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

Joel Robinson

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

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

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

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

$200 million Corallo Palm Beach launches with limited apartment release

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

First look: One Collection advances plans for Castle Hill apartments

At Yarra’s Edge, <a href="https://www.apartments.com.au/developers/mirvac">Mirvac</a>’s newest tower under construction, <a href="https://www.apartments.com.au/new-apartments/trielle-at-yarra-s-edge-docklands-16-point-park-crescent-docklands-vic-3008">Trielle</a>, sets a new benchmark for elevated living. Rising 45 storeys, 12.5 metres from the Yarra River, the landmark building offers residents access to a private wellness retreat and spa, a resident-only golf simulator, and an elegant lounge, dining and bar complete with a self-playing piano, all without ever having to leave home.

Now, that sense of elevation has reached new heights with the Aerus Sub-Penthouses, a limited release of half-floor riverfront residences on the Collins St axis where the sought-after street meets the Yarra River.

Each Aerus Sub-Penthouse, located across levels 42 and 43, represents the most expansive offering within Trielle, aside from the yet-to-be-revealed crowning penthouses. Spanning between 269 and 301 sqm, these residences are designed to capture natural light and uninterrupted views of the city skyline, Yarra River, and Port Phillip Bay.

[smartcode_project:default project_id=114216 project_image_fid=3784]

Among the collection are three-bedroom sub penthouses, complemented by a media room, and expansive four-bedroom layouts. All include panoramic living areas and oversized master suites with luxury ensuites reminiscent of a five-star hotel, complemented by dedicated dressing rooms finished in timber and natural stone.

The interiors have been crafted by <a href="https://www.apartments.com.au/architects/mirvac-design">Mirvac Design</a>, the developer’s award-winning in-house architecture and design team. Every material has been chosen for quality and longevity, from sculpted stone island benches with feature soft wash LED lighting to bespoke joinery and chevron timber oak flooring.

Kitchens are fitted with a BORA induction cooktop with integrated downdraft extractor, alongside Gaggenau appliances, including a fridge, freezer, and wine fridge. The adjoining butler’s pantry incorporates the exclusive Gaggenau Minimalistic Series including oven, steam oven, microwave, coffee machine and warming drawer, all concealed behind handleless glass panels for a clean, integrated presentation. Bathrooms feature custom Apaisar freestanding baths and basins and natural stone benchtops, continuing Mirvac’s design emphasis on tactile, timeless materials.&nbsp;

[smartcode_project:default project_id=114216 project_image_fid=353085]

Michael Wiener, Design Director at Mirvac, says The Aerus Sub-Penthouse embodies the apex of Mirvac’s design ethos.

“Moving through your home is like walking on air - a private sanctuary where the craftsmanship is refined, the proportions generous, and the flow so effortless, you feel completely at ease in the sky,” Wiener says.

“In Aerus, we wanted to create a sense of weightlessness - a home that feels suspended in the skyline, full of light, grounded in luxury.”

[smartcode_project:default project_id=114216 project_image_fid=3777]

The Aerus Sub-Penthouses are expected to attract a mix of local and international buyers seeking a long-term residence of scale and quality in a riverfront setting, from returning expats to established families and business owners who value privacy, craftsmanship, and convenience within walking distance of the CBD.

With an unmatched suite of amenities, Trielle is the most extensively appointed development Mirvac has created to date at Yarra’s Edge. Within the tower will be The Oasis, a 900 sqm podium rooftop wellness retreat designed in collaboration with spa expert Naomi Gregory. Located seven storeys above the Yarra River promenade, it features a 25-metre lap pool, spa and sauna, hot magnesium spa, biophilic gym, yoga and Pilates studio, cold-pail contrast treatment, and day spa treatment rooms. Further amenities include a piano lounge, bookable dining room, cinema room, golf simulator studio, games room, teppanyaki bar, dog wash bay, and two flexible work hubs, The Biblioteca library and Mills Place office space, catering to residents’ evolving lifestyle needs.

Construction of the $350 million tower is underway through Mirvac’s in-house construction arm, with completion anticipated for mid-2027.

[smartcode_project_cta:default project_id=114216]

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

Downturn

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EXPERT OBSERVATION
After many years of strong increases in dwelling values, the two largest housing markets, Sydney and Melbourne, have begun to see values fall over recent months.  While values are declining in both cities the speed of the declines vary greatly, both compared to one another and compared to other recent downturns in these housing markets.
<img src="https://corelogic.com.au/sites/default/files/styles/media_crop/public/2018-04/2018-04-23-blogim1.png" alt=""> 
Since values peaked back in July 2017, Sydney dwelling values have fallen by -3.9% over the following eight months.  If we look at the three previous downturns highlighted in the above chart, in the 2003-06 downturn values had fallen by -5.8% eight months in and went on to decline by -8.2% over 25 months before values started rising again.  In the 2008-09 downturn, values were -4.9% lower eight months in and went on to fall by -7.0% over 12 months.  The 2010-11 downturn saw values fall from their peak to their trough by -3.7% and after 8 months they had fallen by just -1.0%.
<img src="https://corelogic.com.au/sites/default/files/styles/media_crop/public/2018-04/2018-04-23-blogimg2.png" alt="">
 Dwelling values in Melbourne have not been falling as quickly or for as long as those in Sydney.  After the market peaked in November of last year, values have fallen by -0.7% over the four months to March 2018.  In 2003-04, values fell by a total of -3.0% over nine months and were -1.0% lower after four months of declines.  In 2008-09 values fell for 11 months, they had fallen by -3.9% over the first four months and ended up declining by -9.4%.  In the first four months of the 2010-12 period of value falls values were -2.2% lower before they ultimately fell by -8.4%.  Outside of these recent declines, values recorded a peak to trough fall of -8.3% between 1989 and 1992 with values falling by -2.5% over the first four months of this period.
Two other capital cities, Perth and Darwin, have been recording value falls for some time.  Although their declines are somewhat lengthier and different to recent falls in Sydney and Melbourne, it is valuable to analyse how these declines have evolved.
<img src="https://corelogic.com.au/sites/default/files/styles/media_crop/public/2018-04/2018-04-23-blogimg3.png" alt="">
Perth dwelling values increased in March 2018 however, over the period from June 2014 to February 2018 values fell by -11.0%.  There is no guarantee that these declines are over as yet although the pace of these declines has steadied recently.  It is also interesting to note that during the most recent period of value falls the declines began much more moderately on a month-to-month bases than they did in 2006-07, 2008-09 and 2010-11, with the downturn stretching on much longer than any of these previous downturns.  In 2006-07, values fell by -3.7% in five months, in 2008-09 values were -11.0% lower over 13 months and in 2010-11 values declined by -9.1% over 19 months.
<img src="https://corelogic.com.au/sites/default/files/styles/media_crop/public/2018-04/2018-04-23-blogimg4.png" alt="">
 Darwin has only seen two recent period of market downturn, between October 2010 and September 2011 and from May 2014 to February 2018 (values rose over March 2018).  Again, it should be noted although values have risen over the month it doesn’t necessarily mean the downturn is over.  Over the 11 month downturn in 2010 and 2011, Darwin dwelling values fell by -7.9%.  The more recent downturn saw value declines start slower than those in 2010-11 with the downturn stretching for much longer.  As at February 2017 Darwin dwelling values have fallen by -22.3% from its previous peak in May 2014.
While these charts are interesting to consider they don’t provide any particular guidance as to how deep or elongated the current downturns in Sydney and Melbourne may be.  The weak housing market conditions in Perth and Darwin were largely a symptom of weak economic and demographic conditions, while the current downturns in Sydney and Melbourne are occurring against reasonably strong economic and demographic conditions; the slowdown is primarily being influenced by tighter credit conditions.  
What is interesting is that comparing to Perth and Darwin shows that just because they have started falling slower than other housing market downturns doesn’t necessarily mean they won’t end up as a deeper and longer downturn.  Of course the reverse is true as well but it will be interesting to see how deep and how long these current downturns persist for in Sydney and Melbourne and whether they lead to downturns in other cities and regions too.
CAMERON KUSHER is head of research for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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ckusher-ujnxiKuFQs

Are all property downturns the same?

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EXPERT OBSERVER
There’s a startling inconsistency in Australian news media when it comes to the treatment of real estate prices.
When actual data is published, showing what actually happened with house prices, media will savage the figures (if they are positive, as they were in March and April) and dismiss them as irrelevant or misleading. That’s journalism, right? Journalists are supposed to challenge things.
But if someone makes a forecast about prices which is negative, news media will accept that without question. And, worse, media will turn this speculation into a fact. It’s not a case of “prices are forecast to fall”; it’s presented as “prices will fall”.
This inconsistency in the approach of media speaks volumes about the mentality of journalists –
- If it’s a positive, attack it;
- If it’s a negative, make love to it.
Data from both CoreLogic and SQM Research showed prices resisted the impacts of virus shutdown in both March and April, with prices rising to some degree in most markets around the nation. We’re three months into the covid-19 schemozzle and there’s still no evidence of the price collapse predicted by the usual suspects.
But this was broadly challenged by news media as being misleading and untenable. Most headlines early in May, reporting the April figures, were extremely negative. One media outlet managed to turn all that solid price data into this headline: “Real Estate Markets Collapse.
It’s essentially about click-bait and the truth is optional – but, in other walks of life, if someone uses that level of deception and dishonesty to try to make money, they end up being charged with serious offences and in some cases go to jail.
Contrast all that with the treatment in the past week of forecasts for house prices by some of the big banks. These have been quite negative and news media has had a field day with those reports: no one has questioned or challenged them at all.
And they should be challenged, because the track records of bank economists in forecasting anything, but in particular real estate prices, are notoriously bad.
(As an aside, observe the record of Bill Evans, chief economist for Westpac, in predicting interest rates – he will make a forecast about likely movements in the next 12 months, with lots of publicity, but in perhaps two months’ time will issue a new, different, forecast. This begs the question: what was the value of your forecast two months ago, which you are now suggesting is wrong?)
If ever something deserved to be attacked by journalists, it’s the forecasts of bank economists about the housing market. Collectively, they have a very low level of credibility.
Let’s take National Australia Bank as a case study. The bank publishes regular forecasts about residential property prices, including the quarterly NAB Residential Property Survey reports. I’ve been reading NAB’s forecasts for many years and here’s what I know to be true – the forecasts are never correct. And I do mean never.
They always err on the side of pessimistic and invariably they are wrong.
Here’s a recent example. NAB published one of its reports in January 2019, containing forecasts for house prices for capital cities for the coming year.
Here what they predicted: capital cities on average would record a 3.8% fall in house prices in 2019. Sydney would drop 5.6%, Melbourne would decline 7.0%, Brisbane would deliver zero growth and other state capitals would deliver minimal growth.
News media, of course, gave this considerable fanfare and treated the forecasts as facts – i.e. Melbourne prices will fall 7% by the end of the year.
Here’s what actually happened, according to three major research entities which publish price statistics – and also according to NAB itself.
According to the latest NAB report, the capital city average for houses in 2019 was actually a rise of 2.9%, not a fall of 3.8%. The capital average for apartments was a rise of 3.4%, not the 4.3% decline that the NAB report forecast a year earlier.
The Melbourne result was a rise of 4.6% for houses and a rise of 6.5% for apartments, not the big declines that NAB had forecast. And in Sydney, there was a rise of 6.1% for houses and a rise of 3.4% for apartments, in contrast to the declines of 5.6% and 5.5% that the NAB report of January 2019 had forecast.
It’s quite a dismal failing, isn’t it, when you predict something will decline 5.6%, but it actually rises 6.1%.
NAB chief economist Alan Oster did not mention any of that in his recent media soundbites on his latest report. Here’s your credulity rating with me, Alan: 0
But the contrasts between the NAB forecasts and the eventual reality are even more stark when you look at the figures from more credible sources.
According to the figure from three major sources, the capital city average result for house prices in 2019 was a rise 5.5% (Domain), 2.1% (CoreLogic) and 2.9% (SQM Research).
The result for Sydney houses was a rise of 6.8% (Domain), 6.1% (CoreLogic) and 4.8% (SQM). Remember, NAB forecast a 5.6% decline for Sydney house prices.
The result for Melbourne houses was a rise of 8.7% (Domain), 4.6% (CoreLogic) and 5.7% (SQM) – not the 7.0% decline NAB had forecast.
There are similar contrasts with the other cities. Hobart, for example, rose 15.6% (Domain) and 11.7% (SQM), whereas the NAB report had forecast a 2019 rise of just 1.8%.
Without boring you with any more statistical detail, I can tell you that the NAB reports have been similarly, and consistently, wrong with their price forecasts year after year. They always lean towards negativity and real estate keeps on proving them wrong.
Yet, this nation’s gaggle of non-journalists has accepted their latest pessimistic outpouring without a single challenge. Its new forecasts, which are quite negative, have been celebrated in media across the country.
Shame on all of you for being so willing to heap further misery on Australian households without any credible justification.
Terry Ryder is the founder of hotspotting.com.au ryder@hotspotting.com.au twitter.com/hotspotting
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terryryder-YECXbqmri2

House price forecasts are usually wrong: HotSpotting's Terry Ryder

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House prices continue to defy forecasts of dramatic decreases from the virus shutdown – and the significance of that continues to be downplayed and misreported by mainstream media.
It would be refreshing is journalists could simply report the facts, in an even and balanced way, rather than go to extraordinary lengths to find negatives to feature in their headlines.
Let’s look at the facts. Figures published on 1 May by CoreLogic show that house prices nationally recorded another small increase in April.
The CoreLogic figures confirmed those published a few days earlier by SQM Research, showing that most capital cities had recorded rises in the past month.
The CoreLogic figures indicate that six of the eight capital cities, and six of the seven regional jurisdictions, recorded some level of increase in their house price indexes during April.
The biggest increases for the month were recorded in Darwin and Regional Tasmania, which both rose 1.1% in April.
Nationally, there was a 0.2% increase in house prices during the month. It’s a very small increase - but in the circumstances any rise is remarkable.
And it defies media forecasts a significant decline in April.
A month ago, when the figures for March (showing price rises in most markets across the nation), media generally dismissed those figures as being insignificant, as they (allegedly) pre-dated the full impact of the coronavirus shutdown.
Most articles in early April said the March figures were irrelevant and that those for April would show the full impact of the shutdown, with significant decreases predicted. There were some very negative and quite alarmist headlines a month ago.
However, the CoreLogic data shows that the housing market remains resilient in the face of the considerable forces created by the economic downturn. While sales activity has dropped markedly, and rents have fallen in some cities, housing values have not dropped.
The price data is strong also for the three months ending 30 April. All eight capital cities recorded increases in their house price indexes, headed by a 3.4% increase in Darwin and a 3.2% rise in Sydney.
Six of the seven regional markets also rose in the past quarter, with Northern Territory the only exception. The regional increases were headed by a 3% uplift in Tasmania and a 2.7% rise in Victoria.
Nationally, there was a 2% increase in the house price index in the past three months.
In annual terms, house prices are up 8.3% nationally, including a 9.8% increase in the combined capital cities index.
Keep in mind that the first of the share market meltdowns occurred on 20 February and we are now in May. We’re 10 weeks into the virus-induced economic schemozzle and, according to usual suspects like Shane Oliver of AMP Capital, we should be seeing evidence of a dramatic drop in property values.
But we’re not. We’re seeing a big fall in sales activity, but the number of properties for sale has also reduced significantly, so supply and demand remains in some sort of balance in many locations. So there’s no great pressure for prices to fall.
All this confirms anecdotal evidence from the coal face of the property industry. I’m having lots of conversations with valuers, buyers’ agents, investment advisers and marketers of various sorts who are seeing good sales happening amid strong competition and values staying firm.
The number of potential buyers in the market has dropped, but the active ones are genuine buyers, with the tyre-kickers having dropped out.
Terry Ryder is the founder of hotspotting.com.au ryder@hotspotting.com.au twitter.com/hotspotting
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House prices defy forecasts of dramatic virus downturn: Hotspotting's Terry Ryder

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Australian real estate investment trusts (A-REITS) have good gearing buffers to withstand the looming property value declines, according to a recent report from Moody's Investors Service.
The predicted downturn is due to weak demand and slowing economic activity caused by the coronavirus pandemic.  
The report found that property values would need to fall significantly for A-REITs to breach gearing and covenant thresholds.
“We expect retail property values to decline in the next 12-18 months because of weak demand and economic activity resulting from coronavirus related disruptions,” saidsenior analyst Saranga Ranasinghe.
“Office property values will fall to a lesser degree, and continued demand will support industrial property values.”
The report futher found that average property values would need to fall 34% to breach the top end of the rated REITs' target gearing (debt/asset) ranges and fall 55% to breach their covenant thresholds.
The REITs came into the downturn with balance-sheet buffers to withstand an increase in gearing. 
According to the report retail A-REITs will experience the largest declines in property values.
“In response to coronavirus disruptions, Vicinity Centres (VCX, A2 negative), Shopping Centres Australasia Property Group (SCP, Baa1 stable) and Charter Hall Retail REIT (CQR, Baa1 stable) raised equity to strengthen their balance sheets,” added Ranasinghe.
CQR's gearing will approach covenant thresholds if property values fall more than 25%. Without debt reduction, Scentre Group's (SCG, A2 negative) gearing will breach its rating tolerance levels if property values fall more than 27%.
But SCG's gearing will remain well within its covenant thresholds.
Diversified A-REITs with retail property are also exposed to devaluations; office value declines are likely to be moderate.
Despite exposure to retail, the risk to diversified A-REITs is mitigated by exposure to industrial as well as office properties.
Stockland Group (SGP, A3 stable) has the largest exposure to retail. SGP has significant buffers within its covenants, but it will approach its rating threshold if its retail property values decline more than 30%.
We expect office property values will decline only moderately over the next 12-18 months and do not see material risks to gearing levels of other diversified A-REITs.
Industrial property values supported by e-commerce penetration and increasing focus on supply chains.
Unlike retail and office, we expect industrial property values will be flat to up slightly over the next 12-18 months.
The pandemic has accelerated e-commerce penetration in Australia and increased focus on supply chains.
The report concluded that Goodman Group (GMG, Baa1 stable), Goodman Australia Industrial Partnership (GAIP, Baa1 stable), and Charter Hall Prime Industrial Fund (CPIF, Baa1 stable) will benefit most.
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j.ballantyne1990-6AQqhLzZaK

Most Australian REITs can withstand property value declines: Moody’s Investors Service

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EXPERT OBSERVER
The Reserve Bank Governor provided a cautiously optimistic overview of the Aussie economy and a reasonably upbeat assessment of the Reserve Bank’s response to the pandemic crisis. In his opening statement to the Select Committee on COVID-19 today, he said “The evidence so far is that our mid-March package is working as expected and it is helping build the necessary bridge to the recovery.” Dr Lowe also stressed, “With the national health outcomes better than earlier feared, it is possible that the economic downturn will not be severe as earlier thought. Much depends on how quickly confidence can be restored.”
On interest rates: Governor Lowe remained cautious about the road to recovery and signalled that record low interest rates and unconventional monetary policy support would remain in place “for a few years.” He stressed, “But even as the recovery gets under way, there will still be a shadow cast by the pandemic. As a country, we will need to turn our minds as to how to move out of this shadow. A reform agenda that makes Australia a great place for businesses to expand, invest, innovate and hire people would certainly help. For its part, the RBA will maintain its expansionary settings until progress is being made towards full employment and we are confident that inflation will be sustainably within the 2–3 per cent target band.”
On fiscal policy and JobKeeper: In the lengthy cross examination by Senators that followed, Dr. Lowe emphasised that, “It’s very important we don’t withdraw fiscal stimulus too early” and “fiscal policy will have to play a more important role” in the future. In reference to the government’s JobKeeper wage subsidy program, Dr. Lowe said that the Reserve Bank used a much more granular approach to its labour market forecasts and assumptions, “We started the forecasting process [in March] at the number of hours worked.” No assumptions on the number of people on JobKeeper or JobSeeker were considered. And he noted “JobKeeper has kept the connection between workers and firms. The recovery would be more difficult without JobKeeper.” He also expected to see some form of JobKeeper retained for specific industries, such as tourism with international borders unlikely to be re-opened before year end.
On the labour market: Dr. Lowe reiterated the importance of developments in the labour market: “My main focus has very much been on hours worked. I’m expecting to see a decline in May but not of the magnitude of April. The labour force has a lot of definitional issues.” The Governor had previously forecast that hours worked in the economy could fall by 20 per cent. But he now believes that the decline may be closer to 15 per cent and wants to see a “reasonable increase in hours worked in July and August.” And when prodded on his views on the fabled “full employment” number, Dr. Lowe proffered “In February I would have said 4.5 per cent. We were making progress. We know from previous sharp economic downturns that there is scarring in the labour market. It is quite possible that the estimate of full employment rises back up to 5 per cent.”
On monetary support for the economy and negative interest rates: The Governor also said that the Reserve Bank remains “focused on keeping funding costs low across the country” and “keeping interest rates low for bank borrowers. Central banks work through lending not spending.” When prodded on unconventional monetary policy Dr Lowe said, “I think negative interest rates are extraordinary unlikely here. The reason that people are sceptical is the cost to the financial system as it impairs profitability and the ability to lend. Negative interest rates don’t work.” If required, “we could purchase more bonds”, but “as things stand at the moment we don’t see need to do more” as the banks “have a lot of liquidity”. And “we’ve bought $50 billion worth of government bonds that will eventually mature.”
On reforms and infrastructure spending: "The economy has become less dynamic", said, Dr. Lowe and “a reform agenda to encourage investment, hiring would help…regulation is a barrier to entrepreneurship”. On infrastructure spending the Governor said, “Surely there are plenty of good infrastructure projects with a risk adjusted return for Australian society of better than 1.5 per cent.”
On government debt: “The level of public debt, while rising in Australia, is still low. There is strong demand for debt and the government has the capability to issue more debt.”
On the global economy: “There are a lot of domestic ramifications from a weak global economy.”
On recent economic data and forecasts: “We’re tracking between the baseline and the upside forecast scenarios. The recent data has been better than expected but I still a lot of challenges ahead. Even in an upside scenario it’s still a pretty depressing scenario. On policy moves he notes in hindsight and with reference to JobKeeper revisions “We would have done the same thing.”
APRA Chair remarks to the Board of International Banking Federation
APRA Chair Wayne Byers provided an online speech, “Going the distance: APRA’s approach to the COVID-19 fight.”
On pandemic preparation: “In Australia, we have had prudential guidance on pandemic planning for financial institutions in place for many years, and it has certainly proved its worth in recent months.”
On solvency pressures: “Measures to backstop liquidity have worked well and bought us time, but solvency pressures are mounting as credit risks come to the fore.”
On financial services disruption: “Thankfully, firms’ plans have stood up well and (along with a great deal of reactive work behind the scenes) the level of disruption to financial services has thus far been minimal.”
On financial system health: “We were fortunate that Australia went into 2020 with a banking system in generally good health. We had been working for some years to position our largest banks in the top quartile of international peers from a capital adequacy perspective, and fortuitously they had achieved that positioning before the crisis struck. On an internationally comparable basis, our largest banks are operating with CET1 ratios in the order of 15-16 per cent, and capital within the broader banking system is at a historical high – and about twice the level heading into the 2008 crisis. Funding and liquidity positions were also stronger, and asset quality was good, reflecting a lot of supervisory attention in recent years.”
On the road ahead: “This crisis will almost certainly precipitate enduring change in the way society operates. The idea that we’ll employ some temporary measures and then everything will ‘go back to normal’ is therefore a dangerously naïve one on which to base our decisions. Flexibility and agility will be important – we have a long battle ahead.”
On the regulatory and supervisory landscape: “First, financial and operational resilience – the core of prudential supervision – will be the primary area of focus in the foreseeable future… Second, the post-2008 reforms will be properly tested, and inevitably we will find areas they can be improved…. Third, transparency will become even more important.”
What are the implications for interest rates and investors?
The Reserve Bank Governor’s more optimistic tone was somewhat reassuring today. He seemed satisfied that the Bank had done all it could to help cushion the economic blow from the pandemic, but appears prepared to do more (buy more bonds) if the recovery fails to gather momentum as the economy is re-opened.
Of course, the Governor remains focused on developments in Australia’s labour market. The Bank’s assessment of the economy is predicated on the number of hours worked by Australians. The Governor emphasised that “What I’m focused on is people getting their jobs and income. Mortgage repayments are entirely manageable if you’ve got a job and income.” But "The shape and timing of that recovery depends not only on when restrictions are lifted, but also on the confidence that Australians have about their own health and their finances,"
Improving jobs data from the Bureau of Statistics, SEEK and Indeed – albeit off very low levels – provides unemployed Aussies with some hope and lifts confidence.
But a lot of uncertainty will remain, thus impacting consumer behaviour, until a potential virus vaccine is found. In the meantime, government policymakers would be well advised to retain the large fiscal and welfare support necessary for Australian workers and businesses to survive and operate through these challenging times until the economy finds a firmer footing.
RYAN FELMSAN Senior Economist, CommSec
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RBA says downturn less severe than first appeared: CommSec's Ryan Feldman

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EXPERT OBSERVATION 
Australia’s three-decade run of near continuous economic growth is set to end, with treasury warning of a hit to growth of “at least” 0.5% in the first quarter of this year, potentially followed by a “prolonged downturn”.
If it came to pass, treasury’s preliminary assessment would most likely mean economic growth vanished and went backwards for several quarters, producing what is commonly known as a “<a href="https://www.smh.com.au/politics/federal/the-really-lucky-country-talk-of-recession-as-australia-takes-world-record-20170601-gwiiwl" target="_blank">technical recession</a>” – two quarters or more in which income and spending shrink.
Providing the <a href="https://treasury.gov.au/speech/opening-statement-march-2020-senate-estimates" target="_blank">assessment</a> to a Senate estimates committee on Thursday morning, treasury secretary Steven Kennedy said the COVID-19 coronavirus would take “at least half a percentage point” from economic growth during the current March quarter and more beyond that.
In recent quarters economic growth has been about half a percentage point.
Quarterly GDP growth
<a href="https://images.theconversation.com/files/318783/original/file-20200305-127918-160glbr.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/318783/original/file-20200305-127918-160glbr.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Treasury’s preliminary estimate of a hit of at least half a per cent took into account only the direct impacts of the virus on tourism and education, and some exchange rate effects.
It did not take into account broader economic effects or the impact of the coronavirus on supply chains.
The half a percentage point hit to growth would come on top of a hit of 0.2% from the summer bushfires, most of which would be felt in the March quarter.
<hr>
 Read more: <a href="https://theconversation.com/support-package-gains-shape-as-gdp-turning-point-swamped-132969">Support package gains shape as GDP turning point swamped</a> 
<hr>
Dr Kennedy, a former nurse who retrained as an economist, stressed that the impact of the bushfires would extend well beyond the immediate hit to economic growth.
“Evidence from past episodes suggest bushfires can lead to long-lasting physical and mental health effects and destroy cultural heritage,” he said.
“Research by the University of Melbourne after the Black Saturday bushfires in 2009 found mental health problems continued for three to four years.”
The bushfires made clear the increased probability of such events in a world of climate change.
“The CSIRO predicts climate change will make bushfires more likely, as fire weather patterns worsen as a result of an increase in weather patterns with hot and dry winds and fuel becoming drier.”
Deeper, wider and longer lasting than SARS
As of Wednesday there had been 91,868 confirmed COVID-19 cases worldwide and 3,131 deaths, most in China. COVID-19 had spread to 77 countries.
When the virus first emerged in China in December, the treasury saw it through the lens of the 2002-04 Severe Acute Respiratory Syndrome (SARS) pandemic.
It was now clear COVID-19 would be different.
The impact of SARS took on a V shape, a relatively contained reduction in activity, mostly in Asia, followed by a quick bounce back.
The economic impact of COVID-19 is likely to be deeper, wider and longer when compared with SARS.
It will create more risk of a prolonged downturn, and fiscal support will be needed to accelerate the recovery of the economy, especially once the health and health management effects of COVID-19 begin to fade.
The first phase of the economic support package to be delivered next week would target assistance to the businesses and sectors most affected in order to keep people in jobs.
After that, support for aggregate demand (overall spending) would become more important.
“A very substantial part of the impact is actually confidence among consumers and the business sector because of the uncertainty,” Dr Kennedy said.
“Frankly, effective health management will be very important. The economy is actually quite solid. One of the key things will be to to explain to the community how well placed the economy is to manage such a short-term shock.”
The shock would last for some time but the economy would “recover on the other side”.
Keeping workers employed would be very important.<img src="https://counter.theconversation.com/content/133053/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/peter-martin-682709">Peter Martin</a>, Visiting Fellow, <a href="https://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292">Crawford School of Public Policy, Australian National University</a>
This article is republished from <a href="http://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/economic-growth-near-an-end-as-treasury-talks-of-prolonged-coronavirus-downturn-133053">original article</a>.
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Economic growth nearing an end as Treasury talks of prolonged coronavirus downturn: ANU's Peter Martin

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EXPERT OBSERVATION
As green shoots have clearly appeared in the property market, RiskWise Property Research has taken a retrospective analysis of lessons to be learned from the recent downturn.
1) Think long term and don’t seek quick wins. It’s easy to see Sydney and Melbourne carry a low level of risk and are the long-term winners when it comes to the property market. While we’ve had short-lived episodes of enthusiasm in areas such as Hobart and the mining towns in both Western Australia and Queensland, these areas are no longer in favour with owner-occupiers or investors (Hobart delivered a modest annual change in dwelling value of 2.6 per cent). Now we are seeing the Sydney and Melbourne markets starting to perform more strongly, which means that only the people who bought at the top of the market in 2017 and 2018 are seeing temporary reductions in dwelling values. People who are looking for ‘adventures’ in the property market are like gamblers and often find these escapades to be perilous down the track when it is too late to do anything about.
2) Taxation and regulatory changes carry very tangible risk to property investors. Investors should focus on purchasing dwellings that are suitable for families in areas which have a high owner-occupier ratio, particularly houses, as these are less subject to potential taxation changes.
3) High-rise units simply carry a higher level of risk. This is driven by areas which have oversupply of units, often flagged as Danger Zones. However, the newly emerging threat of construction defects and combustible cladding has added an addition layer of risk for investors. For the same amount of money investors can usually buy a house in the middle or outer rings which will present much less risk and is more likely to enjoy solid capital gains down the track due to the long-term appreciation of land values.
4) Capital growth should be the key driver for investor decisions, rather than cash flow. A RiskWise five-year analysis of the property market earlier this year demonstrated that high rental yields generally deliver low overall returns for investors. Our analysis proved that, over the medium to long term, low rental returns delivered significantly higher overall return (i.e. capital growth + rental return), while high rental returns delivered lower ones overall. What it means is people who invest in very affordable suburbs that carry a high level of rental return, with the expectation of strong overall growth, achieve exactly the opposite result. The analysis showed, under the assumption of a 20 per cent deposit, that low-rent houses would increase their net equity by 63.1 per cent. Conversely, high-return houses would increase their net equity by only 29.5 per cent. This means low-rent houses increased their equity by more than twice that of the high-rent ones.
5) Undersupply of houses in Sydney and Melbourne is a systematic issue. With high population growth in both these capital cities, undersupply of family-suitable dwellings, mainly houses and, to a lesser extent, townhouses will drive property values and is likely to create strong long-term growth in prices. What it means is supply has been unable to keep pace with strong demand. While there has been a large supply of units in high-rise buildings, these are generally unsuitable for owner-occupiers and are largely rental properties. This imbalance in dwelling construction has been a major contributing factor to housing affordability challenges, remembering that rental properties and owner-occupied ones are not fully substitute products. Overall, investors are more likely to benefit more from buying houses in the middle rings and the outlying areas of these cities, provided there are adequate transport solutions and access employment.
DORON PELEG is the CEO of RiskWise
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Five lessons from Australia's recent real estate downturn: RiskWise's Doron Peleg

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The Western Australia housing market took a turn for the worse over the last quarter with broad-based downgrades, according to the latest data from Moody's Analytics
They found, despite support from lower interest rates and the continued strength of non-rural commodity prices, dwelling prices remain in a slump after the mining boom.
The labour market in Western Australia has been comparatively weak for some time, with the growth in employment lower than the national average since 2015.
Plus, average weekly earnings contracted over the year to May, the second worst performance among states after the Northern Territory.
Given the subdued conditions, Moody's Analytics forecast is for the housing market is expected to continue declining in 2019, with the trough not likely until 2020, after which conditions will begin to pick up before a modest recovery in 2021.
<img src="https://www.urban.com.au/images/2019/10/28/WA%20Moodys%201.JPG" alt="">
Katrina Ell, Economist at Moody’s Analytics said: "Greater Perth’s house values are expected to fall 7.8% in 2019, building on the 1.8% drop in 2018.
"Mandurah is expected to experience the greatest fall in house prices this year, before stalling in 2020, while Perth Inner and Perth-North West are expected to perform the worst in apartments, which will have double-digit falls. Conditions will improve for both in the following year, but prices are forecast to still be below 2017’s in the medium term.
"Median rental values in Western Australia fell more than 20% peak to trough from November 2013 to September 2016, a sign of continued excess supply. Since then, rental values have remained broadly stable.
"A slow recovery in rental value over the next two years will help the housing market recover.
"Perth-North West, encompassing Joondalup, Stirling and Wanneroo, is representative of trends across Greater Perth. While apartment prices will likely remain weak over 2019-2020, house values will fare better, with less of a decline this year followed by a modest recovery in the next."
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