<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>


Joel Robinson

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

<p><strong>IN BRIEF</strong></p>

<ul>
	<li>
	<p>Just three double-storey Sky Homes sit at the top of The Waterline, each with its own private marina berth and rooftop terrace.</p>
	</li>
	<li>
	<p>Construction on The Waterline is complete, with the first residents expected to move in from mid-October.</p>
	</li>
	<li>
	<p>Sky Homes range from 282 sqm to 367 sqm and are priced from $3.65 million.</p>
	</li>
</ul>

<hr />
<p>Lewis Land has opened the first completed sky home for inspection at Harbour Shores, giving buyers their first opportunity to step inside one of just three double-storey residences crowning The Waterline.</p>

<p>Each sky home comes with its own private marina berth, rooftop terrace and Broadwater views, combining the scale of a larger home with direct access to the boating lifestyle that underpins the wider <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> masterplan.</p>

<p>[smartcode_project:default project_id=113271 project_image_fid=366708]</p>

<p>Lewis Land Head of Development Michael Long said the inclusion of a berth with every Sky Home had become increasingly valuable as marina access across the Gold Coast tightened.</p>

<p>“Marina berths are becoming increasingly difficult to secure across the Gold Coast, so including one with every Sky Home makes this a genuinely rare offering,” Long said.</p>

<p>“The private 70-berth marina will accommodate boats up to 12 metres in length and is positioned just 2.5 kilometres from the Broadwater, placing the open ocean only 15 minutes away.</p>

<p>“Being able to step out of your home onto your boat is a rare luxury, and it’s something residents here can look forward to when it opens later this year.”</p>

<p>[smartcode_project:default project_id=113271 project_image_fid=366709]</p>

<p>The display opening comes as construction completes on The Waterline, with the first residents expected to move in from mid-October.</p>

<p>The three Sky Homes range from 282 sqm to 367 sqm and each feature three bedrooms, three bathrooms, multiple living zones, expansive kitchens with butler's pantries and large balconies taking in the Broadwater outlook.</p>

<p>Each residence also has three secure basement car spaces and additional storage.</p>

<p>“This is the first opportunity the Gold Coast has had to step into Harbour Shores and see, touch and feel what we’re bringing to life here,” Long said.</p>

<p>“There are only three Sky Homes within The Waterline, ranging in size from 282sqm to 367sqm, with each residence featuring three large bedrooms, three bathrooms, multiple living zones, expansive custom-built kitchens with butler’s pantry, and large balconies capturing Broadwater views.”</p>

<p><img alt="Harbour Shores" data-entity-type="file" data-entity-uuid="bab65e10-4fab-45e1-92d8-fc56e2ab98ff" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%202.00.16%E2%80%AFPM.png?VersionId=XT8q76LsPkw3cYTsvN3JfFDaPLud90PN" /></p>

<p>Residents of The Waterline will have access to a private pool, along with Harbour Shores' wider collection of amenity including a lagoon pool, social clubhouse, tennis court, gym, yoga facilities and sauna.</p>

<p>Lewis Land partnered with Studio Collective to furnish the completed display, with the interiors designed to demonstrate how the residences could function as permanent homes rather than simply as show apartments.</p>

<p>Studio Collective Director Melissa Park said the surrounding waterways informed the interiors, but in a more restrained way than a traditional coastal scheme.</p>

<p>“We drew inspiration from the canals and coastal surrounds, but our approach was to interpret that subtly through layered materials and a grounded palette of earthy tones, rather than literal coastal references,” Park said.</p>

<p>“We introduced hero moments of green and teal to reference the surrounding waterways, while mirrored elements help reflect natural light.</p>

<p>“The result is a residence that feels elevated yet comfortable, somewhere buyers can genuinely imagine themselves living, entertaining and unwinding.”</p>

<p>Sky Homes are priced from $3.65 million.</p>

<p>Lewis Land is also offering private marina berths with The Residences, its limited collection of three and four-bedroom villas positioned directly along the Harbour Shores waterfront boardwalk.</p>

<p>Three-bedroom villas are priced from $2.99 million, while four-bedroom residences start from $3.19 million.</p>

<p>Harbour Shores is being marketed by Colliers International.</p>

<p data-end="555" data-start="341">[smartcode_project_cta:default project_id=113271]</p>


Lewis Land opens sky home display as The Waterline completes at Harbour Shores

<p data-end="387" data-start="97">St Vincent de Paul Society Housing Australia has filed plans for a major mixed-use housing precinct on the southern edge of the North Sydney CBD, adding another significant proposal to a pocket around North Sydn​ey Station that is quickly becoming one of the LGA's busiest development zones.</p>

<p data-end="697" data-start="389">The State Significant Development Application covers a 5,990 sqm site at <a href="https://www.apartments.com.au/new-apartments/1-19-mackenzie-street-lavender-bay-nsw-2060">1-19 MacKenzie Street and 211 Blues Point Road in Lavender Bay</a>, immediately south of Nor​th Sydney Station and between the commercial core and the lower-rise Lavender Bay Heritage Conservation Area.</p>

<p data-end="925" data-start="699">Designed by Wardle, the proposal would deliver a new residential tower comprising 88 build-to-sell apartments and 19 affordable apartments, alongside a separate co-living building with 57 rooms and a building manager's studio.</p>

<p data-end="1217" data-start="927">It would also see the significant restoration and upgrade of St Francis Xavier Catholic Church, the adaptive reuse of the former school building, new parish facilities, retail, a new public square and around 1,000 sqm of publicly accessible open space.</p>

<p data-end="1217" data-start="927"><img alt="Vinnies North Sydney" data-entity-type="file" data-entity-uuid="d5dd7f87-a617-463e-b577-17541e01f0e9" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.13%E2%80%AFAM.png?VersionId=4R8TsFN3P_LrrXO2HswTOIrx2blil8lh" /></p>

<p data-end="1538" data-start="1219">The project is seeking a concurrent rezoning of the site to R4 High Density Residential and an increase in the maximum building height to allow a tower reaching RL120, or up to 20 storeys. The proposal was progressed through the NSW Government's Housing Delivery Authority pathway.</p>

<p data-end="1723" data-start="1540">The build-to-sell component will be weighted toward larger apartments, with just six one-bedroom apartments compared with 31 two-beds, 43 three-beds and eight four-bedroom residences.</p>

<p data-end="2063" data-start="1725">The 19 affordable apartments will comprise two studios, 15 one-bedroom apartments and two two-bedroom apartments, taking the total apartment component to 107 residences before the 58 co-living rooms are included.</p>

<p data-end="2063" data-start="1725"><img alt="Vnnies" data-entity-type="file" data-entity-uuid="7d568ca5-cb90-4e18-96c6-d9795dba0c56" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.05%E2%80%AFAM.png?VersionId=GY2R5M9VtQh0EKy1vajaea19PSLOPuRD" /></p>

<p data-end="2205" data-start="2065">Wardle's design for the Vinnies site has sought to negotiate that emerging high-rise context while retaining the lower-scale character of MacKenzie Street and the adjoining heritage conservation area.</p>

<p data-end="4244" data-start="4087">The main building adopts a three-storey podium and tower arrangement, with the podium aligned to the ridgeline and front setback of St Francis Xavier Church.&nbsp;Wardle has designed the podium with colonnades, seating, recessed entries and active ground-floor frontages, with sandstone-toned precast concrete and face brick referencing the materiality of the existing church.</p>

<p data-end="4598" data-start="4246">The tower then steps back eight metres to the south and six metres to the north before rising in a sculpted form comprising four interlocking quadrants. Wardle has also introduced rounded forms and chamfered corners to reduce the tower's perceived bulk and improve view sharing with neighbouring development sites.</p>

<p data-end="4798" data-start="4600">Resident facilities and outdoor areas are planned at the separation between the podium and tower at Level 3, oriented toward Sydney Harbour and the CBD skyline.</p>

<p data-end="4798" data-start="4600">The tower itself will feature a glass reinforced concrete facade, with recessed balconies and deep reveals used both to provide shading and privacy and frame views toward the harbour and city. The lower levels take a different architectural approach, using brick and sandstone-toned finishes intended to establish a stronger relationship with St Francis Xavier Church. The Church itself will be conserved and upgraded for its continued use, while the former school building will be adaptively reused as part of the co-living component.</p>

<p data-end="5032" data-start="4800"><img alt="Lavendar Bay" data-entity-type="file" data-entity-uuid="2d4418ad-90aa-4d49-af93-c80b140aea80" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.09.47%E2%80%AFAM.png?VersionId=Kv4gzbsACaGvZSRuaqcfGC54jEJRXIDJ" /></p>

<p data-end="5486" data-start="5211">&nbsp;</p>

<p data-end="2205" data-start="2065">The proposal adds to an increasingly concentrated pipeline of residential development around Blue Street, MacKenzie Street and Lavender Bay.</p>

<p data-end="2375" data-start="2207">Just west of the site, Central Element lodged plans earlier this year for one of the most significant residential developments proposed in Lavender Bay in recent years.</p>

<p data-end="2712" data-start="2377">Central Element's SJB-designed scheme at 64-66 Lavender Street and 3-7 Middlemiss Street would deliver 163 apartments across two towers rising 23 and 32 storeys, replacing five existing apartment buildings containing 32 homes. The project also forms part of the Housing Delivery Authority pathway.</p>

<p data-end="2751" data-start="2714"><em><a href="https://www.apartments.com.au/news/nsw/first-look-central-element-reveals-lavender-bay-apartment-plans?utm_source=chatgpt.com" rel="noopener" target="_blank">First look: Central Element reveals Lavender Bay apartment plans</a></em></p>

<p data-end="2865" data-start="2753">Immediately around North Sy​dney Station, another two significant proposals have emerged at 5 and 15 Blue Street.</p>

<p data-end="3067" data-start="2867">Zurich Australian Insurance Properties is seeking to adaptively reuse its longstanding commercial building at 5 Blue Street, directly above North Sydney Station, rather than demolishing the structure.</p>

<p data-end="3379" data-start="3069">Its SSDA proposes converting the building into a 14-storey mixed-use development with 62 apartments and 86 co-living rooms, together with ground-floor retail and a major refurbishment of Blue Street Plaza. The application is currently at the Response to Submissions stage.</p>

<p data-end="3379" data-start="3069"><a href="https://www.apartments.com.au/news/nsw/first-look-zurich-targets-north-sydney-office-conversion-with-148-unit-proposal-above-metro-station"><em>First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station</em></a></p>

<p data-end="3883" data-start="3659">&nbsp;</p>


First look: Vinnies files for 20-storey Lavender Bay apartment tower as North Sydney housing pocket heats up

<p data-end="540" data-start="324">When the opportunity arose for South Australian developer Palumbo to return to Kent Town, where it had previously delivered East Park Apartments and the East<br />
Rundle Apartments, it wasn't one the longstanding developer-builder was going to pass up.</p>

<p data-end="680" data-start="542">The decision was quickly vindicated, with more than 30 apartments sold within the first month of launching <a href="https://www.apartments.com.au/new-apartments/royal-apartments-kent-town-2-8-north-terrace-kent-town-sa-5067">Royal Apartments</a> to the market.</p>

<p data-end="909" data-start="682">The 206-apartment development, which will bring significant new supply to Adelaide's tightly held eastern city fringe, also gives <a href="https://www.apartments.com.au/developers/palumbo">Palumbo</a> the opportunity to bring new life to one of Kent Town's most recognisable watering holes.</p>

<p data-end="909" data-start="682">[smartcode_project:default project_id=6109 project_image_fid=376073]</p>

<p data-end="1076" data-start="911">Royal Apartments incorporates the historic Royal Hotel, a venue Palumbo Managing Director Daniel Palumbo said has a longstanding connection with the local community.</p>

<p data-end="1166" data-start="1078">"Everyone in the area has history with the Royal Hotel," Palumbo told Apartments.com.au.</p>

<p data-end="1257" data-start="1168">"It was quite an active pub and social gathering place for locals. We want to bring it back to its former glory."</p>

<p data-end="1257" data-start="1168">[smartcode_project:default project_id=6109 project_image_fid=376072]</p>

<p data-end="1406" data-start="1259">The wider development will comprise two residential towers alongside the restored hotel, sitting on North Terrace opposite the Adelaide Park Lands.</p>

<p data-end="1475" data-start="1408">For Palumbo, the project also marks a return to familiar territory.</p>

<p data-end="1671" data-start="1477">The developer completed East Park Apartments next door more than a decade ago and jumped at the opportunity to develop in Kent Town again when the Royal Hotel site became available.</p>

<p data-end="1726" data-start="1673">"The opportunity emerged, and we moved to secure the site," Palumbo said.</p>

<p data-end="1874" data-start="1728">"We were approached by the previous landowner, who said they had extensive commitments in Sydney and weren't in a position to deliver the project.</p>

<p data-end="2025" data-start="1876">"We took over the site and within six months recut the design scheme to be more in keeping with the type of development we want to bring to Adelaide.</p>

<p data-end="2111" data-start="2027">"Now we're on the market and those changes have really resonated with local buyers."</p>

<p data-end="2225" data-start="2113">That has translated into a strong start to sales, with 33 apartments transacting in the project's first 35 days.</p>

<p data-end="2383" data-start="2227">Palumbo said the early purchaser profile had been consistent with the group's traditional focus on owner-occupiers rather than investor-led apartment stock.</p>

<p data-end="2446" data-start="2385">"Local owner-occupiers have always been our market," he said.</p>

<p data-end="2602" data-start="2448">"There are always some investors, but we've never developed what would be called traditional development stock. Owner-occupiers are very much our market."</p>

<p data-end="2602" data-start="2448">[smartcode_project:default project_id=6109 project_image_fid=376068]</p>

<p data-end="2742" data-start="2604">The buyer mix has been diverse so far, with downsizers and younger professionals both accounting for a significant portion of early sales.</p>

<p data-end="3013" data-start="2744">South Australia's current stamp duty settings, which allow&nbsp;eligible homeowners in South Australia aged 60 savings of up to $103,830 on stamp duty when they downsize to a new property valued at up to $2 million,&nbsp;have helped encourage downsizer activity, while younger buyers in their late 20s and early 30s have been attracted to the opportunity to live immediately outside the CBD while still being able to walk into the city.</p>

<p data-end="3013" data-start="2744"></p>

<p data-end="3065" data-start="3015">Location has been a major part of the proposition for both buyer cohorts.</p>

<p data-end="3065" data-start="3015">[smartcode_project:default project_id=6109 project_image_fid=376075]</p>

<p data-end="3250" data-start="3067">Royal Apartments sits on North Terrace directly opposite the Adelaide Park Lands, with residents able to walk through the parklands toward the East End, Rundle Street and Rundle Mall.</p>

<p data-end="3376" data-start="3252">Apartments have been positioned to capture views across the parklands, Adelaide skyline, Botanic Gardens and Adelaide Hills.</p>

<p data-end="3516" data-start="3378">Palumbo believes the scarcity of developable land along this section of the Park Lands makes the site particularly difficult to replicate.</p>

<p data-end="3592" data-start="3518">"There's very few allotments on that side that can be developed," he said.</p>

<p data-end="3714" data-start="3594">"If this location was in New York and you were sitting on Central Park, you'd be talking about a $60 million apartments."</p>

<p data-end="3861" data-start="3716">Royal Apartments will offer a broad mix of residences, ranging from one-bedroom apartments through to four-bedroom sub-penthouses and penthouses.</p>

<p data-end="4004" data-start="3863">Current listings include one-bedroom apartments from $680,000, while larger three and four-bedroom residences are priced around $2.5 million.</p>

<p data-end="4145" data-start="4006">Residents will have access to a swimming pool, gym, barbecue and recreation areas, residents' lounge and dining space, and a communal deck.</p>

<p data-end="4145" data-start="4006">[smartcode_project:default project_id=6109 project_image_fid=376067]</p>

<p data-end="4273" data-start="4147">The apartments will feature generous balconies, while secure parking, bicycle storage and storage cages will also be provided.</p>

<p data-end="4480" data-start="4275">A porte-cochère-style arrival and drop-off area has also resonated with buyers, particularly those attracted to being able to walk into the CBD during the day while retaining secure vehicle access at home.</p>

<p data-end="4650" data-start="4482">Palumbo is acting as developer, architect and builder on Royal Apartments, continuing the vertically integrated model it has used across its South Australian portfolio.</p>

<p data-end="4785" data-start="4652">The group was also behind the $150 million Sofitel Adelaide, the 251-room five-star hotel and residential tower which opened in 2021.</p>

<p data-end="4889" data-start="4787">Palumbo said Royal's launch had come at an interesting time for the broader Adelaide apartment market.</p>

<p data-end="5144" data-start="4891">Buyer confidence had initially been impacted by uncertainty surrounding the Federal Budget and broader economic conditions, but Palumbo believes sentiment is beginning to improve against a backdrop of significant investment flowing into South Australia.</p>

<p data-end="5305" data-start="5146">He pointed to increased activity across defence and resources, including Olympic Dam, as potential long-term drivers of the state's economy and housing market.</p>

<p data-end="5378" data-start="5307">"Money is starting to flow into Adeliade, significant amounts as Adelaide bucks the trend of the rest of the country.," Palumbo said.</p>

<p data-end="5495" data-start="5380">"There's a lot of activity in the economy over the next decade. I think more investment will come into this market."</p>

<p data-end="5650" data-start="5497">Early works on Royal Apartments are expected to commence this year, with major construction activity and cranes anticipated on site from early next year.</p>

<p>[smartcode_project_cta:default project_id=6109]</p>

Palumbo's return to Kent Town strikes early chord with buyers

<p>Go-to builder-developer <a href="https://www.apartments.com.au/developers/graya">GRAYA</a> is continuing to bulk out its already impressive and diverse apartment portfolio across South East Queensland. Their latest milestone is securing development approval for Silk, its boutique riverfront apartment development in St Lucia.</p>

<p>The approval clears&nbsp;the way for the team to begin construction planning for the 22-residence project.</p>

<p><a href="https://www.apartments.com.au/new-apartments/silk-st-lucia-16-18-sandford-street-st-lucia-qld-4067">Silk</a> will rise 15 levels from an 810 sqm site at 16-18 Sandford Street, occupying a prominent bend of the Brisbane River with a prized northern aspect across Orleigh Park toward the Brisbane CBD.</p>

<p>The approved scheme will comprise 16 split-floor and six full-floor residences, continuing GRAYA's move into larger-format apartment developments targeting Brisbane's prestige owner-occupier market.</p>

<p>The project has been designed around the site's broad river frontage and dual-direction views, with GRAYA prioritising larger residences, privacy and outlook over apartment yield.</p>

<p><img alt="Silk St Lucia" data-entity-type="file" data-entity-uuid="aa5c2349-f96c-4914-a812-1f2cd6827af8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%208.25.44%E2%80%AFAM.png?VersionId=WY0vEU_7vYjeRJKQHiCwFdMxu8PvFh52" /></p>

<p>GRAYA Co-founder and Chief Executive Officer Rob Gray said the project had been shaped around local homeowners wanting to remain in St Lucia without maintaining a traditional family home.</p>

<p>"St Lucia is one of those suburbs people do not want to leave," Gray said.</p>

<p>"They know the river, the trees, UQ, the golf course, Toowong and Indooroopilly, and that familiarity is hard to replace.</p>

<p>"True riverfront opportunities here are exceptionally scarce. What we have designed at Silk is a way to stay in the suburb people love, with the scale and privacy of a private home and far less to maintain.</p>

<p>"This is not typical apartment product. It is a proper home on the river, and that is exactly what this market has been missing."</p>

<p>The approval comes as new apartment development continues to increase across the St Lucia and neighbouring Toowong corridor, although direct riverfront sites remain considerably more tightly held.</p>

<p>GRAYA Co-founder and Managing Director Andrew Gray said securing the approval had removed a significant element of development risk from Silk.</p>

<p>"Genuine riverfront sites of this quality in St Lucia are not something that comes up regularly," Gray said.</p>

<p>"The approval removes a substantial layer of execution risk, and the location underwrites demand in a way very few inner-city sites can.</p>

<p>"The fundamentals here are as strong as anything we have assessed in Brisbane."</p>

<p><img alt="Silk St Lucia" data-entity-type="file" data-entity-uuid="d0f3d734-65e1-48e8-8ed3-2e0715ffcdd9" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%208.25.56%E2%80%AFAM.png?VersionId=sOLSs_jdHkXLWbBKzRyayf5BfTb2vPsD" /></p>

<p>Silk will see GRAYA return to a stretch of the Brisbane River where it already has recent construction experience. The vertically integrated group recently completed ARC in neighbouring Toowong as builder for developer Spyre, delivering the riverfront project on a constrained site.</p>

<p>GRAYA will take a different role at Silk, controlling the project from design and development through construction and aftercare under its vertically integrated model.</p>

<p>The development will include a gym and resident leisure areas at ground level, integrated with the river's edge.</p>

<p>Silk joins a growing pipeline for GRAYA across Brisbane and the Gold Coast, which includes Enclave, The Gallery, Coral and Ripple.</p>

<p>The developer-builder has also recently lodged plans for its largest project to date, <a href="https://www.apartments.com.au/new-apartments/the-silo-19-chester-street-newstead-qld-4006">The Silo</a>, a proposed <a href="https://www.apartments.com.au/news/qld/graya-buys-frasers-newstead-site-plans-the-silo-between-james-street-and-gasworks-precincts">$700 million mixed-use development</a> in Brisbane's James Street precinct.</p>

<p>Silk is expected to predominantly target local owner-occupiers and prestige buyers seeking a permanent riverfront home in Brisbane's inner west.</p>

<p>Registrations of interest are now open, with further details on the project and construction program to be released as it progresses.</p>

<hr />
<h2>SILK PROJECT FACTS</h2>

<p>Developer-builder: GRAYA</p>

<p>Project: Silk</p>

<p>Location: 16-18 Sandford Street, St Lucia</p>

<p>Apartments: 22</p>

<p>Built form: 15 levels</p>

<p>Site: 810 sqm riverfront holding</p>

<p>Mix: 16 split-floor and six full-floor residences</p>

<p>Status: Development approved</p>

<p>Next step: Construction planning underway</p>

<p>[smartcode_project_cta:default project_id=152168]</p>


GRAYA greenlit for riverfront St Lucia apartment development, Silk

Economy

<html><body>
<p>GUEST OBSERVATION</p>
<p>The fastest growing sector in the economy today is not mining, retailing or even education. It’s superannuation, which accounts for almost 30% more than the total savings held by the banking and mutual sector.</p>
<p>Self-managed superannuation is the fastest growing form of investment vehicle.</p>
<p>This has altered the landscape of both property and share investment. In the property market there are well-established regulations and safeguards. The stock market is a different story.</p>
<p>The proposed takeover of David Jones by the South African-based Woolworths and the deal made by Woolworths to buy Solomon Lew’s stake in David Jones, who happens to own an equally large share of Country Road (another takeover target of Woolworths), highlights the problem.</p>
<p>The board of the takeover target recommends to its shareholders what to do, but there is no formal requirement for shareholder approval. It’s assumed if the shareholders sell, that’s their approval. If they don’t sell, they don’t approve.</p>
<p>In the case of David Jones, a wealthy, assertive investor is getting a side deal not available to other investors.</p>
<p>Why should this happen?</p>
<p>In other countries, a formal takeover requires shareholder approval, thus discouraging side deals to occur where some walk away with large profits and others get what they can.</p>
<p><strong>David Jones</strong></p>
<p>The David Jones takeover provided an opportunity for some to simply profiteer, to the extent they could make more money linking this deal with others, thus cornering Woolworths to pay for deals it may not have planned.</p>
<p>If anything, the David Jones scenario raises questions as to whether a takeover of this nature is manipulative, unfair to ordinary shareholders and a distortion of the market mechanism.</p>
<p>The Australian Securities and Investments Commission (ASIC) has intervened, asking questions about the side deal protecting the interests of David Jones' shareholders by intervening in Woolworths' $2.2 billion takeover bid for David Jones.</p>
<p>As ASIC threatens to withhold its consent to the scheme of arrangement, a core part of the $2.2 billion takeover is arguing that a collateral benefit to one shareholder is not available to the other shareholders. The board is so keen to push the takeover that they are prepared to sell the takeover on the basis that the millions made on the side by Lew should not kill the deal.</p>
<p>Directors should of course be supporting the interest of the company as a whole and of all the shareholders. In the past the <a href="https://www.theguardian.com/business/2006/dec/14/australia.theairlineindustry">Allco Finance Group takeover of Qantas</a> had the same set of facts. A takeover favouring those few in particular linked to the board is a further reason for ASIC’s intervention.</p>
<p>ASIC is not about increasing share prices - it’s about access to a fair price. If one shareholder gets a huge side bonus which increases the prices, should those getting the crumbs be happy? Are their shares the same of those getting the bonus?</p>
<p>ASIC had failed in the Federal Court to force David Jones to secure an <a href="https://www.smh.com.au/business/retail/asic-steps-into-david-jones-country-road-battles-with-demand-for-independent-valuation-20140702-zstnq">independent valuation of the “collateral benefit”</a> that Woolworths was offering to one of its shareholders simply to buy his support for the David Jones scheme of arrangement. ASIC can always withhold a letter of consent for the scheme, on the grounds that all David Jones shareholders are not being treated equally.</p>
<p>In response, David Jones has provided shareholders with additional information to help show shareholders how this deal was done.</p>
<p>All this could be resolved if shareholders were given the complete, true facts in an accessible manner, and if takeover predators were forced to make the same offer to all and let shareholders decide.</p>
<p><strong>Why the loophole exists</strong></p>
<p>Law reform in the area of takeovers is well overdue and belongs to another age. Unlisted companies don’t require shareholder approval for takeovers on the presumption that shareholders don’t have enough information. The idea is public information and scrutiny aren’t as readily available as for listed companies.</p>
<p>This thought process belongs to a pre-internet era and is not very relevant today. The rule has been kept as it tends to favour larger investors who play the game of takeover and sales. Allowing other smaller shareholders more power would complicate the game, which explains why governments have kept their distance from changing these laws.</p>
<p>The world has moved on, and it’s only a matter of time before the predators and profiteers further manipulate the hordes of superannuation investors in the market to extract extraordinary profits.</p>
<p>It’s time for a closer look at shareholders' rights, together with the regulation of the market place, to discourage two-tier takeover offers - one for the well-connected and aggressive market operators and another for the other shareholders.</p>
<p class="slammed"><em><strong>Michael Peters</strong> is l<span style="line-height: 1.3em;">ecturer at </span><a href="https://www.asb.unsw.edu.au/Pages/default.aspx" target="_blank" style="line-height: 1.3em;">Australian School of Business</a>.</em></p>
<p><em>This article was originally published on <a href="https://theconversation.com">The Conversation</a>.</em></p>
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po-LsXgBTHBmX

To protect SMSF investors the stock market needs the same safeguards property has

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<p>Time for an abridged gallop to sum up what's going on in Aussie housing markets.</p>
<p><strong>Interest rates and inflation</strong></p>
<p>First up, I have believed for some time that due to rising unemployment and inadequate jobs growth interest rates may need to fall further, which will in turn continue to support demand for housing. A recent Bloomberg survey of economists found that not a single one of them agreed with me on that point, however slowly but surely they are falling back into line.</p>
<p>Wages growth nationally remains sluggish at 2.6%, and, with evident slack in the labour market, non-tradables inflation has been declining as recorded in the chart below.</p>
<p>Although we haven't had an official Australian Bureau of Statistics (ABS) inflation reading since last month, the monthly TD-MI gauge is easing back towards the bottom of the 2% to 3% target band.</p>
<p><img src="/images/2014/10/20/GRAPH14br-tradeinf-small.gif" alt=""></p>
<p>If this is followed by something similar in the official quarterly consumer price index that would leave the door wide open for another interest rate cut in 2015.</p>
<p>Note how futures markets now concur that there is more than a sporting chance of a rate cut in the first six months of 2015, and effectively zero chance of a hike.</p>
<p><img src="/images/2014/10/20/GRAPH2.gif" alt=""></p>
<p><strong>Demand: population growth</strong></p>
<p>Our analysis of the latest quarter's population growth revealed our expected rotation away from the mining states with population growth slowing significantly in Queensland and Western Australia, but exploding higher in financials and services-focused New South Wales to nearly +115,000 over the year. And how:</p>
<p><img src="/images/2014/10/20/GRAPH3.jpg" alt=""></p>
<p>The long term trend in our chart below continues to show that almost all of the material growth in population takes place in only the four main states.</p>
<p>One of several challenges facing South Australia in particular is a brain drain, a demographic scourge involving the best and brightest heading to Sydney and Melbourne which becomes evident through analysis of the net migration sub-indices.</p>
<p>To date, this net interstate migration from South Australia has been countered by net overseas immigration. But this will only work effectively and sustainably for the state if new jobs are created, which has not been happening for the past half decade, hence rising levels of unemployment. Something needs to change in this regard.</p>
<p><img src="/images/2014/10/20/GRAPH4.jpg" alt=""></p>
<p>South Australia may rise to and overcome this challenge, I merely note the risks facing the local economy here, which seldom seem to be mentioned elsewhere.</p>
<p><strong>Demand: jobs growth</strong></p>
<p>The Labour Force survey is presently suffering from a major credibility deficit and has led to the ABS to be something of a figure of fun over recent months (harsh, given recurring budget cuts) with the apparent largest jobs 'gain' in history followed next month by a total reversal.</p>
<p>As a long term buy-and-hold investor I would always advise following the longer term trend anyway, but this is even more so now the case given that the seasonal monthly data has been proven to be so wildly volatile.</p>
<p>The data below underscores the point about the problem child that is the South Australian economy, with close to zero jobs having been created on a net basis for nearly five years.</p>
<p>The strongest economy for the past two years, as discussed here frequently, has been that of New South Wales, while the mining states are now transitioning from construction to production.</p>
<p><img src="/images/2014/10/20/GRAPH5.jpg" alt=""></p>
<p>Below the long term growth in employment chart shows New South Wales to be in relatively good shape, but the southern states – and now to a lesser extent the mining states – struggling.</p>
<p><img src="/images/2014/10/20/GRAPH6.jpg" alt=""></p>
<p>But perhaps the real story in the jobs market is the alarming gulf in fortunes being experienced between the prospering capital cities such as Sydney and Melbourne and the simultaneous hollowing out of the respective regional economies, as I explored here.</p>
<p>The total number of full-time employed in the regions of the main states now sits below 2006 levels, and this casualisation of the workforce may have surprisingly harsh negative impacts for regional housing markets in the decades ahead.</p>
<p><em>This article continues on the next page. Please click below.</em></p>
<p><em> </em></p>
<hr class="system-pagebreak">
<p> </p>
<p><strong>Demand: housing finance</strong></p>
<p>The August Housing Finance data showed a slight decline on the preceding month, leading to a predictable knee-jerk response from commentators, but monthly data rarely rises (or falls) in a straight line and the trend in housing finance still looks to be strong overall.</p>
<p><img src="/images/2014/10/20/GRAPH7.jpg" alt=""></p>
<p>The owner occupier housing finance data may have revealed the first signs of weakness in some states, but saw Queenslander financing looking particularly strong. Good times are ahead in Brisbane in 2015, it appears, after a lengthy wait.</p>
<p><img src="/images/2014/10/20/GRAPH8ROLLING.jpg" alt=""></p>
<p>Last week the ABS Lending Finance data was also released, which details where investors are buying. It's a clear cut Sydney boom which we anticipated long ago.</p>
<p><img src="/images/2014/10/20/GRAPH94c%20inv%20loans.jpg" alt=""></p>
<p><strong>Supply: building<br></strong></p>
<p>Rather than regurgitate our extensive chart packs, just a few takeaway points here on dwelling supply.</p>
<p>At this stage of the property cycle plenty of new supply should be coming online, rental growth should be easing and property investors need to be wary of areas with a looming oversupply of dwellings.</p>
<p>Melbourne and Victoria continue to approve thousand of houses for construction, as has been the case for more than a decade.</p>
<p><img src="/images/2014/10/20/GRAPH10.jpg" alt=""></p>
<p>However, it is actually apartments which generally represent the greater oversupply risk in this cycle.</p>
<p>Note that after an approvals boom, we now see Sydney approvals and construction rolling over and the risk of oversupply easing back, except in a few specific suburbs.</p>
<p><img src="/images/2014/10/20/GRAPH11.jpg" alt=""></p>
<p>Apartments commenced are picking up very strongly in Queensland.</p>
<p><img src="/images/2014/10/20/GRAPH12.jpg" alt=""></p>
<p>The apartments completed chart below underscores a key point – New South Wales has completed a meagre 17,500 units (as well as 19,100 houses) in the year to June 2014, which compares to state population growth of somewhere approaching 115,000 across the same time horizon.</p>
<p><img src="/images/2014/10/20/GRAPH13.jpg" alt=""></p>
<p>The raw numbers should tell you straight away that the risk of a massive Sydney oversupply in aggregate is tenuous unless approvals and construction get a second wind, with the Greater Sydney population set to leap higher by almost 90,000 heads in only one year.</p>
<p>It is true that there is plenty more to come in the pipeline - Greater Sydney has approved just over 26,500 units in the year to August 2014, but this uptrend has already peaked some six months previously on a rolling annual basis, and is set to ease back to around 20,000 in due course.</p>
<p>House approvals also have risen very steadily in Greater Sydney to above 12,500 on a rolling annual basis, but even if 100 percent of these approvals in the pipeline make it through to commencement and then completion (which they won't) there is no pressing risk of a huge oversupply at this juncture.</p>
<p>Melbourne on the other hand already has a clear oversupply problem in existence in some inner locations, while the commencements data also shows that inner Brisbane is steadily getting around to constructing thousands of apartments.</p>
<p>Investors in attached Brisbane dwellings should steer away from those city locations with an oversupply risk and in particular purchase only properties with a point of scarcity (e.g. great outlook/river view/exceptional location).</p>
<p><em>This article continues on the next page. Please click below.</em></p>
<hr class="system-pagebreak">
<p><em> </em></p>
<p><strong>Supply: stock and vacancies</strong></p>
<p>Penultimately, Melbourne has absolutely stacks of stock on the market, about double that of Sydney, with an unprecedented 1800 Melbourne auctions coming right up on Cox Plate weekend. This will likely slow the market. Sydney has the opposite problem with a dearth of stock on the market while demand remains strong.</p>
<p><img src="/images/2014/10/20/GRAPH14.jpg" alt=""></p>
<p>When markets move into the increasing supply phase vacancy rates should eventually rise, and this has happened to some extent in Melbourne and Perth with vacancy rates up at 2.5% on a city-wide basis. Perth investors should look for well-located houses over units and apartments, in our opinion.</p>
<p>Meanwhile Brisbane and Canberra have vacancy rates sitting around the national average of 2.2% on SQM Research's measures.</p>
<p><img src="/images/2014/10/20/GRAPH15.jpg" alt=""></p>
<p>For all the expert talk of a Sydney oversupply, the harbour city's vacancy rate slipped back to just 1.7% in August.</p>
<p>Meanwhile, in further proof that real estate markets do cycle, the years of flat markets, lack of price gains and therefore moribund levels of dwelling construction in Adelaide and Hobart has resulted in low vacancy rates, and these markets could in turn pick up a little as a result.</p>
<p>Although I used to live in Darwin I haven't been up that way lately, so will just note here that there are just a few worrying indicators in the "Top End", with sliding prices, rising stock on market, signs of quite rapidly rising vacancy rates and a resources boom which is threatening to roll over.</p>
<p>The Darwin property boom may risk follow the mining boom back down from whence it came, so watch this space.</p>
<p><strong>Dwelling prices</strong></p>
<p>By this time of year most of the year's property market predictions have normally been conveniently forgotten about or subtly amended. Not ours! Let's see what we got right and what we didn't.</p>
<p>Our Adelaide 2014 market forecast was +0% to +3% capital growth, and RP Data's index has a year to date gain of 3.39% with a couple of months still to run.</p>
<p><img src="/images/2014/10/20/16.jpg" alt=""></p>
<p>Brisbane and Gold Coast tracking nicely for our +2% to +5% capital growth prediction. Brisbane has some of the best prospects for 2015 and beyond after a lean half decade.</p>
<p><img src="/images/2014/10/20/GRAPH17.jpg" alt=""></p>
<p>Melbourne looks set to do better than the top end of our +5% gain forecast, though from a macro perspective it does now seem likely that the market is set to slow up, with whispers afoot of the much-vaunted "buyers market" returning.</p>
<p><img src="/images/2014/10/20/graph%2018.jpg" alt=""></p>
<p>The Perth market is holding up OK, and notably houses are faring much better than apartments on most indices. Our forecast is on track.</p>
<p><img src="/images/2014/10/20/graph19.jpg" alt=""></p>
<p>The Sydney market has been rock solid and will finish 2014 ahead of our +6% to +9% capital growth forecast.</p>
<p>SQM Research believes that the Sydney market will replicate this capital growth once again with another 8% to 12% growth in the year ahead too. We'll release our own 2015 forecasts in due course as well as our 2015 <a href="https://allenwargent.com/" target="_blank"><em>Buyers Eye</em></a> housing market outlook reports for London, Sydney and Brisbane.</p>
<p><img src="/images/2014/10/20/graph20.jpg" alt=""></p>
<p>Overall we could yet score a hit with our forecasts on all five markets, but the Melbourne data needs to start slowing for that to be the case, which it just never quite seems to do.</p>
<p>Watch out for sliding unit rents at this stage in the cycle as new supply comes online. Owners of properties with a unique appeal, in an outstanding location or with a key element of scarcity value will of course have few problems with rental vacancies in 2015, but lower quality stock in other locations could see asking rents getting dropped or have issues securing tenants.</p>
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pwargent-M4siyDbqQY

Australia's macro markets: the numbers you should know

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<div>Australia has created an extraordinary ~325,000 jobs over the past year, including a boom over the past six months the like of which arguably hasn't been seen in decades. </div>
<div> </div>
<div class="separator">Click to enlarge</div>
<div class="separator"> </div>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/25/A4.jpg" alt=""></div>
<p><br><span>The question is how? And where?</span></p>
<div><span>Greater Sydney (+83k), Melbourne (+59k), and now Brisbane (+46k) have each seen a drive in employment growth over the past year. </span></div>
<div><span> </span></div>
<div><span>Greater Sydney now has a monthly unemployment rate of only 4.46 per cent, and the annual average unemployment rate across the harbour city continues to decline, as it has for 3½ years now. </span></div>
<div><span> </span></div>
<div><span>That's been partly driven by apartment construction and the associated multiplier effect, and a swathe of infrastructure projects. </span></div>
<div><span> </span></div>
<div><a href="https://www.propertyobserver.com.au/images/2017/09/25/A1.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div> </div>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/25/A1.jpg" alt=""></div>
<div class="separator"> </div>
<div>Increasingly Hobart is firing up, adding +6k jobs over the year to August 2017, with the median duration of job search continuing to decline. </div>
<p><a href="https://www.propertyobserver.com.au/images/2017/09/25/A2.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/25/A2.jpg" alt=""></div>
<p><br><span>Where else?</span></p>
<div>Gold Coast (+21k) and Sunshine Coast (+12k) have been other contributors to Queensland jobs growth over the past year, presumably driven by tourism, while Toowoomba added a cheeky +5k of new jobs on a net basis. </div>
<div> </div>
<div>Emerging from the resources doldrums, meanwhile, Mackay (+10k) and Townsville (+17k) have clearly turned a corner of sorts lately. </div>
<p><a href="https://www.propertyobserver.com.au/images/2017/09/25/A3.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/25/A3.jpg" alt=""></div>
<div class="separator"> </div>
<div><strong><span style="text-decoration: underline;">Construction still raging</span></strong></div>
<div> </div>
<div>Over the past quarter the greatest employment gains were to be found in construction (+64,600), healthcare &amp; social assistance (+48,000), and education &amp; training (+25,700).  </div>
<div> </div>
<div>Between them these three industries have created net new employment of +263,000 since August 2016, which really is a huge number. </div>
<div> </div>
<div>Alongside tourism, a boom in international students and education has been a shining light of the economy in recent times - at least in terms of quantity, if not quality.</div>
<div> </div>
<div>Offsetting this, some professional services and administrative employment has been scaled back. </div>
<p><a href="https://www.propertyobserver.com.au/images/2017/09/25/A6.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/25/A6.jpg" alt=""></div>
<div> </div>
<div>The construction employment surge needs to be viewed in the context of the preceding resources construction boom, which took construction employment to already unprecedented levels. </div>
<div> </div>
<div>And now total construction employment has elevated further - thanks to a combination of residential and infrastructure projects - to 1,168,000. </div>
<p><a href="https://www.propertyobserver.com.au/images/2017/09/25/A5.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/25/A5.jpg" alt=""></div>
<p> </p>
<div><strong><span style="text-decoration: underline;"><span>The wrap</span></span></strong></div>
<div><span> </span></div>
<div><span>Sydney's economy is clearly relishing its stamp-duty-funded infrastructure boom.</span></div>
<div><span> </span></div>
<div><span>At the industry level, healthcare &amp; social assistance may well continue its structural uptrend, perhaps eventually accounting for ~15 per cent or more of the entire workforce. </span></div>
<div> </div>
<div>Construction now directly accounts for ~9.5 per cent of Australian employment. This is much more surprising, and it's never been higher.</div>
<div> </div>
<div>This is why, in my opinion, it may pay to be sceptical about all the casual chatter about rate hikes.</div>
<div> </div>
<div>Residential jobs account for about three quarters of total construction industry employment.</div>
<div> </div>
<div>So once the residential building sector inevitably slows over the next year or two, total employment growth could be winching itself down to earth with a big, clumsy thump. </div>
<div> </div>
<div>
<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank"><span class="s2">blogger</span></a>.</span></p>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
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Sydney relishing stamp-duty-funded infrastructure boom

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<p>The Reserve Bank's Chart Pack is always worth a gander, being consistently and independently produced... and free from spin.</p>
<p>You can view the full chart pack <a href="https://www.rba.gov.au/chart-pack/index" target="_blank">here</a>.</p>
<p>Let's run through what the Reserve Bank of Australia (RBA) has found this month for households and the housing market.</p>
<p><strong>Part 1: Households and finances</strong></p>
<p>Retail sales growth is humming along both in terms of values and volumes, largely driven by Sydney retail.</p>
<p><img src="/images/2015/01/8/graph%201.gif" alt=""></p>
<p>Savings ratios have been elevated since the financial crisis as households shored up their finances, but the ratio now appears to be gradually declining again as low interest rates encourage investment in growth assets.</p>
<p><img src="/images/2015/01/8/graph%202.gif" alt=""></p>
<p>Consumer sentiment has been knocked around a little by budgets and other adverse news, but remain fairly close to where it has been averaging for the last 34 years.</p>
<p><img src="/images/2015/01/8/graph%203.gif" alt=""></p>
<p>Household wealth in Australia is now at record highs in absolute terms. In terms of net worth as a percentage of annual household disposable income, asset values are growing nicely, and liabilities are holding steady.</p>
<p><img src="/images/2015/01/8/graph%204.gif" alt=""></p>
<p>Interest paid as a percentage of household disposable income has declined in tandem with mortgage rates . Indeed, mortgage serviceability is at its best level in more than a decade.</p>
<p><img src="/images/2015/01/8/graph%205.gif" alt=""></p>
<p><strong>Part 2: The housing market</strong></p>
<p>Stimulated by rising dwelling prices, building approvals brushed record highs, but have now seemingly passed their peak. We will see an oversupply of dwellings <a href="https://petewargent.blogspot.co.uk/2014/12/melbourne-continues-to-hammer-high-rise" target="_blank">in a few regions</a> – one would be wise to steer clear of these, of course.</p>
<p><img src="/images/2015/01/8/graph%206.gif" alt=""></p>
<p>Housing loan approvals rise to record highs, largely driven by investors in this cycle, the direct result of low borrowing rates.</p>
<p><img src="/images/2015/01/8/graph%207.gif" alt=""></p>
<p>And finally, to housing prices. As we expected some years ago, due to an inherent undersupply of dwelling stock and infrastructure, Sydney prices are soaring towards $1 million.</p>
<p>With both the M2 and the M7 closed again earlier this week, and barely a day passing without news of diabolical traffic woes, expect there to be a continuing surge of demand for properties located close to key transport hubs such as rail or light rail links.</p>
<p><img src="/images/2015/01/8/graph%208.gif" alt=""></p>
<p>Elsewhere, Melbourne has been looking peaky for months but has held up reasonably well to date.</p>
<p>Perth's market is trending slightly up but only moderately, while Canberra is now all set for a downturn. The Adelaide market – and particularly its economy – remains unconvicing,</p>
<p>Counter-cyclical investors should be scoping out opportunities in Brisbane, where housing finance is gathering momentum – as reconfirmed this week by <a href="https://www.afgonline.com.au/mortgage-index-january-2015/" target="_blank">AFG's December Mortgage Index data</a>.</p>
<p><strong> </strong></p>
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How Australian households will look in 2015

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<div>The Australian National Accounts recorded that real GDP growth came in at a seasonally adjusted -0.5 percent for the third quarter and +1.8 percent for the year. </div>
<div> </div>
<div>Oops.</div>
<div> </div>
<div>This was the first negative quarterly result for GDP since the Queensland flood-affected quarter of March 2011, and only the fourth such result since Australia's last recession in 1991. </div>
<div> </div>
<div>With a negative contribution of -0.2ppts net exports were a drag on growth this time around, and there was a big drop in public capital expenditure (for a contribution of -0.5ppts) after a surge of government investment last quarter, summarily in helicopters, healthcare, and hepatitis drugs.</div>
<div> </div>
<div>Household consumption contributed 0.3ppts to growth this quarter, but there wasn't much joy elsewhere. </div>
<div> </div>
<div><a href="/images/2016/12/08/GDP1.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div class="separator"><img src="/images/2016/12/08/GDP1.jpg" alt=""></div>
<div class="separator"> </div>
<div>With downward revisions to previous quarters, this takes annual GDP growth all the way down to +1.8 percent. </div>
<p><a href="/images/2016/12/08/GDP1-1.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="/images/2016/12/08/GDP1-1.jpg" alt=""></div>
<div class="separator"> </div>
<div>Nominal GDP fared somewhat better, growing by +0.5 percent in the quarter, and by +3 percent over the year.</div>
<p><strong><span style="text-decoration: underline;">Income boost</span></strong></p>
<div>It's often been pointed out that in a country such as Australia with its volatile bulk commodity prices, real GDP isn't always an ideal measure of how things are tracking. </div>
<div> </div>
<div>In this quarter, for example, there was a large +4.4 percent jump in the terms of trade, meaning that the index is now up by +1.4 percent over the past year. </div>
<div> </div>
<div>Given that the terms of trade index has been falling since Q3 2011, this is hugely welcome news!</div>
<p><a href="/images/2016/12/08/GDP3.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="/images/2016/12/08/GDP3.jpg" alt=""></div>
<div class="separator"> </div>
<div>Behind the scenes, of course, commodity export volumes have been ramping up over time.</div>
<div> </div>
<div>Thus while real GDP contracted, real gross national income, real gross disposable income and real net national disposable income all rose to record highs in the September quarter, and we can expect to see further gains in Q4. </div>
<p><a href="/images/2016/12/08/GDP5.jpg" target="_blank">Click to enlarge</a> </p>
<div class="separator"><img src="/images/2016/12/08/GDP5.jpg" alt=""></div>
<div class="separator"> </div>
<div>In real terms, gross national income increased by +0.9 percent over the quarter and +3.2 percent over the year. </div>
<div> </div>
<div>Essentially, then, this this quarter has been the mirror image of the dynamics we've seen in previous quarters, shifting to strong income growth and weaker GDP growth.</div>
<div><strong><span style="text-decoration: underline;">Two-speed</span></strong></div>
<div> </div>
<div>Research by SGS Economics and Planning has shown that Sydney and Melbourne have beendominating economic growth, while many regional economies are presently running slower as they adjust to life post-resources boom. </div>
<div> </div>
<div>State final demand was very weak in Western Australia at -3.8 percent as capex continues to work through its decline. </div>
<div> </div>
<div><a href="/images/2016/12/08/GDP4.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2016/12/08/GDP4.jpg" alt=""></div>
<div> </div>
<div>At the industry level, construction was the biggest loser, contracting by -3.6 percent, and swiping some -0.3ppts from GDP growth. </div>
<div> </div>
<div>Compensation of employees grew by +1.3 percent over the quarter and a positive +3.1 percent over the year, while the household savings ratio ticked down to 6.3 percent. </div>
<div> </div>
<div>I'll look at the impact on household incomes and expenditure in a separate post. </div>
<p><strong><span style="text-decoration: underline;">The wrap</span></strong></p>
<p>After 100 consecutive quarters without a recession, the economy posted a negative GDP result for the third quarter, but real national income measures surged to a record high.   </p>
<div>Whether or not we experience a technical recession next quarter is open for debate, but it looks to be unlikely based on the recent growth in retail spend. </div>
<div>
<br>Overall, strong public investment figures in the first half of the year masked a softening underlying trend in growth in the economy. </div>
<div> </div>
<div>An annual GDP growth figure of +1.8 percent feels much more in line with the metrics we've seen elsewhere, including low employment and wages growth, soft inflation, and a budget in deficit. </div>
<div>
<br>If hours worked are said to be the best measure of the health of the economy, then the conclusion is clear: the economy stuttered in the first half of 2016, although there was at least a moderate improvement of +0.5 percent in Q3. </div>
<div> </div>
<div><a href="/images/2016/12/08/GDP7.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div class="separator"><img src="/images/2016/12/08/GDP7.jpg" alt=""></div>
<div> </div>
<div>In the face of an obviously weaker result, a key question for the government now is whether it uses low yields to borrow and invest in infrastructure, as the Reserve Bank doesn't sound particularly keen on cutting the cash rate too much further!</div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
</body></html>

A recession looks unlikely: Pete Wargent

<html><body>
<div>The ABS released its Lending Finance data for May 2015 which showed that low interest rates are encouraging greater borrowing across the economy.</div>
<div> </div>
<div>While total lending was a little lower than in April on a seasonally adjusted basis, over the past year the data has strengthened considerably.</div>
<div> </div>
<div>Owner-occupied housing finance has increased to a record high level, while personal finance borrowing is also now tracking at its highest benchmark on record.</div>
<div> </div>
<div>Total lending finance for the month of $74 billion was an increase of 10% on the prior year figure, sending total finance commitments for the past 12 months surging 11% to $846 billion - the highest ever figure on this survey.</div>
<p><a href="https://1.bp.blogspot.com/-r7zMiNP0hrE/VaMqbW5y3nI/AAAAAAAAW2g/Hv0pU7OKztM/s640/LF3.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://1.bp.blogspot.com/-r7zMiNP0hrE/VaMqbW5y3nI/AAAAAAAAW2g/Hv0pU7OKztM/s640/LF3.jpg" width="640" height="282"><br><br><strong><span style="text-decoration: underline;">Sydney property investors running riot</span></strong><br><br></p>
<div>While property investor loans have evidently passed their peak for this cycle in Western Australia and the Northern Territory, elsewhere investor loans are trending upwards.</div>
<div> </div>
<div>Indeed in New South Wales investor lending is exploding off the top of the chart, with the May 2015 result of $6.07 billion again comfortably the greatest ever<em> </em>month of investment lending in any state or territory.</div>
<div> </div>
<div>Summarily, Sydney now has the highest ever level of investment lending in concert with the lowest stock on market levels we have seen. </div>
<div> </div>
<div>Egg on face for many of the property experts once again, though it should be noted here that the market regulator "should" now be targeting Sydney loans with a vengeance in order to dial back this exuberant level of demand.</div>
<p><a href="https://3.bp.blogspot.com/-y4pNm4gMQPI/VaMufvQ20hI/AAAAAAAAW3U/saA0sZZ_hR4/s640/LF1.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="https://3.bp.blogspot.com/-y4pNm4gMQPI/VaMufvQ20hI/AAAAAAAAW3U/saA0sZZ_hR4/s640/LF1.jpg" width="640" height="280"></div>
<p> </p>
<div>Charted below is the raw data for New South Wales, which shows that investor lending has increased by an extraordinary 137% over the three years since May 2012.</div>
<div> </div>
<div>On a rolling annual basis, investor lending has increased by more than 30% over the past year - yet another monster increase.</div>
<p><a href="https://2.bp.blogspot.com/-rtCPwmPXV_w/VaMqbhX32AI/AAAAAAAAW24/QkPXvKGPAiE/s640/LF2.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="https://2.bp.blogspot.com/-rtCPwmPXV_w/VaMqbhX32AI/AAAAAAAAW24/QkPXvKGPAiE/s640/LF2.jpg" width="640" height="272"></div>
<p> </p>
<div>Although not charted here mainly due to laziness, May was also by a whisker the strongest ever month for investment lending in Victoria at $3.27 billion, taking rolling annual lending to $34 billion, a 22 per cent year-on-year increase.</div>
<div> </div>
<div>May was another strong month for Queensland investor lending at $1.73 million. which takes the rolling annual figure 13.3 per cent higher than one year ago.</div>
<div> </div>
<div>It has been a long yet steady recovery for Queensland investors since the financing nadir related to the 2011 floods.</div>
<p><a href="https://1.bp.blogspot.com/-j1D_B7ZhPsI/VaMqcokjPwI/AAAAAAAAW2o/jADYFHRqXGY/s640/LF4.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="https://1.bp.blogspot.com/-j1D_B7ZhPsI/VaMqcokjPwI/AAAAAAAAW2o/jADYFHRqXGY/s640/LF4.jpg" width="640" height="268"></div>
<div class="separator"> </div>
<div>Investor lending was lower in the month of May in South Australia, but nevertheless on a rolling annual basis has moved 11% higher over the past year.</div>
<p><a href="https://2.bp.blogspot.com/-U43UWz-Cr3s/VaMuJcbQtBI/AAAAAAAAW3I/YsmK5om-rqg/s640/SA.jpg" target="_blank">Click to enlarge </a></p>
<div class="separator"><img src="https://2.bp.blogspot.com/-U43UWz-Cr3s/VaMuJcbQtBI/AAAAAAAAW3I/YsmK5om-rqg/s640/SA.jpg" width="640" height="278"></div>
<p> </p>
<div>Investor lending is now declining in Western Australia, albeit fairly moderately, with low borrowing rates sustaining borrowing for property investment at a historically high level.</div>
<div> </div>
<div><a href="https://2.bp.blogspot.com/-z_r-c3Tek1w/VaMuJO7v2TI/AAAAAAAAW3E/AhROalONWVw/s640/Wa.jpg" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></div>
<div><span style="line-height: 1.3em;"> </span></div>
<div class="separator"><img src="https://2.bp.blogspot.com/-z_r-c3Tek1w/VaMuJO7v2TI/AAAAAAAAW3E/AhROalONWVw/s640/Wa.jpg" width="640" height="278"></div>
<div class="separator"> </div>
<div class="separator"><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div class="separator"> </div>
<div class="separator">Overall, a strong result which suggests that total lending finance on an annualised basis may be heading towards $900 billion in due course, suggesting that easier monetary policy is taking effect.</div>
<div class="separator"> </div>
<div class="separator">Property investor lending continues to be exceptionally strong, particularly in Sydney and Melbourne.</div>
<div class="separator"> </div>
<div class="separator">And indeed the data suggests that this dynamic is now spreading to Hobart, Brisbane, and to a somewhat lesser extent, Adelaide.</div>
<div class="separator"> </div>
<div class="separator">
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
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Sydney property investors running riot: Pete Wargent

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<p><em>Note: This is the second part of Peter Chittenden's 2015 outlook. </em></p>
<p><em>To read Part 1, <a href="/expert-insights/buying/the-residential-property-outlook-for-the-year-ahead">click here</a>.</em></p>
<p>Looking further into prospects for 2015: currently, the collapse of commodity prices is making hard work of local economic policy settings.</p>
<p>An interest rate cut looks to be more firmly on the agenda and employment prospects look shaky. Consumers are hesitant, but there is good news at the petrol bowser.</p>
<p>Beyond these leading factors, the residential market and in particular the demand for new apartment projects may slow at the margins in 2015, while remaining strong in key areas.</p>
<p>While the health of the wider economy will have an impact, there are a number of specific policy areas that will more directly influence demand. These include a review of taxation policy, the delivery of major infrastructure projects and planning policy. The falling dollar may, however, act as an incentive for off-shore buyers. This time last year, the AUS$ to US$ exchange rate was $0.89. Today it’s $0.81. Although this is a four and a half year low, the Reserve Bank has suggested the possibility of a greater fall, with the dollar valued closer to US$0.75.</p>
<p>Looking towards 2015, it appears that everything financial will have an impact on the residential property market.</p>
<p>The influence of lower rates for anyone with a home loan or looking to finance will be positive. However, with more caution now apparent in the market, lower rates are not likely to push up demand and hence prices.</p>
<p>What lower rates will do is make it easier to service loans, and as history shows, people tend to use lower rates to boost their mortgage repayments. Cheaper home loans may help to boost spending in other areas, and so benefit the wider economy. Currently, bad residential mortgage loans are at historic lows, which further reinforces how cautious and conservative this market is.</p>
<p><strong>Henry &amp; Murray</strong></p>
<p>In 2010 we had the Henry Review of the Taxation System. Now we have had the Murray Review of the banking system, and it appears that 2015 will at last be a time to act. The Murray Review was wide ranging, but areas impacting superannuation, competition and the taxation system may hold particular focus for the residential market.</p>
<p>While an increase to the GST does not look to be an immediate prospect, the reality is that an increase in the GST would lead to almost irresistible pressure to reduce other taxes, such as stamp duty, which for NSW has delivered a wind-fall in revenue this year.</p>
<p>Already the Federal Government has signaled such a structural change is not possible, given the state of the Federal budget.</p>
<p>However, the Murray report does create pressure for tax reform, that may well involve changes to negative gearing and how superannuation is taxed. Changes here would impact the residential market. Buyers would, of course, welcome a reduction of stamp duty, but any changes to negative gearing could cause investors some pain.</p>
<p>The growth in self managed super funds, and the flow of funds into property, in part highlight the sensitivity of this sector. There are some concerns that over-regulation could have the long-term affect of reducing the pool of savings people can access in their old age.</p>
<p>I think there is a natural tendency for many people to be anxious to manage the fate of their own investments, and so property will remain a popular choice with this group of retirees.</p>
<p>While the banking and tax systems have been under the spotlight, I wonder if there is room in the housing and development market for even more creative forms of finance?</p>
<p>Peer to Peer lending is a new financial tool that is only starting to emerge with some areas of personal finance. Could such ideas spread to the housing market? Could we one day see a Bitcoin revolution in housing finance?</p>
<p>Outside of these policy areas, supply will remain a key issue, supply in some markets is still to catch up with demand, and so this will keep pressure on prices, but this is not a universal trend. Investors are also less geographically focused on their own backyard, and so capital will flow to the stronger markets.</p>
<p>For developers, another emerging reality is that development sites have increased in value and demand remains very strong and competitive. Eventually, high site costs have to be absorbed into the final cost of apartments delivered to the market.</p>
<p><em>This article continues on the next page. Click below.</em></p>
<hr class="system-pagebreak">
<p><strong>Infrastructure &amp; Planning</strong></p>
<p>In 2015, there needs to be an acceleration of infrastructure delivery, moving from what can at times appear to be endless planning.</p>
<p>Major projects are now more visible across Sydney, for example, and urgency might accelerate as both the State Government and Federal Governments look to election in March 2015 and early 2017 respectively.</p>
<p>In any election setting, activity on the ground is what counts. Activity means jobs, and delivery of infrastructure is an important goal as construction investment in the mining industry continues to fall.</p>
<p>However, beyond any political will to accelerate the delivery of infrastructure, the other reality is that values and demand are also impacted as areas associated with these works become more attractive to buyers.</p>
<p>Across Sydney there’s now a growing list of major projects underway including the South West and North West Rail links, the light rail to the Inner West already in operation, and the CBD and East light rail, plus the West Connex. Areas near these projects will see further growth in the demand for project sites.</p>
<p>The NSW state Government has also now released its vision for Sydney in an expansive document,<em> <a href="https://www.strategy.planning.nsw.gov.au/sydney/" target="_blank">A Plan For Sydney</a></em>. The plan includes an important step as it applies to the 41 local government areas and sets up a new body to deliver the vision. Planning issues are always central to the delivery of new homes and apartments, and so it is to be hoped that the policies outlined in the document become a reality.</p>
<p><strong>Quality To Improve</strong></p>
<p>Finance, taxation, infrastructure and government policy are all factors that impact the residential market, but in a more immediate way, there is also a continued trend towards an ongoing improvement in the design and quality of projects.</p>
<p>As buyers approach the apartment market more as a long-term home, and investors also look for quality, we are seeing some inspirational new projects emerge.</p>
<p>This quest for quality and innovation will continue throughout 2015, as will demand for projects with access to established local services and facilities, including transport.</p>
<p>The market in 2015 looks complex than it did this time last year. The current bull run has been with us since mid 2013, so there is a need to remain alert, as possible changes to interest rate settings and taxation policy may yet hold surprises. The resilience of the local economy will be key.</p>
<p><em>To read Part 1 of Peter Chittenden's 2015 outlook, <a href="/expert-insights/buying/the-residential-property-outlook-for-the-year-ahead">click here</a>.</em></p>
<p> </p>
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pchittenden-eLqUUC8TWW

My residential outlook for the year ahead: Part 2

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<p><span>It has been interesting to track economic data over the past few years, watching the Sydney economy outperform across most metrics.</span></p>
<p><span>Small wonder that the Sydney housing market has also forged ahead so strongly since 2008.</span></p>
<p><span>The New South Wales economy is powering Australia's economic growth, with ANZ's stateometer now showing the Premier State both above trend and accelerating across a range of economic indicators, from labour market conditions to house prices.</span></p>
<p><a href="/images/2015/10/22/NSW.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/22/NSW.jpg" alt=""></span></p>
<p> </p>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</body></html>

NSW above trend and accelerating: Pete Wargent

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<h3 class="post-title entry-title"><span style="color: #333333; font-family: Tahoma, Helvetica, Arial, sans-serif; font-size: 12px;">It's become traditional at this time of year for the media to mention all the potential gloom and risks facing the economy - the auto assembly industry shutting down is an old favourite, and resources construction declining, of course.</span></h3>
<p>Thing is, we've known about these issues for aeons now.  </p>
<p>What is rarely mentioned is that if the all of the downside events do play out the declining Aussie dollar would bear the brunt of the adjustment, quickly declining to 40 to 50 cents.</p>
<p>Given that the Reserve Bank seems unwilling to cut interest rates further, a strong increase in business investment over the next couple of years admittedly doesn't seem all that probable. </p>
<p>Regardless, nothing is all good or all bad, and here are a few possible upside risks for the economy.</p>
<div class="post-body entry-content">
<p><span style="text-decoration: underline;"><strong>1 - Manufacturing jobs increase </strong></span></p>
<p>The car industry will see some manufacturing jobs go this year. Still, manufacturing employment soared by +102,000 last year, and the PMI gauge is in positive territory too. Any more to come where this came from with the lower dollar?</p>
</div>
<div id="post-body-153697409885239923" class="post-body entry-content"><a href="https://www.propertyobserver.com.au/images/2017/01/09/A2.jpg" target="_blank">Click to enlarge</a></div>
<div class="post-body entry-content"> </div>
<div class="post-body entry-content">
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/09/A2.jpg" alt=""><br><span><span><br></span></span><span><span><strong><span style="text-decoration: underline;">2 - Unemployment rate drops towards 4 per cent (&amp; wages breakout)</span></strong></span></span><br><span><br></span><span>The unemployment rate has declined from 6.3 percent to 5.7 percent at the latest reading. A sharp decline towards 4 per cent isn't in anyone's base case, but it's not out of the question either according to the Reserve Bank's modelling. </span>
</div>
<div class="post-body entry-content"><span> </span></div>
<div class="post-body entry-content">
<span><a href="https://www.propertyobserver.com.au/images/2017/01/09/RBA1.jpg" target="_blank">Click to enlarge</a><br></span><br><div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/09/RBA1.jpg" alt=""></div>
<div class="separator"> </div>
<div><span><strong><span style="text-decoration: underline;">3 - Mining investment bust ends</span></strong></span></div>
<div> </div>
<div>Commodity prices soared by 45 percent last year, and bulk commodities ripped higher by 145 percent, so it wouldn't be a huge surprise if the nadir is in sooner than expected, possibly before the calendar year is out.   </div>
<div> </div>
<div class="separator"><a href="https://www.propertyobserver.com.au/images/2017/01/09/ENG.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"> </div>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/09/ENG.jpg" alt=""></div>
<div class="separator"> </div>
<div><strong><span style="text-decoration: underline;">4 - LNG price increases 50pc</span></strong></div>
<div><span> </span></div>
<div>LNG export volumes are forecast by Treasury to triple between 2015 and 2021. </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/01/09/RBA3.jpg" target="_blank">Click to enlarge</a></div>
<div><span> </span></div>
<div><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/09/RBA3.jpg" alt=""></div>
<div>
<div><span> </span></div>
</div>
<div>
<div>The Henry Hub natural gas spot prices is up by more than 75 percent from one year ago, and there could be more to come yet as oil prices rebound. </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/01/09/LNG.jpg" target="_blank">Click to enlarge</a></div>
</div>
<div> </div>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/09/LNG.jpg" alt=""></div>
<div class="separator"> </div>
<div>
<div><span><strong><span style="text-decoration: underline;">5 - Property prices rise 12pc in 2017, unleashing a wealth effect</span></strong></span></div>
</div>
<div>
<div><span> </span></div>
</div>
<div>
<div>SQM Research see strong price gains nationally as possible, with prices in Sydney to rise by as much as 18 percent.</div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/01/09/unnamed.png" target="_blank">Click to enlarge</a></div>
</div>
<div> </div>
<div><img src="https://www.urban.com.au/images/2017/01/09/unnamed.png" alt=""></div>
<div><span> </span></div>
<div><span><em><span style="text-decoration: underline;">Source: SQM Research</span></em></span></div>
<div>
<div><span> </span></div>
<div>The wealth effect on household expenditure doesn't seem all that likely, but stranger things have happened, especially with household wealth passing a record $9 trillion last year.<br><br>
</div>
</div>
<div><span><strong><span style="text-decoration: underline;">6 - Infrastructure booms</span></strong></span></div>
<div>
<div> </div>
</div>
<div>
<div>The NSW state government has zero net debt for the first time on record on the back of the biggest stamp duty boom in Australia's history, which should fund some serious infrastructure investment. </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/01/09/NSW.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/09/NSW.jpg" alt=""></div>
</div>
<div class="separator"> </div>
<div><span>Nationally, an infrastructure boom could be underway...</span></div>
<div><span> </span></div>
<div><a href="https://www.propertyobserver.com.au/images/2017/01/09/BORAL2.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div> </div>
<div>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/09/BORAL2.jpg" alt=""><br><br>
</div>
<div><span><strong><span style="text-decoration: underline;">7 - China unleashes its capital account</span></strong></span></div>
<div><span> </span></div>
<div>
<div>China has a rapidly urbanising population of 1.4 billion. If the capital account ever gets unleashed to buy international assets in earnest... well, there are only 24 million of us...</div>
</div>
<div> </div>
<div class="separator"><a href="https://www.propertyobserver.com.au/images/2017/01/09/FIRB.jpg" target="_blank">Click to enlarge</a></div>
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<strong><span style="text-decoration: underline;">8 - Tourism &amp; education boom</span></strong><br><strong><span style="text-decoration: underline;"><br></span></strong>Tourism and international student arrivals are already booming, and arrivals could rise 10 to 15 per cent over the next year following a streamlining of student visa rules, helping to send annual population growth back towards 450,000 per annum. Chinese visitor spend is also already exploding. <br><br><strong><span style="text-decoration: underline;">9 - Global growth accelerates, Australian GDP to above 5 percent</span></strong>
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<div>The Trump victory becomes a global turning point, and a combination of expansionary policy overseas and a revival of the animal spirits sees Australia's GDP growth accelerate to above 5 percent.</div>
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<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
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<div>We won't see all of these unfold of course, but four or five of them could easily play out. </div>
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<div><em><span>PETE WARGENT </span>is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. </em></div>
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Nine upside risks to the Australian economy in 2017: Pete Wargent

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<div>Retail trade turnover missed expectations in rising by a seasonally adjusted 0.2 percent to $25.66 billion, although this was the first miss in four months and came off the back of a 0.5 percent gain in October. </div>
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<br><div>The annual rate of turnover growth has eased back to 3.3 percent, comfortably below the half decade average. </div>
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<div><strong><span style="text-decoration: underline;">Around the traps</span></strong></div>
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<div>There were decent gains in November in New South Wales and Victoria, but not much to write home about elsewhere. </div>
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<br><div>The Australian Capital Territory has long been the leader in annual retail turnover growth since the opening of the Canberra IKEA, with New South Wales slotting into second spot, but growth has stalled in Western Australia. </div>
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<br><div><strong><span style="text-decoration: underline;">Smashed avo rally over?</span></strong></div>
<br><div>The best performing sector this month was 'threads 'n' treads' - clothing and footwear - and the worst, surprisingly enough, was eating out!</div>
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<br><div>Still, I wouldn't read too much into one month of figures - the trend figures show a 14.21 per cent share of total retail accounted for by takeaway food and eating out. It's never been higher. </div>
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<div>A somewhat underwhelming result for retail trade this month, though when spending on services are included Commsec estimated that spending was galloping along at its fastest level since the financial crisis. </div>
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<div class="post-footer"><em><span>PETE WARGENT </span>is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. </em></div>
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