average unit price was $563,439 in November.</p>
<p>Dwelling prices rose in seven of the eight capital cities in November. Home prices rose by the most in Sydney (up by 2.7%), followed by Hobart (up by 2.3%), Melbourne (up by 2.2%), Canberra (up by 1.6%), Brisbane (up 0.8%), Adelaide (up by 0.5%) and Perth (up by 0.4%). But prices fell in Darwin (down by 1.2%). </p>
<p>Home prices were higher than a year ago in four of the eight capital cities in November. Prices rose the most in Hobart (up by 4.2%), followed by Canberra (up by 3.0%), Melbourne (up by 2.2%) and Sydney (up by 1.6%).</p>
<p>But prices were down in Darwin (down by 10.9%), Perth (down by 7.7%), Brisbane (down by 0.5%) and Adelaide (down by 0.5%).</p>
<p>Total returns on national dwellings rose by 4.1% in the year to November - the most in 19 months - with houses up by 3.6% on a year earlier and units up by 5.4%.</p>
<p>In contrast, the S&amp;P/ASX All Ordinaries Accumulation Index lifted by 25.9% over the year to November. </p>
<p><a href="https://www.propertyobserver.com.au/images/2019/12/2/commonsec%204.jpg" target="_blank">Click here</a> to enlarge:</p>
<p><strong><span style="text-decoration: underline;"><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/2019/12/2/commonsec%204.jpg" alt=""></span></strong></p>
<p><strong>Manufacturing Purchasing Managers’ Indexes - November</strong></p>
<p>The Australian Industry Group (AiGroup) Performance of Manufacturing Index fell from 51.6 to a three-year low of 48.1 points in November. And the CBA/IHS Markit Manufacturing Purchasing Managers' Index fell from 50.0 points to 3½-year lows of 49.9 points in November. Any reading below 50 indicates contraction. </p>
<p>According to AiGroup: “Drought remains a top concern for many manufacturers, particularly those located in rural areas or those selling metal products and machinery &amp; equipment to the agricultural sector. The small but diverse Textiles, Clothing and Footwear (TCF), paper and printing’ sector recorded its lowest reading since early 2013, with respondents noting weak market demand and rising raw material costs."</p>
<p>According to CBA/IHS Markit: “Australian manufacturing conditions were broadly stagnant in November, as a survey-record fall in new orders and a decline in output weighed on the headline PMI. A weakening sales trend contributed to a further fall in backlogs which, in turn, dampened hiring. Jobs growth was marginal. Meanwhile, firms once again failed to add to inventories of both inputs and final goods while business confidence fell to the lowest since June 2016.”</p>
<p><em><a href="https://www.propertyobserver.com.au/images/2019/12/2/commonsec%205.jpg" target="_blank">Click here</a> to enlarge:</em></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/12/2/commonsec%205.jpg" alt=""></p>
<p><strong><span>What is the importance of the economic data? </span></strong></p>
<p>The CoreLogic Hedonic Australian Home Value Index is based on Australia’s biggest property database. Unlike the ABS Index, which excludes terraces, semi-detached homes and apartments, the CoreLogic Hedonic Index includes all properties. Home prices are an important driver of wealth and spending.</p>
<p>The AiGroup and CBA Purchasing Manager indexes (PMIs) for services and manufacturing are released each month. The Australian PMIs are the local equivalents of similar indexes released for other countries.</p>
<p>The PMIs are amongst timeliest economic indicators released in Australia. The PMIs are useful not just in showing how the sectors are performing but in providing some sense about where they are heading. The key ‘forward looking’ components are orders and employment. </p>
<p><em><a href="https://www.propertyobserver.com.au/images/2019/12/2/commonsec%206.jpg" target="_blank">Click here</a> to enlarge:</em></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/12/2/commonsec%206.jpg" alt=""></p>
<p><strong>What are the implications for interest rates and investors?</strong></p>
<p>The Aussie property market is booming due to strong demand, reduced supply and record low interest rates.</p>
<p>And with listings remaining at very low levels, residential home building falling and population growth remaining solid, could a potential housing shortage boost home price growth even further in 2020? Yes, according Commonwealth Bank Group economists whom are forecasting a 6.1% lift in capital city home prices over the year, led higher by Sydney (up 7.0%) and Melbourne (up 8.0%).</p>
<p>Gains of 2.5-4.0% are expected elsewhere except Darwin, with prices tipped to be flat. If this materialises, consumers may feel a tad more optimistic about their wealth and be encouraged to increase their discretionary spending. But tepid wage growth and elevated mortgage debt will likely restrain consumers.  </p>
<p>Global manufacturing conditions have improved. In fact, the November purchasing manager index readings for leading exporters’ Germany, Japan and China have bottomed after a period of contraction.</p>
<p>Trade tensions between the US and China have eased in recent months with the official Chinese factory gauge expanding in November for the first time since April on improving external demand.</p>
<p>But the outlook for global growth is highly dependent on a ‘phase one’ trade deal negotiations with the next tranche of US tariffs – 15% duty on US$156 billion worth of Chinese products – due on December 15. </p>
<p>But things aren’t as promising for Aussie manufacturers. Both the AiGroup and CBA/IHS Markit manufacturing gauges hit three-year lows with activity contracting in November.</p>
<p>Like the Reserve Bank and most market economists, the AiGroup has implored the Federal Government to deploy additional fiscal stimulus measures to ‘jump-start’ the economy.</p>
<p>The AiGroup said: The further fall in new orders is far from encouraging...stimulus from interest rate and income tax cuts has not so far flowed through to consumer and business spending. The Government will need to look very closely at additional stimulus options over coming months."</p>
<p>Commonwealth Bank Group economists expect another rate cut in February 2020. But with limited conventional monetary policy ammunition at its disposal, we would prefer to see additional fiscal initiatives – such as infrastructure spending and tax cuts - be announced by the Federal Government to prop up economic activity.</p>
<p>That said, credit ratings agency Standard &amp; Poor’s last week warned that Australia’s AAA sovereign credit rating could be at risk should the government announce large spending measures.  </p>
<p align="left"><em><em><strong>Ryan Felsman</strong> is a senior economist at CommSec.</em></em></p>
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