<p>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.</p>

<p>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;</p>

<p>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;</p>

<p>“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;</p>

<p>[smartcode_project:default project_id=110291 project_image_fid=302785]</p>

<h2>Affordable product leads, premium demand remains resilient</h2>

<p>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;</p>

<p>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;</p>

<p>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.</p>

<p>Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.</p>

<p>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;</p>

<p>[smartcode_project:default project_id=148957 project_image_fid=364102]</p>

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

<p>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.</p>

<p>David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.</p>

<p>“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;</p>

<p>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.</p>

<p>[smartcode_project:default project_id=108869 project_image_fid=317905]</p>

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

<p>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;</p>

<p>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;</p>

<p>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”.</p>

<p>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;</p>


Joel Robinson

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

<p><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.</p>

<p>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.</p>

<p>Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.</p>

<p>“Brisbane was the right step for Sammut,” Sammut said.</p>

<p>“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.”</p>

<p><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" /></p>

<p>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.</p>

<p>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.</p>

<p>“We are DA approved now which is very exciting,” Sammut said.</p>

<p>“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.”</p>

<p><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" /></p>

<p>Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.</p>

<p>“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.</p>

<p>The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.</p>

<p>“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.”</p>

<p>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.</p>

<p>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.</p>


Sammut secures approval for debut Brisbane apartment development in Toowong

<p>Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.</p>

<p>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.</p>

<p>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.</p>

<p>“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.</p>

<p>“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.</p>

<p>“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.”</p>

<p>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.</p>

<p>“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.”</p>

<p>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.</p>

<p>“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.”</p>

<p>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.</p>

<p>“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.</p>

<p>Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.</p>

<p>“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.</p>

<p>“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”</p>

<p>The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.</p>

<p>“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.</p>

<p>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.</p>

<p>&nbsp;</p>


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

<p>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.</p>

<p>The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.</p>

<p>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.</p>

<p>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.</p>

<p>“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.</p>

<p>“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.”</p>

<p><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" /></p>

<p>GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.</p>

<p>“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.”</p>

<p>Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.</p>

<p>“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.</p>

<p><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" /></p>

<p>&nbsp;</p>

<p>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.</p>

<p>Green praised local policy settings.</p>

<p>“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.”</p>

<p>One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.</p>

<p>“The way we will be able to achieve economies of scale is through size,” Green added.</p>


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

<p>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.</p>

<p>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.</p>

<p>Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be</p>

<p data-end="683" data-start="511">"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.</p>

<p data-end="882" data-start="690">"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."</p>

<p data-end="882" data-start="690">[smartcode_project:default project_id=134646 project_image_fid=6109]</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6110]</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6116]</p>

<p data-end="247" data-is-last-node="" data-is-only-node="" data-start="0">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.</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project_cta:default project_id=134646]</p>


WM Residences fills gap in Mordialloc townhouse market

Housing Market

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<p><span>GUEST OBSERVER</span></p>
<p><span>A pick-up in the housing sector was a necessary part of the adjustment in the Australian economy following the end of the mining boom.</span></p>
<p><span> The RBA started cutting interest rates in 2011, home buyers returned, home prices rose and this has all encouraged a dwelling construction boom that has helped offset the mining investment slump. However, as always the surge in home prices has refocussed attention on whether there is a property bubble and how it might end. </span></p>
<p><span>Analysing the Australian residential property market is a bit like Groundhog Day as the big picture fundamental issues don’t really change much in that Australian housing is expensive, affordability is poor, household debt is high and there is a constant debate as to whether there is a crash around the corner. This has been the case ever since 2003. </span></p>
<p><span>So quite clearly the issues around the property market are much more complex than many would see them. This note takes a look at where we are now in the Australian residential property cycle and implications for investors. </span></p>
<p><span>Overvalued with too much debt... </span></p>
<p><span>At a big picture level it’s hard to get away from the view that Australian property is expensive and household debt is high:</span></p>
<p><span style="line-height: 1.3em;">According to the 2015 Demographia Housing Affordability</span></p>
<p><span style="line-height: 1.3em;">Survey the median multiple of house prices to household income is 6.4 times in Australia versus 3.6 in the US and 4.7 in the UK.</span></p>
<p><span style="line-height: 1.3em;">On the basis of the ratio of house prices to rents adjusted for inflation relative to its long term average, Australian houses are 37% overvalued and units 14% overvalued.</span></p>
<p><span style="line-height: 1.3em;">The ratios of house prices to incomes and rents in Australia are at the high end of OECD countries. By contrast the US is near the low end in the OECD.</span></p>
<p><span style="line-height: 1.3em;">Real house prices have been running above trend since 2003. While the excess above trend eased from 2010 it has blown out again in the last two years. </span></p>
<p><a href="/images/2015/10/13/Screen%20Shot%202015-10-13%20at%203.23.20%20PM.png" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></p>
<p><span style="line-height: 1.3em;"><img src="/images/2015/10/13/Screen%20Shot%202015-10-13%20at%203.23.20%20PM.png" alt="" width="632" height="360"></span></p>
<p><span style="line-height: 1.3em;">The shift to overvaluation has come higher household debt. The next chart shows the deviation in house prices from their long term trend against the ratio of household debt to income. </span></p>
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<p><span>Naturally all of this has led to concern that Australia is in a housing bubble that will inevitably burst.</span></p>
<p><span>...but not as simple as it looks</span></p>
<p><span>However, it’s not as simple as this:</span></p>
<p><span>First, the big surge in home prices and household debt actually took place from the late 1990s into early last decade. Since then measures of overvaluation and the debt to income ratio haven’t changed much (esp after allowing for mortgage offset accounts). See the last chart. In other words the surge in home prices and debt was unrelated to the mining boom, except in some cities like Perth.</span></p>
<p><span>Second, the claims around negative gearing, foreign and SMSF buying driving the problem don’t really stack up: negative gearing has been around for a long time and while foreign and SMSF buying has played a role it looks to be small and foreign buying is concentrated in certain areas.</span></p>
<p><span>Third, a more fundamental factor explaining the persistence of “overvalued” home prices in Australia relative to other countries is constrained supply. Australia has had a chronic undersupply which has been worsening until recently. This can be seen in the next chart which tracks housing starts versus underlying demand. The cumulative undersupply on this measure reached above 100,000 dwellings last year. The main reason behind the slow supply response appears to be tough land use regulations in Australia. </span></p>
<p><span> </span></p>
<p style="line-height: 1.3em;"><a href="/images/2015/10/13/Screen%20Shot%202015-10-13%20at%203.37.00%20PM.png" target="_blank">Click to enlarge</a></p>
<p style="line-height: 1.3em;"><img src="/images/2015/10/13/Screen%20Shot%202015-10-13%20at%203.37.00%20PM.png" alt="" width="599" height="327"></p>
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<p><span> </span></p>
<p><span>Fourth, while household debt has gone up a lot there has not been anything like the deterioration in lending standards seen in other countries. Much of the increase in debt has gone to older, wealthier Australians. Bad debts and arrears remain low. While loan size has increased, Australians’ seem focussed on cutting their debt once they get it.</span></p>
<p><span>Finally, while Sydney and Melbourne have had all the characteristics of a bubble of late (overvaluation, rapid price gains, a desire to get in for fear of missing out), the rest of Australia has not. So it’s dangerous to generalise.</span><span style="line-height: 1.3em;"> </span></p>
<p><a href="/images/2015/10/13/Screen%20Shot%202015-10-13%20at%203.38.37%20PM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/13/Screen%20Shot%202015-10-13%20at%203.38.37%20PM.png" alt="" width="603" height="306"></span></p>
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<p><span> </span></p>
<p><span>Despite all these qualifications, high house prices combined with high household debt to income ratios suggest Australia is vulnerable should something threaten the ability of households to service their mortgages. As such the RBA and APRA have been right to try and slow the property market down.</span></p>
<p><span>So where are we now?</span></p>
<p><span>Our assessment is that the national property market is cooling. </span></p>
<p><span>APRA’s measures to slow lending to property investors are clearly biting with lending to investors slowing.</span></p>
<p><span>The Westpac-MI consumer sentiment survey shows a sharp fall in consumers’ assessment as to whether now is a good time to buy a dwelling, led by NSW.</span></p>
<p><span>Auction clearance rates have slowed. </span></p>
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<p><a href="/images/2015/10/13/Screen%20Shot%202015-10-13%20at%203.41.25%20PM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/13/Screen%20Shot%202015-10-13%20at%203.41.25%20PM.png" alt="" width="610" height="338"></span></p>
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<p><span> </span></p>
<p><span>However, this slowdown is likely to be concentrated in Sydney &amp; Melbourne, which are likely to see price growth slow to around 5% over the year ahead. Price growth is likely to remain negative in Perth and Darwin as the mining boom continues to unwind. Hobart &amp; Adelaide are likely to see continued moderate property growth, but Brisbane may start to pick up a bit.</span></p>
<p><span>Nationwide price falls are unlikely until the RBA starts to raise interest rates and this is unlikely before 2017. And then in the absence of a recession or rapid interest rate hikes price falls are more likely to be 5-10% as was seen in the 2009 and 2011 down cycles than anything worse. In fact, the cooling in investor demand in Sydney and Melbourne are likely to provide greater flexibility for the RBA to cut interest rates again.</span></p>
<p><span>What to watch for a harder landing?</span></p>
<p><span>I would nominate the following:</span></p>
<p><span>A recession – much higher unemployment could clearly cause debt servicing problems and hence forced sales. The risk at present looks manageable though at around 20%.</span></p>
<p><span>A surge in interest rates – but the RBA knows about the increased debt sensitivity of households so this would require the RBA to get it wrong badly.</span></p>
<p><span>Property oversupply – this is a risk but would require the current construction boom to continue for several years. </span></p>
<p><span>Implications for investors </span></p>
<p><span>There are several implications for investors: </span></p>
<p><span>First, over the very long term residential property adjusted for costs has provided a similar return for investors as Australian shares, at around 11-11.5% pa. So there is role for residential property in investors’ portfolios.</span></p>
<p><span>Second, housing is looking somewhat less attractive as a medium term investment. It is now expensive on all metrics and offers very low income (rental) yields compared to all other assets except bank deposits and Government bonds. The gross rental yield on housing is around 2.8% (after costs this is around 1%), compared to yields of 6% on commercial property and 6.7% for Australian shares (with franking credits). This means that a housing investor is more dependent on capital growth to generate a decent return.</span></p>
<p><span> </span></p>
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<p style="line-height: 1.3em;"><span style="line-height: 1.3em;"><img src="/images/2015/10/13/Screen%20Shot%202015-10-13%20at%203.48.21%20PM.png" alt=""></span></p>
<p><span>Third, these comments relate to housing in aggregate. For those who want to look around there are pockets of value, eg in regional areas. You just have to look for them.</span></p>
<p><span>Finally, investors need to consider their exposure to Australian residential property generally. As a share of total household wealth its nearly 60%. Once allowance is made for indirect property exposure via Australian shares (banks, property trusts, etc) it’s even higher. I am not in the property crash camp but the risk of it does reinforce our assessment that Australian investors should have a decent exposure to say unhedged global shares because it could provide an offset should something go wrong with Australian housing. </span></p>
<p style="line-height: 1.3em;"><span style="line-height: 1.3em;"> </span></p>
<p style="line-height: 1.3em;"><span style="line-height: 1.3em;"><em><span><a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a></span> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds.</em> </span></p>
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The Australian housing market starting to cool (in parts): AMP Capital's Shane Oliver

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<div>The ABS released its Lending Finance figures for August 2015 this morning.</div>
<div> </div>
<div>August was a weaker month for commercial lending, with the trend estimate declining by -2.1% in the month to $44.1 billion, having peaked at more than $48 billion back in April.<br><br>The trend certainly appears to be softening in sympathy with weak capex intentions surveys and macroprudential measures to trim back property investment loans - but then, that's been said before through this cycle, so time will tell. </div>
<div> </div>
<div>On the other hand, home lending to owner-occupiers is now trendng up sharply, with the seasonally adjusted result showing a +6.1% leap in August, and the trend estimate bolting +18% higher over the year. </div>
<div> </div>
<div>Significantly, AMP announced today that it would chop a variable rate home loan package available to owner-occupiers to a highly competitive rate of just 3.99%.</div>
<div> </div>
<div>It seems likely that the major banks will be targeting this sector hard in the months ahead.<br><br>Total lending finance has also trended down a little from an April peak.</div>
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<div><a href="/images/2015/10/13/A1.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/10/13/A1.jpg" alt=""></div>
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<div><span>Charted below is what at face value is happening to owner-occupier home loans at the state level, which is to say now apparently burning up in the most populous states.</span></div>
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<div><a href="/images/2015/10/13/OwnerOccupiersRolling12m.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2015/10/13/OwnerOccupiersRolling12m.jpg" alt=""></span></div>
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<div>
<div>In obliquely related news, the latest credit card figures from the Reserve Bank showed that Aussies are clearing credit balances more comfortably than before, with balances down over the year and more of us opting to pay off balances by the due date.</div>
<br><strong><span style="text-decoration: underline;">Switcheroo</span></strong><br><div> </div>
<div>For the remainder of 2015, the housing market story will largely be a tale of whether banks and borrowers can find a way to shoehorn owner-occupier lending higher in order to offset any pending declines in investor loans.</div>
<div> </div>
<div>In August the answer was seemingly at an emphatic "yes" with investor loans essentially flat at $13.6 billion but owner-occupier commitments ripping more than <a href="https://petewargent.blogspot.co.uk/2015/10/housing-finance-shock" target="_blank">+6 per cent higher</a> to $20.8 billion. </div>
<div> </div>
<div>In this regard, the AMP decision to cut its variable rate to below 4 per cent effective from today appears to be a clear statement of intent.</div>
<div> </div>
<div>That said, the August figures may yet prove be <a href="https://petewargent.blogspot.co.uk/2015/10/housing-finance-shock" target="_blank">bogus</a> to some extent, and another month or two of data will shed more light. </div>
<div> </div>
<div>In the words of one eminent Chief Economist "we can conclude that the figures have suddenly become a lot murkier", while Westpac instead opted for a more canine theme in describing the latest data as "a dog's breakfast".</div>
<div> </div>
<div>Overall it seems that the macroprudential story has some way to run yet before the waters are de-murkified (or the dog's morning meal is digested). </div>
<br><span>I looked at this in more detail in relation to last week's Housing Finance release </span><a href="https://petewargent.blogspot.co.uk/2015/10/housing-finance-shock" target="_blank">here</a><span>.</span><br><br><div><strong><span style="text-decoration: underline;">Investor loans cooling...</span></strong></div>
<div> </div>
<div>Of course the flip side to the new-found strength in the homebuyer space is that property investment loans should now be cooling in response to APRA's calming macroprudential measures.</div>
<div> </div>
<div>On a rolling annual basis New South Wales originated investor loans climbed to a new high of $67.6 billion, but there have now been two consective months of declines in original terms from the May 2015 monthly peak of $6.6 billion.</div>
<div> </div>
<div>Although investment loans remained at a high level in Victoria and Queensland, there has been a general cooling of this sector across recent months.</div>
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<div><a href="/images/2015/10/13/LF1.jpg" target="_blank">Click to enlarge</a></div>
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<div>
<span>Since the investment loans data is not seasonally adjusted I also look at it on a 12mMA basis, and we can see that while the trend in Queensland has risen to its highest level since April 2008, the trend is now falling in Western Australia, South Australia and Tasmania.</span><br><br><span>In the Northern Territory the trend in investment loans seems to be dropping off a cliff so there is likely to be some fallout for Darwin.</span><br><br><span>More on all of these figures and trends to follow tomorrow.</span><br><br><span>The detailed monthly investor loans figures for New South Wales show loans tracking at $5.53 billion in August, down from the all-time record high of $6.62 billion in June.</span>
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<div><span>Looking at total lending for housing in New South Wales, the total housing market finance for August surpassed $13 billion for the third time, however it could not quite match the record levels seen in June.</span></div>
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<div><a href="/images/2015/10/13/LF2.jpg" target="_blank"><span>Click to enlarge</span></a></div>
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<div class="separator">The most important release of the week will be the Labour Force data for September on Thursday morning. </div>
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<br>Expecting to see a flat result for the month, both for total employment and the unemployment rate.</div>
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<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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The housing market switcheroo: Pete Wargent

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<p><span lang="EN-US">There's a significant cooling of expectations for residential construction - and price growth - in the upcoming December quarter, according to t</span>he ANZ/Property Council Survey.</p>
<p>The ANZ expects housing starts to peak at 215,000 in the year to December and ease back to a still elevated 200,000 by end of 2016.</p>
<p><span>ANZ senior economist David Cannington said the latest survey taken after Malcolm Turnbull became Prime Minister showed a significant shift in outlook for residential property.</span></p>
<p><span>"The property sector expects the growth to disappear over the next 12 months," he told the <em>Australian Financial Review</em>.</span><br><br>The nation’s leading measure of confidence in the property industry - which accounts for 11.5 per cent of GDP - was completed by over 2200 respondents across Australia this quarter.</p>
<p><span lang="EN-US">While nationally confidence remains well in the positive range, it has edged downwards over the four quarters for 2015.</span></p>
<p class="x_MsoNormal"><span lang="EN-US">New South Wales still leads the nation in terms of confidence and Victoria is holding steady.</span></p>
<p class="x_MsoNormal"><span lang="EN-US">Queensland, the Australian Capital Territory and the Northern Territory all recorded rises in confidence for the quarter.</span></p>
<p class="x_MsoNormal"><span lang="EN-US">Tasmania and South Australia fell while Western Australia flatlined.</span></p>
<p class="x_MsoNormal"><span lang="EN-US">Property Council of Australia Chief Executive Ken Morrison said the results should be closely read by policymakers.</span></p>
<p class="x_MsoNormal"><span lang="EN-US">“The economy has relied on strong housing construction, so any softening would have a broader national impact particularly in terms of jobs and economic activity,” Mr Morrison said.</span></p>
<p class="x_MsoNormal"><span lang="EN-US"> “In the December quarter we saw a drop in debt finance availability expectations across the board, which is evidence that our regulatory safeguards are functioning as intended.</span></p>
<p class="x_MsoNormal"><span lang="EN-US">“We need to keep a close watch on the many factors impacting activity levels, particularly in residential construction.</span></p>
<p class="x_MsoNormal"><span lang="EN-US">“Only recently have we started to chip away at the housing supply deficit that built up over a decade as supply fell well short of demand.</span></p>
<p class="x_MsoNormal"><span lang="EN-US">“Housing affordability into the future hinges on maintaining a high level of new residential construction to meet the demands of our growing population.</span></p>
<p class="x_MsoNormal"><span lang="EN-US">“The results from this survey make the task of removing the major roadblocks to further growth in the property industry more urgent.”</span></p>
<p class="x_MsoNormal"><span>ANZ co-head of Australian Economics Cherelle Murphy noted respondents in the majority of states including NSW and Victoria (which together contribute more than 50% of Australia’s GDP) are less optimistic than 12 months ago. </span></p>
<p class="x_MsoNormal"><span>"Those in the residential sector recorded a larger decline in confidence in the last 12 months than any of the commercial property sectors.</span></p>
<p class="x_MsoNormal"><span>“As the housing sector softens, support to aggregate employment growth from hiring in construction and a range of services industries benefiting from housing activity is also expected to wane.</span></p>
<p class="x_MsoNormal"><span>“Without above average employment outcomes in the rest of the economy, the unemployment rate could push higher."</span></p>
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Debt finance availability to impact price growth and residential construction: ANZ/Property Council Survey

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<p><span>The Sydney house market has trumped July’s quarterly growth rate with rate of 7.88%, according to Onthehouse.com.au, who found Melbourne is up on July’s quarter with 3.13% growth for the thee-month period ending August.</span></p>
<p><span>Onthehouse.com.au market analyst Eliza Owen said the next quarter will reveal whether the Sydney unit market is finally slowing down. She says that while the Australian economy may currently be under-performing, this does not mean that housing market will follow suit.</span></p>
<p><span>"In August Melbourne’s unit market barely moved with a rate of -0.01%," she said.</span></p>
<p><span style="line-height: 1.3em;">"Brisbane continues to follow the movements of its fellow East Coast house markets, documenting a strong annual performance of 6.78%. However, Brisbane’s unit market survived the downward trend evident in its East Coast neighbours with a healthy monthly growth rate of 0.92%."</span></p>
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Sydney house market continues to boom, unit market contracts: Eliza Owen

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<p>GUEST OBSERVER</p>
<p>Recognised for its wilderness, tourism, and mining, the local government authority (LGA) of West Coast has officially produced the best total property investment return of all Tasmanian LGA’s over the last fifteen years.</p>
<p>The population of West Coast has declined over the last ten years and, according to 2014 Census, is a mere 4,527 people. When combined with its high unemployment and rather remote location it’s unlikely that even the most astute property investor would even bother typing ‘West Coast’ in to their search engine. But, the actual returns on investment have been absolutely spectacular.</p>
<p>$21,750 is what one would have paid for a typical house at the start of 2000 and, even though properties declined by 34% over the last 6 years, it would now be worth $70,000.  As they say, small fish taste sweeter!</p>
<p>West Coast’s average annual capital growth of 9.4% is well above the 8.0% national average for the same period. An 11.1% rental yield means that its total return of 20.5% has it ranked number four in Australia over the last 15 years. Yes, 4<sup>th</sup> out of 550.</p>
<p>Propertyology conducted a study to compare the historical property market performance of each of Australia’s 550 local government authorities between 2000 and 2014. Given that some property markets have higher rates of growth and others have higher rental yields, Propertyology calculated the ‘total return’ (average annual growth rate plus rental yield) and we then ranked the LGA’s from 1 to 550 based on this performance.</p>
<p>Of the seven LGAs which make up the Greater-Hobart capital city, Derwent Valley was the highest ranked LGA at 24<sup>th</sup> – impressive stuff! Hobart City was ranked a very respectable 147<sup>th</sup> (ahead of every LGA in Sydney and Melbourne). Sorell (55<sup>th</sup>) and Glenorchy (58<sup>th</sup>) were ranked in the best 10% in Australia over the last 15 years.</p>
<p>29 of the total 550 Australian LGA’s are in Tasmania. Twelve of those LGA’s featured in Australia’s Top 100 (the best 20%). <span>Australia’s smallest state bats well above its weight in respect to property market performers over the last 15 years.</span></p>
<p>These results are further proof that, in isolation, population growth is not a magic potion for property price growth. Data from ABS confirms that Tasmania’s population grew by an average of 0.8% per annum, the lowest of all states and well below the national average of 1.7% per annum.</p>
<p>Tasmania’s north performed particularly well. Kentish (32<sup>nd</sup>), Burnie (59<sup>th</sup>), Devenport (113<sup>th</sup>), Launceston (87<sup>Th</sup>), and West Tamar (153<sup>rd</sup>) were strong performers. </p>
<p><a href="/images/2015/10/02/StateScorecard_Tas.1.JPG" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/10/02/StateScorecard_Tas.1.JPG" alt=""></p>
<p><span><em>SIMON PRESSLEY IS MANAGING DIRECTOR OF <a href="https://www.propertyology.com.au/" target="_blank">PROPERTYOLOGY</a>, AN REIA HALL OF FAME INDUCTEE, PROPERTY MARKET ANALYST, ACCREDITED PROPERTY INVESTMENT ADVISER, AND BUYER’S AGENT. </em></span><span><span><em>PROPERTYOLOGY WORKS EXCLUSIVELY WITH PROPERTY INVESTORS</em></span></span><span><em> TO PURCHASE PROPERTIES IN STRATEGICALLY CHOSEN LOCATIONS ALL OVER AUSTRALIA.</em></span></p>
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Tasmania’s property market scorecard: Simon Pressley

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<p>As the feathers fly in Saturday's AFL Grand Final between Victoria's Hawthorn Hawks and Western Australia's West Coast Eagles, property markets in the hometowns of both contenders show a near level playing field, according to LJ Hooker.</p>
<p><span style="line-height: 1.3em;">LJ Hooker’s national research manager Mathew Tiller compared house markets in the </span>suburbs of<span style="line-height: 1.3em;"> Hawthorn and Subiaco (home of the West Coast Eagles’ Domain Stadium) and said </span><span style="line-height: 1.3em;">if you’re landlord, you’d be happier in Subiaco with weekly rents some $100 more and a gross rental yield of 3.3%</span></p>
<p><span style="line-height: 1.3em;">“As expected, Hawthorn had the higher median sale price ($1.44m) and triple the combined value of homes sold over the year ($375m), and more than double the number of properties sold (224)," he said.</span></p>
<p><span style="line-height: 1.3em;">"The average time taken to sell a house in the inner-city markets is near identical at 67.6 for Subiaco and 67.7 days for Hawthorn, respectively. </span></p>
<p><span style="line-height: 1.3em;">“Hawthorn residents (13.8 years) were also likely to stay put longer than Subiaco locals (9.9).</span></p>
<p>“However, while Subiaco’s median house price ($1.2m) dropped 1.8% over the 12 months, it still held its own better than Hawthorn’s (-2%).<span style="line-height: 1.3em;"> </span></p>
<p><a href="/images/2015/09/30/Screen%20Shot%202015-09-30%20at%2010.20.32%20PM.png" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></p>
<p><span style="line-height: 1.3em;"><img src="/images/2015/09/30/Screen%20Shot%202015-09-30%20at%2010.20.32%20PM.png" alt=""></span></p>
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West Coast versus Hawthorn for property bragging rights

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<div>One of the most notable aspects of this building approvals boom has been that it has been focussed on the building of high density housing to an unprecedented extent.</div>
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<div>If you want capital growth from property then I suggest that you should be wary of high rise stock since proportionately far too much of it is has been approved.</div>
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<div>Approvals in most instances do now seem to be pulling back, but the approvals pipeline has seen 4+ storey dwellings pushed through this cycle to date in unprecedented volumes.</div>
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<div>In August the number of approvals pulled back in Victoria from 1,766 to as the new <a href="https://petewargent.blogspot.co.uk/2015/09/building-approvals-boom-passes-peak" target="_blank">levy</a> takes effect, but the 12mMA trendline tells its own story...</div>
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<div><span>In Queensland the number of 4+ storey dwelling approvals at 895 in August was well below the extraordinarily high volumes approved in 7 of the preceding 9 months, and the trendline peak now seems to be in...</span></div>
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<div><a href="/images/2015/09/30/QLD.jpg" target="_blank"><span>Click to enlarge</span></a></div>
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<div><span>Being home to the largest capital city, New South Wales has typically approved the greatest number of high rise apartments, although here too approvals fell from an elevated 3,431 to 1,887 in August...</span></div>
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<div><a href="/images/2015/09/30/HR3.jpg" target="_blank"><span>Click to enlarge</span></a></div>
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<div>Overall it seems that the great flood of approvals of high rise apartments is now easing as developers take note of the looming oversupply.</div>
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<div>The problem with the highest density tower blocks for investors is simply that there is no inherent scarcity value. </div>
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<div>Pass.</div>
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<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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The high rise apartment glut: Pete Wargent

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<p><span>Chief executive officer of McGrath Estate Agents John McGrath has outlined his top five picks for the Brisbane area and Queensland housing market, with the former industrial area of Murarrie looking ideal for those priced out of other areas.</span></p>
<p><span>In the McGrath Report 2015 he said properties in Brisbane and Gold Coast suburbs such as Paddington, Everton Park, Birtinya and Paradise Point are worth keeping note of.</span></p>
<p><span>"Murarrie, Brisbane has long been seen as a largely industrial area but today it is coming of age as young singles, couples and families priced out of nearby Bulimba, Morningside and Cannon Hill venture in looking to renovate," he said.</span></p>
<p><span>"Everton Park, Brisbane offers a huge range of properties to suit every buyer demographic and there is plenty of value for money. Investors and first home buyers are competing strongly for the lower priced homes.</span></p>
<p><span>"Paddington, Brisbane presents the best value among all of Brisbane’s blue chip suburbs. Over the past two years, Paddington buyers have been venturing into Bulimba, Ascot, New Farm and Hawthorne looking for better value. Now they are returning following a rejuvenation of Paddington’s café scene.</span></p>
<p><span>"Paradise Point, Gold Coast is located between Hope Island and the mesmerising Gold Coast Broadwater. It has a wonderful burgeoning café scene and offers four bedroom houses around $700,000 just 200 metres from the water.</span></p>
<p><span>"Birtinya, Sunshine Coast offers great value and there is plenty of room for growth as the suburb continues to benefit from the ongoing development of the Kawana health precinct."</span></p>
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Murarrie leads John McGrath’s top five Queensland picks

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<p><span>Recent falls in auction clearance rates across Sydney is a strong indicator the Sydney market is slowing, according to SQM Research managing director Louis Christopher.</span></p>
<p><span>According to the latest research from SQM, the preliminary clearance rate result this weekend of 69.6% is lower than the same time last year with more listings on the market (984).</span></p>
<p><span>Last year APM recorded a revised auction clearance rate of 76.9% based on 722 listings.</span></p>
<p><span>Louis Christopher said the long term average auction clearance rate for Sydney during spring has been in the order of the low 60's and it should be noted that auction clearance rates tend to fall each spring.</span></p>
<p><span>"Now what does a clearance rate of the high 60's mean for this time of year? Well let me tell you now, it most certainly doesn’t represent a “bloodbath” as some unqualified commentators have put out there this year. And neither does it represent a boom. Rather it represents more normal market activity," he said.</span></p>
<p><span>"For some reason, vendors think spring time is a great time to sell. Perhaps they think their garden is looking fabulous right now. Perhaps they wish to tie up affairs prior to Christmas. Whatever the reasons given, many vendors think this way and therefore it’s not such a great time to sell as everyone else is selling! No wonder they call it the spring selling season!</span></p>
<p>"Nevertheless in all this, we do acknowledge a slowing in the market. However I do not believe at this stage the Sydney market is close to correction territory. I would not be concerned on that event until we see clearance rates below 60%. That hurdle rate has served us well in the past, particularly in predicting the 2010-2012 downturn<a href="https://www.smh.com.au/business/property/clearance-rates-under-60-point-to-correction-to-come-20100628-zcx2" target="_blank">.</a>"</p>
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Strong indicators Sydney market slowing: SQM Research

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<p><span>Mrs Australia 2012, Veronica Cristovao and her property developer husband Duarte have sold the second waterfront duplex in Chiswick.</span></p>
<p>The Cristovaos built the duplex on the prime north-facing site after having bought the land in <a href="https://www.realestate.com.au/property-house-nsw-chiswick-120516033" target="_blank">2010 in $3,655,000</a>.</p>
<p><span>Duarte and Veronica founded Collingwood House, a property development &amp; property management company.</span></p>
<p><span>The latest architect-designed residence on Abbotsford Bay features five bedrooms, four bathrooms, infinity pool and approval for shared jetty.</span></p>
<p><span>The home’s twin was sold two years ago for $3.6 million to downsizing greengrocer supremo Chris Parisi and his wife Emily. </span></p>
<p><span>BresicWhitney agent Nicholas McEvoy was scheduled to take the latest offering to auction with $4.35 million plus hopes, but secured $4.85 million two days before the auction, the highest sale for a duplex on Fortesecue Street.</span></p>
<p><span>Happy with the profit they've made, the Cristovaos are already seeking their next project in the surrounding areas, with Woolwich and Drummoyne of interest.</span></p>
<p><span>Veronica also recently opened a children's store, Diamond Kids Boutique close by on Victoria Road.</span></p>
<p><span>Their Collingwood House website advises Veronica has a background in real estate and has studied interior design. Duarte is a licensed builder, learning the tools of the trade working alongside his father in property development.</span></p>
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