South East Queensland developer&nbsp;<a href="https://www.apartments.com.au/developers/gardner-vaughan-group">Gardner Vaughan Group</a>’s entry into the Gold Coast apartment market has progressed from pipeline to market, with its Chevron Island project Bronze on Chevron now formally available to purchase ahead of a planned 2029 completion.

The 119-apartment development on Mawarra Street marks the Brisbane-headquartered builder-developer’s first residential play in the Gold Coast, following its expansion south from Brisbane and the Sunshine Coast.

<a href="https://www.apartments.com.au/new-apartments/bronze-on-chevron-8-mawarra-street-surfers-paradise-qld-4217">Bronze on Chevron</a> comprises a mix of two-, three- and four-bedroom residences, with pricing starting from just over $1.5 million. The project is being delivered under Gardner Vaughan’s fully integrated model, with the group acting as both developer and builder, a structure it has consistently applied across its South East Queensland portfolio.

[smartcode_project:default project_id=107520 project_image_fid=367182]

Architecture has been designed by <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker</a>, with landscape architecture by <a href="https://www.apartments.com.au/landscape-architect/jeremy-ferrier-landscape-design">Jeremy Ferrier</a>. The building presents as a single-tower scheme, with a focus on maximising outlook across both the Surfers Paradise skyline and the Nerang River.

Apartments have been planned with open-plan living zones extending to generous balconies, a response to the site’s dual-aspect positioning between river and ocean. Interiors follow a restrained coastal palette, with two colour schemes offered, and an emphasis on natural light and cross-ventilation.

[smartcode_project:default project_id=107520 project_image_fid=367181]

Resident amenity is concentrated across more than 1,250 sqm and includes a resort-style pool, gym, yoga lawn and rooftop entertaining areas. A function space with catering facilities forms part of the upper-level offering, alongside north- and south-facing outdoor areas.

Ground level will incorporate two retail tenancies, intended to extend the existing village character of the surrounding streets.

&nbsp;

[smartcode_project:default project_id=107520 project_image_fid=367200]

The project sits within walking distance of Thomas Drive’s established dining strip, while maintaining proximity to <a href="https://www.apartments.com.au/developments/surfers-paradise-qld-4217">Surfers Paradise</a> beach and broader Gold Coast amenity. The location, positioned on Chevron Island between the river and coastline, has increasingly attracted mid- to high-density development in recent years as the precinct evolves beyond its low-rise origins.

Gardner Vaughan’s move into the Gold Coast was first signalled in 2025, with the group identifying the region as a natural extension of its operations. Chief Executive Officer Simon Betteridge described the expansion as both “strategic and natural”, citing demand for well-designed apartments in lifestyle-driven markets.

Construction is expected to complete in early 2029.

[smartcode_project_cta:default project_id=107520]

Joel Robinson

Gardner Vaughan brings Bronze on Chevron to market as Gold Coast debut

One of the penthouses at Lily Lane, the latest stage of Carrington Place by Ellipse Property, has set a new local apartment price record.

The four-bedroom residence, purchased by a local downsizer, sold for $5.75 million—around 75 per cent higher than the previous record of $3.3 million.

Over 40 per cent of the first release of apartments at&nbsp;<a href="https://www.apartments.com.au/new-apartments/lily-lane-at-carrington-place-castle-hill-32-carrington-road-castle-hill-nsw-2154">Lily Lane</a> have already been snapped up just six weeks since it launched to the market.

&nbsp;

Located at 32 Carrington Road, <a href="https://www.apartments.com.au/developments/castle-hill-nsw-2154">Castle Hill</a> and designed by award-winning architects <a href="https://www.apartments.com.au/architects/ptw">PTW</a>, Lily Lane is directly opposite the Hills Showground Metro station. It offers a total 213 units over two 12-storey towers - a mix of 67 one-bedroom, 100 two-bedroom and 46 three-bedroom apartments - with a ground-floor retail offering.

[smartcode_project:default project_id=151821 project_image_fid=368352]

Blake Schulze, National Director – Residential at <a href="https://www.apartments.com.au/project-marketer/colliers">Colliers</a>, says around 44 per cent of buyers are&nbsp;owner occupiers, with 35 per cent being investors and 21 per cent first homebuyers.

“Developments of this calibre are very rare in the Hills District, and Lily Lane’s sales success demonstrates the depth of demand for over-sized apartments that genuinely compete with freestanding homes," Schulze says.

"We are seeing particular demand from downsizers who want to remain in the area but transition into spacious, high-quality apartment living."

On the penthouse sale, it says it shows buyers&nbsp;are prepared to pay a premium for scale, quality, and direct access to the Metro.

[smartcode_project:default project_id=151821 project_image_fid=368351]

One-bedroom apartments are sized from 50-72 sqm with prices starting at $745,000, while two-bedrooms are priced from $990,000 with sizes from 75 to 132 square metres. Three-bedroom floorplans are sized between 97 and 182 sqm,, with prices starting at $1,395,000.&nbsp;

The three remaining penthouses, spanning up to 262 sqm, are priced from $2.9 million.

Over 75 per cent of apartments include dedicated studies, multipurpose rooms or family rooms, with select layouts offering walk-in pantries and laundries. Apartments are appointed with premium Miele appliances including ovens, washing machines, dryers, gas cooktops and dishwashers, while larger residences also incorporate integrated Miele microwaves, Fisher &amp; Paykel integrated refrigerators and five-burner Miele cooktops.

[smartcode_project:default project_id=151821 project_image_fid=360285]

Lily Lane will be constructed by award-winning iCIRT-rated builder <a href="https://www.apartments.com.au/builders/decode">Decode Group</a>, with construction to commence in mid-2026 and expected to complete early 2029.

Carrington Place comprises more than 800 apartments and is being delivered across multiple stages, with completion expected in 2032. Integrated with neighbouring bushland, the project will feature over 20,000 sq, of outdoor recreational area, including a one-kilometre boardwalk to Fred Caterson Reserve.&nbsp;

The Hills Showground Metro Station is just a two-minute walk away, offering fast connectivity to Sydney’s CBD, North Sydney, Chatswood, Macquarie Park and Norwest Business Park.

[smartcode_project_cta:default project_id=151821]

Ellipse sets Castle Hill apartment record with $5.75 million Lily Lane penthouse sale

Fresh off completing its Delano Crows Nest development, Lindsay Bennelong has lodged plans for its next project, this time turning its attention to the beach.

The developer, founded by Clarendon Homes founder Peter Campbell, is proposing a 37-apartment scheme at <a href="https://www.apartments.com.au/new-apartments/17-25-ashburner-street-manly-nsw-2095">17-25 Ashburner Street</a>, Manly, positioned between the southern end of <a href="https://www.apartments.com.au/developments/manly-nsw-2095">Manly</a> Beach and East Manly Cove.

Lindsay Bennelong called on local architecture firm Platform Architects to design the new building, given their success on The Finn, Lindsay Bennelong's current luxury apartment project on North Steyne.&nbsp;

According to the Design Verification Statement by Bridie Gough of Platform Architects, the proposal “relates to the current context but also the desired future character of taller buildings suitable to the new planning controls.”

The site has been identified as a Low to Mid-Rise Housing (LMR) location, given its position within 400 metres of the Manly Town Centre E1 Business Zone. The LMR controls are intended to unlock additional housing supply in well-located areas close to public transport, allowing developers to seek increased height limits to support greater density.

“The proposal seeks to provide this increased level of housing whilst being respectful of some of the smaller scale buildings also nearby,” the statement reads.

Lindsay Bennelong Development Director Leigh Manser said the project has been carefully aligned with the intent of the LMR controls. The proposal will significantly increase housing yield on the site, replacing four houses and 10 apartments, comprising 25 bedrooms, with 37 new apartments delivering a total of 94 bedrooms.

“Sydney is in a severe undersupply, and delivering more dwellings and more bedrooms than what currently exists is exactly what the LMR policy is designed to activate,” Manser said, noting that nine of the apartments will be allocated as affordable housing for frontline workers.

“We have already commenced discussions with our community housing provider to determine the rental levels that frontline workers can realistically afford in this location,” he said. “These will need to sit well below the standard affordable housing benchmark of 20 per cent below market rent, and that has been factored into our feasibility and pricing.”

<img alt="Manly" data-entity-type="file" data-entity-uuid="ad03000f-19f9-48b4-b27d-e85ca800a1da" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-30%20at%208.41.59%E2%80%AFAM.png?VersionId=a.txHwCZgbCInlQ6QXbIrI.umvW1T.r8" />

The design of the building incorporates a wave-like indentation running through the façade, referencing the nearby coastline and anchoring the building within its local context.

The&nbsp;Design Verification Statement says careful consideration has been given to the articulation of the building, ensuring the bulk is broken down to a more human scale through a defined four-storey podium."

The scheme includes a mix of one-, two- and three-bedroom apartments.

“The design ensures a high level of amenity, with apartments offering generous private open space, many with expansive views, and all with comfortable proportions."

<img alt="Bennelong" data-entity-type="file" data-entity-uuid="6a7f2812-72a1-4959-84b0-997e8cd88aed" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-30%20at%2010.15.50%E2%80%AFAM.png?VersionId=6iMxU3MkXmHVHAoNhYBjnqgka8CUZNbk" />

<a href="https://www.apartments.com.au/developers/lindsay-bennelong-developments">Lindsay Bennelong</a>&nbsp;is currently developing Finn Manly, just three full-floor luxury apartments on North Steyne. They recently welcomed residents to its 81-unit Delano Crows Nest development, a&nbsp;carefully scaled infill project designed to bridge&nbsp;<a href="https://www.apartments.com.au/developments/crows-nest-nsw-2065">Crows Nest</a>’s lively village centre with its surrounding heritage streets.

Designed by&nbsp;<a href="https://www.apartments.com.au/architects/ajc-architects">AJC Architects</a>,&nbsp;<a href="https://www.apartments.com.au/new-apartments/delano-crows-nest-27-57-falcon-street-crows-nest-nsw-2065">Delano</a>&nbsp;is arranged across three low-rise buildings, incorporating a mix of one, two, and three-bedroom apartments alongside a limited number of townhomes addressing Hayberry Lane. The architectural approach draws on the area’s Art Deco lineage, reinterpreted through contemporary detailing and framed by landscaped communal gardens.

The developer also has a development site in Maroubra.

First look: Lindsay Bennelong's new Manly apartment development revealed

Fifty-nine residences across 37 levels. No more than two per floor. With 80 per cent now sold, what remains at <a href="https://www.apartments.com.au/new-apartments/madeline-by-mosaic-broadbeach-22-mary-avenue-broadbeach-qld-4218">Madeline by Mosaic</a> is a short list.

Madeline was always conceived at a scale that sits outside the normal register of Gold Coast apartment living. The residences are half- and full-floor configurations, with the largest spanning more than 400 sqm, dimensions that place them closer to the penthouse end of the market regardless of where they sit in the building.

That scale is the organising principle of everything else: how the floorplans are laid out, how the materials read, how the connection between inside and outside works.

[smartcode_project:default project_id=150135 project_image_fid=355941]

The interiors were developed in collaboration with <a href="https://www.apartments.com.au/architects/fraser-partners-0">Fraser &amp; Partners</a>, the architecture practice&nbsp;<a href="https://www.apartments.com.au/developers/mosaic-property-group">Mosaic</a> brought in as design partner for the first time on this project. The palette runs to natural stone, textured timbers, and soft metallics, materials chosen as much for their tactile quality as their appearance.

Light cleverly shifts across surfaces through the day, and the design is explicit about wanting that to be noticed. Full-height glazing runs across the primary living areas, and where the building faces east toward the ocean, those walls of glass are doing real work: framing a view corridor that the site's position directly opposite Broadbeach State School's playing fields keeps permanently open.

That outlook is the site's most consequential asset. In a suburb where new towers continue to rise, a protected view line is genuinely rare, and the Mary Avenue address secures it. Residents at Madeline will look out over open parkland rather than the rear of another building, a distinction that becomes more meaningful with each new development approved nearby.

[smartcode_project:default project_id=150135 project_image_fid=355939]

The private outdoor spaces are sized to match the residences themselves. Terraces on the upper levels frame uninterrupted ocean panoramas, and the planning ensures that living areas extend into those outdoor zones rather than treating them as separate attachments. The flow between the two is part of the design intent, not an afterthought.

Inside, the finish specification reflects the same approach. Rich stone benchtops, warm timber joinery, bespoke hardware, each element specified to hold up over time rather than read as a moment in a particular trend cycle.

[smartcode_project:default project_id=150135 project_image_fid=3409]

Beyond the residences, the amenity offering extends that register. A lap pool and sun deck anchor the outdoor space, alongside a magnesium pool, cold plunge, steam room, and sauna.

A commercial-grade gymnasium, residents' lounge, library, and boardroom round out a programme that functions more like a private members club than a standard building amenity floor.

Construction has commenced under Mosaic's in-house building arm, with completion scheduled for late 2028.

[smartcode_project_cta:default project_id=150135]

Madeline by Mosaic delivers penthouse-level living across every apartment

Developer Fortezza Group is the latest to take its new apartment development, <a href="https://www.apartments.com.au/new-apartments/the-belvedere-5-7-church-street-nelson-bay-nsw-2315">The Belvedere in Nelson Bay</a>, to the NSW Government.

Fortezza, predominantly a South East Queensland developer, is the latest to apply for State Significant Development&nbsp; status through the NSW Government's Housing Delivery Authority, a pathway becoming favoured by developers to speed up the approval process.

They are planning 57 two- and three-bedroom apartments across 5-7 Church Street and 42 Donald Street, near d'Albora Nelson Bay Marina. The diverse apartment mix has sizes from just over 80 sqm to the largest three-bedroom penthouses that reach nearly 200 sqm.

<img alt="Fortezza" data-entity-type="file" data-entity-uuid="090360e1-66d7-43ad-b686-aba81f173bf2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-29%20at%2010.22.40%E2%80%AFAM.png?VersionId=DMqF96eBZolqSAAAcugX0l66ueWng66m" />

Fortezza calls the project a "piece of Istria in Nelson Bay,"&nbsp;referring to the largest peninsula in the Adriatic Sea, shared by Croatia (90%), Slovenia, and Italy, which is known for its Roman history, Venetian-style coastal towns and inland hilltop villages.

They say the The Belvedere is strategically positioned at the apex of Nelson Bay, offering unrivalled views of the ocean, the bay and captivating topography of the area.

"Our commitment to maintaining the integrity of every view and sight line has been relentless," Fortezza Group says.

"Through extensive modelling and analysis, we ensure that each apartment enjoys the natural beauty of Nelson Bay, regardless of future developments. Each design element is carefully curated to harmonise with our European heritage, drawing profound inspiration from the Roman architectural marvels in Istria. The arches, the cascades of greenery and the stonework that define our project pay homage to the structures that once exemplified Roman grandeur."

Residents will have access to a pool, communal green spaces, an office and a coffee shop.

First look: Fortezza Group takes The Belvedere, Nelson Bay apartment development, to NSW Government

Falling Prices

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When we think about the housing market we tend to focus on when values rise but in the recent past values have fallen in each capital city; this week we look at the magnitude and duration of these falls in the past.
Throughout the past 20 years it has been much more common for combined capital city dwelling values to have been increasing than falling. 
Although value rises have been more common, it doesn’t mean that the housing market is bulletproof and in some instances values have fallen quite dramatically and rapidly. 
Typically the Reserve Bank (RBA) or the Government have adjusted fiscal and/or monetary policy to support the housing market and arrest the value falls.
Across the combined capital cities, dwelling values have increased by 346.4% over the 20 years to April 2017. 
In the two periods in which values have fallen, capital city dwelling values fell by -6.1% between March and December 2008 and they fell by -7.4% between October 2010 and May 2012.
<a href="https://www.propertyobserver.com.au/images/2017/06/14/Screen%20Shot%202017-06-14%20at%209.53.45%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/14/Screen%20Shot%202017-06-14%20at%209.53.45%20am.jpg" alt="">
At an individual capital city level housing markets have cycled quite differently however, the majority of capital cities recorded a decline in dwelling values in both 2008 and from late 2010/early 2011. 
The 2008 decline occurred as the financial crisis hit with values falling however, stimulus measures in the form of aggressive interest rate cuts along with cash handouts and boosts to first home buyer’s grants proved enough to spur demand and turnaround the decline in values.
<a href="https://www.propertyobserver.com.au/images/2017/06/14/Screen%20Shot%202017-06-14%20at%209.53.56%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/14/Screen%20Shot%202017-06-14%20at%209.53.56%20am.jpg" alt="">
In 2010 dwelling values fell as the post financial crisis stimulus was being wound out of the market with interest rates increasing and first home buyer incentives being removed. 
These value falls were arrested as the RBA reversed direction and started to cut official interest rates again in late 2011.
Looking at the declines which commenced in 2008, the magnitude of falls was fairly minor considering most advanced economies fell into recession as a result of the financial crisis. 
Hobart and Darwin were relatively unaffected by the declines however, Melbourne (-8.3%), Perth (-6.8%) and Sydney (-6.2%) were more impacted than all other capital cities. 
The period of decline proved quite short and it has become clear that the stimulus measures effectively staved off sharper declines and possibly a national recession.
<a href="https://www.propertyobserver.com.au/images/2017/06/14/Screen%20Shot%202017-06-14%20at%209.54.07%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/14/Screen%20Shot%202017-06-14%20at%209.54.07%20am.jpg" alt="">
From 2010 to 2011/12 all capital cities experienced falls in dwelling values as the financial crisis stimulus and low interest rates were wound out of the market. 
Sydney (-5.0%), Adelaide (-6.9%) and Canberra (-4.4%) were the only capital cities in which values didn’t fall by more than 10% over this period. 
The largest falls were recorded in Darwin (-19.7%), Hobart (-14.3%) and Brisbane (-11.7%). 
Over the period of falls, Darwin (-1.2%) averaged the largest average monthly fall along with Hobart (-0.8%), Melbourne (-0.6%) and Perth (-0.6%). 
Across the other capital cities, Sydney, Adelaide and Canberra recorded average declines of -0.3%/month and Brisbane’s declines averaged -0.5%/month.
<a href="https://www.propertyobserver.com.au/images/2017/06/14/Screen%20Shot%202017-06-14%20at%209.54.19%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/14/Screen%20Shot%202017-06-14%20at%209.54.19%20am.jpg" alt="">
This analysis serves as a reminder that although capital city dwelling values have largely increased over the past 20 years, they are not immune from potential declines. 
The impetus for these previous declines have been external economic shocks and the stimulus of low interest rates and grants to first home buyers being removed. 
We aren’t currently seeing any economic shocks of the size of the 2008 financial crisis but we are seeing unemployment rate at similar levels to 2008/09 and historically high levels of underemployment. 
The market is also slowly seeing historic low mortgage rates moving higher against a backdrop of record low wages growth and record high household debt. 
Depending on how much mortgage rates are increased (noting that this is not happening due to the RBA) home owners should be aware that it could lead to a slowing or even some potential falls in dwelling values.
Cameron Kusher is head of research for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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ckusher-ujnxiKuFQs

What happens when house prices start falling? Cameron Kusher

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A vacated Parramatta apartment has sold for $32,000 less than it did 2014.
Located at 103B/3 Broughton Street, the unit features one bedroom, one bathroom, a car space, and a balcony.
In May it sold for $483,000.
In 2014, however, it was secured for $515,000 from the developer Starryland.
The ground floor unit was on the market for 45 days.
The sale comes amid fears that a market decline, with HSBC estimating that Sydney prices could fall by 15 per cent if current economic conditions are extended.
Christopher Sahyoun and John Dahdah, from Belle Property Parramatta, had the listing.
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j.ballantyne1990-6AQqhLzZaK

Starryland, Parramatta apartment sold for $32,000 less than 2014 price

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EXPERT OBSERVER
The core task for investors is to find the growth locations, preferably before values rise significantly.
It’s not an easy one because there’s a shortage of helpful information. Mostly the media and the research companies give us historical information and usually in a generalised way. 
This means they tell what’s happened recently, which doesn’t necessarily inform the future, and usually with a single growth figure to describe an entire major city.
But something that came recently from CoreLogic was a little more helpful, because it provided some segmentation of sub-markets. Rather than simply tell us that Sydney and Melbourne prices are falling, it acknowledged that this is only true of some market sectors – and that others are still rising.
There are some patterns with this data which are handy to observe and useful in deciding what happens next and where.
One of the things I know to be true, from a scary number of years of experience, is that up-cycles often/usually begin in the inner-city areas. Over time they ripple out to the middle-ring suburbs and latterly to the outer-ring areas.
Why is it so? One reason, probably the biggest single one, is that real estate markets are largely driven by local economic conditions – not by national factors like interest rate levels or taxation policies, but by what’s happening in the economy at a local level.
This helps to explain why Sydney and Melbourne, underpinned by the No.1 and No.2 economies in the nation, have had booms while the cities afflicted by the weakest of the state/territory economies, Perth and Darwin, have had markets in reverse.
When economies rise, the first people to notice are those in the business community – the ones earning the most money. They react before anyone else does and they tend to live in the millionaire suburbs. Those markets rise first and others follow over time.
When you get towards the end of the cycle, those early adopters have passed their peaks and it’s the cheaper areas on the fringes that are experiencing the busiest markets and the strongest annual price growth.
So, according to the recently-published CoreLogic figures, it’s overly simplistic to claim that Melbourne house prices are falling. CoreLogic’s analysis says that prices in the upper end of the market are down 3.5 percent (generally speaking), but prices at the affordable end are up more than 10 percent.
This correlates with Hotspotting research which indicates that the outer-ring precincts in the Greater Melbourne area – suburbs in LGAs like Hume, Whittlesea, Casey, Melton and Wyndham – have strong sales activity and price growth. And this is what we would expect at this point in the Melbourne cycle.
There’s a similar scenario in Sydney – the upper end price levels generally are falling but there’s still some growth in the cheaper outlying areas.
The pattern for Hobart is interesting and informative, because it suggests that the Tasmanian capital is still pumping but that the peak might be near. The top end of the Hobart market is still rising (up almost 10 percent) but the cheaper end is up a lot more (around 18 percent, according to these figures).
That suggests the market overall is still strong but the lower end is the strongest.
In terms of how all this informs the future, Perth is a good case study. When I recently looked at all the numbers for Perth, one of the things that stood out was that many of the million-dollars suburbs had recorded good growth in their median house prices but elsewhere this was not the case.
The CoreLogic figures would tend to confirm that, because they find that the upper end has risen but the cheaper end is still slightly in the negative.
This, taken with other information, confirms for me that Perth is moving into a recovery phase in response to improvements in the local economy – and, as I would expect, the upper end areas are the first to react.
I’ve seen evidence of a similar scenario in Adelaide, with many of the top end suburbs showing good annual price growth, ahead of what I expect to be a strong showing by the Adelaide market generally in the next 12-18 months.
Terry Ryder is the founder of hotspotting.com.au
<a href="https://mailto:ryder@hotspotting.com.au">ryder@hotspotting.com.au</a>
twitter.com/hotspotting
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terryryder-YECXbqmri2

Pinpointing where house values are rising and where they are falling

soliver-smf6LQXgW9

Further property price falls ahead: Shane Oliver

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EXPERT OBSERVER
Back on 19th March when we first looked at the impact of the intensifying shutdown of the Australian economy on the housing market (see here) we concluded that the impact would depend on how high unemployment rose.
Our base case was a recession that saw unemployment rise to around 7.5% and would push average home prices down around 5%, but the risk was that a deeper downturn with say 10% unemployment could see a 20% fall in prices. Subsequent government support measures along with an earlier reopening of the economy have reduced the risk of worse case scenarios for home prices.
So Far So Good
The combination of the need for social distancing and the banning for a while of traditional on-site auctions led to a sharp decline in properties for sale.
In addition to this, the Federal Government’s JobKeeper scheme keeping around 3.5 million people in paid employment and a doubling in unemployment benefits along with bank mortgage payment holidays, all of which are for the six months to September, have helped head off an increase in forced sales that might have occurred given the size of the hit to the economy.
So, while property demand has fallen, it’s been matched by a collapse in supply, which has left the property market in a bit of a twilight zone.
While listings have started to pick up a bit lately, they are still very low and this has all helped soften the blow to house prices that would have otherwise occurred, but prices are still starting to fall. According to CoreLogic, after slowing to just 0.2% growth in April, average capital city home prices fell -0.5% in May.
Prices fell in all cities except Adelaide, Hobart and Canberra, with Melbourne -0.9%, Sydney -0.4% and Perth -0.6%. This has seen the monthly change in capital city home prices collapse from a peak of 2% in November.
The positives for the property outlook
There are basically five “positives” for property prices. 
Mortgage rates have fallen to record lows with deals around 2 to 3%. This is keeping mortgage debt interest costs as a share of household income well below historic highs even though the ratio of household debt to income is at a record high of around 200%. Low mortgage costs also make the funding costs for an investment property very low.
As noted above, while listings remain low. 
Government support measures have provided a huge boost to household income, supported businesses, supported employment for around 3.5 million workers, prevented a confidence zapping surge in measured unemployment &amp; with bank mortgage payment holidays (which has seen around 440,000 mortgage deferrals) are preventing a sharp rise in mortgage delinquencies and hence forced sales. 
The shutdown, impacting mostly services jobs, has hit women and younger workers harder in contrast to past recessions which have hit male breadwinners harder and this may have helped keep down debt servicing problems. 
China is running 2-3 months ahead of Australia with respect to the coronavirus shock and its experience provides some guide. While property sales were near zero in the peak lockdown month of February average property price growth slowed but did not go negative and is now picking up a bit.
The negatives
Against these positives there are these big “negatives” for property prices flowing from the coronavirus shock.
High unemployment. We have long regarded the combination of high house prices and high household debt as Australia’s Achilles heel and so we feared back in March that a large rise in unemployment could trigger debt servicing problems, forced sales and so sharp falls in prices.
As it’s turned out, measured unemployment is being suppressed and household incomes supported by stimulus measures. This is by design to help businesses, jobs and incomes hold up through the shutdown period.
It’s likely headed off the worst case 20% decline in house prices scenario we saw in March. But once the support measures end later this year, measured unemployment will likely rise to around 8% and take a long time to fall back to the pre coronavirus levels around 5.2%.
This in turn is likely to lead to some increase in mortgage defaults as bank payment holidays (for around 440,000 mortgages) end, boosting forced sales and act as a drag on property demand, albeit it’s unlikely to be anywhere near what would have occurred in the absence of support measures through the shutdown. 
A big drop in immigration. Thanks to travel bans, the Government expects net immigration to fall to just below 170,000 this financial year and to around 35,000 next financial year from 240,000 last financial year. This is a huge hit and if it occurs – the Government could always allow a faster return of immigration – it will take population growth over 2020-21 to just 0.7%, its lowest since 1917.
It will imply a hit to underlying dwelling demand of around 80,000 dwellings over the next 12 months taking it down to around 120,000 compared to underlying demand last year of around 200,000. This risks resulting in a significant oversupply of dwellings, reversing years of undersupply that has maintained very high house prices since mid-last decade.
A cut to immigration is not something China has had to deal with, so its property market experience is not directly translatable to Australia.
Falling rents and rising vacancy rates. Vacancy rates rose sharply in April and this plus rent relief is putting downwards pressure on rents. This will be further impacted by very low immigration. It will further weigh on investor demand and may cause problems for heavily geared property investors.
Measures to boost housing construction. Faced with a big reduction in housing construction activity over the year ahead, governments appear to be working on plans to boost activity to protect home builders’ jobs via new home building grants and possibly the construction of social housing.
Normally first home buyer grants provide a boost in overall demand. But if the focus is just on boosting supply at a time when underlying demand is very low reflecting lower immigration it could add to downwards pressure on average prices. (Proposed moves from stamp duty to land tax in some states could provide a short-term boost to home prices but should be long term neutral if the same revenue is raised and it’s unclear whether or when it will occur.)
Concluding comment
Our worst-case scenario for a 20% decline in prices and those of others seeing 30% plus falls are unlikely thanks to support measures and the earlier reopening of the economy. To get these worst-case scenarios would require a “second wave” of coronavirus cases &amp; so a renewed shutdown or another down leg in the economy in response to a surge in bankruptcies.
However, further falls in prices are still likely, as “true” unemployment (to become clear after September) remains high for several years, government support measures and the bank payment holiday end after September, immigration falls and likely government measures boost housing construction. Our base case is for national average prices to fall around 5-10% into next year.
Sydney &amp; Melbourne are likely to see 10% falls as they are more exposed to immigration and have higher debt levels whereas Adelaide, Brisbane, Perth &amp; Hobart are only likely to see small falls and Canberra prices are likely to be flat. This may be seen as a reasonable outcome in terms of making housing more affordable but without posing a big threat to the economy (via a downwards spiral of falling prices and negative wealth effects on consumer spending) at the same time.
Dr Shane Oliver Head of Investment Strategy and Chief Economist at AMP Capital
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Australian house price collapse likely averted but expect more weakness ahead: Shane Oliver

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Despite the continued resurgence in the property market, capital city residential prices dropped 0.7 per cent over the June quarter, according to figures released by the ABS.
It's considerably less than the three per cent declines seen in the March quarter. Every capital city had recorded price declines.
Sydney and Melbourne had been the biggest drivers over the March quarter, but this time it was Darwin (-1.8 per cent) and Perth (-1.4 per cent) leading the declines given the Sydney and Melbourne resurgence.
Melbourne (-0.8 per cent) was the third worst performing capital over the June quarter, followed by Brisbane (-0.7 per cent) then Adelaide (-0.6 per cent).
Sydney saw declines of -0.5 per cent, a considerable bounce back from its -3.9 per cent declines over the March quarter.
ABS chief economist Bruce Hockman said the falls in Melbourne were driven by detached dwellings, while attached dwellings drove the fall in Sydney.
To enlarge the capital city June quarter performance, <a href="https://www.propertyobserver.com.au/images/2019/9/17/Capital%20City%20June%20Quarter%20House%20Prices%20ABS.jpg" target="_blank">click here.</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/9/17/Capital%20City%20June%20Quarter%20House%20Prices%20ABS.jpg" alt="">
"Sydney and Melbourne housing markets have seen residential property price falls moderate this quarter," Hockman said.
"A number of housing market indicators, such as auction volumes and clearance rates, have begun to show signs of improvement, though they remain below the levels seen one year earlier".
Hobart (+0.5 per cent) and Canberra (+0.2 per cent) were the only capitals to record price growth over the June quarter.
Through the year, residential property prices fell 7.4 per cent to the June quarter 2019.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/9/17/ABS%20quarterly%20change.jpg" alt="">
Prices fell 9.6 per cent in Sydney and 9.3 per cent in Melbourne.
Hobart (+2.0 per cent) was the only capital city to record positive through the year growth.
The REIA recently suggested the <a href="/news/market-hit-the-bottom-in-the-june-quarter-reia">market hit the bottom</a> over the June quarter.
 
 
 
 
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jrobinson-rf4aSBido9

Property price falls slow, but 0.7 per cent declines felt in June quarter: ABS

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The largest regulatory credit crunch in 30 years will cause a further slide in property values, Endeavour Equity Strategy said in a detailed 30-page report.
Sydney and Melbourne house prices could fall by 15 to 20% in a repeat of the late 1980s and '90s, the equity research firm suggested citing evidence that about 40% of all mortgages were "non-prime."
It was based on the level of borrower's income relative to debts.
Endeavour suggested the crackdown on the use of measures that understated borrower expenses, and overstated their borrowing capacity, would reduce loan values by up to 30%.
"Our base case suggests expense ratios will increase sharply, serviceability ratios will decrease proportionately, and loan sizes and property prices will suffer in the order of 15 to 20% in real terms," the report said.
It written by Endeavour's Douglas Orr, and circulated to fund manager clients with a report appearing in The Australian Financial Review.
A fall in house prices would lead to a decline in building activity resulting in a "modest increase" in arrears as incomes tied to the sector fall.
"Lower house prices would reduce the ability for stressed borrowers to trade out or finance," the report said.
Endeavour called on the prudential regulator to force the banks to disclose metrics such as "debt serviceability to income ratios" and said the "commercially conflicted" Household Expenditure Measure, or HEM, used to assess borrower expenses boosted serviceability by 15% to 20%.
"Mandatory disclosure of serviceability metrics would achieve this and offset real concerns that the current regime allows banks to 'commission their own risk goal posts' – by relying on HEM," the report said.
Endeavour Equity Strategy was founded 15 years ago by Douglas Orr, a former ABN AMRO research analyst. 
"We see credit growth over the coming 12 to 18 months as likely flat to negative, margins under pressure, heightened legal risks and bad debts set to increase as equity turns negative for a significant portion of leveraged home owners and investors."
The report said a sample of 420 Westpac mortgages, made public as part of the Hayne royal commission, supported its prior view that 40% of all outstanding mortgage debt was "non-prime".
This was based on the "internationally accepted" measure of "non-prime" being a mortgage in which more than 40% of income was being used to service interest payments on debt.
"Non-prime mortgages areas have default rates three to five times higher in a downturn," Orr told AFR.
The Endeavour report described the banks' lending buffers as "illusory" because the HEM understated expenses for most households, and therefore overstated how much income borrowers had available to service debt even after a buffer was factored in.
The Westpac loan sample also showed the extensive use of the HEM to assess borrower expenses. In that loan sample, 97 out of the 100 loans originated by mortgage broker RAMS relied on the HEM, while 86% of Westpac's loans relied on the measure.
A more "realistic" assumption around living expenses would substantially reduce the funds available to service a loan to a household on $150,000 of annual income from $76,000 to $56,000.
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Largest regulatory credit crunch in 30 years could trigger 20% price fall

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EXPERT OBSERVER
Since the housing market’s September peak, the 2% slip in national prices has surpassed the minor correction in 2015-16 that marred the otherwise multi-year upswing since 2012.   Unsurprisingly, Australia’s long-treasured dinner party conversation topic is starting to generate more nervous chatter.   Firstly, the good news: the rate of decline has moderated a little in the last three months.
The bad?
Buyer sentiment may be showing tentative signs of levelling out but is still not particularly promising, turnover remains near record lows and auction clearance rates are again falling in Sydney and Melbourne.
<a href="https://www.propertyobserver.com.au/images/2018/6/19/ride.jpg" target="_blank">Click here to enlarge.</a>
<a href="https://www.propertyobserver.com.au/images/2018/6/19/ride.jpg" target="_blank"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/6/19/ride.jpg" alt=""></a> If it’s any comfort, it’s worth remembering the 2% national decline from the peak remains shallow by historical standards and the declines are narrowly based.
With Sydney leading the decline with a 4.5% fall from the peak, it looks similar to the mid–2000s when the Sydney market experienced a downturn that mostly bypassed other markets, rather than the broader corrections seen during prior major interest rate tightening cycles, such as the mid-1990s.<a href="https://www.propertyobserver.com.au/images/2018/6/19/ride.jpg" target="_blank"></a>
Click here <a href="https://www.westpac.com.au/content/dam/public/wbc/news/images/article/2018/06/wbc-news-graph-australian-dwelling-prices.png" target="_blank">to enlarge.</a>
<img src="https://www.westpac.com.au/content/dam/public/wbc/news/images/article/2018/06/wbc-news-graph-australian-dwelling-prices.png">
Breaking it down further based on our preferred basis – the CoreLogic hedonic series – shows that a third of all properties are recording annual price declines, with just under 6% recording falls greater than 5%.As our May <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2018/May/WestpacHousingPulseMay2018.pdf" target="_blank" data-s-object-id="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/australia/2018/may/westpachousingpu_1">Housing Pulse</a> report shows, these falls compare to the more substantial house price corrections in 1994–96, 2004, 2008–09 and 2010–12 when more than half of all properties recorded annual price declines. Conditions across the country of course vary widely. In NSW, the largest state economy where prices rose the strongest in the recent boom years, slightly more than 25% of properties are now experiencing falls compared to none six months ago, representing the biggest rise in the incidence of price declines since September. What bears watching is whether the price falls spread beyond the middle and “top tier” houses, given several other Sydney segments are on the cusp of declines. Victoria is performing better. Only one segment – Melbourne “top tier” houses – are recording declines, accounting for 12% of all properties in the state.
Click here <a href="https://www.westpac.com.au/content/dam/public/wbc/news/images/article/2018/06/wbc-news-graph-share-of-dwellings-by-price.png" target="_blank">to enlarge.</a>
<img src="https://www.westpac.com.au/content/dam/public/wbc/news/images/article/2018/06/wbc-news-graph-share-of-dwellings-by-price.png">
 Although not driving the national correction, the mining states are still doing it relatively tough. Nearly 40% of Queensland properties are seeing annual price falls, while in Western Australia the entire state continues to suffer price declines. However, WA’s tentative housing recovery out of the state’s broader recession in recent years looks to be coming through with price slippage moderating and turnover finally lifting. Elsewhere, trends are mixed as the rising Tasmanian market experiences virtually no housing segments recording price falls and the South Australian market recording a lift in the incidence of price declines since 2017. All this feeds into our view that the housing correction is stabilising but susceptible to deteriorating. One thing to watch closely will be the impact of the banking regulator’s prudential policy measures, given the latest guidance points to some further “micro–prudential” tightening in credit conditions in coming months even as some “macro prudential” limits on lending to investors are removed.
Click here <a href="https://www.westpac.com.au/content/dam/public/wbc/news/images/article/2018/06/wbc-news-graph-macro-prudential-targets.png" target="_blank">to enlarge.</a>
<img src="https://www.westpac.com.au/content/dam/public/wbc/news/images/article/2018/06/wbc-news-graph-macro-prudential-targets.png">
 Also, the Reserve Bank estimates that $120 billion of interest only loans are set to roll over to principle and interest terms each year for the next three years. While the RBA suggests this should be a reasonably comfortably transition, there’s the risk of a further weakening in housing markets if it’s not. More generally, a thin market with low levels of turnover and persistent price slippage is likely to be more susceptible to shocks, buyer sentiment may have improved on a year ago but a loss of confidence from here would be a cause for concern. The chances of discussion about the housing market dying down at the dinner table and everywhere else any time soon appear very low. Matthew Hassan is a senior economist at Westpac.
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