<p data-end="587" data-start="368">Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.</p>

<p data-end="778" data-start="589">The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.</p>

<p data-end="907" data-start="780"><a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.</p>

<p data-end="1052" data-start="909">The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.</p>

<p data-end="1311" data-start="1054">The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.</p>

<p data-end="1451" data-start="1313">The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.</p>

<p data-end="1676" data-start="1453">MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.</p>

<p data-end="1908" data-start="1678">Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.</p>

<p data-end="2142" data-start="1910">The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.</p>

<p data-end="2142" data-start="1910"><img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" /></p>

<p data-end="2308" data-start="2144">MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.</p>

<p data-end="2648" data-start="2310">"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.</p>

<p data-end="2797" data-start="2650">"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."</p>

<p data-end="2938" data-start="2799">The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.</p>

<p data-end="3216" data-start="2940">Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.</p>

<p data-end="3325" data-start="3218">Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.</p>

<p data-end="3442" data-start="3327">"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.</p>

<p data-end="3662" data-start="3444">"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."</p>

<p data-end="3818" data-start="3664">MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.</p>

<p data-end="4076" data-start="3820">"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.</p>

<p data-end="4375" data-start="4078">"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."</p>

<p data-end="4503" data-start="4377">Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.</p>

<p data-end="4741" data-start="4505">"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."</p>

<p data-end="4910" data-start="4743">The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.</p>

<p data-end="4951" data-start="4912">MAYD is targeting an early 2027 launch.</p>


Joel Robinson

First look at MAYD's North Kirra mixed-use precinct

<main data-perf-region="main">
<p data-end="600" data-start="394">Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.</p>

<p data-end="733" data-start="602">But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.</p>

<p data-end="970" data-start="735">Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.</p>

<p data-end="970" data-start="735">[smartcode_project:default project_id=152737 project_image_fid=377679]</p>

<p data-end="1159" data-start="972">The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.</p>

<p data-end="1357" data-start="1161">It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.</p>

<p data-end="3400" data-start="3216">[smartcode_project:default project_id=152737 project_image_fid=377675]</p>

<p data-end="3400" data-start="3216">Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.</p>

<p data-end="1664" data-start="1517">Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.</p>

<p data-end="1826" data-start="1666">Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.</p>

<p data-end="1826" data-start="1666">[smartcode_project:default project_id=152737 project_image_fid=377685]</p>

<p data-end="2045" data-start="1828">Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.</p>

<p data-end="2269" data-start="2047">"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.</p>

<p data-end="2430" data-start="2271">A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.</p>

<p data-end="2606" data-start="2432">It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.</p>

<p data-end="2724" data-start="2608">At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.</p>

<p data-end="2892" data-start="2726">Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.</p>

<p data-end="2892" data-start="2726">[smartcode_project:default project_id=152737 project_image_fid=377680]</p>

<p data-end="3004" data-start="2894">Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.</p>

<p data-end="3214" data-start="3006">"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.</p>

<p data-end="3400" data-start="3216">The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.</p>

<p data-end="3400" data-start="3216">More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.</p>

<p data-end="3670" data-start="3538">&nbsp;</p>

<p data-end="3670" data-start="3538">[smartcode_project_cta:default project_id=152737]</p>

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>


Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

<p>A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.</p>

<p>Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.</p>

<p>Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374005]</p>

<p>The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.</p>

<p>Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.</p>

<p>Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374010]</p>

<p>Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.</p>

<p>The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.</p>

<p>“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374002]</p>

<p>“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”</p>

<p>The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.</p>

<p>[smartcode_project_cta:default project_id=150999]</p>


Maréa Residences brings parkside apartments to Coolangatta

<p data-end="535" data-start="324">Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.</p>

<p data-end="717" data-start="537">The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.</p>

<p data-end="918" data-start="719">The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.</p>

<p data-end="1131" data-start="920">PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.</p>

<p data-end="1131" data-start="920"><img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" /></p>

<p data-end="1318" data-start="1133">Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.</p>

<p data-end="1433" data-start="1320">The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.</p>

<p data-end="1658" data-start="1591">A significant component of The One will be its residential amenity.</p>

<p data-end="1864" data-start="1660">More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.</p>

<p data-end="2011" data-start="1866">The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.</p>

<p data-end="2011" data-start="1866"><img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" /></p>

<p data-end="2191" data-start="2013">The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.</p>

<p data-end="2365" data-start="2193">PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.</p>

<p data-end="2473" data-start="2367">“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.</p>

<p data-end="2775" data-start="2475">“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”</p>

<p data-end="2943" data-start="2777">The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.</p>

<p data-end="3145" data-start="3001">PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.</p>


PDG secures approval for $1.5bn Southbank apartment development, The One

<p>Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.</p>

<p>The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.</p>

<p>That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.</p>

<p>The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.</p>

<p>A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.</p>

<p>&nbsp;</p>

<p>Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.</p>

<p>Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.</p>

<p>While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;</p>

<p>Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.</p>


First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

Dwelling Approvals

<html><body>
<p>GUEST OBSERVER</p>
<p>Approvals rose 1.8 percent in Jan, retracing most of a downwardly revised 2.5 percent fall in Dec.</p>
<p>The result was above market expectations of a 0.5 percent dip.</p>
<p>As always, January housing data should be treated with extra caution as the summer low season amplified what are already volatile month to month estimates.</p>
<p>Adding to this, the detail showed the Jan monthly gain was driven by ‘units’ – the lumpier, more volatile component up 6.2 percent/mth. In contrast, private detached house approvals were down 3 percent.</p>
<p>Looking by state, the rebound was led by a 24 percent jump in NSW, again suggesting volatility and seasonal adjustment are exaggerating the picture here.</p>
<p>Notably, the weakness in private sector house approvals was broadly-based with all the major eastern states recording declines. </p>
<p><span>Details</span> <br>Private houses  -3%mth, -9.4%yr<br><span>Private 'units'    6.2%mth, -14%yr          </span></p>
<p>NSW     24%mth, 9.4%yr<br><span>Vic       -5.3%mth, 1.5%yr<br></span><span>Qld       -11.9%mth, -45.4%yr<br></span><span>WA       3.5%mth, -21.8%yr<br></span><span>SA        6.5%mth, -16.9%yr       </span></p>
<p>Alteration &amp; additions^   -17.7%mth, 2.4%yr<br><span>Non-residential^                         -14%mth, -13.8%yr<br></span><span>^ value </span></p>
<p><span><em><span>Matthew Hassan</span> is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.</em></span></p>
</body></html>

Matthew_Hassan-HHWHptmrw4

Australian dwelling approvals approvals rise 1.8 percent in Jan: Matthew Hassan

<html><body>
<div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
<p><span>GUEST OBSERVER</span></p>
<p><span>The latest ABS housing approval data for NSW indicates a big drop over five months giving the new Housing Minister a big challenge.</span></p>
<p><span>The ABS t</span><span>rend data indicates that between July 2016 and December 2016 home approvals in NSW dropped by 24% </span><span>and apartment approvals by 35 percent.</span></p>
<p><span>These </span><span>figures will give the new Housing Minister, Anthony Roberts, a big challenge as he acquaints himself with his </span><span>new portfolio.</span></p>
<p><span>The home approvals by trend for December 2016 were 4,950 compared to the July 2016 figure of 6,545. </span><span>This is a drop of 1,595 or 24 percent over 5 months. </span></p>
<p><span>Most of the drop was with apartment approvals which dropped from 4,1</span><span>33 in July 2016 to 2,668 in December 2016. This is a drop of 1,465 or 35%.</span></p>
<p><span>The trend graphs illustrate a steady drop over the last 5 months. </span><span>It will be important that the new NSW Housing and Planning Minister brings in some new policies and improvements to the planning system to </span><span>reverse the current trend.</span></p>
<p><span>It would appear that the Greater Sydney Commission (GSC) which began in February 2016 has not been </span><span>able to influence housing approvals and that the confusion with local council amalgamations may have </span><span>contributed to the slow down.</span></p>
<p><span>A number of Urban Taskforce members have reported difficulties in getting approvals from local councils and from the GSC’s planning panels even in areas where the state governm</span><span>ent has encouraged </span><span>development.</span></p>
<p><span>The recent </span><span>release of the District Plans by the GSC has added to uncertainty as they seem to restrict housing in a number of areas. The August rezoning review issued by the Government has also made it more difficult to submit planning </span><span>proposals.</span></p>
<p><span>The big drop in h</span><span>ousing approvals comes just as the new Premier, Gladys Berejiklian, has stated that housing supply is the key to housing affordability and appointed Anthony Roberts as Housing Minister to </span><span>tackle the supply issue.</span></p>
<p><span>Minister Roberts is in an ideal position </span><span>as both Housing and Planning Minister to take some strong action to ramp up housing supply in the state. He needs to look at the restrictive zoning in the District Plans that stops new housing in district and strategic centres and in out of date industria</span><span>l areas in inner Sydney.</span></p>
<p><span>The Minister should also use the Greater Sydney Commission to fast track housing approvals for large </span><span>projects over the value of $20 million. He should also look at setting up planning centres of excellence in each of the six Syd</span><span>ney districts to drive housing supply.</span></p>
</div>
</div>
</div>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<p><span>In the current boom economic times</span><span>, Sydney should be completing 40,000 new homes a year but the </span><span>highest number to date has only been 31,000.</span></p>
<p><span>The Urban Taskforce is keen to work with Minister Roberts to develop f</span><span>ast track processes to lift housing </span><span>supply. We are also keen to outline a plan to complete 4,000 new affordable homes a year for Sydney.</span></p>
<p><span>See below New monthly private sector home approvals NSW graph based on ABS figures: </span></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.41.36%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="https://www.urban.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.41.36%20AM.png" alt=""></span></p>
<p><span><em>Chris Johnson is chief executive officer of property development industry group Urban Taskforce and can be contacted <a href="https://www.urbantaskforce.com.au/index.php?option=com_content&amp;view=article&amp;id=97&amp;Itemid=126#.Vdaart55dFI" target="_blank">here</a>.</em></span></p>
</div>
</div>
</div>
</body></html>

mick.cee-iDmgDDAmu8

Housing Minister must act as approvals dropping fast: Chris Johnson

<html><body><div class="page" title="Page 1">
<div class="section">
<p>GUEST OBSERVER </p>
<p>Dwelling approvals posted a slight 1.2 percent decline in Dec in line with expectations (Westpac –1 percent, market –1.5 percent).</p>
<p>The Dec dip follows a 7.5 percent gain in Nov that was a partial rebound from a sharp 23 percent drop over the previous 3mths. </p>
<p>That earlier move marked the first definitive sign that Australia's high-rise driven building boom was starting to turn down.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.17.36%20AM.png" target="_blank">Click to enlarge </a></p>
<p><img src="https://www.urban.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.17.36%20AM.png" alt=""></p>
<p>The Nov bounce and Dec stablisation scales back the pace of the decline but leaves the downtrend intact – trend approvals are now down 13%yr.</p>
<p>The Dec mix showed further weakness in private sector houses (–1.6%mth to be down –9.6 percent/yr) with ‘units’ up slightly (+0.9 percent/mth but still down –13 percent/yr). Our estimates suggest high rise approvals were up about 4%mth with 'low rise' broadly stable.</p>
<p>High rise is still at the epicentre of the slowdown although the softer picture on non high rise approvals is notable particularly for construction activity in 2017 (the longer time frame on projects means the high rise impact falls more into 2018).</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.19.49%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.19.49%20AM.png" alt=""></p>
<p>The state detail suggests the high rise downturn is more abrupt for NSW and Qld with Vic approvals in this segment more volatile around a milder downtrend. For ‘non high rise’ approvals the weakness is much more pronounced in Qld and WA with approvals flattening out in NSW and Vic rather than trending materially lower.</p>
<p>Given the aforementioned timing differences, that suggests the path for construction activity will be very different across states with near term weakness concentrated in the mining states, and the high rise slowdown having more of an impact on NSW and Qld in 2018.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.20.46%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.20.46%20AM.png" alt=""></p>
<p>The value of renovation approvals surged 15.2 percent in Dec to be up 12.3 percent/yr. The renewed uptrend and detail suggests there was a 'pause' in activity in NSW and Vic, possibly relating to election uncertainty.</p>
<p>The value of non res building approvals edged up 0.7 percent but were down 6.7%yr. Extreme lumpiness makes it difficult to be sure of the underlying trend although the value of approvals for Q4 as a whole was down across most segments with a notably sharp fall in NSW.</p>
<p>Overall, aggregate approvals continue to track in line with our expectation of a significant high rise driven slowdown. The mix has been a little weaker for non-high rise approvals though suggesting construction activity may be a touch softer in the second half of 2017.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.21.42%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.21.42%20AM.png" alt=""></p>
<p>As we highlighted in a several pieces last year, the long lags on high rise projects mean the downturn in this segment will not impact construction activity until well into 2018 with work done still relatively well supported in 2017. We will be expanding on this research in coming months to provide a clearer view of the likely path for construction activity and completions across the major states. </p>
</div>
<div class="section">
<div class="layoutArea">
<div class="column">
<p><span><em><span>Matthew Hassan</span> is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.</em></span></p>
</div>
</div>
</div>
</div></body></html>

jchancellor-FAypfDUnLy

December dwelling approvals decline: Westpac's Matthew Hassan

<html><body>
<p>According to the Australian Bureau of Statistics (ABS) November 2016 building approvals data there were 17,569 houses and units approved for construction across the country over the month. </p>
<p>Based on the seasonally adjusted series, the number of dwelling approvals rose by 7.0 percent over the month due to a substantial rebound in unit approvals.  Despite an increase in approvals in November, they are -4.8 percent lower over the year and are -18.6 percent lower than their peak in October 2015 when 21,588 houses and units were approved.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/09/chart-1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/09/chart-1.jpg" alt=""></p>
<p>In November 2016 there were 9,503 houses and 8,066 units approved for construction throughout the country. Over the month, house approvals fell by -0.4 percent while unit approvals increased 17.3 percent. </p>
<p>Unit approvals tend to be lumpy and volatile, which goes a long way towards explaining the 17.3 percent increase in November following a -20.1 percent decline in September and -22.8 percent fall in October of last year. Year-on-year, houses approved for construction were -2.1 percent lower and unit approvals were down -7.8 percent. </p>
<p>Over the current construction cycle, house approvals peaked at 10,649 in April 2015 and unit approvals peaked at 11,763 over the month of October 2015.  November 2016 house approvals were -10.8 percent lower than the April 2015 peak while unit appears have fallen more dramatically, down -31.4 percent from their October 2015 peak.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/09/chart-2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/09/chart-2.jpg" alt=""></p>
<p>Looking deeper into unit approvals by type, it becomes clear that the surge in new high-rise construction projects has slowed.  This data is split into three segments: townhouses, low-rise units (less than four storeys) and high-rise units (four storeys or higher). </p>
<p>The above chart highlights the volatility in unit approvals and also shows that the recent plunge of unit approvals is being driven by the high-rise unit sector. With ongoing concerns about oversupply of high-rise units in certain inner city markets and slowing value growth for units, it seems that developers are responding by seeking fewer new high-rise unit approvals. Another interesting trend over the past year or so has been the steady upwards trend in townhouse approvals. The substantial increase in high-rise approvals over recent years has occurred at the expense of townhouse and low rise approvals. </p>
<p>With the expected further slowing of high-rise unit approvals there is potential for a lift in townhouse approvals over the coming year.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/09/chart-3.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/09/chart-3.jpg" alt=""></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/09/chart-4.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/09/chart-4.jpg" alt=""></p>
<p>The two above charts show the proportion of dwelling approvals that were for units.  The data points to the fact that in most capital cities developers have recently slowed their submissions for unit building approvals. As a proportion of all approvals there have been some significant declines in unit approvals in Melbourne, Brisbane, Perth, Hobart and Darwin over the past six months.</p>
<p>The reality is that this is an appropriate response in most of these cities given how much unit construction has been taking place.</p>
<p>Hobart is the one exception where it could be argued that more unit construction is required, particularly given the booming tourism sector.  Sydney and Canberra have recorded no significant slowdown in unit approvals as a proportion of total approvals over recent months.  Sydney has been approving more units than houses for more than two decades where in most other capital cities the dominance of unit approvals over those for houses is a relatively new phenomena.</p>
<p>Unit approvals are trending lower, particularly for high-rise units, which is an appropriate response so late in the current construction phase. The reality is that at least initially, an increasing proportion of these units approved for construction may not be sold. There remains a substantial pipeline of construction work already underway which should keep residential builders busy for some time. </p>
<p>Should, as we expect, approvals soften further and remain well below their recent heights over the coming years absent a pick-up in non-residential or infrastructure construction, there could be some headwinds for builders and associated businesses. </p>
<p>Housing construction has been a significant driver of economic growth over recent years and a slowdown in this sector could also impact on economic growth over the coming years unless some other large industry segment can pick up the slack. <span> </span></p>
<p><em>Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></p>
<div class="sharedaddy sd-sharing-enabled">
<div class="robots-nocontent sd-block sd-social sd-social-icon-text sd-sharing">
<h3 class="sd-title"> </h3>
</div>
</div>
</body></html>

ckusher-ujnxiKuFQs

Dwelling approvals bounce in November but don’t expect it to continue: Cameron Kusher

<html><body>
<h3 class="post-title entry-title"> </h3>
<p>In some markets and circumstances, declining dwelling commencements can be a fair indicator that prices may be about to follow suit.</p>
<p>I don't want to generalise too much here, because there are of course different sub-markets and sectors.</p>
<p>Nevertheless, note how in Western Australia the dwelling price index peaked in Q1 2014, stalled in Q2 2014, before losing its mojo and beginning to decline in the third quarter of that year, by which time dwelling starts were already on their way down as builders had anticipated the downturn. </p>
<p><span style="color: #333333; font-family: Tahoma, Helvetica, Arial, sans-serif; font-size: 12px;"><a href="/images/2016/10/17/BA1.jpg" target="_blank">Click to enlarge</a></span></p>
<p><img src="/images/2016/10/17/BA1.jpg" alt=""></p>
<div id="post-body-7273343903178272230" class="post-body entry-content">
<br><div>Why does this happen? </div>
<div> </div>
<div>Predominantly because developers have become aware that demand is fading, and are understandably reluctant to commence a project if the sale of the end product for an acceptable profit is in doubt. </div>
<br><div><strong><span style="text-decoration: underline;">House commencements robust</span></strong></div>
<div> </div>
<div>Detached houses on average take 6 to 8 months from commencement to completion, although sometimes a bit less than six months in the sprawling greenfield sites of Queensland and the Northern Territory. </div>
<div> </div>
<div>In Western Australia, detached house commencements peaked in the middle of 2014 as it became increasingly clear that the resources sector was slowing significantly and demand for housing was dropping.  </div>
<div> </div>
<div>Elsewhere commencements for detached homes remain fairly robust in trend terms, while in Victoria sentiment appears to be positively serene. </div>
<div> </div>
<div>This is not without reason: population growth in Victoria is tracking at close to 115,000 per annum with inbound interstate migration heading to record highs.</div>
<div> </div>
<div>With variable rate home loans available from well under 4 per cent buyers for new homes in Melbourne should be sourced reasonably comfortably over the next few quarters.</div>
<br><div class="separator"><a href="/images/2016/10/17/BA2.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/10/17/BA2.jpg" alt=""></div>
<br><div>Progressively through the cycles, Sydney is increasingly struggling to provide new build houses at affordable prices - the successive peaks in new house construction are falling - except out towards the western and south-western city fringes where infrastructure is painfully sparse and demand for housing inherently lower. </div>
<br><strong><span style="text-decoration: underline;">Other dwellings - units</span></strong><br><br>The dynamic for the market in attached dwellings is markedly different!<br><br><div>This construction cycle has seen the approval of more high density and 'high rise' apartments than ever before. </div>
<div> </div>
<div>A unit or apartment project might take 15 to 21 months on average to be completed from the point of commencement, which in part explains why completions have taken so long to have an impact through this cycle.<br><br>In Sydney and Melbourne it is usual for apartment projects to take more than 24 months to complete on average, largely due to brownfield site remediation challenges (the figure is much lower in Queensland, for example, at around 19 to 20 months). <br><br>With lead times for new apartments so much longer, developers are often required to ensure a certain percentage of pre-sales before project financing can be secured. </div>
<div> </div>
<div>Commencements of attached dwellings remain strong in New South Wales. </div>
<div> </div>
<div>Overall, in fact, we should expect attached dwelling commencements to remain higher than their long run averages in Sydney (on average, through the cycle), since over the last three decades fewer houses are being constructed, while population growth today is typically higher. For now at least.<br><br><strong><span style="text-decoration: underline;">Concentration risk</span></strong>
</div>
<div> </div>
<div>The Reserve Bank of Australia (RBA) provided some useful analysis of how many inner city apartments are expected to be completed in the next two years.</div>
<div> </div>
<div>In Sydney the number is 10,000, representing a relatively low share of the established dwelling stock when compared to other cites.</div>
<div> </div>
<div>Sydney's construction boom is quite widely dispersed, although as usual there will only be a comparatively small increase in the dwelling stock in the beachside eastern suburbs or the treasured garden suburbs of the lower north shore. </div>
<div> </div>
<div>In LGAs such as Parramatta, on the other hand, there are still thousands more apartment completions expected, and the north west is another region that is expected to suffer from oversupply. </div>
<div> </div>
<div><a href="/images/2016/10/17/RBA.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/10/17/RBA.jpg" alt=""></div>
<div class="separator"> </div>
<div class="separator"><em><span style="text-decoration: underline;">Source: Reserve Bank</span></em></div>
<div> </div>
<div>In Melbourne (16,000) and Brisbane (12,000) the number of expected inner city apartment completions is both higher and more concentrated, and as such will also represent a greater percentage increase in the dwelling stock.</div>
<div> </div>
<div>This has been well enough known for some time, not least by developers with their ears to the ground. </div>
<div> </div>
<div>Sure enough, total attached dwelling commencements are now in decline in Victoria and Queensland, while in Western Australia they peaked all the way back in 2014. </div>
<div> </div>
<div><a href="/images/2016/10/17/BA3.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/10/17/BA3.jpg" alt=""></div>
<br><div>In the southern states the figures for attached dwellings are relatively immaterial, and thus are not included for discussion here. </div>
<div> </div>
<div>In both Melbourne and Brisbane it is easily possible to find plenty of examples of apartments being resold for less than they were initially bought for 'as new', a sure sign of the impending downturn.<br><span><br></span><strong><span style="text-decoration: underline;"><span>The wrap</span></span></strong><br><span><br></span><span>Attached dwelling commencements are likely to decline further through 2017 as developers fear that new off-the-plan purchasers are at risk of not settling, particularly those based offshore. </span><br><span><br></span><span>To date, non-settlements have reportedly remained low, and material losses to banks have not yet resulted.</span><br><span><br></span><span>In theory - at least in areas and property types that people actually want to live in! - while credit remains available markets should be self-correcting in time as dwelling commencements fall, and buyers sensing bargains populate the newly supplied markets. </span><br><span><br></span><span>The Reserve Bank took a detailed look at the apartment sector in its bi-annual Financial Stability Review, and concluded:</span><br><em><br></em><em>"Any oversupply in Australia would be more localised to certain geographic areas, and potential price falls tempered as the population moved to absorb the new (and cheaper) supply of housing in these areas over time."</em><br><em><br></em><span>Of course, central banks rarely predict catastrophes, for fear that they may become self-fulfilling. </span><span>Be vigilant!</span>
</div>
<div><span> </span></div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
<div> </div>
</div>
<div class="post-footer"> </div>
</body></html>

pwargent-M4siyDbqQY

Demand is fading, let the apartment downturn commence: Pete Wargent

<html><body>
<p>GUEST OBSERVER</p>
<p>Dwelling approvals outstripped expectations again in August, with a small 1.8 percent pull back from a big spike in July (+12 percent revised up slightly from +11.3 percent).</p>
<p>The consensus forecast was for a more material 6 percent fall. The July update was the second highest level of approvals on record. The August pull back still leaves approvals at the fourth highest level on record.</p>
<p>Expectations centred on high rise approvals which drove the July gain and which tend to be volatile due to large projects. This segment instead held up better than expected with our estimates pointing to about a 10 percent drop in seasonally adjusted terms that still left high rise approvals about 25 percent above their June level.</p>
<p>The rest of the detail showed a decent rise in ‘low-mid rise’ approvals, we estimate up about 7-8 percent in the month with the more stable detached house approvals segment down 1.3 percent/mth. Combine approvals ex high rise were up slightly, we estimate up 1.2 percent/mth. To the extent that this measure is more reflective of underlying trends it is pointing to a modest decline running at about 1-1.5 percent a month.</p>
<p>By state, approvals dipped 2.3 percent in NSW but were up slightly in Vic and Qld with big monthly declines coming in WA and SA. Notably, within the NSW estimates ‘unit’ approvals were still the second highest monthly level on record.</p>
<p>The value of renovation approvals also softened in Aug, down 0.9 percent. The value of non res building approvals recorded a bigger decline down 24 percent/mth and 13 percent/yr.</p>
<p><br>Overall, the continued high level of approvals points to a dwelling construction holding up stronger for longer although a softening is still expected to come through in coming months.</p>
<p><span>Details</span></p>
<p>Private houses –1.3%mth, –6.5%yr</p>
<p>Private 'units' –3.6%mth, 26.3%yr</p>
<p>NSW –2.3%mth, 37%yr</p>
<p>Vic 1.8%mth, 14.7%yr</p>
<p>Qld 0.6%mth, 13.5%yr</p>
<p>WA –14.3%mth, –36.5%yr</p>
<p>SA –10.6%mth, –22.6%yr</p>
<p>Alteration &amp; additions^ –0.9%mth, 1.2%yr</p>
<p>Non-residential^ –24.3%mth, –12.9%yr<br>^ value</p>
<p><em><span>Matthew Hassan</span> is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.</em></p>
</body></html>

Australian dwelling approvals August 2016: Westpac's Matthew Hassan

<html><body>
<p>The Australian Bureau of Statistics has released the latest building approvals data for August 2016. </p>
<p>The data showed that the strength in residential dwelling approvals is continuing. </p>
<p>Over the month there were 20,788 dwellings approved for construction which was a moderate -1.8 percent lower over the month but 10.1 percent higher than the number in August last year.</p>
<p><a href="/images/2016/10/04/Chart-1-580x211.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/Chart-1-580x211.jpg" alt=""></p>
<p>The 20,788 dwelling approvals were split between 9,475 houses and 11,313 unit approvals.  Over the past year, on seven occasions there have been more units approved for construction than houses which highlights the growing shift towards densification with a particular emphasis on high rise unit developments.  The number of houses approved for construction fell by -0.9% over the month to its lowest level since March 2014. </p>
<p>House approvals in August 2016 were -5.8% lower than at the same time in 2015.  The number of units approved for construction was slightly lower over the month, down -2.5% however, compared to the number in August 2015 they were 28.3% higher. </p>
<p>Despite the slight fall in approvals over the month they still remain at very high levels on an historic basis indicating that there remains a level of confidence from property developers that they can continue to bring new stock to the market and attract a sufficient level of demand to make a profit.</p>
<p><a href="/images/2016/10/04/Chart-2-580x212.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/Chart-2-580x212.jpg" alt=""></p>
<p>Focusing on unit approval over the month, 26.9 percent of all approvals were for townhouses, 5.1% were low-rise units (defined as less than four storeys) and 68.0 percent were for high-rise units (four storeys or higher). </p>
<p>To highlight the prevalence of high-rise unit development, if we look over the four years to August 2016 there have been 112,153 townhouses approved for construction, 43,471 low-rise units and 232,232 high-rise units. </p>
<p>High-rise unit approvals over that four year period have been more than double the number of townhouse approvals which historically been the dominant type of unit approval.</p>
<p><a href="/images/2016/10/04/Chart-4-1-580x209.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/Chart-4-1-580x209.jpg" alt=""></p>
<p>Across the combined capital cities, there were 16,763 dwellings approved for construction in August 2016.  Capital city dwelling approvals were -4.3% lower over the month but 15.3% higher year-on-year.  Melbourne (+1.4%), Hobart (+58.2%) and Canberra (+9.6%) were the only capital cities with a higher number of dwelling approvals over the month. </p>
<p>Year-on-year the number of dwelling approvals were higher in Sydney (+45.8%), Melbourne (+21.3%) and Brisbane (+29.0%) but lower in Adelaide (-13.8%), Perth (-38.3%), Hobart (-4.4%), Darwin (-28.4%) and Canberra (-6.6%).</p>
<p><a href="/images/2016/10/04/Chart-4-580x209.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/Chart-4-580x209.jpg" alt=""></p>
<p>In August 2016 there were 7,264 capital city houses approved for construction which was the highest number of approvals since July 2015.  Capital city house approvals increased by 10.2% over the month and were 4.7% higher year-on-year.  The number of houses approved for construction in August was higher across all capital cities. </p>
<p>Year-on-year house approvals were higher in Sydney (+4.3%), Melbourne (+18.0%), Brisbane (+15.1%), Hobart (+8.8%) and Canberra (+62.1%), were unchanged in Adelaide and were lower in Perth (-20.6%) and Darwin (-23.2%). </p>
<p>Perth and Darwin are seeing falling sales, rents and home values and it seems the development industry is responding by seeking fewer new house approvals.</p>
<p><a href="/images/2016/10/04/Chart-5-580x209.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/Chart-5-580x209.jpg" alt=""></p>
<p>There were 9,499 units approved for construction across the combined capital cities in August 2016.  Although unit approvals were -13.1% lower over the months, they were 25.0% higher year-on-year. </p>
<p>Although unit approvals were lower over the month it was the 23rd consecutive month that house approvals were lower than unit approvals.  The number of capital city unit approvals were lower over the month across all cities except for Canberra which were 9.9% higher. </p>
<p>Looking at the year-on-year changes in approvals, they were lower in Adelaide (-39.2%), Perth (-67.1), Canberra (-18.5%) and Hobart and Darwin where there were no approvals in August 2016.  Unit approvals were higher year-on-year in Sydney (+71.1%), Melbourne (+24.3%) and Brisbane (+43.0%).  Interestingly the number of units approved for construction is trending higher again in Sydney and Melbourne (although they fell a little in August) while in most other capital cities they are falling.</p>
<p>We’ve been expecting the number of dwelling approvals to start trending lower for some time and to-date it just hasn’t occurred.  We anticipate that approvals will slow over the coming year however, they are likely to remain high on an historic basis. </p>
<p>With tighter lending policies, particularly for investors it is reasonable to expect that once the slowdown occurs, it is likely to impact on the unit market more so than the detached housing market which tends to be dominated by owner occupiers more than investors.</p>
<p><em>Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></p>
</body></html>

Dwelling approvals remain at very high levels: CoreLogic

<html><body>
<p>Dwelling approvals outstripped expectations again in August, with a small 1.8 percent pull back coming well above the consensus expectation of a more material 6 percent decline and a slight upward revision to July's big jump.</p>
<p><a href="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%204.56.55%20PM.jpg">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%204.56.55%20PM.jpg" alt=""><br><br>The number of approvals in July was the second highest month on record. Even with a dip, the August reading is still the fourth highest month on record with approvals now up 10.1 percent/yr.</p>
<p><a href="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%204.57.00%20PM.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%204.57.00%20PM.jpg" alt=""><br>Expectations for a pull back centred on high rise approvals. This segment saw a spectacular 39.8 percent jump in July that was expected to largely reverse in August. Approvals instead held up much better than expected with our estimates pointing to about a 10 percent drop in seasonally adjusted terms in the month. This still leaves high rise approvals 25 percent above their June level.</p>
<p><a href="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%204.57.06%20PM.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%204.57.06%20PM.jpg" alt=""></p>
<p>The rest of the detail showed mixed moves. The small ‘low-mid rise’ segment saw a solid 7.8 percent gain in the month but the larger and more stable detached house approvals segment recorded a 1.3 percent dip. Combined, approvals ex high rise were up slightly, about 1.2 percent/mth but down 4.1 percent/yr. To the extent that this measure is more reflective of underlying conditions it is pointing to a modest trend decline running at about 1-1.5 percent a month.</p>
<p><a href="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%204.57.25%20PM.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%204.57.25%20PM.jpg" alt=""><br>By state, approvals dipped 2.3 percent in NSW but were up slightly in Vic and Qld with big monthly declines coming in WA and SA. Notably, within the NSW estimates ‘unit’ approvals were still the second highest monthly level on record.</p>
<p><a href="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%204.57.37%20PM.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%204.57.37%20PM.jpg" alt=""></p>
<p>The value of renovation approvals also softened in August, down 0.9%mth, but up slightly on a year ago (+1.2%). Both moves are fairly small for what is typically a much more volatile monthly series.</p>
<p><a href="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%204.57.43%20PM.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%204.57.43%20PM.jpg" alt=""></p>
<p>The value of non residential building approvals recorded a large 24.3 percent fall in August to be down 12.9 percent/yr. Monthly reads have been extremely choppy over the last year but approvals appear to be tracking and underlying downtrend. Falls in public sector work, private accommodation, and private sector education, health and office approvals drove the August decline.</p>
<p><a href="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%204.57.49%20PM.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/04/Screen%20Shot%202016-10-04%20at%204.57.49%20PM.jpg" alt=""></p>
<p><br>Overall, the continued high level of dwelling approvals points to a dwelling construction upturn holding up stronger for longer. Both tightening lending conditions and a surge in new apartment supply have had little or no impact to date but are expected to rein in 'high rise' approvals over the next year. But even allowing for a potentially sharp reversal lower in coming months, the pipeline of dwellings under construction is set to continue expanding strongly throughout the rest of 2016 and is likely to continue rising in the first half of 2017.</p>
<p><em><span>Matthew Hassan</span> is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.</em></p>
</body></html>

High rise boom continues: Westpac's Matthew Hassan

<html><body>
<p>A potential oversupply, and settlement risks around on off-the-plan apartment purchases has not deterred the number of dwellings approved for construction across Australia’s capital cities according to CoreLogic research.</p>
<p>A review by CoreLogic research analyst Cameron Kusher based on data to July 2016, shows there were 17,380 capital city dwelling approvals; the highest number of approvals since October 2015 and the third highest monthly number of capital city dwelling approvals on record. Mr Kusher said, “Despite a recent slowdown in capital city dwelling approvals there was a substantial rebound in July 2016.”</p>
<p>Looking at the split between houses and units over the month, there were 6,482 houses and 10,898 units approved for construction across the combined capital cities. There have now been more units approved for construction than houses across the combined capital cities for 22 consecutive months. Over the 12 months to July 2016, 57.9% of all capital city dwelling approvals were for units.</p>
<p>Over the past year, there have been 76,356 capital city houses and 104,835 capital city units approved for construction. In each of: Sydney, Melbourne, Brisbane and Canberra there have been more units than houses approved for construction over the past year.</p>
<p><a href="/images/2016/09/22/Screen%20Shot%202016-09-22%20at%2010.55.34%20AM.jpg" target="_blank">Click to enlarge</a></p>
<p style="text-align: left;"> </p>
<p><img src="/images/2016/09/22/Screen%20Shot%202016-09-22%20at%2010.55.34%20AM.jpg" alt=""></p>
<p>Sydney - there were 54,667 dwelling approvals over the past year which is 7.3 percent higher than the previous year. This figure comprised of 16,360 house approvals (+3.2 percent yoy) and 38,307 unit approvals (+9.1 percent yoy).</p>
<p>Melbourne – over the year to July 2016 there were 57,428 dwellings 4,000 approvals which was -0.2 percent lower over the year. 25,880 of these approvals were for houses and 31,548 were units, with the year-on-year 3,000 changes recorded at +11.2 percent and -7.9 percent respectively.</p>
<p>Brisbane – The 30,901 dwelling approvals over the past year consisted of 11,210 houses and 19,691 units. Overall approvals are 4.0 percent higher over the year with house approvals -1.4 percent lower and unit approvals 7.4 percent higher.</p>
<p><a href="/images/2016/09/22/Screen%20Shot%202016-09-22%20at%2010.55.26%20AM.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/09/22/Screen%20Shot%202016-09-22%20at%2010.55.26%20AM.jpg" alt=""></p>
<p>Adelaide – there were 6,119 houses and 3,899 units approved over the past year resulting in 10,018 total approvals. Over the past year, dwelling approvals are 10.9 percent higher with house approvals up 9.3 percent and unit approvals 13.5 percent higher.</p>
<p>Perth – the number of annual dwellings approvals fell by -24.3 percent over the year to 20,963. Over the year, the 14,202 house approvals were -26.7 percent fewer than the previous year and the 6,761 unit approvals were -18.6 percent less than a year ago.</p>
<p><a href="/images/2016/09/22/Screen%20Shot%202016-09-22%20at%2010.55.47%20AM.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/09/22/Screen%20Shot%202016-09-22%20at%2010.55.47%20AM.jpg" alt=""></p>
<p>Hobart – there were only 989 new dwellings approved for construction over the year, 799 of which were houses and 190 units. House approvals were -22.7 percent lower year-on-year and unit approvals were down -10.8 percent.</p>
<p>Darwin – there were 1,304 dwelling approvals over the past year which was -12.7% lower year-on-year. Over the year, the 657 house approvals was -22.8 percent lower than the previous year and the 647 unit approvals were 0.6 percent higher than the previous year.</p>
<p>Canberra – there were 1,129 houses and 3,792 units approved for construction over the past 12 months. There were -8.1 percent fewer house approvals than over the previous year while unit approvals were 24.7 percent higher over the year.</p>
<p>While policy makers and analysts voice concerns about the level of housing construction currently underway, particularly for units, Mr Kusher said we’re seeing approvals in capital cities remain unquestionably strong. “It will be interesting to see just how many of these approvals immediately progress to commencement and ultimately through to a completion given tighter lending conditions imposed on both developers and purchasers for off-the-plan units.”</p>
<p>“The data also reiterates why purchasers of off-the-plan units in major capital city housing markets should be very selective with regard to the types of units they purchase.”</p>
<p>“Importantly, oversupply concerns are most visible across specific and well defined geographic areas and product types,” Mr Kusher said.</p>
<p><a href="/images/2016/09/22/Screen%20Shot%202016-09-22%20at%2010.56.01%20AM.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/09/22/Screen%20Shot%202016-09-22%20at%2010.56.01%20AM.jpg" alt=""></p>
</body></html>

j.ballantyne1990-6AQqhLzZaK

Capital city dwelling approvals rebounding: CoreLogic

<html><body>
<div>The ABS Consumer Price Index figures confirmed that rental growth nationally has continued to be slow - and slowing - of late, as should generally be expected at this stage in the construction cycle. </div>
<div> </div>
<div>It's important to recognise, though, that the property market is cyclical. Always has been the case, and always must be! </div>
<div> </div>
<div><a href="/images/2016/08/02/8.3%20PROPERTY%20CONSTRUCTION%20CYCLE.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2016/08/02/8.3%20PROPERTY%20CONSTRUCTION%20CYCLE.jpg" alt=""></div>
<div> </div>
<div>With annual rental growth declining to +0.7 percent nationally, this was the slowest result in nominal terms since 1994. </div>
<div> </div>
<div>One of the outcomes we can expect to see in an era of low inflation and low interest rates is that things will actually decrease in value from time to time!</div>
<div> </div>
<div>Something that was of course far less likely in say the early 1980s when inflation was blazing along at 10 to 12 percent and interest rates were much, much higher (the typical home loan rate back then was an eye-watering 12 to 14 percent - yowsers). </div>
<p><a href="/images/2016/08/02/A1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/08/02/A1.jpg" alt=""></p>
<p><br><span>The plus side for property investors in this era of lower inflation is that mortgage debt has never been so cheap, with ING releasing a record low variable rate product at just 3.79 percent last week. </span><br><br></p>
<div><strong><span style="text-decoration: underline;">City by city</span></strong></div>
<div> </div>
<div>The soft annual result was driven largely by sharp declines in the resources capitals. In Perth, annual rental growth declined by -5.2 percent over the year to June. </div>
<p><a href="/images/2016/08/02/A2.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="/images/2016/08/02/A2.jpg" alt=""></div>
<div class="separator"> </div>
<div>And in Darwin, annual rental growth declined to -6.4 percent. Of the smaller capital cities, Hobart and Canberra have both been somewhat soft rental markets in recent years, but both seem to have turned a bit of a corner, with rental growth in Hobart now picking up in response to tight vacancy rates. </div>
<div> </div>
<div><a href="/images/2016/08/02/A4.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2016/08/02/A4.jpg" alt=""></div>
<p><br><strong><span style="text-decoration: underline;">Reality check</span></strong><br><br></p>
<div>Slow rental growth seems to cause a good deal of excitement and sometimes hyperbole in reporting, but it is worth stressing that cyclical rental markets are an integral part of the property market and construction cycles. </div>
<div> </div>
<div>Moreover, although there are many ways to present data to show it in its most unfavourable light (such as cherry picking start dates, dodgy y-axis selection, adjustments for "inflation", or simply focusing on decreasing annual growth rates) over the long term generally rents do increase in areas where there is the strongest demand for housing.</div>
<div> </div>
<div>In fact, despite what you'd think from most articles on the subject, rents are actually at all-time highs in Sydney, Melbourne, Brisbane, Adelaide, and Hobart (even if you must adjust for inflation in the case of the two largest cities). </div>
<div> </div>
<div>Historically nominal rents have rarely declined since inflation was was generally stronger, but this may change in future cycles.<br><br>Plotted below are the rental CPI numbers indexed back to 1972. </div>
<div> </div>
<div class="separator"><a href="/images/2016/08/02/A3.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/08/02/A3.jpg" alt=""></div>
<p> </p>
<div>Naturally enough city-wide figures mask diverging underlying trends. After taking a bit of a look around Sydney last week - see <a href="https://petewargent.blogspot.com.au/2016/07/traffic-traps-and-infrastructure-gaps" target="_blank">here</a> - I'm fairly sure that off-the-plan unit rents are struggling in the Parramatta LGA, for example. </div>
<div> </div>
<div>On the other hand, if you excitedly confronted renters in Manly with a 'good news story' about weak rents you'd likely be met with a hollow laugh.</div>
<div> </div>
<div>Another point worth acknowledging is that due to the compounding effect, small increases in rent in the short term tend to stack up to become very large increases over time. </div>
<p><a href="/images/2016/08/02/a5.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/08/02/a5.jpg" alt=""></p>
<p> </p>
<div>While I've personally been a fan of the idea of "rent-vesting" - renting and investing in multiple properties - I've also often furrowed a brow when media articles suggest that young folk should just forget buying a home and rent instead.<br><br>This might have worked if reporters were good at timing market cycles and people were good at saving, but generally speaking they haven't been, and they aren't. </div>
<div> </div>
<div>Ultimately home ownership is an effective means of forced saving, and should form an important part of a retirement plan. </div>
<div>
<br><strong><span style="text-decoration: underline;">The wrap</span></strong>
</div>
<div> </div>
<div>Broadly as expected, rental growth remains sluggish.<br><br>Looking at the pipeline of properties under construction this seems dynamic appears likely to continue for the next couple of years at the capital city level. </div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
</body></html>

Dwelling Approvals

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Dwelling Approvals

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News