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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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. 
They could’ve had 50% capital gains in a single year if they’d been more on the ball. 
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.
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?
50% price rises in 12 months? Rental yields above 30%? Are such things possible?
In reality, no. They’re the product of computer glitches, careless research companies and media that doesn’t give a damn.
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.
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.
They regularly publish lists from researchers who seek publicity without caring too much about the data quality. 
Examples are “Top 20 locations with the highest yields” and “Locations where values have risen 40% in 12 months”.
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.
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. 
A recent example declared that the capital growth king of the nation, with a 49% rise in prices over 12 months, was Clayton Bay.
Where? I hear you ask. Clayton Bay is a town of just 200 residents near Hindmarsh Island south of Adelaide. Its property values have not 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.
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”. 
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. 
Every other entry on this list was similar. The information was worse than worthless.
But it gets worse.
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.
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.
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.
What’s the true median rental yield for Mission Beach? According to more reliable research sources, it’s 4.9%.
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.
Lovely place to visit but you wouldn’t want to invest there.
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. 
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.
 
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

Property investors must ignore nonsense research data: Terry Ryder

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GUEST OBSERVER
The minutes from the RBA’s October meeting suggested little change for the near term path for monetary policy. While there are clearly concerns over growth prospects in China and East Asia, on the domestic front the tone was quintessentially ‘glass half full’. 
On the domestic front, the minutes suggested:
Soft GDP growth in Q2 reflected temporary weather-related disruptions and overall growth was expected to have strengthened in Q3. There was further evidence of a rebalancing of growth supported by the lower AUD (through net services trade) and lower rates (through housing construction and consumer spending).
The Board remains uncertain about the housing outlook. The minutes noted that it was too early to be confident that signs of slowing house prices would be sustained. They also highlighted the unreliability of the housing finance numbers, noting that “the data on the split of lending to owner-occupiers and investors were of questionable quality at present”. On the financial stability front, the Board noted that increased competition in the owner-occupied and business lending sectors suggested that “a key challenge would be to ensure that lending standards at both Australian and foreign-owned banks did not weaken from this point”.
The Board seems somewhat more comfortable about the risks posed by strongly growing house prices, noting that ”the response of the banks to supervisory measures implemented by APRA were helping to manage risks in the housing market”.
On the global front the tone was more cautious:
Concerns remain raised about the outlook for growth in China and East Asia. In particular, the minutes highlighted the slowdown in industrial production and exports in the region and noted that ongoing below-average growth remains “a source of concern for the strength of the global economy”. 
The October board meeting pre-dated last week’s move by Westpac to increase mortgage rates by 20bps, although the announcement would not have come as too much of a surprise to the RBA. Governor Stevens noted in July that higher mortgage rates were to be expected given the increased capital requirements for major banks. We continue to expect the RBA to wait until next year to cut rates, when the stimulus from housing and the lower AUD are likely to fade. However, if other major banks follow Westpac’s lead in coming weeks, a late 2016 rate cut cannot be ruled out. 
Felicity Emmett co-head of Australian economics, ANZ Research and can be contacted <a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/felicity-emmett/5a/3ba/256" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

No direction change from RBA: ANZ's Felicity Emmett

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GUEST OBSERVER
If there's one thing which really irks me most about property markets it's the long list of headline-chasing commentators who, each time they come public with a property opinion piece, do little more than demonstrate their limited knowledge on the complexities of property markets.
The recent Macquarie Wealth Management Aussie Macro Outlook report is a classic example. Citing a pending property oversupply and a slowdown in population growth, the report said “in terms of the price phase of the adjustment, we expect a measured 7.5% peak-to-trough decline in house prices over 2016 and into 2017, with a recovery commencing in 2H17”.
A day later, AMP couldn’t resist the urge to go one better with forecasts of a slide in property values of up to 10%.
Extraordinary jibberish by them both!
As if referring to one massive country that contains 550 different local government jurisdictions in eight states and territories as one big market isn’t laughable enough; to then try to predict a specific value that ‘the market’ will decline by is ridiculous. Why 7.5 or 10%? Why not 2% or 15%?
Unlike share markets, property markets do not have an ‘All Ords Index’. It’s not as if an investor can sink $10,000 of their savings in to a ‘Property Index’ that constitutes the cumulative value of properties within Australia’s biggest cities.
The problem with the likes of banks and economists is that many of their utterings are gross generalisations and are based on the premise that we do have a ‘Property Index’. Too often they make a diagnosis as a 'general practioner' which is often even less accurate than their monthly interest rate forecasting and only creates unhealthy drama in the lives of others. It’s irresponsible. These general practioners should stick to general economic commentary and leave the property economic commentary to the specialists. 
Exactly which ‘market’ are these general practioners referring to with their 7.5 to 10% decline in property values anyway? Is Doctor Macquarie referring to the Perth and Darwin markets which, at the very start of this year, Propertyology forecast would [and now are] declining. Is Doctor AMP referring to Adelaide, Brisbane, Canberra and Hobart which completely missed the boom and property values today are much the same as they were six years ago? My guess is that ‘Australia’ really means ‘Sydney and Melbourne’ and that they’ve probably given little thought to the remaining 61% of the country. Or, perhaps I missed the memo which referred to their exclusion from that co-called ‘Property Index’.
It would take real research to forecast the outlook of the hundreds of regional markets across the country where a significant eight million Australians elect to live and some exciting investment potential exists. This is one of the many limitations of general practitioners.
Whilst Australia’s population growth rate has eased, a growth rate to the year ending March 2015 of 1.4% is only marginally lower than the 1.5% national average over the last ten years. If Doctor Macquarie’s property market forecasting is based on the gross generalisation that ‘Australia’ actually means ‘Sydney and Melbourne’ as we suspect, they obviously haven’t looked at the facts close enough; the latest available capital city population data shows that Sydney’s growth rate of 1.8% is above its 1.5% annual average and Melbourne’s 2.3% population growth is also above its 2% average. ‘Oops’, I hear them utter. 
Many commentators [not Propertyology, mind you] are describing Brisbane as the number one place to invest in at the moment, yet its population growth of 1.7% is significantly below its ten-year average annual growth rate of 2.2%.
A specialist, as opposed to a general practioner, knows that the complex nature of property markets is much deeper than running the ruler over a few population figures; here’s plenty of research with substance to back this up.
Propertyology forecasts Melbourne to be Australia’s best performing capital city property market in 2016. It’s not a location that we’ll be investing in though. The property asset class requires a longer focus and our concerns with Melbourne’s economic profile were well documented earlier this year and nothing has changed. Dark clouds loom for Melbourne from 2017 onwards.
In regards to dwelling supply, those who have been listening will know that over the last couple of years Propertyology has warned that national building approval volumes are at all-time record levels. At a national level, over the two years ending July 2015 there were 416,141 new dwellings approved which equates to a 34% increase on the 310,797 for the two years ending July 2012.
The devil is always in the detail though. On a state-by-state basis, the biggest increases in building approvals have occurred in New South Wales (+63%), Western Australia (+55%), and Queensland (+45%). Victoria has consistently high building approval volumes for the last five years. On the other hand, supply has been better controlled in South Australia (+10%), Tasmania (-1%), and Canberra (- 21%). The wide range of results from supply data is just as prominent across regional cities.
‘Oops’, again.
Rounding out the trifecta of these gross generalisations are claims from general practioners that household incomes haven’t grown enough to sustain the increases in property prices over the last couple of years. Which of the 9.6 million Australian households would these generalisers be referring to? If they are going to generalise about wages showing a nominal increase over the last five years surely it’s relevant to at least factor in the 2.5% reduction in the cash rate which equates to an extra $11,250 in the household budget (based on a $450,000 home loan). In most of Australia, housing affordability has actually improved.
How many oops’s are we up to now?
Employment prospects in this country are much healthier than many scribes have given credit. Yes, the national unemployment rate has increased a bit but so has our population. Australia actually created 342,700 new jobs over the two years ending August 2015 but I don’t recall ever seeing that as a lead news story. Imagine what this (once) great country could achieve with less glass-half-empty people occupying the tabloids.
Another thing that the general practioners probably don’t realise is the unprecedented pipeline of infrastructure projects throughout the country which, pending greater cooperation from all levels of government, actually has the potential to supercharge Australia’s economy.
Affordability is definitely an issue for Australia’s most expensive city to live in, Sydney; that’s nothing new though. While a significant amount of new supply will hit Sydney’s market during the next couple of years, Propertyology’s research suggests that Sydney’s economy will remain very healthy for some years and property prices are likely to have a prolonged flat period. That’s one of the main reasons why Propertyology resisted the temptation to help clients invest in our biggest city.
Increased supply and a significant spike in investor home loans over the last two years is likely to result in property rents in Australia’s three biggest cities easing throughout 2016 and 2017.
Brisbane, Adelaide and Hobart will experience price growth next year while Perth and Darwin are likely to fall further and remain in a property trough for at least another year.
With 411 separate regional local governments throughout Australia there will always be mixed fortunes amongst the forgotten 35% of Australia’s population. The money trail which Propertyology is following is directly linked to the Asian Century; locations which we have identified for solid property market performance over the medium term have economies which contain a mix of agriculture, tourism, premium manufacturing, education, and health.
If these markets decline in value by 7.5 to 10% I guess the general practioners will be able to shout from the rooftops that there is such a things as a ‘Property Index’. I’ve put my money where my mouth is though and I can assure you that, before doing so, I did a lot more than look at very broad population and construction numbers.
 
Simon Pressley is Managing Director of <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>, REIA Hall of Fame Inductee, property market analyst, accredited property investment adviser, and Buyer’s Agent.
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spressley-sBoeMhannA

Melbourne to be Australia’s best performing capital city property market in 2016: Propertyology's Simon Pressley

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Sydney had a preliminary auction clearance rate of 66.6% from 830 reported auctions, according to CoreLogic RP Data's Property Market Indicator Summary for the week ending 18 October.
The final clearance rate for the city was 69.6 per cent, across 1,197 auctions.
The Inner West had an 80% preliminary clearance rate and the Eastern Suburbs 76.8%. The north Sydney and Hornsby region had a clearance rate of 87.6% from 118 auctions.
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Sydney's Inner West shows 80% clearance rate: CoreLogic RP Data

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Dwelling prices across Australia in 2016 are tipped to rise at the slowest pace recorded since 2012, according to the Housing Boom and Bust Report by SQM Research.
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<div>The report predicts average capital city dwelling prices will rise between 3% and 8% for the full calendar year, down from the current 9.8% recorded for the 12 months to June 2015.</div>
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<div>SQM managing director Louis Christopher said the slowdown will occur predominantly as a result of a slowing Sydney property market, which is forecasted to rise between 4% and 9% and Melbourne is forecasted to overtake Sydney and be the best outperforming capital city in 2016 with a forecast rise in dwelling prices of between 8% to 13%.</div>
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<div>"Nationally, the rental market is likely to see a continued flat market with expected rental changes of between 0% and 3%. Darwin is tipped to record another year of significant declines in rents of -12% to -8%.  While Hobart is tipped to record the fastest rental growth of all capital cities at +5% to +8%," he said.</div>
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<div>"This year, it has become quite apparent that rents have slowed, possibly as a result of the lower inflationary environment. We believe there is evidence that rents will slow further in 2016 with our average capital city forecast to be 0% to 3%. Perth and Darwin will experience the largest falls in rents however this is just part of an ongoing trend currently being recorded in these two cities. Hobart, Melbourne and the Gold Coast will likely record the strongest rental increases. </div>
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<div>"We believe the threat of a massive oversupply in Melbourne has been overstated. Indeed our vacancy rates for that city have fallen for the year as population growth and housing formation have quickly absorbed the new stock being completed."</div>
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Melbourne to be strongest, but national housing market will slow in 2016: SQM Research

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GUEST OBSERVER
Today's RBA semi-annual financial stability review focused on increasing risks in Australia's property market.
On housing, the RBA noted some tentative signs that market activity was pulling back in Sydney and Melbourne, from rapid rates of growth, which is positive. At the same time, they suggested that recent lending standards had been weaker than had been previously thought and that the Melbourne and Brisbane apartment markets look to be over-supplied.
On commercial property, they re-iterated concerns that prices are rising much faster than rents. In our view, a further RBA rate cut, as the market is pricing, seems unlikely in an environment of already 'frothy' property markets.
Facts
The RBA noted that 'recent investigations by regulators had revealed that housing lending standards in recent years have been somewhat weaker than had originally been thought'.
They noted that 'while the housing market remains a long way from oversupply nationwide, some geographic areas appear to be reaching that point, particularly inner-city areas of Melbourne and Brisbane'.
They noted that 'many existing borrowers also continue ... to pay down their mortgages faster than required' and that 'aggregate mortgage buffers remain around 16% of outstanding loan balances, equivalent to more than two years of scheduled repayments'.
They noted that 'risks are rising in the commercial property sector' with 'oversupply evident in the Perth and Brisbane office markets'.
Implications
The property market has been a keen focus of RBA observers recently. Some are arguing that the signs of slowdown in housing price growth and construction may mean the RBA needs to cut interest rates further to maintain growth momentum in the economy. In contrast, we still see the RBA as more worried about excessive property market exuberance than the modest pullback we have seen recently.
Today's semi-annual financial stability review sheds some light on the RBA's own view of the property market situation. First, they note that, although there are some 'tentative' signs of some slowing in the Sydney and Melbourne housing markets, demand remains strong in these markets (prices are still rising at 17% and 14% annually). Second, they noted that the upswing in housing construction is starting to lead to pockets of oversupply of housing, in the Melbourne and Brisbane apartment markets, although they suggested that the nationwide housing market is a long way from oversupply.
Finally, they suggested that although lending standards have been tightening, as the prudential regulator has been turning up the dial on its micro-prudential settings, it appears that the starting point was that lending standards were looser than had been previously thought.
In our view, the RBA still seems more concerned about making sure that financial conditions and lending standards are tighter in the housing market, rather than being concerned about needing to deliver more stimulus.
In this regard, the recent increase in effective mortgage rates (as a result of a lift in mortgage rates by a major bank), partly in response to the authority's requirement that banks hold more capital, may not be as much of a surprise to the central bank as the market has been suggesting.
Keep in mind that, for some time, the RBA's challenge has been that it wanted to maintain loose financial conditions to support the rebalancing of growth, but has been increasingly worried that very low interest rates could over-inflate parts of the housing market. A modest lift in effective mortgage rates, combined with continued low business lending rates and a lower AUD may, in fact, be closer to the ideal policy setting at the moment.
On commercial property, the RBA noted increasing concerns about the gap that is opening up between prices and rents. Much like in housing, the risk that is building up appears to be geographically concentrated. In particular, the central bank noted that oversupply is evident in the Perth and Brisbane office markets. Office vacancy rates are rising to quite high levels in these cities and these are the areas most exposed to the mining downturn. In contrast, vacancy rates are lower in Sydney and falling in Melbourne.
Overall, the RBA stated that the Australian banking system faces 'heightened, but manageable, risk' but it is clear that having interest rates at low levels for a long time may be starting to create some unwanted problems. 
 
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<a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">PAUL BLOXHAM</a> IS CHIEF ECONOMIST (AUSTRALIA AND NEW ZEALAND) FOR HSBC. 
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Property market risks rising: HSBC's Paul Bloxham

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The housing market across Mt Gambier has an even spread of sales across all price sectors so far in 2015, according to Herron Todd White.
Herron Todd White's October Month in Review found the highest number of sales occurred in the price bracket between $201,000 and $250,000. 
"This spread across the price sectors is an indicator of the current market conditions being somewhat static," HTW noted.
"If the market was increasing, we would expect to see a noticeable increase in sales within the higher value price sectors."
According to CoreLogic RP Data, the price sectors with most frequent sales throughout 2015 in the region are:
• $151,000 to $200,000 (70 sales) 
• $201,000 to $250,000 (86 sales)
• $251,000 to $300,000 (71 sales)
• $301,000 to $400,000 (59 sales)
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Mt Gambier sales highest under $250,000: Herron Todd White

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A Melbourne four-bedroom designer home at 6 St Helens Road, Hawthorn East is up for sale with an asking price of $3.175 million through agents Nikki McCarthy and Svetlana Hudson of RT Edgar.
The house, on<a href="https://www.realestate.com.au/property-house-vic-hawthorn+east-120495689" target="_blank"> 877 square metres</a>, has a traditional double brick façade, juxtaposed by a soaring, cutting-edge extension. 
It has custom designed full-height tri-slide stacking doors and a solar-heated, salt-chlorinated pool.
The place is close to schools including Bialik College and Scotch College, in zone for Auburn South Primary. Within a short distance are Anderson Park, trams and shopping and dining areas at Camberwell Junction.
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Designer home up for sale in Hawthorn East for $3.175 million

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CoreLogic-RP Data already appears set to report further dwelling price growth in October for Sydney, with prices once again up at a sprightly pace and moving another +$5,300 higher. </div>
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<div>There has been plenty of spirited debate in the media about what comes next for house prices in Australia.</div>
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<div>Macquarie has suggested that a housing market correction of -7.5 per cent could take place - beginning some time in 2016 before ending in 2017 - while Stockland's Mark Steinert disagrees and sees prices continuing to rise by +3% to +5% through next year.</div>
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<div>This pretty much tells you everything you need to know about short term property market predictions: one analyst thinks prices will rise, another thinks they'll fall! Central Bank What about the role of the Reserve Bank and monetary policy settings? Here's what central bank expert Sophia Rodrigues thinks:</div>
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Long term focus Property owners would do well to retain a long term outlook rather than waste too much energy on short term dwelling price predictions, which are invariably a hit and miss affair at the best of times.</div>
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<div>As for the bubble/crash/correction calls which have continued over the past 15 years or so, Sydney median house prices now need to suffer an enormous correction - a gargantuan fall of $300,000 - even just to get back to where they were a couple of years ago in June 2013, let alone to actually correct from there. </div>
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Market variances One thing that can be said with some certainty is that there will be significant variances across the Sydney property market.</div>
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<div>Outer suburban auction markets in Sydney have already turned in favour of buyers with clearance rates tanking fast in the west, south west, and north west sub-regions. More stringent deposit requirements appear to be biting hard in the outer. On the other hand clearance rates have remained relatively elevated for now in the eastern suburbs, the inner west, lower north shore, northern beaches, and the city &amp; inner south. 
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<div>Higher density markets will also almost certainly fare less happily than the metropolitan averages due to a looming stock overhang.</div>
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In terms of other market drivers, Sydney presently has a vacancy rate of around 1.7% but with plenty of supply now in the pipeline, while the unemployment rate for Greater Sydney is only 5.1%. Implied yields on cash rate futures contracts are pricing a 100% chance of an interest rate cut to just 1.75% by April 2016. This morning's Building Activity data release will shed more light on dwelling commencements and completions around the states. Expect to see both commencements and completions respectively at close to their highest ever levels.
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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>. 
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>.
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October housing prices: Pete Wargent

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Capital city dwelling values increased by 0.9% over the first month of Spring, according to CoreLogic RP Data head of research Tim Lawless.
In the latest national housing market update he says the quarterly rate of growth is 4.0% and annual rate of growth at 11.0%.
Watch the video <a href="https://www.youtube.com/watch?v=fq_OnQKCpLs" target="_blank">here</a>.
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