Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.

The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.

The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" />

According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”

The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.

The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.

Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.

“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.

The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.

The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" />

The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.

While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.

“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.

According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.

“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.

“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”

The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.

Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.

&nbsp;

The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" />

St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.

Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.

The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.

More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.

Joel Robinson

First look: Aqualand joins St Leonards apartment party

<section data-scroll-anchor="false" data-testid="conversation-turn-5" data-turn="user" data-turn-id="e65dbe94-e3b6-47f7-b62a-9cbb30c9bf79" data-turn-id-container="e65dbe94-e3b6-47f7-b62a-9cbb30c9bf79" dir="auto">Time &amp; Place’s plans to transform the former David Jones factory building in Surry Hills into a mixed-use residential precinct have gone on exhibition through the NSW Government’s In-fill Affordable Housing pathway.</section>

<section data-scroll-anchor="false" data-testid="conversation-turn-6" data-turn="assistant" data-turn-id="request-WEB:f4d533b7-64a5-413d-86fd-5c99649c2b73-2" data-turn-id-container="request-WEB:f4d533b7-64a5-413d-86fd-5c99649c2b73-2" dir="auto">
The Marlborough House proposal, lodged for the <a href="https://www.apartments.com.au/new-apartments/marlborough-house-47-97-marlborough-street-surry-hills-nsw-2010">47-97 Marlborough Street</a> site, would see the adaptive reuse of the heritage-listed warehouse building alongside the construction of new residential additions and a separate apartment building on the northern portion of the site.

The proposal seeks approval for 172 apartments across three buildings, including 15 per cent affordable housing managed by a community housing provider for at least 15 years from occupation.

<img alt="Marlborough" data-entity-type="file" data-entity-uuid="5d1d3c2a-bf13-47d6-a335-7c01102cdee1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.36%E2%80%AFAM.png?VersionId=cjMYrbR.BLUlWH4dar0RVDDo0bG.u2YT" />

Interior view from the Northern Building Penthouse overlooking the park

&nbsp;

The redevelopment is planned for the prominent 3,413 sqm site bounded by Marlborough Street, Goodlet Street and Lansdowne Street, directly opposite Eddie Ward Park and around 200 metres from the Surry Hills light rail stop.

Time &amp; Place acquired the former David Jones building in 2024, marking the first time the property had changed hands in around 50 years.

Designed by Wardle, the proposal centres around the adaptive reuse of the former David Jones factory, originally constructed between 1913 and 1935 in the Inter-War Chicagoesque architectural style.

Wardle noted in its Architectural Design Report that the building “occupies a significant place in the industrial and cultural history of Surry Hills” and at its peak was “the largest department store manufacturing facility in Australia, employing over 800 people and fuelling the growth of Sydney’s fashion and retail industries.”

The practice said the project positions itself “not as an isolated intervention, but as a contributor to the civic, social, and architectural grain of the precinct.”

The proposal would deliver 75 apartments within the retained southern heritage building, 59 apartments within the central addition, and a further 38 apartments within the new northern building fronting Lansdowne Street.

Planning documents show the scheme would comprise a mix of heritage apartments, new-build apartments, townhouses and penthouses.

<img alt="Marlborough" data-entity-type="file" data-entity-uuid="57758518-40a3-4b83-958c-d06e96a2cffa" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.42%E2%80%AFAM.png?VersionId=VerlX9ST5xgBi8.1_YRsqdWTJeT6ygjs" />Interior View of the Heritage Building Apartment

The development would also include a ground-floor retail tenancy on the corner of Marlborough and Lansdowne streets, rooftop communal open space, a landscaped pedestrian link along the western edge of the site, and basement parking accessed from Lansdowne Street via a car stacker system.

&nbsp;

The scheme emerged from a competitive design process run by Urbis, with Wardle ultimately selected as the winning architect ahead of FJC Studio, TZG, Architectus and Wilkinson Eyre.

The Design Integrity Panel later described several aspects of the Wardle scheme as fundamental to the project, including “the stepped character of the new addition to the north of the site”, the landscaped western pedestrian link, and the “garden arrival” experience separating the original Marlborough House from the heritage addition.

Wardle’s design heavily references the site’s industrial and heritage history, while also responding to the surrounding Surry Hills streetscape.

The Architectural Design Report describes Surry Hills as “a finely grained neighbourhood with beautiful and expressive brickworks throughout the suburb,” with the proposal introducing a material palette intended to sit comfortably alongside the existing warehouse fabric and neighbouring terraces.

The report also outlines the project’s relationship with Eddie Ward Park and the broader landscape context of the area.

“Marlborough House occupies a site of deep cultural memory and the neighbouring Eddie Ward Park is of local ecological significance, where natural systems, topography, and stories have long shaped human experience,” Wardle noted in the report.

The architects said the proposal sought to “rebind built form to Country” through landscape, materiality and the adaptive reuse of the heritage structure.

<img alt="Marlborough House" data-entity-type="file" data-entity-uuid="9ae3f2f9-c85f-477a-a6f8-b43f6cb97c41" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.53%E2%80%AFAM.png?VersionId=B.qUCLqRvJOR.n9CvYcTpaknIX9LuqKZ" />

The project is also being progressed under the NSW Government’s in-fill affordable housing provisions, allowing developments that include affordable housing to access additional height and floor space incentives.

Under the plans, 2,593 sqm of the project’s floor space would be dedicated to affordable housing, slightly exceeding the required 15 per cent threshold.

In its Design Excellence Strategy, Urbis said the project aimed to “sensitively adapt and enhance the heritage-listed building on site through alterations and additions that preserve its historical significance” while delivering “high-quality market and infill affordable housing development in Surry Hills.”

Time &amp; Place has been one of the most active developers nationally in the last 12 to 24 months. Late last year they completed&nbsp;The Queensbridge in&nbsp;<a href="https://www.apartments.com.au/developments/southbank-vic-3006">Southbank</a>, a mixed-use tower with 353 apartments and a hotel. They are currently selling Park Modern, 246 apartments near the famous Botanic Gardens in&nbsp;<a href="https://www.apartments.com.au/developments/south-melbourne-vic-3205">South Melbourne</a>, and have future projects, <a href="https://www.apartments.com.au/new-apartments/the-wilmot-173-burke-road-28-hope-street-glen-iris-vic-3146">The Wilmot</a>&nbsp;in&nbsp;<a href="https://www.apartments.com.au/new-apartments/glen-iris-vic-3146">Glen Iris</a>, the redevelopment of the Northcote Plaza, and another tower in South Melbourne.

The developer broke into Sydney just a few years ago with Two Tides in Manly. They have another project nearby, which is at the ultra-luxury end of the market on&nbsp;<a href="https://www.apartments.com.au/buildings/shoreline-manly-beach-89-90-north-steyne-manly">North Steyne</a>, fronting the beach.

It is also continuing to work through the <a href="https://www.apartments.com.au/news/nsw/first-look-time-place-settles-on-design-for-the-chimes-potts-point-redevelopment">redevelopment of The Chimes building</a> on Macleay Street in&nbsp;<a href="https://www.apartments.com.au/developments/potts-point-nsw-2011">Potts Point</a>, as well as a project on <a href="https://www.apartments.com.au/news/nsw/time-place-to-take-on-mosman-apartment-market">Mosman's Redan Street</a>.
</section>

First look: Time & Place unveils Marlborough House redevelopment designs for former David Jones warehouse in Surry Hills

The residential transformation of St Kilda Road is set to continue into with more new apartment plans for the sought-after boulevard.

Wing Tai Asia has lodged plans for a major residential tower at 464-466 St Kilda Road, replacing the former VACC House with an 18-storey mixed-use development designed around a retained heritage podium and a sculpted contemporary tower.

The proposal, prepared under Victoria’s Significant Residential Development with Affordable Housing pathway, would deliver 325 apartments and ground-floor retail across the prominent 4,653 sqm boulevard site in Melbourne’s St Kilda Road North Precinct.

The project centres on the adaptive reuse of the site’s heritage-listed VACC Building, an eight-storey office designed by Bernard Evans that has occupied the address for decades. Planning documents state the development would involve “carefully dismantling and conserving off-site the original metal fabric of the podium visible from St Kilda Road,” before reinstating it as the defining frontage of the new scheme.

Above the restored podium, Wing Tai is proposing a curvilinear residential tower. The scheme includes 172 one-bedroom apartments, 63 two-bedroom apartments, 66 three-bedroom apartments, and 24 four-bedroom apartments, alongside two ground-floor food and beverage tenancies fronting St Kilda Road.

The tower has been designed with substantial articulation and variable setbacks to minimise perceived bulk and maintain view corridors along the boulevard. Urbis, which prepared the planning report, said the design “has been significantly articulated through a curvilinear design” with “an interplay with materials, façade expression and depth” to create visual separation and visual interest.

The proposal also includes 254 basement car spaces, landscaped pedestrian links connecting St Kilda Road and Queens Lane, and a biophilic landscape strategy featuring canopy trees, raised planters, cascading greenery and a glass oculus pool overlooking the eastern frontage.

Planning documents confirm the $270.1 million development will contribute 3 per cent of project costs to the Social Housing Growth Fund as part of the application process.

Wing Tai acquired the St Kilda Road property in 2018 alongside Abacus Property Group for $95.38 million, before later consolidating ownership of the site. The property previously served as the Victorian Automobile Chamber of Commerce headquarters for around 60 years.

The transformation of the St Kilda Rd boulevard is already beginning to materialise, with a number of high-profile projects recently completed, launched, or approaching launch as developers continue to back the long-term appeal of the precinct.

Among the most notable recent completions is Louise by Samuel Property Group, just off the strip on Queens Lane, the same pocket Hirsch &amp; Faigen recently launched The Queensbury. Mirvac is too on the same street with The Albertine, which is approaching completion.

Dexus recently secured approval for its slice of St Kilda Road, while Gurner also has approved plans for the precinct.

Wing Tai unveils 325-apartment St Kilda Road tower on former VACC House site

Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

House Prices

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Median house prices fell in Perth in the quarter ended December from the comparable quarter a year earlier, although the results reflected trends seen throughout 2015, preliminary data from REIWA shows.
The December quarter showed the expected impact the Christmas and New Year period traditionally has on the property market, said REIWA President Hayden Groves.
“It’s not uncommon to see a fluctuation in the market at this time of year as it is typically a quieter time in WA real estate. Properties come off the market over the holidays and sales tend to drop off,” he said.
“We get a much clearer picture of how the market is travelling when comparing the data to the December 2014 quarter.”
Houses and units 
Perth’s preliminary median house price came in at $530,000 for the three months to December 2015.
“This is down 0.2 per cent on the revised September 2015 quarterly median and down five per cent when compared to the December 2014 median, however on an annual basis for the year to December 2015 Perth’s median house price held firm dipping just 1.8 per cent,” Groves said. 
Median price for units in the quarter fell 2.2 per cent from the year-ago quarter, though it was up 1.2 per cent to $435,000 over the quarter.
Further, 35 per cent of all house sales in the Perth metro area were in the $360,000 to $500,000 price range. 
“This shows us that first home buyers are still very active and recognise that there is an opportunity in the current market to take the step into home ownership,” Groves said. 
Sales volumes in the $500,000 to $750,000 price range weren’t far behind, making up 32 per cent of total sales volumes in the December 2015 quarter. 
Groves said activity in this bracket tended to be from current home owners who wanted to upgrade to their next home. 
Listings 
Listings for sale fell 3.8 per cent to 14,551 in the December quarter, following a peak of 16,969 in November. 
“It’s not uncommon for listings to drop off at this time of year as traditionally properties are taken off the market around the holiday period before returning to normal levels in the New Year,” Groves said.
“When we compare this figure to the December 2014 quarter we see, as was the case throughout 2015, listings are still higher than the long-term average.”
Sales volumes 
Sales volumes for the three months to December, however, fell sharply to 5,909 from 9,176 in the September 2015 quarter. 
“We estimate that once all sales have settled in the coming months the total number of dwelling sales in WA will come in at around 6,500 for the quarter,” Groves said. 
Selling days and discounting  
Average selling days in the Perth metro area were 59 days in the December quarter, again 13 days more than a year earlier.
“Additionally, 47 per cent of vendors needed to discount their asking price in order to sell in the December quarter, which is an improvement on the September quarter but higher than for the three months to December 2014,” Groves said.
Rental market 
Perth’s overall median rent price in the quarter came in at $400 per week, down $40 from a year earlier though it was steady on the September quarter.
For houses, it was $410, and for units $380. 
Rental listings increased to 9,532 in December from 8,267 in September, while the vacancy rate rose to six per cent. 
Investors were faced with short-term challenges, but it was a good time for tenants to secure a lease at more affordable prices.
“Migrations trends have changed rapidly in WA over the last six months and housing supply has increased. This has caused demand for rental housing to lessen putting downward pressure on prices. 
“The property market is cyclical and long term the projected population growth in WA is still expected to continue which will soak up stock and even out the imbalance we’re seeing,” he said. 
Regional WA 
Results were mixed across regional WA, with regions in the state’s north continuing to adjust, while those in the south were generally more stable. 
Top performers in the quarter were Augusta-Margaret River with 6.5 per cent growth to its annual median house price, followed by Blackwood with a modest increase of 0.7 per cent. 
Groves said the North West sub-region was still feeling the impact of the shift to production in the mining sector, with annual growth in the Kimberley and Pilbara regions declining 3.6 per cent and 26.6 per cent respectively. 
“These areas are experiencing an adjustment as construction slowed down significantly in a short period of time changing the employment requirements. However, when we look at the longer term growth rates for these areas we can see they have declined at a much slower rate,” Groves said.
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prateek24-ezbwHMbNAk

Perth house prices dip, rentals fall in December quarter: REIWA data

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As the debate escalates on whether Sydney house prices are set to fall, plateau or edge up in 2016, a very small number of loss making sales are occurring across Sydney. Rare opportunities to possibly snare a bargain.
Currently only 1.7 per cent of homes sold are selling at a loss for their vendor based on their prior purchase price, according to CoreLogic RP Data, with the numbers increasing the further outside of what were the early 2015 suburban Sydney hotspots.
In recent months the municipalities of Rockdale, Fairfield and Ashfield have had three percent or higher of sales as loss takers.
Regional Sydney loss-making districts have been Wyong, Gosford and the Blue Mountains.
The prestige market has also been problematic with losses in Mosman, Pittwater and Woollahra muncipalities.
The biggest known price drops last year were in Darling Point when mining boss Peter Freyberg, the Australian head of Glencore Xstrata, sold his four-bedroom residence for $5.5 million having paid $7 million in 2008 ahead of the GFC.
Urologist Phillip Stricker sold his Darling Point penthouse last year for $6.575 million after paying $7.4 million in 2010.
A $10 million Mosman harbourfront sold last year at the same price as its 2011 sale, so no gain in four years for the vendor, the Commonwealth Bank chairman David Turner.
In Woollahra $6 million was secured for a contemporary terrace which fetched $6.5 million in 2011.
Property success depends on your timing in the cycle, but also not getting emotionally carried away in your purchase price negotiations, one agent noted.
"The most important factor is the time the property is held; the property market is cyclical so those who buy at the peak of the market must ensure they are not selling at the following trough," CoreLogic RP Data advised.
The 1.7% of homes resold in Sydney over the third quarter of 2015 that sold at a loss was the lowest proportion on record.
Outside Sydney it noted while localities linked to the mining sector have seen their proportion of loss-making sales rise over recent years, the coastal markets have generally seen conditions improve.
The proportion of loss-making resales has been recorded at: 1.7% in Illawarra, 2.6% in Newcastle-Lake Macquarie, 12.5% in Richmond-Tweed and 8.3% in Mid-North Coast.
Coastal lifestyle locations continued to be traps for overpaying with one sale at Avoca Beach at $825,000 in 2004, reselling at $705,000 last year. At Ettalong Beach an apartment sold last month at $350,000 having been bought in boomtime 2003 at $360,000.
But price dips are an opportunity for savvy buyers. Hong Kong jockey Nash Rawiller and his wife Sarah secured $3.7 million for their redundant Maroubra home.
Rawiller, who won three Sydney riding premierships after making the move from Melbourne in 2007, had bought the property for $3.07 million in 2012 after it had sold at $4 million in pre-global financial crisis 2008.
The 3.7% of homes in Rockdale that experienced a total loss in the September quarter typically went back by $158,000. It was a similiar $150,000 for the Pittwater loss takers who had owned for around five years. However 96% of Pittwater homes were sold at a profit, typically gaining $411,000 having owned for nine years.  
In the Blue Mountains there was a typical $72,000 loss for the three percent who went out backwards.
The data doesn’t include expenses such as holding costs and purchase and selling costs so the proportion of actual loss-making re-sales would be higher on a net basis.
This article was first published in the Sunday Telegraph.
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jchancellor-FAypfDUnLy

Prices potentially going backwards - most obvious in Sydney prestige market

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GUEST OBSERVER
For more than 100 years the average Australian family was able to buy its first home on one wage. The median house price was around three times the median income allowing young home buyers easy entry into the housing market.
 As can be seen from the graph below (ï¿½ Real Home Price Indexï¿½), the median house price has increased, in real terms, by more than 300% - from an average index of 100 between 1900 and 2000 to an index over 300 by the year 2008. Relative to incomes, house prices have increased from three times median income to more than nine times income. 
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Thatï¿½s $600,000 they are not able to spend on other things - clothes, cars, furniture, appliances, travel, movies, restaurants, the theatre, childrenï¿½s education, charities and many other discretionary purchase options. 
It is a similar story in the UK, US, Canada, New Zealand, Ireland and Japan. The economic consequences of this change have been devastating. The capital structure of these countriesï¿½ economies have been distorted to the tune of hundreds of billions of dollars and for those on middle and low incomes the prospect of ever becoming homeowners has now all but vanished. 
Housing starts are below what they should be and so have all the jobs associated with them - civil construction, house construction, transport, appliances, soft furnishings, you name it. Not to mention billions of dollars in lost taxes and other housing-related revenue to the nation state. 
The distortion in the housing market, this misallocation of resources resulting from the supplydemand imbalance is enormous by any measure and affects every other area of a countryï¿½s economy. New home owners pay a much higher percentage of their income on house payments than they should. Similarly, renters are paying increased rental costs reflective of the higher capital and financing costs in turn paid by landlords. 
12th Annual Demographia International Housing Affordability Survey (2015: 3rd Quarter) The economic consequences of all that has happened over these past 15 years have been as profound as they have been damaging. 
The housing industries of these countries have been decimated as have industries supplying that sector. Economies have been distorted and getting them back into alignment is going to take some time. But it is a realignment that is necessary. A terrible mistake was made and it needs to be corrected. Home ownership has long been a feature of western life. Levels of home ownership rose sharply in the postwar period. 
Home ownership had become both a symbol of equality and a means through which average citizens could provide security and stability for themselves and their families while building wealth and claiming a tangible stake in their nation. For the vast majority, owner-occupation of the home in which they live was, and remains, a great ambition. So what happened? Why have ï¿½house pricesï¿½ skyrocketed?
 While influential bodies in Australia like the Productivity Commission and the Reserve Bank focused their attention on demand drivers like capital gains tax treatment, negative gearing, interest rates, readily accessible finance, first home buyers' grants and high immigration rates, few were looking at the real source of the affordability problem - land supply for new housing stock. 
It is undeniable that demand factors played a role in stimulating the housing market and those factors were, for the most part, in the hands of national governments. However, the real culprit, the real source of the problem, was the refusal of local and state governments and their land management agencies to provide an adequate and affordable supply of land for new housing stock to meet demand. 
The graph below (Capital Cities: Price of Land per sq/mï¿½) highlights the growth rate in the price of serviced allotments in Australiaï¿½s five mainland capital cities. This massive escalation in the price of land carries with it a multitude of detrimental impacts. Establishing affordable rental accommodation for those in greatest need becomes even more difficult for social and public housing authorities as they seek to purchase land and housing in a greatly inflated market. 
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Road widening and major infrastructure projects experience cost blow-outs as land acquisition costs skyrocket, and establishing schools, community centres, health services and business facilities becomes difficult, and at times impossible. 
The whole community suffers as a result of increased 12th Annual Demographia International Housing Affordability Survey (2015: 3rd Quarter) tax, transaction, finance and establishment costs. It is important to remember that the "scarcity" that drove up land prices is wholly contrived - it is a matter of political choice, not geographic reality. 
It is the product of restrictions imposed through planning regulation and zoning. The problem is, it is young home buyers, hit with spiraling costs of home ownership who end up paying. They are mostly forced into overpriced units and will never be able to afford their primary ambition ï¿½ a free-standing family home of their own. Quite apart from the economic foolishness of it all, it is morally wrong for legislators to be enriching some (established home owners) while impoverishing others (first home buyers). 
We cannot deny the rising generation a home of their own merely to satisfy the ideological fantasies of urban planners and the financial concerns of State and Territory Treasury officials. We cannot deny ourselves the joys of grandchildren because young women have to work to pay mortgages instead of raising a family. The joke that high mortgages are the new contraceptive is becoming no laughing matter. Young women used to be afraid of getting pregnant, now, as they approach 40, they are afraid of not getting pregnant. 
We have to get back to the situation where a couple can pay off a mortgage on one income so they can start a family in their 20s, not in their late 30s or early 40s. In creating the conditions for home ownership to become the privilege of the few rather than the rightful expectation of the many, governments have produced intergenerational inequity and breached the moral contract between generations. 
In human affairs this imprecise, and at times neglected, moral contract between generations dictates that we should leave things better than we find them. When it comes to home ownership this contract has been breached. In making home ownership much harder for the next generation we have denied them much more than a home. We have denied them the security and benefits that go with home ownership and the opportunity to build wealth that will provide them with options in later life. 
Many are now choosing to defer having a family in the hope that they will be able to somehow put together the funds to buy a home later in life. If they can't afford to buy a house, they certainly can't afford to have children! 12th Annual Demographia International Housing Affordability Survey (2015: 3rd Quarter) When the time for retirement comes, those who own their homes have much more control over their lives than renters. 
They can choose where they will live and how they will live. Given the vast social and economic benefits that flow from homeownership, restoring housing affordability should once again become one of a nationï¿½s most important priorities. 
Senator Bob Day, a former National President of the Housing Industry Association, <a href="https://www.demographia.com/dhi.pdf" target="_blank" style="line-height: 1.3em;">wrote the forward for the 12th Demographia report</a>. He was elected as a Senator representing the State of South Australia at the 2013 Australian Federal election.
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High mortgages are the new contraceptive: Senator Bob Day

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The recent surging house prices in Sydney and Melbourne kept Australia near the very top of Demographia's annual list of the world's least affordable countries.
The typical Australian house costs 5.6 times the median household income, with only Hong Kong (19) ranked less affordable; with New Zealand (5.2) and the UK (5.1) not too far behind.
Sydney sits as the second least affordable city in the world, with house prices calculated by the property think tank as 12.2 times incomes.
Melbourne came in equal fourth, along with Auckland and San Jose, at 9.7, narrowing pipping San Francisco (9.4) and London (8.5).
<a href="https://www.demographia.com/dhi.pdf" target="_blank">Demographia</a> only looks at house prices rather than units which constitutes around 35% of Australian dwellings.
Outside the big cities, Tweed Heads was the most costly place to live with a ratio of 9.3.
Bowral-Mittagong, the Sunshine Coast, Port Macquarie, the Gold Coast and Wollongong all had price-to-income ratios of 8 or more.
The two most affordable towns in Australia were both Western Australian mining centres, where those who still have mining industry employment earn high wages, while house prices have slumped.
Karratha had a ratio of 2.5 and Kalgoorlie at 2.9.
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Karratha and Kalgoorlie - Demographia's most affordable towns

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GUEST OBSERVER
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The Westpac–Melbourne Institute Index of Consumer Sentiment fell by 3.5% in January from 100.8 in December to 97.3 in January.
The Index is at its lowest level since September 2015 but remains 4.3% above its level of a year ago.
With limited domestic news during the holiday season consumers appear to have been mainly impacted by the spate of negative news on the international front and the spill over effect on financial markets.
Over the two weeks to the end of the survey the oil price has fallen by 20%.
Furthermore, over the same period, the Australian share market has fallen by 7.6% and the US market by 8.0%.
News on China’s volatile share market may also be affecting households with the Chinese market down by around 15% since the beginning of the year.
Partly reflecting those forces, we have also seen a fall in the Australian dollar from USD 0.73 to USD 0.69.
Not surprisingly these concerns have weighed most heavily on how respondents assess their own financial position. The component of the Index tracking views on ‘family finances vs a year ago’ dropped by 9.4% to be at its lowest level since July last year. The component tracking expectations for ‘family finances over the next 12 months’ fell 2.3%.
Among the other components: ‘economic conditions over the next 12 months’ fell by 5.0%; ‘economic conditions over the next 5 years’ improved by a modest 0.3%; and ‘time to buy a major household item” fell by 1.7%.
Both the Index and its components are seasonally adjusted to take account of the regular positive impact on confidence of the holiday season.
Other Indexes in the survey are not seasonally adjusted so results for these Indexes in January need to be treated with some caution.
The Westpac Melbourne Institute Index of Unemployment Expectations increased by 0.7% from 141.7 to 142.7. This implies a slightly more concerned feeling amongst respondents about the outlook for the unemployment rate. However, the Index is 5.3% lower than in January 2015 indicating that there has been a material improvement in respondents’ attitudes to the labour market over the year. 
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There was a sharp 13.9% increase in the ‘time to buy a dwelling’ index from 99.2 in December to 113.0 in January. That is the highest reading for this Index since May last year. 
The Index is now only 1.4% below its level for January 2015. The sharp increase in the Index in January will reflect some seasonality but the move is so large that we can only conclude that this print may be signalling some improving optimism in the housing market. 
Most of the improvement in the national Index was driven by a sharp improvement in New South Wales which has regularly posted the weakest readings amongst the states in recent times. For this reason it is best to be cautious but nevertheless encouraged by this result.
This improvement in the outlook for housing was also indicated in the Westpac Melbourne Institute Index of House Price Expectations. The Index increased by 21.1% in January from 103.7 in December to 125.8 in January. The Index is still down by 10.2% over the year but this read represents the best result since September 2015. 
The Reserve Bank Board next meets on February 2. Despite markets confidently expecting that the Reserve bank would cut rates by February Westpac has remained firmly of the view that the Bank will remain on hold throughout the second half of 2015 and the whole of 2016. We retain that view despite some concerns from this survey that consumers may slow their spending in response to this current global uncertainty. 
The Australian dollar has adjusted further providing the important ongoing boost to Australia’s competitiveness which is now assisting the economy’s adjustment as the mining sector slows. Furthermore the survey has provided an early signal that the pessimism which has dominated the housing market in the second half of 2015 may be easing. 
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Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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NSW cautious but encouraging spike in housing confidence: Westpac's Bill Evans

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Sea-changing is a long-held Australian tradition for retirees and empty nesters, however property expert John McGrath believes the next wave of sea-changers will be young families leaving Sydney for good.
In John's recent Switzer blog article, he cited the annual McGrath report and highlighted how Sydney families have previously adapted to rising house prices by moving to less expensive commuter areas like the Central Coast and Wollongong; or buying apartments over houses in Sydney.
"Family apartment living was a significant trend in the early 2000s but today, average Sydney apartments are more expensive than houses anywhere else in Australia and many families are tired of feeling stretched," he said.
"We believe a desire for an easier, more affordable lifestyle will contribute to a growing contingent of families leaving Sydney altogether."
McGrath suggested that some families are still willing to commute, with our offices reporting more Sydney buyers on the Central Coast and in Newcastle and the Southern Highlands this year.
He backed the statement up by referring to the Australian Bureau of Statistics census figures, which showed a rising number of new residents in Newcastle, the Central Coast and Wollongong who have moved from other parts of NSW (typically Sydney) since 2001.
McGrath added that Brisbane, the Sunshine Coast and Melbourne are also proving popular with Sydney families looking further afield for even better value for money.
"Many are relocating to Melbourne, with Bureau of Statistics data showing the highest net interstate migration in 40 years in Victoria last year with the majority of interstate migrants coming from NSW."
He also suggested that a change in employment practices is also facilitating the trend in young families leaving Sydney.
"An increasing number of businesses are allowing their staff to work from home, especially those with specialised skills who can negotiate working away from the office into their contracts because their abilities are so highly sought-after," he said.
There is also a rising number of families with one parent working in a fly-in, fly-out job, particularly in the mining sector, which gives them the freedom to set up their home base in any location that has an airport as they simply don’t need to be in Sydney.
The article indicates that more empty nesters are shunning the sea-change in favour of CBD living, which is reflected in forecasts that retirement age residents will be the fastest growing group in the City of Sydney LGA (local government area) by 2026, up 72% on 2011 compared to an increase of 34% in working age residents, according to population analysts, forecast.id.
McGrath suggest that delayed retirement post-global financial crisis is contributing to this trend.
"There is a desire for lower maintenance living close to work; providing childcare for their grandkids; and an inner city construction boom providing an abundance of high quality options for a generation that wants to enjoy the next phase of their lives in security and comfort.
"The global NORC phenomenon (Naturally Occurring Retirement Communities) is expected to evolve in Sydney, with more apartment buildings not actually designated for seniors gradually developing a predominately older community as existing owners ‘age in place’ and downsizers move in."
He concluded by stating that his offices are observing more empty nesters from Sydney’s Eastern Suburbs and Upper North Shore downsizing to the Inner East, Inner City and Inner West.
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Sydney families to flee for sea-change: John McGrath

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Middle south east and bayside regions appear to be attractive for investors, according to Herron Todd White's latest month in review.
The HTW November report states that depending on the property investors choose, they may invest in detached housing to get the negative gearing investment for tax benefits for future capital growth or development opportunities or they can invest in apartments with slower capital growth, but with high and stable rental yields. 
"Established areas provide a choice of different property types which can meet any investor’s goals. 
"Currently investors in middle south east and bayside regions are fairly active and are purchasing detached houses, townhouses, units and apartments."
The report also notes that outer south east regions appear to be mainly attractive to first home buyers and families with medium household income. 
"Investors are not very active at this stage due to low capital growth and consistent competition from the construction and development industry, which continue to offer affordable brand new housing. 
"Investors who purchase in outer south east regions are looking for investment diversity geographically and also to meet different investment targets such as finding long term tenants for stable rental yields."
Middle south east and bayside areas consist of local investors in established markets and mainly overseas investors for brand new strata townhouses and apartments, says the HTW November review.
"Bayside offers consistently strong capital growth with stable rental return of 4% to 4.5% for units.
"Rental yields for apartments and units experience a stronger rent in comparison to the housing market in general."
The report goes on to suggest that outer south east area is mainly dominated by local investors aiming to achieve long term stable cash flow in terms of rental income.
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"Investor goals can differ and therefore they will choose the market and area to meet their targets such as consistent cash flow, low vacancy rates and high rental yield. 
"Investors in the outer south east area are looking for long term tenants who will stay in the property for two to five years. 
"They are usually young families with children in primary school who are willing to rent a new detached house with private backyard and easy access to local parks, shopping and schools."
The HTW report shows that medium housing price in the outer south east area can range from $380,000 to $450,000 for a single storey dwelling and $550,000 to $630,000 for double storey residence. 
However investors in this region typically do not spend more than $500,000, with current rental yields in the outer south east area generally ranging from 4.5% to 5%, says the review.
"Townhouse and unit markets are emerging in outer south east areas and appear to be mostly an untested market. 
"Some developers offer limited stock of townhouses called “cityliving” which engage people by offering close proximity to schools and parks and to reside in particular estates at a more affordable price, whereas townhouses and units appear attractive in the bayside region due to higher land prices and more expensive detached housing."
Rental yields are also higher in the bayside area for townhouses and units compared to detached housing, says the report. 
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It also adds that investor activity within this area will not be as sustainable over the coming year as banks begin to lend less for investment properties. 
"The hardest hit properties will be off the plan apartments. 
"With the lack of confidence for investors combined with expected cash rate rises from the RBA on the horizon, it is unlikely that investment levels will grow in the medium term. 
"It has been suggested that not only would there be a decrease in house prices, but due to falling house values, home owners will cut back on spending as they will consider themselves to be worse off than before as their safest investment, bricks and mortar, has lost some of its market value."
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jrobinson-rf4aSBido9

Townhouses an untested investor market in Melbourne's outer south east: HTW

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GUEST OBSERVER
At the National Housing Conference last week, there was considerable optimism about the newly appointed federal minister for cities, Jamie Briggs, whose infrastructure mandate includes housing.
New energy is coming from the states with the largest affordable housing deficits – a social housing initiative from the New South Wales government and a “refreshed” metropolitan planning strategy in Melbourne with a stronger emphasis on affordable housing.
It is now possible to imagine Australia having a national affordable housing strategy, backed by funding, by the end of 2016.
Australia certainly needs such a strategy. The population is projected to reach 38 million in the next 35 years. Sydney and Melbourne are each expected to grow by at least three million people. The proportion of older people will be higher, with a lower proportion in the paid workforce.
This means we need at least six million new housing units in the next three decades. There is increasing impetus to locate these dwellings close to public transport, employment clusters and health and social services.
<h2>Cost pressures are intensifying</h2>
Rising housing demand and prices affect everyone, but low-income renters have fared worst in recent years. Capital city rents rose by twice the level of inflation from 2005 to 2010. By 2011, the shortage of suitable rental properties exceeded 500,000.
As a result, even most households that receive Commonwealth Rent Assistance (projected to cost A$6.6 billion in 2015-16) pay well over the recommended maximum rent. Some 55% of the A$7.7 billion annual cost to the government of capital gains exemptions and negative gearing goes to the top 10% of income earners. Only 4% goes to the bottom 20% of households by income.
Existing programs are not accomplishing policy aims. The Abbott government discontinued two small national programs, the Social Housing Initiative co-funding construction of non-profit housing and the National Rental Affordability Scheme subsidising below-market rental housing. No national strategy or infrastructure funding program has replaced those small but important initiatives.
<h2>Key steps towards affordability</h2>
What would be the basic elements of a national affordable housing strategy? Economist David Rosen led a review of the US$7 trillion spent in the US on federal finance, tax, lending, spending and regulatory programs and policies. According to Rosen, the place to start is a standard definition of “affordable housing”.
The next step would be to calculate current and projected need for affordable housing by subtracting housing need from the available stock. There are local efforts to calculate this in cities like Melbourne, but it would need to be done in a consistent way across the country.
The cost of owning or renting a home includes rent or mortgage payments, property taxes and unit maintenance. A household can also incur onerous transport costs, if living far from employment and good public transport. Internationally, affordability is usually defined as housing that costs no more than 30-35% of household income, adjusted for household size.
For households earning less than 30% of their area’s median income, private market housing will almost certainly be out of reach without some form of subsidy.
In metropolitan Melbourne, for instance, the average weekly income is A$1333. A little over 11% of households in the city (159,000 households) earn less than A$400 a week, which is 30% of the median income. These households could only afford to pay a maximum of A$133 a week on the rent or mortgage. Less than 1% of rentals in Melbourne are available at those prices.
Social housing constitutes less than 3% of total housing stock. Most of it is occupied by these low-income households. So, at the most basic level, affordable housing would seek to fill that shortfall of more than 150,000 units in one major city alone, as well as building for future affordable housing needs.
<h2>How do we fund affordable housing?</h2>
After calculating need, the next requirement for a national affordable housing strategy would be to identify all potential revenue sources to fund it. These could be direct funding from national, state and local governments, but also indirect funding through tax rebates, low- or no-cost land, or mechanisms like reduced parking requirements or expedited planning approvals (which cuts land-holding costs and uncertainties).
A plethora of mechanisms used in other countries could be adopted here. For instance, in the US the Low Income Housing Tax Credit has, since 1986, allowed private investors to obtain tax credits in return for a ten-year investment in constructing or rehabilitating low-income rental housing. The stable and bipartisan program injects about US$6 billion a year in capital into affordable housing.
If a small proportion of the negative gearing tax credit were re-allocated towards investment in social housing, a similarly scaled program could be instituted in Australia. Similarly, if the Commonwealth guaranteed a 6% return on social housing investment, how much of the A$2 trillionheld in superannuation funds could be unlocked?
For the past two years, the Transforming Housing project has brought together state and local government, private developers, community housing providers and commercial and philanthropic investors to identify barriers to scaling up affordable housing in metropolitan Melbourne and how to overcome them.
Much of the emphasis has been on mechanisms at a state and local level, ranging from value capture financing to innovative design and construction. However, there is growing consensus that a Commonwealth affordable housing strategy is essential to enable integrated action by other levels of government and the private and charitable sectors.
With a clear sense of the numbers around affordable housing need and a stable financing and renewal model, the Turnbull government could reap multiple co-benefits. A national strategy could make cities more liveable, stimulate the property and construction sector, and reduce healthcare costs. The private and charitable sectors are waiting to swing into action.
 
Carolyn Whitzman is professor of Urban Planning, University of Melbourne and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/carolyn-whitzman-9944" target="_blank">here</a>.
This article was co-authored by: Dr David Rosen, principal of DRA Associates and an advisor on development, finance and policy; Rob Pradolin, general manager of business development for Frasers Property Australia; Catherine Brown, CEO of the Lord Mayor’s Charitable Foundation; and Dr Heather Holst, deputy CEO and director of services and housing for Launch Housing.
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mick.cee-iDmgDDAmu8

A national affordable housing strategy: necessary, attainable and maybe on its way

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The valuation firm Herron Todd White has issued its latest property clock for houses - a simple broad brush means to suggest where property markets are - and what direction prices are moving in.
The valuation firm has included capital and regional cities on the property clock for house price direction.
<a href="/images/2015/11/700_nov_HTW_houses.jpg" target="_blank">Click here</a> to enlarge.
For more information, <a href="https://www.htw.com.au/" target="_blank">click here</a>.
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Sydney and Melbourne houses at peak pricing in November HTW property clock

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GUEST OBSERVER
Building approvals are coming off record highs on a month by month basis, according to the latest ABS data, suggesting governments need to keep a close eye on the supply pipeline for new housing.
While nationally approvals still had enough momentum to hit 230,298 year on year on a seasonal basis, one good year won’t make up for a decade of underbuilding.
We are only now starting to see new housing supply eat into demand in key markets like Sydney and take some of the heat out of house prices.
A strong, sustainable pipeline of new housing is imperative to ensure future housing affordability and must be a priority for government.
ABS figures for September recorded 18,900 building approvals across the country, down from the previous highs of 20,000 per month recorded for much of 2015.
Recent data shows significant variations month on month across the states and territories ranging from a 42% increase in Queensland to a 39% fall in the ACT. It also pointed to an emerging trend for greater apartment and multi-unit living.
The 1.9% drop in private house approvals nationwide for the month of September was offset by continued strength in apartment approvals which grew by 6.1% on the previous month.
Apartment and multi-unit approvals are almost at parity with private sector houses, suggesting a changing demographic trend and increased growth in our major cities.
While a degree of moderation in record high residential construction activity is expected, governments needed to guard against any sudden drops.
Maintaining a steady supply of new housing is vital to keep up with population increases, household formation rates, and to avoid the price spikes that occur when demand outstrips supply. Residential construction also creates much-needed jobs.
Putting in place the right planning and taxation frameworks will help lock in a steady stream of residential development that benefits homebuyers and the broader economy.
 
Nick Proud is residential executive director, Property Council of Australia and can be contacted<a href="https://www.propertyoz.com.au/" target="_blank"> here</a>.
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