<p>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.</p>

<p>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;</p>

<p>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;</p>

<p>“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;</p>

<p>[smartcode_project:default project_id=110291 project_image_fid=302785]</p>

<h2>Affordable product leads, premium demand remains resilient</h2>

<p>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;</p>

<p>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;</p>

<p>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.</p>

<p>Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.</p>

<p>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;</p>

<p>[smartcode_project:default project_id=148957 project_image_fid=364102]</p>

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

<p>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.</p>

<p>David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.</p>

<p>“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;</p>

<p>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.</p>

<p>[smartcode_project:default project_id=108869 project_image_fid=317905]</p>

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

<p>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;</p>

<p>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;</p>

<p>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”.</p>

<p>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;</p>


Joel Robinson

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

<p><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.</p>

<p>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.</p>

<p>Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.</p>

<p>“Brisbane was the right step for Sammut,” Sammut said.</p>

<p>“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.”</p>

<p><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" /></p>

<p>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.</p>

<p>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.</p>

<p>“We are DA approved now which is very exciting,” Sammut said.</p>

<p>“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.”</p>

<p><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" /></p>

<p>Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.</p>

<p>“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.</p>

<p>The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.</p>

<p>“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.”</p>

<p>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.</p>

<p>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.</p>


Sammut secures approval for debut Brisbane apartment development in Toowong

<p>Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.</p>

<p>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.</p>

<p>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.</p>

<p>“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.</p>

<p>“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.</p>

<p>“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.”</p>

<p>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.</p>

<p>“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.”</p>

<p>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.</p>

<p>“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.”</p>

<p>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.</p>

<p>“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.</p>

<p>Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.</p>

<p>“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.</p>

<p>“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”</p>

<p>The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.</p>

<p>“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.</p>

<p>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.</p>

<p>&nbsp;</p>


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

<p>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.</p>

<p>The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.</p>

<p>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.</p>

<p>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.</p>

<p>“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.</p>

<p>“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.”</p>

<p><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" /></p>

<p>GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.</p>

<p>“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.”</p>

<p>Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.</p>

<p>“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.</p>

<p><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" /></p>

<p>&nbsp;</p>

<p>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.</p>

<p>Green praised local policy settings.</p>

<p>“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.”</p>

<p>One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.</p>

<p>“The way we will be able to achieve economies of scale is through size,” Green added.</p>


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

<p>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.</p>

<p>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.</p>

<p>Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be</p>

<p data-end="683" data-start="511">"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.</p>

<p data-end="882" data-start="690">"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."</p>

<p data-end="882" data-start="690">[smartcode_project:default project_id=134646 project_image_fid=6109]</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6110]</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6116]</p>

<p data-end="247" data-is-last-node="" data-is-only-node="" data-start="0">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.</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project_cta:default project_id=134646]</p>


WM Residences fills gap in Mordialloc townhouse market

Dwelling Prices

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<p>Amid increasingly irrational media coverage of property markets, occasionally there is a mild outbreak of common sense.</p>
<p>It’s doesn’t happen often, but sometimes someone who understands real estate and doesn’t have publicity as their prime objective will comment – and a media outlet will actually print it.</p>
<p>It’s unusual because media tends to favour sensational negatives from non-specialists for whom the main motivation is generation of publicity.</p>
<p>Amid the great seething mass of nonsense about housing affordability – dominated by people arguing their vested interest, political world-view or pet theory, often with a silver-bullet miracle solution – there is the occasional commentator who understands the issue.</p>
<p>This rare moment of common sense on the affordability issue came from Ken Morrison, CEO of the Property Council of Australia:</p>
<p>“For 20 years we have had a logjam of costly regulation, poor planning decisions and excessive taxation across all levels of government. This has driven up construction costs, impeded supply and resulted in the dramatic increase in house prices in our major cities …</p>
<p>“This affordability cauldron has taken years to develop, and it will take concerted effort over many years to unwind ...</p>
<p>"Too much of the housing affordability debate has misdiagnosed the problems, focused on measures that won't do anything to fix affordability, or set out to blame scapegoats for political convenience.”</p>
<p>That’s the best summary of the issue I’ve seen in all these years of hot air, parliamentary inquiries, political rhetoric, media outrage and lack of decisive action. But it has been drowned by the tsunami of emotive misinformation that has dominated the “debate”.</p>
<p>Then we have the issue of the alleged bubble, over-valuation of housing and impending collapse of values – usually from overseas observers looking at Australia through a very long telescope, although also from the usual local suspects such as Shane “Why can’t I ever get this right?” Oliver or Steve “Why are people still listening to me?” Keen.</p>
<p>Media just loves hearing from anyone silly enough to predict that our housing values will fall massively.</p>
<p>And then, recently, out of the blue someone with a rational, well-thought-out viewpoint was given some minor airplay.</p>
<p>Stephen Halmarick, chief economist at Colonial First State Global Asset Management (Australia’s biggest fund manager), said that the risks of a residential property crash were being exaggerated. He said he’s heard stories of impending doom in the property market for most of his 30-year career, but he doesn’t see any more risk of a crash this time.</p>
<p>“I do get a little bit worked up sometimes when I read in the paper that there will be lots of mortgage stress if interest rates rise sharply,” Halmarick said. “But inflation would have to increase dramatically above the target range before that occurs. So you ask yourself the probability of those things happening - and I think it is pretty low …</p>
<p>“I’ve seen so-called experts from overseas — usually Americans — saying that the housing market in Australia is a bubble that’s going to burst and take the banking system with it. They’ve been telling me that for 25 years and they’re still wrong.”</p>
<p>While he conceded that there are pockets of concern in the eastern capital cities, Halmarick said the Australian housing market “isn’t as vulnerable as some of the headlines would lead you to believe”. And he does not see much risk to the financial system from the property market.</p>
<p>“People just look at gross debt to income, which is high, at 190%,” he said. “But if you look at net debt to income — taking account of the redraw facilities — household debt has been roughly flat since 2006 because people have used the lower interest rates to repay their mortgages faster.</p>
<p>“So the value of housing assets has gone up a lot, as have super funds and other investments of households. So their net wealth continues to rise and is actually close to record highs.”</p>
<p>Many articles have characterised the current situation as a national property boom, with prices either soaring or skyrocketing – everywhere, apparently – and “white hot” markets running rampant with growth that is unprecedented.</p>
<p>And then recently Property Observer quietly put that into perspective with some data which showed that, compared to the previous cycle, it’s all far from extraordinary and unprecedented.</p>
<p>It reported that capital city dwelling values (the average across the eight cities) have risen 45 percent in the past seven years, compared to a rise of 98 percent in the previous seven years (2000 to 2007).</p>
<p>“So far this decade, dwelling values growth is less than half that over the same period last decade,” Property Observer reported.</p>
<p>This is because that previous period included the last time Australia had a genuine nationwide property boom. In 2003, according to ABS data, every capital city grew at least 13 percent in terms of median house prices, with four cities above 20 percent growth.</p>
<p>We haven’t had anything remotely like that this time around. The overall city growth figure for the past seven years is relatively low because only Sydney has had consecutive years of double-digit growth, while Melbourne has only recently challenged. Perth and Darwin have been going backwards for four years, while Adelaide and Brisbane have delivered very little growth. Hobart and Canberra have recently sprung to life.</p>
<p>So the scenario across the past four years has been big performance in Sydney, un-matched by any other city. Sydney’s situation dominates coverage by media, which has tended to extrapolate the city’s growth and pricing levels to the rest of the nation, creating a national crisis.</p>
<p class="p1"><span class="s1">Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank"><span class="s2">hotspotting.com.au</span></a>. You can <a href="mailto:%20%3Cscript%20type='text/javascript'%3E%20%3C!--%20var%20prefix%20=%20'ma'%20+%20'il'%20+%20'to';%20var%20path%20=%20'hr'%20+%20'ef'%20+%20'=';%20var%20addy38821%20=%20'ryder'%20+%20'@';%20addy38821%20=%20addy38821%20+%20'hotspotting'%20+%20'.'%20+%20'com'%20+%20'.'%20+%20'au';%20document.write('%3Ca%20'%20+%20path%20+%20'/''%20+%20prefix%20+%20':'%20+%20addy38821%20+%20'/'%3E');%20document.write(addy38821);%20document.write('%3C//a%3E');%20//--%3E/n%20%3C/script%3E%3Cscript%20type='text/javascript'" target="_blank"><span class="s2">email him</span></a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank"><span class="s2">Twitter.</span></a></span></p>
<p> </p>
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terryryder-YECXbqmri2

Common sense can prevail in the housing affordability issue: Hotspotting's Terry Ryder

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<p><img src="https://counter.theconversation.edu.au/content/75703/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1"></p>
<p>GUEST OBSERVER</p>
<p>In the first article reviewing The Conversation’s many articles on housing issues, the commentary about fiscal and supply-side issues was consistent. The same is not true for affordable housing due to the diversity of affordability issues.</p>
<p>The issues have to do with the complexity and scale of the affordability problems and possible policies discussed in Conversation articles since January 2016. As it is not possible for one article to cover all the relevant policies, the focus here is on the National Affordable Housing Agreement(NAHA), support for not-for-profit social housing, bond aggregation and inclusionary zoning.</p>
<p>The terms affordable and social housing are sometimes used interchangeably, a potential cause of confusion. Affordable housing is more encompassing – it represents an aspiration for all who cannot enter the market for housing. This includes both ownership and rental.</p>
<p>Social housing is one form of affordable housing. It includes public housing and housing owned and managed by not-for-profit community housing providers. As well as providing housing for those unable to enter the market, community housing providers accommodate, for example, people with disabilities and those escaping domestic violence.</p>
<h2>A ‘hot’ political issue</h2>
<p>Affordable housing is a “hot” issue. Recently, the new premier of New South Wales, Gladys Berejiklian, listed it as one of her top three priorities.</p>
<p>Federal Treasurer Scott Morrison claims supply-side constraints are pushing up housing prices. He targets state planning regulations as the problem.</p>
<p>Federal politicians favour this explanation as supply-side complaints can be used to blame state and local governments. This serves to divert attention from federal fiscal policies, which effectively subsidise home ownership.</p>
<h2>How big is the problem?</h2>
<p>Of the need for public and social housing, authors wrote:</p>
<p>We have modelled the income rules determining eligibility for public housing, and estimate that there are 900,000 households satisfying these income eligibility criteria.</p>
<p><em>… state-owned-and-managed housing still accommodates around 700,000 of our most vulnerable citizens.</em></p>
<p><em>… there are as many as 105,000 people who are without a home and 160,000 households on public housing waiting lists. The overall stock of public housing has fallen from 331,000 units in 2007-08 to 317,000 in 2013-14.</em></p>
<p>Social housing has nearly 200,000 Australians on a waiting list.</p>
<p>In addition to the public housing stock, not-for-profits provide about 100,000 social housing dwellings.</p>
<p>The scale of the affordable housing problem is highly dependent on mortgage stress. This, in turn, is linked most closely to household incomes and employment levels. This mortgage stress is not especially concentrated in the capital cities. </p>
<p>Into this affordability mix one might also add some 2 million Australians who “don’t have the resources to bounce back” from unexpected bills.</p>
<h2>Ways to improve social housing supply</h2>
<p>The NAHA, which has been referred to as Australia’s housing policy, is a “national partnership agreement” by the Council of Australian Governments (COAG). Its largest component is social housing. </p>
<p>Federal government ministers have described the A$1.3 billion-a-year NAHA as an “abject failure”. This is because it has not increased “the number and availability of public and social housing stock”.</p>
<p>In contrast, The Conversation authors agree that spending on public housing is inadequate and declining.</p>
<p><em>Australia’s social housing system remains grossly underfunded. Currently available resources are inadequate even to properly maintain the existing portfolio, let alone to underpin the new supply needed to keep pace with the growing need.</em></p>
<p><em>… the overall stock has been eaten away, through market sale of public housing, and run down, through skimping on repairs and maintenance.</em></p>
<p>The history of public housing is that housing was briefly referred to as a “right” after the second world war. Public housing was used to accommodate people from various classes; it was not initially a preserve of the poor. Later, that changed:</p>
<p><em>[Public] housing’s declining share of the housing stock became more tightly rationed to the lowest-income households. This eroded the system’s rent base. At the same time, its ageing buildings and households with greater support needs increased its costs.</em></p>
<p>When operating expenses are not covered, maintenance is inadequate. When that happens, the number of habitable units declines.</p>
<p>It is feared that the NAHA might not survive the 2017 budget. Likewise it is feared that:</p>
<p><em>… [Productivity] commission-inspired “reforms” could involve the forced sale of public housing to vulture capitalists unconstrained by enforceable obligations to provide tenant services or to maintain, upgrade and retain housing stock for its current purpose.</em></p>
<p><em>… some residents face eviction through large-scale public housing redevelopment by governments that view their homes as key real estate assets.</em></p>
<p>The fear of eviction from public housing sites with high land value is certainly warranted:</p>
<p><em>In March 2014, New South Wales government minister Pru Goward announced that all of the 293 public housing dwellings in Millers Point, Dawes Point and The Rocks, as well as the 79 apartments in the Sirius Building built for public housing in the 1970s, were to be sold. Their tenants would be moved.</em></p>
<p>One of the potential bipartisan ways forward is to scale up social housing provided by not-for-profits. As federal housing minister, Tanya Plibersek proposed in 2009 that:</p>
<p><em>… not-for-profit community housing providers would be supported to grow to a scale enabling them both to complement and compete with public housing entities.</em></p>
<p>Social housing critically serves low-income renters. The high cost and limited availability of rental housing is a defining feature of the affordability problem. It also underscores the inequality between owners and renters due to the fiscal policy benefits for home owners.</p>
<p>Funding is needed to scale not-for-profit social housing. In a context of seeking to cut public spending, Morrison is looking to private sector funding of the sector to increase both the supply of affordable housing and the transfer of public housing to not-for-profits.</p>
<p>He is seeking to secure such funding based on a bond aggregator model. This is best explained by the Australian Housing and Urban Research Institute (AHURI). It has proposed:</p>
<p><em>… an Affordable Housing Finance Corporation … designed to aggregate and source large amounts of capital from the bond market so as to provide lower-interest, long-term loans to not-for-profit community housing providers developing housing for lower-income households. The intention is that money would be raised efficiently with reduced financing costs rather than in expensive one-off transactions such as when borrowing from a bank.</em></p>
<p>AHURI cautions that the not-for-profit need for rental income means that households whose only income is welfare assistance cannot access not-for-profit social housing. The need for rental assistance remains.</p>
<p>Another means advocated for increasing the supply of affordable housing is inclusionary zoning. This approach requires a percentage of new housing projects on rezoned and government land to be affordable housing. An additional benefit is that this improves access to jobs for low-paid service workers. </p>
<p>Inclusionary zoning has long been practised in Europe, the US and, more recently, in South Australia. The rationale for inclusionary zoning is:</p>
<p><em>… that the uplift in land value results from public policy changes that allow for housing development or higher-density housing. It is not unreasonable, then, that landowner windfalls should be limited to achieve the important public policy outcome of housing affordability.</em></p>
<p>The Property Council opposes inclusionary zoning, claiming that it will increase the cost of housing for others. This is doubtful, for the following reason:</p>
<p><em>If a fixed percentage of affordable housing becomes a condition of rezoning … this will only affect the size of the landholder’s windfall gain. Developers will offer lower prices for the land, based on the mandated requirements for affordable housing.</em></p>
<p>The Greater Sydney Commission supports inclusionary zoning, which is sorely lacking in Melbourne. In Sydney, the debate concerns the percentage of dwellings allocated to affordable housing. The commission suggests figures of 5 percent-10 percent, whereas The Conversation authors advocate:</p>
<p><em>… at least 15 percent of housing in new private developments … [and] on publicly owned land, at least 30 percent of new housing developments should be affordable. </em></p>
<h2>Fresh approaches and funding needed</h2>
<p>If NAHA funding is reduced, or the NAHA is terminated, the affordable housing problem will sharply escalate. Australia’s “housing crisis” will truly deserve that label. </p>
<p>It can be anticipated that social housing provided by not-for-profits can scale, but this will take many years. Government rental assistance will still be needed. Inclusionary zoning is desirable and can serve low-income households, but will never be an alternative to the need for social housing. </p>
<p>The question is what policy alternatives Morrison has in mind and how much he is prepared to spend.</p>
<p><em><span class="fn author-name">Richard Tomlinson is p</span>rofessor of Urban Planning, University of Melbourne and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/richard-tomlinson-10016" target="_blank">here</a>.</em></p>
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jchancellor-FAypfDUnLy

Affordable housing, finger-pointing politics and possible policy solutions

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<p>House price growth is typically regarded as a good thing. It creates a feel good wealth effect which triggers spending across the economy.</p>
<p>But the recent scenario from the Organisation for Economic Co-operation and Development casts that concept aside.</p>
<p>The Paris-based OECD said in its latest economic report that the single biggest threat to Australia is from rising house prices.</p>
<p>They suggested a recession was possible after a hard landing in the property market following our years of double-digit price gains.</p>
<p>Putting the risk of a recession at around one in five, the report said the residential market may not ease gently but develop into a "rout on prices and demand" especially given that households account for around half of Australia's total debt.</p>
<p>Their warning came a day after gross domestic product data showed the we'd avoided recession in 2016.</p>
<p>It also coincided with CoreLogic calculation that Sydney's price growth had firmed even further through February.</p>
<p>It now sits at an 18.4 percent annualised price growth with the house median a $895,000 and apartments at $685,000. </p>
<p>The last time there was similiar growth in Sydney was in 2003 when prices jumped 17 per cent in 12 months to $454,000. Soon afterwards the Sydney market had crashed and then an extended price plateau set in.</p>
<p>Even further back was 1989 when Sydney prices jumped 24 percent in the wake of the 1987 stockmarket crash and bicentennial switch into property, that resulted in an horrific crash during our last recession. </p>
<p>Normally house prices fall because of the impact of rising unemployment or rising interest rates. For the past few years there's been the looming spectre of fallout from an envisaged Chinese downturn, which hasn't eventuated.</p>
<p>But the OECD now suggests house prices could collapse because the ever increasing prices will trigger households into the realisation that they were carrying too much debt. Regulatory retraints will kick in too as a contributing factor.</p>
<p>It will create a downward spiral in economic activity that pushes up unemployment, accelerating mortgage defaults, and creating distressed bank balance sheets, turning what may have been an orderly "correction" in house prices into what the OECD warns could be a "rout".</p>
<p>The OECD did not nominate any timing on the tipping point.</p>
<p>And OECD has been at the misinformed bearish end of the forecasting spectrum for many years.</p>
<p>Despite the headlines that always come after their reports, the mum and dad home buyers and investors have stopped listening.</p>
<p>Driven instead by the fear of missing out or being on the sidelines given continuing price gains in Sydney.</p>
<p>The OECD's report does echo the Reserve Bank's recent unease over household indebtedness, which the new governor Philip Lowe considers could backfire into a spending slowdown.</p>
<p>But we aren't seeing any impact at Saturday property auctions. They've sat at 80 percent or higher for the past month.</p>
<p><em>This article was first published in the Daily Telegraph. </em></p>
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Can too much house price growth hurt the economy?

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<p>GUEST OBSERVER</p>
<p>Homes near green amenities are more desirable and more expensive because residents are willing to pay higher prices to gain the many benefits of green spaces.</p>
<p>Our research has confirmed, for instance, that apartments near to the greenbelt in Vienna, Austria, are more expensive compared to otherwise similar apartments in that city.</p>
<p>Similar findings have been reported for cities in England, Ontario in Canada, and the South Korean capital, Seoul.</p>
<p>Green spaces have well-known environmental benefits. Green neighbourhoods also have social benefits – such as less aggression and violence, and fewer incidents of youth crimes and domestic violence – and health benefits, including reduced risk of cardiovascular disease, certain cancers and certain types of diabetes.</p>
<p>However, Australia’s growing cities face a shortage of urban parks. Often, the provision of parks is seen only as planning compliance or an accessory.</p>
<p>There have been calls for developers and councils to make adequate contributions toward improving and maintaining existing parks, rather than just leveraging the benefit for financial gain with new development projects.</p>
<p>However, the unparalleled population growth in our cities and increasing inner-city density mean we will need not only to protect existing green spaces, but also to plan new, better-quality green amenities.</p>
<h2>What higher prices near green amenities mean</h2>
<p>Our study in Vienna found the price of a constant-quality (taking into account other differences) apartment drops by 0.13–0.26% with every 1% increase in distance from the greenbelt. This suggests that proximity to the greenbelt is a significant location-related predictor of Viennese apartment prices.</p>
<p>If there is higher demand for this type of amenity and a lack of supply, prices of houses located close to greenbelts will go up. And, if green amenities are provided in areas accessible to low- and middle-income households, the social and health benefits can be promoted across cities.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/3/image-20170217-4243-1vmg3lp.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/03/3/image-20170217-4243-1vmg3lp.png" alt=""></p>
<p>Some argue that saving the greenbelts results in higher house prices, leads to satellite cities and creates negative consequences such as increased car-dependence. Lost economic profit due to restricted development is also a concern.</p>
<p>To ease these pressures, “unproductive” greenbelt land and privately owned greenbelt land with intensive farming could be exempted from this protection.</p>
<h2>A history of failed planning attempts</h2>
<p>Greenbelts are a special type of open space consisting of natural, agricultural or largely undeveloped land around urban areas. These areas typically outline the edge of the urban fringe and are known as “urban growth boundaries” in such cases. </p>
<p>Greenbelts are an outcome of the containment policy; they limit the physical expansion of the urbanised area and protect a compact urban form. They can also be an outcome of a policy intended to preserve green spaces for environmental and recreation purposes. </p>
<p>Green wedges are similar to greenbelts but may run through an urban area rather than around it. Urban parks are different: they may have diverse features like gardens, playgrounds, running trails and walking paths, and are spread across a city.</p>
<p>The idea of a greenbelt for Sydney was formally proposed as early as 1948. This became an example of the failure of planning for greenbeltsdue to lack of support by state government agencies, property owners and developers. </p>
<p>The federal government’s refusal to provide funding due to unexpected immigration numbers ultimately led to the project’s demise. Most of Sydney’s inner-area greenbelt was eventually used for urban expansion.</p>
<p>In Melbourne, green wedges remained an established part of planning until the early 1990s. Since the liberalisation of the proposed restrictions on urban uses in Melbourne 2030, new residential, tourist and commercial developments are continuing in and beyond the greenbelt. </p>
<p>By 2010, urban growth boundaries in Melbourne’s north and west had moved. Consecutive governments have regarded open space as commercially expendable and as a free input to public and private projects.</p>
<p>Brisbane has introduced urban growth boundaries and reinforced the protection of non-urban areas bordering the city through strong regulatory planning controls. Current debates about the greenbelt in Brisbane show the challenging nature of managing conflicting interests. </p>
<p>There is widespread support for preserving the greenbelt between Brisbane and the Sunshine Coast, but an increasing level of approval for developments within the Brisbane to Gold Coast greenbelt.</p>
<h2>Which way ahead?</h2>
<p>Cities are growing fast and the current supply of urban parks is not sufficient. So, governments need to take radical steps to protect existing greenbelts. </p>
<p>Greenbelts generate large-scale environmental services compared to their smaller counterparts (like urban parks). It will be a point of no return once the greenbelts are sacrificed to development.</p>
<p>In a new world where high-density development is widely endorsed, a bit of nature in the city fringe seems like a sensible policy. A stronger greenbelt policy can only come with political leadership – and cities such as Paris are bravely putting in greenbelts. Australian cities should follow these examples.</p>
<p><em><span class="fn author-name">Shanaka Herath is v</span>ice-chancellor’s Postdoctoral Research Fellow, University of Wollongong and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/shanaka-herath-333069" target="_blank">here</a>.</em></p>
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Home prices tell us the value the public puts on green spaces

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<p>GUEST OBSERVER</p>
<p>The CoreLogic Home Value Index of capital city home prices rose by 1.4 percent in February and was up 11.7 percent over the year.</p>
<p>Prices rose in five of the eight capital cities with Canberra up the most (up 3.2 per cent). Regional house prices rose by 0.6 per cent in January (latest available).</p>
<p>The Performance of Manufacturing index rose by 8.1 points to 59.3 in February – the strongest result since 2002. A reading above 50.0 indicates that the sector is expanding. This was the fifth consecutive month of expansion.</p>
<p>Home price data is important for retailers, especially those focussed on consumer durables. The manufacturing data provides guidance for companies in the Industrials sector.</p>
</div>
<div class="column"> </div>
<div class="column"><a href="https://www.propertyobserver.com.au/images/2017/03/1/Screen%20Shot%202017-03-01%20at%2011.55.01%20AM.png" target="_blank">Click to enlarge</a></div>
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<div class="column">What does it all mean?</div>
<div class="column"> </div>
<div class="column">It might just be one of the better days when it comes to economic data. Stronger home prices and the strongest expansion in manufacturing in 15 years. In addition the just-released economic growth data confirmed the momentum shift across the Australian economy.</div>
<div class="column"> </div>
<div class="column">It may be no surprise to see that home prices continue to lift across most capital cities. But what was clearly surprising was the size of the lift in prices. Across the nation home prices rose by a substantial 1.4 per cent in February, matching a similar result in December - the fastest monthly growth in 9 months. In fact over the three months to February home prices have accelerated by 3.5 per cent.</div>
<div class="column"> </div>
<div class="column">Across the capital cities, Sydney and Melbourne featured heavily but what was more encouraging was the strength in Canberra and Hobart home prices. Canberra prices rose by 3.2 per cent in February to be up 10.4 per cent over the year. Interestingly the key resource states continued to see significant weakness, with substantial falls in home prices across Darwin and Perth. The sustained lift in commodity prices may help to alleviate some of the weakness in coming months.</div>
<div class="column"> </div>
<div class="column">Overall policymakers will keep a close eye on the housing sector the early part of 2017, and will prefer to see more balanced house price growth across the nation. In particular, a lift in regional house prices would be a positive outcome. Annual growth in home prices across regional centres was just 1.1 per cent over the past 12 months.</div>
<div class="column"> </div>
<div class="column">What do the figures show?</div>
<div class="column"> </div>
<div class="column">Home prices</div>
<div class="column"> </div>
<div class="column"> The CoreLogic Home Value Index of capital city home prices rose by 1.4 per cent in February and was up 11.7 per cent over the year.</div>
<div class="column"> </div>
<div class="column">  In regional Australia, house prices rose by 0.6 per cent in January and were just 1.1 per cent higher than a year ago. (Regional prices cover just houses and data is up to the end of January).</div>
<div class="column"> </div>
<div class="column">In capital cities, house prices rose by 1.5 per cent in February while apartment prices rose by 1 per cent. House prices were up 12.0 per cent on a year ago and apartments were up by 9.2 per cent.</div>
<div class="column"> </div>
<div class="column">The average Australian capital city house price (median price based on settled sales over quarter) was $600,000 and the average unit price was $495,000.</div>
<div class="column"> </div>
<div class="column"><a href="https://www.propertyobserver.com.au/images/2017/03/1/Screen%20Shot%202017-03-01%20at%2011.55.07%20AM.png" target="_blank">Click to enlarge</a></div>
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<div class="column">Dwelling prices rose in five of the eight capital cities in February: Canberra (up 3.2 per cent), Sydney (up 2.6 per cent), Melbourne (up 1.5 per cent), Hobart (up 1 per cent), and Adelaide (up 0.6 per cent). Prices fell the most in Darwin (down 4.3 per cent), Perth (down 2.4 per cent), and Brisbane (down 0.4 per cent).</div>
<div class="column"> </div>
<div class="column">Home prices were higher than a year ago in six of the eight capital cities. Prices rose most in Sydney (up 18.4 per cent); followed by Melbourne (up 13.1 per cent), Canberra (up 10.4 per cent); Hobart (up 5.8 per cent); Adelaide (up 3.5 per cent); and Brisbane (up 2.2 per cent). Prices fell in Perth (down by 4.5 per cent) and Darwin (down 5.3 per cent)</div>
<div class="column"> </div>
<div class="column">Total returns on capital city dwellings rose by 15.4 per cent in the year to February with houses up 15.7 per cent on a year earlier and units up 13.8 per cent.</div>
<div class="column"> </div>
<div class="column">Performance of Manufacturing\</div>
<div class="column"> </div>
<div class="column"> The Performance of Manufacturing index rose by 8.1 points to 59.3 in February – the strongest result since 2002. A reading above 50.0 indicates that the sector is expanding. This was the fifth consecutive month of expansion.</div>
<div class="column"> </div>
<div class="column">AIG notes “Six of the seven activity sub-indexes in the Australian PMI® expanded in February (seasonally adjusted). Encouragingly for the outlook, new orders (60.6 points) and sales (55.3 points) grew strongly. Production jumped from stable conditions in January to a strong expansion (65.3 points), as did employment (57.5 points). Deliveries lifted out of contraction (56.3 points) while exports strengthened further (57.0 points). Reflecting this surge in demand, inventories contracted mildly in the month (48.3 points.”</div>
<div class="column"> </div>
<div class="column"> “Comments from manufacturers in February indicate that demand looks to be increasing and confidence returning to some of the larger sub-sectors such as food processing and machinery and equipment (other than auto). Exports are continuing to provide a good source of growth, as are large transport infrastructure projects and increased activity in parts of mining and agriculture in response to the recovery in prices for bulk commodities, wool and some grains. On the inputs side, energy costs and energy reliability are posing a significant threat to ongoing profitability and viability for some manufacturers.”</div>
<div class="column"> </div>
<div class="column">What is the importance of the economic data?</div>
<div class="column"> </div>
<div class="column">The CoreLogic Hedonic Australian Home Value Index is based on Australia’s biggest property database. Unlike the ABS Index, which excludes terraces, semi-detached homes and apartments, the CoreLogic Hedonic Index includes all properties. Home prices are an important driver of wealth and spending.</div>
<div class="column"> </div>
<div class="column">The Australian Industry Group compiles the Performance of Manufacturing Index (PMI) each month. The Australian PMI is the Australian equivalent of the US ISM manufacturing gauge. The PMI is one of the timeliest economic indicators released in Australia. The PMI is useful not just in showing how the manufacturing sector is performing but in providing some sense about where it is heading. The key ‘forward looking’ components are orders and employment.</div>
<div class="column"> </div>
<div class="column">What are the implications for interest rates and investors?</div>
<div class="column"> </div>
<div class="column">Activity in the manufacturing sector is encouraging especially the lift in new orders that has been identified in recent months. All the published data and anecdotes indicate that business conditions have markedly improved since the flat spot recorded for the economy in mid-2016.</div>
<div class="column"> </div>
<div class="column">Investors are once again driving key housing markets such as Sydney and Melbourne. But there are more risks, with investors relying on expected capital appreciation for returns on their investment rather than rising rents. More apartments are being built, supply will catch up to demand and growth of home prices will ease over the next few years. Investors need to be aware of the risks including further actions by regulators to slow housing demand.</div>
<div class="column"> </div>
<div class="column">The broad-based health of Australian housing markets reduces the potential for further rate cuts. While fixed-term lending rates have lifted, it is still too early to canvas possible rate hikes from the Reserve Bank. </div>
<div class="column"> </div>
<div class="column"><em>Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a></em></div>
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Home prices and manufacturing activity accelerate: Savanth Sebastian

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<p>There has been a “significant fall” in investor purchase intentions in the past three weeks, marking the biggest move in the research group, Digital Finance Analytics’ 10 years of data.</p>
<p>DFA’s data doesn’t always align with future bank lending to investors, but analytics principal Martin North said property purchase intentions could be “on the turn”. </p>
<p>“If this is the case, then auction clearances, investor lending momentum and property price rises may be impacted,” he said on <a href="https://digitalfinanceanalytics.com/" target="_blank">DFA’s blog</a>, as reported in The Australian.</p>
<p>He said the drop in buying intentions was driven by concerns about future prices, falling rental returns, rising investment interest rates and potential changes to “generous” tax breaks for ­investors.</p>
<p>Prime Minister Malcolm Turnbull last week attempted to affirm the government had no plans to alter the 50 per cent capital gains tax concession for investors who hold a property for at least 12 months after reports suggested changes were being considered. </p>
<p>Confidence was also hit when measures to cool CBA’s property investment lending growth were advised so the bank was adhering to the regulator’s 10 percent annual cap on credit growth.<span style="font-size: 12.16px;"> </span></p>
<p>CBA ceased refinancing investors from other banks via mortgage brokers and raised interest only lending rates.</p>
<p>North's reported noted over 1.5 million households aspire to purchase property, 85% are looking for owner occupied, 15% investment.</p>
<p>"At the moment 18% are actively saving, hoping to buy sometime in the future, down from 21 percent a year ago.</p>
<p>"The biggest barriers which are stopping them from purchasing, include that prices are too high (44 percent) and the costs of living (17 percent) although the fear of employment is down to 4 percent from 11 percent a year ago.</p>
<p>"Under 1 percent were expecting to transact within the next 12 months, indicating that the majority are currently disenfranchised from the property market, despite the fact that 42 percent expect house prices to rise over the same period.<span style="font-size: 12.16px;"> </span></p>
<p>"More than 13% said they were having difficulty finding a suitable loan," the latest report noted.</p>
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Property investor 2017 purchasing intentions wane  

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<p><img src="https://counter.theconversation.edu.au/content/72354/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1"></p>
<p>GUEST OBSERVER</p>
<p>For all the talk of a housing affordability crisis across Australia, having unaffordable housing isn’t necessarily bad for people.</p>
<p>This is perhaps a dangerous statement to make, but housing cost stresses and other problems – when experienced in isolation – may be tolerable. Difficulties usually emerge not from one problem but from an accumulation of problems.</p>
<p>Housing affordability alone may have limited impact on people if they are able to adjust the household budget or their rental or mortgage costs. But if a household has an accumulation of problems (for example, unaffordable housing, plus insecure tenure, plus unemployment), that greatly reduces their capacity to adjust or respond effectively.</p>
<p>Acknowledging the difference between separate problems and an accumulation of problems is more important than you’d think. If we don’t, we underplay the impact of multiple problems on people, incorrectly identify who most needs assistance and probably misdirect our attempts to help.</p>
<p>Generations of Australians have enjoyed very high housing standards compared to most other nations. For the last couple of decades, though, cracks have appeared (and are widening) in the Great Australian Dream.</p>
<p>Australia now has some of the most unaffordable housing in the world. The problems of housing quality and insecurity in the private rental sector are increasing.</p>
<p>And the public housing safely net is now so small it cannot catch all of the people who need it.</p>
<p>Researchers, governments and Australia as a society are concerned and heavily invested in understanding and responding to housing-related problems. But perhaps we are too “problem-focused”.</p>
<p>We often seek to understand and solve housing affordability, or rental insecurity, or homelessness, or even more broadly, employment or problems associated with disability. But we tend to look at each aspect separately.</p>
<p>In doing so, we overlook the fact that many housing-related problems are experienced in combination – usually by the same people.</p>
<p>Teasing out patterns of problems</p>
<p>What if we were to think of people with multiple problems, instead of the separate problems that multiple people have?</p>
<p class="p3"><a href="https://www.propertyobserver.com.au/images/2017/02/15/image-20170201-22560-14ebw5a.png" target="_blank"> Click to enlarge</a></p>
<p class="p3"><img src="https://www.urban.com.au/images/2017/02/15/image-20170201-22560-14ebw5a.png" alt="" width="1117" height="727"></p>
<p class="p1"><span class="s1">In the current edition of <span class="s2">Cities</span>, we model how people’s problems accumulate. Using data from the Household Income and Labour Dynamics in Australia (HILDA) dataset, we look at more than 17,000 adult Australians in unaffordable housing. We define people as having unaffordable housing if they have low to moderate incomes and spend more than 30% of their household income on housing costs.</span></p>
<p class="p1"><span class="s1">Our research set out to test the degree to which these people experience multiple housing and related problems. In this experiment we focus on six problems: affordability, locational advantage, security, welfare, employment and disability.</span></p>
<p class="p1"><span class="s1">This simple analysis far from captures the full breadth of housing-related problems that individuals face. Even so, it reveals enough about people’s accumulation of housing problems in Australia to challenge our current thinking.</span></p>
<p class="p1"><span class="s1">Our analysis shows us that only a relatively small proportion of people (around 10%) have an accumulation of these housing-related vulnerabilities. But simply identifying who has multiple problems doesn’t necessarily indicate the package of assistance they might need.</span></p>
<p class="p1"><span class="s1">When we examine the collection of accumulated problems among the 10%, we see few clear patterns of shared problems. Even in this small analysis, there are 40 distinct combinations of problems.</span></p>
<p class="p1"><span class="s1">The largest group sharing a pattern of problems represents only 12% of the 10%. Remember that we are only looking at a limited list of six problems here. It would almost certainly be much more complex in the real world.</span></p>
<p class="p1"><span class="s1">The findings allow us to reflect on how assistance might shift if focused on people with an accumulation of problems. Using the example of housing affordability, we might seek to address it for every person in the whole population of 17,000 classified as having unaffordable housing.</span></p>
<p class="p1"><span class="s1">However, this research shows that more than half of these people (60 percent) do not have any other problems.</span></p>
<p class="p2"><span class="s1"><strong>How does this affect policy?</strong></span></p>
<p class="p1"><span class="s1">Perhaps our concern for housing affordability should be disproportionately focused on the small group who have an accumulation of multiple problems.</span></p>
<p class="p1"><span class="s1">What this research leaves us with is a call for a different way to think about and respond to housing-related problems. It suggests we should look beyond separate problems – such as housing affordability – and focus more attention on the people with an accumulation of multiple problems.</span></p>
<p class="p1"><span class="s1">The substantial variation in combinations of housing problems also suggests that “individualised” responses may be much more effective than generic packages of problem-focused assistance.</span></p>
<p class="p1"><span class="s1">To some extent, the suggestion that we should be thinking about people’s accumulation of vulnerabilities and problems is not new.</span></p>
<p class="p1"><span class="s1">Policy thinking appears to be heading in this direction anyway. Australia is well down the path of exploring individualised welfare, with approaches and packages like Consumer Directed Care and the NDIS (the intentions of which were well discussed in <span class="s2">recent work</span>).</span></p>
<p class="p1"><span class="s1">Perhaps the way we think about housing affordability just needs to catch up.</span></p>
<p><em>Emma Baker is associate professor, School of Architecture and Built Environment, University of Adelaide and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/emma-baker-172081" target="_blank">here</a>.</em></p>
<p class="p1"><span class="s1"> </span></p>
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Housing affordability problems might not be all bad

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<p>GUEST OBSERVER</p>
<p>The CoreLogic Home Value Index of capital city home prices rose by 0.7 percent in January and was up 10.7 percent over the year.</p>
<p>Prices rose in seven of the eight capital cities with Hobart up the most (up 1.4 percent).</p>
<p>Regional house prices rose by 1.1 percent in December.<span style="font-size: 12.16px;"> </span></p>
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<p>The Performance of Manufacturing index fell by 4.2 points to 51.2 in January. A reading above 50.0 indicates that the sector is expanding.</p>
<p>Home price data is important for retailers, especially those focussed on consumer durables. The manufacturing data provides guidance for companies in the Industrials sector.</p>
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<p>What do the figures show? </p>
<p>Home prices </p>
<p>The CoreLogic Home Value Index of capital city home prices rose by 0.7 percent in January and was up 10.7 percent over the year.</p>
<p>In regional Australia, house prices rose by 1.1 percent in December and were just 2.8 percent higher than a year ago. (Regional prices cover just houses and data is up to the end of December). </p>
<p>Across regional Australia, house prices in NSW were up by 7.2 percent over 2016 with South Australia up 2.8 percent, Victoria and Queensland up 1.2 percent. In Western Australia, regional home prices were down 10.7 percent in 2016.</p>
<p>In capital cities, house prices rose by 0.5 percent in January while apartment prices rose by 2.2 percent. House prices were up 11.1 percent on a year ago and apartments were up by 8.0 percent. </p>
<p>The average Australian capital city house price (median price based on settled sales over quarter) was $636,000 and the average unit price was $530,000.</p>
<p>Dwelling prices rose in seven of the eight capital cities in January: Hobart (up 1.4 percent), Sydney (up 1.0 percent), Melbourne (up 0.8 percent), Adelaide (up 0.5 percent), Canberra (up 0.4 percent), Perth (up 0.2 percent), and Brisbane (up 0.1 percent). Prices fell in Darwin (down 1.7 percent).</p>
<p>Home prices were higher than a year ago in six of the eight capital cities. Prices rose most in Sydney (up 16.0 percent); followed by Melbourne (up 11.8 percent), Hobart (up 7.8 percent); Canberra (up 6.7 percent); Adelaide (up 4.8 percent) and Brisbane (up 4.4 percent). Prices fell in Perth (down by 3.2 percent) and Darwin (down 0.7 percent).</p>
<p>Total returns on capital city dwellings rose by 14.4 percent in the year to January with houses up 14.7 percent on a year earlier and units up 12.5 percent.</p>
<p>Performance of Manufacturing</p>
<p>The Performance of Manufacturing index fell by 4.2 points to 51.2 in January. A reading above 50.0 indicates that the sector is expanding. The PMI has only fallen below 50 twice in the past 19 months.</p>
<p>AIG notes “Three of the seven seasonally-adjusted manufacturing sub-indexes expanded in January with two sub-indexes stable and two contracting. In a positive indicator for near term growth, new orders continued to expand (53.7 points). Exports expanded (54.1 points) and stock levels (56.0 points) built up over the month. Production (49.9 points) and employment (49.6 points) were stable while deliveries (47.0 points) and sales (47.6 points) contracted.”</p>
<p>“Comments from manufacturers in January show new orders are picking up across many sub-sectors at the start of the year. While demand appears to be patchy, some construction projects are helping activity and pockets of growth in agriculture and mining (due to some recovery in commodity prices) are lifting activity for manufacturers. As with much of 2016, exports continue to spur growth mainly due to the continued lower Australian dollar. Recently, inventories look to have built up for most manufacturers and this may impact production in coming months. Energy costs and reliability remain prominent issues for manufacturers with higher prices in particular impacting the profitability of many manufacturers.” </p>
<p>What is the importance of the economic data?</p>
<p>The CoreLogic Hedonic Australian Home Value Index is based on Australia’s biggest property database. Unlike the ABS Index, which excludes terraces, semi-detached homes and apartments, the CoreLogic Hedonic Index includes all properties. Home prices are an important driver of wealth and spending.  </p>
<p>The Australian Industry Group compiles the Performance of Manufacturing Index (PMI) each month. The Australian PMI is the Australian equivalent of the US ISM manufacturing gauge. The PMI is one of the timeliest economic indicators released in Australia.</p>
<p>The PMI is useful not just in showing how the manufacturing sector is performing but in providing some sense about where it is heading. The key ‘forward looking’ components are orders and employment.</p>
<p>What are the implications for interest rates and investors?</p>
<p>CoreLogic continues to note that investors are driving key housing markets such as Sydney and Melbourne. But CoreLogic also continues to highlight the risks, with investors relying on expected capital appreciation for returns on their investment rather than rising rents. More apartments are being built, supply will catch up to demand and growth of home prices will ease over the next few years. Investors need to be aware of the risks including further actions by regulators to slow housing demand.</p>
<p>The broad-based health of Australian housing markets reduces the potential for further rate cuts. While fixed-term lending rates have lifted, it is still too early to canvas possible rate hikes from the Reserve Bank.</p>
<p>Housing is far from homogeneous and investors need to carefully do their homework on the states, suburbs and streets that are on their radar screens.</p>
<p>Activity in the manufacturing sector is encouraging especially the lift in new orders that has been identified in recent months. All the published data and anecdotes indicate that business conditions have markedly improved since the flat spot recorded for the economy in mid-2016. </p>
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<p>Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx">CommSec</a>.</p>
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Persistently firm growth in city home prices: Craig James

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<p>Sydney rates as the second-most expensive city for house prices globally, priced out only by Hong Kong for the second year running, according to international research group, Demographia.</p>
<p>Australia has five of the 29 cities rated in the group’s annual Housing Affordability Survey as “severely unaffordable.”</p>
<p>The median price of a house in Sydney was 12.2 times the city’s annual median household ­income.</p>
<p>In Hong Kong it was 18.1 times. Vancouver ranked the third-most unaffordable city at 11.8 times.</p>
<p>Auckland ranked fourth.</p>
<p>Melbourne have slipped out of the top five this year, ranked sixth in 2017 and more expensive than Los Angeles and London.</p>
<p>Adelaide, Brisbane and Perth all featured in the top 20.</p>
<p>Some 11 of the most affordable housing markets were in the US, according to Demographia, which looked at 406 cities of which 95 were major metropolitan centres with a population of more than 1 million.</p>
<p>Demographia listed Australia's major problem as urban containment policies.</p>
<p>Commonly called 'greenfields', urban containment plans aim to reduce the growth of the urban sprawl by encouraging greater density in existing housing areas.</p>
<p>New NSW Premier Gladys Berejiklian announced before the news that she would address the states housing affordability crisis.</p>
<p>To read the full Demographia report <a href="https://www.demographia.com/dhi.pdf" target="_blank">click here</a>.</p>
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All five state mainland capitals feature in most expensive top 20 places to buy: Demographia

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<p>The median dwelling price in regional New South Wales is $405,000, up from $330,000 five years ago, according the December 2016 Housing Affordability Report from CoreLogic.</p>
<p>The median dwelling value across regional NSW now costs 6.6 times the median annual household income, according to CoreLogic. </p>
<p>REGIONAL NSW</p>
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