Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

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

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

Demographics

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The Australian Bureau of Statistics has recently released demographic data at a capital city level to June 2013. 
We have <a href="/expert-insights/investing/abs-stats-reveal-population-growth-is-escalating-in-nsw-and-victoria">previously covered the population data</a> however, when the data is paired with dwelling approvals data over the same period there are some very interesting findings.
Over the 12 months to June 2013, the population of the combined capital cities increased by a total of 313,387 persons.  At the same time, there were 114,825 capital city dwelling approvals over the period.  Based purely on the ratio of population growth to dwelling approvals, there was one dwelling approved for construction for every 2.73 residents added to the capital cities.
At a national level, the 2011 Census reported that average people per household at that time was 2.6 persons.  Based on that figure you can see that population growth has exceeded dwelling approvals over the past year.  Of course measuring demand for housing is not quite so simple.  Although it is a bit old now, the former Deputy Governor of the Reserve Bank (RBA) gave a speech entitled ‘Housing and the Economy’ to the National Housing Conference in November 2009, which is available <a href="https://www.rba.gov.au/publications/bulletin/2009/dec/pdf/bu-1209-5.pdf" target="_blank">here</a>.  In the speech he posed the question, ‘Are we building enough dwellings?’  Two of the most interesting revelations from the speech were:
<ol>
<li>A higher proportion of the new dwellings built are simply replacing existing homes that have been demolished.  The RBA estimated that between 2001 and 2006, around 15% of new dwellings built replaced those that had been demolished; 10-15 years earlier that figure was less than 10%. 
</li>
<li>A significant proportion of dwelling investment appears to have gone into holiday homes or second homes.  Census data (2006 Census) shows that the number of dwellings built has exceeded the increase in the number of households by a large margin.  As a result, the ratio of the number of dwellings to the number of households has been rising over time; as at 2006, there were 8% more dwellings in Australia than there were households.  Presumably, most of this surplus reflects holiday houses and second houses.</li>
</ol>
So at a national level, the former Deputy Governor’s speech suggested that in order to cater to dwelling replacements and secondary homes we need to construct 23% more dwellings than the previous simplistic analysis of measuring the rate of population growth compared to approvals.  Also keep in mind here that we are looking at approvals, they won’t necessarily all go on to become commencements and ultimately completions.
An assumption we could make here is that, holiday and second homes are generally more likely to be situated outside rather than inside a capital city.  As a result, the second revelation detailed above is probably not going to have as much of an impact at a capital city level.  Nevertheless we still have to allow for the 15% of homes which have been demolished when looking at the approvals data.
<blockquote>
Maybe it is time to look at ways that we can incentivise developers to bring vacant land to the market quicker rather than banking land and drip-feeding it to the market.
</blockquote>
Across individual capital cities, the 2011 Census reported that on average; Sydney, Brisbane and Darwin had 2.7 persons per household, Melbourne, Perth and the Australian Capital Territory had 2.6 persons per household and Adelaide and Hobart had 2.4 persons per household. 
Returning to the original findings, over the year to June 2013, the capital city population increased by 313,387 persons and 114,825 dwellings were approved for construction.  If we adjust for average household sizes as per the 2011 Census, to match population growth there would have ideally been a slightly higher 119,135 approvals over the year.  If we then further adjust for the assumption that we should approve 15% more homes to replace demolitions, there should have been 137,005 dwellings approved for construction last year, a shortfall of 22,180 capital city approvals.
<img class="aligncenter size-full wp-image-3122" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Chart-11.jpg" alt="Chart 1" width="500" height="181">
As the above chart shows, the supply of new dwelling approvals was generally quite sufficient through the 1990s however, throughout the 2000’s new dwelling approvals have been insufficient in relation to the level of population growth.  We are now seeing rising dwelling approvals on the back of escalating housing demand and rising home values which is encouraging however, it will have to continue for many years to make up for the insufficient supply response over the past decade or so. 
In Sydney and Melbourne, there was one home approved for every 2.72 and 2.48 new residents respectively indicating a level of supply closer to equilibrium with demand over the most recent year.  New supply remains very much insufficient in Brisbane and Perth where one new home was approved for every 3.26 new residents in Brisbane and 3.45 new residents in Perth.
The following charts track the annual population growth and the annual number of dwelling approvals across each capital city.
<img class="aligncenter size-full wp-image-3114" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Syd-chart.jpg" alt="Syd chart" width="500" height="179">
<img class="aligncenter size-full wp-image-3115" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Mel-chart.jpg" alt="Mel chart" width="500" height="179">
<img class="aligncenter size-full wp-image-3116" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Bne-chart.jpg" alt="Bne chart" width="500" height="179">
<img class="aligncenter size-full wp-image-3117" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Adl-chart.jpg" alt="Adl chart" width="500" height="179">
<img class="aligncenter size-full wp-image-3118" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Per-chart.jpg" alt="Per chart" width="500" height="179">
<img class="aligncenter size-full wp-image-3119" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Hob-chart.jpg" alt="Hob chart" width="500" height="179">
<img class="aligncenter size-full wp-image-3120" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Dar-chart.jpg" alt="Dar chart" width="500" height="179">
<img class="aligncenter size-full wp-image-3121" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Can-chart.jpg" alt="Can chart" width="500" height="179">
As the above charts show, the disconnect between the level of population growth and dwelling approvals over the past decade have been greatest within our largest capital cities.  It is no coincidence that these cities are also the regions that have been recording the greatest increase in population over this period.
A further important consideration when looking at the relationship between population growth and dwelling approvals is the type of product that is being developed for the market.  While the city-wide analysis is valuable new housing typically comes in the form of new houses on the outskirts of the city or medium to high density product within the inner city areas. Over time, we are seeing a shift away from greenfield housing development in most capital cities towards infill higher density development.
<img class="aligncenter size-full wp-image-3123" src="https://blog.rpdata.com/wp-content/uploads/2014/04/Chart-21.jpg" alt="Chart 2" width="500" height="182">
Over the year to June 1991, 29.9% of all new dwelling approvals across the combined capital cities were for units as opposed to houses.  In June 2013, 49.7% of all dwelling approvals over the year were for units.  Over the year, there were more units than houses approved for construction in Sydney (66.1%), Melbourne (52.7%), Brisbane (50.1%), Darwin (64.5%) and Canberra (54.9%).  The unit category type includes townhouses and semi-detached homes as well as units. 
The 2011 Census reported that across the separate house category, the most prevalent number of bedrooms is three bedrooms (49.6%) and four bedrooms (32.4%).  When you combine the results for semi-detached and units the most prevalent number of bedrooms is two bedrooms (50.1%) and three bedrooms (28.6%). 
To look at it another way, 88.8% of detached houses have three bedrooms or more compared to 66.9% of units having two bedrooms or fewer.  The point here is that if you are going to deliver more units to the market, they typically have fewer bedrooms and therefore are likely to have a smaller average household size than a detached house would.  As a result, it is likely that as the delivery of units increases there actually needs to be a greater number of units constructed in order to cater for population growth than there would have been if houses were exclusively built.
It is clear for the analysis that particularly within the four largest capital cities there has been a growing deficiency of dwellings approved for construction over recent years when compared to population growth.  Over the past 12 to 18 months there has been a noticeable rise in dwelling approvals however they will have to continue to rise over coming years to make up for the deficiency over recent years.  Particularly in Sydney, Melbourne and Brisbane we are seeing a push to greater density in the inner city areas. 
So how do we fix the supply side problems? 
There are many solutions but I think in the main we need to approve new developments faster, increase developable land both in the inner city and within greenfield areas and reduce the costs of new development to the developer because these costs are ultimately passed on to consumers.  Remember that developers are commercial entities looking to make the best possible returns for shareholders. 
Maybe it is time to look at ways that we can incentivise developers to bring vacant land to the market quicker rather than banking land and drip-feeding it to the market.  Whether that be an additional tax on undeveloped land or some sort of financial incentive to bring stock to the market, I am not sure, but it is clear that particularly within the major capital cities the current conditions are not working and finding a way to increase the supply of new dwellings is imperative.
</body></html>

ckusher-ujnxiKuFQs

Our capital city population is booming but housing supply failing to keep up

<html><body>
Living in compact housing is becoming more popular across Australia due to our changing demographic makeup and lifestyle expectations.
Demography
Every second household in Australia currently supports either one or two people.  Let me repeat, 51% of households, according to the 2011 Census, held just one or two people.
It is forecast that this proportion of one and two person households will rise.  Some estimates are that two-thirds of Australia’s homes will support singles or couples within a generation.
We are not just talking about the Gen Y rental markets here, but owner-resident households too.  This trend is even more pronounced for aging baby boomers and their first generation parents.
Lifestyle
Our time-short lifestyle is making the increased commuter time from ‘home’ to ‘work’ to ‘play’ (whether by car or public transport) less acceptable.
The increasing cost of long private commutes (petrol, car maintenance and insurance etc.) and the need for several cars is making the idea of a ‘go-card’ and public commutes/walking/cycling more appealing.
<blockquote>
The most important consideration in any new investment property purchase is who is likely to be the next owner after you.
</blockquote>
The lag in infrastructure provision to outlying new suburbs is adding additional strain on a public which increasingly wants more now.  Waiting for things (like neighbourhood services and amenity) is no longer part of our creed.
We, as a nation, by and large, seem happy to trade ‘space’ for ‘place’.
Creating place
I often repeat this simple phrase – “density needs to be offset”.
If we are going to live in a more compact dwelling space, then that space itself, and what surrounds it, needs to better than if our home and private yard was much more voluminous.
I am not staying that detached homes are potential dumps or that living on acreage is akin to being in a pigsty*, it’s just that the room for error is far greater in tight confines.
If I have learnt anything from watching those property shows on Foxtel, it is that space is often working against you when it comes to small builds.
Better buying
Compact housing design, like for apartments, must be clever in its use of space; finishes; building amenities and services.
One of the keys to better housing investment is to match the aspirations of the resident now and into the future.  The most important consideration in any new investment property purchase is who is likely to be the next owner after you.  It’s the next buyer who determines your capital growth potential and in most cases it is best if that next buyer is an owner-resident.
So what are some rules to buying a better compact dwelling?
<ol>
<li>
Space  Now this may sound like an oxymoron, but one should always buy as much space as one can afford.  There are basic human dimensions that can only be compromised so far.  For example, living areas must allow for residents and guests to easily move around.  One needs to be able to walk around a queen sized bed.   You do need to do the three S’s (shower, shave and s… well you get the picture) in a bathroom.  Kitchens aren’t just places for Clooney coffee machines, they need workable bench space, multiple storage options; good lighting and a full suite of appliances. 
</li>
<li>
Natural light and ventilation  Think energy efficiency.  The best way to do that is via natural light and ventilation.  All glass should be full floor to ceiling, designed to ensure privacy. 
</li>
<li>
Ceiling height  Space should not only be judged on floor area, but also by ceiling height.  It’s the perception of space that is important, not just the overall metereage. Buy apartments with a minimum ceiling height of 2.6 metres, over 2.7 metres is better still.  
</li>
<li>
Lighting and ceiling type  Down lights recessed into a plasterboard ceiling.   The plasterboard ceiling creates an air gap between the concrete slab structure and room itself.  This creates an important acoustic barrier that lessens noise from the apartment above.    Make sure there is enough lighting in the kitchen; bathrooms and laundry area. 
</li>
<li>
Hard floor finish  Carpet is out and tiles or timber is in when it comes to living areas.  Carpet in bedrooms is still strongly favored. 
</li>
<li>
Great kitchens  The kitchen is usually the ‘centerpiece’ of one’s home.  But when it comes to compact living, the kitchen’s status has lifted to ‘showpiece’. Let’s get a bit specific here, kitchens should incorporate:  Stone bench tops and high quality splash backs;  Designer cupboards and drawers – in fact the more drawers the better;  High quality appliance package with cooktop, oven, range hood, dishwasher, convection microwave and refrigerator – yes a microwave and fridge;  Good task lighting is vital  
</li>
<li>
Functional bathrooms  When it comes to local moves, one of the most cited reasons why is that the bathrooms weren’t practical.  Bathrooms need to have:  Sizable showers with detachable shower rose;  Mandatory WC;  Vanity with sufficient storage and shelves; Floor to ceiling tiled walls;  Natural light and direct ventilation if possible – i.e. operable windows;  Several towel rails;  Include stand-alone bath if space permits  
</li>
<li>
Separate laundry  A dedicated laundry area that is well ventilated and capable of linen and appliance storage - in fact the more storage the better.  
</li>
<li>
Storage Think about those designer closet advertisements you see in the weekend papers or on TV.  Storage is king when it comes to compact living.  The better the storage space the better your tenant and owner-resident resale appeal.  And this is the one area that most developers – like nearly all of them – don’t do well.  Sadly, most aren’t even interested in addressing this issue.  
</li>
<li>
MPR  One bedroom apartments – for example - can sometimes be a room short.  A small multiple purpose room or study has a variety of uses for a one or two person household.  It should be large enough to have a single bed, study desk and some robe space. 
</li>
<li>
Good sized balconies  A well-proportioned balcony not only allows for outside private entertaining, but allows the ‘outside in’.  The balcony should be able to accommodate a six seat table setting and room for a small BBQ.  A glass up stand is much better than a solid balustrade. 
</li>
<li>
Aspect and view  The most preferred aspect is north, but there are occasions where south, east and west can have a more appealing outlook and view.  An inviting view is a strong lifestyle and resale benefit. 
</li>
<li>
ASC  All living areas and all bedrooms these days should have individual air-conditioning.  Key card or intercom security to building and apartment floor is also mandatory.  Any new compact home should be capable of access to the NBN or broadband wireless. 
</li>
<li>
Car parking  One car per apartment is the minimum required to have future owner-resident appeal.  When it comes to the provision of visitor car spaces, one per four apartments is ideal. 
</li>
<li>
Lifts  Lifts and their operation are vital when it comes to apartment living.  A good lift service with access to basement carpark is one lift per 50 apartments. 
</li>
<li>
Recreational facilities  Residents and guests always appreciate a common area incorporating a swimming pool and deck.  Other meeting areas are also highly regarded.  A great foyer works wonders but gyms are better done offsite these days. These rules apply always.  But become vital when looking at buying in a crowded market.  Our property pick <a href="https://matusik.com.au/files/2013/03/Matusik-Property-Picks-March-2014.pdf" target="_blank" style="line-height: 1.3em;">rules</a> also apply.
</li>
</ol>
Good investing.
*I live on acreage in Brisbane’s west and let me tell you space allows one to hide a multitude of property sins.
Our thanks go to John Egan, <a href="https://www.eganprop.com.au/" target="_blank">Egan Property Solutions</a>, for his collaborative contribution to this article.
Visit Michael's <a href="https://www.matusik.com.au/" target="_blank">website</a>, read <a href="https://www.matusikmissive.com.au/" target="_blank" rel="nofollow">his blog</a>, follow him on <a href="https://www.facebook.com/ThinkMatusik?fref=ts" target="_blank" rel="nofollow">Facebook</a> and <a href="https://www.twitter.com/michaelmatusik" target="_blank" rel="nofollow">Twitter</a>, or connect via <a href="https://www.linkedin.com/in/michaelmatusik" rel="nofollow">LinkedIn</a>.
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michaelmatusik-49YzLvdmNv

The rules for buying better compact housing investments 

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Recently released data from the Australian Bureau of Statistics (ABS) shows that as at June 2013, the rate of population growth in Australia’s capital cities was significantly greater than that of regional markets.
Perth topped the charts as the city to consistently record the fastest rate of population growth with 395,000 new persons moving to Perth between 2006 and 2013. However in raw number terms, the increase in population has been much greater in Melbourne and in Sydney.
Between 1991 and 2013 Sydney added an additional 1,084,169 residents, Melbourne 1,153,248, Brisbane 826,621, Adelaide 198,141 and Perth 746,243.
As at June 2013, ABS reported that almost two out of every five Australian’s (39.4%) lived in either Sydney or Melbourne, however, the proportion of Australian’s living in Sydney or Melbourne fell slightly from 1991 (39.7%). This is largely due to a rising prominence of Brisbane and Perth as population centres.
In 1991, 21.3% of Australian’s lived in Sydney, 18.5% in Melbourne, 8.2% in Brisbane and 7.1% in Perth. By 2013, 20.6% of Australian’s lived in Sydney, 18.8% in Melbourne, 9.7% in Brisbane and 8.5% in Perth. Despite the declining prominence of Sydney, the proportion of Australian’s living within our four largest cities has increased from 55.0% in 1991 to 57.6% currently.
<img src="/images/2014/04/10/kusher-april-10-foru.gif" alt="">
The rising prominence of Brisbane and Perth as population centres has really emerged over recent years. Obviously the resources sector boom has driven this to some extent with escalating demand for professionals working and associated with this sector.
Darwin was the only other capital city to record an increase in its overall proportion of the national population over the period, shifting from 0.5% in 1991 to 0.6% in 2013.
Adelaide recorded the largest decline in its proportion of population over the period across the capital cities, falling from 6.3% of the national population in 1991 to 5.6% in 2013.
Sydney and Melbourne continued to be the most significant population centres however; Melbourne is catching Sydney quite quickly. In 1991, 3,672,914 persons lived in Sydney and 3,194,707 in Melbourne, a gap of 478,207 persons. By 2013, the gap had reduced to 409,128 persons.
During the same period, regional Queensland was the only regional market to record a greater increase in population than within the capital city. Over the period, Brisbane's population increased by a total of 826,621 persons compared to an 869,231 increase in Regional Queensland’s population.
The surge in population across Regional Queensland is linked to the growth in those markets directly adjacent to Brisbane, Gold Coast and Sunshine Coast.
Regional Queensland’s population has increased due to the ‘sea change’ phenomenon which has seen significant migration and development along the state’s coastal communities.
Over the year, the ABS reported that Australia's population increased by 1.8% with capital city regions recording population growth of 2.1% over the year compared to a 1.2% annual increase in regional population.
<img src="/images/2014/04/10/kusher-april-10-three.gif" alt="">
From 1995 onwards, capital city populations have consistently increased at a faster rate than those in regional areas. In June 1991, 64.6% of all Australian’s lived within a capital city and by June 2013 the proportion had risen to 66%.
Almost two thirds (66.3%) of all Australian’s live within a capital city, up from 64.6% in 1991.
Based on the ABS results, Australian’s are showing an ongoing preference to live in capital cities rather than regional markets. This is largely due to job security found in the cities.
With home values rising at a much faster rate in Sydney and in Melbourne than in other capital cities it will be interesting to see over the coming years if we see an outflow of population from Sydney and Melbourne to other more affordable capital city housing markets such as Brisbane and Adelaide.
Of course a key driver of any shift away from Sydney and Melbourne will be providing well-paid jobs and a high quality of life while ensuring that housing remains relatively more affordable than it is within Sydney and Melbourne.
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Capital cities' job security remains attraction for population growth

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Many residential property markets around Australia are currently in a ‘hot’ phase of their cycles. By that, I mean that these markets are in the maximum peak property values of their current market cycles.
It is a great time for sellers but a tough time for buyers.
Buyers in markets like Sydney, Brisbane, Perth and many regional centres are facing tough times right now. There are a number of contributing factors as to why these markets are so hot; not limited to the following:
<ul>
<li>A record low interest rate environment is encouraging some first time buyers in to the market who otherwise would not have been able to afford to.</li>
<li>First time Australian citizen investors, enticed by the low interest rates on offer and an increase in construction upstarts for off the plan investment purchases, are buying up properties at very high rates.</li>
<li>In regard to non-Australian-citizen/foreign investors, the introduction of relaxed government policy as well as incentives offered for certain degrees and levels of foreign investment in Australia has made for a property buying frenzy from foreign investors.</li>
<li>The ever-increasing urbanisation of Australia’s population is resulting in more people moving to capital cities as well as established regional cities also. This in turn adds demand.</li>
<li>The general ‘FOMO’ effect (fear of missing out) as a result of the above factors adds a heightened sense of urgency to another property-seeking group, mainly upgraders and second or third time property buyers.</li>
</ul>
All of this of course adds up to high asking prices in many markets. However, initial high buying prices isn’t the only challenge that occupants and residents of these hot markets will face. Different groups will be affected in these hot markets, and in different ways:
First home owners
Despite low interest rates on offer, first home buyers remain consistently out-bid and out-priced within their desired suburbs. The other worrying factor for these buyers is that even if they stretch to their absolute maximum buy rate to secure a property now, they are doing so in a very low interest rate environment.
If first home owners are stretched to their limits now, how they will cope when interest rates fluctuate back up to higher levels over the next 24 months?
I am not of the view that a massive property bubble is forming, however I don’t deny that in low middle income areas where first home buyer volumes are higher, should a significant volume of them fall under mortgage stress over the next couple of years property values in those areas may stagnate for several more years to come.
Australian-based investors
I use the phrase ‘Australian-based’ for this investor group to encompass both Australian citizens who naturalised in this country for most or all of their lives, as well as those who are newer arrivals to Australia but call Australia home (in other words, they live here full-time).
Investors who have purchased residential property in hot markets are no different to those who seek out properties in emerging or undervalued markets; all interested only in the return they get on their investment. This means that providing that either strong capital growth potential, or high rental return, are evidenced in a property purchase, they will consider a property in any market climate – hot or cold.
The problem is hot property markets mean that capital growth for that market/post code is usually at its maximum. That means that for investors seeking immediate capital growth, this will be unlikely for several more years because the property is at its peak right now.
<blockquote>
The consequences of suburb specific saturation by investors have not yet been truly seen.
</blockquote>
This means that if an investor in a hot market is truly a savvy buyer, versus a poorly-researched, ill-advised wannabe investor, they must be seeking 'hot’ (and immediate) rental return over capital growth.
That  paints an alarming picture for overall housing affordability in these markets. Investor owned properties must be charging very high rents to occupants of their properties right now to ensure their investment isn’t a massive loss-maker for them. That means that not only are property buying rates high in hot areas, but so are rents. Overall affordability to live in these cities  becomes poorer.
Non-Australian and foreign investors
Similar factors exist for foreign investors in comparison to local ones.
However, there is another factor at play. Recent investor profile data research from Australian Property Investor magazine suggests that local investors tend to buy in the same city (if not in a nearby suburb) to where they live. Foreign investors typically purchase, site-unseen, in markets that they have never lived in, nor even (in many instances) have visited.
I guess the missing ingredient here is the ‘sense of community’ that mass-property buying, condensed into a small group of ‘favoured’ suburbs or areas, erodes and the effect this has on an area. Some suburbs can become at risk of being investor ghettos whereby the ratio of owner-occupier to investor-owned property is so high that a genuine sense of community within that area becomes quickly eroded.
<blockquote>
Investors should look to emerging markets where owner-occupier to renter ratios are much more balanced.
</blockquote>
This then changes the dynamic of that entire area; eroding the gentrification developed over decades, in the space of just a decade or so of heavy investor-buying. Of course, it is not the fault of (nor should the blame be pointed at) the foreign investors themselves; but rather local and state councils, policy-makers and governments whose planning departments allow this occur, as well as property developers who exclusively market to foreign investors from the moment the first block foundation concrete is poured, en-mass. 
I draw a parallel here to post-World War Two Melbourne, where ‘outrage’ existed over the Italians buying out entire suburbs within just a couple of years after the war. The difference however, is that these communities owner-occupied the areas, made a great contribution to the ‘sense of community’ those areas had, and in hindsight were one of the major market driving factors that has given these suburbs the wonderful identity (and desirability) they have today. Yes, some areas were almost entirely ‘foreigner-owned’, but these people became locals and celebrated their communities.
Fast forward to 2014 and there is a lot of uncertainty around the concentrated foreign-investor buyouts of entire suburbs. This is because investors are not living in the suburbs themselves. They do not have say a vested interest in ensuring the local park lands are maintained, or that roads don’t become too congested, or that units and houses are not occupied by too many people, and so on.
It is no doubt clear that hot property markets offer rewards and benefits for some property owners. However, the implications of investor buying extend beyond just bumping the rental and purchase prices up. The consequences of suburb specific saturation by investors have not yet been truly seen. Ever the optimist as I am, I remain doubtful that investors buying in hot areas, at a grand scale, will be a positive thing for those areas.
Investors should look to emerging markets where owner-occupier to renter ratios are much more balanced.
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cmcevoy-Go82SmsJA9

Investor saturation in suburb hotspots will have consequences for residents and investors

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Demand for new housing in Sydney will continue to outstrip supply as development targets have been set too low to accommodate population growth, according to NSW Department of Planning and Infrastructure director general Sam Haddad.
“Indicators are that for the next couple of years we are going to achieve our targets of 25,000 to 27,000 dwellings in Sydney and I’m not sure that’s enough,” Haddad said last week at an industry forum organised by the Committee for Economic Development of Australia.
The department last year predicted the NSW population would increase by two million people to reach 9.2 million by 2031. Since then it has been examining updated Australian Bureau of Statistics data and invested in improving its population forecasts.
“Indications are that we are expecting a much higher population than we have predicted before,” Haddad said.
A larger population in Sydney meant demand for new housing would be much higher than previously anticipated and the existing targets for housing development would be too low.
The total number of dwelling units approved in NSW fell 0.2% in February after rising for 24 months, ABS data shows.
Approval times for new dwellings fell in 2012-13 compared with the previous year, according to the Local Development Performance Monitoring Report for 2012-2013. It took 68 days on average to approve a development application in 2012-13, three days less than in the previous year. Fast-tracked approvals took 17 days on average, one day less than the year before.
Haddad said there was a lag between dwellings being approved and work commencing, which the department was trying to understand but its key focus was on driving changes to the NSW planning system.
The department released a white paper outlining a new planning system for NSW and draft planning legislation on April 16 last year. The paper and legislation were on public exhibition until June 28.
The draft legislation has not yet been passed but Haddad said he was hopeful that it would pass soon as existing legislation could not cope with changes to population, community and investor expectations, environmental concerns and how infrastructure was integrated into urban developments.
“NSW is changing and we need to look ahead as to how we are going to manage this change and manage growth ... The current planning legislation cannot cope with the change that I’m talking about. It can no longer deliver to the community,” he said.
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zfielding-GvX3Uq9KTa

Housing development supply targets set too low: NSW Department of Planning and Infrastructure

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Australia faces medium term challenges of paying for the things it wants to do as a society and finding enough workers as the population ages, Reserve Bank Governor Glenn Stevens says.
Stevens strongly backed Treasury Secretary Martin Parkinson who <a href="/expert-insights/finance/treasury-boss-hints-at-the-need-for-a-broader-gst">this week outlined</a> the huge calls on the budget over the coming years and urged a reweighing of the tax system to rely more on indirect taxes such as the GST.
Speaking in Brisbane, Stevens said it was becoming clear that programs were not fully funded by taxes over the medium term. “Our situation is not dire by the standards of other countries but neither are the issues trivial. A conversation needs to be had about this,” he said.
He described the Parkinson speech as “very important”.
Stevens said it was understandable that with announcements of job losses people focused on where future jobs would come from. But the problem was more likely to be not enough workers, rather than not enough jobs.
At present the number of new entrants to the workforce exceeded those retiring. 10 years from now, those numbers could be roughly equal, without a further rise in labour participation by older people.
“Demographic trends point in the direction of a smaller population working, and a larger proportion needing support in their later years, even as public demands on the finances for the provision of social goods increase.
“That looks like a pretty uncomfortable combination of trends.”
He said the answer to reconciling them was growth. To some extent we would hopefully be able to lessen the problem through higher labour participation, for longer. “But most of all we will need higher productivity of those working. That means making the system as flexible as possible and as encouraging as possible to innovation.”
For Australia one potential source of productivity improvement lay in the fact that across a range of sectors US productivity was much higher than our own. There were possibly substantial “catch up gains” to us by adopting better practices.
To those worried about projected job losses, Stevens pointed out that new jobs “will come from areas that we don’t see yet”.
“In the middle of 1991, at the low point of the last serious recession, people were very pessimistic about future employment prospects. The rate of unemployment was in double digits.
“But today, over 20 years later, there are nearly four million new jobs in the economy as there were then. The rate of unemployment, although it has gone up recently, is just slightly more than half what it was at its peak in the 1990s.
“It’s worth noting that none of those additional net jobs came from manufacturing,” Stevens said.
MICHELLE GRATTAN is professorial fellow at the <a href="https://www.canberra.edu.au/" target="_blank">University of Canberra</a>.<img src="https://counter.theconversation.edu.au/content/25216/count.gif" alt="The Conversation" width="1" height="1" style="line-height: 1.3em;">
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>. 
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jake-cSmGT7VXVf

Finding workers and money our main worries: Glenn Stevens

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2014 is still motoring along very strongly. The lull we reported of the last few weeks seems to have been nothing more than another stair landing in the continuously rising price-staircase which began in October 2012.
This weekend was another Super Saturday, with over 150 auctions in Melbourne’s inner east and Bayside. It was a very solid test, in that bidders were spread out over a large number of auctions – i.e. there was significant choice. The bidder depth held up, in fact it increased marginally with over two bidders per auction on average – this is strong.
If you look at the roughly 200 $1 million plus auctions that took place across all of Melbourne, an average of two bidders means that not only were there 200 buyers, there were also 200 bidders who missed out. Most of those “wounded” bidders are not discretionary buyers – they have to buy and next time they will be more aggressive on price, even if only a tad.
<blockquote>
For a number of our Chinese clients, one of the reasons we are engaged is that they are concerned what other Chinese buyers may do and they don’t want to miss out.
</blockquote>
However, after next week it gets very tight for new stock going into the school holidays and Easter. So the pool of choice will diminish. That means many of those 200 “wounded underbidders” may well be competing against you over Easter but on lower stock levels. That means we’re likely to see 200 underbidders competing not on 200 homes, but on, say, 100 good homes which would double the bidders. If that number is spread out over 50 good homes, that will be four times the bidder strength we saw this weekend.
So what to do as a buyer? Maybe it’s time to wait until the steam goes out of the market?
For those buyers still waiting on the edge for a downturn – good luck. I’m not sure that is a proven good strategy.
But surely it can’t last forever!
Why has our market been so good for so long and will it last?
The Chinese community – simple demand and supply
The reason our market has been so good for so long is very simple – the overseas Chinese community.
Here are the top 10 reported sales on Saturday.
The Top 10 reported on Saturday
<ul>
<li>14 Selwyn Av, ELWOOD – Above $3,600,000</li>
<li>
21 Monash Av, BALWYN – $3,520,000</li>
<li>17 Rolls Ct, GLEN WAVERLEY – $3,416,000</li>
<li>
65 Metung St, BALWYN Above $3,200,000</li>
<li>30 Wills St, KEW Above $3,000,000</li>
<li>4 Mt Ida Av, HAWTHORN EAST  $3,235,500</li>
<li>69 Alfred Cr, FITZROY NORTH  $3,140,000</li>
<li>
2 Barnsbury Rd, BALWYN Above $3,000,000</li>
<li>9 Fairfield Av, CAMBERWELL  $2,888,000</li>
<li>
65 Yarrbat Av, BALWYN $2,850,000</li>
</ul>
40% of those sales were in <a href="/news">Balwyn</a> for new homes or land blocks to build new homes. Where is <a href="/news">Brighton</a>, where is <a href="/news">Toorak</a>? <a href="/news">North Balwyn</a> and Balwyn reported 13 bought from a reported 15 auctions. Brighton had 9 bought from 16 and Toorak and <a href="/news">South Yarra</a> just 7 from 12.
So how long will it last?
This is my potted history of Chinese involvement in Melbourne’s property market.
1973: I went to Camberwell Grammar in the early 1970s (I’m not sure they want me to advertise that fact – it could be bad for new enrolments). Camberwell Grammar is in Balwyn and a number of my classmates at that time were Chinese.
1983: Chinese start buying into Doncaster and Box Hill, which were then more affordable suburbs. I grew up in Doncaster.
1993: After economic reforms start having an impact in China, wealthy overseas Chinese start buying into premium Melbourne suburbs such as Balwyn and <a href="/news">Canterbury</a>. Why? Private schools. Chinese people want to give their children the best education (see 1973) and now a few could also afford to buy a home near the schools of their choice such as Carey, MLC, Scotch and Camberwell Grammar. But it was still difficult under Australian buying laws for overseas people.
2000: With restrictions on what Chinese people could buy and Chinese wealth increasing, off the plan properties became popular for many Chinese buyers. There were very few restrictions on Chinese people buying new properties and Chinese people were used to buying new apartments. High rises went up left, right and centre in Melbourne, many on the back of Chinese money.
2005: Chinese wealth had increased dramatically over the last two decades and as Chinese buyers became wealthier they also became more sophisticated in their knowledge about Melbourne properties and Toorak became a place where land banking became popular. It still is today.
2009: Australian government changes the laws making buying “second-hand” family homes in Australia a lot easier for Chinese people. This one decision really brought the inner Melbourne property market out of the GFC a lot quicker than other countries.
2013: By this time, every one of the bigger buying or selling real estate agencies, ourselves included, has at least one Mandarin-speaking staff member.
2014 : At this weekend’s Super Saturday, 40% of our Top 10 $3m+ sales were in Balwyn, rather than Toorak or Brighton.
So in my 55 year history I have seen this equation of simple demand (increasing Chinese buyers) versus supply (no new land in inner Melbourne) push prices up and up and up. I cannot see anything changing anytime soon. So waiting for the market to turn in 1970, 1980, 1990, 2000 and 2010 hasn’t in my mind proven to be a winning strategy. If you see the right home for you (emotionally, physically and financially) then you should buy it now.
You may be interested to know that for a number of our Chinese clients, one of the reasons we are engaged is that they are concerned what other Chinese buyers may do and they don’t want to miss out.
Auctions in Bayside see around half  the number of people attending as in Boroondara. A good auction in Brighton has 40 people while in Kew it would be 80. The Chinese community is nowhere near as well established in Bayside as it is in Boroondara.
Why not? There are some great private schools in Bayside! St Leonards, Haileybury, Caulfield Grammar.
Its a historical thing. But you can see more and more Chinese people considering say other areas such as Brighton when:
<ul>
<li>Chinese people become more comfortable with Bayside as a place to live, and</li>
<li>Demand in Boroondara and then Stonnington forces some Chinese people to consider other options.</li>
</ul>
Over time the Chinese community demand and supply equation will have the same effect in Bayside as it has had in Boroondara, unless China’s wealth begins to diminish.
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maljames-vHwm28JUAa

Chinese buyers in Melbourne: A simple case of supply and demand

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Someone asked me last week if I am "bullish on property?".
It's a bit of wild concept if you think about it.
At the last count there are around 9,300,700 dwellings in Australia, and the vast majority of them I wouldn't invest in.
There are a huge number of areas that I would consider to be extremely risky, in fact, including a whole range of mining towns and regional centres, and even some larger cities with weak population growth and job markets.
My position always been that if you can demonstrate a certain level of skill and invest in the right suburbs and property types you can make a lot of money, but I wouldn't say that makes me bullish on housing per se.
In Britain, London and its surrounds has been the only area worthy of investing for my money over all the years.
In Australia, I generally stick to certain suburbs in Sydney. 
In 2007, that meant a number of key suburbs in the inner west, and even then only certain types of property. 
Last year we were buying on the lower north shore, but again only in a handful of suburbs and certain types of property. 
At the weekend, the lower north recorded another blistering auction clearance rate of 92%. 
I wouldn't get too bogged down in the weekly conspiracy theories about under-reporting: just look at the actual results <a href="https://domainmastheads.homepriceguide.com.au/saturday_auction_results/Sydney.pdf" target="_blank">reported</a> in suburbs like Kirribilli, Wollstonecraft, Cremorne and Neutral Bay. 
The lower north shore is now absolutely flying!
We expect to see Milsons Point and Waverton outperforming in 2014 too.
We try to avoid buying in heated markets, however, so we may leave the hordes to the auction frenzies at ever-higher prices now, and look elsewhere.
Next on our hit-list will include three suburbs in particular to the west and south-west, a little further out than the traditional capital growth hotspots, in order to catch the ripple effect of capital growth which is repeated in most property market cycles. 
March property prices 
RP Data will released its <a href="/expert-insights/investing/melbourne-tops-the-list-of-best-performing-capital-cities-in-march-quarter-rp-data-rismark">property price results for the month of March</a>, which unsurprisingly will continue to report very strong gains in Australian capital cities (+2.3%) for the 10th month in a row.
Leading the way, of course, were Sydney (+2.8%) and Melbourne (+2.3%), although in fact gains were recorded everywhere in March.
Over the past 12 months, the best performing capital city has continued to be Sydney, and the worst, perhaps not surprisingly given its weak jobs market and low population growth, Adelaide.
<a href="https://1.bp.blogspot.com/-j43vYsDmeWo/Uzjzxz9ceQI/AAAAAAAAMN4/3tun4W9-5oA/s1600/RPD111.jpg"><img src="https://1.bp.blogspot.com/-j43vYsDmeWo/Uzjzxz9ceQI/AAAAAAAAMN4/3tun4W9-5oA/s1600/RPD111.jpg" width="460" height="181"></a>
Philosophy 
Like most people, my investment philosophy has changed a bit over time, but the basic principles remain the same.
About a decade and a half ago, Robert Kiyosaki wrote a book, Rich Dad Poor Dad, which showed a diagram something like the one below which demonstrates the difference between the typical financial profile of a salary earner (lots of expenses, lots of liabilities) and that of an investor (fewer expenses and lots of income-producing assets).
<blockquote>
My basic philosophy is to think of investment as being like a snowball, compounding and growing its income and capital appreciation year after year, for as long as I live.
</blockquote>
Spending less than you earn and investing the difference was a real "aha!" or "light bulb" moment for millions of people around the globe. Kiyosaki sold 26 million copies of that book alone and went on to build a substantial business empire from this one very simple core idea.
<div><img src="https://www.richdad.com/MediaLibrary/RichDad/images/blogs/rdpd-wealthy-vs-middleclass-chart.jpg" width="400" height="303"></div>
Concept: Robert Kiyosaki
Kiyosaki's point was that investors should try to avoid getting into bad debts (credit cards, car loans, school loans etc) and instead load up the asset column with your business, real estate and stocks.
My one simple big idea
Like many people I've experimented with a few different approaches, including trading or buying speculative stocks. These days I have stripped back my investment philosophy to keep it as simple as humanly possible. My one simple ideas as it relates to my investment philosophy is this: 
I want every single dollar I invest to still be going out to work for me if I live to be 110 years old. 
That's my basic philosophy, to think of investment as being like a snowball, compounding and growing its income and capital appreciation year after year, for as long as I live.
What to invest in? 
So what assets to invest in to achieve that goal? 
You can spend a lot of time analysing companies and still get it wrong. The simplest method for most average investors might be to pick out some diversified Listed Investment Companies (LICs) which have a proven track record of increasing their profits and dividends for decade after decade after decade.
I don't recommend individual stocks for others to invest in. You have to pick companies which suit your own risk profile. But this is the kind of chart that I look for:
<div class="separator"><a href="https://1.bp.blogspot.com/-iZUT2PTDq2g/Uznpgh8Z4HI/AAAAAAAAMOI/AX9f8KgSmjc/s1600/MLT.jpg"><img src="https://1.bp.blogspot.com/-iZUT2PTDq2g/Uznpgh8Z4HI/AAAAAAAAMOI/AX9f8KgSmjc/s1600/MLT.jpg" width="400" height="173"></a></div>
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<div class="separator">Source: MLT Annual Report 2013</div>
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<div class="separator"><a href="https://2.bp.blogspot.com/-7UCvvjPl6TU/Uzn3J6MCj2I/AAAAAAAAMPA/lWOyNZnEWAY/s1600/WHF.jpg"><img src="https://2.bp.blogspot.com/-7UCvvjPl6TU/Uzn3J6MCj2I/AAAAAAAAMPA/lWOyNZnEWAY/s1600/WHF.jpg" width="400" height="236"></a></div>
Source: WHF Annual Report 2013
If a company can achieve this type of result with its bottom line profits with its and franked dividend payments then the share price will likely take care of itself over time.  Through investing in these types of diversified companies your dollars can go to work for you from now until... forever.
You don't even need to know what the wires do, although of course, you can lift the cover plate and see what the inner workings are up to if you so desire.
<div class="separator"><a href="https://3.bp.blogspot.com/-m6Ug96wmaaE/UznqPMdYIPI/AAAAAAAAMOQ/Yg_SYJCw978/s1600/BKI.jpg"><img src="https://3.bp.blogspot.com/-m6Ug96wmaaE/UznqPMdYIPI/AAAAAAAAMOQ/Yg_SYJCw978/s1600/BKI.jpg" width="400" height="317"></a></div>
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<div>Source: BKI Annual Report 2013</div>
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<div class="separator"><a href="https://1.bp.blogspot.com/-a8UdJKNChMo/Uzn2XPoACII/AAAAAAAAMO4/eTCnft7XLm0/s1600/ARGO.jpg"><img src="https://1.bp.blogspot.com/-a8UdJKNChMo/Uzn2XPoACII/AAAAAAAAMO4/eTCnft7XLm0/s1600/ARGO.jpg" width="400" height="371"></a></div>
Source: ARG Annual Report 2013
Companies may in theory be perpetual but, surprisingly, many of them come and go. How much more re-assuring it is to be invested in a company which holds 100-120 top companies and trusts? Even if one of the companies held experiences a huge corporate fraud or failure, the investor should not be hurt too much. I covered in more detail why I like LICs <a href="https://petewargent.blogspot.com.au/2013/04/5-reasons-to-consider-lic" target="_blank">here</a>.
Real estate 
I apply very similar principles in property investment. I want to invest in cities which will still be thriving if I live to be 110 years old. That means that for the core of my portfolio, I tend to steer away from small regional cities or one-industry towns. 
It's no coincidence that my company has offices in London and Sydney, by the way, for those are two cities with tremendously strong fundamentals for the long-term.
Knight Frank reported yesterday that London prices are up by 68% in the last five years since March 2009. How on earth, and why on earth, is that happening? 
It's partly because of desperately inadequate construction. Parts of the market are desperately undersupplied and the activity in the market resembles a feeding frenzy at the moment.
It's also because in recent times, there has been a tremendous shift of funds towards residential real estate as a store of wealth, but only in certain key global cities. It's fairly obvious why prices have been growing when you consider this chart.
<div><img src="https://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/03/London%20market_0.jpg" width="400" height="322"></div>
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<div>If you know your history, you'll know that London has had something of a rollercoaster ride as a city.</div>
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<div class="separator"><a href="https://1.bp.blogspot.com/-gLopaBB9AhA/UzntvXvbM7I/AAAAAAAAMOc/wCMOLBe16KE/s1600/LONPOP.jpg"><img src="https://1.bp.blogspot.com/-gLopaBB9AhA/UzntvXvbM7I/AAAAAAAAMOc/wCMOLBe16KE/s1600/LONPOP.jpg" width="460" height="275"></a></div>
Centuries ago we had wars, plagues and even a Great Fire, and from the Second World War through to 1991 the city population declined for five consecutive decades as the city de-industrialised and went through a process of slum clearance and suburbanisation. 
Since 1991, London has been busy establishing itself as a major financial centre, and international migration combined with an economic boom has seen the population explode from 6.4 million to above 8.1 million. London's population has been increasing at twice the speed of that of the rest of the UK and is expected to surpass 9 million by the end of this decade.
Importantly, the population in inner London has often been expanding at the same percentage rate as that of the Greater City of London, despite the limited availability of land. I don't worry too much what the talking heads in the press consider likely to happen this year or next. I just know that over the decades, London property will continue to represent an absolute no-brainer.
Sydney
As a newer city, Sydney has not been through such a rollercoaster ride: the population trend is simply up, up, up and away.
The below is a dated population projection from the Bureau of Statistics. More recent data suggests that the estimates have been under-cooked and that Sydney's population could rise much more rapidly still than this (click chart) to <a href="https://www.afr.com/f/free/national/why_australia_needs_to_get_real_7hEC3IX0RZWitSkELPcJEI" target="_blank">around 8 million by 2050</a>, instead following the trajectory of the red line (click chart). 
<div class="separator"><a href="https://4.bp.blogspot.com/-bS0zccQITYI/Uzn49dmzSuI/AAAAAAAAMPM/WMo25KmGhDU/s1600/POPSYD.jpg"><img src="https://4.bp.blogspot.com/-bS0zccQITYI/Uzn49dmzSuI/AAAAAAAAMPM/WMo25KmGhDU/s1600/POPSYD.jpg" width="460" height="245"></a></div>
So much energy is diverted towards what might happen to prices in the next 12 months, but as an investor, inactivity can actually be your greatest friend. 
As for the flow of international funds, well let's be blunt: this will have very little (if any impact) on regional centres. The impact will be felt most keenly in inner Sydney where land is scarce, and inner Melbourne.
Through owning properties in suburbs where the supply is fixed you can be assured that your dollars you invested in investment properties will still be out there working for you for decades and decades to come. And more comforting still, the nature of compound growth means that they gains just get better and better over time. 
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
His new book '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' is out now.
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