While the Gold Coast continues to densify around key transport and lifestyle nodes, <a href="https://www.apartments.com.au/developments/mermaid-beach-qld-4218">Mermaid Beach</a> has retained its village-like charm even as demand intensifies for walkable beachside living. It’s a suburb that holds firm to its community feel, while sitting within one of Australia’s fastest-growing urban corridors.

Developer DANKAV put the neighbourhood and its residents first when drawing up the plans for <a href="https://www.apartments.com.au/new-apartments/the-alfred-residences-mermaid-beach-2375-gold-coast-highway-mermaid-beach-qld-4218">The Alfred Residences</a>, which will replace the former Mermaid Beach Shopping Village near Nobby Beach. The project marks a rare example of precinct renewal at a truly local scale.&nbsp;

<a href="https://www.apartments.com.au/new-apartments/the-alfred-residences-mermaid-beach-2375-gold-coast-highway-mermaid-beach-qld-4218">The Alfred Residences</a>&nbsp;comprises a wide variety of one- and two-bedroom apartments, set above a new ground plane of curated hospitality and boutique retailers, all framed by generous laneways, shaded plazas, and garden paths designed to enhance pedestrian flow and public interaction.&nbsp;

[smartcode_project:default project_id=149942 project_image_fid=355148]

The site’s configuration reflects both a respect for the area's established rhythm and a recognition of its future trajectory, particularly with the planned Mermaid Beach South light rail station directly across the road.

Residents will find immediate access to both everyday needs and broader connectivity. A Woolworths Metro and local cafés are already operating nearby, while the beach sits just 100 metres from The Alfred’s front door. Pacific Fair, the region’s flagship retail centre, is also close by, with an extensive mix of dining, fashion and entertainment.&nbsp;

For those commuting or exploring beyond Mermaid Beach, the upcoming light rail link promises seamless movement north through Broadbeach, Surfers Paradise and into Southport, expanding access without the need for a car.

[smartcode_project:default project_id=149942 project_image_fid=355150]

Neighbouring locales such as Miami and Nobby Beach further enrich the lifestyle offering. These established precincts contribute everything from surf clubs and oceanfront parks to laid-back dining venues and independent retailers, all within a short walk or bike ride.&nbsp;

The Alfred effectively places residents within one of the Gold Coast’s most liveable pockets, where the essentials of daily life converge with long-term infrastructure planning and timeless natural appeal.

Predominantly local buyers jumped at the first release at The Alfred Residences, transacting the majority of the release in a matter of weeks. Demolition of the former shopping village is now underway, and Dankav expects completion of the first collection of residences in 2027.

[smartcode_project_cta:default project_id=149942]

Joel Robinson

The Alfred Residences brings village-style living to the heart of Mermaid Beach

<a href="https://www.apartments.com.au/developments/chermside-qld-4032">Chermside</a> is better known for bus interchanges and Westfield than for high-end apartment towers. Kabbalah, on Playfield Street, is a deliberate push against that reputation.

Developed by <a href="https://www.apartments.com.au/developers/playfield-developments">Playfield Developments</a>, the building holds 64 apartments, all three and four bedrooms, across its 13 storeys. The apartments are generous by any measure: lower-floor three-bedrooms start at 164 sqm, each with a multi-purpose room and private balcony, while the north-facing penthouse stretches to 382 sqm. Every residence comes with two car spaces.

<a href="https://www.apartments.com.au/architects/ana-architects">ANA Architects</a>, the Brisbane firm behind the 25-storey Willahra Tower on Queen Street and the 45-storey Mantra on Mary in the CBD, shaped the building around curved forms drawn from the natural landscape. Balcony gardens run throughout, with planter boxes worked into the private outdoor spaces of each apartment, giving residents greenery at the threshold rather than just at the rooftop.

[smartcode_project:default project_id=149578 project_image_fid=354319]

That rooftop carries its own weight: a pool, landscaped gardens, and outdoor entertaining areas sit above the city, designed as much for quiet evenings as for hosting. The wellness offering continues at ground level, where a centre with pool, sauna, and communal lounge zones anchors the building's other end. Together they give the building a rhythm, somewhere to arrive at the top and somewhere to retreat to below.

The site itself is part of the pitch. "One of the last available sites to develop in an established precinct," is how Playfield Developments describes the Playfield Street address, and the surrounding context backs that up. Westfield Chermside, the second largest Westfield in Australia, is within a few minutes on foot, along with its dining precinct and cinema complex.&nbsp;

The Chermside bus interchange connects directly to the Brisbane CBD and across the northern suburbs via more than 20 Translink routes, with the CBD roughly 15 minutes away by road. The Prince Charles Hospital, one of Queensland's major teaching hospitals and the state's leading cardiac centre, is roughly a kilometre up the road on Rode Road.

[smartcode_project:default project_id=149578 project_image_fid=354321]

Place Projects is handling sales, bringing a track record across some of Queensland's largest residential developments. Early buyer response has centred on the finishes and scale, "buyers consistently comment on the high-quality finishes throughout the apartments," the sales team notes, pointing to craftsmanship and considered design as the recurring draw.&nbsp;

"They're looking for generously sized apartments that offer both space and functionality, combined with a strong lifestyle offering," Place Projects says.

Construction has been awarded to Clearcon, with completion slated for late 2027. Pricing runs from $1.5 million for a lower-floor three-bedroom up to $3.65 million for the penthouse.

[smartcode_project_cta:default project_id=149578]

Playfield Developments brings 64 apartments to Chermside with Kabbalah

More than 3,000 dwellings are currently selling or gearing up to launch across Surfers Paradise, the suburb’s most concentrated apartment pipeline in years. At least eight projects are already in market, with more moving through registration and presale, creating a meaningful wave of new supply.

This isn’t happening in a vacuum. Strong interstate migration into Queensland, particularly the Gold Coast, continues to underpin demand, with the local population expected to push past 800,000 in the early 2030s.

We’re also seeing solid early-stage buyer activity. As usual, the earliest phases tend to offer the best mix of pricing and choice, before the more popular layouts get snapped up.

Comparing Surfers Paradise projects? Browse all listings → <a href="https://www.apartments.com.au/developments/surfers-paradise-qld-4217">View all Surfers Paradise apartments</a>

<hr data-end="1189" data-start="1186" />
<h2 data-end="1218" data-section-id="tdhbfr" data-start="1191">How to Read the Pipeline</h2>

Apartment projects in Surfers Paradise are at various stages of their project lifecycle, from pre-launch, selling now, construction commenced, or construction complete.

Where you buy in that cycle matters.

<ul data-end="1674" data-start="1409">
	<li data-end="1542" data-section-id="d5c11p" data-start="1409">Registration and&nbsp;presale: Typically the lowest price points and best choice, but with longer wait times to completion</li>
	<li data-end="1608" data-section-id="plnjqp" data-start="1543">Under construction: Greater certainty, shorter timelines.</li>
	<li data-end="1674" data-section-id="13k7yl8" data-start="1609">Completed: No construction risk, but pricing reflects that.</li>
</ul>

The projects below are grouped by stage to help buyers understand where they sit in the buying window.

<hr data-end="1942" data-start="1939" />
<h2 data-end="1967" data-section-id="zj5dj7" data-start="1944">Projects Now Selling</h2>

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a> is the newest apartment development to launch in Surfers Paradise.

Exhale, being developed by SIERA, comprises just 54 apartments, a density not often seen in Surfers. It sits on the corner of Enderley Avenue and Garfield Terrace, just off Northcliffe Beach. SIERA Founder and Managing Director Brent Thompson spent over a year trying to secure the rare beachside site.

[smartcode_project:default project_id=112661 project_image_fid=359603]

SIERA engaged BDA Architecture to design the building, with a striking glass curtain wall&nbsp;façade.

Offering two-, three-, and four-bedroom apartments, Exhale will also offer its residents a two-level wellness podium with a heated magnesium pool, spa, sauna, Nordic&nbsp;cold shower, and biophilic designed landscaped gardens.

There's also a dedicated Pilates and yoga studio, library and reading retreat, cinema lounge, and private dining room with a private bar and wine cellar.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217" style="text-decoration:none">Enquire about Exhale →</a>

<hr data-end="2500" data-start="2497" />
Paradiso Place is the largest project currently in market in Surfers Paradise. Developer SPG Land recently begun construction on its 845-unit development they are bringing to 103 Ferny Avenue.

[smartcode_project:default project_id=106566 project_image_fid=185858]

At this scale, it’s effectively its own sub-market, offering a wide mix of configurations across multiple price points, from entry-level investor stock through to larger owner-occupier product. Amenities include a pool, gym, and outdoor spaces.

With projects of this size, early buyers typically benefit most from the broader selection before key layouts are taken up.

<a href="https://www.apartments.com.au/new-apartments/paradiso-place-surfers-paradise-103-ferny-avenue-surfers-paradise-qld-4217" style="text-decoration:none">Enquire about Paradiso Place →</a>

<hr data-end="2500" data-start="2497" />
Jewel Residences is the only completed development on this list. The three towers, which drastically altered the Surfers Paradise skyline when they were complete in 2020 from their dress circle position&nbsp;at 36 Old Burleigh Road, home 512 apartments.

[smartcode_project:default project_id=8843 project_image_fid=264503]

With the six-star The Langham within the middle tower, Jewel offers&nbsp;​​​​​​significant hospitality venues including&nbsp;signature restaurants, a bar, cafe, and a resort pool with a swim-up bar

<a href="https://www.apartments.com.au/buildings/jewel-residences-surfers-paradise-36-old-burleigh-road-surfers-paradise-qld-4217" style="text-decoration:none">Enquire about Jewel Residences </a>

<hr data-end="2938" data-start="2935" />
Andrews Projects recently commenced construction at South Beach, just shy of 400 apartments at 3006–3016 Surfers Paradise Boulevard. Prices start from $1.08 million for the one-bedroom apartments.

[smartcode_project:default project_id=8887 project_image_fid=358399]

Central to the South Beach offering is a 5,500m sqm wellness and lifestyle precinct designed around the concept of renewal as a daily ritual.

The wellness facilities include sunrise and sunset pools, an indoor hydrotherapy pool, plunge baths, a Hammam, traditional and infrared saunas, red-light therapy and dedicated treatment rooms. A Technogym gym,&nbsp;cinema, co-working lounge and a range of indoor and outdoor dining and entertaining spaces, including BBQ terraces, complete the amenity.

<a href="https://www.apartments.com.au/new-apartments/south-beach-surfers-paradise-3006-3016-surfers-paradise-boulevard-surfers-paradise-qld-4217" style="text-decoration:none">Enquire about South Beach →</a>

<hr data-end="3316" data-start="3313" />
Another new entry to the market is Palmera Residences, developed by Central Equity at 18 Garfield Terrace. That has 347 large-scale, three-bedroom residences, priced from just shy of $3 million.

[smartcode_project:default project_id=108274 project_image_fid=361247]

<a href="https://www.apartments.com.au/new-apartments/palmera-residences-18-garfield-terrace-surfers-paradise-qld-4217">Palmera Residences</a>&nbsp;is being constructed in the prestigious Northcliffe residential neighbourhood on an expansive 3,239 sqm site. It is located at 18 Garfield Terrace near the Northcliffe Surf Life Saving Club and the patrolled Northcliffe surf beach, situated between&nbsp;<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a>&nbsp;and&nbsp;<a href="https://www.apartments.com.au/developments/surfers-paradise-qld-4217">Surfers Paradise</a>.

Residents will have private access to extensive, state-of-the-art amenities, featuring two large pools including a generously scaled, family-friendly pool with safe shallow zones, and a 25-metre lap pool facing the western side, ensuring maximum sunlight all day.

<a href="https://www.apartments.com.au/new-apartments/palmera-residences-surfers-paradise-18-garfield-terrace-surfers-paradise-qld-4217" style="text-decoration:none">Enquire about Palmera Residences →</a>

<hr data-end="3711" data-start="3708" />
26 Vista has benefitted from the boom in Surfers Paradise over the last few years. Over 70 per cent of the 280 apartments have sold, with the remaining priced from $1.86 million.

[smartcode_project:default project_id=112730 project_image_fid=365605]

26 Vista, being developed by MRCB, is scheduled to complete in late 2030 and has attracted strong interest from locals and interstate buyers, Matt George, from project marketer Urban Activation, says.

“The diverse mix of buyers we’ve seen investing in this development stands as a testament to the superior product that is being offered. 26 Vista is truly the gold standard for coastal living, with its thoughtfully considered design and its commitment to providing residents with five-star luxury in sub-tropical surrounds.”

<a href="https://www.apartments.com.au/new-apartments/palmera-residences-surfers-paradise-18-garfield-terrace-surfers-paradise-qld-4217" style="text-decoration:none">Enquire about 26 Vista →</a>

<hr data-end="3711" data-start="3708" />
Away from the beach and closer to the Budds Beach area of Surfers Paradise is Homecorp's new tower, Florence Residences.

[smartcode_project:default project_id=150414 project_image_fid=357950]

The Monte Carlo building has 116 apartments amid a suite of wellness spaces including&nbsp;a private residents’ only wellness club including a resort-style rooftop pool, hot and cold plunge pools, a spa retreat, contemporary gymnasium and a spacious yoga and Pilates studio.&nbsp;

<a href="https://www.apartments.com.au/new-apartments/florence-residences-24-monte-carlo-avenue-surfers-paradise-qld-4217" style="text-decoration:none">Enquire about Florence Residences →</a>

<hr data-end="4321" data-start="4318" />
<h2 data-end="4364" data-section-id="1bj0450" data-start="4323">The Broader Pipeline</h2>

There's a lot more to come in Surfers Paradise in the coming years. The most interest is likely the two-tower beachfront project proposed by Winx billionaire John Camilleri. The two towers, which will comprise 275 apartments, are to be connected by a 45-storey skybridge.

On the more boutique end, Cavella, by SEYAH, will have <a href="https://www.apartments.com.au/news/qld/first-look-seyah-to-launch-cavella-in-emerging-sunrise-boulevard-surfers-paradise-pocket-following-density-rethink">just 18 residences</a> across a more modestly-sized 12-level building, also nearer the river than the beach.

For a broader view, see our breakdown of the top 10 new apartment projects launching on the Gold Coast in 2026, covering key opportunities suburb by suburb.

<hr data-end="5185" data-start="5182" />
<h2 data-end="5234" data-section-id="1kp72fk" data-start="5187">What Buyers Should Weigh Up Before Enquiring</h2>

Where a project sits in the development cycle matters just as much, if not more than, the price.

An off-the-plan apartment at registration stage may offer the lowest entry point, but it typically comes with a 24–36 month settlement timeline.

Later-stage projects trade some of that upside for greater certainty, so the right choice ultimately depends on your timeframe, risk appetite, and what you’re prioritising: price, selection, or delivery.

The 3,000 apartments to reshape Surfers Paradise skyline

An $8 million penthouse has sold at <a href="https://www.apartments.com.au/developers/pomeroy-pacific-quattro-corp">PQD</a>’s <a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a> development in Hawthorn, marking one of the highest apartment sales ever recorded in the suburb and across the wider City of Boroondara.&nbsp;

The three-bedroom penthouse, featuring two living areas, a study and expansive outdoor living across two levels, including a rooftop pool, spans 577 sqm, with nearly 300 sqm of internal living space and a further 281 sqm externally.

The penthouse was purchased by a Melbourne-based CEO, who is downsizing from a large family home nearby, and will move into the apartment with his two adult children.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355297]

“Our family is entering a new phase, and apartment living offered an opportunity to embrace a different lifestyle while still having the space we’re used to,” the buyer said.&nbsp;

“Kooyongkoot immediately gave us confidence in the developer. Every detail feels deliberate, from the overall design down to the smallest touches. The level of quality and refinement is exceptional, but what really sold it was how liveable it felt. My wife and I loved features like the dog wash, oversized storage rooms and private garages because they showed genuine thought for everyday life. It felt like a place where everything had been considered, not just a luxury building.”&nbsp;

Designed by award-winning architecture studio <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a>, Kooyongkoot comprises just 18 luxury residences within <a href="https://www.apartments.com.au/developments/hawthorn-vic-3122">Hawthorn</a>’s tightly held Scotch Hill precinct.&nbsp;

The development incorporates a curated suite of lifestyle amenities, including a private wellness centre featuring infrared and traditional saunas, massage and therapy rooms, a yoga and pilates studio, a gymnasium and cold therapy shower, alongside a residents’ retreat, a golf simulator and other convenience features.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355303]

The buyer said the penthouse’s scale and design were key factors in the decision.&nbsp;

“The layout offers the same core living spaces you would expect in a large family home, which makes multi-generational living comfortable, but without the ongoing maintenance of a freestanding house.

“The wellness facilities and rooftop space were also compelling. They’re rare in a building of this size and add another dimension to the lifestyle the development offers,” he said.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355262]

Mark Pomeroy, Director of PDQ, said the purchase reflects a broader shift in Melbourne’s prestige apartment market, where downsizers are increasingly seeking larger residences that allow adult children to remain at home longer while maintaining independence.&nbsp;

“We’re seeing more families choose apartment living without sacrificing space. For many downsizers, the reality is that adult children are staying at home longer, so buyers are looking for large apartments that allow everyone to live comfortably.”&nbsp;

Research conducted by the University of Melbourne in 2024 found that just over half of young men (54%) and 47% of young women aged 18 to 29 years old are still living under the same roof as their parents.&nbsp;

The penthouse sale places the transaction among the highest apartment sales ever recorded in the City of Boroondara, with only a handful of comparable penthouse deals including Victoria Hill in Camberwell (around $15 million) and Rondure House in Kew (around $6.5 million).&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355304]

Located on prestigious Kooyongkoot Road in Hawthorn, the development sits within walking distance of parklands, private schools, Auburn Village and Camberwell Junction, and offers direct tram access to Melbourne’s CBD. Kooyongkoot’s main building structure was completed in March 2026, with residents expected to move in from November 2026.&nbsp;

A limited selection of residences remains available, offering penthouse scale living without traditional penthouse pricing. Options range from oversized two-bedroom apartments to corner three-bedroom residences with private three-car garages and generous storage. Pricing starts from $1.9m, rising to the mid-to-high $4 million range. The final penthouse is available for private viewing upon request.&nbsp;

Kooyongkoot is being delivered by PQD (Pomeroy Quattro Developments), a Melbourne-based development partnership focused on creating boutique, design-led residential projects in premium locations across the city.&nbsp;

[smartcode_project_cta:default project_id=102717]

Kooyongkoot records $8m penthouse sale as multi-gen leads the way

Excited buyers in <a href="https://www.apartments.com.au/developers/abadeen">Abadeen</a>'s debut Gold Coast apartment development, <a href="https://www.apartments.com.au/new-apartments/villea-palm-beach-26-mawarra-street-palm-beach-qld-4221">Villea</a> at Palm Beach, are almost ready to walk through their brand new apartments.

The Mawarra Street project is entering its final construction phase, with interiors now taking shape ahead of completion in the coming months. The 69-residence development, located just 400 metres from the beachfront, introduces a mix of two and three-bedroom apartments to a part of the Gold Coast where demand has steadily shifted toward larger, owner-occupier-focused layouts.

Abadeen, alongside selling agents <a href="https://www.apartments.com.au/project-marketer/srq-projects">SRQ Projects</a>, has held back a selection of its most premium residences until the final release. The remaining three-bedroom apartments, each spanning more than 150 sqm of combined internal and outdoor space, are positioned toward the upper levels of the low-rise building.

Corner positioning is a defining feature in many of the three-bedroom residences, particularly those with north-east orientation. This brings natural light throughout the day and enables cross-ventilation across the main living spaces. Full-height glazing reinforces the connection between indoors and outdoors, with the living zone and adjoining balcony functioning as a continuous space.

[smartcode_project:default project_id=106840 project_image_fid=336449]

The kitchen is integrated into the central living area, anchored by stone benchtops, European appliances, and bespoke joinery. Engineered oak flooring runs throughout the main living spaces, creating a consistent material palette.

Bedrooms are arranged to separate the primary suite from the secondary rooms. The master typically includes a walk-in robe and ensuite with double vanity, while the additional bedrooms are positioned for privacy from the main living areas. Several layouts also incorporate a dedicated study zone, reflecting the increasing need for flexible work-from-home arrangements.

Outdoor space has been treated as an extension of the apartment rather than an afterthought. Balconies are proportioned to accommodate both dining and seating, allowing for everyday use rather than occasional entertaining. In upper-level residences, these spaces also capture broader coastal views, including sightlines toward Burleigh Headland and Snapper Rocks.

SRQ Projects Director Nick Clydsdale said the ability for buyers to soon walk through the apartments and experience their scale and aspect firsthand is expected to drive strong final demand.

[smartcode_project:default project_id=106840 project_image_fid=336450]

Abadeen’s approach to Villea reflects a deliberate focus on owner-occupiers, particularly downsizers and local buyers seeking larger homes near the beach. Founder Justin Brown said the project aligns with the group’s emphasis on “design-led living, premium quality, and the convenience we are bringing for residents to feel part of a perfect beachside community.”

"It is a particularly special project for us, being our first with spectacular ocean views, just metres from the water and with the addition of ground-floor retail."

[smartcode_project_cta:default project_id=106840]

Inside the three-bedroom apartments at Villea Palm Beach

Housing Growth

<html><body>
EXPERT OBSERVATION
<div class="x_WordSection1">
The Bureau of Statistics reports that Australian home prices fell by 0.7 per cent in the March quarter to stand 2.0 per cent higher over the year – the weakest annual growth rate since September 2012.
Record homes in South Australia: At the end of March there were 40,600 more homes than at the end of December across Australia.  The number of homes in South Australia increased by 2,700 to 776,500 in the March quarter – the largest increase since the data series began in December 2011.  However, the number of homes in NSW increased by 7,800 to 3,096,900 in the March quarter – the smallest increase in 4 years. 
Consumer confidence: The weekly ANZ/Roy Morgan consumer confidence rating fell by 0.7 per cent to 122.1. Confidence is up by 9.2 per cent over the year and above the average of 113.9 since 2014 and average of 112.9 since 1990. Views on family finances are the best in 18 months at 132.5.
Reserve Bank Board minutes: The minutes from the June 5 Board meeting were issued. The Board’s neutral policy bias remains intact with a period of record low interest rate stability ahead for the foreseeable future. It noted that “recent data had been consistent with the Bank's central forecast for GDP growth to pick up to be above 3 per cent by the end of 2018.”
Home price data is important for retailers, especially those focussed on consumer durables. The consumer confidence figures have implications for retailers, and other consumer-focussed businesses. The Reserve Bank Board minutes provides guidance on interest rate settings.
</div>
<div class="x_WordSection2">
What does it all mean?
The rebalancing of the Aussie housing market continues. Today’s release from the Bureau of Statistics has been superseded by more timely monthly data issued on home prices by property analytics company, CoreLogic.
The Sydney and Melbourne markets have both slowed with prices falling in both cities. Data from CoreLogic confirms that national home prices have fallen by 0.4 per cent over the year to May – the first annual fall since October 2012. 
But it’s not all bad news. Perth and Darwin home prices appear to have bottomed and modest price appreciation has been recorded in Adelaide, Brisbane and Canberra over the three months to May. And Hobart’s economic renaissance and strong population growth is pushing-up home prices.  
Regional areas are also stand-out performers. The Melbourne and Sydney commuter belts of Geelong, Ballarat, Southern Highlands and Newcastle have recorded annual growth in property prices of 5-10 per cent to May.
The Reserve Bank is continuing to monitor developments, particularly around slowing housing credit growth, elevated household debt and the potential for tighter bank lending standards.
And the slowdown in the residential property market has seen the annual growth rate of the number of homes in Australia decelerate to 18-month lows in the March quarter. The stock of NSW homes rose by the slowest amount in four years. But it’s a different story in South Australia. The number of homes grew by the most on record during the March quarter.
What do the figures show?
Residential property prices
The Bureau of Statistics (ABS) has released its Residential Property Price indexes for the March quarter.
“The price index for residential properties for the weighted average of the eight capital cities fell 0.7 per cent in the March quarter 2018. The index rose 2.0 per cent through the year to the March quarter 2018.
The capital city residential property price indexes fell in Sydney (-1.2 per cent), Melbourne (-0.6 per cent), Perth (-0.9 per cent), Brisbane (-0.6 per cent) and Darwin (-1.1 per cent) and rose in Hobart (+4.3 per cent), Adelaide (+0.5 per cent) and Canberra (+0.9 per cent).
Annually, residential property prices rose in Hobart (+14.1 per cent), Melbourne (+6.2 per cent), Canberra (+3.8 per cent), Adelaide (+2.6 per cent) and Brisbane (+1.6 per cent) and fell in Darwin (-6.5 per cent), Perth (-1.5 per cent) and Sydney (-0.5 per cent).
“The total value of residential dwellings in Australia was $6,913,636.6 million at the end of the March quarter 2018, falling $22,498.3 million over the quarter.”
“The mean price of residential dwellings fell $5,100 to $687,700 and the number of residential dwellings rose by 40,600 to 10,052,600 in the March quarter 2018.”
CommSec estimates that the number of people per home increased from 2.47 in the December quarter to 2.48 in the March quarter.
The number of homes in South Australia increased by 2,700 to 776,500 in the March quarter – the largest increase since the data series began in December 2011. 
The number of homes in NSW rose by just 7,800 in the March quarter – the smallest lift in 4 years.
Consumer Sentiment
The weekly ANZ/Roy Morgan consumer confidence rating fell by 0.7 per cent to 122.1. Confidence is up by 9.2 per cent over the year and above the average of 113.9 since 2014 and average of 112.9 since 1990. 
Three components of the index decreased last week:
- The estimate of family finances compared with a year ago was down from +9.1 to +3.8;
- The estimate of family finances over the next year was up from +28.5 to +32.5;
- Economic conditions over the next 12 months was down from +15.3 to +10.9; 
- Economic conditions over the next 5 years was down from +18.0 to +17.0;  
- The measure of whether it was a good time to buy a major household item was up from +44.0 to +46.3.  
- The measure of inflation expectations two years ahead increased to 4.8 per cent – the equal highest level in 2½ years - up from 4.4 per cent in the previous week.
Reserve Bank March Board minutes:
Last paragraph: “The low level of interest rates was continuing to support the Australian economy. Further progress in the period ahead in reducing unemployment and returning inflation to the target was therefore expected, although this progress was likely to be gradual.”
On the labour market: “Forward-looking indicators of labour demand had continued to point to employment growth increasing to above-average rates in coming months.. The ratio of job vacancies to the number of unemployed workers had remained well below levels seen a decade earlier, which also signalled spare capacity in the labour market.”
On demographics: “The composition of net overseas migration had affected the age structure of the population. As a result, Australia's median age and old-age dependency ratios were projected to increase by less than those of other advanced economies, despite a relatively high life expectancy. This would make Australia one of the youngest populations within this group of countries.” 
On inflation and wages growth: “Inflation remained low and was likely to remain so for some time, reflecting slow growth in labour costs and strong competition in the retail sector. However, a gradual pick-up in inflation to be above 2 per cent was still expected as the economy strengthens and wages growth increases.” 
<h1>What is the importance of the economic data?</h1>
The Australian Bureau of Statistics (ABS) provides quarterly data on residential prices. The figures provide further perspectives on the state of the housing purchase sector.
The ANZ/Roy Morgan weekly survey of consumer confidence closely tracks the monthly Westpac/Melbourne Institute consumer sentiment index but the former measure is a timelier assessment of consumer attitudes and is now closely tracked by the Reserve Bank.
The Reserve Bank releases minutes of its monthly Board meeting a fortnight after the event. The minutes give a guide to Reserve Bank thinking on interest rate settings.
<h1>What are the implications for interest rates and investors?</h1>
The Reserve Bank remains patient. According to the Board, the slowdown in the Aussie housing market through macroprudential measures and tighter credit standards “has been helpful in containing the build-up of risk on household balance sheets”. And policy makers expect the“tightening [of lending standards] to be modest”. 
While there are a combination of reasons for slowing property prices in Sydney and Melbourne, including tighter government and lender restrictions on foreign and interest-only investment, the overall stock of homes being built in NSW is growing at a slower rate. Modest additions to supply combined with strong jobs growth, firm population growth and record low interest rates should cushion against a significant market downturn. The Reserve Bank stressed in its minutes that “Information from the Bank's liaison program suggested that demand for detached houses had remained strong, while off-the-plan apartment sales had slowed considerably as a result of weaker investor and foreign demand.” 
Nevertheless, household consumption remains a key uncertainty for the monetary policy outlook. The recent uplift in the Aussie sharemarket is timely as it appears that wealth accumulation from residential housing has peaked for now.
Consumer confidence is just below the 4-year highs last seen in January. Petrol prices have fallen over the past two weeks, while winter department store sales, solid economic growth data and possible personal tax cuts have lifted spirits. Jobs growth is still strong, but goods prices remain low. Interest rates won’t lift in the near-term.
And the Aussie sharemarket is lifting after a period of relative underperformance to its global peers. The ASX200 index is now up by 1.0 per cent year-to-date, broadly in-line with the US Dow Jones index. So it’s little wonder that Aussie household views on family finances are the best in 18 months. Total returns from shares should continue to outperform residential property.  
CommSec expects interest rates to be unchanged until at least February 2019.
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Ryan Felsman is a senior economist at CommSec.
 
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jrobinson-rf4aSBido9

Record increase in South Australia homes as NSW slowest growth in four years: CommSec

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GUEST OBSERVER
The media recently reported that the Australian housing market had ‘peaked in winter’. While Sydney – the market leader – is coming into a downswing, it is not useful to aggregate the market this way.
Historically, the different dwelling markets around the country have not been synchronised. In fact, assuming the economy was performing steadily, the Melbourne and Brisbane markets would be yet to experience peak capital growth before slowing in late 2016. However, economic uncertainly and lending restrictions may prematurely curb growth in these markets.
November 2015 Summary
<a href="/images/2016/01/14/Table_1_November_Summary_v2.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/01/14/Table_1_November_Summary_v2.jpg" alt="" width="768" height="558">
Growth in Melbourne house market is 12.87% in the year to November, which is up from 11.03% in the year to October.
There is a large growth disparity between Melbourne houses and units. Melbourne units performed steadily with annualised capital growth of 6.13%, however values dropped in the month of November (-0.37%). With a difference of 6.74 percentage points between annualised growth in houses and units, Melbourne’s house and unit markets show the largest growth disparity Residex has on record. This is presumably due to large levels of stock in the unit market relative to demand. Graph 1 presents the growth trend.
Click to enlarge
<img src="/images/2016/01/14/Graph_1_Melbourne_Trend.jpg" alt="">
Annual sales figures for Melbourne indicate that houses are the more desired dwelling purchase. Melbourne houses saw the largest volume of sales in the year to November, with 52,530 sales.
Annual growth in Sydney houses was again significant – with values jumping an enormous 20.53%. However, growth in the November quarter was just 2.93% – the lowest result since July 2014 – and while these figures are still very strong, they indicate a clear slowing in this market. Sydney units have also slowed dramatically, with growth for the month of November at just 0.55%.
Despite the slowing of growth in Sydney, 2016 is unlikely to see a market crash due to strong population migration in New South Wales and Sydney feeding dwelling demand. Even a market correction of 10% would still leave Sydney home owners well off after the latest housing boom.
Interestingly, the regional markets of Lake Macquarie, Newcastle and Wollongong have seen enormous capital growth, which is most likely a result of spill over as individuals and businesses seek cheaper rent outside the Sydney Metropolitan.
Dwelling markets across Western Australia continue to struggle. Perth houses fell in value by 2.83% for the year and rents fell a significant 5.43%.
Many unit markets across the country have seen a fall in value in November, as can be seen in Table 1. Dwelling markets usually reflect broader trends in the economy.
Brisbane was expected to be a strong performer in 2015. While the market remained in positive growth, it was very slow and subdued for the Brisbane Metropolitan as a whole. Select markets such as those in close proximity to the CBD and in the south-east performed more strongly.
Continued commodity declines have presented enormous challenges for the mining sector and state government revenues. It is for this reason that care should be taken when considering the economic output of the Adani Mine project and Liquefied Natural Gas (LNG) projects in Queensland. In particular, it should not be assumed that these projects will see long term high capital growth in nearby dwelling markets. This is an important takeaway from recent commodity price crashes.
Indian company Adani is set to go ahead with a coal mine and connecting rail line in Central Queensland’s Galilee Basin. The Queensland Land Court ruled Adani should receive mining leases, however the court agreed that the benefits of the $16 billion project are overstated.
Adani claimed the project would create 10,000 jobs annually from 2024. This has since been revised down to 1,464 full time equivalent jobs. Furthermore, the $22 billion in mining royalties anticipated from the coal mine was based on inflated estimates of the commodity, meaning this figure will be lower.
Challenges also exist for prospects around LNG projects in Queensland, Western Australia and the Northern Territory.
By the time these projects go into operation, the LNG market is forecast to be in a supply glut of approximately 20-30 million tonnes through to 2018, according to Bernstein Research. Oversupply in LNG is partially due to the increase in participating suppliers but also slowed economic growth, especially from China. However, the LNG projects across Australia largely have supply contracts already secured with set prices.
<h2>Economic Outlook</h2>
The Mid-Year Economic and Fiscal Outlook was delivered by Scott Morrison. The government has increased the budget deficit to $37.4 billion over 2015-16, which is greater than the May budget outlook by $2.3 billion.
Despite the budget deficit, Australia still maintains a sustainable level of debt to GDP[1]. So long as debt is at a sustainable level, it is not thought to have a large effect on economic growth relative to other factors such as investment in education.
Employment in Australia seems to be moving in a positive direction, which has surprised many (including me).
Capital investment and commodities have not performed well this year, leading to a huge reduction in revenue for businesses and government alike, and thousands of people losing work.
However, employment and participation in job searching has improved over 2015, which can be seen in Graph 2.
<a href="/images/2016/01/14/Graph_2_Employment-1.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/01/14/Graph_2_Employment-1.jpg" alt="">
The dark blue line indicates where trends in employment began to move favourably. In a recent interview with the Australian Financial Review (AFR), Governor Glenn Stevens suggested this may be because the sectors behind employment growth may not require large amounts of capital investment, such as services, tourism and hospitality.
Uber is one such example of an emerging service where little large scale capital investment is needed, especially from drivers. Uber reportedly employs 15,000 people in Australia.
As a result, Stevens has revised down expected jobless figures and the need to further reduce the cash rate.
However, I would argue that the nature of employment is not enough to provide a wealth effect that would fuel demand strong enough for housing. Wage growth remained at 2.3% in the September quarter and it is likely that a significant portion of new found employment would be part time work.
As documented thoroughly this year, unaffordability persists across the country in both ownership and rent of dwellings. Unaffordability, combined with higher interest rates and low wage growth means that we probably can’t expect the exceptional growth seen this year in any of the major capital city markets in 2016.
Australia’s economy still faces many challenges before returning to strong GDP growth, and many dwelling markets across the country are also likely to see slowed or negative growth in 2016. However, property is a long term game and we have very diverse markets and opportunities throughout the country. I will aim to highlight more of these unique opportunities in 2016.
Eliza Owen is the market analyst for Onthehouse.com.au. She can be contacted <a href="https://www.onthehouse.com.au" target="_blank">here.</a>
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