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

Dwelling Approvals

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Home building approvals started the year on a positive note, with an increase of 2.5 percent during January in seasonally-adjusted terms.
Master Builders Australia's chief economist Shane Garrett said the rise in approvals during January follows a run of weak results during the back end of last year.
"Higher density housing in particular has lost a lot of ground over the past 12 months,” he said. 
“During January, the number of approvals for new detached houses rose by 1.9% with a stronger increase of 3.8% on the apartment/units side of the market,” Garrett said. 
“Despite the welcome increase in approvals during January, we are still down by almost 30% compared with this time last year,” he said. 
“The ongoing difficulties in the flow of credit and concerns about the direction of housing policy post-election are having negative effects on home building activity,” Garrett added. 
“Construction is the economy’s largest provider of full-time jobs and the upcoming round of federal, state and territory budgets provides a real opportunity to get us back onto the right track,” he said. 
During January, WA saw the largest increase in total new home approvals (+28.8%), followed by Tasmania (+15.4%) and NSW (+12.0%). 
The largest reductions affected the ACT (-19.8%) and the NT (-8.0%). Approvals also declined in Victoria (-7.9%), Queensland (-3.5%) and SA (-1.5%) during the month.
The raw figures announced by the ABS may be weak. 
In January, dwelling approvals decline 3.2 percent in trend terms.
Approvals for townhouses and apartments fell just over eight percent in trend terms, with private sector housing decline 0.4 percent.
 
 
 
 
 
 
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jrobinson-rf4aSBido9

Home approval boost in January, but trending lower

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EXPERT OBSERVER
Housing weakness in late 2019 was clearly not confined to just turnover and prices with new dwelling approvals sliding sharply into year end – down 26% between Sep and Dec, the last month marking the lowest level for monthly approvals since June 2013. For Q4 as a whole, approvals were down 10.9%qtr and 23.7%yr.
Approvals are now signalling an unambiguous further weakening that will clearly see declining new dwelling investment detract from Australia’s growth in 2019. Westpac expects new dwelling investment to decline 8% in the year with a further 5% contraction in 2020.
The composition of the approvals decline points to downside risks to this outlook. Units continue to drive the cycle with a further 18.8% drop in Dec to be down 38%yr. Within this segment, ‘high rise’ approvals look to be down a further 16% in the month and by over a third in Q4 as a whole. That is outpacing our assumed path of a cumulative 40% decline by the end of 2019, suggesting weakness may be more pronounced and/or 'front loaded'.
More importantly, there continues to be significant weakness in other segments as well – medium density approvals down over 10% in the month and private detached house approvals down –2.2%mth, –11.3%yr. The shorter ‘lags’ on non high rise work means these declines will likely impact activity through the first three quarters of 2019.
The state breakdown shows weakness spread across the major eastern states: NSW –8.1%mth, –21%yr; and Vic –8.1%mth, –23%yr; and Qld –5.8%mth, –29.7%yr. WA posted a slight gain but is also down 30%yr.
The total value of renovation approvals rose 3.1% to be about flat on a year ago but with a modest uptrend in place. While the rise is mild, it is coming across all the major states.
The total value of non res building approvals fell 9.8% to be down about 15%yr. Latest monthly reads have been choppy around a flat trend, albeit with better gains for NSW and Vic and, by sector, for education-related building in the public sector.
Overall the December approvals update clearly challenges the RBA's view from the November Statement on Monetary Policy that "... dwelling investment is expected to decline gradually" and suggests that, as well as incorporating the weaker starting point from the Q3 national accounts, its revised forecasts to be released in Friday's February Statement on Monetary Policy will also need to materially lower the near term outlook for dwelling investment.
Even if the Reserve Bank maintains its view that the negative 'wealth effect' spillovers from falling house prices will be limited, there is a clear ‘real economy’ negative coming through via new dwelling investment.
MATTHEW HASSAN is a senior economist at Westpac
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Matthew_Hassan-HHWHptmrw4

A clear ‘real economy’ negative coming through via new dwelling investment: Matthew Hassan

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Dwelling approvals continued to fall nationwide in December, according to figures released by the ABS.
Approvals declined over 8.4 percent in December, bringing the seasonally adjusted annual decline to 22 percent.
The annual decline has been driven by apartment approvals, which have now gone back 38 percent over the 12 months to December 2018.
House approvals have declined 11 percent in that time period.
In trends terms, dwelling approvals have now fallen for 14 straight months, down 39 percent from the November 2017 peak.
It's the fourth consecutive quarterly decline, according to economist <a href="http://jamesfostermacro.blogspot.com/" target="_blank">James Foster</a>.
Click here <a href="https://www.propertyobserver.com.au/images/2019/2/4/ABS-Dwellings.jpg" target="_blank">to enlarge</a>.
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Daniel Rossi, director of construction at the ABS, said the series is now at its lowest level since June 2013.
"The trend for the total dwelling approvals series has continued to decline over the past year," Ross said.
Economist Lindsay David said building approvals for both Sydney and Melbourne are moving in line with his anticipated 97% fall from the peak.
David said the figures were "recessionary".
Building approvals is always a volatile data set, but the trend is lower and has been for some time.
 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/2/4/Approvals1.jpg" alt="">
Far and away the state with the biggest dwelling approval decline was the Australian Capital Territory where approvals declined over 21 percent.
The ACT was followed by Queensland (6.5 percent), New South Wales (5 percent) and Western Australia (3.8 percent).
South Australia and Victoria registered small declines, while the Northern Territory and Tasmania saw small increases in their dwelling approvals.
"Absolutely horrible building data approvals", economist Stephen Koukoulas tweeted.
Economic data feed AlertFX.com had predicted a 2.1 percent increase in dwelling approvals.
The AUD has reacted negatively to the approvals news, pulling back 20 points in the market.
 
 
 
 
 
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Apartments drive dwelling approval decline back to 2013 levels

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ABS dwelling approvals data have shown a 9.1 percent drop in November.
According to the latest figures Westpac suggest its takes the total decline over the year to 32.8 percent.
The decrease in November was driven by townhouses and apartments, which declined nearly 18 percent, bringing the yearly total decline to 28 percent.
Housing approvals dropped just 2.6 percent in November, a total of 6.4 percent down on the year.
"We are seeing a second leg lower in approvals following a strong and extended upswing," Westpac economist Andrew Hanlan said.
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"The pull-back in approvals from historic highs is against the backdrop: of softer demand, notably from investors (domestic and international); additional supply coming onto the market; and tighter lending conditions.
"High rise developments, which have been a key driver of this cycle, are correcting lower with further falls ahead as suggested by weaker site purchases by property developers.
"The cooling of the housing market will weigh on the economic outlook for 2019, including a likely trend decline in new home building activity," Hanlan said.
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Justin Lokhorst, director of construction statistics at the ABS, said the trend for total dwellings has been steadily declining over the past twelve months.
Relative to Q2, dwelling approvals were hit the hardest in South Australia (-31%) and Western Australia (23.7%).
New South Wales recorded a -19.7% decline, closely followed by Queensland at -19.2%
Victoria, the centre of Australia’s population boom, is now down -11.1% relative to Q2.
Tasmania is an island of strength, with approvals up in the month (+30.6%) and higher since the June quarter (+37.6%).
Diwa Hopkins, an economist at the Housing Institute of Australia, said new home approvals fell to reach their lowest level since August 2013.
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“This weak result shows just how much the current credit squeeze is weighing on the home building sector," Hopkins said.
“The credit squeeze is happening at the behest of the banks’ own lending practices which have been tightened above and beyond APRA’s requirements. 
“HIA research has found that the time taken to gain approval for a loan to build a new home has blown out from around two weeks to more than two months.
Hopkins described APRA’s decision to lift its 30 per cent cap on banks’ interest-only lending as a "welcome development", however suggested more needs to be done to mitigate the growing risks of a hard-landing in the housing market.
“Policy makers and lenders alike need to be cognisant that ordinary home buyers are now facing blow- outs in loan processing times and also much greater rates of flat-out loan rejection. Today’s results show how this is weighing substantially on the new home building sector. 
“We’ve long been anticipating the current downturn in new home building, but there is a risk it could develop more quickly and strongly than expected. 
“In particular policy makers and lenders will need to respond judiciously to the pending release of the Banking Royal Commission’s recommendations,” Hopkins said.
 
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Apartments drive dwelling approval November decline:

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EXPERT OBSERVER
Dwelling building approvals fell an as expected 1.5% in October, with unit approvals down 5.4%.
The trend in alterations and additions is falling at around 0.1% a month.
The trend in non-residential approvals is also falling.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/12/4/Approvals1.jpg" alt="">
The downtrend in dwelling building approvals and in the value of alternations and additions points to gradual decline in dwelling investment over the year ahead.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/12/4/Approvals2.jpg" alt="">
Meanwhile in other data released today
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<li class="x_MsoListParagraph">September quarter business indicators were on the soft side with company profits up 1.9%qoq (against market expectations for a 2.4% gain), the wages bill rising just 0.9%qoq (and don’t forget this allows for wages and employment growth), sales volumes slowing to just 0.1%qoq and flat inventories pointing to a detraction from growth of 0.3 percentage points.</li>
</ul>
Taken together this points to a bit of a softening in growth after a few stronger quarters and suggests downside risks to our September GDP growth forecast of 0.6%qoq, although there is data on net exports and public demand to be released tomorrow. 
Finally
<ul type="disc">
<li class="x_MsoListParagraph">ANZ jobs ads fell 0.3% in November with annual growth slowing to 2.3%yoy pointing to softer jobs growth ahead.</li>
<li class="x_MsoListParagraph">The Melbourne Institute’s Inflation Gauge for November basically stalled with headline inflation slowing to 1.6%yoy and underlying inflation slowing to just 1.3%yoy suggesting that inflation may be actually slowing this quarter.</li>
</ul>
Implications for interest rates
Along with CoreLogic data showing ongoing falls in house prices, today’s data adds to our expectation that RBA rate hikes are at least two years away and that there is rising risk that the next move by the RBA will be a rate cut rather than a rate hike.
SHANE OLIVER is Head of Investment Strategy and Chief Economist at AMP Capital.
 
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soliver-smf6LQXgW9

Unit approvals lead building approvals decline in October: Shane Oliver

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EXPERT OBSERVER
Dwelling approvals declined 1.5% in October, in line with the consensus forecast but with both the headline and detail a touch better than we had been expecting.
Approvals remain locked in a clear downtrend but this month's update eases some of the downside risks that had been emerging around non high rise approvals in particular.
Recall that the September approvals report showed a solid headline rise (+5.5% revised up from +3.3% previously) that concealed a much weaker underlying picture.
All of the monthly gain was due to a jump in Vic high rise approvals – excluding this segment, approvals were down 7.5% (since revised to –4.5%).
Moreover, that weak underlying picture followed a sharp 14% drop in approvals over July-August.
Going into the October update we were expecting headline approvals to reconnect with this clear downtrend. Instead the decline is somewhat milder and detail mixed rather than weak.
Private detached house approvals rose 2.7% in October with the previous month's fall pared back to from –2.7% to –1.5%.
The decline in this segment from June's peak is now a much milder 3.5% vs the 7.3% fall presented in September.
Private units posted a 4.8% drop, continuing a volatile run: +13% in September; –23% in August; and –7% in July.
Most of this is due to ‘high rise’ approvals which dropped 40% over July-August, spiked 60% in September and dropped back 40% again in October.
Forward indicators continue to point to a weak outlook for this segment, site purchases in particular.
For the month of October, a strong rise in 'medium density' unit approvals provided a material offset, this small segment up about 25% in the month, reversing a similar sized decline in September.
All states recorded declines in October, Vic showing less of a pull back than might have been expected (–2.6%mth, –13.7%yr) given last month's high rise spike; and SA notably weaker (–17%mth, –24.8%yr).
Across the other majors: NSW approvals were down –0.5%mth, –16.5%yr; Qld –1.1%mth, –13.3%yr; and WA –0.1%mth, –23.1%yr.
The total value of renovation approvals edged up 0.5% but are still down 10%yr with the trend showing no real direction.
The total value of non res building approvals rose 4% but were still down 25%yr.
While trends remain very difficult to discern, recent weakness has been most pronounced across offices.
By state, weakness over the last 3mths has centred on Qld and WA rather than NSW and Vic.
Overall, the October approvals report is weak but not quite as weak as we had feared.
While the detail eases some of the downside risks to the outlook our view remains that residential building will see a significant 5% decline in 2019.
MATTHEW HASSAN is a senior economist at Westpac
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Australian dwelling approvals, another soft month: Matthew Hassan

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EXPERT OBSERVATION
Dwelling approvals rose 3.3% in September, reversing part of the 13% slide over the previous two months but with the monthly move a touch below the consensus expectations of a 3.8% rise.
Despite this, the detail was weak. The monthly gain centred on the famously volatile high rise unit segment, which had fallen sharply over the previous two months. The September high rise bounce was also heavily concentrated in Victoria. Approvals outside of this narrow state segment were significantly weaker (our estimates suggest total dwelling approvals ex Vic high rise were down about 7.5%).
Private detached house approvals declined 2.7% to be down 7.3% since June – a significant shift for what is usually a more stable segment.
Private units in total posted a 9.2% bounce, retracing some of the 20% decline over the previous two months. With-in this, ‘high rise’ approvals jumped 40-50% although this looks to be exaggerated by seasonal adjustment. A sharp fall in 'medium density' partially offset the gain.
By state, the Vic recorded an outsized 30.5% gain but was softer ex high rise (we estimate down 2.3% in seasonally adjusted terms). The other major states recorded big falls, NSW down 6.8%, Qld down 10.5% and WA down 19%.
The total value of renovations edged up 0.8%, the slight trend decline over the first half of the year showing signs of leveling out. Notably, trend approvals in NSW and Vic are down 7.6% since the start of the year.
The total value of non res building approvals declined 3.8%. Trends remain difficult to pick out due to high volatility but the segment looks to be tracking lower in most states.
Overall, the headline gain in dwelling approvals this month is a 'head fake'. Excluding a sharp spike in Vic high rise, something that is very unlikely to sustain, reveals a fairly broad based picture of weakness. Tightening credit conditions are clearly impacting both residential and non residential sectors. The pace of decline remains hard to pin-point but building activity is more clearly tracking towards a contraction in activity heading into 2019.
Matthew Hassan is a Senior Economist for Westpac
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Australian dwelling approvals had an unconvincing bounce: Matthew Hassan

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EXPERT OBSERVATION
Dwelling approvals came in slightly below expectations in April with a 5% fall vs consensus forecasts of a 3% decline. Annual growth slowed to 5.2%yr. The detail was mostly on the soft side.
Private detached house approvals were flat in the month but supported by an abnormally large 20% jump in WA which was coming off very weak reads in February-March. We suspect this relates more to processing issues than conditions on the ground which are still not conducive to a pick-up in the west (Perth house prices still declining and rental vacancy rates above 5%). Ex WA, private detached house approvals were much softer, down 6.7%.
Private units were the main driver of the headline decline, posting a sharp 11.5% drop in the April month. Our estimates indicate high rise unit approvals were down over 20%. While extreme volatility makes this sub-segment hard to read, the monthly series looks to be shaping into a second leg lower, as indicated by site purchase data over the past year. That said, it will still take some time to confirm. ‘Medium density’ approvals also declined sharply, by around 6%mth.
By state, the pull back in units was concentrated in Vic (–8.4%mth but still up 25.8%yr). NSW posted a decent 5% gain and Qld nudged up 1.2% but in both cases approvals are still down on a year ago. Approvals have firmed slightly in SA but are showing clear trends lower in both WA (despite this month's jump) and Tasmania.
The value of renovation approvals dipped 0.3% after a 6.5% drop last month. Although approvals are still up 16%yr the monthly trend has swung into a clear decline.
The value of non-res building approvals fell 4%mth to be down nearly 20%yr. The dominant driver continues to be a sharp fall back in the previously very strong office segment with the slowdown concentrated in NSW and Vic.
The latest Foreign Investment Review Board (FIRB) annual report has also been released with data confirming the slump in foreign residential purchases. It shows a dramatic 67% drop in FIRB approvals to just 13.2k in 2016-17 from just over 40k in 2015-16. Note that these counts include purchases of existing properties and developer 'off the plan’ approvals, the latter counting projects with multiple properties as a single approval. Our estimates suggest the underlying number of new properties purchased via FIRB approvals saw an even bigger fall, from 52k in 2015-16 to 13.5k in 2016-17. Note that the full impact on activity may take time to come through as developers may still be selling properties in projects that obtained FIRB approval in previous years. More generally, the wider foreign buyer share of total market activity looks to have shrunk from 10-15% to 3-4%.
Overall the April data-flow is broadly in line with our expectations that approvals are tilting towards taking another leg lower through 2018 with the main impact on new dwelling construction coming in 2019.
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Private units the main driver of dwelling approval decline: Westpac

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EXPERT OBSERVATION
The February 2018 data from the Australian Bureau of Statistics (ABS) shows NSW housing approvals flattening while Victorian approvals are higher.
NSW approved 5673 new dwellings in trend terms in February 2018 which is similar to January but well down on the July 2016 high point of 6,800.
The smaller state of Victoria approved almost 1,000 more dwellings in February with 6,577 approvals. Clearly Victoria is firing in the new dwelling market.
Victoria’s success has been mainly through their strong house market with 3,353 approvals compared to 2,471 house approvals in NSW. The NSW house approvals have been consistent over the last few years with 2,432 approvals in July 2016.
The NSW apartment market seems to have flattened with 3,202 approvals in February 2018 similar to the January approvals of 3,183. The current approvals for apartments, however, are well down on the July 2016 high point of 4,368 approvals.
The current flattening of housing approval numbers in NSW reflects the uncertain environment created by tighter bank lending and the potential for future levies for affordable housing by councils and the removal of the infrastructure contribution cap.
With a state election less than a year away there is a growing concern about over development being expressed by political candidates to gain the support of residents unhappy about the rate of change.
It is important that politicians at state and local level get behind the Greater Sydney Region Plan that defines the need for 725,000 new homes over a 20 year period.
The plan for A Metropolis of Three Cities sets the agenda for where the cities growth should go and this independent plan produced by the Greater Sydney Commission needs the support of all political parties.
The Urban Taskforce is keen to work with the NSW Government and the Greater Sydney Commission to ensure that housing supply targets are met.
See below graph based on ABS figures
Click here <a href="https://www.propertyobserver.com.au/images/2018/4/4/approvals.jpg" target="_blank">to enlarge.</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/4/4/approvals.jpg" alt="">
CHRIS JOHNSON is the Urban Taskforce CEO.
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NSW housing approvals flat, fall behind Victoria: Chris Johnson

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Guest Observer
Dwelling approvals rose by 17.1 per cent in January after declining by a downwardly revised 20.6 per cent in December (previously -20.0 per cent).
It was the strongest monthly increase in over four years. The annual value of commercial building approvals stands at record highs of $47.4 billion.
What does it all mean?
Commercial building approvals reached record highs in dollar terms at $47.4 billion in January. Strong growth in tourism and high occupancy rates are likely encouraging activity in the CBD hotels sector. High demand for warehousing from growing online retailing may also be supporting industrial commercial developments. Office sentiment also remains elevated according to the latest NAB commercial property survey.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/3/6/commercial%20building.jpg" alt="">
Apartment approvals remain volatile, especially in Melbourne. This is to be expected during the summer ‘low’ season. Victorian dwelling approvals are up by 22.5 per cent over the year, reflecting the underlying strength of the economy and nation-leading population growth.
But it’s Queensland that leads the nation in total building approvals with an annual growth rate of 24.5 per cent. Much has been made of a potential apartment supply glut in Brisbane. Apartment approvals have rebounded, almost doubling over the year to January.
Overall dwelling investment may have peaked, but detached house building activity remains healthy. House approvals are up by 5.9 per cent over the year to January, despite some seasonal weakness, especially in Queensland
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What are the implications for interest rates and investors?
The housing market is continuing to rebalance across the country. Prices are cooling in Sydney and Melbourne and investor demand has subsided in the face of lending restrictions.
Commercial property building has reached record highs. This could provide support for building commencements, especially with residential construction softening from record high levels. Of course, approvals need to translate into starts, though commercial property building activity sentiment is positive.
Apartment supply remains in focus. Seasonal volatility makes it difficult to get a read on council approvals – especially in Sydney and Melbourne. Nevertheless, concerns still persist about a supply glut of inner Brisbane (i.e. West End) and suburban (i.e. Chermside) high rise unit blocks. Still, Queensland is leading the country in jobs growth and interstate migration is strengthening.
Ryan Felsman is a senior economist at CommSec.
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