Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

Housing Market

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Amid all talk of runaway home prices, especially in Sydney and Melbourne, and tightening of mortgage criteria by banks, RBA assistant governor Luci Ellis said low income households with disproportionately high debts pose a risk.
“It is rarely the median borrower who defaults. Risk comes from the tails of the distribution,” she said at the Australasian Housing Researchers Conference where the main theme was housing and inequality.
Ellis said that ,”Because higher-income households are more likely to be owner-occupiers, they are also more likely to have mortgage debt” but they were better able to service it than lower-income households which tend “to have quite a lot of debt relative to their incomes”. 
“Sometimes this is because they have temporarily low incomes, but overall it does speak to the need to be aware of pockets of potential stress within a more benign overall picture.”
<a href="https://www.propertyobserver.com.au/images/2017/02/17/RBAHouseholdDebt.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/17/RBAHouseholdDebt.png" alt="">
Ellis also said if “we are concerned about inequality of housing outcomes, perhaps we should focus less on the type of tenure, and more on security of tenure.”
She’s said participation in the housing market “need not be about owning your own home”.  
Many rent, but renters are more likely to move than home owners, which could be disruptive and costly.
She questioned “whether all those moves by renters were desired by those households. Many renters are happy with their current home, but are required to move because the lease expired or the landlord sold the property.”
She said some earlier studies had suggested that transaction costs induce home owners to move less often than they might otherwise do, which makes it harder for them to take advantage of changing labour market opportunities, but that effect wasn’t clear in Australian data.
Earlier this week, NSW Premier Gladys sought former Reserve Bank governor Glenn Stevens’s advise on ways to improve housing affordability. 
Tackling the affordability issue is one of her priorities, Berejiklian has said since becoming Premier in January.
Meanwhile, Macquarie Bank recently tightened its lending criteria, asking home loan borrowers for details on almost every little aspect of their living expenses, from grocery, internet to shoes.
 
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jonathanchancellor-7SQnKwU6yx

Housing and Inequality: RBA’s Luci Ellis says ‘security of tenure’ more important than type

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Over recent months the average number of days it takes to sell a residential property has been falling, reflecting the overall improvement in housing market conditions.
The average days on market figure provides valuable insight into the performance of the housing market.  The figure measures the average difference between the date at which a property is listed for sale and the day at which it goes under contract. The figure is only calculated across those properties that sold by private treaty, excluding tenders and auction sales.  When homes are selling quicker it points to stronger buyer demand and vice versa.
Across the combined capital cities, it took an average of 38 days to sell a home in December 2016. This figure was lower than the 41 days a year earlier and is down from high throughout 2016 of 50 days in August 2016. 
Four of the eight capital cities now have an average days on market figure below 40 days while most of the other capital cities are now seeing the days on market figure starting to trend lower.
<a href="https://www.propertyobserver.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.41.37%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.41.37%20AM.png" alt="">
The typical Sydney dwelling sold after an average of 33 days in December 2016 compared to 39 days in December 2015.
Melbourne dwellings took an average of 35 days to sell in December 2015 with the figure falling to an historic low of 29 days at the end of 2016. 
<a href="https://www.propertyobserver.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.43.15%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.43.15%20AM.png" alt="">
Dwellings were taking an average of 57 days to sell at the end of 2016 in Brisbane compared to 43 days a year earlier.  Brisbane is only city in which the days on market figure has trended higher.
Adelaide dwellings were taking 43 days to sell at the end of last year, which is as long as they were taking a year earlier however, the days on market figure has fallen over recent months.
<a href="https://www.propertyobserver.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.44.20%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.44.20%20AM.png" alt=""> 
The typical Perth dwelling was taking 65 days to sell at the end of 2016 compared to 58 days at the end of 2015 however, the days on market figure has reduced over the past few months.
Hobart has recorded a large fall in the days on market figure over the past year, reducing from 47 days in December 2015 to 35 days in December 2016.
<a href="https://www.propertyobserver.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.45.17%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.45.17%20AM.png" alt="">
Dwellings in Darwin were taking an average of 86 days to sell at the end of 2016, up from 74 days at the end of 2015 however, over recent months the figure has begun to fall.
At the end of 2015, the typical Canberra dwelling was taking 47 days to sell compared to 37 days at the end of 2016.
<a href="https://www.propertyobserver.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.46.13%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.46.13%20AM.png" alt="">
The days on market figures will be important to follow throughout 2017.  After the current growth phase has run for more than four and a half years, we are still seeing a rapid rate of sale in Sydney and Melbourne.  Low levels of stock available for sale and many willing purchases continue to drive a rapid rate of sale in Sydney and Melbourne while the rate of sale is improving in most other capital cities. 
The days on market figure will provide a good indication of the strength of individual housing markets throughout 2017.  Keep in mind that the next two months of data (January and February) will show the regular seasonal spike but thereafter the data will be much more representative of the housing market’s performance across each capital city.
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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ckusher-ujnxiKuFQs

Melbourne properties selling the fastest of any capital city: Cameron Kusher 

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The Melbourne and Sydney auction markets will ramp up this weekend with the holiday season well and truly over.
More than 200 homes are set for auction across Sydney and Melbourne this Saturday with Melbourne suburbs Hoppers Crossing, St Albans, Epping holding the most popular.
Sydney's western suburbs region will host the most number of auctions followed by the inner west and the upper north shore.
Dr Andrew Wilson, Domain Group chief economist said the most popular suburbs for auctions this weekend in Sydney are Blacktown, Marrickville and Parramatta.
"The lower north, Canterbury Bankstown and the south west all reported 100 percent clearance rates last weekend from low listing numbers," he said.
"In Melbourne, the north east, the outer east, the west and the inner east all reported 100 percent clearance rates last weekend from low listing numbers. 
"Low auction numbers can result in misleading insights into the underlying nature of the housing market with more robust understandings set to be revealed as listings climb sharply over coming weekends.
"The Reserve Bank will meet for the first time this year next week to decide the level of official interest rates for February. 
"Recent economic data remains underwhelming, particularly with the national jobless rate rising to 5.8 percent over December – the highest result for the year. Although the Bank is more likely to leave rates on hold for the fifth consecutive month, a pre-emptive early year cut similar to February 2015 can’t be ruled out."
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Sydney, Melbourne auction levels back from holiday lows

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GUEST OBSERVER 
Dwelling approvals posted a slight 1.2 percent decline in Dec in line with expectations (Westpac –1 percent, market –1.5 percent).
The Dec dip follows a 7.5 percent gain in Nov that was a partial rebound from a sharp 23 percent drop over the previous 3mths. 
That earlier move marked the first definitive sign that Australia's high-rise driven building boom was starting to turn down.
<a href="https://www.propertyobserver.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.17.36%20AM.png" target="_blank">Click to enlarge </a>
<img src="https://www.urban.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.17.36%20AM.png" alt="">
The Nov bounce and Dec stablisation scales back the pace of the decline but leaves the downtrend intact – trend approvals are now down 13%yr.
The Dec mix showed further weakness in private sector houses (–1.6%mth to be down –9.6 percent/yr) with ‘units’ up slightly (+0.9 percent/mth but still down –13 percent/yr). Our estimates suggest high rise approvals were up about 4%mth with 'low rise' broadly stable.
High rise is still at the epicentre of the slowdown although the softer picture on non high rise approvals is notable particularly for construction activity in 2017 (the longer time frame on projects means the high rise impact falls more into 2018).
<a href="https://www.propertyobserver.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.19.49%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.19.49%20AM.png" alt="">
The state detail suggests the high rise downturn is more abrupt for NSW and Qld with Vic approvals in this segment more volatile around a milder downtrend. For ‘non high rise’ approvals the weakness is much more pronounced in Qld and WA with approvals flattening out in NSW and Vic rather than trending materially lower.
Given the aforementioned timing differences, that suggests the path for construction activity will be very different across states with near term weakness concentrated in the mining states, and the high rise slowdown having more of an impact on NSW and Qld in 2018.
<a href="https://www.propertyobserver.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.20.46%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.20.46%20AM.png" alt="">
The value of renovation approvals surged 15.2 percent in Dec to be up 12.3 percent/yr. The renewed uptrend and detail suggests there was a 'pause' in activity in NSW and Vic, possibly relating to election uncertainty.
The value of non res building approvals edged up 0.7 percent but were down 6.7%yr. Extreme lumpiness makes it difficult to be sure of the underlying trend although the value of approvals for Q4 as a whole was down across most segments with a notably sharp fall in NSW.
Overall, aggregate approvals continue to track in line with our expectation of a significant high rise driven slowdown. The mix has been a little weaker for non-high rise approvals though suggesting construction activity may be a touch softer in the second half of 2017.
<a href="https://www.propertyobserver.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.21.42%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/03/Screen%20Shot%202017-02-03%20at%208.21.42%20AM.png" alt="">
As we highlighted in a several pieces last year, the long lags on high rise projects mean the downturn in this segment will not impact construction activity until well into 2018 with work done still relatively well supported in 2017. We will be expanding on this research in coming months to provide a clearer view of the likely path for construction activity and completions across the major states. 
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Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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jchancellor-FAypfDUnLy

December dwelling approvals decline: Westpac's Matthew Hassan

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GUEST OBSERVER
Premier Berejiklian’s new ministry must drive housing supply and ensure NSW retains its position as Australia’s leading state. 
The new ministry announced by NSW Premier, Gladys Berejiklian is an very talented and competent team, capable of ensuring the continued success of the high-performing NSW economy.
In particular, the appointment of the Hon. Anthony Roberts as Minister for Planning and Minister for Housing is an excellent choice. His past achievements and experience, including overhauling the ageing NSW strata system, make him very well placed to improve the lack- lustre performance of the NSW planning system.
The Urban Taskforce is keen to work with Minister Roberts on ways to drive more housing completions throughout NSW and in particular in the Sydney metropolitan area. We believe there are many aspects of the NSW planning system and the Draft District Plans for Sydney which prevent greatly hinder the supply of new housing. Given the current housing affordability crisis, changes must be made to address this problem.
Minister Roberts should look at restrictive land use zones and development controls that prevent adequate housing supply and onerous conditions of consent which lead to only 58 per cent of housing approvals become real houses or apartments. 
Other key issues include lengthy bureaucratic approval processes which create delays and blockages in the planning system and excessive levies and fees which drive up the cost of housing.
The Urban Taskforce and the property industry is keen to work collaboratively with the new Minister for Planning and Housing to help alleviate the housing affordability crisis and deliver positive outcomes for the people of NSW.
Chris Johnson is chief executive officer of property development industry group Urban Taskforce and can be contacted <a href="https://www.urbantaskforce.com.au/index.php?option=com_content&amp;view=article&amp;id=97&amp;Itemid=126#.Vdaart55dFI" target="_blank">here</a>.
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mick.cee-iDmgDDAmu8

Minister Roberts must drive housing supply

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GUEST OBSERVER
Despite a terrible start to the year and a few political surprises along the way, 2016 saw good returns for diversified investors who held their nerve.
Balanced super funds had returns around 7.5 percent, which is pretty good given inflation was just 1.5 percent. 2017 is commencing with less fear than seen a year ago but there is consternation regarding Donald Trump’s policies, political developments in Europe and the growth outlook.
This note provides a summary of key insights on the global investment outlook and key issues around it in simple dot point form.
Seven lessons from 2016
<ol>
<li>Global growth may be constrained – but it’s far stronger and more resilient than was feared at the start of 2016.</li>
<li>The US Federal Reserve is not stupid - it is not on “rate hike autopilot” and takes account of global conditions and the $US and the impact of both on the US.</li>
<li>China won't tolerate a rapid slowing in economic growth - yes it wants to reform the supply side of its economy and slow down the growth of debt but it will not do so blindly.</li>
<li>Geopolitics is having a rising impact on investment markets – in part a populist backlash against establishment politics with implications for economic policy, eg, globalisation.</li>
<li>But, turn down the noise - fears that Brexit, Australia's messy election, a Trump victory and an Italian "No" vote would lead to financial catastrophe proved ill-founded. Retreating to cash after these would have been costly.</li>
<li>The terror threat is alive and well but the impact on investment markets is limited.</li>
<li>Stick to an investment strategy - 2016 proved distracting for investors but they would have done okay provided they stuck to an investment strategy that prevented them from getting blown around by swings in market sentiment.</li>
</ol>
Key themes for 2017
Global growth of around 3.2 percent or just above, with the US around 2.5 percent, Europe and Japan lagging and China running around 6.5 percent. Australian growth of around 2.5 percent.
A gradual rise in underlying inflation, albeit from low levels.
Global monetary conditions remaining easy but less so, with gradual monetary tightening in the US and China offset by ongoing easing in Europe, Japan and Australia.
Reflecting this, global shares are likely to trend higher and we favour Europe and Japan over the US (which may be constrained after its 2016 outperformance and Fed hikes).
 Australian shares are likely to have solid returns as resource sector profits surge following the rebound in bulk commodity prices, overall profits rise 10 percent and interest rates remain low.
 Still low yields and capital losses from a gradual rise in bond yields are likely to see low returns from bonds.
 Commercial property and infrastructure are likely to continue benefitting from investors’ ongoing search for yield, but this demand will wane as bond yields trend higher.
 Australian capital city residential property price gains are expected to slow to around 3-4%, as the heat comes out of the Sydney and Melbourne markets and rising supply hits.
 Cash and bank deposit returns will remain poor.
 The downtrend in the $A from 2011 is likely to continue as the interest rate differential in favour of Australia narrows and it undertakes its usual undershoot of fair value.
Key risks for 2017
 President Trump could set off a global trade war and wider political tensions with China (eg, in the South China Sea).
 US fiscal stimulus under Trump could overheat the US economy resulting in an aggressive Fed &amp; a further rebound in the $US causing problems for emerging countries.
 A further rapid rise in bond yields would be bad for shares and assets that have benefitted from the search for yield including real estate and infrastructure investments.
 Success by populist parties in Europe could reignite Eurozone break up fears.
 China could have its long feared hard landing.  Australia could be vulnerable as apartment supply surgesand housing construction slows.
 Factor X – there is always something from left field. Last year it was the rise of populism in some Anglo countries.
Five things to watch
<ol>
<li>  President Trump - whether we get Trump the pragmatist or Trump the populist.</li>
<li>  US inflation and the Fed – how quickly both move up.</li>
<li>  Elections in the Netherlands in March, France in April/May,</li>
<li>  Germany around September and possibly in Italy.</li>
<li>  Global business conditions indicators (PMIs). </li>
</ol>
Business confidence &amp; non-mining investment in Australia.
Three reasons why global growth is likely to continue
<ol>
<li>We have not seen the excesses (massive debt growth, overinvestment, plunging spare capacity or excessive inflation) that normally precede recessions.</li>
<li>The US monetary tightening cycle is in its very early stages and global monetary conditions are still very easy.</li>
<li>Fiscal austerity has faded and we are seeing early signs of a shift from monetary easing (which arguably has become less potent) to fiscal stimulus.</li>
</ol>
 Three reasons to expect Trump the pragmatist to ultimately take precedence  
<ol>
<li>Donald Trump’s anti-establishment mandate, bellicose approach and inexperience will no doubt continue to create much uncertainty about his policies in the short term. His war with the media, issues around Russia and potential conflicts of interest add to the risks. However, there are reasons to expect that on the policy front pragmatism will ultimately prevail with the focus being on the growth boosting potential of tax cuts, infrastructure spending and deregulation:</li>
<li>Economic and political realities (including Congress) invariably take some of the edge off more radical policies once politicians attain power.</li>
<li>Trump has a focus on growth and jobs and won’t want to threaten this which suggests pragmatic policy outcomes.</li>
</ol>
As a businessman he is likely to ultimately seek win/win solutions with other countries (notably China) even though he may use a bellicose negotiating stance.  Three reasons why Chinese growth will likely come in around 6.5 percent and not much lower. Stimulus measures over the last two years highlight the government has no tolerance for a collapse in growth.
The services sector is taking over from manufacturing.
Deflation is receding as indicated by rising producer prices. Three reasons why geopolitics is more important
The slow post GFC recovery, rising inequality in some countries and stress around immigration are leading to a backlash against establishment politicians.
The relative decline of the US is shifting us away from the unipolar world that dominated post the Cold War (where the US was the world's cop) to a less stable multi-polar world (where skirmishes and proxy wars are more common). The symbiotic relationship between the US and China is fading.
  The information revolution is enabling us to make our own reality, with the decline of traditional media in favour of online news sources that can be less reliable or self- selected. Conspiracy theories go mainstream!  Four reasons why the Eurozone won't break up  Eurozone break up fears will again feature with elections in the Netherlands, France and Germany and maybe Italy. But there are three reasons why it won't break up... well at least not yet:
  Most of Europe does not have the problems with inequality that have helped drive Brexit and Trump.
  Eurozone break up risk arguably peaked a few years ago when austerity and unemployment were at their peak.
  Support for Eurosceptic parties has not picked up significantly since Brexit and Trump and support for the Euro in mainstream Europe remains high.  
Five reasons why Australia won't have a recession
<ol>
<li>  Interest rates can still fall further if needed.</li>
<li>  The drag on the economy from falling mining investment is  fading and should bottom in the next year or so.</li>
<li> National income is rising thanks to rising commodity prices.</li>
<li> Sectors such as tourism and higher education (both helped by the lower $A) along with state capital spending should help offset the gap left by slowing housing investment</li>
<li> Stronger export volumes (from resource projects) will provide a partial offset to lower commodity prices.</li>
</ol>
Five reasons the RBA is more likely to cut than hike
<ol>
<li> The outlook for business investment is still weak.</li>
<li> To offset a slowing contribution to growth from housing.</li>
<li>The $A needs to fall further.</li>
<li>To offset the monetary tightening from bank mortgage rate hikes for existing home owners.</li>
<li>Inflation is likely to remain below target for longer.</li>
</ol>
Three reasons why the super cycle bond bull market from the early 1980s is likely over
<ol>
<li>  Deflation is waning with commodity prices hitting bottom.</li>
<li>  Global spare capacity is gradually being used up.</li>
<li>  Bonds are over-loved having benefitted from a huge flow out of equities since the GFC.</li>
</ol>
Five reasons why shares are likely to provide decent returns by year end
<ol>
<li> Shares are not overvalued against still low bond yields and interest rates.</li>
<li> A global recession looks a long way away.</li>
<li> A pick up in global growth should help profits.</li>
<li> Monetary conditions are still very easy and while the Fed will continue to tighten other central banks are still easing.</li>
<li> There is a lot of pessimism around.</li>
</ol>
...but three reasons to expect continued volatility
<ol>
<li> Much uncertainty remains in the short term around President Trump’s policies.</li>
<li> Geopolitical risks could flare up – particularly between the US and China and in Europe.</li>
<li> Shares are not dirt cheap anymore.</li>
</ol>
Nine things investors should remember
<ol>
<li>  The power of compound returns – saving regularly in growth assets can grow wealth substantially over long periods. Using the “rule of 72” it will take 29 years to double an asset’s value if it returns 2.5% pa (ie 72/2.5) but only 9 years if the asset returns 8% pa.</li>
<li>  The cycle lives on – markets cycle up and down and we need to allow for it and not get thrown off by rough patches.</li>
<li>  Diversify – don’t put all your eggs in one basket.</li>
<li>  Turn down the noise – this was a big one in 2016 where the noise around political events really just created distractions.</li>
<li>  Starting point valuations matter – for example low bond yields will mean low medium term bond returns.</li>
<li>  Remember that while shares can be volatile, the income stream from a diversified portfolio of shares is more stable over time and higher than the income from bank deposits.</li>
<li>  Avoid the crowd – at extremes it’s invariably wrong.</li>
<li>  Focus on investments providing sustainable and decent cash flows – not financial engineering. </li>
<li>  Accept that it’s a low nominal return world – when inflation is 2% a 7.2% super return (the average for balanced growth super funds over the last three years) is pretty good. </li>
</ol>
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<a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds.
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soliver-smf6LQXgW9

Why housing adds vulnerability to Australia's macro investment outlook: Shane Oliver 

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The executive Chairman at WBP Property Group Greville Pabst says that Melbourne's median house price growth will rise by another 10 percent this year.
"Not unprecedented but watching stock being absorbed so quick in late spring and numbers at opens in 2017, I believe median house price growth should forge another 10 percent this year," he has advised.
"With two caveats," he added.
"Interest rates and unemployment."
Meanwhile Mr Pabst expects the property market to continue in the seller’s favour this year, particularly for houses.
“Given a lot of the stock has been mopped up, I think there will be pent-up demand when this market opens up again in mid-February.”
Mr Pabst says the market would be dependent on economic factors.
“A rise in unemployment or interest rates might take a bit of wind out of the sails,” he told the Herald Sun.
“There’s also the Trump factor, which could mean we have to put up interest rates faster, or it could mean a policy decision that has an impact on our economy.”
His tip was established apartments could grow up to 5 per cent because there was limited supply, with a similar outcome for single-level villas.
As for houses, he said established homes within 10km of the CBD and less than $2 million would “remain one of the safest bets” this year.
He predicts that prices could grow because homebuyers were fighting to buy within that range.
Similar growth could be expected for property less than $2 million up to 20km from the CBD, where listing shortages and affordability would drive prices in the area.
Mr Pabst forecast the value of resold modern apartments could fall about 6 per cent.
“Supply in certain postcodes including Melbourne, Docklands and Southbank and the in-built incentives will mean it might take up to six years for many of these investments to break even."
His WBP valuation group is known as one of the most bearish among the inner Melbourne valuers with their off the plan bank valuations.
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j.ballantyne1990-6AQqhLzZaK

10 percent price growth for Melbourne houses predicted by Greville Pabst

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<div>If it seemed that the big capital city housing markets were strengthening into Christmas then so it was, with a massive 4.9 percent jump in investment loans to a 17-month high of $13.3 billion, up 21.4 percent from a year ago in seasonally adjusted terms. </div>
<div> </div>
<div>It never pays to get too excited about month to month changes, but even with the ABS drilling its trend line through the figures it's clear than investors were resurgent. </div>
<a href="https://www.propertyobserver.com.au/images/2017/01/18/HF1.jpg" target="_blank">Click to enlarge</a>
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<div>Total housing finance increased by 2.2 percent in the month to a strong $32.7 billion.</div>
<div> </div>
<div>Ex-refinancing, the number of owner-occupier loans picked up in the month, but the real story is the huge flip back to investment loans. </div>
<a href="https://www.propertyobserver.com.au/images/2017/01/18/HF2.jpg" target="_blank">Click to enlarge</a>
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Average loan sizes are now clearly trending up again, having been knocked back by the first salvo of macroprudential measures to curb investor lending. 
<a href="https://www.propertyobserver.com.au/images/2017/01/18/HF4.jpg" target="_blank">Click to enlarge</a>
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<div>In the owner-occupier markets, Melbourne and to some extent Queensland are seeing strong mortgage volumes for owner-occupiers. </div>
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<div>The number of first homebuyer loans jumped from 7,302 to 8,281 in November in original terms, but overall it's a tough environment for first homebuyers in Sydney (which in part accounts for why so many are turning to investment property as a first purchase).  </div>
<a href="https://www.propertyobserver.com.au/images/2017/01/18/HF5.jpg" target="_blank">Click to enlarge</a>
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 The wrap - $1 trillion of home loans 
<div>Investment loans increased for the sixth time in seven months, and this one was a big leap, taking the year-on-year increase to above 21 per cent, the highest such percentage increase since the peak of the Sydney boom in Q2 2015. </div>
<div> </div>
<div>In part thanks to net loan reclassifications and some cases of 'switching' of loan purpose, the stock of outstanding investor loans increased by only 3 per cent over the year to November.</div>
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<div>Owner-occupier loans outstanding on the other hand surged by more than 9 per cent to pass $1 trillion.</div>
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<div class="separator"><a href="https://4.bp.blogspot.com/-g5-Tg33GHjs/WH31_I5OUZI/AAAAAAAAhRU/VCV8q8CCN5c4WJuXe286wL37ZzkAc-_yQCLcB/s1600/HF6.jpg"><img src="https://4.bp.blogspot.com/-g5-Tg33GHjs/WH31_I5OUZI/AAAAAAAAhRU/VCV8q8CCN5c4WJuXe286wL37ZzkAc-_yQCLcB/s640/HF6.jpg" width="640" height="356"></a></div>
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<div>Regardless of the blurred classification of outstanding credit, the key takeaway is that investors were pouring back into the market in late 2016, particularly in Sydney and Melbourne,</div>
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<div>I'll look as those investment loans in more detail and by state. </div>
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<div>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. </div>
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pwargent-M4siyDbqQY

APRA shrugged? Investments loans up 21 percent: Pete Wargent

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The NSW property industry is kicking off 2017 with nation leading levels of confidence, according to the latest ANZ/Property Council Survey released today.
“NSW had a strong 2016 and the next twelve months are looking positive with high expectations for growth, investment and hiring across the state,” Property Council NSW executive director Jane Fitzgerald said.
“NSW industry confidence leads the nation at 149 index points, up from 142 last quarter and is at near six year highs.
"Over the twelve months to March 2017, confidence in NSW is up 11 index points indicting a strong lead in to the new year.”
Staffing level expectations across the industry are also strong and is leading the nation this quarter which means the industry will continue to provide jobs for the state’s growing population.
“The survey shows that the NSW industry is strong across all sectors in terms of capital growth expectations with office, industrial, retail, retirement and hotel property sectors all expecting a strong 2017,” she said.
“But residential sentiment is softening across the nation and has been for the past 12 months or so which means we need to do all we can to strengthen the housing supply pipeline in NSW."
"We must cut stamp duty for families trying to get a foot in the property market, scrap the foreign investment tax and continue steps towards streamlining the planning system so that we can continue to build the NSW of the future."
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NSW property industry starts 2017 leading the nation in confidence

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A survey of property sector expectations for 2017 has found strong expectations of economic growth has driven confidence to a two-year high.
Recent housing market data on price growth, auction results, and investor finance has driven confidence in the property sector.
ANZ chief economist Richard Yetsenga said the first quarter ANZ-Property Council Survey shows a further increase in sentiment in the property sector, despite the sharp slowdown in economic growth prior to the survey.
"Nonetheless, we believe growth will continue to pick up through 2017, with most of the Q3 weakness proving to be only temporary," he said.
"Our solid outlook for the Australian economy in 2017 is broadly consistent with the strong tone to this quarter’s survey. Sentiment in New South Wales’, Victoria’s, and the ACT’s property markets sits around record levels, in line with the transition away from mining-led growth. A stronger non-mining economy means that we believe the RBA’s easing cycle is over, and we expect rates will remain on hold this year. 
"A noteworthy feature of this quarter’s survey is that businesses nationwide now expect interest rates to increase over the coming year. This reflects both the RBA being at the end of their easing cycle, as well as tighter funding conditions. But as of yet, there is little sign that the likelihood of higher funding costs is having an adverse impact on the property sector.” 
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