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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At the RBA's December 2020 meeting, the members noted that conditions in the domestic housing market were improving, but were uneven.

"Regional housing prices had increased by more than those in capital cities since the onset of the pandemic", RBA Governor Philip Lowe's meeting minutes read.

They highlighted the variation in changes in housing prices across the capitals, with Sydney and Melbourne markets more subdued than elsewhere in the country.

Lowe said that, within Sydney and Melbourne in particular, conditions in the detached housing market were firmer than for higher-density markets.

"Overall, national housing prices had increased only a little since the outbreak of the pandemic," Lowe stated.

They focused on the slowdown in population growth impacting the housing market nationally as a result of the closure of international borders.

"This had been more consequential in Australia than in many other economies," Lowe advised, saying that it has impacted the rental market in particular, with rents falling and rental vacancy rates in inner-city Sydney and Melbourne around their highest levels in many years."

Lowe touched on the strong growth in New Zealand housing markets, with population growth, expat buying interest and an earlier easing in lending standards.

"By comparison, these factors had been less relevant in Australia and, partly as a result, the increase in housing prices in Australia this year had been considerably smaller than in a number of other advanced economies."
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Conditions in the domestic housing market improving, but uneven: RBA's December 2020 meeting minutes

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EXPERT OBSERVER
The March 2020 Lending to Households and Business figures released today by the Australian Bureau of Statistics show the value of loans for housing continued to increase, albeit at a slower rate, with the increase being driven by owner occupiers, according to the Real Estate Institute of Australia (REIA).
Overall the figures for March 2020 show, in seasonally adjusted terms, that the value of owner-occupied finance commitments, excluding refinancing, increased by 0.2 per cent for the month and 17.5 per cent for the past year,” said Adrian Kelly, president of the REIA. 
Whilst the value of new loan commitments for owner occupier housing has grown in ten of the last twelve months, the March loan commitments reflect loan applications submitted in February, or the first half of March before restrictions were introduced across Australia in response to the Covid-19 pandemic.
The number of owner occupier first home buyer loan commitments increased 1.3 per cent in seasonally adjusted terms for the month and 21.3 per cent for the year and can in part, at least, be attributed to the introduction of the First Home Loan Deposit Scheme in January 2020. 
The number of owner occupier first home buyer loan commitments is up 24.7 per cent from the most recent low point in December 2018.
Owner occupier first home buyer loan commitments accounted for 31.8 per cent of all owner occupier commitments, excluding refinancing.
With lending institutions reporting a considerable slowdown in new loan applications from the end of March, as both restrictions on movements and caution about the economy impact on activity in the housing market, we may find the March finance figures will be a high point for some months to come.
ADRIAN KELLY is the President of the REIA
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j.ballantyne1990-6AQqhLzZaK

March housing finance numbers a high tide mark: REIA's Adrian Kelly

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Expert Observation
Despite the current gains recorded for the March quarter being on track with our base case forecasts, given current events, there is only a single scenario that is still feasible and that is Scenario 4 – a scenario we outlined in our top 4 scenarios for 2020. 
One where the RBA would bring the cash rate to zero and start quantitative easing. It was based on a possibility the tentative trade war truce between the U.S and China would collapse and a ‘take no prisoners’ trade war would break out between the two countries, turning into a global trade war.
The outlook for housing in this scenario was one where the market would eventually stall and start to record price decreases from mid-year onwards. That the rate cuts and money printing would not be able to offset job losses and subsequently, forced sales activity.
Yes, the RBA has now had to introduce quantitative easing. Yes, the cash rate is now just 0.25 per cent. But what we now face economically is a tsunami that dwarfs even a global trade war.
To get a sense of the economic carnage that is underway, check out this gif of U.S jobless claims.
The scale of what we are facing right now on the economic front is something never truly encountered since The Great Depression. And if we don’t manage it well then a depression (a contract in in GDP of greater than 10 per cent) is what we will have – something which I am far more frightened of than catching Covid-19. And believe me, I do not want to catch this virus.
Click <a href="https://www.propertyobserver.com.au/images/2020/4/16/SQM%20chart.JPG" target="_blank">here</a> to enlarge.
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So, with that in mind, I want to now give a general outlook on what I think are two main scenarios that are really in play this year.
A V-shaped recovery
Let’s be clear, despite the positive Corelogic numbers (dwelling prices rose 2.8 per cent for the quarter) and indeed our asking price indexes, I think housing price expectations have already corrected by five per cent to ten per cent from their very highs. That may not show up in the official numbers as the highs were only briefly obtained during the later stages of February. It is anecdotal only, through my discussions with real estate agents and the sharp fall in clearance rates, which were already occurring prior to the auction ban starting from the 25th of March.
The best case scenario from here for property owners and investors is one where we get to zero new Covid-19 cases before April is over with. And on that front the numbers have been looking promising. I believe it is now a 50 per cent chance that our three major states will record a zero new Covid-19 cases day before the month is over. If we get to that point, the next question begs how long will restrictions be kept? Potentially some restrictions could be lifted in May. And my bet is that when restrictions are eventually lifted, they will be lifted in the reverse order that they were placed on to begin with. As the ban on auctions occurred as one of the last stages (25 March), it is quite feasible that lifting that ban could come sooner than expected.
If we are able to get back to close to normal business by end of May (I certainly don’t think all restrictions will be lifted by that time), then I think confidence in the housing market is going to return. Assisted with all the stimulus announced and the economic damage relatively limited, it would mean a fall in housing prices recorded for the June quarter but a bounce back in the September and December quarters. The net result for the year may come in at our Scenario 4 range or slightly better.
It should not be underestimated how much expenditure has been announced (including RBA money printing via quantitative easing) and how low lending rates are now. 
A borrower with a good credit rating can now expect a variable owner occupier lending rate somewhere between 2.5 per cent to 2.8 per cent. Average capital city gross rental yields are running at about 2.9 per cent for houses and 3.9 per cent for units.
That means property owners on a purely interest expenses verses rental payments scenario could do better owning. And of course it also means that investors may find more cashflow positive properties in our major cities.
That said though, we think there is trouble ahead for the rental market. We will come to that point later.
<h2>The worse-case scenario</h2>
The worse-case scenario is we have a second wave in new virus case counts and it occurs shortly after some restrictions are lifted. Or that new case numbers flatten at current levels but never quite manage to get to zero cases or stay at zero cases. This appears to be the plight of South Korea at the moment.
If this second wave were to occur, we think the housing market will have a much deeper correction.
A second wave of new Covid-19 cases is a great risk. Note, a second wave of Spanish Flue hit Australia in mid-1919 and this occurred just after restrictions were lifted after the first wave, noting hospital numbers (which is the available data we have for time) never actually got to zero on the lull.
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Such a scenario would mean current restrictions would stay with us for longer. Probably more than six months. Or worse, more restrictions added. A second wave of infections may be more deadly as it would potentially occur over the course of the Southern Hemisphere winter. A sharp rise in deaths may result in more panic at the shops and most certainly a new low in confidence.
Damage to the economy would be deeper and longer lasting. Many businesses, including those that are currently on life-support, would not last the distance and will be liquidated.
You see, even with the generous measures announced for small business, it won’t be enough to keep much of the sector alive for half a year. When there is little to zero revenues coming in, month after month, PAYG relief is not enough. Being subsidised to cover employee wages at $1,500 a fortnight is not enough. Neither is a $10,000 cash grant for most. And forget about asking small business to go into debt. Most of them, particularly in retail, hospitality and tourism, will refuse to do so. And so job creation would occur at a far slower rate when a recovery would eventually return.
With the surging and sustained unemployment rate, the banks could start to get nervous on mortgages. Potentially, after the six-month hiatus, banks may be backed into a corner where they are forced to repossession on defaulted housing loans. Now I believe the RBA and/or the Federal Government would come to the rescue to enable banks to avoid a mass repossession event. Let’s keep in mind that in 2008, the banks could have pulled the trigger on the commercial property sector. Many owners at the time were in breach of lending covenants. The banks, by and large, chose not to pull that trigger. Mainly for their own self-preservation, as doing so would have created a cascading affect that would have smashed their balance sheets.
So I am not convinced we will see a lot of forced sales activity, even in this bleaker scenario. All the same, there will be many property owners who will want to sell out if this crisis goes on for six months or more. They will see the falls in dwelling prices over the course of the June quarter. And they will be very protective of what is left of their net wealth.
The buy side of the property equation would be hit very hard as it is being hit hard now. But far worse than what we had in 2018 or indeed 2008.
You see it’s not just the loss of employees representing many first home buyers, but, as mentioned above it is also the potential wipe out of many thousands of small business owners, who themselves employ nearly 50 per cent of the total workforce. Small business owners actually represent a very large component of the home buyer market. As at the 2016 Census there were over two million small businesses.
So this is very much a buy side issue in my view. Anyone that is worried they will lose their job or their business, won’t be seriously thinking of taking out a home loan to buy into the property market.
Let’s also remind ourselves that our international border is closed to most except for permanent residents, citizens and some temporary visa holders. And I believe it will remain closed for many months to come. So underlying demand for housing, which has been predominantly driven by net overseas migration has now stalled for this year. This will be a different experience to the Spanish Flu of 1919, whereby population growth still expanded at a very strong rate (1.9 per cent for 2019) due to our soldiers returning home as well as the settling of European refuges.
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Up to a 30 per cent peak to trough price decline cannot be ruled out.
In this more bleaker scenario, a 30 per cent decline in dwelling prices would be on the cards. Note, I have not modelled this out, other than taking elements such as previous work on the relationship between unemployment and the housing market. Modelling in this environment is almost impossible. It is simply based on my experience and study. The most overvalued cities would be hit the hardest, that being Sydney and Melbourne. Other cities should do better than a 30 per cent correction given their relative fair value. Now some of you will note that during The Great Depression, the Australian housing market did not correct by this magnitude. Nor, during the Spanish plague of 1919 did the Australian housing market record such a correction. However, those two markets were not laden with the debt burden our current housing market has. Not even close. The only market that comes close in Australia was the massive boom/bust of the 1890s.
Of course, it should be noted that period was also laden by a very dodgy and nearly entirely unregulated banking sector.
Either way, the rental market is in trouble.
Overall, a stalling in underlying demand for accommodation driven by near zero migration, combined with a reduction in existing tenancy demand (as a result of job losses) plus a very likely increase in supply from empty AirBNB accommodation will likely mean we can now expect a rise in rental vacancies over this year. Previously the forecast was for a gentle reduction in vacancies in 2020 as dwelling completions were (and still are) due to fall.
On our estimates and other estimates, there are some 120,000+ properties nationwide at any point in time being used for short term accommodation via websites such as airbnb. And on our latest numbers for February,there were some 68,000 vacant rental properties available for normal leasing.
I can’t tell you how many property owners are going to switch back to longer term leasing but there will be a number, especially if this plays out for longer. This is not a scenario here. This is our view. Our view is that rental vacancy rates are going to rise sharply over the short term. I think we can expect the rate to rise from the current 2.0 per cent to north of 2.5 per cent and perhaps north of 3.0 per cent. That may not sound like much to you but if we do hit 3.0 per cent that would be a record high on our index which goes back to 2005. Rents would fall as a result. Perhaps our weekly asking rents index is already revealing some weakness with national asking rents for houses down by 0.9 per cent for the month and 0.3 per cent down for units.
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The weakness in the rental market will probably put off many would-be property investors over 2020 creating more issues on the buy side of the market.
So what is it going to be? - Scenario 1, Scenario 2 or another scenario?
The next 30 days will likely tell the story. It is very hard to judge it. Like everyone else I am watching the new case numbers closely.
Let me tell you. I don’t want Scenario 2 to play out. A depression would create massive economic misery. Suicides will rise, so will crime.
There is also the possibility we muddle through somewhere between the two scenarios. A world where daily new virus cases don’t quite get to zero but there isn’t a second wave. Restrictions lifted very gradually over many months. Eventually, a vaccine is produced and distributed in 2021. We would need to see what is lifted and at what point in time to work out the impact on the housing market. Regardless, rents will still be hit for simply the fact that the international border will still remain closed.
LOUIS CHRISTOPHER is the CEO of SQM Research
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Looking back at forecasts made in October last year: Louis Christopher

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

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Expert Observation
The COVID-19 pandemic is a double crisis affecting public health and the economy. And both aspects are playing out in our housing system – in our homes.
More and more of us are being directed to stay home, to work from home, or to socially isolate at home. Our homes are the “first line of defence against the COVID-19 outbreak”, as the UN’s Special Rapporteur on Housing <a href="https://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=25727&amp;LangID=E" target="_blank">puts it</a>. But, depending on how our housing system responds, it could make the double crisis worse.
More and more workers are <a href="https://theconversation.com/coronavirus-puts-casual-workers-at-risk-of-homelessness-unless-they-get-more-support-133782" target="_blank">losing shifts</a>, or <a href="https://www.canberratimes.com.au/story/6687586/coronavirus-australia-preparing-for-significant-rise-in-unemployment/" target="_blank">losing jobs</a> altogether, as well as the incomes they use to pay for their homes – whether it’s the rent or the mortgage. On Friday, the prime minister announced that states would work on model rules to provide relief to tenants in “hardship conditions”. On Sunday, the federal government moved to replace some of the income households have lost, <a href="https://www.pm.gov.au/media/supporting-australian-workers-and-business" target="_blank">temporarily doubling some social security payments and making cash grants to businesses</a>.
The risk of people becoming homeless during the pandemic is still high. Some more specific actions are needed to shore up our first line of defence. Governments must implement a moratorium on evictions as long as the crisis lasts. Similar changes have already been made overseas.
<h2>Evictions can happen quickly</h2>
A sudden loss of wages puts renters at risk of arrears and owner-occupiers at risk of mortgage default. This may result in legal proceedings to terminate the tenancy or give possession to the bank or other lender, and ultimately eviction. Tenants are vulnerable to termination and eviction for a host of other reasons, too.
Renters are at particular risk because rent arrears termination proceedings are quick. You can go from a missed payment to termination orders in about eight weeks in New South Wales. Other states and territories are similar.
Many renters’ finances are <a href="https://theconversation.com/coronavirus-puts-casual-workers-at-risk-of-homelessness-unless-they-get-more-support-133782" target="_blank">already precarious</a>. About <a href="https://www.afr.com/companies/financial-services/one-in-five-households-facing-mortgage-stress-despite-low-rates-20191223-p53mfn" target="_blank">one-third</a> of private renters are low-income households in housing stress (in the bottom 40% of household incomes paying more than 30% of income in rent). And 30% <a href="https://www.pc.gov.au/research/completed/renters" target="_blank">don’t have $500 saved</a> for an emergency.
Homeowners with a mortgage are also at risk of default due to loss of income. About <a href="https://digitalfinanceanalytics.com/blog/mortgage-stress-still-climbed-in-february" target="_blank">20% of mortgagees</a> are already in mortgage stress. This rate has <a href="https://digitalfinanceanalytics.com/blog/mortgage-stress-still-climbed-in-february" target="_blank">grown over the last year</a> despite rate cuts.
Now workers are facing sudden income and job losses. We see widespread evidence of an economic downturn across many sectors, including <a href="https://theconversation.com/the-end-of-global-travel-as-we-know-it-an-opportunity-for-sustainable-tourism-133783" target="_blank">tourism</a>, <a href="https://www.theguardian.com/world/2020/mar/18/theyre-going-to-go-under-australias-coronavirus-hit-restaurants-bars-and-caterers-seek-bailout" target="_blank">hospitality</a> and the <a href="https://theconversation.com/coronavirus-australian-arts-need-a-stimulus-package-here-is-what-it-should-look-like-133803" target="_blank">arts</a>. Casual workers are at particular risk of reduced income if required to <a href="https://www.health.nsw.gov.au/Infectious/factsheets/Pages/contacts-and-travellers.aspx" target="_blank">self-isolate</a> for long periods or care for unwell family members.
<h2>A breach of our defences</h2>
An eviction is a breach in the first line of defence that housing provides against COVID-19. In fact, the risk of arrears and eviction might drive an infected person to keep working and transmitting the virus.
An evicted household might pile in with family or friends, disrupting social isolation and contributing to unsanitary overcrowding. It’s a challenge people already living in share housing will have to manage. Across Australia, 81,000 dwellings are already overcrowded, <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/2049.0Main+Features12016?OpenDocument" target="_blank">51,000 of these “severely overcrowded”</a>.
People who have been evicted might move through temporary accommodation, and through real estate offices, social services and doctors’ rooms making urgent applications. Or they may be shut out of assistance, and sleeping rough. With limited space and facilities to wash hands and personal effects, the risk of transmission will grow.
<h2>How would a moratorium work?</h2>
These risks justify a government-imposed moratorium on evictions for the duration of the crisis. This could be done through legislation, or through an emergency executive direction to authorised officers to stop evictions. Other countries have already taken such steps.
In the United States, many states and cities have <a href="https://www.antievictionmap.com/blog/2020/3/19/covid-19-emergency-tenant-protections-map" target="_blank">suspended eviction proceedings against tenants</a>. Federal housing finance agencies have implemented <a href="https://www.washingtonpost.com/business/2020/03/18/hud-orders-60-day-foreclosure-moratorium-homeowners-affected-by-coronavirus/" target="_blank">a 60-day moratorium to protect some families from mortgage default</a>.
Ireland has also suspended evictions and <a href="https://www.rte.ie/news/coronavirus/2020/0319/1124168-evictions-ban-coronavirus/" target="_blank">temporarily frozen rent increases</a>. In the United Kingdom, renters in the private or social sector are <a href="https://www.gov.uk/government/news/complete-ban-on-evictions-and-additional-protection-for-renters" target="_blank">to be protected from eviction</a>.
A moratorium on evictions is an obvious triage measure. That’s why in Australia a <a href="https://actionnetwork.org/petitions/protect-our-communities-no-evictions-during-a-health-crisis" target="_blank">community coalition</a> has come together to advocate for no evictions during this crisis. You can show your support by <a href="https://actionnetwork.org/petitions/protect-our-communities-no-evictions-during-a-health-crisis" target="_blank">signing the petition</a>.
The <a href="https://www.smartpropertyinvestment.com.au/management/20864-federal-opposition-leads-eviction-moratorium-call" target="_blank">federal opposition is urging</a> the government and financial institutions to consider similar measures.
<h2>What about the mounting debts?</h2>
By itself, an eviction moratorium doesn’t affect the legal liability to pay rent or mortgage instalments. Without anything more, those liabilities would continue.
The federal government’s increased social security payments and business grants will go some way to replacing the income households are losing. But even as the government tips money into households, money is drained away by rents and mortgage payments.
About A$40 billion is due to flow out of Australia’s 2.5 million private renter households and into 1.3 million landlord households. Landlord households have, on average, much <a href="https://www.tandfonline.com/doi/full/10.1080/02673037.2019.1644297" target="_blank">higher incomes and wealth</a> than other households.
Billions more are due to flow, as principal and interest payments, from 3.4 million owner-occupier mortgagees to the banks. Australia’s big four banks last week announced borrowers could <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-03-21/mortgage-pause-coronavirus-nab-commonwealth-anz-westpac/12076690" target="_blank">“pause” their payments</a> as a pandemic hardship measure. But mortgagees should be aware interest not paid is capitalised into the debt, so they will have more to pay off after the “pause” ends.
Both to prevent the accumulation of arrears, and to make the government’s income-replacement measures more effective, governments should consider implementing reductions or waivers of rent and interest liabilities for as long as the crisis lasts.
The double crisis of the COVID-19 pandemic needs a dual response that aims to keep households in their homes and to keep income in households.<img src="https://counter.theconversation.com/content/134148/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/sophia-maalsen-376520" target="_blank">Sophia Maalsen</a>, ARC DECRA Fellow and Lecturer in Urbanism, School of Architecture, Design and Planning, <a href="https://theconversation.com/institutions/university-of-sydney-841" target="_blank">University of Sydney</a>; <a href="https://theconversation.com/profiles/chris-martin-203935" target="_blank">Chris Martin</a>, Senior Research Fellow, City Futures Research Centre, <a href="https://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a>; <a href="https://theconversation.com/profiles/dallas-rogers-5269" target="_blank">Dallas Rogers</a>, Program Director, Master of Urbanism, School of Architecture, Design and Planning, <a href="https://theconversation.com/institutions/university-of-sydney-841" target="_blank">University of Sydney</a>, and <a href="https://theconversation.com/profiles/emma-power-250930" target="_blank">Emma Power</a>, Senior Research Fellow, Geography and Urban Studies, <a href="https://theconversation.com/institutions/western-sydney-university-1092" target="_blank">Western Sydney University</a>
This article is republished from <a href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/why-housing-evictions-must-be-suspended-to-defend-us-against-coronavirus-134148" target="_blank">original article</a>.
Main Photo by Antonio Guillem/Shutterstock.
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Why housing evictions must be suspended to defend us against coronavirus

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New home sales bounced back in September to return to levels seen during the latter half of 2018, according to HIA Economist, Angela Lillicrap.
The HIA New Home Sales report – a monthly survey of the largest volume home builders in the five largest states – saw sales increase for the second consecutive month.
Sales were up by 5.7 per cent.
"Despite these lifts, they remain down by 1.5 per cent compared to the June 2019 quarter,” added Ms Lillicrap.
“This improvement in sales is a welcome reprieve from the steady decline that emerged in late 2018. It remains too soon to confirm that we have passed the bottom of the cycle, but this result does highlight that we are not likely to see further material falls in new home sales.
“The easing of APRA’s lending restrictions and the RBA’s rate cuts have started to have a positive impact on the new home market.
“With the addition of the Governments First Home Loan Deposit scheme likely to see an additional increase in first home buyer activity, we expect that the improvement in new home sales will be sustained,” concluded Ms Lillicrap.
Across the country, new home sales increased for the month in all the states except for New South Wales which declined by 12.1 per cent to be flat (-0.3 per cent) for the quarter. 
Victoria increased by 11.0 per cent, Queensland by 1.7 per cent, South Australia by 18.0 per cent and Western Australia increased by 13.6 per cent during September. These gains were not enough to offset earlier weak results with Queensland being the only state to experience a significant increase (+6.9 per cent) compared to the previous June quarter. 
Victoria declined by 4.7 per cent and South Australia by 5.4 per cent. New South Wales and Western Australia were relatively steady compared to the previous quarter, down by 0.3 and 1.0 per cent respectively.
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Confidence returning to housing market: HIA 

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The RBA have said there is a sizeable downturn in construction underway.
"Contacts in the Bank's liaison program indicate that demand for new houses and apartments has remained around the low levels of late 2018", RBA Deputy Governor Guy Debelle's said when he <a href="/news/the-evolution-of-the-housing-market-and-its-effect-on-the-economy-rbas-guy-debelle">addressed the CFA Societies Australia Investment Conference in Sydney</a>. 
"The typical lags between the sale and construction of new dwellings imply that the decline in dwelling investment will continue for some time, despite the recent signs of stabilisation in the established housing market," Debelle noted.
Debelle admitted the RBA were surprised at the decline in construction activity, with 2020 now looking to be the low year for the residential construction sector.
"Given the large size of the pipeline, we had expected construction activity to remain at a pretty high level for most of this year, but it turned down sooner and by more than we had expected," Debelle said on Thursday morning.
"Even so, much of the downturn in construction activity is still ahead."
 <img src="https://www.rba.gov.au/speeches/2019/images/sp-dg-2019-10-17-graph02.gif" alt="Graph 2: Residential Dwelling Pipeline">
He said long lead times on higher-density construction mean the supply response is likely to be slow, and the tight conditions on lending to developers may mean it is even more protracted.
The housing construction cycle clearly turned down at the end of last year, which brought to an end a long upswing at the national level that started in 2012, Debelle stated.
Debelle did add however that the RBA can "see through the trough to the other side."
"Demand is still continuing to increase given population growth," Debelle said.
He said that the recent price turned in Melbourne and Sydney will probably bring investors back into the market.
Debelle believes investors left the market due to falling house prices, more so than the impact of tighter lending conditions.
He suggested it was possible that the 11 and 15 per cent declines in Melbourne and Sydney triggered some demand, as well as lower mortgage rates and APRA's changes to the interest rate threshold.
<h1>Housing Turnover Rate</h1>
Housing turnover decline to historically low levels earlier in the year before a slight uptick in recent months.
<img src="https://www.rba.gov.au/speeches/2019/images/sp-dg-2019-10-17-graph05.gif" alt="Graph 5: Housing Turnover Rate">
" In the past, housing prices and turnover have moved in lock step so it has been difficult to determine the impact of each channel," Debelle said.
"But with prices starting to grow again now, but turnover so far only picking up a little from its lows, we may get a better sense of which has been the bigger drag on consumption – wealth or turnover – and hence what the outlook for consumption might be now the housing price cycle has turned."
Debelle concluded his speech by saying that inflation and unemployment were a big concern.
"Unemployment is a little higher than it was at the beginning of the year, and there has not been much upward pressure on wages.
"In turn, this has contributed to the extended run of inflation outcomes below the medium-term target range.
"As a result, the Board has decided to ease monetary policy in recent months.
"We are seeking to make more assured progress towards both full employment and the inflation target."
<div class="image-graph"> To read Guy Debelle's full speech, <a href="/news/the-evolution-of-the-housing-market-and-its-effect-on-the-economy-rbas-guy-debelle">click here</a>.</div>
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2020 to be the low year for residential construction: RBA's Guy Debelle

The evolution of the housing market and its effect on the economy: RBA's Guy Debelle

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While housing sales activity slumped during the housing downturn, the recent trend shows turnover has levelled out as home values rise and mortgage rates reach the lowest level since the 1950’s.
Although the housing market appears to have moved through the bottom of a near two year downturn, sales activity remains well below normal levels.
Nationally, CoreLogic estimates that there were 367,630 settled sales over the twelve months ending August 2019; 17% lower year- on-year, and about 30% below the recent peak level of annual sales recorded over the twelve months ending September 2015.
<a href="https://www.propertyobserver.com.au/images/2019/9/26/corelogic%201.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/9/26/corelogic%201.jpg" alt="">
 
Source: CoreLogic 
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The good news is that home sales appear to be stabilising, albeit at a low base. 
The six month trend has found a floor at around the same lows recorded during the previous two downturns in 2008 and 2010-12. 
The six month trend has been tracking higher since June 2019, in line with a recovery in home values.
Such a large reduction in market activity has implications for the economy, especially from a consumption perspective. 
Reduced housing activity implies less spending on retail items such as home furnishings, white goods and appliances. 
With both values and volumes falling, state government stamp duty revenues have experienced a big hit, and of course we see real estate industry and finance sector participants receiving less income based on lower rates of sale and lower values.
<a href="https://www.propertyobserver.com.au/images/2019/9/26/corelogic%202.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/9/26/corelogic%202.jpg" alt="">
Source: CoreLogic 
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The drag on economic growth is compounded when housing values fall, as the wealth effect moves into reverse and households are less inclined to spend on discretionary items.
There isn’t a single trigger for the levelling in sales activity; in fact we can point to a variety of factors that have supported a turnaround in conditions.
A boost to confidence following the federal election, which removed a lot of the uncertainty around housing tax reform. Also, lower mortgage rates and policy changes from APRA which relaxed home loan servicing tests for borrowers were other likely factors driving the rebound in activity. 
Additionally there is the improvement in housing affordability driven by the 8.4% fall in housing values nationally.
<a href="https://www.propertyobserver.com.au/images/2019/9/26/corelogic%203.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/9/26/corelogic%203.jpg" alt="">
Source: CoreLogic 
Most of the capital cities have seen either a stabilisation in settled sales activity or a rise in the trend rate of sales. 
Housing turnover is rising the most sharply in Adelaide, with a more subtle improvement across Sydney, Melbourne and Canberra. 
The trend in sales has stabilised across Brisbane, Perth and Darwin but is still trending lower in Hobart.
The fact that housing values are now under some upwards pressure while housing turnover remains low presents somewhat of a paradox.
One explanation for the low rate of sales activity comes back to constraints around stock available for sale. 
Newly advertised stock levels remain about 15% lower than a year ago across Australia and total advertised stock levels are still 8% lower than a year ago and haven’t been this low for this time of the year since 2010.
As housing values continue to recover and the seasonal rise in listing numbers gathers pace we are likely to see sales activity also trend higher. Credit availability remains the wildcard in a material bounce back in turnover.
Although credit policies have become a little looser, gaining loan approval remains a challenge for many borrowers, despite the lowest mortgage rates since the 1950’s.
TIM LAWLESS heads up the CoreLogic RP Data research and analytics team and can be contacted<a href="https://blog.corelogic.com.au/author/timlawless/" target="_blank"> here.</a>
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Housing turnover stabilises as housing conditions improve: Tim Lawless 

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The latest REIV Days on Market (DOM) figures show Metro Melbourne home vendors had their properties on the market for a median period of 34 days before a private treaty sale in August.
That’s the lowest DOM figure in more than a year.
It is well down from a high of 50 days in February which includes the holiday break.
In Inner Melbourne in August, homes spent a median period of 41 days on the market, down from an annual peak of 52 in May.
Middle Melbourne home vendors waited a median period of 38 days before a sale in August, well below a peak of 63 days in February, while Outer Melbourne vendors waited only 35 days for a sale, compared to a high of 50 recorded in February.
REIV Chief Executive Officer Gil King said the figures demonstrated again that demand for Melbourne property was outstripping supply.
"We have now had 12 consecutive weeks of auction clearance rates of more than 70%, with the past five weeks above 75%," he said.
“These clearance rates are well above what we saw in the corresponding three months last year, but volumes of available houses are well down.”
"Anecdotally there is perhaps some reticence from vendors following the correction."
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