<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 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>
</body></html>

terryryder-YECXbqmri2

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

<html><body>
<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>
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<div class="column">What do the figures show?</div>
<div class="column"> </div>
<div class="column">Home prices</div>
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<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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