<p>A long-stalled Campbelltown development site is back in play, with new plans for 139 apartments set to supersede a mixed-use scheme approved almost a decade ago but never built.</p>

<p>The new proposal for 28 Cordeaux Street would deliver 116 market and 23 affordable apartments in a part 14-storey building, bringing a substantial new project into a Campbelltown market where new apartment supply remains limited.</p>

<p>Plans have been filed over the 3,092 sqm corner site at Moore-Oxley Street, around 600 metres from Campbelltown Railway Station and the city-centre retail core.</p>

<p>The site already carries a mixed-use residential approval dating to 2016. Doroch Architects has now been engaged on a larger replacement scheme, which is progressing as a State Significant Development Application following a Housing Delivery Authority determination in August 2025.</p>

<p>The apartment mix comprises 39 one-bedroom, 72 two-bedroom and 28 three-bedroom residences. Two-bedroom apartments make up just over half of the project, while three-bedroom homes account for 20 per cent.</p>

<p><img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="136dd5b9-3791-4da6-9e31-76f533f5b4de" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da2.png?VersionId=LgOSy9nwf5u.MGswBBwaGGxuX8QpHSl_" /></p>

<p>Of the 139 apartments, 23 will be delivered as affordable housing under the in-fill affordable housing provisions of the Housing SEPP. The affordable component represents 15 per cent of the residential gross floor area and will be managed by a registered Community Housing Provider.</p>

<p>Doroch has sought to break the scale of the building into two distinct elements, with a masonry podium of around four storeys establishing the street edge before the residential tower steps back above.</p>

<p>The corner position has shaped that approach. Cordeaux Street faces toward the commercial and civic centre, while Moore-Oxley Street leads into the lower-scale residential neighbourhood to the south, and the design verification report describes the site as "bridging the commercial core to the north and established residential areas to the south."</p>

<p>The podium will be expressed predominantly in face brick, while the upper levels shift to brushed and grooved concrete cladding with darker metal detailing. Recessed sections, deep balcony edges and landscaping break down the upper form, with an approximately 11.8-metre setback to the northern boundary addressing the adjoining St Peters Anglican School.</p>

<p><img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="c8b3d2d3-c561-4bfc-a5d9-a68c0c10dac1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da1.png?VersionId=AeAEyJU02Gk2k5noUj2StziCvdQ7fW4B" /></p>

<p>Campbelltown has been starved of new residential developments in the last decade.</p>

<p>The only other notable development set to come to market this year is ALAND's Queen Square, a mixed-use precinct on over two hectares that will comprise apartments above a vibrant ground-level retail and hospitality dining precinct.</p>


Joel Robinson

First look: New 139-apartment plans revive long-stalled Campbelltown city centre site

<p>
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<p>A 60-apartment building nine storeys tall would be a rarity almost anywhere along this stretch of Moreton Bay, but that's exactly what's been lodged for a modest Deception Bay street better known for its single-storey weatherboard homes.</p>

<p><a href="https://www.apartments.com.au/developers/sherlock-construction-homes">Sherlock Construction Homes</a> is seeking to push Deception Bay’s emerging medium-density housing profile higher, lodging plans for a nine-storey apartment building near the suburb’s shopping centre and foreshore.</p>

<p>Dubbed Grosvenor Apartments, the proposal at 14-20 Grosvenor Terrace would replace two detached homes with a new building designed by&nbsp;<a href="https://www.apartments.com.au/architects/mode">Mode Design</a>&nbsp;which would&nbsp;reach nearly 30 metres, well above the site’s mapped 21-metre building height.</p>

<p><img alt="First Look: Sherlock Construction pitches 9-storey tower for low-rise Deception Bay" data-entity-type="file" data-entity-uuid="86c21a25-5a97-4ca7-a361-80757137ea5b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Deception%20da%20front.png?VersionId=aXIujfvEhH33sLHOEjHFv9Ii6qxSvAF4" /></p>

<p>The apartment mix is weighted toward larger homes, with 14 three-bedroom apartments, 31 two-bedroom apartments and 15 one-bedroom apartments. Six apartment types are spread across the floors, ranging from 66 sqm one-bedroom units through to three-bedroom apartments of 116 sqm, most with private balconies or terraces.</p>

<p>Levels one through seven follow a consistent layout of six to eight apartments per floor arranged around a central lift and stair core, with the top floor, level eight, trading one apartment for a landscaped community breakout space rather than repeating the standard layout below.</p>

<p>Ground floor is dedicated to arrival and services, with a lobby, mailroom and manager's office, alongside 91 car spaces.</p>

<p><img alt="First Look: Sherlock Construction pitches 9-storey tower for low-rise Deception Bay" data-entity-type="file" data-entity-uuid="b098bde0-5fe1-4e6c-9601-e5446612e5fc" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Deception%20podium.png?VersionId=A0hfENMNxSxkfh9Jl6D4WJ9XIraeOukA" /></p>

<p>Mode Design's brief describes a "serene coastal-inspired design blending soft curves, natural textures and light-filled spaces to reflect the relaxed Deception Bay lifestyle."&nbsp;</p>

<p>The material palette leans on white and grey render, timber-look aluminium screening and stacked-brick-look finishes, with hanging greenery and vine planting proposed across balcony edges and ground-level walls.&nbsp;</p>

<p>Balconies feature asymmetrical geometries intended to vary the building's rhythm rather than repeat a single module up the tower, while lush planting is concentrated over the entry and level one balconies to soften the building's base.</p>

<p><img alt="First Look: Sherlock Construction pitches 9-storey tower for low-rise Deception Bay" data-entity-type="file" data-entity-uuid="c05c5693-3e00-42d0-b075-55c36094f4db" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Deception%20da%201.png?VersionId=cMKJgBsBaaVCd2dA5O22SOT38OT_.BPA" /></p>

<p>The design evolved following an April 2025 prelodgement meeting with council. At that stage, the project was conceived as a seven-storey building containing 45 apartments. The subsequently lodged scheme increases the development to nine storeys and 60 apartments while introducing one-bedroom residences to the mix.</p>

<p>Zone Planning argues the additional scale reflects the site's position within an area earmarked for increased residential intensity. The planning report points to the North Lakes-Redcliffe-Moreton Bay Rail corridor strategy, which identifies Deception Bay as a district-level activity centre and supports greater housing choice within urban neighbourhoods.</p>

<p>Market Square Deception Bay, Deception Bay Sports Centre, Deception Bay State School, public transport, community facilities and the Moreton Bay foreshore are all identified within approximately one kilometre of the site, while the property falls within a 400-metre walking catchment of Market Square.</p>

First Look: Sherlock Construction pitches apartments for low-rise Deception Bay

<p data-end="587" data-start="368">Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.</p>

<p data-end="778" data-start="589">The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.</p>

<p data-end="907" data-start="780"><a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.</p>

<p data-end="1052" data-start="909">The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.</p>

<p data-end="1311" data-start="1054">The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.</p>

<p data-end="1451" data-start="1313">The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.</p>

<p data-end="1676" data-start="1453">MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.</p>

<p data-end="1908" data-start="1678">Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.</p>

<p data-end="2142" data-start="1910">The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.</p>

<p data-end="2142" data-start="1910"><img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" /></p>

<p data-end="2308" data-start="2144">MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.</p>

<p data-end="2648" data-start="2310">"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.</p>

<p data-end="2797" data-start="2650">"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."</p>

<p data-end="2938" data-start="2799">The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.</p>

<p data-end="3216" data-start="2940">Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.</p>

<p data-end="3325" data-start="3218">Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.</p>

<p data-end="3442" data-start="3327">"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.</p>

<p data-end="3662" data-start="3444">"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."</p>

<p data-end="3818" data-start="3664">MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.</p>

<p data-end="4076" data-start="3820">"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.</p>

<p data-end="4375" data-start="4078">"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."</p>

<p data-end="4503" data-start="4377">Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.</p>

<p data-end="4741" data-start="4505">"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."</p>

<p data-end="4910" data-start="4743">The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.</p>

<p data-end="4951" data-start="4912">MAYD is targeting an early 2027 launch.</p>


First look at MAYD's North Kirra mixed-use precinct

<main data-perf-region="main">
<p data-end="600" data-start="394">Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.</p>

<p data-end="733" data-start="602">But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.</p>

<p data-end="970" data-start="735">Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.</p>

<p data-end="970" data-start="735">[smartcode_project:default project_id=152737 project_image_fid=377679]</p>

<p data-end="1159" data-start="972">The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.</p>

<p data-end="1357" data-start="1161">It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.</p>

<p data-end="3400" data-start="3216">[smartcode_project:default project_id=152737 project_image_fid=377675]</p>

<p data-end="3400" data-start="3216">Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.</p>

<p data-end="1664" data-start="1517">Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.</p>

<p data-end="1826" data-start="1666">Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.</p>

<p data-end="1826" data-start="1666">[smartcode_project:default project_id=152737 project_image_fid=377685]</p>

<p data-end="2045" data-start="1828">Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.</p>

<p data-end="2269" data-start="2047">"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.</p>

<p data-end="2430" data-start="2271">A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.</p>

<p data-end="2606" data-start="2432">It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.</p>

<p data-end="2724" data-start="2608">At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.</p>

<p data-end="2892" data-start="2726">Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.</p>

<p data-end="2892" data-start="2726">[smartcode_project:default project_id=152737 project_image_fid=377680]</p>

<p data-end="3004" data-start="2894">Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.</p>

<p data-end="3214" data-start="3006">"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.</p>

<p data-end="3400" data-start="3216">The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.</p>

<p data-end="3400" data-start="3216">More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.</p>

<p data-end="3670" data-start="3538">&nbsp;</p>

<p data-end="3670" data-start="3538">[smartcode_project_cta:default project_id=152737]</p>

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
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Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

<p>A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.</p>

<p>Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.</p>

<p>Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374005]</p>

<p>The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.</p>

<p>Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.</p>

<p>Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374010]</p>

<p>Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.</p>

<p>The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.</p>

<p>“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374002]</p>

<p>“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”</p>

<p>The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.</p>

<p>[smartcode_project_cta:default project_id=150999]</p>


Maréa Residences brings parkside apartments to Coolangatta

Housing Market

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<p>When you start to see politicians debating tax changes you should be afraid – very afraid. We know with the negative gearing debate that neither party has completed any costings preferring to work from the economic theory of guesstimates.</p>
<p>This is a very dangerous path as Australia does not have a Housing Minister and any changes are fraught with danger.</p>
<p>Just this week, the Australian Bureau of Statistics (ABS) revealed that for the first time rental, hiring and real estate service companies made $14 billion before tax in the second half of 2015 while mining companies made $9.8 billion. This is not the time to start meddling with property taxes as an excuse for economic reform policy.</p>
<p>I have no doubt that any changes to negative gearing will distort the market, and should there be an “investor run” prices will inevitably fall.</p>
<p>Australia is currently recording wage growth at a record low of 2.2 per cent a year. This is the lowest annual growth since the ABS started recording annual growth back in 1998. On top of that statistic in the September quarter, the ratio of household debt to income hit a new high of 184.6 per cent which translates to households’ debt now being at 1.85 times their total income.</p>
<p>This record growth in debt is a by-product from record low interest rates. But before we hit the panic button we need to investigate further and try and identify what is causing this.</p>
<p>On many occasions I have said “if there was a gold medal for real estate portfolios Australia would win hands down.” I see no use comparing Australia’s debt ratios with other countries when the Australian model has no tax payable on the principal place of residence and the overseas models do have tax payable on the principal place of residence. Australians work their principal place of residence as their main superannuation platform, which works very well when you have the cash rate at record lows.</p>
<p>If you were a betting person you would definitely be betting that the next cash rate movement will be down. Of course these high debt ratios will be challenged when the Reserve Bank of Australia (RBA) starts increasing the cash rate, but nobody really knows when that will be or in what decade even.</p>
<p>Prior to the Global Financial Crisis the average cash rate over a 25 year term came in at around 7.25 per cent, where based on what we are seeing today mortgage holders are going hard at 2.00 per cent.</p>
<p>Another statistic that is flying well off the radar are reverse mortgages which very few people discuss within the Australian property debate. In its annual Reverse Mortgage Report, Delloitte estimates more than $500 billion of home equity is held by Australians aged over 65, with the total reverse mortgage loan book worth $3.66bn as at the end of 2014.</p>
<p>This figure is naturally added to the Australian household debt figure so this would go part of the way to explaining why we are starting to see record debt levels. Back at the end of 2014 there were almost 40,000 reverse mortgages on issue in Australia with the average size being $92,000, up from $86,000 in 2013. It would then be reasonable to suggest that the number of reverse mortgages would have increased in 2015 as too the average mortgages – this is clearly a growth market.</p>
<p>To put this into further perspective the reverse mortgage market loan book was $3.66bn in 2014 and the Commonwealth Bank home loan portfolio currently sits around $393 billion. With many retirees opting for reverse mortgages this is another reason why we are seeing fewer properties on the market. Although this would change significantly once the cash rate starts increasing or a federal Government starts tampering with negative gearing in an adverse way.</p>
<p>What it does tell us is that Australia needs property investors as they play an integral part in Australian property machinations. If you want to have a rational debate about housing affordability in Australia firstly examine the delays by respective governments who forever and a day burden and choke the supply side of the property industry. It’s obvious to most that they fail to understand the Supply V demand equation.</p>
<p>Furthermore the Labor negative gearing proposal states that this will only apply to new properties. Well somebody should advise them that in December 2008 they lifted the number of properties that can be sold from new developments by foreign buyers from 50 per cent to 100 per cent. Property developers are selling all their new developments directly overseas as that way they can achieve higher prices so the local markets are blocked from buying these developments.</p>
<p>Nor is there any requirement nor legislation stipulating that foreign buyers must rent the property out to the local market – we do know that currently in Australia there are thousands of properties that have been land banked. Politicians are hopeless when it comes to the Australian property market.</p>
<p>The last thing the Australian economy needs is a domino effect with property prices because they are not pretty and should be avoided at all costs. If you want to bring property prices down do it organically by increasing supply which just so happens to be the greatest failure of local, state and federal Governments in the modern economy.</p>
<h4>MOSMAN – 2088</h4>
<p>• Number of houses on the market this time last year – 83</p>
<p>• Number of houses on the market last week – 64</p>
<p>• Number of houses on the market this week – 63</p>
<p>• Number of apartments on the market this time last year – 53</p>
<p>• Number of apartments on the market last week – 52<br>• Number of apartments on the market this week – 53</p>
<h4>CREMORNE – 2090</h4>
<p>• Number of houses on the market this time last year – 10</p>
<p>• Number of houses on the market last week – 18</p>
<p>• Number of houses on the market this week – 11</p>
<p>• Number of apartments on the market this time last year – 23</p>
<p>• Number of apartments on the market last week – 23</p>
<p>• Number of apartments on the market this week – 25</p>
<h4>NEUTRAL BAY – 2089</h4>
<p>• Number of houses on the market this time last year – 4</p>
<p>• Number of houses on the market last week – 8</p>
<p>•Number of houses on the market this week – 10</p>
<p>• Number of apartments on the market this time last year– 36</p>
<p>• Number of apartments on the market last week – 26</p>
<p>*Number of apartments on the market this week – 25</p>
<p><span> </span><em><span>ROBERT SIMEON</span> is a director of </em><em><a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> </em><em>and has been selling residential real estate in Sydney since 1985. <br>He has also been writing real estate blog </em><em><a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> </em><em>since 2000. </em></p>
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robertsimeon-hRNTwJyXkQ

It’s time for the Australian property debate: Robert Simeon

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<p>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.</p>
<div>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<h3>10th percentile price of houses and units <br>3 months to January 2016</h3>
<p><a href="/images/2016/04/15/2016-03-29--img1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/04/15/2016-03-29--img1.jpg" alt=""></p>
<p><br>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.</p>
<p>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.</p>
<h3>Suburbs with most affordable median values, January 2016</h3>
<p><a href="/images/2016/04/15/2016-03-29--img2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/04/15/2016-03-29--img2.jpg" alt=""></p>
<p><br>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.</p>
<p>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.</p>
<p>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.</p>
<p> <em>Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></p>
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ckusher-ujnxiKuFQs

Hobart housing much more affordable than other capital cites

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<div>One of the occupational hazards of middle age is that from the mouths of babes can spout seemingly simple questions which are devilishly difficult to answer. </div>
<div> </div>
<div>This troublesome issue was highlighted in a wittily observed <em>Bigpond</em> advert a decade or so ago, in which a hapless father answers to his curious son that the Great Wall of China was built by "Emperor Nasi Goreng...to keep the rabbits out."</div>
<div> </div>
<div>
<div>The difficulty in answering an apparently straightforward question such as "how much money is there?" is twofold. Firstly, this is because the answer depends on what you mean by "money". And secondly since the money supply is a moving target, by the time you have scraped together a coherent answer more money will inevitably have been created. </div>
<div> </div>
<div><strong><span style="text-decoration: underline;">How much money is there?</span></strong></div>
<div> </div>
<div>For those of us with bank accounts today, generally we don't come in to direct physical contact with most of our money. Instead, we just see a number on a screen which changes daily.</div>
<div> </div>
<div>The latest figures from the Reserve Bank of Australia (RBA) showed that the total there is more than $65 billion of currency and $250 billion of current deposits - for a total of just over $315 billion which is represented by the green line in the chart below and known as the "M1" measure of the money supply in circulation.</div>
<div> </div>
<div>It's an arresting thought that in the years since I was born there is more than 30 times more M1 money knocking around in Australian circulation.</div>
<div> </div>
<div><a href="/images/2015/11/23/A1.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/11/23/A1.jpg" alt=""></div>
<div> </div>
<div>
<span>Of course, as the above chart shows, the green line is only a small and increasingly insignificant part of the money supply, partly because today most of us use alternative forms of payment, including credit cards and EFTPOS.</span><br><br><span>The red line in the chart above (known as "M3") - which includes term deposits, certificates of deposit, and various other deposits from building societies and credit unions with banks - totals well over $1.8 trillion, the dollar value of M3 money in circulation having increased by more than 45 times over the same time period.</span>
</div>
<div><span> </span></div>
<div><a href="/images/2015/11/23/A1-1.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2015/11/23/A1-1.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<div>Adding the green shaded areas in the graphic above (currency and current deposits, or "M1") to the blue shaded areas (the aforementioned other deposits) gets us to "M3", while there is a broader measure of money still, which funnily enough is known as "broad money" - it includes certain other borrowings denoted by the red shaded area.<br><br>All up the money supply comprises $1.83 trillion of broad money in circulation.</div>
<br><strong><span style="text-decoration: underline;">Boiling frogs</span></strong><br><br><div>One thing that we all learn in childhood is that if something that a lot of people want is scarce, then it tends to go up in value. Unfortunately, however, the supply of money has been anything but scarce. </div>
<div>
<br>While 6.3% growth in M3 money over the past 12 months (following on from 8% in the preceding year) may not sound like all that much, due to the power of compounding these cumulative increases in the money supply have snowballed into an enormous expansion.</div>
<div> </div>
<div>This, of course, is why folk have tended not to leave large sums of money in their bank accounts earning low returns for too long, and often instead aim to invest in inflation-busting businesses, "hard assets" with intrinsic value such as gold and silver, or well-located residential property with a high land value component. </div>
<div> </div>
<div>Over time we expect the price of quality assets in high demand to appreciate, while the value of any associated debt is surprisngly quickly inflated away. Only one decade ago the broadest monetary aggregate ("broad money") showed $784 billion of money supply in circulation, an amount which has comfortably doubled and then some to $1.83 trillion today.<br><br>Summarily there is well over double the amount of money chasing a limited supply of desirable assets. These figures are in themselves powerful enough, but in truth even the money supply in circulation represents only one part of the tale.</div>
<div> </div>
<strong><span style="text-decoration: underline;">Credit where it's due</span></strong><br><br><div>The other part of the story is that of "credit", being loans, advances and bills discounted to the private sector (but excluding loans made to other financial intermediaries).<br><br>Note in the chart below the massive surge in credit growth following the deregulation of the financial system in 1983 which lasted all the way through until the early 1990s "recession we had to have".</div>
<div> </div>
<div><a href="/images/2015/11/23/A3.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/11/23/A3.jpg" alt=""></div>
<div> </div>
<div>
<div>While there is not necessarily a link between the expansion of the broad money supply and growth in credit, the data over the long run suggests that a relationship between the two clearly exists, albeit a complex one.</div>
<div> </div>
<div>As explained by a Bank of England research paper last year, the way in which most money is created in a modern economy is through banks making loans. When a bank creates a loan, it also creates a deposit in the borrower's bank account (and in turn it follows that if a bank lends me money to buy your house, then that after the settlement you will have more money in the form of a deposit).</div>
<div> </div>
<div>Thus, contrary to what you might intuitively expect, deposits are not created by households saving income, but by banks creating money through loans, although of course there is ultimately a speed limit as to how much banks can lend.</div>
<div> </div>
<div><a href="/images/2015/11/20/A7.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/11/20/A7.jpg" alt=""></div>
<div> </div>
<div>
<div>The above chart shows what has happened to the amount of "narrow credit" (a measure which excludes securitisations) sloshing around Australia since 1976, which is to say that it has expanded at an even more furious pace from $36 billion to nearly $2.4 trillion, thereby increasing by an astonishing factor of more than 66 times. </div>
<br><div>While back in the year I was born housing accounted for only 24% of ourstanding credit (refer to the red shaded areas in the chart below), today that figure has expanded to 61%, with housing credit growth continuing to outpace the growth in lending to businesses.</div>
<div> </div>
<div><a href="/images/2015/11/23/A5.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/11/23/A5.jpg" alt=""></div>
<div> </div>
<div>
<div>There are a number of identifiable reasons for this trend, but probably the most significant of these is simply that banks love to lend against housing - for even if you default on a mortgage you cannot easily take the house with you, and in any case the land that it sits on isn't going anywhere.</div>
<div> </div>
<div>There have been many predictions of falling house prices over the last decade, but a bet against housing has essentially been a bet against the above chart, which shows that over the past ten years the stock of outstanding housing credit has more than doubled, from approximately $700 billion to $1.5 trillion.</div>
<div> </div>
<div>Of course, the price of all residential property has not increased as a result of this flood of credit. There is no scarcity of land in many mining regions, for example, and the demand for it has been declining in recent years, resulting in spectacularly crashing prices in many cases. Outer suburban Sydney property is now correcting sharply in some instances due to similar dynamics.<br><br>It would be true to say, however, that suburban land values in capital cites have generally been increasing strongly over time.</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">The outlook for credit growth</span></strong></div>
<div> </div>
<div>Onthe subject of speed limits, the regulatory body APRA recently decreed that it would like to see lenders growing their investor mortgage books at a pace of no faster than 10 per cent per annum, and for this reason we can expect to see banks instead pushing products in their largest and most profitable market sector, being owner-occupier housing credit.</div>
<div> </div>
<div>The private sector credit figures arguably represent one of the more significant indicators of what is happening in the domestic economy, and for this reason I analyse the data on this blog at the end of each calendar month. </div>
<div> </div>
<div>As I looked at in more detail at the end of last month the series showed that while commodity prices may be tanking over the year to September annual business credit growth moved up to a 79 month high of 6.3%, while housing credit growth had also accelerated to a 60 month high of 7.5%.</div>
<div> </div>
<div>Now sure, 7.5% is certainly a lower level of growth for housing credit than we have seen in cycles past - mainly because we are starting from a higher base - yet if sustained it would be enough to more than double the stock of outstanding housing credit to beyond $3 trillion within the next decade, which is food for thought (gulp).</div>
<div> </div>
<div>Whether or not banks can continue to expand owner-occupier credit growth will be one of the key housing market narratives to watch over through 2016. I'll analyse all the key figures here, of course. </div>
<div> </div>
<div>
<p><span><em>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>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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pwargent-M4siyDbqQY

How much money is there? Pete Wargent

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<p>GUEST OBSERVER</p>
<p>Housing is Australia’s largest asset class, worth an estimated $6.7 trillion, so it’s important to measure the performance of this very important asset class in an accurate and timely manner.</p>
<p>Recently there has been a lot more focus on the measurements of housing market performance, so it’s timely to provide a summary of the primary methods used for measuring housing market performance from a value/pricing perspective.</p>
<p><strong>The complexities of property data</strong></p>
<p>Before we go into the different measures, it’s worthwhile providing a brief refresher on property data which provides some background about why measuring housing market performance is a complex undertaking.</p>
<p>Firstly, compared with the equites markets, housing is an illiquid asset class. Individual properties are transacted, on average, every 8-10 years. The infrequency of transactions implies that the vast majority of residential properties are excluded from most housing market measurements which are reliant on transactional activity.</p>
<p>Secondly, housing is fundamentally nonhomogeneous; dwellings are unique in their characteristics based on their location and attributes, which makes the measurement of price and value shifts more challenging.</p>
<p>Additionally, the quality and timeliness of property data varies remarkably from state to state and between the private sector data providers. State governments collect a base level set of data which needs to be cleaned and augmented with more timely data and additional data sets such as attribute information to ensure a more complete and timely measure of housing markets is derived.</p>
<p>Regardless of the methodology used to measure dwelling price or value shifts, having housing data that is of the highest quality possible is the first and most important step in producing a reliable and accurate measure of the housing market.</p>
<p>CoreLogic collects and maintains the most comprehensive and current property and mortgage database, with more than 4.2 billion decision points across Australia and New Zealand that is growing in size every day. More than 60% of housing market transactions are collected directly from the industry, which provides a much more timely view of the housing market than relying solely on government provided transaction data.</p>
<p><strong>What indicators are available to measure housing market conditions?</strong></p>
<p>Housing market indices range in complexity from a simple median price indicators, which is subject to large amounts of bias and revision, through to a stratified median, repeat sales index and hedonic regression models. Each of these methods will provide different results for measuring price or value shifts across the housing markets.</p>
<p>Outside of these methodological differences, there will be further differences in results based on the data held by each of the private and public sector index providers as well as the way the data is cleaned, the sampling method, what geographic regions are being reported and what time frames the measures are reported across.</p>
<p><strong>Simple median price</strong></p>
<p>The median is simply the middle sales observation across a series of transactions. The median sale price is subject to a range of biases which can skew the middle observation up or down. Bias in median price can be caused by buyer types who are more active or less active in the market (for example, if first home buyers become more active there is likely to be a downwards bias in the median observation due to more transactions occurring at the affordable end of the pricing spectrum). Bias can also be found if there are changes in the types or quality of stock transacting and the median can be very volatile in markets with low turnover or where there are dramatic differences in the quality of housing. The advantage of median price is that it is very simple to compute and is easy to understand and interpret.</p>
<p>Simple median price measures are generally utilised by some of the real estate institutes and are still a common way of reporting price movements at the suburb or postcode level. Simple medians are useful for understanding what the middle observation for pricing is across a particular region over a specified point in time, however they aren’t all that useful for measuring capital gains over time due to the volatility and bias associated with this measure.</p>
<p><strong>Stratified median</strong></p>
<p>The stratified median measure, although still a measure of the middle observation, attempts to overcome the compositional bias of median price measures by dividing the market into separate strata’s, or segments, that are more alike. The Australian Bureau of Statistics, who use a stratified median measure, bases their stratification across dwelling types, the long term median price and socio economic indicators as specified here: https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6416.0Explanatory%20Notes1Jun%202016?OpenDocument. The ABS index is released quarterly after a significant lag and is non-revising.</p>
<p>Domain also use a stratified median approach, however no documentation appears to be publically available on their method or stratification approach. The Domain index is revisionary, however there is no transparency around the level of revision between quarters. Also, Domain do not appear to release their index results in a freely available format online.</p>
<p>The stratified median approach is a substantial improvement over the simple median for measuring price change across the housing market. As outlined in the simple median method, despite attempts to control for bias, the stratified median approach can be affected by changes in buyer activity or inactivity and by changes in the types or quality of dwellings that are transacting in the market.</p>
<p>It is important to note that non revising stratified median indices will not include off the plan sales data if the sale date has occurred more than three months prior to the reporting date. The reason for this is that such data tend to be quite lagged and reported by the Valuer General after settlement, which can occur several years after the sale date.</p>
<p><strong>Repeat sales</strong></p>
<p>A repeat sales index relies on identifying sales pairs and measuring the capital gain across these individual resales. The repeat sales method is very useful for measuring the demonstrated capital gain across individual properties that have resold, however the method excludes all transactions that don’t have a previous sale associated with the property. Inherently, the repeat sales method excludes new properties, which is a significant weakness at a time when a record amount of new housing stock is entering the market place. Additionally, the repeat sales index can be biased by property resales that have been affected by capital works (eg renovations and subdivisions) and can also be biased by properties that are transacted more frequently such as units and investment owned properties which generally have a higher turnover rate.</p>
<p>Residex (which is a CoreLogic owned company) publish a repeat sales index which is revisionary and released quarterly.</p>
<p>Off the plan sales are not accounted for in repeat sales indices as this methodology requires at least two sales for a property to make it eligible for inclusion.</p>
<p><strong>Hedonic regression</strong></p>
<p>The hedonic method of measuring housing market performance aims to track the true value shifts across the overall portfolio of housing, rather than price based movements based on observations of only those properties that have transacted. The hedonic imputation technique, which is used exclusively in Australia by CoreLogic, imputes the value of every Australian dwelling each day, taking into consideration every single data point we knew about the housing market at the point in time of calculation. Factors such as lot size, the number of bedrooms and bathrooms, car spaces and whether the home has a swimming pool or view are some of the hedonic attributes factored into the analysis. Based on a flow of around 1,400 new transactions received each day as well as a constant flow of new attribute data, our most accurate view of the imputed value of the property market is updated each day.</p>
<p>The benefits of a hedonic regression index include the sheer timeliness of the reading (virtually a real time indicator), the lack of any bias that can push the index higher or lower, as well as the fact that the index tracks true value shifts across the entire housing asset class rather than only across those properties that have recently transacted.</p>
<p>CoreLogic provides free public access to a full 12 month back series of the daily hedonic index, as well as a monthly summary of the end of month index results across each capital city by dwelling type (https://corelogic.com.au/research/rpdata-corelogic-home-value-index.html). The index is published on the first working day of each month and has been independently peer reviewed and audited, the results of which are published on the CoreLogic web site, along with full documentation of the hedonic method used to build the index.</p>
<p>In summary, there are a variety of measures available to track dwelling prices and values across Australia. Each method presents its own pros and cons and there will always be differences in the results based on the different methods being uitlised, but also based on the differences in data quality, cleaning and sampling techniques, data timeliness, geographic context and time frames of the calculation. Other technical differences will also play out in the data based on specific ways each method treat the underlying data sets. For example, using a settlement date rather than a contact date in the analysis will show a difference in results, particularly at a time when a great deal of off the plan unit sales are flowing into the market where the difference between the contact date and settlement date could be several years.</p>
<p>While there will be divergence in these measurements of price and value changes from period to period, over a longer period, each of the methods used will tend to show broadly similar results. One notable exception is the presence of off the plan transactions, which will cause the hedonic index to diverge from repeat sales and non-revising median indices from time to time. Repeat sales indices and non-revising median indices (in particular based on sales data over the prior quarter) are more likely to broadly track one another because they both exclude off the plan sales.</p>
<p>CoreLogic privately calculates all of the indices described above, however our primary reference for measuring the change in house and unit values is the hedonic regression index thanks to the timeliness of the measure, the absence of any bias in the measurement and the fact that the index measures value growth across the entire housing portfolio rather than only those properties that have transacted.</p>
<p>In order to get a complete understanding of the housing market there is a vast array of other housing market measures that need to be viewed in context with indices that measure price and value movements.  CoreLogic also provides weekly updates on auction markets and clearance rates, private treaty metrics such as average selling time and vendor discounting rates, transaction numbers, listing counts and rental information as some examples.</p>
<p>Additionally the performance of the housing market will vary substantially across the different product types and geographically, so it’s important to analyse the housing market at more granular levels than just capital city dwelling performance.</p>
<p>At CoreLogic, we place the utmost importance on our data and analytics assets. </p>
<p>We dedicate more than $20 million each year in acquiring and maintaining our data sets.  Our collection, analysis and research methods are audited regularly, and we are independent of any real estate, media or banking interests.  CoreLogic continues to grow with over 480 people employed in ten locations in Australia and New Zealand. Over 20,000 customers and 150,000 end users in property, finance and government use CoreLogic services and platform more than 30,000 times a day.</p>
<p><em>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>.</em></p>
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tlawless-5VLUrbAk9s

Property 101: A refresher on housing market measurements

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<p>GUEST OBSERVER</p>
<p>Interest rate cuts and the return of lending to investors over the past year have seen a re-emergence of investors as a dominant force in the national housing market.</p>
<p>At the end of last week the Australian Bureau of Statistics (ABS) published housing finance data for January 2017 and it showed that at that time, demand from the investment segment of the market was continuing to surge.  Pairing the housing finance data with the Reserve Bank’s (RBA) lending aggregate data provides deeper insight into housing investor behaviour. </p>
<p>The January 2017 housing finance data showed that over the month, investors committed to a total of $13.8 billion in finance for investment properties.  The figure represented a 4.2 percent rise over the month and a 27.5 percent increase year-on-year (the largest annual increase since August 2014). </p>
<p>The first chart shows that the value of investor housing finance commitments remains below its previous peak but has ramped-up significantly over the past 12 months.  In fact, the value of investor housing finance commitments in January 2017 was just -5.3 percent lower than its historic peak in April 2015. </p>
<h3>Monthly value of investor housing finance commitments</h3>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/22/2017-03-20-image1.png" target="_blank">Click to enlarge</a></p>
<div>
<h3><img src="https://www.urban.com.au/images/2017/03/22/2017-03-20-image1.png" alt=""></h3>
<p> </p>
<p>The second chart highlights how most of the investor housing finance commitments are flowing to established homes rather than new homes.  This isn’t really a surprise when you consider that the amount of established housing stock is substantially greater than new stock and new housing typically has a price premium over existing stock.  Over the month, $1.2 billion in commitments were for new construction compared to $12.6 billion for established housing stock.</p>
<h3>Monthly value of investor housing finance commitments by property type</h3>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/22/2017-03-20--image2.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/03/22/2017-03-20--image2.png" alt=""></p>
<p>The third chart comes from data published by the RBA on investor housing credit which represents the total amount outstanding to mortgage lenders for the purposes of investor housing.  In January 2017, investor credit expanded by 0.6 percent to be 6.6 percent higher over the year. The monthly change was actually the lowest it has been in four months while the annual change was the highest it has been in 10 months. </p>
<p>Much like the housing finance data, the credit data shows the impact of APRAs recent curbs to investor credit growth which have slowed growth however, more recently credit has once again started to expand. </p>
<h3>Monthly and annual change in investor housing credit to Australian lenders</h3>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/22/2017-03-20--image3.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/03/22/2017-03-20--image3.png" alt=""></p>
<p>The final chart shows the monthly value of investor credit outstanding to Australian lenders.  At the end of January 2017, the RBA reports that there was $572.2 billion in investor credit outstanding to Australian lenders.  This figure accounted for 34.9% of all housing credit outstanding ($1.637 trillion) and 21.5 percent of total outstanding credit.  The chart shows a significant rise in investor housing credit, in fact, two decades ago investor credit represented 21.8% of total housing credit and 8.7 percent of all credit.</p>
<h3>Monthly value of investor housing credit to Australian lenders</h3>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/22/2017-03-20--image4.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/03/22/2017-03-20--image4.png" alt=""></p>
<p>All of the data presented highlights that the latest data we have shows demand from the investor segment in the housing market continues to surge.  With the substantial increase in dwelling values in Sydney and Melbourne over recent years, home owners are able to utilise the equity in their principal place of residence to purchase investment properties.  It is clear from the data that many are doing so. </p>
<p>While investor activity is rampant, the proportion of total housing finance commitments to owner occupier first home buyers is at an historic low.  On one hand it is positive that home owners are investing on the other hand they can continue to outbid those people that don’t already own homes further locking many potential buyers out of the housing market.</p>
<p>It is anticipated that over the coming months we will see further tightening of lending policies to investors with some lenders approaching APRAs 10 percnet speed limit.  Should this occur it is likely to result in a moderate slowing of demand from the investment segment, at least temporarily like we saw in mid-2015 and early 2016.</p>
<p><em>Cameron Kusher is research analyst for CoreLogic. You can contact him <span class="s2"><a href="https://blog.corelogic.com.au/about/" target="_blank">here</a>.</span></em></p>
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Investor lending gathers pace as dwelling values surge higher: Cameron Kusher

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<p class="p1"><span class="s1">Back in 2011 Gladstone property was all the rage.</span></p>
<p class="p1"><span class="s1">Unfortunately the predicted housing boom was based upon temporary factors, including a resources construction boom which finally an almighty peak in Queensland in the first quarter of 2013.</span><span style="font-size: 12.16px;"> </span></p>
<p class="p1"><span class="s1">As construction turned to production, the housing boom turned to dust, despite unfounded claims that the new residential development could never lead to oversupply.</span></p>
<p class="p1"><span class="s1">Over the last three years alone asking rents for houses have collapsed by 46 percent. </span></p>
<p class="p1"><span class="s1">Units have fared even worse with asking rents down by 56 percent (for landlords lucky enough to find a tenant). </span></p>
<p class="p1"><a href="https://www.propertyobserver.com.au/images/2017/03/21/ENG.jpg" target="_blank"><span class="s1">Click to enlarge</span></a></p>
<p class="p3"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/21/ENG.jpg" alt=""> </p>
<p class="p1"><span class="s2"><em>Source: SQM Research</em></span></p>
<p class="p1"><span class="s1">Dwelling prices have followed a similar pattern, albeit in a marginally less painful trajectory, with unit prices down by 40 per cent over the past three years. </span></p>
<p class="p1"><span class="s1">It looks as though the market may finally be set to move into equilibrium as the glut of supply is absorbed and the <span class="s3">LNG export boom ramps up</span>. </span></p>
<p class="p1"><span class="s1">Vacancy rates in Gladstone have now been falling for 9 months, while rents and prices seem to be consolidating or forming some kind of bottom. </span></p>
<p class="p1"><a href="https://www.propertyobserver.com.au/images/2017/03/21/G2.jpg" target="_blank"><span style="font-size: 12.16px;">Click to enlarge</span></a></p>
<p class="p3"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/21/G2.jpg" alt=""></p>
<p class="p1"><span class="s2"><em>Source: SQM Research</em></span></p>
<p class="p1"><span class="s1">It's all too little and too late for those that bought off the plan at the heady market peak, but it looks likely that the worst is over for now. </span></p>
<p class="p1"><span class="s1">Even engineering construction activity began rising again in Queensland from the first quarter of calendar year 2016, but this time around resources projects have not been the driver, although the Adani project is still potentially lurking in the wings. </span></p>
<p class="p1"><a href="https://www.propertyobserver.com.au/images/2017/03/21/G1.jpg" target="_blank"><span class="s1">Click to enlarge</span></a></p>
<p class="p1"><a href="https://www.propertyobserver.com.au/images/2017/03/21/G1.jpg" target="_blank"><span class="s1"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/21/G1.jpg" alt=""></span></a></p>
<p class="p1"> </p>
<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/"><span class="s2">blogger</span></a>.</span></p>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
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Gladstone nearing the property bottom

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<p><span>EXPERT OBSERVER</span></p>
<div>New listings fell in March according to SQM Research as more potential vendors decided not to list.</div>
<div> </div>
<div>However, total listings had already begun to increase (+3.7 per cent) as more 30-60 day stock banked up, having failed to sell. </div>
<p><span style="font-size: 12.16px;"><img src="https://1.bp.blogspot.com/-d2CQt-N3jio/XowhwDv7zpI/AAAAAAAA1IM/83eJ9Qa8bz0i2eCpwC4KlueT4ghuvHaLgCNcBGAsYHQ/s640/SQM1.jpg" width="640" height="388" data-original-height="830" data-original-width="1368"></span></p>
<p> </p>
<p>From a year ago total property listings remained -13 per cent lower than year earlier, mainly due to Sydney where listings were still -23 per cent below March 2019 levels, with Hobart also down -19 per cent year-on-year.</p>
<div><span style="font-size: 12.16px;"><img src="https://1.bp.blogspot.com/-LrJvfUcx3w0/XowhwMrVFKI/AAAAAAAA1IQ/2u2tYMooKcsELebZ2QC6lyCKmpIAn6IGwCNcBGAsYHQ/s640/SQm2.jpg" width="640" height="388" data-original-height="827" data-original-width="1359"></span></div>
<div class="separator"> </div>
<div class="separator"> </div>
<div>SQM reported that asking prices increased further in March, driven by increases in Sydney, Melbourne, and Perth, suggesting that vendors have not yet adjusted their price expectations, despite the effective shutdown of the economy.</div>
<p><span><strong>PETE WARGENT</strong><em> is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em></span></p>
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New listings and sales are falling but asking prices rose in March: Pete Wargent

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<p>Property investors across Australia must be cursing themselves because they didn’t find out about the great Clayton Bay property boom of 2015 before it was too late. </p>
<p>They could’ve had 50% capital gains in a single year if they’d been more on the ball.<span style="line-height: 1.3em;"> </span></p>
<p>Others will be giving themselves an upper cut because they overlooked the hotspot potential of Canyonleigh and missed out on $300,000 in overnight equity.</p>
<p>Still others will be demanding answers from their advisers who failed to alert them to the 34% rental yields on offer in Mission Beach. How could they have missed that?</p>
<p>50% price rises in 12 months? Rental yields above 30%? Are such things possible?</p>
<p>In reality, no. They’re the product of computer glitches, careless research companies and media that doesn’t give a damn.</p>
<p>Much of this startling misinformation about booms that never were comes to the Australian public via a relatively new part of the property reporting landscape – the online “magazines” with daily bulletins.</p>
<p>Most of these products, which purport to be information services, are anything but that. The content is created by recycling press releases and contributed blogs. Most of it is propaganda from organisations with a vested interest in their message or the outpourings of publicity-addicted research companies that believe media will publish anything labeled “research”, particularly if it contains a list of the top five/ten of almost anything.</p>
<p>They regularly publish lists from researchers who seek publicity without caring too much about the data quality.<span style="line-height: 1.3em;"> </span></p>
<p>Examples are “Top 20 locations with the highest yields” and “Locations where values have risen 40% in 12 months”.</p>
<p>These lists are the worst kind of nonsense, because most of the entries are computer-generated statistical aberrations – often because a small sales sample means the median price is meaningless.</p>
<p>Media reports a 40% rise in the median price as a 40% rise in values and it’s nothing of the sort. Usually it’s a mathematical glitch and the researchers don’t care enough to clean up their data.<span style="line-height: 1.3em;"> </span></p>
<p>A recent example declared that the capital growth king of the nation, with a 49% rise in prices over 12 months, was Clayton Bay.</p>
<p>Where? I hear you ask. Clayton Bay is a town of just 200 residents near Hindmarsh Island south of Adelaide. Its property values have <strong><span style="text-decoration: underline;">not</span></strong> increased 49% - a statistical glitch created by a very small sales sample (one sale per month, on average) has produced a 49% rise in the median house price.</p>
<p>Close behind of this fool’s gold list was Canyonleigh in the NSW southern highlands which, according to one breathless media report, “achieved 49.13% growth on a median house price of $857,500”.<span style="line-height: 1.3em;"> </span></p>
<p>Canyonleigh, like Clayton Bay, is so small it doesn’t have a property market worthy of the name. It has insufficient sales to produce price data that makes any sense.<span style="line-height: 1.3em;"> </span></p>
<p>Every other entry on this list was similar. The information was worse than worthless.</p>
<p>But it gets worse.</p>
<p>Did you know you could get 37% rental returns on residential properties in Mission Beach, Queensland? According to media (quoting figures from the same research firm), you can.</p>
<p>So why aren’t investors stampeding to Mission Beach to snap up every home in sight? Because it’s nonsense – yet another computer-generated statistical anomaly.</p>
<p>This blunder is created by recording the peak season rents achieved by holiday lettings and not telling the computer that properties are vacant for most of the year. If those peak holiday season rates were achieved 52 weeks of the year, the rental return might indeed be 30%-plus. But they’re not.</p>
<p>What’s the true median rental yield for Mission Beach? According to more reliable research sources, it’s 4.9%.</p>
<p>And would you want to buy there? Prices have been falling (a lot) for the past three years and it takes six months to sell the average property.</p>
<p>Lovely place to visit but you wouldn’t want to invest there.</p>
<p>Every location on the national list of best places to buy for the best rental yields was, yet again, a furphy. It makes for entertaining reading – as long as you understand it’s rubbish.<span style="line-height: 1.3em;"> </span></p>
<p>But, week after week, the online “news services” pump out this nonsense as credible information. So I have to wonder how many people read it, believe it – and act on it.</p>
<p> </p>
<p><em>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></em></p>
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terryryder-YECXbqmri2

Property investors must ignore nonsense research data: Terry Ryder

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<h3 class="post-title entry-title"> </h3>
<div id="post-body-5860701746523950073" class="post-body entry-content">
<div>When it comes to property investment I generally favour the largest capital city housing markets, which in Australia tend to have more diversified economies, the greatest population and employment growth, tighter supply, and less prime location land available for release. </div>
<div> </div>
<div>One of the <em>regional</em> success stories of the past half decade has been a town - or a "city" as you would say in Australia - that I went to visit this weekend.</div>
<div> </div>
<div>With a population of around 162,000 it is the 16th largest city in Australia, and the largest inland city after the nation's capital, Canberra...</div>
<div> </div>
<div>
<div><span>The city I am referring to, of course, is <strong>Toowoomba</strong> in Queensland, to the west of Brisbane.</span></div>
<div><span><br>Queensland is the one state in Australia which has a number of sizeable regional cities, and there are four others that are larger again than Toowoomba: Gold Coast, Sunshine Coast, Townsville, and arguably Cairns (depending upon where you draw the boundary). </span></div>
<div><span> </span></div>
<div class="separator"><span>The <a href="https://petewargent.blogspot.com.au/2014/07/x" target="_blank">Grattan Institute</a> found in a 2014 study that Australia's capital cities have become vital to economic activity, driving most of the economy in every state .</span></div>
<div class="separator"><span> </span></div>
<div class="separator"><span>For regional centres, Grattan found that it is their proximity to the CBD which largely drives their fortunes and thus their respective rates of economic growth. </span></div>
<div class="separator"><span> </span></div>
<div class="separator"><span>According to Grattan's research, regional centres stationed less than 150km from the CBD are growing at a considerably faster pace than those located further away.</span></div>
<div><span> </span></div>
<div><span>This in turn suggests that the best placed regional centres over the long term might include cities such as Toowoomba which is positioned approximately 125km from Brisbane. </span></div>
<div><span> </span></div>
<div><span>Other centres which sit close to their respective capitals include Geelong (around 75km from Melbourne), Newcastle &amp; the Hunter (Newcastle is located approximately 160km from Sydney), and Wollongong (85km to the south of Sydney). </span></div>
<div><span><br>The end of the mining construction boom will lead to desperate times for some regional centres, but the unemployment rate in Toowoomba has remained relatively low thanks to its diversified economy, which includes defence, agriculture, food processing, energy resources, retail and construction.</span></div>
<div><span> </span></div>
<div><span>There are some ongoing wages cuts disputes happening in the region, but overally the economy has held up relatively well. </span></div>
<div><span> </span></div>
<div>
<p><span><em>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>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Toowoomba a regional success story: Pete Wargent

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<p>The standout feature of Domain’s Top 10 prestige beach suburbs list is the remarkably poor performance on capital growth.</p>
<p><span style="line-height: 1.3em;">The best of them wouldn’t make the Top 10 list for capital growth rates in Melbourne, Perth, Darwin, Sydney or Brisbane – nor the Top 25 list of best performers in regional Australia. </span></p>
<p>One of the so-called Top 10, Noosa, has recorded zero growth over 10 years. This helps to confirm our ranking of Noosa as Australia’s biggest real estate lemon.</p>
<p><span style="line-height: 1.3em;">The Domain list of Top 10 prestige beach suburbs continues a grand tradition of Australian media publishing real estate lists that are pointless, inaccurate or farcical.</span></p>
<p><span style="line-height: 1.3em;">It says something about the mediocre performance of these apparently prestigious beachside locations that one of the Top 10 has recorded no growth at all over the past decade. </span></p>
<p><span style="line-height: 1.3em;">It’s the antithesis of investment, which is meant to be about achieving growth. The only thing of value to owners in many of these ritzy locations is the ego trip. Beyond that, they’re crying all the way to the bank.</span></p>
<p><span style="line-height: 1.3em;">These locations, which include Brighton in Melbourne, Bronte in Sydney and Cottesloe in Perth, have all the qualities that many people imagine would make them out-performers on capital growth: great beaches, quality restaurants, wonderful amenities and top quality homes. </span></p>
<p><span style="line-height: 1.3em;">Many investors would rue their inability to afford to buy there and grow their wealth. But they need not concern themselves: there’s better capital growth in the middle market areas and the downmarket suburbs, which dominate the Top 10 growth lists in most of our major cities.</span></p>
<p>Remember that old real estate adage about property doubling in value every 10 years, which means a growth rate averaging better than 7% per year? It’s generally untrue. The best performers achieve it, but most properties do not. And certainly none of the Top 10 prestige beach suburbs have done so.</p>
<p><span style="line-height: 1.3em;">The No.1 ranked prestige beach suburb for capital growth, which apparently is Brighton in Melbourne, has managed growth averaging just 6.7% per year.</span></p>
<p>No.2 Portsea, also in Melbourne, recorded growth averaging only 5.55% per year. This is not a stellar performance, although the people who put together the list apparently thought it was.</p>
<p><span style="line-height: 1.3em;">Byron Bay, which according to Domain Group senior economist Andrew Wilson is “an exceptional market”, has averaged a mediocre 5.4% per year - a growth rate at which it would take over 13 years for values to double.</span></p>
<p>The bottom half the Top 10 list is made up of suburbs with growth rates that don’t even match inflation. </p>
<p>Main Beach on the Gold Coast has a growth rate of a little over 1% per year. Palm Beach in Sydney, where the median price is $2.7 million, has managed less than 1% per year.</p>
<p>To put these growth rates into perspective, the best suburbs in Darwin, Perth and Melbourne all have growth rates above 10% per year. The best in Sydney are above 9% per year.</p>
<p><span style="line-height: 1.3em;">And, outside the capital cities, the Top 25 regional centres all have growth rates of 10% per year or better, with the top four achieving 15%-plus. </span></p>
<p>If you’d bought the typical Palm Beach property 10 years ago, you would have paid around $2.46 million and managed capital gains of around $220,000 a decade later. In real terms, you lost money.</p>
<p>If you’d spent that $2.46 million in the best-performing suburbs in Perth, Darwin, Sydney and Melbourne (you could have bought multiple properties in multiple cities for that sum), your capital gain would have been $4.2 million.</p>
<p>Which would you rather have: the prestige - or $4.2 million?</p>
<p> </p>
<p><span style="line-height: 1.3em;"><em>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></em> </span></p>
<p> </p>
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