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

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After CoreLogic RP Data recently reported a median house price of $499,000 in Brisbane, Property Observer went searching for what that got. 
That price tag will purchase a three-bedroom, one-bathroom home at <a href="https://www.realestate.com.au/property-house-qld-sinnamon+park-123161422" target="_blank">22 Radcliffee Street</a> in Sinnamon Park (above) on a 725 square metre block of land or a four-bedroom, three-bathroom home at <a href="https://www.realestate.com.au/property-house-qld-bracken+ridge-123155166" target="_blank">12 Meelagh Street</a> in Bracken Ridge on a 618 square metre block (below). 
<img src="/images/2016/08/31/b6.jpg" alt="">
Just below the median price house-buyers can purchase the four-bedroom, two-bathroom house at <a href="https://www.realestate.com.au/property-house-qld-parkinson-123157978" target="_blank">8 Innes Close</a>, Parkinson (below). The low maintenance home was built in 2005 and sits on a 450 square metre block. 
<img src="/images/2016/08/31/m7.jpg" alt="">
From $480,000 purchases can snag the three-bedroom, two-bathroom house at <a href="https://www.realestate.com.au/property-house-qld-algester-123164806" target="_blank">167 Ridgewood Road</a>, Algester (below). The home feature an in-ground swimming pool and sits on a 686 square metre block. 
 <img src="/images/2016/08/31/Screen%20Shot%202016-08-31%20at%205.15.19%20PM.png" alt="">
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jonathanchancellor-7SQnKwU6yx

What the $499,000 median house price gets in Brisbane

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After CoreLogic recently reported a median house price of $415,000 in Adelaide, Property Observer went searching for what that got. 
For that price house hunters can purchase a 1950s inspired two-bedroom, one-bathroom home at <a href="https://www.realestate.com.au/property-house-sa-north+plympton-123235598">50 Dingera Avenue</a> in North Plumpton on a 397 square metre block (above). The house has recently undergone $120,000 worth of improvements. 
The 1966 solid brick three-bedroom, one-bathroom house at <a href="https://www.realestate.com.au/property-house-sa-north+plympton-123190630" target="_blank">1 Murdoch Avenue</a> in North Plympton has been listed for $410,000 (below). The house sits on a 599 square metre allotment. 
<img src="/images/2016/08/31/Screen%20Shot%202016-08-31%20at%204.46.49%20PM.png" alt=""> 
The three-bedroom, one-bathroom house at <a href="https://www.realestate.com.au/property-house-sa-brooklyn+park-122700214" target="_blank">43 Elston Street</a> in Brooklyn Park has been listed for $400,000-440,000 (below). The Torrens Title investment sits on a 353 square metre block of land located between the city and the sea.  
 <img src="/images/2016/08/31/Screen%20Shot%202016-08-31%20at%204.48.23%20PM.png" alt="">
Alternatively, the three-bedroom, one-bathroom house at <a href="https://www.realestate.com.au/property-house-sa-brooklyn+park-123227278?listingType=buy" target="_blank">9 Byrnes Street</a> in Brooklyn Park has been listed for $427,000 (below). The house sits on 379 square metres of land. 
<img src="/images/2016/08/31/Screen%20Shot%202016-08-31%20at%204.49.42%20PM.png" alt="">
The 1910 three-bedroom, one-bathroom cottage at <a href="https://www.realestate.com.au/property-house-sa-thebarton-122820610" target="_blank">21 Smith Street</a> in Thebarton (below) has been listed for $450,000 and sits on 266 square metre block. 
<img src="/images/2016/08/31/Screen%20Shot%202016-08-31%20at%204.51.05%20PM.png" alt="">
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What the $415,000 median house price gets in Adelaide

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After CoreLogic RP Data recently reported a median house price of $300,250 in Hobart, Property Observer went searching for what that got. 
In <a href="https://www.realestate.com.au/property-house-tas-moonah-123289826" target="_blank">Moonah</a>, the median house price will secure a three-bedroom, one-bathroom house on Tregear Street (above). The house sits on 536 square metres of land. 
For $315,000 on <a href="https://www.realestate.com.au/property-house-tas-kingston-122495030">Redwood Road</a> in Algona Rise, Kingston buyers can secure a brand new two-bedroom, two-bathroom house (below). The house is the final remaining house in Algona Rise. 
<img src="/images/2016/08/31/Screen%20Shot%202016-08-31%20at%204.36.51%20PM.png" alt="">
In <a href="https://www.realestate.com.au/property-house-tas-old+beach-121977542" target="_blank">Old Beach</a>, $300,000 will secure a three-bedroom, one-bathroom house with river and mountain views on Grevillea Avenue (below). The 1995 brick veneer house sits on 1,002 square metres of land.
<img src="/images/2016/08/31/Screen%20Shot%202016-08-31%20at%204.39.13%20PM.png" alt="">
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What the $385,000 median house price gets in Hobart

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The housing market appears to be responding to a number of factors which have spurred further growth in home values. 
Official interest rates are at historic low levels which has encouraged borrowing for housing and driven housing debt to record-high levels. 
The low interest rate setting is also seeing significant competition amongst lenders which has resulted in substantial discounts to headline mortgage rates. 
Furthermore, while the total number of homes available for sale is similar to levels a year ago, there has been significantly fewer newly advertised properties listed for sale over the past few months relative to previous years. 
The low number of newly advertised dwellings available for sale has created a sense of urgency for buyers in the market, particularly in Sydney and Melbourne, and resulted in further increases in home values over this growth cycle which has been running for more than four years.
While the banking regulator has implemented policies aimed at slowing investment related credit demand, his has not resulted in a significant cooling in the housing market. The pace of investment related credit growth has slowed from a peak of nearly 11 percent per annum to 5 percent over the most rent 12 months period, however we are now seeing an uplift in lending to investors once more. 
Following the most recent interest rate cut, auction clearance rates have elevated to levels not seen for more than a year, particularly in Sydney, the nation’s least affordable housing market.
Interest rates
On August 2, the Reserve Bank (RBA) decided to cut official interest rates by 25 basis points to 1.5 percent. 
While interest rates were lowered to historic lows, headline variable mortgage rates were generally reduced by much less, with each of the Big 4 banks lowering their mortgage rates by no more than 14 basis points. 
Despite the fact that the interest rate cuts were not passed on in full to mortgage holders, mortgage rates below 4 percent are available for those who wish to move from their current lender.  With most mortgages on a variable rate, any cut to mortgage rates will improve a household’s disposable income.  Furthermore, it has become clear that it will also give them more confidence to increasingly purchase more expensive homes, well in Sydney and Melbourne at least.
Housing debt
Each quarter the RBA publishes ratios of household finances which include the ratio of household debt to disposable income. The latest data to March 2016 shows that the typical level of housing debt is 134.7 percent higher than household disposable income. 
The current ratio is a record-high but it is important to remember that it is a national snapshot and conditions across different housing markets are likely to vary substantially.  Since the current phase of growth in home values commenced in the June 2012 quarter, this ratio has lifted from 119.0 percent.
While the ratio of housing debt to disposable income has increased and is at a record-high, the ratio of housing assets to disposable income has also risen as home values have increased. 
In the June 2012 quarter, the typical value of household assets was 394.4 percent higher than household disposable income.  
By March 2016, the ratio had increased to 470.8 percent indicating a significant increase in the value housing assets.  Again, it should be remembered that this is a national measure and local market ratios are likely to be vastly different especially within areas of very little value growth over that time as well as those areas in which home values have fallen.
Properties listed for sale
Over the four weeks ending August 21 2016 there were 39,676 new (not previously advertised for at least six months) residential properties listed for sale and 229,386 total (includes new and relisted properties) properties advertised for sale. 
The number of newly advertised properties listed for sale was -3.4 percent lower than at the same time last year and new listings have been lower each week year-on-year since early June 2016.  Meanwhile, total listings are -0.9 percent lower than they were a year ago and on a weekly basis have been consistently lower year-on-year since early July of this year.  New and total listings are now starting to increase as we head closer to the beginning of the Spring Selling Season as they do each year.
While the national figures show fewer listings than a year ago, the trends are very different across individual capital cities, particularly in Sydney and Melbourne where home value growth conditions are strongest.
In Sydney, over the past four weeks there were 6,299 newly advertised and 18,951 total properties advertised for sale. Year-on-year, new listings have now been lower than they were the previous year fairly consistently since last November and are currently -20.6 percent lower than they were a year ago. 
Over the past four weeks there were 17,949 total listings in Sydney which was 0.8% higher than a year ago. 
While total listings are slightly higher than a year ago, there is very little new stock being listed for sale.  New listings are arguably more important than relisted properties, especially if the relisted stock has been for sale for a long period of time and vendors aren’t adjusting their price expectations.   Even though spring is just around the corner, there is very little fresh stock being added to the market.
It is a similar story in Melbourne where there were 7,177 new and 25,846 total residential properties listed for sale over the four weeks to 21 August 2016.  The number of new listings was -9.4 percent lower year-on-year and total listings were -0.8 percent lower.  Again, with spring just around the corner there is a relatively low supply of newly advertised properties hitting the market for sale.
Mortgage demand
One of the big challenges the RBA has is the quality and regularity of mortgage data collection. While housing finance data is published each month, owner occupier housing finance commitments are published both on a number and value basis while investor housing finance commitments are only published on the basis of value not the number of loans. 
With the investment segment having become so prevalent, it is a challenge not knowing both the number and value, particularly when investment is so strong in Sydney and Melbourne at a time when home value growth is also so strong. 
Adding to the challenge of interpreting housing finance data is the lack of clarity about how off-the-plan unit purchases are captured in the data.  It is unclear as to whether they are classified as construction of dwellings or purchase of new dwellings. Finally re-classification of large swathes of mortgages from lenders away from investment and toward owner occupiers has made reading the market even more difficult.
The latest housing finance data showed that in June 2016 there was $32.6 billion worth of commitments with the value having increased by 2.3 percent over the month following a 1.8 percent rise in May. 
Although mortgage lending is rising, it remains -2.1 percent lower than its peak in April of last year. 
Over the month, there was $20.8 billion in commitments to owner occupiers and $11.8 billion in commitments to investors.  Both segments of lending rose over the month however, owner occupier lending is -2.4 percent lower than its December 2015 peak while investment lending is -22.0 percent lower than its April 2015 peak.
Owner occupier lending remains quite strong and although investment lending has slowed significantly, there is now scope for it to increase over the coming months.  Without additional details on the number of investment loans it is difficult to know whether the increase is being driven by larger loan sizes, a larger number of loans or a combination of both.
Auction clearance rates
Auction clearance rates are one of the timeliest indicators of the housing market and they tend to be indicative of the broader housing market trends.  It is important to remember that far more homes sell by private sale than by auction and auctions are only a significant proportion of sales in the Sydney, Melbourne and Canberra housing markets.
Auction clearance rates in Sydney last week were at their highest levels in more than a year.  Sydney’s auction clearance rate has been above 70 percent for 18 consecutive weeks and in Melbourne they have been above 70 percent for 7 consecutive weeks.
As already discussed, the supply of homes available for sale, particularly in Sydney and Melbourne, is much lower than it has been over recent years.  This is particularly evident when looking at auction volumes. 
Over 2016 so far there have been 18,619 auctions in Sydney compared to 25,399 auctions at the same point in 2015.  This represents a -26.7 percent decline in the number of auctions in Sydney over the year to-date. 
In Melbourne there have been 23,779 auctions so far this year which is -9.5 percent lower than the 26,282 auctions to the same point last year.  The low volume of auction stock is likely to be resulting in the ongoing strength in clearance rates across each city.  Less stock for sale creates a sense of urgency for those looking to purchase.
So what does this mean for Spring?
It is too early to say definitively what will happen this Spring but I would be very comfortable stating that what happens with property listings will have a substantial influence on the market’s performance over the period. 
Spring is typically characterised by a fairly significant upswing in stock for sale, this is driven by the belief that Spring is the best time of year to sell (that is a topic for another day).  As supply increases, the value growth performance can slow and as we saw last year, auction clearance rates can actually start to dip.  So the amount of stock which becomes available for sale will be an important factor for the strength of the Sydney housing market.
The recent interest rate cut is another important consideration for the market’s performance. Although mortgages and the availability of them, is calculated on the borrower’s ability to repay the mortgage at a much higher interest rate, lower mortgage rates impact households by giving them the option to reduce mortgage repayments and therefore having more money each week in their pocket. 
This is because most mortgages are on a variable rate and changes to the interest rate on their largest commitment (the mortgage) have an immediate impact on household balance sheets. 
With the recent cut to interest rates, it is unlikely to mean that people that could not previously borrow now can, but it does mean that households that previously weren’t considering moving home or buying an investment property may now be more inclined to do so. 
This may result in more confidence from those looking to upgrade their property to list their home which means that they also become an additional purchaser.  If someone is now starting to consider buying an investment property it also means additional demand for housing. 
How many new buyers there are in Spring remains to be seen but it may encourage an increase in demand for purchase and could result in more people looking to sell their home.
The other major consideration, particularly in Sydney and Melbourne, but also across the rest of the country is what the prospects are for additional increases in home values over the short and medium term. 
Combined capital city home values have been rising for more than four years now however, this has largely been driven by Sydney and Melbourne due to their much stronger economies. While the economies in these cities remain strong, the increasing cost of housing due to the four plus years of value growth may be starting to deter buyers.
When you also consider that rents are increasing at record low levels (falling in some areas) and gross rental yields are at record lows, purchasing a property, particularly an investment, is looking less attractive than it has for some time.  Especially when you also factor in the heightened level of housing construction, most of which is inner city units, which is currently underway.
It is going to be interesting to see how all of these factors play out over the next few months and ultimately how the housing market performs.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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Where to for the housing market in Spring? Cameron Kusher

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 After CoreLogic RP Data recently reported a median house price of $590,750 in Melbourne, Property Observer went searching for what that got.
The median price will cover a brand new five-bedroom, three-bathroom, double-storey home in the new Haven Wollert complex at <a href="https://www.realestate.com.au/project-haven+wollert-vic-wollert-600007915?propertyTypes=houses" target="_blank">60 Harvest Home Road, Wollert</a> (above). Construction is currently underway.  
In Werribee the median price will purchase a five-bedroom, two-bathroom home at <a href="https://www.realestate.com.au/property-house-vic-werribee-123258866" target="_blank">3 San Remo Drive</a> (below). The land measures 898 square metres. 
 <img src="/images/2016/08/29/700_remo.jpg" alt="">
In Bundoora, the median price will secure a three-bedroom, one-bathroom, single-storey home at <a href="https://www.realestate.com.au/property-house-vic-bundoora-123258186" target="_blank">131 Greenwood Drive</a> (below). The family home is set on a 545 square metre block. 
 <img src="/images/2016/08/29/Screen%20Shot%202016-08-29%20at%2011.19.26%20AM.png" alt="">
Newly built houses are also available within the median price range at Stockland Highlands, located at <a href="https://www.realestate.com.au/project-highlands-vic-craigieburn-600000499?propertyTypes=houses" target="_blank">1 North Shore Drive, Craigieburn</a> (below).There, $580,00 will purchase a four-bedroom, two-bathroom, 34 square metre house. 
 <img src="/images/2016/08/29/Screen%20Shot%202016-08-29%20at%2011.21.00%20AM.png" alt="">
At <a href="https://www.realestate.com.au/property-house-vic-reservoir-123361010" target="_blank">1/62 Dundee Street</a> (below) in Reservoir the median price will secure a three-bedroom, two-bathroom duplex house.
<img src="/images/2016/08/29/700_build.jpg" alt="">
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What the $590,750 median house price gets in Melbourne

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Population growth has long been considered the key to whether house prices go up or down in the Mildura district, according to the valuers, Herron Todd White.
The biggest driver of the property market is whether the Mildura economy and lifestyle can attract people, it recently noted.
They noted data provided by Regional Development Victoria shows that in the past few years, the population of the Mildura Local Government Area has been growing at just under 1 percent per annum, compared to the Victorian state average of around 1.75 percent per annum.
The main industries in terms of employment are agriculture, retail and health care and social assistance.
"In the past two to three years we have seen an improvement in some of the key local farming industries, especially table grapes, almonds and citrus, and we are now starting to see the first shoots of an improvement in the wine grape industry.
"This confidence has increased demand for local service industries that support the local farming sector and for the next few years at least, it appears as though this segment of our local economy should grow.
"The retail sector is expected to maintain current levels of employment but is considered unlikely to grow," HTW said.
With regard to health care, Mildura has a higher than state average percentage of the population aged over 55 and is expected to continue to attract older people from smaller centres within a 300 kilometre radius due to the presence of good medical and recreational facilities and relative housing affordability.
"We feel that the local economy is currently enjoying a period of growth and that this will see our population grow at a faster rate than has been occurring in recent times.
"Housing that is attractive to retirees is expected to continue to see good demand, as will three or four bedroom homes that appeal to young families," the HTW report tipped.
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Mildura population growth set to assist housing price growth

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GUEST OBSERVER
With national home values continuing to rise, the proportion of homes selling at lower prices is continuing to fall, resulting in fewer housing options for those on lower incomes.
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Over the 12 months to June 2016, 33.1 percent of all houses and 40.6 percent of all units sold, transacted at a price point below $400,000. 
These proportions have fallen from 34.8 percent and 44.1 percent respectively at the same time a year earlier.  The proportion of house sales under $400,000 nationally is at a record low while the proportion of unit sales is at close to an historic low.
<h3>Annual proportion of house and unit sales below $400,000, National</h3>
<a href="/images/2016/08/19/2016-08-15--img1.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/08/19/2016-08-15--img1.png" alt="">
Turning the focus to the combined capital cities shows that less than 1 in 5 houses (19.1 percent) and less than 1 in 3 units (31.0 percent) sold over the year to June 2016 for less than $400,000.  In June 2015, the proportion of sales at less than $400,000 was greater at 21.3 percent for houses and 31.9 percent for units.
<h3>Annual proportion of house and unit sales below $400,000, combined capital cities</h3>
<a href="/images/2016/08/19/2016-08-15--img2.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/08/19/2016-08-15--img2.png" alt="">
Regional markets are characterised as having homes transacting at substantially lower prices than the capital cities. Across the combined regional markets, 54.6 percent of houses and 65.4 percent of units that sold over the 12 months to June 2016 sold for less than $400,000. 
Whilst the proportion of sales under $400,000 was at a record low for houses and units, both houses and units were more than twice as likely to transact for less than $400,000 than they were across the combined capital cities.
<h3>Annual proportion of house and unit sales below $400,000, combined regional markets</h3>
<a href="/images/2016/08/19/2016-08-15--img3.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/08/19/2016-08-15--img3.png" alt="">
The table included in the report shows the proportion of total home sales under $400,000 over the 12 months to June 2016 and 10 and 20 years earlier. 
What the table highlights very clearly is that over the decade to June 2006 there was a substantial decline in home sales under $400,000 with the decline continuing over the following 10 years. 
Hobart is the only city in which more house sales occurred for less than $400,000 than above the price point over the past year.  For units, only Adelaide and Hobart had more sales below $400,000 than those above. 
<h3>Annual proportion of house and unit sales  below $400,000, individual capital cities</h3>
<a href="/images/2016/08/19/2016-08-15--img4.png" target="_blank">Click to enlarge</a>
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These figures highlight the decline in sales across more affordable price points, particularly across the capital city housing markets. 
With values continuing to rise it is a fairly safe bet that there will continue to be a decline in the number of homes selling for less than $400,000.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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Just over a third of homes nationally selling for less than $400,000: Cameron Kusher

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The Reserve Bank governor Glenn Stevens is confident Australia’s banks would survive a large fall in house prices.
Mr Stevens told the The Australian and The Wall Street Journal that whether a property price fall was damaging depended on how much debt was behind it.
“You care, of course, whether asset prices seem divorced from their fundamentals. That’s often in the eye of the beholder,’’ he said.
“But the thing you most care about is, ‘is there a lot of borrowed money behind the assets’. “(With) housing, the debt being carried there is pretty significant now, but I don’t think we’re seeing another massive step up in leverage at the moment, and, as you know, we’ve been watching that fairly carefully. Every attempt to stress-test housing portfolios that I’m aware of ... none of those show a very bad outcome for the system.
“Now, some losses get incurred, but by and large the system manages with that OK.
“We wouldn’t have major institutions getting even close to failure. Not even close.
“They’d wear some losses and they’d have to, again, strengthen balance sheets at some point, but you wouldn’t have a systemic event,’’ he said. “Whatever you thought the risks posed to financial stability and macroeconomic stability might’ve been from the housing sector a year ago, they’ve probably diminished a bit since then,’’ Mr Stevens said.
 
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Banks would survive large house price fall: Glenn Stevens

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GUEST OBSERVER
Across Australia’s capital cities, price growth has slowed with house prices up 6.1 percent in the year to July 2016 and unit prices increasing by 6.0 percent.
Since the low point in 2012, capital city house prices have increased by 40.0 percent in aggregate while unit prices rose by 29.8 percent. Unit prices started to recover a few months earlier than house prices;
Since bottoming out, the divergence between dwelling price growth in the different capital cities has been remarkably wide. The biggest uplifts have been in Sydney (+61.3 per cent) and Melbourne (+42.0 per cent). At the other end of the scale, Perth (-8.3 per cent) and Darwin (-12.7 per cent) prices have fallen substantially since peaking in 2014;
Despite the considerable variation during the current cycle, price growth across the capital cities has been quite uniform over the past two decades. In real terms, house prices have increased by 5.3 per cent annually compared with 3.9 per cent growth in unit prices;
The ratio of the median dwelling price to average earnings has increased substantially over the past two decades. Much of this is explained by structural changes in household size, economic participation rates, earnings patterns and the level of mortgage interest rates;
During the June 2016 quarter, the price to earnings ratio was 6.96 for houses and 5.80 for units. The highest ratios were in Sydney and Melbourne, with the lowest in Hobart and Perth. With the exception of Sydney, affordability is more favourable than the 15-year average in all capitals;
With respect to wider economic and financial conditions, dwelling prices across Australia appear to be proportionate. However, the wide geographical variation in current conditions means than some markets are likely to experience significantly stronger price growth than others over the medium term. 
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This is an update of the HIA Economics note on dwelling prices which was released in November 2015. 
That piece of research then reported on how annual dwelling price growth across Australia’s eight capital city markets reached 10.1 per cent during October 2015. Since then, the pace of dwelling price growth has slowed and latest data show that dwelling prices increased by 6.1 per cent during the year to July 2016. Over this period, detached house price growth (+6.1 per cent) was almost exactly the same as the growth in unit prices (+6.0 per cent). Later, we explore in greater detail the relationship between house price growth and unit price growth over time in each of the capital city markets. 
As was the case late last year, the variation in dwelling price growth trends is very large when comparing capital cities. The chart below illustrates the changes in house and unit prices in each of the capital cities over the year to July 2016. House prices saw the largest increase in Sydney over the year (+9.0 per cent) followed by Melbourne (+8.0 per cent). Over the same period, the largest increase in unit prices occurred in Hobart (+12.9 per cent) and Sydney (+9.4 per cent). Despite the strong uplifts in several markets, house prices fell quite significantly in both Perth (-5.6 per cent) and Darwin (-5.9 per cent). Over the year, unit prices declined in three capital cities: Perth (-5.8 per cent), Darwin (-14.6 per cent) and Canberra (-0.4 per cent). 
<a href="/images/2016/08/18/Screen%20Shot%202016-08-18%20at%208.46.14%20AM.png" target="_blank">Click to enlarge</a>
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Aggregated data for the eight capital cities indicate that dwelling prices bottomed out during May 2012 and have since expanded fairly consistently in all capitals apart from Perth and Darwin. The chart below summarises the cumulative increase in detached house prices in each market during the current cycle. Overall, detached house prices increased by 40.0 per cent across the eight capitals between May 2012 and July 2016. The largest house price rise occurred in Sydney over this period (+65.7 per cent), followed by Melbourne (+45.2 per cent) and Brisbane (+18.6 per cent). In contrast, house prices in Perth and Darwin have fallen back since reaching their peaks in 2014. Perth house prices have declined by 8.3 per cent while Darwin house prices are down by 11.8 per cent. Of the cities that have experienced consistent price growth, Canberra has seen the smallest increase in house prices since the 2012 trough (+13.0 per cent). 
<a href="/images/2016/08/18/Screen%20Shot%202016-08-18%20at%208.47.24%20AM.png" target="_blank">Click to enlarge</a>
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The comparison between prices for detached houses and units in terms of growth is illuminating in several respects. The increase in unit prices has been significantly less pronounced during the current cycle. Also, the upturn in unit prices appears to have commenced about six months earlier than the recovery in detached house prices. Whereas detached house prices have increased by 40.0 per cent during the current cycle, unit price growth has been about 10 percentage points lower (+29.8 per cent). Over the same period, detached house prices have outpaced unit price growth in every single capital city apart from Hobart. This may be related to the smaller sample size in Hobart, as well as the shorter timeframe being analysed for the city.
<a href="/images/2016/08/18/Screen%20Shot%202016-08-18%20at%208.49.27%20AM.png" target="_blank">Click to enlarge</a>
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The pace at which detached house prices have outrun unit prices during the current cycle is greatest in Brisbane (18.6 per cent v 6.7 per cent), followed by Canberra (13.0 per cent v 5.5 per cent) and Melbourne (45.2 per cent v 20.1 per cent). It is also worth noting that in the Perth and Darwin markets where prices are falling, unit prices have dropped considerably faster than detached house prices. Hobart is the only capital city where unit prices have increased by more than detached house prices in the current cycle (+27.3 per cent v +16.1 per cent). The behaviour of prices in the current cycle underlines the great degree of heterogeneity both across and within the capital city markets. 
How do dwelling prices behave over the long run? 
Assessing dwelling price growth over time allows us to net out the effects of cycles and temporary factors and capture a sense of long-term trajectory of price dynamics. The chart below illustrates the real annual average growth rate for both detached house and unit prices over the 20-year period to the June 2016 quarter (due to data availability constraints, a 15-year timescale is used for both Hobart and Darwin). These data suggest that growth in real detached house prices tends to outpace unit price growth over the long run (5.3 per cent v 3.9 per cent per year). This was the case in each of the eight capital cities, with the single exception of Hobart. 
Perhaps the most striking takeaway is that real dwelling price growth rates across each of the eight capital cities tend to lie within a relatively narrow band over the long run, especially in the detached house market. Real detached house price growth was strongest in Melbourne over the two decades in question (+6.4 per cent annually) and weakest in Brisbane (+4.3 per cent) over the same period. However, six of the eight capital cities were all less than one percentage point apart in terms of real detached house price growth on an annual basis (ranging from 4.4 per cent to 5.3 per cent per year). 
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Compared with detached house prices, the divergence in real unit price growth has been wider from city to city. Over the long term, Hobart units have experienced the largest increase in real terms (+5.6 per cent annually) with the slowest pace of growth in Brisbane (+2.2 per cent per year). In the other six capitals, real unit price growth has been concentrated in a relatively narrow range of between 3.0 per cent and 4.7 per cent annually. 
Despite the considerable differences in economic structure, geographies and the regulatory framework across Australia’s eight capital cities, real dwelling prices still behave in remarkably similar ways from city to city over long periods of time with detached house prices consistently growing more strongly than those of units, although there tends to be much greater price variation on the unit side of the market. 
A possible implication of this is that those markets which have seen recent the strongest price growth exceed the long term average in the recent past are most at risk of below par price performance over the coming years. By the same token, the markets that have recently seen price growth underperformed the long term average rate performed weakest in terms of price are most likely to see future acceleration in price growth. 
Price to Earnings: the relative price of housing 
While median disposable household income is the most conceptually sound indicator for benchmarking dwelling prices relative to income in the economy, the fact that these data are released only once per year with a long lag means that other measures must be utilised for more timely and frequent updates. Accordingly, this note uses average earnings as a barometer for household income due to the fact that earnings data are produced twice yearly (for the May and November ‘quarters’) in a relatively timely fashion. However, it is important to note that earnings data are an imperfect gauge of households’ financial resources, as no account is taken of direct taxation, unearned income (such as pensions, etc.) and income in kind.1 
Based on the average earnings data available from the ABS, the chart below provides an overview of the median dwelling price to earnings ratio across Australia since 1995, including data for detached houses and units. Over this period, the ratio has increased from 3.79 in the June 1995 quarter to 6.57 during the June 2016 quarter. The median detached house price is now 6.96 times earnings, compared with 3.83 in June 1995. On the unit side of the market, the price to earnings ratio has increased from 3.73 to 5.80.
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At first glance, this suggests that dwelling prices have lost touch with prices and incomes in the economy. However, the big uplift in the price to earnings ratio can largely be explained by two structural changes over the past 20 years. First, the number of employees per household has risen significantly over the two decades due to higher female labour force participation rates, a trend towards taking retirement at older ages and changes in the structure of some households involving greater numbers of young professionals in ‘share’ housing. The secular reduction in interest rates over this period has also permitted dwelling prices to grow faster, due to the fact that homebuyers can affordably service much larger mortgages at current interest rates than was the case when the interest burden was much higher. It is worth noting that the RBA’s Official Cash Rate in August 2016 of 1.50 per cent is only one quarter of the 6.00 rate in August 2006 and an even smaller fraction of the 7.00 per cent cash rate of August 1996. 
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Given the wide variation in dwelling price levels across Australia, it is useful to compare the ratio of dwelling price to earnings in the eight capital cities. This is shown in the chart below for each city during the June 2016 quarter for both detached houses and units. In Sydney, the detached house price to earnings ratio continues to be the highest in the country but eased back to 9.55 during the June 2016 quarter, after reaching an all-time high of 10.31 during the final quarter of last year. Detached house price to earnings ratios are also elevated in Melbourne (7.72) and Canberra (6.96). The ranking in terms of unit price to earnings ratios is similar: it is highest in Sydney (7.31), followed by Melbourne (6.03), although Brisbane is in third place (4.86). 
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The detached house price to earnings ratio is lowest in Hobart (4.53), followed by Perth (5.50) and Adelaide (5.92). In terms of unit prices, the pattern is similar. The price to earnings ratio is lowest in Hobart (3.67), followed by Perth (4.29) and Canberra (4.65). Across the eight capital cities, the detached house price to earnings ratio in the June 2016 quarter was 6.96 with the median unit price at 5.80 times average annual earnings. The tendency of dwelling price growth rates to converge implies that the capacity for future dwelling price growth is most limited in those markets where the ratio of dwelling prices to earnings is high, and vice versa. 
The importance of affordability 
While the dwelling price to earnings ratio is a useful snapshot of valuations, it does not take account of changes in financing costs which have fallen sharply over the past decade. The chart below provides an estimate of affordability in both the detached house and unit segments of the market, which is calculated as the ratio of mortgage repayments to gross average earnings of an individual (note that the average household earnings is are greater than the earnings of an individual in the vast majority of cases) on the purchase of a median price dwelling2. With the exception of the GFC period, affordability has shown rather steady improvement over the past decade. The eventual reversion to higher mortgage interest rates over the long term, however, is likely to put affordability under some pressure given that average housing debt levels are high by historic standards. 
Shane Garrett is senior economist for HIA and can be contacted <a href="https://hia.com.au/en/BusinessInfo/economicInfo/EcoGroup.aspx" target="_blank">here</a>.
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Dwelling prices and the current state of play: HIA's Shane Garrett

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The level of residential listings nationwide fell in most capital cities across June except Brisbane and Perth, according to SQM Research.
Listings in Brisbane and Perth rose month on month and national sales listings are up 2.5 percent compared to June 2015.  
Canberra recorded the largest decline for June with property listings falling 5.6 percent, according to SQM Research managing director Louis Christopher.
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He said total online national residential listings fell during June 2016 from 350,333 to 345,058, decreasing 1.5 percent from May 2016.
“This is a fairly normal result for winter where, historically, property listings fall during the colder months," he said.
"The one abnormality is Sydney, where we’re recording a massive year on year rise of 30 percent.
"If anything that just shows how frenzied the Sydney market was this time last year. However, Sydney is not oversupplied with listings right now. Rather, it is returning to more normal long term averages.
 
"Year-on-year results reveal Melbourne median asking prices have risen 15.6 percent for houses and 6.4 percent for units compared to this time last year.
"Brisbane has also experienced yearly changes, with median asking prices for houses climbing 5.8 percent, compared to just 0.8 percent for units.
Meanwhile, median asking prices continue to fall in both Darwin and Perth."
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