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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GUEST OBSERVER
The ongoing diversity in the housing market highlights the different growth drivers that are evident from region to region.
The economies of Sydney and Melbourne remain relatively sheltered from the downturn in the resources sector and have benefited from a very healthy services sector and positive population inflows while the mining states and territories are experiencing softer economic conditions and a sharp wind down in population growth, particularly from overseas migration.
The annual expansion in investor related housing credit has now dropped to a pace that is much lower than APRA’s mandated 10 percent growth per annum, while credit growth for owner occupiers is expanding.
<a href="/images/2016/06/09/Screen%20Shot%202016-06-10%20at%208.33.17%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/06/09/Screen%20Shot%202016-06-10%20at%208.33.17%20AM.png" alt="">
With many banks now placing a premium on investment mortgage interest rates and also increasing mortgage rates and serviceability limits on all mortgages we have seen investment housing demand slow however, there has been a slight up-tick in demand from this segment over recent months.
It’s important to note, however, that lenders have been reclassifying existing mortgages from investment purposes to owner occupation, which is likely to be having an impact on the figures. Some lenders have recently relaxed previous restrictions on investors which could result in a rebound in demand from this segment over coming months.
<a href="/images/2016/06/09/Screen%20Shot%202016-06-10%20at%208.39.33%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/06/09/Screen%20Shot%202016-06-10%20at%208.39.33%20AM.png" alt="">
The cumulative effect of tighter lending conditions, more expensive mortgage rates for investors and lower yields, as well as natural affordability constraints and higher levels of new housing supply, is likely to continue to impact the Sydney housing market resulting in a further slowdown over the year.
It is also expected that as the year progresses the rate of home value growth in Melbourne will also slow however, the slowdown is likely to be more moderate than the slowing in Sydney, at least during 2016. South-East Queensland looks set to see further increases in housing demand and potentially stronger value growth throughout the year.
Hobart and Canberra also appear better set for value growth over 2016 due to improving housing and economic conditions and relatively more affordable housing compared to Sydney and Melbourne. Adelaide is likely to show only moderate rates of value growth this year. In the meantime, we anticipate that values will continue to fall in trend terms throughout 2016 in Perth and Darwin.
<a href="/images/2016/06/09/Screen%20Shot%202016-06-10%20at%208.42.17%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/06/09/Screen%20Shot%202016-06-10%20at%208.42.17%20AM.png" alt="">
 
Tim Lawless is head of the CoreLogic research and analytics team and can be contacted <a href="https://blog.corelogic.com.au/author/timlawless/" target="_blank">here</a>.
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tlawless-5VLUrbAk9s

Upturn on slowing investment housing demand: Tim Lawless

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Moody's Investors Service says that signs of a re-acceleration in Australian house prices are credit negative for Australian banks and pose a risk to the economy.
The 2016 spurt had raised the banks' sensitivity to downside risk in the housing market.
"The likelihood of an outright downward correction in prices is rising,” the agency advised.
Moody’s Investors Service viewed loans taken out over 2014-15 as “bearing the most risk, given that they were originated after significant house price appreciation had already occurred”.
While noting strong employment conditions and low interest rates continue to support the quality of the banks' housing portfolios, the household debt/income ratios continue to rise.
Moody's conclusions are contained in its report, "House Price Growth is Increasing Tail Risks for Australian Banks".  
Annual house price growth has risen over the past two months, increasing by 10 percent for the 12 months to May 2016.   Moody's says that there is evidence the banks' appetite for investor lending is returning, after a period of tighter underwriting to comply with the Australian Prudential Regulation Authority's 10 percent annual limit for growth in such loans.  
Moody's points out that over the past month, a number of lenders have lifted their maximum loan to value ratios for investor lending, and there are indications that the banks are becoming more competitive in their pricing for investor loans.  Moody's notes, however, that some of the newer lending activity can be explained by investors bringing their purchase plans forward, ahead of the federal election.  
"These trends are unfolding against a backdrop of already high levels of household indebtedness, and elevated overall leverage in the economy," says Daniel Yu, a Moody's Vice President and Senior Analyst.
"The current trends are therefore credit negative for Australian banks, particularly in the context of the banks' high ratings, because these trends raise the banks' sensitivity to any potential deterioration in the housing market," Yu suggested.
According to Moody's senior vice president Ilya Serov, the housing market in Australia appeared to have accelerated over the past couple of months partly on the back of the cut in interest rates in May.
Mr Serov told he ABC's The World Today investors were exposed if the RBA moves or banks hike rates independently.
"The economy now I think from a household sector is more sensitive to increases in interest rates should they occur," Mr Sherov said.
"We are already in an economy which is characterised by fairly high levels of debt particularly in the household sector and the debt to income ratio which had been stable is now creeping up again."
 
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jchancellor-FAypfDUnLy

Moody's concern at 2016 house price re-acceleration

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On Wednesday night I watched finance commentator Alan Kohler on ABC TV puzzling over the apparent contradiction of sharply-falling loans to investors and rising prices in the major cities.
His basic message was: it doesn’t make sense and it can’t continue. 
His basis problem was: it didn’t occur to him that some of the data he was presenting might be rubbish.
He shares this problem with commentators, economists and journalists right across Australia. No one ever questions the real estate data that’s pumped out by publicity-addicted research companies – not even when it’s patently absurd and clearly wrong.
We had the situation recently where one of big research firms published figures showing that house prices fell in six of the eight capital cities in the March Quarter. That was treated as gospel and interpreted as evidence that the alleged boom was over.
Around the same time another of the big numbers companies published figures claiming that house prices rose in six of the eight capital cities in the March Quarter. That result was reported as truth as well, with no one (apart from me, it seems) noticing that the two sets of figures totally contradicted one another and that two conflicting messages were being sent to the public. 
One source said Adelaide was leading the nation on price growth while another said its prices were falling at the fastest rate since 2012.
So back to Kohler who is very good at making sense of share-market events and economic data, but not so bright when it comes to real estate. He displayed a graph suggesting loans to investors have dived. He attributed this to the crackdown by APRA and the reaction of major lenders.
That was starkly at odds with reports in media only days earlier, claiming that “investors have begun flooding back into the market”. Newspapers reported that investors were 47.6% of all new mortgage commitments in March, the highest proportion since August 2015. This was attributed to “some lenders reversing the tighter lending requirements that were previously in place”. 
So Kohler’s graph told quite the opposite story to the figures published elsewhere. And he made the incorrect assumption – the Labor Party is making the same mistake with its negative gearing policy – that price rises are caused exclusively by investors.
His next problem - his confusion over prices rising so much against a background of apparently plummeting investor lending – was based on his blind acceptance of the May price growth figures from CoreLogic.
Like so many journalists and commentators, he fell into the trap of (a) accepting published figures as unchallengeable and (b) placing big emphasis on month-to-month movements. He’s been around long enough to know better. 
Much of the data purporting to depict monthly changes in prices in our major cities is worthless. Indeed, it’s worst than worthless, because it’s misleading and causes confusion for consumers. 
The CoreLogic figures for May would have us believe that the apartment prices rose 8.4 percent in Hobart. Seriously? Hobart units have added 8.4 percent in value in a single month? I visited Hobart just a week ago and there is nothing happening in that market to justify that figure, nor the one that says Hobart unit prices have risen almost 19 percent in the past 12 months. These figures are made of an artificial elastomer synthesized from petroleum byproducts (they’re rubbery).
The same research source claims that Darwin apartments prices fell 10 percent in the month of May; that Canberra apartment prices fell 6 percent; that Perth prices fell 6.3 percent; and that Sydney house prices rose 3.6 percent. All those dramatic movements in property values in a single month – are they believable? I would suggest not. 
Everyone reporting these numbers has expressed breathless amazement, but it hasn’t occurred to anyone that maybe the figures are a tad sus – or that short-term movements in median prices or value indexes are essentially irrelevant because a month is too short a time frame to deliver a meaningful pattern.
If you examine month-to-month movements in anything – retail spending, building approvals, the jobs market, you name it – you’ll find the numbers are quite erratic. Often they’re just statistical aberrations, but economists will be lining up to attribute great significance to them. 
Only the long-term trend matters and only that should be reported - and then only with care, because you can be sure that the numbers you’re recording today will be contradicted by another set from other source tomorrow.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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terryryder-YECXbqmri2

Some data depicting monthly residential price changes is worthless: Terry Ryder

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The Queensland city of Mackay is approaching the bottom of the market for houses while remaining in decline for units, according to valuation firm Herron Todd White's recent property clock.
Mackay was at the same stages in the April clock as well, which looked at its fringe suburbs.
There are quite a number of fringe suburbs and rural townships scattered in most directions from Mackay. These fringe areas all received good solid market gains through the period 2010 to 2013 on the back of a very strong Mackay residential market. The main attraction was affordability, with a lot more bang for your buck in these areas. Towns such as Sarina and its surrounding beach towns to the south and Marian and Mirani in the Pioneer Valley were good performers as the market moved out of Mackay. 
However, since 2014, the Mackay market has fallen significantly on the back of a weakened resource sector and the heavy reliance the Mackay residential market has on the mining industry. The market in Mackay generally has fallen between 20% and 30% with weakening demand for both sale and rental properties and rising vacancy rates. While this downturn has seen values fall, it has presented some great buying opportunities in terms of value levels not seen in Mackay for more than 10 years. 
This fall in property values in Mackay has had a huge influence on sale numbers and values in the fringe areas. The big wave that rode out of Mackay in the boom times has definitely receded. The relative affordability now experienced in Mackay has meant these fringe areas had to reposition price points to compete. Towns such as Marian and Sarina have seen significant price falls sometimes greater in percentage terms than seen in Mackay City. 
Property Observer looked up a few recent property sales in some of the fringe suburbs of Mackay such as Sarina and Marian, from www.realestate.com.au:
The median price of houses in Sarina is $299,600, according to CoreLogic RP Data. There was no recent data for units.
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The four-bedroom house at <a href="https://www.realestate.com.au/property-house-qld-sarina-121472326" target="_blank">95 West Street Sarina Qld 4737</a> last traded at $292,000.
<img src="/images/2016/06/09/Screen%20Shot%202016-06-09%20at%208.25.21%20AM.png" alt=""> 
The median house price in Marian was $420,000, according to CoreLogic RP Data. There was no recent data for units.
A four-bedroom house at <a href="https://www.realestate.com.au/property-house-qld-marian-122061830" target="_blank">25 West Street Marian Qld 4753</a> traded for $386,000. 
 <img src="/images/2016/06/09/Screen%20Shot%202016-06-09%20at%208.31.33%20AM.png" alt="" width="550" height="349">
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prateek24-ezbwHMbNAk

Resources boom over, fringes around Queensland's Mackay seeing price falls: HTW

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The Australian Bureau of Statistics released construction work done data for the March 2016 quarter last week. 
The data set looks at the value of construction work completed over the quarter and is an input to the national accounts (GDP) data.
<a href="/images/2016/06/06/Chart-1-3-580x210.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/06/06/Chart-1-3-580x210.jpg" alt="">
Over the quarter, the value of construction work done was $47.928 billion which was down -5.5 percent over the quarter and -7.2 percent year-on-year.  In fact, the value of construction work done over the March 2016 quarter was the lowest since June 2011 and has been trending lower since the December 2012 quarter.
<a href="/images/2016/06/06/Chart-2-2-580x208.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/06/06/Chart-2-2-580x208.jpg" alt="">
The decline in the value of work done is largely being driven by engineering construction which was bolstered until recent by the mining investment boom.  Over the quarter there was $24.9 billion worth of building work completed and $23.0 billion in engineering construction completed. 
It shows that following a recent boost from infrastructure investment, building construction is now the key driver.  The value of engineering construction work done peaked at $34.7 billion in the September 2012 quarter and has since fallen by -33.6 percent while building activity peaked at $25.2 billion in the December 2015 quarter and has fallen by -1.0%.  With construction work in both the building and engineering sectors falling it is difficult to see how construction work done won’t continue to decline over the coming months.  Even the largest residential housing construction boom on record has not been enough to offset the previous largest engineering construction investment boom on record.
<a href="/images/2016/06/06/Chart-3-2-580x210.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/06/06/Chart-3-2-580x210.jpg" alt="">
The building segment of construction work done consists of residential and non-residential construction (offices, retail shops, industrial properties).  The previous data showed building work has started to fall with the fall being driven by non-residential construction.  In fact residential construction work done is continuing to climb and is now at a record high $16.6 billion while non-residential is down -18.6 percent from its June 2010 peak.  While the largest residential construction boom in history continues to drive activity in that sector higher, it isn’t enough to offset the decline in the non-residential (and engineering construction) sector which is well below peak levels of activity.
<a href="/images/2016/06/06/Chart-4-1-580x207.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/06/06/Chart-4-1-580x207.jpg" alt="">
The residential construction component is further broken down into three components: houses, other residential (units) and alterations and additions, including conversions. Unit construction work done reached a record high of $6.8 billion on the back of the biggest unit construction boom on record. 
While unit construction activity continues to rise, the $7.7 billion in work done for houses is down -7.1 percent from its recent peak in March 2015 at $8.3 billion.  The value of alterations and additions completed was recorded at $2.0 billion over the quarter down -6.9 percent from its $2.1 billion peak over the September 2011 quarter.  It is anticipated work done for houses will continue to trend lower while unit work should trend higher over the next few quarters before starting to fall. 
Meanwhile, the direction of alterations and additions is unclear but there could be some scope for an increase over the coming quarters and years given how much equity some home owners have and the costs associated with moving home.
Residential construction has been a large contributor to economic growth over recent years however, it looks as if it is likely to start detracting from growth as construction activity moves through a peak. 
Housing construction activity has already been fading for a year while unit activity continues to rise however, we anticipate that it too will turn within the next 12 months. With the resources boom and concurrent infrastructure investment boom so important to Australia’s prosperity coming out of the financial crisis as it faded, building activity became extremely important, particularly residential construction activity. 
With the residential construction boom starting to fade we need the next economic driver to rise in order to offset the slowing in building activity. An increase in infrastructure investment would seem to be a prime candidate however, Governments may not be willing to invest the money. The next boom will seemingly need to come from somewhere else; potentially from the education, health and tourism sectors as the lower Australian dollar makes these sectors more globally competitive as well as increased consumption if households start to ease their rate of saving.
 
<div class="sharedaddy sd-sharing-enabled">
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>. </div>
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The value of construction work done for houses is falling with units likely to follow shortly: Cameron Kusher

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GUEST OBSERVER
Dwelling approvals were stronger than expected in April, posting a 3 percent rise against expectations of a 3 percent fall.
Approvals have risen 6 percent over the last 2mths with the monthly trend rate lifting back to 1.2 percent, an double-digit annualised pace.
However, the detail carries a strong warning that this renewed uptrend is unlikely to sustain and may be prone to a sharp reversal in coming months. 
All of the gain is coming from a resurgence in ‘high rise’ approvals, up an estimated 16% in April alone and nearly 40% since Feb (Westpac estimates of seasonally adjusted approvals).
That is unlikely to continue both in light of the segment’s typically ‘lumpy’ monthly profile and its exposure to investor activity – a segment currently coming under additional pressure from tightening lending conditions domestically and efforts to rein in non-resident purchases.
Meanwhile, other segments are looking much more subdued: private detached house approvals declined 2.3 percent mth and ‘low-mid-rise’ unit approvals posted a small rise but coming off a sharp fall in March (Westpac estimates of seasonally adjusted approvals).
The state detail shows the high rise increase was concentrated in NSW and Qld.
Ex high-rise, approvals are showing tentative signs of stabilising in NSW and WA and are continuing to track higher in Qld and Vic, giving a very mixed read on trends overall.  The value of renovation and non res building approvals both posted strong gains in April, lifting trend growth into strong positive for renovations but just flat for non res building.
Overall, approvals continue to surprise to the upside but the detail is much less positive given the extent to which high rise approvals are driving gains. Details  Private houses  –2.3%mth, –8.9%yr      
Private 'units'    8.7%mth, 13%yr                       
NSW     10.4%mth, 18.8%yr   Vic       –2.7%mth, –4.6%yr   Qld       6.7%mth, 16.8%yr     WA       –0.6%mth, –28.4%yr SA        13.7%mth, 30%yr                  
Alteration &amp; additions^   18.7%mth, 13.7%yr     Non-residential^                         47.3%mth, 32.4%yr       ^ value      
 
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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High-rise resurgence offsetting slowdown in other housing segments: Westpac's Matthew Hassan

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Headlines over the past few weeks have used words such as tightening, clamping and crunching when talking about the housing market and its affiliate institutions, Residex analyst Eliza Owen has noted.
"While a bearish approach to property is expected as we enter a downswing in the market cycle, further context and data are needed for a more grounded perspective," she said.
Table 1 presents the statistics summary for April.
Table 1: April 2016 Summary
<a href="/images/2016/05/31/Table_1.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/05/31/Table_1.jpg" alt="">
Source: Residex
Quarterly growth in the value of Sydney’s median house was a modest 0.03 percent, which is off the back of losses in the March quarter. The result is a stagnant median house value of just over $1,040,000, where it has been hovering around since January.
"On the other hand, units in the Sydney market increased a significant 1.26 percent over the April quarter, following losses in January," Eliza Owen said.
The median Sydney unit is now at a historic high of $695,000.
The Melbourne market experienced more significant easing in the April quarter, with the median house and median unit value dropping by approximately $5,000 and $3,000 respectively. As Melbourne tends to follow Sydney at a lag, there could be further short-term fluctuations in this market over the next few months, rather than a distinct downward trend.
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Residex anticipate downswing, as Sydney units hit record $695,000

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The Real Estate Institute of Australia (REIA) has unleashed the hounds on Labor’s proposed reforms to negative gearing.
The REIA’s campaign, Negative Gearing Affects Everyone, follows the lead of the Property Council, which describes the Australian housing market as a “house of cards”, with the REIA stressing how “fragile” the Australian economy is. You might be tempted to dismiss this as propaganda from people who exaggerate for a living, but evidence is mounting of instability close to the REIA’s home: the off-the-plan apartment sector.
An array of forces are converging to give the multi-unit house of cards a shove. Over the past couple of years apartment development has boomed. The Australian Bureau of Statistics shows building approvals for new flats, units and apartments reached a huge peak last year. It has stepped down in the most recent quarter, but is still very high.
<a href="/images/2016/05/27/image-20160525-25213-knw2ks.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/05/27/image-20160525-25213-knw2ks.png" alt="">
<h4>ABS, 8731.0 Building approvals, Table 6</h4>
You can see this development in the skylines of our cities, especially in Sydney, Melbourne, Brisbane and Canberra – and in the RLB Crane Index. RLB counts a total of almost 650 cranes engaged in construction in our capital cities, and says more than 80% of these are on residential projects.
<a href="/images/2016/05/27/image-20160525-25245-if8dg7.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/05/27/image-20160525-25245-if8dg7.png" alt="">
<h4>RLB Crane Index, 8th Edition</h4>
This coming supply is reflected in CoreLogic’s projections for new units hitting the market. It estimates that sales for more than 92,000 new units will be settled in the next 12 months, only slightly less than last year’s total number of sales of new and established units. The year after, a further 139,000 new units sales are due to be settled, substantially more than total sales (new and established) last year.
<a href="/images/2016/05/27/image-20160526-17553-1387xjw.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/05/27/image-20160526-17553-1387xjw.png" alt="">
<h4>Source: CoreLogic</h4>
<h2>Dampeners on demand</h2>
But for all this supply, it appears there may be much less demand than anticipated, particularly from the foreign investors who did so much to stoke the boom. Evidence for this includes:
<ul>
<li>
Over the last six months the Chinese government has tightened controls over currency exchange by its citizens. This has restricted their capacity to buy – and repay loans to buy – property in Australia and elsewhere. This in turn has led to…
</li>
<li>
Credit restrictions by Australian banks. Last month each of the Big Four banks restricted how much they’ll lend to foreign buyers (lower loan-to-valuation ratios), with Westpac withdrawing altogether. This month, Macquarie has pulled its horns in.
</li>
<li>
The Victorian government has doubled the stamp duty payable by foreigners – it’s now 7 percent of the property purchase price. The NSW government is reported to be considering doing something similar; it is also introducing checks for residency and Foreign Investment Review Board approvals as a condition for conveyance of property titles, and the FIRB is now charging $5,000 for applications.
</li>
</ul>
Foreign demand for new dwellings (as gauged by the NAB’s Quarterly Australian Residential Property Survey) was already down over the first quarter of the year, before the credit restrictions cut in. Now the media are reporting that Chinese demand for apartments has “fallen off dramatically”: Meriton says the number of Chinese buyers of its apartments halved in the last month.
As those cranes in the sky indicate, there’s a lot of people out there – foreign and local – who’ve paid deposits and entered into contracts to pay boom-era prices on completion of their units. When they go to the bank to borrow the balance, they may find that, between lower loan-to-valuation ratios and lower valuations, they are caught short. Some might make up the difference by selling another property, but many of those settlements projected by CoreLogic may not settle at all.
The result: deposits forfeited, unsold units dumped on the market – accelerating the bust – and possibly, at least for buyers who are actually in the jurisdiction, the threat of being sued by developers for the loss of the contracted higher price.
<h2>So what might policymakers do?</h2>
Faced with such a calamity, why won’t our politicians do something to shore up demand for all these newly constructed rental properties? Oh wait….
This is precisely what Labor’s proposed negative-gearing reform promises do, by allowing rental losses to be set against non-rental income only where the property is newly built. Under Treasurer Bowen, Australia’s dedicated army of negative gearers would be given new direction and purpose, switching from the established dwelling market into the new-built market deserted by foreign buyers. Furthermore, because no-one after the first purchaser can call a dwelling new (and hence get the same preferential treatment on their gearing), they may be inclined to hang on to their properties even as demand looks weak.
We should still expect such a reform to reduce total investor demand for housing, and hence reduce house prices overall. These are both good things. But it may also help cushion what might otherwise be a drastic and painful collapse in the new-build sector.
Both the REIA and the Coalition government talk about Australia’s “transitioning” economy. They should consider negative-gearing reform as a measure for transitioning out of our presently fragile, property-bubble-led economy.
Chris Martin is research fellow, Housing Policy and Practice, UNSW Australia and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/chris-martin-203935" target="_blank">here</a>.
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Might Labor’s negative-gearing policy yet save the housing market?

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Aussie John Symond has been back on 2GB with broadcaster Ross Greenwood to suggest that negative gearing should be left alone as the property market softens.
"At the moment things are tough enough, housing is propping up the economy," John said.
"I think you should leave it alone for the time being."
Symond says Labor's proposal would have a "terrible" impact on the existing housing markets.
"I think we're seeing a cooling taking place in the hot areas of Melbourne and Sydney, which has seen a levelling out," he said.
John suggests the market is starting to sort itself out, however he suggests that a potential oversupply of apartments in certain areas looks like it's started.
He also says that through Aussie Home Loans there is a softening, as people are starting to become more circumspect and more careful.
"Banks and lenders are being a lot more tough on investors and of course with all the talk of bubbles and all the rest of it it's scared off a lot of investors."
"So certainly the investor market which has really been driving credit growth has eased back significantly and that's now having an impact on softening prices," he said.
"Impending new housing starts coming on the market, off the plan is significant in a lot of areas that's going to impact the market for some time to come."
 
 
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Any negative gearing changes would be unwelcome in the softening market: Aussie John Symond

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The list of the most affordable capital city suburbs in each state and territory highlights the dramatic difference in the cost of housing between the most affordable and most expensive capital cities.
<div>
When we are talking about affordable prices for capital city housing, Hobart is the location of choice with property prices much lower there than across the mainland capital cities.
To highlight this we have looked at selling prices for the bottom decile of homes over the three months to January 2016.  A decile simply divides a group into ten equal parts.  What this means is if there were 20 sales over the three months and we lined the sales up from lowest to highest we would take the 2nd price as a representation of the most affordable segment of the market.
Over the three months to January 2016, the 10th percentile price of a house across the combined capital cities was $315,000 and the 10th percentile unit price was $255,000.  Over the same period, the 10th percentile house price across the combined regional markets was $175,000 compared to $180,000 for units.  This again highlights that housing tends to be much more affordable outside of the capital cities.
<h3>10th percentile price of houses and units  3 months to January 2016</h3>
<a href="/images/2016/04/15/2016-03-29--img1.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/15/2016-03-29--img1.jpg" alt="">
 Hobart has the lowest 10th percentile house and unit prices at $205,000 and $167,000 respectively.  Darwin is the second most affordable for houses at $229,000 and for units Adelaide is in second place with a price of $222,000.  At the other end of the spectrum, the 10th percentile house price is highest in Sydney and Darwin (both $430,000) and the unit price is highest in Sydney at $360,000.
The table below highlights the five most affordable capital city suburbs for both houses and units in each state.  The data is based on median values and we have only included suburbs that had at least 10 sales over the 12 months to January 2016.
<h3>Suburbs with most affordable median values, January 2016</h3>
<a href="/images/2016/04/15/2016-03-29--img2.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/15/2016-03-29--img2.jpg" alt="">
 The much more affordable nature of Hobart housing is evident when you look at the most affordable lists for each city, particularly for houses.  The five most affordable suburbs for houses in Hobart are all more affordable than the most affordable suburbs in each other capital city.  The data also highlights that housing costs in Sydney, Darwin and Canberra tend to be more expensive than the remaining capital cities.
For units, Adelaide suburbs actually have the most affordable suburbs and certain suburbs in Brisbane are also cheaper than those in Hobart where medium to high density development is less common.  On the other hand, unit values in the most affordable Darwin and Canberra suburbs are much higher than elsewhere.
The data shows that affordable housing options are available in most capital cities however, they tend to be located on the outskirts of the capital cities.  Of course Hobart, Adelaide and Brisbane tend to have much more affordable housing options relative to the other capital cities.  Meanwhile, regional markets often offer up even more affordable housing alternatives.
 Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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