A landmark former orphanage site in Surrey Hills could be transformed into a new residential community under plans lodged by <a href="https://www.apartments.com.au/developers/antipodean-land-developments">Antipodean Land Developments</a> that would deliver 76 apartments and townhouses while restoring some of the suburb's most significant heritage buildings.

The burgeoninng Melbourne-based developer has submitted plans for the 9,158 sqm site at 1 Kent Road and 24 Durham Road, home to the former St Joseph's Home for Destitute Children, a historic institutional complex dating back to the late 19th century. The proposal seeks to adaptively reuse several heritage buildings while introducing two new four-storey residential buildings set within extensive landscaped grounds.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> and Kerstin Thompson Architects, the project has been conceived as a contemporary residential village embedded within a restored heritage precinct. The development team describes the design approach as "The Village in the Garden," with new buildings positioned among mature landscaping by OCULUS and significant heritage structures.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="44ec8c1b-c0b6-44ae-859e-5811b3e6a023" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%281%29.png?VersionId=p.p1_KFh4iQoV4nisdnPfQBAsWNi7m79" />

The proposal would deliver 76 dwellings comprising a mix of apartments and duplex-style residences, significantly increasing housing supply on one of the largest privately held residential landholdings in Surrey Hills. The development includes 127 car spaces, 24 bicycle spaces and more than 1,000 sqm of communal amenity, with the existing chapel building earmarked for conversion into resident facilities.

According to the planning submission, the project centres on the restoration and adaptive reuse of the site's most significant heritage assets, including the original c.1889 St Joseph's building, the chapel designed by architect Augustus Andrew Fritsch, and the historic brick perimeter walls and entry gates. The proposal also incorporates the retention of other contributory buildings including the former infirmary and school building.

Tract Consultants, in the planning report accompanying the application, said the scheme had been shaped through extensive heritage analysis and design development.

"The shared vision for the Site by the project team has culminated in a scheme which successfully breathes life back into a historic site while delivering upon the objectives of Victoria's Housing Statement in a carefully curated and contextually responsive manner."

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="7263b7d8-95ea-400f-9531-6ca7d22c3c33" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%282%29.png?VersionId=4cR1tiWOsDpgxEOwZi5vVFcyvvOsYkIE" />

The proposal is being assessed under Victoria's Significant Residential Development with Affordable Housing pathway. As part of the application, three per cent of the project's residential development cost would be contributed to the Social Housing Growth Fund. The development would also provide a diverse mix of one, two and three-bedroom residences targeting a broader range of buyers than typically found in Surrey Hills' detached housing market.

Sustainability initiatives include an anticipated 66 per cent BESS score, natural cross-ventilation to 80 per cent of apartments, 28 per cent deep soil landscaping and a canopy cover outcome exceeding local planning requirements. The proposal also sets aside more than 1,083 sqm for communal indoor and outdoor resident amenity spaces.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="33fad46f-fe26-4d0a-acfd-6b776e1c6a3d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design.png?VersionId=D9F6WVSyYCtGvSUmith35LRp6R7PQkw_" />

Planning documents describe the property as one of the largest underutilised residential sites in Surrey Hills, arguing it presents a rare opportunity to introduce "missing middle" housing in an established inner-eastern suburb while preserving and revitalising a significant heritage precinct.

Antipodean Land Developments has built a reputation for design-focused residential projects across Melbourne, particularly in the medium-density sector. Previous developments include Neighbourhood in Brunswick East, delivered with Breathe Architecture, and Balfe Park Lane, designed by Kerstin Thompson Architects.

They've been very active in site acquisition as they build out their future development pipeline. They recently launched Thornubury House, 45 apartments above a mix of commercial, retail, and food and beverage tenancies, and have plans for a boutique project in Fitzroy and another <a href="https://www.apartments.com.au/news/vic/antipodean-plan-apartments-for-deepdenes-missing-middle-on-whitehorse-road">"missing middle" project</a> on Deepdene's Whitehorse Road.

Joel Robinson

First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills

Developer <a href="https://www.apartments.com.au/developers/auyin-property-development">Auyin</a> is the latest to turn to the Victorian Government's Development Facilitation Program in an effort to secure approval for its long-planned, mixed-use project in Elsternwick.

In 2018, Auyin lodged plans with Glen Eira City Council for a 14-storey building, however Council approved a reduced eight-storey scheme. A subsequent VCAT appeal in 2019 upheld the eight-storey height limit.

The project was later amended to nine storeys, but Auyin is now seeking to revive something closer to its original vision. The developer argues that the planning context has evolved significantly over the past decade, particularly within the Elsternwick Activity Centre, where higher-density development has increasingly been encouraged along Glen Huntly Road.

The proposal would transform the 1,239 sqm site at <a href="https://www.apartments.com.au/new-apartments/7-12-horne-street-elsternwick-vic-3185">7-15 Horne Street</a>, opposite Elsternwick Railway Station, into a 13-storey residential and retail development designed by CBG Architects, with 40 apartments

The site currently comprises three commercial properties.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="5f465dd4-509b-4082-a669-0253b313914b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20podium.png?VersionId=72frWi0SmQ5AVJ3ARRhX5ILUYObhTm7x" />

The proposed apartment mix comprises 25 two-bedroom and 15 three-bedroom residences above 200 sqm of retail space at ground level. Residents would have access to a 90 sqm wellness facility, a 351 sqm communal indoor and outdoor terrace on the third level, and extensive landscaped areas throughout the development. A publicly accessible 135 sqm plaza would be created on the north-east corner of the site, providing seating, landscaping, and a new gathering space adjoining Horne Street.

The design adopts a four-storey podium that references the finer-grain character of the surrounding streetscape, with the upper tower recessed behind generous setbacks on all boundaries.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="e637e763-2abc-4c34-a0aa-5c7ad36fae18" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20open.png?VersionId=J1AoOpZgTyaF.KeeFSX6lMjEScX8KKRi" />

A key element of the proposal is the reconfiguration and widening of the surrounding laneways. Vehicle access would be retained from Lois Lane, with upgraded pedestrian connections linking Ross Street and Horne Street. The development would provide 58 residential car spaces, two retail car spaces, and 52 bicycle spaces across two basement levels and ground-floor facilities.

Architecturally, the building draws inspiration from the established character of Elsternwick Village. The façade combines dark charcoal brickwork, textured concrete, bronze-toned metal detailing, and extensive planting integrated into podium and tower levels. The design also incorporates a chamfered corner treatment and publicly accessible plaza intended to strengthen pedestrian activity around the station precinct.

Elsternwick's last new development completion was&nbsp;EVA Elsternwick by Pitard late last year. <a href="https://www.apartments.com.au/developers/milieu-property">Milieu</a> is working away on its nature-led neighbourhood, <a href="https://www.apartments.com.au/new-apartments/elsternwick-gardens-by-milieu-8-gordon-street-elsternwick-vic-3185">Elsternwick Gardens</a>, on Gordon Street, with its first stage expected to complete next year.

First look: Auyin seeks mixed-use apartment project in growing Elsternwick Activity Centre

<a href="https://www.apartments.com.au/new-apartments/otium-parkdale-123-125-como-parade-east-parkdale-vic-3195">Otium Parkdale</a>, the 13-residence boutique development by&nbsp;<a href="https://www.apartments.com.au/developers/huxtable-property">Huxtable Property</a>, has entered its final stages of delivery, with completion expected within the coming month and more than half of the residences sold.

The Como Parade East project is nearing the finish line at a time when opportunities to purchase new apartments in <a href="https://www.apartments.com.au/developments/parkdale-vic-3195">Parkdale</a> remain exceptionally limited. Fewer than 10 per cent of dwellings in the bayside suburb are apartments, making developments like Otium a relatively rare addition to a market traditionally dominated by detached housing.

[smartcode_project:default project_id=134974 project_image_fid=5427]

The three-level development comprises 13 residences, including ten two-bedroom apartments and three larger three-bedroom homes, all positioned above a secure basement car park.

Designed by <a href="https://www.apartments.com.au/architects/almeida-architects">Almeida Architects</a> with a strong connection to its coastal surroundings, Otium combines red brick, exposed concrete and dark metal detailing with integrated landscaping and greenery. Expansive glazing, generous balconies and terraces have been incorporated throughout the design to maximise natural light and reinforce indoor-outdoor living.

Inside, the residences feature engineered European oak flooring, natural and reconstituted stone benchtops, Bosch kitchen appliances, ducted heating and cooling, lift access and secure entry systems. The larger three-bedroom residences on the upper level have been designed with house-like proportions, while the two-bedroom apartments prioritise functionality, flexibility and low-maintenance living.

[smartcode_project:default project_id=134974 project_image_fid=5421]

The project is now in its final stages, with <a href="https://www.apartments.com.au/builders/labco">Labco</a> completing the remaining landscaping and external finishing works following the completion of the residences' interiors.

Otium's location within the heart of Parkdale continues to underpin its appeal. Residents will be just steps from local cafés, restaurants, shops and the newly elevated Parkdale Station, while the beach is less than a kilometre away.

With the project tracking ahead of schedule, buyers can currently secure a residence with a five per cent deposit and benefit from settlement terms of up to eight months. The advanced stage of construction also provides buyers with the opportunity to walk through the near-complete residences and experience the quality and finishes firsthand ahead of completion.

[smartcode_project_cta:default project_id=134974]

Otium Parkdale enters final month before completion as rare apartment opportunity nears sellout

A new boutique apartment development is entering the market in <a href="https://www.apartments.com.au/developments/chermside-qld-4032">Chermside</a>, with Brisbane-based developer <a href="https://www.apartments.com.au/developers/ausdev">Ausdev</a> bringing 33 residences to a well-connected pocket of Brisbane's north.

<a href="https://www.apartments.com.au/new-apartments/parkdrive-apartments-chermside-25-sammells-drive-chermside-qld-4032">Parkdrive Apartments</a>, at 25 Sammells Drive, will comprise a mix of one- and two-bedroom residences positioned within walking distance of Westfield Chermside, The Prince Charles Hospital, and Bradbury Park.

Established in 1989, Ausdev has a long-standing presence across both development and construction, with Parkdrive Apartments representing its latest residential project in Brisbane's northern suburbs.

[smartcode_project:default project_id=152125 project_image_fid=363778]

The development has been designed around open-plan living and natural light, with residences featuring stone benchtops, timber cabinetry, BOSCH appliances, and private balconies that extend the living areas outdoors.

Kitchens are positioned as the centrepiece of the homes, incorporating natural material palettes and integrated appliances, while bathrooms have been designed with a focus on functionality and understated finishes.

Residents will have access to a communal barbecue and entertaining area on Level 3, providing shared outdoor space within the development. Secure parking and lift access are also incorporated into the building.

The project will deliver a limited collection of 33 apartments, with one-bedroom residences priced from $749,000.

[smartcode_project:default project_id=152125 project_image_fid=363782]

Beyond the building itself, the location places residents within easy reach of several of Chermside's key amenities. Bradbury Park is around 350 metres away, while Westfield Chermside is approximately 1.3 kilometres from the site. The Prince Charles Hospital is located within 750 metres, and the Chermside Bus Interchange is around 1.5 kilometres away, providing connections across Brisbane.

Parkdrive Apartments adds to the growing residential pipeline in Chermside, a suburb that continues to evolve as a major retail, healthcare, and transport hub for Brisbane's north.

[smartcode_project_cta:default project_id=152125]

Ausdev introduces boutique Parkdrive Apartments to Chermside's growing centre

<a href="https://www.apartments.com.au/developers/skymark-group">Skymark</a>'s boutique Cronulla development Solis has secured a 10-year Latent Defects Insurance policy through Resilience Insurance, providing buyers of the 16-residence building on Ewos Parade with structural and waterproofing protection that extends a decade beyond the building's completion.

Currently under construction and due for completion in late 2027, <a href="https://www.apartments.com.au/new-apartments/solis-cronulla-8-ewos-parade-cronulla-nsw-2230">Solis</a> is one of a small number of new developments in the Sutherland Shire to carry Resilience LDI coverage, a distinction that carries increasing weight as buyer confidence in the off-the-plan sector continues to be shaped by how developers stand behind their product.

Latent Defects Insurance, which entered the Australian market in 2022 when Resilience Insurance was approved to offer the cover, protects buyers against major structural or waterproofing defects for ten years post-completion. Unlike traditional statutory warranties, it operates as a first-resort policy, if a covered defect arises, the insurer responds directly, without the buyer needing to pursue the builder or developer through a lengthy claims process.

Resilience Insurance CEO Corey Nugent has noted that the product addresses something fundamental to the new apartment market.

"The overarching feedback from prospective buyers in the new development space is that they want more confidence and assurances around the quality of the build," Nugent says.

"Resilience Insurance Latent Defects Insurance not only gives them complete peace of mind for 10 years, but it shows the developer they are buying from is standing by their product."

[smartcode_project:default project_id=150499 project_image_fid=370898]

For Solis, the Resilience LDI policy adds a meaningful layer of accountability to an already considered project. The development comprises nine two-bedroom and seven three-bedroom residences, including one dual-level three-bedroom apartment, across a five-storey building on Ewos Parade, positioned between Shelly Beach and South Cronulla.

Garden apartments connect directly to private landscaped courtyards, while upper-level homes capture beach views to the east from level four and above.&nbsp;

All 16 residences include at least one balcony or courtyard, and select apartments on the upper floors feature bar areas and secondary flexible living spaces.

Hiba Sander, Managing Director of Skymark, says Solis offers a rare balance, nestled between the quiet beauty of secluded beaches and the lively charm of South Cronulla's esplanade.

"It's a place to choose your pace and live gracefully, seaside'," Sander says.

[smartcode_project:default project_id=150499 project_image_fid=370900]

The architecture, designed by <a href="https://www.apartments.com.au/architects/ida-design-group">IDA Design Group</a>'s Michael Trinh, draws from the natural erosion patterns of <a href="https://www.apartments.com.au/developments/cronulla-nsw-2230">Cronulla</a>'s sandstone headlands, translating the organic forms of the coastline into soft curves, pavilion-style massing, and a material palette chosen for longevity in a salt-tinged environment.&nbsp;

Textured natural stone, soft renders, and timber-look battens reference the tones of the surrounding cliffs, while the building has been oriented to maximise natural light and passive ventilation, with primary living spaces facing north and east to capture morning sun and sea breezes.

"At Solis, our aim was to create architecture that feels quietly confident, grounded in natural materials like stone and timber, and elevated by light and landscape," Trinh says.&nbsp;

"The buildings are designed to sit gently within their coastal surrounds, with expansive glazing and abundant greenery creating a seamless dialogue between inside and out."

[smartcode_project:default project_id=150499 project_image_fid=370897]

Interiors by <a href="https://www.apartments.com.au/architects/hot-black">Hot Black</a> carry the same material language through to every room. Kitchens feature integrated Gaggenau appliances, sculpted stone benchtops, and Lo &amp; Co joinery, while bathrooms feature natural stone, timber, and brushed metal finishes.&nbsp;

Hot Black Founder and Design Director Sophie Safrin describes the intent as one of considered restraint: "At Solis, every detail has been thoughtfully considered to create a timeless coastal retreat, calm, refined, and effortlessly liveable. From natural finishes to seamless indoor-outdoor flow, Solis offers a quiet elegance that's deeply connected to its surroundings.

The landscape, designed by Julian Brady of <a href="https://www.apartments.com.au/landscape-architect/sitedesignstudios">Site Design Studios</a>, treats green space as an integral part of the resident experience rather than an afterthought.&nbsp;

"Gentle curves and layered native plantings mirror the ebb and flow of the ocean," Julian Brady says, "creating a serene connection between architecture and place."&nbsp;

Coco Republic has provided bespoke furniture packages tailored to the project's coastal palette.

[smartcode_project:default project_id=150499 project_image_fid=370899]

Skymark has an established track record in the Sutherland Shire, with a portfolio spanning Cronulla, Woolooware and Burraneer that includes Isla, Sylva, Bask, Shells, Sula and Mist. Securing LDI on Solis reflects a broader shift in how the developer is positioning its buildings to buyers, at a time when Resilience Insurance expects the policy to become mandatory in New South Wales by 2028.

Sales at Solis are launching soon through Ray White Projects, with an official event scheduled for 11 June. Enquire for more information.

[smartcode_project_cta:default project_id=150499]

Skymark takes out 10-year Resilience Insurance LDI at Solis Cronulla

Housing Bubble

<html><body>
Sydney is at risk of a "housing bubble", according to a report from UBS Wealth Management.
<div>
The UBS Global Real Estate Bubble Index report analysed residential property prices in 18 cities around the world. 
UBS says Sydney's housing market has been overheating since the city became a target for foreign investors several years ago.
It had been the least risky city in Asia Pacific in 2012. 
<a href="/images/2016/09/27/Screen%20Shot%202016-09-28%20at%207.16.56%20AM.png" target="_blank"> Click to enlarge</a>
<img src="/images/2016/09/27/Screen%20Shot%202016-09-28%20at%207.16.56%20AM.png" alt="">
"When combined with rigid supply and sustained demand from China, this has produced an ideal setting for excesses in house prices," the report said.
Sydney housing prices peaked in the second half of 2015 after an increase of 45% since mid-2012.
"Since then, prices have corrected by a low single-digit," it noted on Sydney.
"The Australian residential market is influenced by a rapidly growing foreign demand (in particular, Chinese), which has tripled in value over the last three years.
"Increasing supply and further tax measures to reduce foreign housing investments may end the price boom rather abruptly." 
The report noted the situation is fragile for the most overvalued housing markets.
A sharp increase in supply, higher interest rates or shifts in the international flow of capital could trigger a major price correction at any time, the report warned.
<a href="/images/2016/09/28/Screen%20Shot%202016-09-28%20at%2010.52.29%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/09/28/Screen%20Shot%202016-09-28%20at%2010.52.29%20AM.png" alt="">
Vancouver tops the index in 2016.
"Bubble risk also seems eminent in London, Stockholm, Sydney, Munich and Hong Kong.
"Deviations from the long-term norm point to overvalued housing markets in San Francisco and Amsterdam.
"Valuations are also stretched, but to a lesser degree, in Zurich, Paris, Geneva, Tokyo and Frankfurt."
In contrast, Singapore, Boston, New York and Milan are fairly valued, while Chicago’s housing market remains undervalued relative to its own history.
While property overvaluations have become more pronounced in many major cities since 2011, according to the report, Vancouver faces the greatest risk of a housing bubble, while London is the riskiest city among the major financial centres. 
In contrast, New York, Hong Kong and Singapore prices have stagnated or decreased over the last year, according to the index.
The report noted 'bubble risk zones" where prices within that zone have increased by 50 per cent on average since 2011. 
"What these cities have in common are excessively low interest rates, which are not consistent with the robust performance of the real economy," the report stated.
"In a world in which more than a third of all government bonds offer negative yields, investing in tangible assets remains popular.
"So it is hardly any wonder that housing markets are again overheating, just a few years after the last major wave of global correction.
"We see a significant overvaluation of housing markets in some key financial centers.
"What these cities have in common are excessively low interest rates, which are not consistent with the robust performance of the real economy.
"This is illustrated by the Eurozone, where monetary policy cannot accommodate the macroeconomic differences between the countries.
"Yet other countries such as Australia, Canada and the UK are also keeping their interest rates artificially low.
"When combined with rigid supply as well as sustained demand from China, this has produced an ideal setting for excesses in house prices.
"Even in the cities with the clearest signs of a real estate bubble, it is not possible to predict exactly the timing and duration of a correction.
"The situation is nevertheless fragile for housing markets.
"A sharp increase in supply, higher interest rates or shifts in the international flow of capital could trigger a major price correction at any time."
It says the publication UBS Global Real Estate Bubble Index reveals the financial centers where the imbalances are most apparent, and the cities where house prices still have fair valuations overall. 
</div>
</body></html>

jonathanchancellor-7SQnKwU6yx

UBS sees overheated Sydney's housing bubble risk

<html><body>
Australia was potentially on the cusp of a "dramatic and destabilising" end to the housing boom because of the apartments building boom, the Organisation for Economic Co-operation and Development has suggested.
In its latest assessment of the threats to the economy, the Paris-based think tank went into few details, but added jitters over the federal election policy are adding to risks.
Analysis of the OECD's latest report by the Australian Financial Review commented that the OECD had paradoxically simultaneously noted that risks of a property boom appeared to be receding which provided leeway for even more official interest rate cuts.
"Domestically, the unwinding of housing market tensions to date may presage dramatic and destabilising developments, rather than herald a soft landing," it said.
The warning is accompanied by graphs showing dwelling approvals retreating from a peak and house prices levelling out. 
Australia’s entire economy was vulnerable to the continued commodity price plunge too, the OECD warned.
Suggesting that the strong economic growth of the first three months of the year will not be maintained, the OECD forecast growth for Australia of 2.6 per cent this year, down from the 3.1 per cent over the year to March.
“Australia’s exposure to commodity-market developments, par­ticularly those linked to the Chinese economy, remains an important source of uncertainty and risk,” the OECD says in its latest economic outlook.
“The unwinding of tensions in the housing market to date may presage dramatic and destabilising developments, rather than herald a soft landing,” it advised.
The OECD's two-page analysis calls for “close vigilance” of the heavily leveraged housing market and suggests Labor’s negative gearing proposal had created uncertainty.
</body></html>

jchancellor-FAypfDUnLy

OECD warns of dramatic end to housing boom

<html><body>
Talk of a housing bubble is "simply hot air," says the Property Council’s chief of policy and housing, Glenn Byres.
Official data from the Australian Bureau of Statistics released last week signals a warning, he suggests, with the 5.1 per cent fall in building commencements and 2.3 per cent drop in completions for the December quarter suggesting the construction boom has passed its peak.
"While the number of commencements and completions over the past 12 months remain at record highs – reaching 220,887 throughout 2015 – there is now a real risk that housing starts could head south," Byres says.
“We only risk a housing bubble if we are creating demand that won’t be met.
"There will be pockets and cycles in individual markets, but overall the reality is the opposite – we have a shortage of supply.
“The fundamentals that support housing markets are very sound. The economy is growing, jobs are growing and our population is growing.
“At the same time, we have challenges on the supply side. When you piece these things together, there’s nothing to suggest the market is operating at anything other than normal speed.”
While the increase in housing supply has been much lauded over the last two years, Byres is more circumspect.
“This is the first time we’ve seen a balance between supply and demand in more than 10 years. We are only just now hitting the levels of supply we need. In capital cities, particularly Sydney, we are still playing catch up on the big deficit that accumulated over the last decade.”
He advised Australia was currently adding an extra million people to its population every three to four years, and numbers in our four largest cities – Sydney, Melbourne, Brisbane and Perth – are expected to double within the next 15 years.
"Sydney will need an estimated 664,000 houses over the next 15 years just to keep up with this growth.
“We know most of our nation’s growth is going to happen in the ‘big four’ capital cities – and that’s where our challenge is most acute. We have fallen a long way behind in supporting this growth with the infrastructure and housing we need. Until we get ahead of the curve, we risk landing on the wrong side of the affordability equation.”
While New South Wales saw the largest increase in commencements in 2015, up 19.1 per cent for the year, Byres says the 14.0 per cent fall in the December quarter is a marker for concern.
“It is a reminder that NSW needs to get cracking and fix up its planning system, which is still the most dysfunctional in the nation.”
“We need policy solutions in place that reduce the time, cost and red tape on projects and make it easier to deliver a sustained period of strong supply and improve affordability over the long-term.”
Byres says the choices are simple: smart growth or dumb growth.
“Growth is coming – but dumb growth involves turning off housing supply, tying up markets in red tape and pushing up prices beyond the point at which the average person can enter the market.”
</body></html>

No housing bubble, but risk of housing starts heading south: Glenn Byres

<html><body>
Charter Keck Cramer executive chairman Scott Keck says the housing market is "fully priced" but property values are likely to drift sideways over the next few years rather than crash.
Keck told clients that while the housing market was "certainly inflated [though] perhaps not fully inflated to the extreme" domestic conditions were subsiding with the market having just recently drifted off its peak.
"We think that it is unlikely that there will be a significant increase in commercial interest rates or unemployment and thus these internal factors are not a danger. Left alone there seems to be no internal or domestic pending or immediate threat that would cause a major correction." he said.
But, he did acknowledge that at inflated levels, property along with other asset classes would be vulnerable to a major international event like an economic meltdown in China or another GFC.
"So, in summary, does Charter think that there is a bubble which infers an event that is about to collapse? Our answer is NO," he wrote.
Speaking to The Australian Financial Review, Mr Keck said housing values were supported by strong population growth and immigration, major demographic changes and a "huge depth of demand" from those looking to buy at lower rungs of the property ladder.
</body></html>

Scott Keck says there's no housing bubble

<html><body>
GUEST OBSERVER
It’s reporting season, and over the past few weeks some of Australia’s biggest companies have been releasing information on how they’re travelling. 
These reports reflect key themes of how things are going in key sectors of the economy. 
Today we look at the banking sector.
The Australian banking industry is a classic economic ‘oligopoly’ with the so-called ‘Four Pillars’ or ‘Big Four’ (National Australia Bank (NAB), Commonwealth Bank of Australia (CBA), ANZ and Westpac) dominating not only the banking sector but the whole financial sector and arguably the economy.
The big four banks account for over 25 percent of the market capitalisation of the ASX 200, and are valued at over $360 billion. In total, the four banks reported assets in 2015 of some $3.5 trillion or about 10 times the size of BHP and RIO combined, and profits for their latest financial year of over $30 billion between them.
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/114178/width668/image-20160308-15110-odx4a3.png" target="_blank"> Click to enlarge</a>
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/114178/width668/image-20160308-15110-odx4a3.png" alt=""><a class="license" href="https://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a>
 
 
<h2>The risks in Australia’s banking system</h2>
In an oligopoly, the dominant players operate a very similar business model. This is true of the Big Four, which operate within a structure known as ‘universal banking’. Not only do each of these behemoths run a traditional retail and business bank, they also have wealth management (mainly retail superannuation fund management) and insurance subsidiaries. To complete the picture, each of the four runs a wholly owned bank in New Zealand, again dominating the banking system in that country. The banks operate throughout Australasia, often with competing branches (and valuable jobs) in each small town - Australia is ‘over banked’.
The risks of having one of the most concentrated banking systems in the world were outlined in 2012 by the International Monetary Fund (IMF), it warned that Australia’s banks had: “broadly similar business models and reliance on offshore funding leave them exposed to common shocks and disruptions to funding markets. Against a still worrying global environment, these risks will need to be closely monitored, particularly if the domestic economy slows sharply.”
Among the four banks, there is constant jockeying for prominence and any one time one bank climbs to the top of the pile. At the moment, the clear winner is CBA, largest by capitalisation, latest annual profits and staff employed with the lowest Cost to Income Ratio (CIR). Another winner is Westpac, the smallest by assets and employees but with an enviable CIR and Net Interest Margin (NIM) leading to excellent profit results. Meanwhile, NAB trails the others by profitability and with a low NIM and high CIR, will be likely do so for some time. Nonetheless, NAB is by any standards a very profitable company, if a bit overshadowed by the other banks this year.
It should be noted that not all banks report their financial results at the same time in a completely consistent fashion. However each quarter the banks are required to report their risk numbers to the Australian Prudential Regulation Authority (APRA), the banking regulator. These so-called APS 330 reports give a picture (albeit slightly murky) of where banks are taking risks and the size of those risks.
These numbers show that the banks hold roughly similar amounts of assets, so-called Risk Weighted Assets (RWA) and associated capital. Although Westpac, being slightly smaller, has about 10 percent less of each. This data shows Big Four banks are still predominantly lending institutions with about 86 percent of their Risk Weighted Assets (RWAs) related to credit.
While ANZ has a higher proportion of corporate and business lending than the others, about 23 percent of its credit (RWAs) relates to retail, mainly residential mortgage, lending. With a few notable exceptions, such as CBAs exposure to interest rate risks and NAB’s operational risks, the risk numbers are similar across the banks.
From an analysis of prior APS 330 reports (not shown), it appears that, although the RWAs for residential mortgages have increased slightly for all banks (mainly because lending has increased), the banking sector has not factored in much additional capital to cover the potential for the busting of a housing bubble.
The large Australian banks will in the next year face headwinds from a number of directions. First, any busting or even deflation of Australia’s real or imagined housing bubble will undoubtedly give the banks serious headaches.
Likewise, the end of the mining boom is already beginning to take its toll on mining companies, even the largest. If the gloom spreads, loans to the sector might be under pressure. Last, but far from least, banking scandals will definitely come to the fore this year especially market manipulation and product misselling.
<h2>Disruption from technology</h2>
Following the retreats of both NAB and ANZ from their respective overseas forays, it looks like the four banks are going to resemble each other even more as they are all embarking on strategies that target the same Australasian retail, mortgage and business markets. But there is at least one significant point of difference between the banks that might give a clue to potential shifts in future.
In banking, as in other industries, technology is critical. After an outsourcing deal that went sour, in 2008 the CBA board was forced (some say was brave enough) to embark on a complete refresh of its ageing IT systems, often called a Core Systems Replacement (CSR).
After some significant project blowouts, CBA eventually got the CSR to work and their annual profit numbers are beginning to reflect that success. Meanwhile, NAB is in the middle of its almost decade long CSR project (called Nextgen) and is constantly changing its management, which does not bode well for its completion in the near future. On the other hand, the new Chief Information Officer (CIO) of Westpac has denied that the firm needs a CSR, and has embarked on a much needed face-lift to the bank’s ageing systems.
After a number of attempts to change its core systems, the new management of ANZ have just announced that they are hiring an ex-Google executive to become its head of ‘digital banking’ - but to do what is still not certain.
Given the oft repeated fact that some 70 percent of IT projects fail, it looks like one or more of the banks are in for some big headaches over the next decade.
For this snapshot, the information is collected from the latest annual reports (2014-2015), except for CBA which reported its semi-annual numbers in February 2016. The risk figures are taken from the 2016 December quarter APS 330 reports of the banks to APRA, which are available at the banks’ websites.
Pat McConnell is honorary fellow, Macquarie University Applied Finance Centre, Macquarie University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/pat-mcconnell-13137" target="_blank">here</a>.
 
</body></html>

Property 101: The housing bubble risk to the big four banks

<html><body>
The national Australian housing market is severely overpriced relative to all the fundamental measures of value: rental incomes, inflation, construction costs, household incomes and GDP.
That is the conclusion of LF Economics duo Lindsay David and Philip Soos who conclude debt-financed speculation as the major cause of the what they describe as "Australia’s largest housing bubble in the nation’s economic history."
"The media and industry has warned housing price growth will begin to moderate and fall, but the latest results from the debt accelerator, Speculative Index and Kavanagh-Putland Index, however, indicates annualised real price growth of 8.9% could remain steady over the course of the next couple of quarters, inflating the bubble further.
They noted nationwide real housing prices surged by 4.3% in 2015Q2, the single largest quarterly increase since 2009Q4.
<a href="/images/2015/10/21/Screen%20Shot%202015-10-21%20at%2012.35.41%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/21/Screen%20Shot%202015-10-21%20at%2012.35.41%20PM.png" alt="">
The duo calculate the price to income ratio has reached record highs in 2015Q2: houses (8.3x) and units (6.4x).
"Both historically and internationally, Australian dwelling prices are extremely expensive and unaffordable relative to household incomes," according to the LF Economics report titled Ahead of the Housing Curve,  written by Lindsay David and Philip Soos.
"Australia is catastrophically overleveraged in terms of private sector debt, particularly the household sector.
"Since 1996, housing prices have outpaced economic fundamentals such as inflation, household incomes, rents, construction costs and GDP, demonstrating the housing market is in the thrall of an asset bubble.
"Australia’s economic history indicates real estate bubbles developed during the 1830s, 1880s, 1920s, mid-1970s and late 1980s.
"Contrary to the analyses of the vested interests, the data overwhelmingly demonstrates Australia is in the midst of the largest housing bubble on record, both in terms of prices to rents and household incomes.
"The government, central bank (RBA), prudential regulator (APRA), FIRE sector (finance, insurance and real estate industries) and their economists predictably deny the existence of a housing bubble, believing a severe downturn in the housing market simply cannot occur.
"The usual arguments put forward are the same as those made everywhere else a housing bubble has occurred: prudent lending practices, deregulation of finance, recourse mortgages, dwelling shortages, restrictions on land supply, low nominal interest rates and inflation, population growth, demographic change and so on.
"Today, after centuries of asset bubbles, mainstream economists have yet to determine and define what they are, so debate on the matter is kept necessarily vague.
"Housing bubbles are poorly understood, if at all, on the basis of ‘irrational exuberance’ or ‘chasing capital gain’.
"No rational explanation can be made as to why housing prices have so radically departed from fundamental factors, most notably rental prices.
"The data strongly suggests the boom in real housing prices are not caused by any commensurate movement in economic fundamentals, but rather, debt-financed speculation as evidenced by the exponentially growing stock of mortgage debt.
<a href="/images/2015/10/21/Screen%20Shot%202015-10-21%20at%2012.37.53%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/21/Screen%20Shot%202015-10-21%20at%2012.37.53%20PM.png" alt="">
The report concludes there is greater awareness among policymakers and public of the housing bubble and its potential for wealth destruction.
"While there is more to say about Australia’s fascinating and quite dangerous economic experiment with financialisation and real estate speculation, the data and commentary in this report illustrates the long-term trends in the housing and debt markets, providing the necessary proof that a housing bubble does indeed exist and therefore represents a clear and present danger to the economy and banking system," the LF Economics report concluded.
For the full report from LF Economics, <a href="https://www.lfeconomics.com/news" target="_blank">click here</a>.
</body></html>

Catastrophically overleveraged as Australia’s largest housing bubble in history continues: LF Economics

<html><body>
Sydney home owners can feel confident that their property values will hold up amid the gradual wind-down of the price boom.
There are two reasons. One is that economists are predicting values will fall. Given their track record of getting it wrong on real estate, we can be fairly sure values won’t decline.
The other reason is the historic precedent. Sydney has had big price booms before and when the bull run ended, there was no decline in values. Prices simply stopped growing.
I fully agree with the growing list of pundits calling the end to Sydney’s boom. I’ve been writing about it for the past 5-6 months.
On 21 May I wrote in this column: “It was inevitable that Sydney would run out of puff eventually and the most likely time for it to happen was in the third year of price growth – which means some time this year. It’s rare for major markets to sustain a boom for any longer than that. 
“I’ve just finished the research for the latest edition of The Price Predictor Index, examining market activity in suburbs and towns across the nation, and it indicates Sydney has begun a gradual fade.”
That view was subsequently confirmed by sales figures for the June Quarter, which continued the pattern seen in the March Quarter figures. It’s clear now that, in terms of sales activity, Sydney peaked in the December Quarter last year and has been on a gradual fade ever since.
But does this mean prices will collapse? Not if 2004 is any guide.
The preceding 2-3 years represent the last time Australia had a genuine national property boom. In 2002, six of the eight capital cities recorded double-digit growth in median house prices, including three (Sydney, Brisbane and Adelaide) where prices grew more than 20%. The national average rise was 18%, double the average rise in the past 12 months.
The following year was even more prolific. In 2003, all eight capital cities recorded growth of at least 13%. Five of capital cities grew more than 20% and the city average that year was a 19% rise.
The past 12 months, in comparison to those stellar years, have been rather tame, with only Sydney recording double-digit growth (although some research sources have Melbourne nudging above 10%). Media hysteria suggesting we have been in the midst of an unprecedented national boom lately is quite ludicrous when we consider the 2002-2003 scenario.
 The bottom line, however, is this: by 2004 the boom had run out of steam. Economists, journalists and other pontificators were routinely predicting a collapse in prices. But it didn’t happen. The growth subsided but there was no price decline.
Earlier this year I conducted a research exercise for a client, examining media coverage of real estate since the beginning of the 21st Century and comparing it to actual outcomes.
This revealed that reports of bubbles, unsustainably high property values and inevitable price collapse have occurred constantly in Australian media over the past 15 years.
Every economist complaining that property prices should fall because they don’t comply with their theory about where prices should be has been given airplay.
Every overseas spruiker seeking to drum up attention for a book launch or a seminar tour has gained massive publicity by forecasting that our property values were about to decline 40%, 50% or 60%. One was silly enough to predict a 90% drop in land values and media was silly enough to publish it.
None of them was right. Despite that relentless production line of doomsday headlines stretching across 15 years, there has been no Armageddon in Australian real estate.
So, now the chattering economists are at it again. No matter how many times they get it wrong on real estate, they will continue to step up for another bout of false profiteering. 
The boffins at Macquarie Bank have rolled out some very specific forecasts about something they call “Australian property prices”. They’re going to start falling in March next year. And the decline won’t be 5% or 6% or somewhere in the band from 5-10%, it will be exactly and precisely 7.5%.
Will they be proven accurate? Not a chance.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
</body></html>

Housing Bubble

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Housing Bubble

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News