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.

Joel Robinson

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

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

[smartcode_project:default project_id=112661 project_image_fid=355935]

Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

[smartcode_project:default project_id=112661 project_image_fid=361052]

Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

[smartcode_project:default project_id=112661 project_image_fid=359607]

More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
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[smartcode_project_cta:default project_id=112661]

SIERA kicks off construction at Northcliffe tower Exhale

House Prices

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Home prices hit record highs in 11 regions: CommSec's Ryan Felsman

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The housing markets in Melbourne and Sydney are on a downward trend, according to the valuation firm Herron Todd White.
The last few months Herron Todd White suggested Sydney and Melbourne have been declining due to the impacts of COVID-19, but now they have deemed houses and units in Sydney are now classified as a declining market rather than one just starting to decline, suggesting they have been hit harder than Melbourne.
To enlarge the national property clock for houses, <a href="https://www.propertyobserver.com.au/images/2020/8/11/HTW%20August%20Clock%20RESI.JPG" target="_blank">click here</a>.
<img src="https://www.urban.com.au/images/2020/8/11/HTW%20August%20Clock%20RESI.JPG" alt="">
There has been no movement across the housing and unit markets at the peak of market position this month, HTW found.
However there has been some minor shuffling in markets nearing the bottom or starting to recover.
They noted, "many regional property markets remain resilient due to low/nil infection numbers, with CBD accessible lifestyle regions gaining appeal."
"Multi-residential investments (e.g. flats) hold excellent promise across many markets," they added.
To enlarge the national property clock for units, <a href="https://www.propertyobserver.com.au/images/2020/8/11/HTW%20August%20Clock%20UNIT.JPG" target="_blank">click here</a>.
<img src="https://www.urban.com.au/images/2020/8/11/HTW%20August%20Clock%20UNIT.JPG" alt="">
"Affordable housing and granny-flat construction in Western Sydney looks promising."
"Town planning changes in Kyogle and surrounds are opening up small development opportunities"
"Queensland property positions itself as an appealing post-pandemic alternative for southern investor."
"New construction is gaining momentum in some centres on the back of government stimulus, plus in Perth, transaction numbers rose, and vacancy rates fell due to low infections," HTW concluded.
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Sydney residential market hit harder than Melbourne: HTW Residential Clock

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According to Domain's House Price Report for the June quarter prices on units fell across Australia with houses seeing similar results.
They found, all major capital cities saw unit prices fall across the June quarter; only Adelaide, Canberra and Hobart saw an increase in house prices during this period.
Price falls to date have been minimal from the pre-coronavirus March quarter to June. 
Significant government stimulus, mortgage holidays and low interest rates have supported home values, and kept distressed and urgent selling low. 
With lenders extending mortgage pauses for those under serious financial strain, and the JobKeeper subsidy being extended, the outlook for prices largely depends upon how well the economy is tracking when fiscal stimulus ends.
<a href="https://mcusercontent.com/b16c0b957ea98f662ab985606/images/75efec9e-c7f3-4327-93bf-b0973ef61244.png" target="_blank">Click to enlarge</a>:
<img src="https://mcusercontent.com/b16c0b957ea98f662ab985606/images/75efec9e-c7f3-4327-93bf-b0973ef61244.png" width="980" height="583" data-imagetype="External">
<a href="https://mcusercontent.com/b16c0b957ea98f662ab985606/images/1d2bf323-8e75-4224-92bd-83dd94605fea.png" target="_blank">Click to enlarge</a>:
<img src="https://mcusercontent.com/b16c0b957ea98f662ab985606/images/1d2bf323-8e75-4224-92bd-83dd94605fea.png" data-imagetype="External">
“Nationally house prices have dropped by 2 per cent and unit prices by 2.2 per cent over the June quarter."
"This is the first quarter to show the impact of COVID-19, reversing upward price swings in Sydney and Melbourne."
"While most capital cities declined, the falls have been minimal to-date as unprecedented government stimulus, mortgage holidays, low stock levels and record low interest rates shield values from any significant declines, helping to retain stability in the housing market,” said Domain Senior Research Analyst, Dr Nicola Powell.
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Unit prices fall nationally with houses hit slightly less: Domain

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Capital city home prices fell for the second consecutive month: Shane Oliver

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House prices have increased, according to the latest edition of Real Estate Market Facts, published by the REIA.
“During the March quarter 2020, the weighted average median price for houses for the eight capital cities increased to $786,923, with Sydney, Melbourne, Hobart and Darwin all having increases,” said Mr Adrian Kelly, president, REIA.
“The weighted average median price for other dwellings increased to $602,293 over the quarter, with prices increasing in Sydney, Melbourne and Adelaide but decreasing in Brisbane, Perth, Canberra, Hobart and Darwin.”
Mr Kelly said the March 2020 quarterly change in median prices was the largest March quarter increase since 2017 which was the beginning of the housing boom of 2017/18.
“Over the quarter, the median rent for three-bedroom houses increased in all capital cities except for Brisbane and Perth, which remained steady and Darwin, which decreased,” said Mr Kelly.
 “The median rent for two-bedroom other dwellings increased in all capital cities except Darwin, which had a 2.4% decrease. 
“The weighted average vacancy rate for the eight capital cities decreased to 2.5% during the March quarter, which shows a tightening in the market compared to last quarter.
“However, this is prior to markets showing the impact of COVID-19.”
Mr Kelly said with the new lending to household data released by the Australian Bureau of Statistics, lending to households for investment in dwellings decreased 16.3% over the quarter and decreased 13.1% for owner occupiers.
“The decrease is usual for the March quarter and has been occurring for the past 10 years,” said Mr Kelly.
“Our next report will reflect the impacts of the start of the COVID-19 pandemic on both the sales and rental markets.”
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House prices on the bounce back: REIA

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EXPERT OBSERVATION
All capital cities recorded a rise in residential prices in the March 2020 quarter, led by Sydney (+1.9 per cent) and Melbourne (+2.1 per cent). 
The two largest cities both recorded gains of more than +10 per cent over the year, taking the weighted average capital city price +7.4 per cent higher over the year to March.
Most of the COVID restrictions were rolled out in March, so there was little impact on the price charts by capital city. 
<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/2020/6/17/PW2.jpg" alt="">
Sydney houses and attached dwellings both recorded quarterly gains.
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The mean dwelling price rose to a record high at an estimated $690,200.
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The number of dwellings was an estimated 10,485,700.
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The value of Australia's dwelling stock hit a record high, with a preliminary estimate of $7.23 trillion.
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The ratio of dwelling stock to GDP increased to 3.79x, but was still just below 2017 levels.
<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/2020/6/17/PW7.jpg" alt="">
This is a high figure in global terms, but plenty lower than, say, Hong Kong.
Pete Wargent is the co-founder of AllenWargent property buyers and a best-selling author and blogger 
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pwargent-M4siyDbqQY

Average capital city dwelling prices hit record high: Pete Wargent

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Since reaching a trough last May house prices have recovered strongly.
The gains have been led by both Sydney and Melbourne which are now 14.3% and 12.4% higher than a year ago. While outcomes across the other capitals have been more mixed - there was evidence of a pre-COVID pickup in momentum.
However, price growth has slowed more recently and activity in the established housing market has slowed sharply. Auction clearance rates have fallen to low levels and turnover has fallen away.
We expect dwelling prices to fall by around 10% this year and decline further in the first half of 2021 before levelling off. The declines will be led by Sydney and Melbourne - but the other cities will not be immune to rising unemployment and slower wage growth.
Alongside the decline in house prices, we expect dwelling construction to continue to fall. The pipeline of work yet to be done remains relatively elevated in NSW and VIC but this will be rapidly eroded with high rates of work done.
Building approvals remain low and are expected to decline further, suggesting little replenishment of the pipeline of work.
Our outlook for the economy more broadly is unsurprisingly significantly weaker than 3 months ago.
We expect quarterly GDP growth will fall by around 7% in Q2 following a small fall in Q1. Coronavirus containment measures have seen a significant fall in consumer and business confidence with an outright restriction on some forms of activity.
Tourism and hospitality are likely to see the largest hits given the nature of measures in place – although the magnitude of the declines in business confidence is likely to see broad-based weakness in investment and hiring across the economy.
In line with this we expect a sharp deterioration in the labour market, with unemployment rising sharply to 11.7% by mid-year and only a partial recovery to 7.3% by end 2021.
While growth will rebound as restrictions are lifted we do not see the level of activity recovering until early-2022.
The labour market will take longer to recover which should see a slowing in wage growth from already low levels. We see high debt levels and slow wage growth continuing to weigh on the consumer.
Weak consumer demand and the sharp deterioration in business confidence will see business investment remain weak - resulting in a similar preCOVID dynamic of weak domestic demand, somewhat offset by support in government spending.
With rising spare capacity in the economy and slow wage growth, we expect inflation to be muted. This will see the RBA keep the cash rate at record lows for an extended period, and a gradual shift to a tightening bias only when inflation appears to be heading sustainably back to target and the there is a significant improvement in the labour market. 
ALAN OSTER is the NAB Group Chief Economist
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House prices to fall 10-15% in 2020/2021: NAB's Alan Oster

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Current seemingly high rates of home ownership in Australia are masking a long-term problem of serious housing inequality between older and younger generations and between wealthier and poorer households, new AHURI research reveals.
The research, ‘Australian home ownership: past reflections, future directions’, undertaken for AHURI by researchers from Swinburne University of Technology examines the growth of home ownership and its tenure dominance in Australia after the Second World War, together with its fading, most notably for younger households (ages 25–44) over the last four decades.
While Australia’s overall home ownership rate appears to have held up well—it was 68 per cent in 1976 and 67 per cent in 2016—the rate is projected to decline to around 63 per cent for all households by 2040, and to 51 per cent for households in the 25–55 age bracket, down from 60 per cent in 1981.
‘A housing system in which one half—predominantly older homeowners—acquires wealth and the other half—generally younger renters—doesn’t, is a recipe for long-term social problems’ says lead researcher Professor Terry Burke of the Swinburne University of Technology.
The research suggests that while no single policy failure, single political decision or single market or state failure has eroded the ability to achieve the ownership dream, the change has come from complex shifts throughout the entire institutional environment.
While weakening affordability has been an important factor in this erosion, other factors should not be neglected including an increase in casualised employment, a financial and tax environment favouring rental investors, the emergence of new housing products largely designed for rental living, the inability of housing supply to match population and household growth, and the financialisaton of housing.
‘Broadly, Australia now has an institutional environment which no longer supports ownership as it did in the past,’ says Professor Burke. ‘This means the housing system will become more inequitable irrespective of what incremental housing policy reforms are made. Given this, we have to rethink what sort of housing system is appropriate for Australia’s future.’
‘Either we embrace fundamental and broad-based reforms to rebuild ownership or we accept a retreat from its historical dominance, moving to a system which has more balance between rental and ownership—what we can call a dual tenure system.’
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Falling house prices unlikely to increase home ownership: AHURI

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GUEST OBSERVATION
Despite two years of housing market cooling in Sydney and Melbourne, Australia stayed near the top of the global unaffordability league in 2019. And with prices rebounding in our two largest cities, that status is likely to be reinforced in 2020. Australia’s 30-year housing affordability decline has been among the worst in the developed world.
This problem is <a href="https://www.tandfonline.com/doi/full/10.1080/02673037.2011.616994" target="_blank">fundamentally structural</a> – not cyclical – in nature. Yes, periodic turbulence affects prices and rents. And yes, market conditions vary greatly from place to place. Australia-wide, though, there is an underlying dynamic that – over the medium to long term – is driving housing affordability and rental stress in one general direction only: for the worse.
<a href="https://images.theconversation.com/files/315152/original/file-20200213-41678-12hohlt.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/315152/original/file-20200213-41678-12hohlt.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" alt=""></a>
<a class="source" href="https://www.propertyobserver.com.au/https://www.palgrave.com/gp/book/9789811507793" target="_blank">Palgrave Macmillan</a>
Certain key factors in Australian housing woes are, of course, far from unique. As we argue in <a href="https://www.propertyobserver.com.au/https://www.palgrave.com/gp/book/9789811507793" target="_blank">our new book</a>, neoliberal policy dominance and the <a href="https://theconversation.com/explainer-the-financialisation-of-housing-and-what-can-be-done-about-it-73767" target="_blank">financialisation of housing</a> have damaged housing system performance in <a href="https://theconversation.com/housing-policy-reset-is-overdue-and-not-only-in-australia-112835" target="_blank">many other countries</a> as well. Similarly, cheap debt has supercharged house prices globally, not just here. And ours is not the only comparable nation where coping with rapid population growth is part of the policy challenge.
But, as we show in our book, over the past 30 years across 18 OECD countries, our market has had the third-biggest fall in house price affordability – and the largest of any major OECD nation.
In Australia, the focus of concern is often on the <a href="https://theconversation.com/first-home-buyer-schemes-arent-enough-to-meet-young-adults-housing-aspirations-121431" target="_blank">challenges aspiring first-home buyers face</a>. Although important, this shouldn’t distract policymakers from the bigger policy problem: <a href="https://theconversation.com/private-renters-are-doing-it-tough-in-outer-suburbs-of-sydney-and-melbourne-120427" target="_blank">affordability stress affecting lower-income renters</a>.
Being pushed into poverty by high rents is a serious issue. It affects <a href="https://www.propertyobserver.com.au/https://www.palgrave.com/gp/book/9789811507793" target="_blank">well over a million Australians</a>. That’s many more than the <a href="https://theconversation.com/small-but-well-formed-the-new-home-deposit-scheme-will-help-and-its-unlikely-to-push-up-prices-117073" target="_blank">marginal first-home-buyer cohort</a>.
<a href="https://images.theconversation.com/files/315157/original/file-20200213-41683-5tfu2t.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/315157/original/file-20200213-41683-5tfu2t.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
<a class="source" href="https://theconversation.com/private-renters-are-doing-it-tough-in-outer-suburbs-of-sydney-and-melbourne-120427" target="_blank">Source: Private renters are doing it tough in outer suburbs of Sydney and Melbourne/The Conversation</a>
<h2>Systemic problems have very broad impacts</h2>
Financial regulators and policymakers are starting to realise housing system under-performance doesn’t just <a href="https://theconversation.com/is-this-a-housing-system-that-cares-thats-the-question-for-australians-and-their-new-government-117311" target="_blank">damage the welfare</a> of key population groups. It also <a href="https://theconversation.com/is-social-housing-essential-infrastructure-how-we-think-about-it-does-matter-110777" target="_blank">raises concerns about economic productivity</a> and <a href="https://theconversation.com/four-ways-an-australian-housing-bubble-could-burst-76505" target="_blank">systemic financial risk</a>.
Even from a narrow “cost to government” perspective, the Australian government should treat current housing system trends as a serious budgetary concern because of impacts on future public spending.
For example, <a href="https://theconversation.com/retiree-home-ownership-is-about-to-plummet-soon-little-more-than-half-will-own-where-they-live-115255" target="_blank">declining home ownership</a> among younger and middle age groups will filter through to older age groups over time. Increasing numbers of older, <a href="https://theconversation.com/private-renters-are-doing-it-tough-in-outer-suburbs-of-sydney-and-melbourne-120427" target="_blank">lower-income, private renters</a> will <a href="https://www.aist.asn.au/Media-and-News/News/" target="_blank">generate political pressure</a> to boost <a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/rent-assistance" target="_blank">Rent Assistance</a> and the <a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/age-pension" target="_blank">Age Pension</a>. And <a href="https://www.aist.asn.au/Media-and-News/News/" target="_blank">pensioner numbers will be inflated</a> if rising numbers of home owners who reach retirement age with mortgages draw on superannuation savings to pay off their debt.
<a href="https://images.theconversation.com/files/296993/original/file-20191015-98661-b2ne0v.PNG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/296993/original/file-20191015-98661-b2ne0v.PNG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
The number of private renters has grown as the proportions of owner occupiers and public housing tenants have fallen. <a class="source" href="https://www.pc.gov.au/research/completed/renters/private-renters.pdf" target="_blank">Vulnerable Private Renters: Evidence and Options, Productivity Commission</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/" target="_blank">CC BY</a>
<h2>Why do we need system-wide change?</h2>
As we argue in our book, housing policy needs to be much more broadly conceived. It’s about much more than “housing programs”. Indeed, housing outcomes in Australia over the past 25 years have been driven far more by policy on tax, finance and regulation – activities rarely controlled by any department with housing in its title – than by explicit spending on housing or subsidies.
Because housing is a system, any serious attempt to improve housing outcomes must recognise the need for system-wide analysis and transformation.
Micro-measures have been the <a href="https://www.tandfonline.com/doi/abs/10.1080/02673037.2015.1044948" target="_blank">preferred approach</a> of most Australian governments over the past 25 years. But these often generate minimal net benefit or are <a href="https://www.google.com/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;uact=8&amp;ved=2ahUKEwjKi9vC2qLnAhXyjOYKHXvSDhYQFjAAegQIAxAB&amp;url=https%3A%2F%2Fwww.aph.gov.au%2FDocumentStore.ashx%3Fid%3D99cfa3f6-858f-467d-91a9-31e384534a5e%26subId%3D31798&amp;usg=AOvVaw3nBV95LNjlwdZiDyeAp7tN" target="_blank">even counterproductive</a>.
A national housing strategy is long overdue. And only the Commonwealth can lead this. The Commonwealth and its agencies – not the states – control key instruments driving housing outcomes, especially tax and social security settings, as well as financial regulation.
As national governments recognised in the early 1990s and from 2007-10 – and indeed exemplified by the Turnbull government’s 2018 <a href="https://theconversation.com/government-guarantee-opens-investment-highway-to-affordable-housing-88549" target="_blank">National Housing Finance and Investment Corporation</a> – the constitutional designation of state and territory responsibility for housing and planning is no bar to this.
What are the priorities for a national strategy?
A key goal must be to discourage speculation in land and housing. This would include a phased restructure of tax settings that incentivise unproductive housing over investment. For example, <a href="https://grattan.edu.au/wp-content/uploads/2018/03/901-Housing-affordability.pdf" target="_blank">most housing economists agree</a> investor landlord tax concessions should be wound back and a <a href="https://www.theage.com.au/politics/federal/it-s-just-a-bad-tax-former-treasury-heads-unite-to-slam-stamp-duty-20200216-p541aq" target="_blank">broad-based land tax should gradually replace stamp duty</a> on housing sales.
The strategy must also aim to increase diversity in the housing market. Expanding the scale of government and non-profit housing provider activity can boost the capacity to better house disadvantaged groups. It will also <a href="https://theconversation.com/build-social-and-affordable-housing-to-get-us-off-the-boom-and-bust-roller-coaster-113113" target="_blank">reduce vulnerability to damaging market volatility</a> arising from the overwhelming reliance on for-profit developers building for individual buyers.
To repair the hollowing-out of housing policy-making capability within governments, the plan should include institutional reform and capacity-building. Both levels of government should have a dedicated cabinet-level housing minister to champion the housing cause across departments. We also need an enduring national agency like the US Department of Housing and Urban Development or the former UK Housing Corporation.
<h2>Start small and build up to far-reaching action</h2>
Our insistence on system-wide analysis and reform might seem utopian, especially given the current state of Australian politics. There are parallels here to the challenges of climate change: many might ask how much worse things have to get before active policy action becomes irresistible as a bipartisan commitment.
In the absence of immediate system-wide action on housing, <a href="https://www.propertyobserver.com.au/https://www.palgrave.com/gp/book/9789811507793" target="_blank">we can also point</a> to initial reforms that Australian governments could easily adopt with minimal direct budgetary impact.
State and territory governments could, for example, follow many comparable countries in adopting planning system <a href="https://theconversation.com/england-expects-40-of-new-housing-developments-will-be-affordable-why-cant-australia-94581" target="_blank">rules that set minimum levels of affordable housing</a> that must be built within market housing developments.
In the realm of tenants’ rights, other states could <a href="https://www.tenantsvic.org.au/media/media-releases/rental_fairness_package_oct2017/" target="_blank">follow Victoria</a> in <a href="https://theconversation.com/an-open-letter-on-rental-housing-reform-103825" target="_blank">rebalancing residential tenancy laws</a> away from their typically in-built landlord advantage. “No grounds evictions” should be outlawed.
The Commonwealth could restore the pre-1996 rules of its longstanding <a href="https://theconversation.com/the-new-national-housing-agreement-wont-achieve-its-goals-without-enough-funding-99936" target="_blank">National Housing Agreement</a> with the states and territories which largely ringfenced federal funding to supply and improve social housing. All governments could commit to delivering a substantial proportion of affordable housing within residential developments on ex-government land. Many industry stakeholders advocate a <a href="https://www.domain.com.au/news/calls-for-higher-affordable-housing-targets-as-more-people-on-cusp-of-poverty-20170802-gxo11s/" target="_blank">30% target</a>.
We see scope for a phased approach: first-step measures could be implemented while building the political consensus needed for more far-reaching actions. To improve affordability and moderate the <a href="https://theconversation.com/how-the-housing-boom-is-remaking-australias-social-class-structure-66976" target="_blank">rising inequities within</a> and <a href="https://theconversation.com/for-the-first-time-in-a-long-time-were-setting-up-a-generation-to-be-worse-off-than-the-one-before-it-121983" target="_blank">between generations</a>, Australia’s housing system must be fundamentally reformed. There is no responsible “business as usual” option.
<a href="https://www.propertyobserver.com.au/https://www.palgrave.com/gp/book/9789811507793" target="_blank">Housing Policy in Australia: A case for system reform</a> by Hal Pawson, Vivienne Milligan and Judith Yates was published by Palgrave Macmillan this month.<img src="https://counter.theconversation.com/content/130291/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/hal-pawson-147969" target="_blank">Hal Pawson</a>, Professor of Housing Research and Policy, and Associate Director, City Futures Research Centre, <a href="https://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a>; <a href="https://theconversation.com/profiles/judith-yates-148000" target="_blank">Judith Yates</a>, Honorary Associate Professor, School of Economics, <a href="https://theconversation.com/institutions/university-of-sydney-841" target="_blank">University of Sydney</a>, and <a href="https://theconversation.com/profiles/vivienne-milligan-147970" target="_blank">Vivienne Milligan</a>, Honorary Professor – Housing Policy and Practice, City Futures Research Centre, <a href="https://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/australias-housing-system-needs-a-big-shake-up-heres-how-we-can-crack-this-130291" target="_blank">original article</a>.
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Australia's housing system needs a big shake-up

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Australian economist Chris Joye says home owners will see around 20 per cent capital gains in this cycle, assuming no further cuts by the RBA.
The Coolabah Capital Investments fund manager predicted the recent quick turn around in housing fortunes.
"When house prices were still in free-fall back in April 2019, we controversially forecast that the record 10 per cent bust (which we predicted in 2017 when prices were still climbing) would promptly end and be superseded by a sharp 10 per cent rebound", the AFR columnist said.
"To the best of my knowledge, no other investors shared this central case."
He said this was based on the assumption the RBA would cut rates twice in quick succession. They then "poured more fuel on the flames with a third cut in October."
Joye suggests the RBA will need to "shunt rates" a lot lower than their current level if they want to achieve its legislated full employment target and boost wage growth back to historical trend.
<img src="http://i3.cmail20.com/ei/d/87/BA7/587/160955/csfinal/hp1-9900000000079e3c.png" alt="" width="600">
"Getting the jobless rate down to between 4 per cent and 4.5 per cent (from its current 5.1 per cent mark) will require a large amount of additional monetary stimulus—much more than the RBA will get from the partial pass-through on the next two cuts. And this could easily push house prices 30 per cent beyond their June 2019 trough", Joye said.
Dwelling values are now eight per cent above their mid 2019 bottom, with Sydney and Melbourne leading the way with over 11 per cent gains on a non-annualised basis.
"This is a little stronger than the run-rate we outlined in April 2019 to get to 10 per cent appreciation over the following 12 months, but that analysis banked on two cuts and we have been furnished with three", Joye added.
<img src="http://i4.cmail20.com/ei/d/87/BA7/587/160955/csfinal/arrears1-9900000000079e3c.png" alt="" width="600">
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"Unfortunately for the RBA, this price action betrays its intellectual hypocrisy. During the 2012 to 2017 boom the RBA repeatedly claimed that the 50 per cent increase in national prices had little to do with its slashing the cash rate from 4.75 per cent to 1.50 per cent."
Joye said they blamed inert housing supply and population growth.
"Fast forward to 2020 and now the RBA tells us that the sudden boom in prices proves that its "monetary policy transmission mechanism is working", Joye says.
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