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.
</section>
</section>

[smartcode_project_cta:default project_id=112661]

SIERA kicks off construction at Northcliffe tower Exhale

House Prices

<html><body>
Rising household debt levels, the hot Sydney property market and continued low interest rates has made Australian Prudential Regulation Authority Wayne Byres uneasy.
It seems he especially fears a market propped up by artificially low, interest-only borrowing rates.
Last month he decided the trend to over borrow, and then not to repay home loans in the conventional manner of interest and principal, was a likely recipe for a economic uncertainty.
To preserve financial stability, the prudential regulator decided in its latest macro-prudential measure that the interest-only loans fad need to be constrained.
The banks were told that less than 30 per cent of their new mortgages can be interest-only, well below the 38 per cent of total loans currently taken.
With borrowers realising paying interest-only freed up cash-flow, they've dived into interest-only loans which haven't been below 30 per cent since around 2008.
Interest-only loans typically have a period of five years, and then the loan will revert to the normal P&amp;I repayments, with the recent accompanying price growth seeing the investor nicely placed to cope with the higher repayments.
The tax deduction of interest payments in the meantime on these investor loans will have been a big incentive for the investor.
Investors have accordingly snapped up the bulk of interest-only loans, but owner occupied borrowers have been a worrying large 40 per cent share.
As Sydney house prices have surged since 2012, house loan sizes have grown, and for most households who've have experienced limited wage growth, the upsizing to the bigger home has only really worked with getting an interest only loan.
On a $300,000 mortgage over 25 years at a 5% p.a. interest rate, the usual monthly repayment would be $1,754 a month. But if you were making interest-only payments, the monthly cost would be $1,250 a month.
For a $750,000 home loan the monthly repayment of $4,174 drops to $3,325 if only the interest is repaid – which for many Sydney families is the difference between owning a bigger home or not.
The push hasn't just come from borrowers as mortgage broker's commissions are calculated on the size of the loans so they are incentivised to write interest only loans.
ASIC advised this week while interest-only loans may be a reasonable option for some borrowers, for the vast majority of owner-occupiers in particular, an interest-only loan will not make sense.　
The Reserve Bank of Australia has warned for two years that the rise in interest-only loans could amplify the housing price cycle, increase the risk of significant price falls, and may result in households overburdened in debt. 
If house prices do drop, the borrower will likely end up owing more than the house is worth, paying much more interest than they would have otherwise paid, and then coping with the many ensuing dramatic problems.
This article first appeared in the Daily Telegraph.
</body></html>

jchancellor-FAypfDUnLy

Three housing market factors making APRA's Wayne Byres uneasy

<html><body>
The council areas of NSW's Murrumbidgee, Queensland's Issac and Victoria's  Monash, Whitehorse and Boroondara are among the best nationwide for median house price growth over the past two decades, according to CoreLogic.
A new report from CoreLogic states over the 20 years to December 2016, median selling prices of houses nationally have increased at a compound annual rate of 7.2 percent, indicating that property prices have, on average, doubled over ten years. 
"While the national growth rate is strong, the rate of growth has varied dramatically between the states and territories and within different regions of each state and territory," CoreLogic said.
"The first table within this release highlights the 25 council areas across the country that have seen the greatest compound annual increase in median house prices over the past 20 years. 
"Note that data for the Northern Territory is not available for 20 years and as a result has been excluded from the analysis."
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="106">
Council Area
</td>
<td valign="top" width="47">
State
</td>
<td valign="top" width="84">
Median Price
</td>
<td valign="top" width="97">
20 yr growth pa
</td>
</tr>
<tr>
<td valign="top" width="106">
Murrumbidgee
</td>
<td valign="top" width="47">
NSW
</td>
<td valign="top" width="84">
$167,000
</td>
<td valign="top" width="97">
13%
</td>
</tr>
<tr>
<td valign="top" width="106">
Issac
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$140,000
</td>
<td valign="top" width="97">
11%
</td>
</tr>
<tr>
<td valign="top" width="106">
Monash
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,100,000
</td>
<td valign="top" width="97">
10%
</td>
</tr>
<tr>
<td valign="top" width="106">
Whitehorse
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,081,000
</td>
<td valign="top" width="97">
10%
</td>
</tr>
<tr>
<td valign="top" width="106">
Boroondara
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,910,000
</td>
<td valign="top" width="97">
10%
</td>
</tr>
<tr>
<td valign="top" width="106">
Glen Eira
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,328,500
</td>
<td valign="top" width="97">
10%
</td>
</tr>
<tr>
<td valign="top" width="106">
Maribyrnong
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$781,500
</td>
<td valign="top" width="97">
10%
</td>
</tr>
<tr>
<td valign="top" width="106">
Yarra
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,210,000
</td>
<td valign="top" width="97">
10%
</td>
</tr>
<tr>
<td valign="top" width="106">
Darebin
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$840,000
</td>
<td valign="top" width="97">
10%
</td>
</tr>
<tr>
<td valign="top" width="106">
Banana
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$190,000
</td>
<td valign="top" width="97">
10%
</td>
</tr>
<tr>
<td valign="top" width="106">
Bayside
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,658,750
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Boorowa
</td>
<td valign="top" width="47">
NSW
</td>
<td valign="top" width="84">
$235,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Manningham
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,170,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Stonnington
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,810,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Kingston
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$851,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Nannup
</td>
<td valign="top" width="47">
WA
</td>
<td valign="top" width="84">
$372,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Port Phillip
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,550,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Liverpool
</td>
<td valign="top" width="47">
NSW
</td>
<td valign="top" width="84">
$750,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Byron
</td>
<td valign="top" width="47">
NSW
</td>
<td valign="top" width="84">
$800,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Greater Dandenong
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$600,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Maroondah
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$745,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Waverley
</td>
<td valign="top" width="47">
NSW
</td>
<td valign="top" width="84">
$2,625,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Hobsons Bay
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$771,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Moreland
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$740,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Moonee Valley
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$955,500
</td>
<td valign="top" width="97">
9%
</td>
</tr>
</tbody></table>
The Murrumbidgee council area in the Riverina areas of New South Wales has seen the greatest increase in median house prices over the past 20 years at 13.0 percent pa. 
Isaac, located in the coal mining heartland of Queensland’s Bowen Basin, in second place is an interesting one because 3-4 years ago house prices were substantially higher due to the mining boom but they have fallen by -22.4 percent pa over the past five years as the mining boom has unwound. 
Elsewhere on the top 25 list; New South Wales and Victorian council areas feature heavily, especially those located within Sydney and Melbourne. 
These tables highlight how the increases in prices in Sydney and Melbourne have outstripped those of the rest of the country. 
In Sydney in particular, this has occurred despite the fact that prices generally fell between 2003 and 2009.
The second table highlights the 25 council areas nationally that have seen the lowest annual increases in median house prices over the past 25 years. 
Not one of these council areas is situated in a capital city highlighting that there is often a divide between the performance of capital city and regional housing markets. 
Most of these council areas are in regional areas linked to single industries such as mining or agriculture.
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="106">
Council Area
</td>
<td valign="top" width="47">
State
</td>
<td valign="top" width="84">
Median price
</td>
<td valign="top" width="97">
20 yr growth pa
</td>
</tr>
<tr>
<td valign="top" width="106">
Coolgardie
</td>
<td valign="top" width="47">
WA
</td>
<td valign="top" width="84">
$87,500
</td>
<td valign="top" width="97">
0.4%
</td>
</tr>
<tr>
<td valign="top" width="106">
Yilgarn
</td>
<td valign="top" width="47">
WA
</td>
<td valign="top" width="84">
$58,500
</td>
<td valign="top" width="97">
0.5%
</td>
</tr>
<tr>
<td valign="top" width="106">
Dundas
</td>
<td valign="top" width="47">
WA
</td>
<td valign="top" width="84">
$33,000
</td>
<td valign="top" width="97">
1%
</td>
</tr>
<tr>
<td valign="top" width="106">
Paroo
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$50,000
</td>
<td valign="top" width="97">
1%
</td>
</tr>
<tr>
<td valign="top" width="106">
Unincorporated SA
</td>
<td valign="top" width="47">
SA
</td>
<td valign="top" width="84">
$46,000
</td>
<td valign="top" width="97">
2%
</td>
</tr>
<tr>
<td valign="top" width="106">
East Pilbara
</td>
<td valign="top" width="47">
WA
</td>
<td valign="top" width="84">
$150,500
</td>
<td valign="top" width="97">
2%
</td>
</tr>
<tr>
<td valign="top" width="106">
Hay
</td>
<td valign="top" width="47">
NSW
</td>
<td valign="top" width="84">
$120,000
</td>
<td valign="top" width="97">
2%
</td>
</tr>
<tr>
<td valign="top" width="106">
Kimba
</td>
<td valign="top" width="47">
SA
</td>
<td valign="top" width="84">
$70,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Morawa
</td>
<td valign="top" width="47">
WA
</td>
<td valign="top" width="84">
$60,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Burdekin
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$175,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Quilpie
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$87,500
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Walgett
</td>
<td valign="top" width="47">
NSW
</td>
<td valign="top" width="84">
$80,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Buloke
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$82,750
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Blackall Tambo
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$75,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Central Highlands
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$190,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Bruce Rock
</td>
<td valign="top" width="47">
WA
</td>
<td valign="top" width="84">
$70,250
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Roebourne
</td>
<td valign="top" width="47">
WA
</td>
<td valign="top" width="84">
$291,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Cassowary Coast
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$250,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Yarriambiack
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$90,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Southern Mallee
</td>
<td valign="top" width="47">
SA
</td>
<td valign="top" width="84">
$99,000
</td>
<td valign="top" width="97">
4%
</td>
</tr>
<tr>
<td valign="top" width="106">
Tatiara
</td>
<td valign="top" width="47">
SA
</td>
<td valign="top" width="84">
$142,000
</td>
<td valign="top" width="97">
4%
</td>
</tr>
<tr>
<td valign="top" width="106">
Gannawarra
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$160,000
</td>
<td valign="top" width="97">
4%
</td>
</tr>
<tr>
<td valign="top" width="106">
Douglas
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$405,000
</td>
<td valign="top" width="97">
4%
</td>
</tr>
<tr>
<td valign="top" width="106">
Berri and Barmera
</td>
<td valign="top" width="47">
SA
</td>
<td valign="top" width="84">
$181,000
</td>
<td valign="top" width="97">
4%
</td>
</tr>
<tr>
<td valign="top" width="106">
North Burnett
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$146,000
</td>
<td valign="top" width="97">
4%
</td>
</tr>
</tbody></table>
The past, of course, is no indicator of future performance, but the data provides a good insight into the areas which are likely to see stronger price growth in the future.
Regions that have diverse economies and are not reliant on single or a handful of industries are likely to see higher levels of housing demand. 
Subsequently, these areas also tend to see greater increases in selling prices due to the heightened level of housing demand.
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j.ballantyne1990-6AQqhLzZaK

Murrumbidgee, NSW, leads top 25 best performing areas for median house price increases over past 20 years

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<img src="https://counter.theconversation.edu.au/content/75126/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Whether house prices have been inflated by limited supply, or because of transfers to investors and homeowners, government policy is now trapped in a vicious cycle.
The wealth accumulated in our houses has become a central part of the retirement system, and the government itself can’t afford for prices to fall.
Generous tax subsidies and asset test concessions on the family home have incentivised the accumulation of wealth in property and fuelled demand pressures in the housing market for decades.
Government assistance to home buyers and owners is provided in the form of the First Home Owners Grants, stamp duty concessions, and the family home’s exemption from capital gains tax, land tax, as well as the pension and other assets tests. These subsidies and concessions combine to make wealth accumulation in the family home more attractive than other assets.
In many real estate markets, land supply constraints and planning controls can limit urban sprawl while housing demand pressures continue to intensify. Hence, cities such as Sydney have become “pressure cookers” where the subsidies result in rising house prices in the face of land supply constraints.
<h2>The policy-price cycle</h2>
The family home has become a cornerstone of the Australian retirement system. Sustained house price increases have allowed government income support to be set at historically low levels in Australia compared to other countries with lower home ownership rates such as Sweden and the Netherlands. This is based on the assumption that the low-income elderly will be housing asset-rich, and can therefore can get by on smaller pensions.
Indeed, in an era of ageing populations, governments have been encouraging older Australians to tap into their store of housing wealth to fund their own retirement and ease intergenerational fiscal tensions. For instance, the Productivity Commission’s aged care equity release scheme recommends elderly home owners draw down against their housing equity to meet aged care costs.
Of course, this only works if house prices continue to rise.
If house prices fall, the cycle gets broken and the family home may no longer be an adequate base for supporting the retirement needs of the wider population. In the event of a long-term decline in house prices, individuals would require greater income support from governments as their personal asset base weakens. This would in turn perpetuate a rise in government social security expenditure.
<h2>Over the long term</h2>
But even if house prices weren’t to decline, there is a paradox at play in this system. In order to maintain a healthy housing asset base for retirees, house prices must remain high. So the policy-price cycle is aimed at sustaining home ownership as a key pillar of the welfare system. However, it has also resulted in housing wealth becoming increasingly concentrated in the hands of smaller subgroups. Notably, housing equity is getting concentrated in the hands of older generations.
<a href="https://www.propertyobserver.com.au/images/2017/04/6/image-20170403-16550-3uf443.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/04/6/image-20170403-16550-3uf443.png" width="600" height="330">
Author’s own calculations from the Australian Bureau of Statistics Surveys of Income and Housing. Author provided
As these charts show, the intergenerational housing wealth gap has widened in the last two decades. In 2011, the median housing equity of home owners aged 45-64 years was nearly double the value held by the 25-44 year olds. The share of the population’s housing equity held by those aged 45-64 years has widened between 1990 and 2011 at the expense of those aged 25-44 years.
This means the system could potentially unravel in the long term. If large numbers of young people continue to face price barriers to home ownership, the home ownership pillar within the welfare system will be weakened as the future population of home owners shrinks.
In the short-term a significant group of millennials will miss out on the benefits of home ownership. But in the long term, unless governments address some fundamental structural problems currently entrenched within our tax-transfer system, there is a significant weakness in our social welfare system built on housing.
 
Rachel Ong is deputy director of the Bankwest Curtin Economics Centre, Curtin University and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/rachel-ong-113482" target="_blank">here</a>.
 
 
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Governments are trapped in a vicious cycle of housing policies and prices: Rachel Ong

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<div class="parsys parsys-article-content-top">
<div class="cq-article-content-paras section">
House price growth in Sydney and Melbourne increased further in March according to CoreLogic, with Sydney house prices up 19 percent compared to the same month last year and Melbourne 16 percent.
Tim Lawless, CoreLogic head of research, said the early results come after a strong rebound in housing market conditions through the latter half of 2016 and into 2017.
"The strong capital gain results are further evidenced by a continuation in low stock levels, high auction clearance rates and strong investment demand," he said.
"March's figures reflected a strong rebound in housing market conditions that picked up in the latter half of last year and continued into this year."
</div>
</div>
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Sydney home prices up 19 percent in year to March: CoreLogic

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Record high house prices in Australia doesn’t seem to deter buyer sentiment, while sellers think 2017 is a good time to sell, says a new survey.
Two in three (62 percent) Aussie home owners believe this year is a good time to buy, while a further 73 percent believe it is a good time to sell, according to the findings of the survey commissioned by free real estate agent search service, LocalAgentFinder.
The survey was conducted from a nationally representative, independent panel of 1001 Australian adults.
LocalAgentFinder allows vendors to compare property sales agents in their local area, in conjunction with Pureprofile, a data and insights company.
LocalAgentFinder CEO Matt McCann said it was interesting to see two-thirds of Australians believe property is a good buy this year, given the double-digit percentage increases, talk of interest rates rises, and possible changes to property investment legislation.
“Many of us are talking about Sydney and Melbourne’s strong property market, but that is not really being seen outside of the Eastern Seaboard. In fact, the value of property in Brisbane, Adelaide, Perth and Hobart were lower in 2016 than they were eight years ago,” he said.
Sydney and Melbourne recorded the highest dwelling value increases from 2015 to 2016, at 15.5 percent and 13.7 percent respectively. 
Other cities had lower increases, with Canberra dwellings increasing by 9.3 percent, Brisbane by 3.6 percent and Adelaide by 4.2 percent, while Perth decreased by -4.3 percent.
A majority of home owners surveyed in New South Wales, 81 percent, believe it is a good time to sell, and in Victoria and the Australia Capital Territory, where 82 percent of home owners believe the same.
Elsewhere, confidence was slightly lower: 73 percent of home owners in the Northern Territory, 70 percent in South Australia, 67 percent in Queensland and Tasmania, and 44 percent in Western Australia thought it was a good time to sell.
<a href="https://www.propertyobserver.com.au/images/2017/03/29/Mar30NewsPropertySurvey.png" target="_blank">Click to enlarge</a>
 <img src="https://www.urban.com.au/images/2017/03/29/Mar30NewsPropertySurvey.png" alt="">
Home owners in WA and NT most likely to buy property in 2017
Residents in Western Australia are most optimistic about buying, with 85 percent believing 2017 is a good year to purchase property. Northern Territory residents follow at 80 percent, then Tasmanians at 71 percent.
Contrastingly, ACT and NSW residents are on the fence – at 47 percent and 55 percent respectively.
Outside of these areas, 68 percent of South Australians believe this year is a good time to buy, 65 percent of Queenslanders, and 57 percent of Victorians believe this year is a good time to buy.
The findings are consistent with rising house prices across Australia. 
Confidence highest among Baby Boomers
Over 60s are the most likely to believe 2017 is a good time to buy (53 percent of all over-60s), while those in their 20s were the least likely to believe 2017 to be a good time to buy (35 percent of all 20-somethings) – unsurprising, given wage-to-property ratios are growing unevenly. The survey also revealed that 53 percent of 60+ believe 2017 is a good time to sell.
“Older Australians typically have more purchasing power than young people, as they are able to rely on the equity of existing assets to purchase. Younger people are struggling to keep up with rising house prices, and they are less likely to be inclined to purchase this year,” McCann said.
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jonathanchancellor-7SQnKwU6yx

Rising home prices? Majority of Aussies still upbeat on buying/selling

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This year has seen continued upwards pressure on Sydney house prices, but standby for a shift.
Yes there's still near-record low interest rates, reduced stock levels, strong population growth, as well as a renewed rush from investors to use negative gearing to set up for retirement.
But the slightly higher interest rates announced by lenders recently - or more likely the obvious prospect of continued out of cycle rate rises - ought act as a break on the exuberance on display on Saturday's across Sydney this year.
The double digit price growth cycle - which has just hit 18.9 percent according to CoreLogic - needs to come to an end.
It doesn't mean prices will head backwards or crash, rather the rate of growth ought slow. 
This week there was analysis that mortgage rates would need to rise to around six per cent before house prices nationally start sliding.
That's highly unlikely, but a slow down in price growth is around the corner - and what almost everyone wants.
Just when it all takes place is the big question as certainly the 80 per cent plus weekend clearance rates haven't faltered this autumn.
Perhaps higher stock levels heading into Easter will provide a trigger mid-next month. Then the actual holiday pause could lay the platform for wiser heads at auction.
Earlier this month it was suggested that just three rate hikes of 25 basis points by the RBA would deliver a bigger increase in debt-servicing costs for households than 10-11 rate hikes did in the mid-1990s
According to Macquarie Bank’s head of economic research, James McIntyre current households' debt levels are at a record 187 percent of income and a one percentage point increase in the RBA's cash rate would, excluding further increases in lenders' borrowing rates, push the household debt servicing ratio beyond 10 per cent.
While household debt serviceability is currently manageable given the record low rates, the risk is ripe for when when they increase given record high household debt.
McIntyre studied previous tightening cycles, some which involved 11 quarter-point hikes.
"We estimate that three to four 25 basis-point rate hikes would deliver a bigger increase in debt-servicing costs for households than 10 to 11 rate hikes did in the mid-1990s," he told clients. 
"The RBA's reticence about further increases in household debt-to-income ratios is clear when you begin to consider how potent interest-rate rises might be from a debt-servicing perspective,'' McIntyre said.
He noted a big difference between the periods is a wider spread between the cash rate and lenders' mortgage rates: from 180 basis points to about 375 basis points, expanding since the GFC supposedly due to rising bank funding costs.
McIntyre, however, doesn't expect a formal RBA rate increase until early 2019.
This article first appeared in the Daily Telegraph.
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Sydney's rate of house price growth ought to slow

<html><body>
<img src="https://counter.theconversation.edu.au/content/75130/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Climbing house prices seem to scare people but houses are relatively more affordable today than they were in 1990, it’s actually interest-rate risk that’s the bigger problem for first home buyers.
If you look at latest numbers on house prices, as a measure of affordability, they use a “median measure” – that is, the ratio of median house price to median salary. According to the latest Demographia survey, the price of the median Sydney house is 12.2 times the median salary, and it is 9.5 in Melbourne.
But it’s simply misleading to compare median-based measures of housing across different time periods in the same location. These simple median measures do not take into account differences in interest rates in different time periods. 
A house in 2017 that costs nine times the median salary, when mortgage interest rates are less than 4%, is arguably more affordable than a house in 1990 that costs six times the median salary. Interest rates in 1990 were 17 percent.
Consider this simple example. In 1990 a first home buyer purchases an average house in Sydney priced at A$194,000. With mortgage interest rates at 17 percent, the monthly mortgage repayments were A$2,765 for a 30-year mortgage.
But in 1990 the average full-time total earnings was only A$30,000 per annum, so the buyer’s mortgage repayments represented over 111 percent of before-tax earnings. In 2017 a first home buyer purchasing a Sydney house for A$1,000,000, with interest rates at 4 percent, is only required to pay A$4,774 every month, or 69% of their before-tax average full-time total earnings. 
So, relatively, houses are substantially more affordable today than they were in 1990. The lower interest rate means the costs of servicing a mortgage is lower today than it was 25 years ago, or even 50 years ago. 
However, those lower interest rates also mean today’s first home buyers face greater perils than their parents or grandparents.
<h2>Interest-rate risk</h2>
Interest rate risk is the potential impact that a small rise in mortgage interest rates can have on the standard of living of homeowners. This does not consider the likely direction of interest rates, rather how a 1 percent change in interest rates affects the repayments required on a variable rate mortgage.
When interest rates rise so do mortgage repayments. But the proportional increase in repayments is higher when interest rates are lower. For example, if mortgage interest rates were 1 percent, then increasing interest rates by another 1 percent will double the interest costs to the borrower. When interest rates are higher, a 1 percent increase in interest rates will have a lower proportional affect on their repayments.
If we go back to the example from before, the interest rate risk of the first home buyer from 1990 is much lower than that of the 2017 buyer. If mortgage interest rates rose by 1 percent in 1990, repayments would rise by only 5.7 percent to $2,923. For the 2017 buyer on the other hand, a 1 percent increase in interest rates would see their repayments rise by over 12 percent to $5,368 per month. 
This has the potential to financially destroy first home buyers and, due to the high reliance of the retail banking industry on residential real estate markets, potentially create a systemic financial crisis. 
Interest rate risk has an inverse relationship to interest rates – when interest rates fall, interest rate risk rises. As a result, interest rate risk has been steadily increasing as mortgage interest rates have fallen. Given that we have record low interest rates at the moment, interest rate risk has never been higher.
<h2>Putting it all together</h2>
Compounding all of this is the general trend of interest rates. 
In 1990 mortgage interest rates were at a record high and so our first home buyer could reasonably expect their repayments to decrease in the coming years. They could also reasonably expect that, as mortgage interest rates fell, demand for housing would increase (all else being equal) and so would house prices, generating a positive return on their investment.
But our 2017 first home buyer is buying when interest rates are at record lows. They cannot reasonably expect interest rates will fall or for their repayments to go down in future years. It’s also unlikely that house prices will increase as they have for previous generations. 
So while the current generation of first home buyers find housing much more affordable than their parents, they face substantially higher interest-rate risk and a worse outlook for returns on their investment. If we wish to address the concerns of first home buyers we should look into these issues rather than exploiting misrepresentative median-based measures of house affordability. 
Apart from addressing issues with the supply of housing, governments need to investigate ways to reduce interest rate risk over the longer term.
Jamie Alcock is associate Professor, University of Sydney and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/jamie-alcock-349860" target="_blank">here</a>.
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Houses aren’t more unaffordable for first home buyers, but they are riskier

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Most research sources have Melbourne leading on annual house price growth – and it’s not so surprising, when you look at the sales data.
The ABS, the Real Estate Institute of Australia and Domain all have Melbourne leading the nation for house price increases (although Hobart is challenging strongly).
Where’s Sydney in all this? CoreLogic continues to publish massive growth numbers for the Sydney house market, but those other three sources listed in the previous paragraph all record annual growth around 3 or 4 percent for the Sydney housing market.
Quite apart from the ludicrous proposition that you can reduce a metropolitan area with over 700 suburbs down to a single growth figure, this reinforces my view that all real estate statistics are rubbery figures to some degree.
When you have media constantly quoting one source (the one that reports massive annual growth) and then all those other sources which are suggesting Sydney’s price boom is over (but largely ignored by media), it’s difficult to know what to believe.
Here’s what I do know for certain: sales volumes gradually faded in Melbourne throughout 2016 but, late in the year and early in 2017, staged a revival. The city’s various markets are proving very resilient, no doubt boosted by nation-leading population growth and a state economy which, while not as strong as Sydney’s, is performing well.
My research shows that the busiest markets are split between the best of the Middle Melbourne areas and the strongest of the affordable outer-ring areas.
And the most affordable areas of metropolitan Melbourne have taken over as the city’s price-growth leaders. Many have delivered double-digit growth in their median house prices in the past 12 months.
As one example, all suburbs in the Sunshine precinct in Melbourne’s west are above 12%, including some which have grown 23-25% in the past year. Again, this data is presented with a reminder that all real estate figures are rubbery – but when all suburbs in an area are delivering the same strong growth pattern, you can be reasonably confident that something notable is happening.
Two Middle Melbourne precincts stand out: the Moreland LGA and the Whitehorse LGA. Both have numerous suburbs where sales activity is still growing.
These and other Middle Ring precincts had been fading gradually, in terms of sales activity, throughout 2016 but have come roaring back to life. Sales levels are still lower than the peaks of 2015, but remain very solid and prices continue to grow.
Typical growth areas in the Moreland LGA include Glenroy, where sales have been 113, 149, 143 and 165 in consecutive quarters. Other standout suburbs are Coburg, Coburg North, Hadfield, Pascoe Vale, Oak Park and Pascoe Vale South.
Whitehorse was the Melbourne market leader in 2015 before sales levels plateau-ed in most of its suburbs throughout 2016. But there has been a recent revival to stronger sales activity, led by Blackburn, Burwood East, Mitcham, Nunawading and Surrey Hills.
Four bottom-end markets are close behind in the terms of the number of growth markets: the LGAs of Brimbank (west), Whittlesea (far north), Casey (far south-east) and Hume (far north).
The far north of metropolitan Melbourne features strongly. The Whittlesea LGA (seven) and the Hume LGA (five) jointly have 12 suburbs with growing sales activity.
Whittlesea is consistently one of the city’s strongest markets, driven by affordability, strong infrastructure and proximity to jobs nodes. The suburb of Lalor, with sales rising from 64 to 101 to 117 to 121 in recent quarters, is typical. Nearby Epping has lifted quarterly sales from 110 to 135 to 145. 
Neighbouring Hume has similar qualities. The suburb of Craigieburn has recorded sales totalling 175, 228, 239 and 244 in the past four quarters.
The leading precinct in the far south-east is the City of Casey, which has five Rising Steadily suburbs, led by Cranbourne, Doveton and Narre Warren.
Other affordable outer-ring precincts with growth markets include Melton is the far west, Wyndham in the far south-west and Frankston in the far south-east.
Middle-ring areas travelling well, in addition to Whitehorse and Moreland, include the LGAs of Monash (Ashwood, Glen Waverley and Mulgrave), Maroondah (Croydon North, Ringwood and Ringwood East) and Banyule (Heidelberg Heights, Ivanhoe and Greensborough).
The worst performers in an otherwise strong Melbourne market are the inner-city apartment precincts.
I classify both the Melbourne CBD and Docklands as Danger markets. Sales levels have dropped markedly at a time of increasing apartment supply and growing state and federal measures likely to discourage foreign investors, who are the target of many of the inner-city high-rise projects.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/">hotspotting.com.au</a>. You can  <a href="mailto:%20%3Cscript%20type='text/javascript'%3E%20%3C!--%20var%20prefix%20=%20'ma'%20+%20'il'%20+%20'to';%20var%20path%20=%20'hr'%20+%20'ef'%20+%20'=';%20var%20addy38821%20=%20'ryder'%20+%20'@';%20addy38821%20=%20addy38821%20+%20'hotspotting'%20+%20'.'%20+%20'com'%20+%20'.'%20+%20'au';%20document.write('%3Ca%20'%20+%20path%20+%20'/''%20+%20prefix%20+%20':'%20+%20addy38821%20+%20'/'%3E');%20document.write(addy38821);%20document.write('%3C//a%3E');%20//--%3E/n%20%3C/script%3E%3Cscript%20type='text/javascript'%3E%20%3C!--%20document.write('%3Cspan%20style=/'display:%20none;/'%3E');%20//--%3E%20%3C/script%3EThis%20email%20address%20is%20being%20protected%20from%20spambots.%20You%20need%20JavaScript%20enabled%20to%20view%20it.%20%3Cscript%20type='text/javascript'%3E%20%3C!--%20document.write('%3C/');%20document.write('span%3E');%20//--%3E%20%3C/script%3E">email him</a> or follow him on <a href="https://twitter.com/hotspotting">Twitter.</a>
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terryryder-YECXbqmri2

Melbourne's two dangerous residential markets

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Three rate hikes of even 25 basis points by the central bank could deliver a bigger increase in debt-servicing costs for households than 10-11 rate hikes did in the mid-1990s, according to Macquarie Bank’s head of economic research, whose analysis adds to the debate on the impact of the economy in the event of a housing market crash.
Macquarie Bank’s James McIntyre found after studying previous tightening cycles in the mid 1990s and turn of the century, the first of which involved 11 quarter-point hikes, that the subsequent surge in households' debt servicing ratio -- interest costs as a portion of disposable income -- would be achieved with less than a third of those hikes today, thanks to record high private debt levels, Bloomberg reported.
McIntyre, however, doesn't expect a rate increase until early 2019 when core inflation is likely back inside its 2 percent to 3 percent target.
"The RBA's reticence about further increases in household debt-to-income ratios is clear when you begin to consider how potent interest-rate rises might be from a debt-servicing perspective,'' McIntyre was cited by Bloomberg as saying.
“At the current level of debt-to-income, we estimate that three to four 25 basis-point rate hikes would deliver a bigger increase in debt-servicing costs for households than 10 to 11 rate hikes did in the mid-1990s.''
He said the other difference between the periods is a wider spread between the cash rate and lenders' mortgage rates: from 180 basis points to about 375 basis points. Current households' debt levels are at a record 187 percent of income and a one percentage point increase in the RBA's cash rate would, excluding further increases in lenders' borrowing rates, push the household debt servicing ratio beyond 10 per cent,  the analysis found.
RBA Governor recently sounded an alarm, saying inflation will only rise slowly but the combination of record high household debt to income when wages were growing slowly was a “sobering combination”.
Even the OECD said recently that a potential hard landing in the property market could morph into a recession fuelled by record high household debt.
<a href="https://www.propertyobserver.com.au/images/2017/03/17/700_bloomberg.jpg" target="_blank">Click to enlarge</a>
<div><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/17/700_bloomberg.jpg" alt=""></div>
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SOURCE BLOOMBERG 
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<div>The Bloomberg article cites a hypothetical scenario where the Federal Reserve turns aggressive in lifting rates, the Australian dollar tumbles, and the RBA seeks to tame a subsequent boost in inflation with monetary policy: too much household debt would pose a risk of the central bank crushing the economy with the hit from rate rises.</div>
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<div>Frontier Advisors, a consultancy for institutional investors, similarly said this week that while household debt serviceability is currently manageable given the record low rates, the risk is when they increase.</div>
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It analysis found that Australian house prices are 15 to 20 per cent overvalued, and that a rate rise of more than 1.5 per cent would imply a higher level of overvaluation -- at which point a correction would become more likely. The Melbourne-based consultant said it doesn't expect a house price collapse.
"Given the sensitivity of the housing market to monetary policy, this is likely to provide a cap on how high interest rates will rise,'' said Chris Trevillyan, director of capital markets and asset allocation research at Frontier.
"The RBA will avoid triggering the kind of house price collapse that will have a major impact on bank capital.''
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Future RBA rate hikes' impact likely far greater than previous cycles: Macquarie economist

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Sydney’s house prices could experience a correction starting in the second half of 2017 after years of growth, according to a leading economic forecaster. 
House prices will drop by 5 percent in two years starting later this year, said BIS Oxford Economics managing director Robert Mellor said at the Building Industry Prospects conference in Sydney, according to a post on domain.com.au.
The forecasting firm was formed recently after Oxford Economics acquired BIS Shrapnel and the name was changed to BIS Oxford Economics.
Sydney has enjoyed a four-year property boom, during which the median house price has climbed to more than $1 million.
“Given that price growth over the last 12 months has been much greater than we would have anticipated six or 12 months ago we now expect price declines probably between 2017 and 2019 somewhere in the order of 5 percent in the detached housing market in Sydney,” he said.
Apartment prices are likely to see an even bigger correction, according to the forecaster.
The median house price was likely to peak “at $1.2 million” by mid-2017 before falling, he said. These price declines are more substantial than those predicted mid-2016 by the firm.
But even if prices fall by $60,000 to $70,000, they would still be “above where they were six months ago”, he said.
“By June this year [house prices] will be up 80 percent since June 2012.”
The apartment market, however, is likely to drop by much higher levels.
Mellor anticipated that those who paid “high prices off-the-plan” might see price declines of 10 percent or higher.
These falls in prices would also be likely in the Brisbane and Melbourne apartment markets, where prices could “easily” drop 10 percent in the next two to three years.
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