Apartment buildings are increasingly being designed around how people actually live day to day, not just how they want a building to look.

For buyers, that shift is showing up in practical inclusions that respond to changing habits. Work-from-home spaces, EV charging, wellness amenities, secure bike storage and parcel management are becoming part of the broader apartment conversation, reflecting a move toward buildings that reduce friction in everyday life.

Online shopping has become one of the clearest examples of that change.

Australians spent a record $82.6 billion online in 2025, with nearly one in four retail dollars now spent online. That has made parcel delivery a regular part of apartment living, rather than an occasional inconvenience.

For apartment residents, however, the delivery process can be less straightforward than it is for detached homes. Parcels may be left in lobbies, redirected to Post Offices, missed entirely, or placed under the responsibility of building managers and concierge teams.

That is why secure parcel infrastructure is increasingly being considered alongside more familiar apartment amenities.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/-VjjLwoViX0?si=A3k7ws9NX35Uac7_" title="YouTube video player" width="560"></iframe>

Australia Post Parcel Lockers offer one way to address the issue. When a parcel arrives, residents receive a notification through the AusPost app or SMS, then collect it using a QR code or one-time PIN. The parcel is kept secure, accessible and removed from common areas.

The broader Parcel Locker network now includes more than 1,500 locations across Australia, positioned at Post Offices, shopping centres, supermarkets, transport hubs and other accessible locations.

For new apartment projects, the relevance is clear. A building’s amenity offering is no longer only about lifestyle spaces, but also about convenience, security and functionality.

As buyer expectations evolve, secure parcel delivery is becoming part of the same design conversation as flexible working, sustainable transport and resident wellbeing.

It is one less thing for residents to worry about, and another example of apartment design adapting to the way Australians now live.

Joel Robinson

Apartment design is adapting to the way Australians shop

While school holidays and trips to Europe tend to define the winter property market, there's been no cold snap at <a href="https://www.apartments.com.au/new-apartments/the-walden-north-sydney-177-walker-street-north-sydney-nsw-2060">The Walden</a> in North Sydney.

Developer-builder&nbsp;<a href="https://www.apartments.com.au/developers/aland">ALAND</a> sold more than $35 million worth of apartments throughout June, including a $6.8 million apartment that now ranks among the highest apartment sales ever recorded in North Sydney.

SRM Residential agent Ben Stewart said buyer demand throughout June reflected a mix of improving market confidence and longer-term thinking from owner-occupiers.

"We're seeing strong demand from owner-occupiers who are taking a longer-term view," Stewart said.

"Many recognise the opportunity to secure an apartment in an iconic building and premium location while values remain attractive. They may initially lease the property, but the intention is to eventually move in themselves, rather than purchasing purely as an investment."

[smartcode_project:default project_id=134323 project_image_fid=367129]

Located at 177 Walker Street, The Walden will deliver 161 one, two, three and four-bedroom residences across a 30-storey tower designed by Rothelowman. Every apartment occupies a corner position, maximising natural light, cross ventilation and views across Sydney Harbour, the Opera House, Sydney Heads and the northern districts.

Rather than a traditional balcony, the residences feature winter gardens that seamlessly extend the open plan living areas, creating versatile spaces for relaxing or entertaining throughout the year. Floor-to-ceiling glazing draws in natural light while showcasing sweeping views from the building's elevated Walker Street position.

Every apartment features high-end Calacatta marble, bespoke joinery, and fully integrated appliances.

The larger residences have been planned with distinct entertaining and private zones, with many master suites positioned on corners to capture natural light and harbour views. Walk-in dressing rooms, freestanding baths and refined stone finishes reinforce the house-like feel that has resonated with downsizers and owner-occupiers.

[smartcode_project:default project_id=134323 project_image_fid=6393]

Rothelowman Principal Ben Pomroy said the project was designed to make the most of its unique position overlooking the harbour.

"The Walden is a celebration of all things beautiful, curated for those who expect nothing less than exceptional," Pomroy says.

"Meticulously designed entertaining spaces and light-filled living areas that capitalise on capturing the natural beauty of Sydney's iconic harbour."

Residents will also have exclusive access to The Pavilion, a dedicated amenity building featuring a rooftop pool, wellness studio, gymnasium, sauna, concierge service, residents' lounge, private dining spaces and work-from-home facilities.

[smartcode_project:default project_id=134323 project_image_fid=6402]

The project marks ALAND's first major luxury apartment development in Sydney's inner-city market after more than two decades delivering residential communities across Greater Sydney.

Founder and CEO Andrew Hrsto previously said the rarity of the Walker Street site made it an opportunity the company could not overlook.

"This is a rare opportunity to bring a truly exceptional project to life in one of Sydney's most iconic locations, and to showcase our craftsmanship and design expertise at a world-class level," Hrsto said.

[smartcode_project:default project_id=134323 project_image_fid=6383]

The Walden has been introduced to the market at a time when demand for living in North Sydney is at an all-time high. Billions of dollars have been invested in infrastructure, including the recently opened Victoria Cross Metro station, located just 300 metres from The Walden, providing residents with direct access to the Sydney CBD in just minutes.

Private investment has also transformed the area through the arrival of new retail and dining destinations, elevating the lifestyle offering in what was once considered primarily a commercial precinct rather than an aspirational residential address.

The Walden is currently under construction and is scheduled for completion in 2028.

[smartcode_project_cta:default project_id=134323]

ALAND records $35 million in sales in North Sydney as The Walden bucks quiet winter selling season

The long-awaited redevelopment of the former Eastlakes Shopping Centre site has reached a major milestone, with Conquest's plans for a new mixed-use precinct officially placed on public exhibition.

The State Significant Development Application would transform the 1.7-hectare site at <a href="https://www.apartments.com.au/new-apartments/19a-evans-avenue-eastlakes-nsw-2018">19A Evans Avenue</a> into one of Sydney's largest urban renewal projects, delivering 736 apartments above a new shopping centre anchored by Woolworths, alongside specialty retail, dining, commercial space and new public open spaces.

The public exhibition marks the next chapter for the project after <a href="https://www.apartments.com.au/developers/conquest">Conquest</a> acquired the stalled Stage Two development from Crown Group, who completed the first stage across the road prior to their voluntary liquidation.

<img alt="First look: Conquest unveils plans for 736-home Eastlakes Shopping Centre redevelopment" data-entity-type="file" data-entity-uuid="5fca22c5-d1ed-4e2c-8801-03f7df1eafc8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/eastland%20podium.png?VersionId=uomwr41nF8CmLUZRDcu3mHQechlbxucS" />

&nbsp;

Designed by DKO Architecture, the proposal comprises four residential buildings ranging from 14 to 18 storeys above a two-level retail podium. The development would deliver 736 apartments, including 74 affordable homes, 215 Build-to-Rent apartments and 521 market residences. Provision has also been made for dual-key apartments, which could increase the total number of dwellings to 877.

At ground level, the shopping centre has been designed as the suburb's new meeting place, anchored by a full-line Woolworths and complemented by a curated mix of fresh food retailers, cafés, restaurants, health services and everyday convenience shopping. Generous pedestrian links and landscaped public spaces will connect the retail precinct through to Jack Mundey Reserve, creating a more walkable and connected neighbourhood.

Conquest CEO Michael Akkawi said the redevelopment was about far more than replacing a shopping centre.

"Eastlakes has been overlooked for too long, and this is the community’s moment. We are building a shopping centre and homes, a genuine heart for the suburb, and we genuinely want locals to help shape it."

"We enrich communities through the creation of homes, places, and experiences designed for life, built to last, and owner for generations. That starts with listening, so we warmly encourage everyone with a connection to Eastlakes to view the plans and share their thoughts."

<img alt="First look: Conquest unveils plans for 736-home Eastlakes Shopping Centre redevelopment" data-entity-type="file" data-entity-uuid="22f6fb20-54fb-4bd7-8a92-48fafdd00608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/eastland.png?VersionId=cugp7s9hrMHGJJdYzkeAkrFoQgnF4GXf" />

DKO said the design had been shaped by the site's landscape setting and surrounding open space.

"Our vision for the site embraces its unique Bidjigal identity by blending the residential living with generous landscaping and a material palette inspired by the Bidjigal locality, and celebrating the panoramic views to Botany Bay and the wetlands reserves."

"Taking cues from Country, we seek to harmonise built form with the landscape and lightly touch the earth. By reconnecting, retaining and regenerating existing ecology, and weaving in natural elements, we can deepen our connection to Country."

The landscape strategy extends across the podium and rooftops, incorporating communal gardens, children's play areas, lawns, community gardens, family gathering spaces and extensive tree planting. New landscaped links will also strengthen the connection between the precinct and Jack Mundey Reserve, while publicly accessible open spaces have been integrated throughout the development.

The proposal builds on Conquest's broader placemaking strategy for the site. Through an ongoing partnership, local artist Joe Rashbrook has been appointed Urban Art Curator, working alongside young residents to transform the project's site hoardings into a public art gallery that allows the community to engage with the redevelopment before construction is complete.

Conquest has rapidly expanded its development pipeline since acquiring the Eastlakes site, with more than $6 billion worth of mixed-use projects now in planning across Sydney, including Stanmore, Castlecrag and Waterloo.

Conquest CEO Michael Akkawi said the redevelopment was about far more than replacing a shopping centre.

First look: ‘Far more than replacing a shopping centre’ as Conquest unveils 736-home Eastlakes redevelopment

Abadeen has lodged a State Significant Development Application (SSDA) for one of Mosman's largest apartment developments in recent years, seeking approval to transform the former Honeysuckle Garden and Midas site on Military Road into a 100-apartment mixed-use development.

The SSDA, lodged with investment partner Phoenix Property Investors, proposes around $230 million worth of new housing on the prominent <a href="https://www.apartments.com.au/new-apartments/494-516-military-road-mosman-nsw-2088">494-516 Military Road</a> site.

The proposal comes as Mosman Council continues to progress its recently endorsed Masterplan, which identifies the precinct for increased housing density while maintaining the suburb's established character.

Designed by DKO Architecture, the development would comprise 100 apartments above ground-floor retail, with a rooftop wellness precinct including a gym, sauna, entertaining areas and landscaped communal spaces.

Rather than pushing to the full 12-storey height identified in Council's Masterplan, the proposal ranges between five and nine storeys, stepping down towards Hale Road. A tenth level would accommodate resident amenities rather than additional apartments.

The project has been designed to appeal to a broad range of buyers, from first home buyers and young professionals through to families and local downsizers looking to remain on the Lower North Shore.

<img alt="Mosman" data-entity-type="file" data-entity-uuid="5dada03f-5b4c-43ba-ba62-2868add31440" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-27%20at%209.57.55%E2%80%AFAM.png?VersionId=7LBy0B.Jo8_iWAFJsClcV7Q3UnXrv49r" />

Abadeen Executive Chairman Justin Brown said the apartments had been designed as genuine long-term homes rather than investor-focused stock.

"The apartments have been designed as genuine long-term homes, with efficient floorplans that maximise usable living areas, generous storage, natural light and strong connections between indoor and outdoor spaces," Brown says."

"We've focused on creating homes for a broad range of buyers, from first home buyers and growing families through to downsizers who want to remain in Mosman."

The rooftop wellness offering forms a key part of the proposal, with residents set to have access to a gym, sauna, outdoor entertaining spaces, communal dining areas, landscaped gardens and a multi-use recreation court overlooking Sydney Harbour.

<img alt="Mosman" data-entity-type="file" data-entity-uuid="d37c2d6b-583a-4a0f-b7a9-9f46b893d2f4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-27%20at%209.58.06%E2%80%AFAM.png?VersionId=FPoa5FCm2RtzjhAh2w5FTWJbV6GHfY8D" />

DKO drew heavily on the site's natural and cultural history, undertaking a Connecting with Country process with local Aboriginal Elders to inform the architectural and landscape design.

Senior Associate Matthew Ritchard said the design sought to create a building that responded to both the site's landscape and its cultural significance.

"The architectural language of the project is a deep expression of Connecting with Country, where the materiality and colour palette serve as a bridge between the site's geological history and its future as a residential sanctuary."

The proposal also retains the site's established blue gum tree as the centrepiece of the communal landscaped gardens, while introducing activated retail fronting Military Road to strengthen the connection between Mosman and Cremorne villages.

If approved, the project would deliver 100 new homes within walking distance of shops, public transport, schools and local amenities, adding to the limited pipeline of new apartments on the Lower North Shore.

<h2>Project Snapshot</h2>

Project: Honeysuckle Garden Redevelopment

Address: 494-516 Military Road, Mosman

Developer: Abadeen and Phoenix Property Investors

Architect: DKO Architecture

Lead Architect: Matthew Ritchard

Value: $230 million

Residences: 100 apartments

Key features:

<ul>
	<li>
	Ground-floor retail
	</li>
	<li>
	Rooftop wellness precinct
	</li>
	<li>
	Gym and sauna
	</li>
	<li>
	Outdoor entertaining and BBQ areas
	</li>
	<li>
	Landscaped communal gardens
	</li>
	<li>
	Multi-use recreation court
	</li>
	<li>
	Retained mature blue gum tree
	</li>
	<li>
	Connecting with Country design process
	</li>
	<li>
	Harbour, CBD and Balmoral views from upper-level apartments
	</li>
</ul>

Abadeen Executive Chairman Justin Brown said the apartments had been designed as genuine long-term homes rather than investor-focused stock

First look: Abadeen plans 100 apartments on former Honeysuckle Garden site in Mosman

The wave of apartment proposals sweeping through Mosman shows no signs of slowing, with another major residential development lodged through the NSW Government's State Significant Development pathway.

Developer First Quadrant Properties, which recently completed Willoughby Grounds and has several projects in planning across the North Shore, has unveiled plans for <a href="https://www.apartments.com.au/new-apartments/cove-on-ourimbah-40-56-ourimbah-road-mosman-nsw-2088">Cove on Ourimbah</a>, a 63-apartment development on Ourimbah Road, adding to the growing pipeline of projects reshaping one of Sydney's most tightly held harbour suburbs.

The proposal would consolidate nine properties at 40-56 Ourimbah Road into a part eight, part nine-storey apartment building, continuing the momentum created by the NSW Government's accelerated planning pathways that have seen several significant developments emerge across Mosman over the past 12 months.

Designed by Doroch Architects, the project would deliver 63 apartments, resident wellness facilities including a gym, pool and sauna, landscaped communal spaces and basement parking, while using recessed upper levels, generous setbacks and extensive planting to reduce the perceived scale of the building.

<img alt="First look: First Quadrant Properties eyes nine-storey Mosman apartment project under State Significant pathway" data-entity-type="file" data-entity-uuid="32ee68e4-141e-4a10-8f83-48e961a5e71e" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Ourimbah%20Road%2C%20Mosman%20a.png?VersionId=CUeILFc6APlwXPc.iplElbxHvREKwjig" />

Doroch Architects said the building had been designed to reinforce Mosman's established character.

"The building's aesthetic is grounded in the existing residential character of Ourimbah Road and the broader Mosman context," the architect noted in the planning documents submitted to the NSW Government.

The design adopts a contemporary material palette of natural stone, textured concrete and brown concave metal cladding, complemented by integrated planters and deep balconies. The podium incorporates softened curved concrete forms, while increased setbacks have been provided adjacent to the heritage-listed property at 60 Ourimbah Road to create a more sympathetic transition.

The site sits around 330 metres from Mosman Town Centre, placing it within the NSW Government's Low and Mid-Rise Housing policy area, where increased residential density is being encouraged close to shops, transport and services.

The proposal follows a string of major apartment projects lodged or declared State Significant in Mosman in recent months, including Abadeen's 100-apartment Honeysuckle Garden redevelopment on Military Road and several other developments across Awaba Street, Redan Street and Muston Street from the likes of Time &amp; Place, HELM and Prosker Property.

&nbsp;

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/time-place-to-take-on-mosman-apartment-market">Time &amp; Place to take on Mosman apartment market</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/qld/first-look-abadeen-plans-100-apartments-on-former-honeysuckle-garden-site-in-mosman">First look: Abadeen plans 100 apartments on former Honeysuckle Garden site in Mosman</a>

&nbsp;

First look: Another major apartment proposal signals Mosman's development boom

Craig James

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The annual rate of economic growth eased in the December quarter of last year. But that is to be expected – figures bounce around from month to month and quarter to quarter. And it is even more understandable given the length of our record economic expansion. But economic growth is likely to lift over 2018. We share the Reserve Bank’s view that growth will be stronger this year than last year. The economy is tipped to grow by 2.9 per cent in 2018 after 2.3 per cent growth in 2017.
The release of quarterly economic growth figures is a good time to take stock. Australia has a record economic expansion with record low interest rates, below-target inflation and a jobless rate nearing a level that is regarded as “full employment”. No other advanced economy has experienced an economic expansion as long as we are enjoying in Australia. Remarkable.
Consumer spending finished 2017 strongly and will be supported over 2018 by a stronger job market, low interest rates and slightly firmer wage growth. Business spending will be supported by record profitability, domestic infrastructure projects and a buoyant global economy.
Productivity slowed in the December quarter but that is to be expected given the extraordinary lift in employment over the year. Once the new workers get up to speed, they should – in theory – be boosting output and lifting economic growth. It is an area to watch over 2018.      
It is always important to remember that two months have passed since the economic growth figures. And more recent data suggests the economy has started 2018 with solid momentum.
The Reserve Bank Governor again said this morning that the next move in interest rates was likely to be up. But there is no reason to either cut or lift interest rates at present. A further period of interest rate stability lies ahead, and the record low interest rates will be highly supportive of continued firm and sustainable economic growth.
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Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>. 
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jrobinson-rf4aSBido9

Economic growth likely to lift over 2018: CommSec

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<div class="column">The CoreLogic Home Value Index of capital city home prices fell by 0.3 per cent in February to stand 2.0 per cent higher over the year. The national home price index fell by 0.1 per cent in February to be up 2.2 per cent over the year. It was the smallest annual growth in national prices in 18 months.</div>
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<div class="column">Prices fell in six of the eight capital cities in February. Hobart prices rose the most, up by 0.7 per cent, while Darwin prices fell the most, down by 0.9 per cent. Hobart leads annual gains in home prices, up 13.1 per cent in the year to February. Darwin home prices remained in the doldrums, falling by 7.4 per cent over the year.</div>
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<div class="column">Apartment prices across capital cities are up by 3.6 per cent over the year to February, producing a total return of 7.7 per cent. Apartments are outperforming houses which rose by 1.5 per cent over the year with total returns up 4.6 per cent.</div>
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The CBA/Markit Manufacturing index rose from 55.4 to 55.6 in February. The Australian Industry Group manufacturing index eased from 58.7 to 57.5 in February. Readings above 50.0 indicates that the manufacturing sector is expanding.
Home price data is important for retailers, especially those focussed on consumer durables. The manufacturing data provides guidance for companies in the Industrials sector.
What does it all mean?
Housing is all about supply and demand. Demand for homes is strong in Hobart, outpacing supply, and prices are rising. In contrast, the previously high-flying Sydney market is experiencing a correction in prices. More new homes are on the market, giving buyers greater choice. As a result, prices are adjusting to more realistic and sustainable levels. Home prices in Sydney are now lower than a year ago.
The rebalancing of the housing market should be closely watched, but it is not a cause for concern. Supply and demand are always in adjustment in housing markets
Sydney prices may ease a little further and Melbourne prices also have potential to soften over 2018.
There are more anecdotes of “rent-vesting” occurring where young people from Sydney and Melbourne are buying in other capital cities and regional areas and using rent proceeds to offset their costs of leasing in inner-city Sydney and Melbourne.
Latest survey data shows that the manufacturing sector is in strong shape. As always, the focus now is to gauge whether wage and price pressures are starting to creep through.
Ai Group said “many manufacturers are now looking to employ more staff but are finding it difficult to find skilled workers for their locations or specialisations”.
Click here <a href="https://www.propertyobserver.com.au/images/2018/3/1/commsec1.jpg" target="_blank">to enlarge.</a>
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What do the figures show? 
Home prices
The CoreLogic Home Value Index of capital city home prices fell by 0.3 per cent in February to stand 2.0 per cent higher over the year.
The national home price index fell by 0.1 per cent in February to be up 2.2 per cent over the year. It was the smallest annual growth in national prices in 18 months.
In capital cities, house prices fell by 0.4 per cent in February and apartment prices were flat. House prices were up 1.5 per cent on a year ago and apartments were up by 4.3 per cent.
In regional areas, home prices rose by 0.4 per cent in February to be up 2.8 per cent on the year.
Click here <a href="https://www.propertyobserver.com.au/images/2018/3/1/commsec2.jpg" target="_blank">to enlarge</a>
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The average Australian capital city house price (median price) was $694,478 and the average unit price was $578,244.
Dwelling prices fell in six of the eight capital cities in February: Home prices fell in Darwin (down 0.9 per cent) from Sydney (down 0.6 per cent), Canberra (down 0.3 per cent), Perth (down 0.2 per cent) and Melbourne and Brisbane (both down 0.1 per cent). Prices were flat in Adelaide. Prices rose 0.7 per cent in Hobart.
Home prices were higher than a year ago in six of the eight capital cities. Prices rose most in Hobart (up 13.1 per cent); followed by Melbourne (up 6.9 per cent); Canberra (up 3.2 per cent); Adelaide (up 2.2 per cent); Brisbane (up 1.8 per cent). Prices fell in Darwin (down 7.4 per cent), Perth (down by 2.7 per cent) and Sydney (down by 0.5 per cent).
Total returns on capital city dwellings rose by 5.4 per cent in the year to February with houses up 4.6 per cent on a year earlier and units up 7.7 per cent.
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Manufacturing Purchasing Managers’ Indexes
The CBA/Markit Manufacturing index rose from 55.4 to 55.6 in February. Readings above 50.0 indicate that the sector is expanding.
CBA/Markit notes: “Australian manufacturers are benefiting from the positive global backdrop. New export orders were up sharply in February. This extra demand is driving strong jobs growth. But capacity pressures remain evident in the rundown of finished goods stocks, lengthening supplier delivery times and rising backlogs of work. Rising input and output prices are one outcome.”
The Australian Industry Group manufacturing index eased from 58.7 to 57.5 in February. The month of February marked the 17th month of expanding or stable conditions for the manufacturing sector.
Ai Group said that all of the seven activity subindexes contained in the report improved in February.
“This marks a fourth consecutive month in which all seven activity sub-indexes have expanded,” the group said.
“Five of the seven activity indexes slowed in February, however, with only the employment and exports sub- indexes accelerating.”
What is the importance of the economic data?
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.
The Australian Industry Group compile the Performance of Manufacturing Index and Performance of Services index each month. CBA and Markit also compile purchasing manager surveys for manufacturing and services sectors. The surveys are amongst the timeliest economic indicators released in Australia.
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The surveys are useful not just in showing how key sectors are performing but also in providing some sense about where they are headed. The key ‘forward looking’ components are orders and employment. 
What are the implications for interest rates and investors?
In the housing sector, prices of established homes are easing in many parts of the country. In the manufacturing sector there are reports of skilled shortages, potentially leading to higher wages and prices. Welcome to 2018 where the world is on watch for higher inflation rates despite mixed messages.
CommSec expects official interest rates to be stable until late 2018. But as always, the outlook for rates is data dependent. It will be a case of monitoring each economic indicator very closely to see if there are signs of inflationary pressures emerging.
Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>. 
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Sydney prices may ease a little further: CommSec

j.ballantyne1990-6AQqhLzZaK

Craig James sees only one possible rate rise in 2018

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This is the third year running that this topic has been included in the year’s Big Issues.
In 2015 we said: “the answer will be revealed over 2016.” In 2016 we were more circumspect saying “we believe that discussion will continue to swirl about what sort of landing the housing market will experience.”
And indeed the issue has continued to be debated. But arguably the longer that the issue is debated, the more likely that Australia’s buoyant housing markets, notably Sydney and Melbourne, will experience a soft landing.'
Certainly there are many parts of the country that have far different experiences. Perth and Darwin housing markets are going through corrections after mining and energy construction booms. Adelaide and Brisbane have generally seen steady conditions. However the significant apartment building in Brisbane has led to a very soft rental market. Interestingly though, demand for some accommodation like townhouses is strong and not being met by supply, supporting prices.
The Hobart housing market is firm, benefitting from an overflow of housing demand from Sydney and Melbourne. The issue is one of under-supply rather than over-supply. And the Canberra housing market remains healthy, due in part to the control of land supply by the ACT Government.
The Sydney housing market has certainly softened with a combination of cooling demand and the gradual completion of more homes, especially apartments. The auction clearance rate has eased to around 61 per cent, down from around 80 per cent a year ago. But population growth remains solid in Sydney and rental vacancy rates are still low. In Melbourne, the market remains solid, again supported by population growth.
A key factor that points to the potential for a “soft” landing rather than “hard” landing in markets such as Sydney and Melbourne has been the policy of lenders. Reflecting on the experience of housing over-supply in the US and Europe during the Global Financial Crisis, Australian lenders adopted a new policy. Before lenders would provide finance to developers they sought that around 100 per cent of properties be sold “off the plan” by developers. There is still scope for ‘indigestion’ in some markets with a lot of building going on, but less scope for a broader “hard landing”.
Craig James cited a number of big issues for 2018:
- US President Donald Trump 
- How long will inflation stay low?
- The disconnect between jobs and wages
- Housing: Hard landing or soft landing?
- Infrastructure
- The economic benefit of lower taxes
- Consumer Debt
- The 'slowdown' of the Chinese economy
 
Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>. 
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Housing hard landing or soft landing? CommSec Research - The Big Issues of 2018

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GUEST OBSERVER
There are a number of ‘hot button’ issues to monitor at present: home prices; inflation, the Aussie dollar and the outlook for the US and the global economy.
So what are the current RBA views?
Well, in typical economist parlance, there is a lot of ‘on the one hand this, on the other hand that’.
For instance: “conditions in the housing market vary considerably around the country”; “Labour market indicators continue to be mixed”; and “the economy is continuing its transition”.
Importantly though, the Reserve Bank remains positive.
The global economy has “improved”; domestic economic growth is forecast around 3%; and headline inflation is tipped to lift to over 2% in 2017.
So while the Reserve Bank is sticking with its “neutral stance”, it clearly won’t be cutting rates anytime soon.
The Reserve Bank has left the cash rate at 1.50%.
The previous rate cut was in August 2016 (25 basis points).
There have now been 12 rate cuts since November 2011, cutting rates from 4.75% to 1.50%.
The Reserve Bank had previously lifted rates seven times from October 2009 to November 2010 – a total of 1.75 percentage points, from 3% to 4.75%.
If the Reserve Bank was to change rates in coming months, the trigger is more likely to emerge from overseas, probably a development from policies adopted by the new US government.
For instance, stimulatory policies could serve to lift the US, and the broader global economy, in turn boosting inflation.
In that event, rate hikes would be more likely in Australia than rate cuts.
Conversely, if the fiscal stimulus doesn’t emerge in the US, rather protectionist actions are advanced, that could serve to restrain global economic growth, stifle inflation pressures and cause Australia’s Reserve Bank to cut rates to protect domestic activity.
Oil prices need to be watched carefully in coming months.
<a href="https://www.propertyobserver.com.au/images/2017/02/07/Screen%20Shot%202017-02-07%20at%207.18.00%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/07/Screen%20Shot%202017-02-07%20at%207.18.00%20pm.jpg" alt="">
If key oil nations continue to comply with new production targets and support oil prices, then deflationary fears will continue to ease.
Fixed-term interest rates have lifted sharply over the past six months.
But future moves will be dependent on European elections in 2017 as well as US monetary and fiscal policies.
Bank depositors are getting better returns at present, but still returns remain more attractive amongst blue-chip listed companies.
The Reserve Bank will especially watch the following in coming months: US fiscal policy; Chinese economic activity; commodity markets; Australian home prices; inflation expectations; and the local job market.
CommSec expects the Reserve Bank to stay on the interest rate sidelines for the 2017 year.
Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
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