<section data-scroll-anchor="false" data-testid="conversation-turn-48" data-turn="assistant" data-turn-id="request-WEB:55d7c6ac-8e6d-4881-ad49-0ed9bf66d1cc-23" dir="auto">
<p data-end="447" data-start="0">Melbourne’s apartment market entered 2026 with renewed momentum, but the recovery is uneven, policy-driven, and increasingly shaped by constrained supply.</p>

<p data-end="447" data-start="0">According to the RPM Apartments &amp; Townhomes Market Report (April 2026), apartments have begun to outperform detached housing on key metrics,yet that performance is occurring against a backdrop of falling approvals and a tightening development pipeline.</p>

<p data-end="904" data-start="449">At the end of 2025, Melbourne unit values reached a three-year high of $656,500, recording quarterly growth of two per cent. That figure edged ahead of the 1.8 per cent growth recorded in the house market over the same period, marking a notable shift in relative performance. While modest in absolute terms, the outperformance is significant given the sustained dominance of houses through much of the previous cycle.</p>

<p data-end="1420" data-start="968">This shift has been driven in large part by policy. The federal government’s expanded five per cent Deposit Scheme has had a disproportionate impact on apartment demand, particularly in Melbourne where the $950,000 price cap captures a large share of medium- and high-density stock.</p>

<p data-end="1420" data-start="968">As RPM notes, the scheme “heavily favours medium and high-density dwellings,” effectively accelerating demand in the apartment sector.</p>

<p data-end="1822" data-start="1422">The impact is most visible in buyer activity. Victoria recorded more than 43,000 new housing loans in Q4 2025, the highest quarterly volume since mid-2022 and one of the strongest results in over a decade. This lift was broad-based across all buyer types, with first home buyers, owner-occupiers and investors all returning to the market with greater confidence.</p>

<p data-end="2308" data-start="1876">This surge in demand has flowed directly into apartment pricing, particularly in Melbourne’s middle and outer rings. Middle-ring unit values reached approximately $757,500, a four-year high, while outer-ring units climbed to a record $650,000. Quarterly growth of 2.9 per cent and 2.5 per cent respectively significantly outpaced both the inner ring (0.8 per cent) and the broader house market.</p>

<p data-end="966" data-start="906">&nbsp;</p>

<p data-end="966" data-start="906"><img alt="RPM" data-entity-type="file" data-entity-uuid="4628dde5-ad63-4b03-b18e-77d0f750e2aa" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-24%20at%209.23.32%E2%80%AFAM.png?VersionId=ig6mqc7Oz7UaszRuzULrGtLPUxGf4NJC" /></p>

<p data-end="2353" data-start="2310">&nbsp;</p>

<p data-end="2746" data-start="2355">The divergence between apartments and houses is also being shaped by affordability. Detached housing remains out of reach for many buyers, pushing demand toward apartments as a more accessible entry point into well-located suburbs. This is particularly evident among first home buyers and downsizers, both of whom are increasingly prioritising location, amenity and lifestyle over land size.</p>

<p data-end="3059" data-start="2748">At the same time, population growth continues to underpin demand. Victoria added more than 122,000 residents in the year to Q3 2025, with Melbourne attracting both overseas migrants and interstate movers, partly due to its relative affordability compared to other capitals.</p>

<p data-end="3115" data-start="3061">&nbsp;</p>

<p data-end="3115" data-start="3061"><img alt="Population" data-entity-type="file" data-entity-uuid="49e10567-a8b3-47c3-afbd-290f0bb62c49" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-24%20at%209.22.25%E2%80%AFAM.png?VersionId=.2Drmko4TPh02X55JdF3mIC1EcG0ZfGl" /></p>

<p data-end="3207" data-start="3117">However, the most critical factor shaping the apartment market is not demand, it is supply.</p>

<p data-end="3663" data-start="3209">Apartment approvals across Greater Melbourne have fallen sharply, signalling a constrained pipeline of future stock. In Q4 2025, just 2,339 apartments were approved, down 20 per cent on the previous quarter and 47 per cent lower than the same period a year earlier. On an annual basis, 11,066 apartment approvals were recorded, an improvement on the previous year, but still well below medium- and long-term averages.</p>

<p data-end="3710" data-start="3665">&nbsp;</p>

<p data-end="3710" data-start="3665"><img alt="Apartment approvals" data-entity-type="file" data-entity-uuid="12f2e7bc-fe01-40c0-80b5-9e829b279d98" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-24%20at%209.21.56%E2%80%AFAM.png?VersionId=5mnIXkXGoDgIJdAFhA0alm0cSKzEytqZ" /></p>

<p data-end="4035" data-start="3712">This decline reflects a broader contraction cycle that has been underway since 2020. As RPM notes, “apartment approvals appear to be sliding back into a downward trend,” with developers increasingly focused on launching and completing existing projects rather than initiating new ones.</p>

<p data-end="4519" data-start="4037">The reasons are well understood. Construction costs have risen more than 20 per cent since 2021, driven largely by labour shortages and material price escalation. At the same time, financing conditions have tightened, with lenders requiring higher contingencies and taking a more cautious approach to risk. Combined with recent interest rate rises, these factors have made feasibility more challenging, particularly for higher-density projects.</p>

<p data-end="4910" data-start="4521">This dynamic is creating a disconnect in the market. Demand for apartments—particularly at the more affordable end—is strengthening, while the pipeline of new supply is weakening. In the short term, this may limit the number of new projects coming to market. Over the medium term, however, it is likely to support price resilience and potentially further outperformance relative to houses.</p>

<p data-end="5296" data-start="4912">There are some signs of policy-driven supply response. The introduction of Victoria’s Mid-Rise Code, which streamlines approvals for four- to six-storey developments, is expected to improve delivery in well-serviced middle-ring locations. However, this is unlikely to materially offset the broader decline in apartment approvals in the near term.</p>

<p data-end="6044" data-start="5747">Despite the positive momentum at the end of 2025, the outlook for 2026 has become more complex. Two interest rate rises early in the year have already impacted consumer confidence, while broader cost pressures, particularly energy and fuel, are feeding through to construction and development costs.</p>

<p data-end="6206" data-start="6046">“Victoria’s built form market ended 2025 on a high, but early 2026 rate rises quickly reversed the momentum,” RPM notes.</p>

<p data-end="6548" data-start="6208">The implication is that while apartments are currently outperforming houses, the trajectory of that outperformance will depend on how these competing forces evolve. Policy support and affordability are clearly working in favour of apartments, but constrained supply and rising costs are likely to shape the pace and nature of future growth.</p>

<p data-end="6858" data-start="6550">What is increasingly clear is that apartments are playing a more central role in Melbourne’s housing market. As population growth continues and affordability pressures intensify, higher-density housing is becoming not just an alternative to detached homes, but a primary solution to the city’s housing needs.</p>
</section>


Joel Robinson

Units lead Melbourne price growth as apartments outperform houses: RPM

<p>Brunswick is set for some of its largest apartments ever delivered with the upcoming new development Frith &amp; Howarth, where the apartments are around 20 per cent larger than what has come before it in the sought-after suburb.</p>

<p>Developer Young Group focused its design on Frith &amp; Howarth around size and scale, but within a boutique building, to create a mini neighbourhood within the mid-rise development. There are just 24 apartments in the mid-rise building on Victoria Street, a short walk to Brunswick Station and the cafe and dining strip along Sydney Road.</p>

<p>“We spent hours comparing what’s currently on the market so we could offer genuine points of difference,” Young Group says, pointing to room sizing, storage, and functional planning as key drivers behind the design.</p>

<p>All of the two-bedroom apartments in the building have been snapped up, with just the large three- and four-bedroom apartments, with the biggest floorplans and best outlooks, remaining.</p>

<p>[smartcode_project:default project_id=134317 project_image_fid=354139]</p>

<p>Apartments open directly into open-plan living zones where full-height glazing draws light deep into the apartment. Sliding doors extend the space outward to terraces, many oriented toward the adjacent park or back toward the city skyline.</p>

<p>Kitchens sit within this central space, anchored by sculptural island benches that reference the building’s faceted exterior language. Storage is integrated across multiple layers, overhead cabinetry, concealed joinery, and, in larger configurations, dedicated sculleries or butler’s pantries.</p>

<p>[smartcode_project:default project_id=134317 project_image_fid=354137]</p>

<p>The penthouse is the largest ever offered in Brunswick. The penthouse measures nearly 400 sqm all-up, with 242 sqm of internal space complimented by a further 149 sqm of terraces.</p>

<p>It spans the whole top floor and has four bedrooms, four bathrooms, and parking for four cars.</p>

<p>[smartcode_project:default project_id=134317 project_image_fid=354133]</p>

<p>Low maintenance resident amenity has been created in the form of a landscaped rooftop, complete with&nbsp;vegetable plots, outdoor cooking areas, and aflresco dining spaces, designed as a place for neighbours to gather outside of their homes.</p>

<p>“To enable connection with neighbours, generous rooftop gardens with communal spaces and outdoor cooking areas offer a chance to develop a sense of community,” says John Patrick, Principal of <a href="https://www.apartments.com.au/landscape-architect/john-patrick-landscape-architects">John Patrick Landscape Architects</a>.&nbsp;</p>

<p>“Private open spaces with a selection of native and exotic plantings and gorgeous city views on the rooftop create a high-end aesthetic, with a low maintenance lifestyle. The perfect balance, so that residents can enjoy a serene living space.”</p>

<p>[smartcode_project:default project_id=134317 project_image_fid=354134]</p>

<p>Sustainability is embedded at both the building and apartment level. <a href="https://www.apartments.com.au/new-apartments/frith-howarth-288-290-victoria-street-brunswick-vic-3056">Frith &amp; Howarth</a> is one of only a small number of all-electric residential developments in Brunswick, supported by solar infrastructure, EV-ready parking, and high-performance glazing. These measures sit alongside less visible systems such as rainwater reuse and high-grade insulation, reducing long-term operational costs while maintaining consistent internal conditions.</p>

<p>Positioned within walking distance of Brunswick Station, Route 96 trams, and established retail along Sydney Road and Barkly Square, the development balances access to transport with proximity to open space, a combination that has become increasingly difficult to secure in inner-city sites.</p>

<p>“These exquisite homes are nestled in a culturally diverse neighbourhood, with parklands and nature right on your doorstep,” says Young Group.</p>

<p>[smartcode_project_cta:default project_id=134317]</p>


Frith & Howarth to deliver Brunswick’s largest apartments

<p><a href="https://www.apartments.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> in Brunswick is entering its final stages of construction, with the removal of the project’s last tower crane and the unveiling of the building’s full façade marking a significant milestone ahead of completion this coming spring.</p>

<p>The Park Street development, designed by <a href="https://www.apartments.com.au/architects/bates-smart">Bates Smart</a>&nbsp;and Mirvac Design with landscaping by <a href="https://www.apartments.com.au/landscape-architect/jack-merlo">Jack Merlo</a>, is now largely structurally complete, with internal works progressing across the 169-apartment project opposite Princes Park.</p>

<p><a href="https://www.apartments.com.au/builders/mirvac-construction">Mirvac Construction</a> Project Manager Sam Payne said the latest update reflects a transition from structure to refinement.</p>

<p>“Since our last update, all façade panels have been installed and the scaffolding and gantry has come down, unveiling the building in its full form for the very first time,” Payne said.</p>

<p>“A significant milestone was reached this month with the removal of our final tower crane, signalling the completion of major structural works and a pivotal step forward in the building’s transformation.”</p>

<p>[smartcode_project:default project_id=4802 project_image_fid=366856]</p>

<p>Apartments are now well advanced internally, with joinery completed to level eight and tiling to level six, alongside the delivery of a prototype apartment used to set the benchmark for the remaining residences.</p>

<p>This next phase coincides with the release of a completed furnished residence, styled by MCM House, and the introduction of private buyer tours, giving purchasers a clearer understanding of the finished product ahead of settlement.</p>

<p><a href="https://www.apartments.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> will comprise 169 one to four-bedroom apartments, with completion targeted for early spring. Interiors focus on natural materials and muted tones with two design schemes, while kitchens and bathrooms adopt a restrained palette anchored by stone, timber and textured finishes.</p>

<p>Bates Smart Director Jeffery Copolov said the project reflects a shared design direction centred on liveability and sustainability.</p>

<p>“Blending Mirvac and Bates Smart’s focus on wellness and sustainability, <a href="https://www.apartments.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> offers a new kind of conscious, elevated living in Melbourne’s inner north,” Copolov said.</p>

<p><a href="https://www.urban.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> presents Mirvac's third parkside collaboration with&nbsp;<a href="https://www.urban.com.au/architects/bates-smart">Bates Smart</a>&nbsp;in Victoria.&nbsp;Their previous collaborations delivered two of the city’s landmark apartment buildings: The Melburnian opposite Kings Domain and The Eastbourne on Fitzroy Gardens.</p>

<p>[smartcode_project:default project_id=4802 project_image_fid=366857]</p>

<p>A key focus of the development is its landscape-led amenity offering. The central courtyard, spanning around 600 sqm, will feature established trees and planting grown off-site, alongside communal lawns and seating areas designed for everyday use.</p>

<p>Development Manager James Gardner said the outdoor spaces are central to the project’s lifestyle positioning.</p>

<p>“<a href="https://www.apartments.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> isn’t just a home, it’s a complete lifestyle offering, and the resident amenity is just one example of the elevated living experience the soon-to-be-complete building will be known for,” Gardner said.</p>

<p>The courtyard connects to a series of shared indoor and outdoor spaces, including a residents’ lounge, dining room, library and secondary west-facing garden area, designed as extensions of the apartments themselves.</p>

<p>Located directly opposite Princes Park and around four kilometres from the CBD, the development places residents within one of Melbourne’s most established inner-north precincts, with access to open space, transport and the retail and hospitality offerings of Brunswick and Carlton.</p>

<p>With façade works complete and landscaping and final finishes now underway, <a href="https://www.apartments.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> is moving into its most active construction phase, with permanent services and external works to be finalised in the coming months ahead of completion in spring.</p>

<p>[smartcode_project_cta:default project_id=4802]</p>


Mirvac’s latest landmark, Prince & Parade Brunswick, enters final construction phase

<p>Boutique Perth developer ADC has unveiled its latest project.</p>

<p>The developer, which focuses on bringing apartments to some of Perth's most premium inner-city and riverside suburbs, has launched <a href="https://www.apartments.com.au/new-apartments/mos-lane-mosman-park-46-manning-street-mosman-park-wa-6012">Mos Lane</a>, 68 luxury apartments and townhouses in the heart of <a href="https://www.apartments.com.au/developments/mosman-park-wa-6012">Mosman Park</a>.</p>

<section data-scroll-anchor="true" data-testid="conversation-turn-124" data-turn="assistant" data-turn-id="request-69e027bc-1530-839b-a316-e9dad2cbd4d9-34" dir="auto">
<p data-end="496" data-start="78">Alongside the one-, two-, three- and four-bedroom apartments, the development will also include five two-level townhomes and two luxe penthouses. ADC is also introducing a significant retail offering for residents through Mos Lane Village, which will feature a wellness studio, fish and chips shop, barber, and florist, adding a layer of amenity not typically found in the predominantly residential Mosman Park area.</p>

<p data-end="876" data-is-last-node="" data-is-only-node="" data-start="498">Construction has already commenced on the project, which sits just a short walk from the Swan River, Mosman Park Bowls Club, and Mosman Park Golf Course.</p>

<p data-end="876" data-is-last-node="" data-is-only-node="" data-start="498">House Agency Directors Tom House and Lachlan McDonald say they are fielding the majority of buyer interest from local downsizers, as well as buyers with a long-standing affinity for Mosman Park.</p>
</section>

<p>[smartcode_project:default project_id=148957 project_image_fid=364591]</p>

<p>Mos Lane will comprise two buildings; Samson House and Manning House, which have been designed by&nbsp;<a href="https://www.apartments.com.au/architects/nelson-koo">Nelson + Koo</a>, an emerging design consultancy specialising in the masterplanning and design of mixed use places and spaces.</p>

<p>The two buildings adopt distinct architectural responses to their surroundings. Manning House references the strong roof forms of nearby homes, with floorplates oriented to maximise light and long-range views, while Samson House is organised around a central atrium designed to bring daylight deep into the building and create a greater sense of openness.</p>

<p>At ground level, the inclusion of five townhomes introduces a typology more commonly associated with Mosman Park’s established streets, each with private courtyards and direct frontage, offering a transition between traditional housing and apartment living.</p>

<p>[smartcode_project:default project_id=148957 project_image_fid=364103]</p>

<p>Interiors have been led by Melbourne-based Hecker Guthrie, with an emphasis on practical, long-term liveability. Residences incorporate sculpted joinery, generous storage and flexible multi-purpose rooms that can adapt to changing household needs, whether for working from home, guest accommodation or additional living space.</p>

<p>Material selections draw on a restrained palette of textured stone, timber and neutral tones, with options for lighter or darker schemes. Detailing such as fluted glass, full-height joinery and integrated appliances is intended to balance functionality with a more refined residential finish.</p>

<p>Outdoor spaces are a consistent feature across the development, with balconies and terraces designed for dining and entertaining, and larger apartments incorporating outdoor kitchens. Orientation has been considered to allow residents to choose between morning or afternoon sun, while mature street trees and landscaped communal areas contribute to a softer streetscape.</p>

<p>[smartcode_project:default project_id=148957 project_image_fid=364107]</p>

<p>Shared amenities are positioned to support both day-to-day convenience and occasional use. These include a private dining room with a caterer’s kitchen, alfresco entertaining areas, and a bookable guest suite for visiting friends and family. Additional practical features such as a resident workshop, storage facilities, car and pet wash areas, and concierge-style services for cleaning and dry-cleaning collection reflect a focus on usability.</p>

<p>Positioned between the Swan River and Cottesloe Beach, and within reach of schools such as Iona Presentation College and St Hilda’s Anglican School, the development is aimed at a broad buyer group, from downsizers seeking a lower-maintenance alternative to larger homes, through to local residents looking to remain in the area in a different housing format.</p>

<p>Mos Lane represents one of the more significant additions to Mosman Park’s limited pipeline, combining new housing supply with a village-style retail centre in a suburb where opportunities for large-scale redevelopment are relatively constrained.</p>

<p>[smartcode_project_cta:default project_id=148957]</p>


Living village precinct set for Mosman Park as ADC launches Mos Lane

<p>An entity linked to I&amp;D Group Founder Ivan Filipović has filed plans for a new residential development at 188–202 Swan Street in Cremorne, targeting a prominent site within the tightly held Swan Street activity corridor.</p>

<p>The proposal seeks to redevelop the consolidated Swan Street landholding into a <a href="https://www.apartments.com.au/new-apartments/188-202-swan-street-cremorne-vic-3121">high-density mixed-use project</a>, replacing a series of existing commercial buildings with a significantly scaled residential outcome. The planning submission positions the development as a response to increasing demand for housing in well-connected inner-urban locations, particularly within established activity centres.</p>

<p>Plans outline the construction of a 14-storey building delivering 165 apartments above a four-level basement, alongside a ground-floor retail and commercial offering designed to activate the streetscape. A key feature of the scheme is a new north–south pedestrian link connecting Swan Street to Railway Place, intended to “enhance permeability and provide an active, publicly accessible connection through the site.”</p>

<p><img alt="First Look: Plans lodged for Ivan Filipović-linked Cremorne apartment project on Swan Street" data-entity-type="file" data-entity-uuid="7332a8f8-dd2b-483d-b86e-320658838c84" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/cremorne.png?VersionId=cXm8vAaRdHh.LpYVbecrRkjckgu9mtAF" /></p>

<p>The development will retain part of the existing built form at 198–200 Swan Street, while the remainder of the site will be cleared to accommodate the new structure. Basement levels will provide 196 car spaces and 113 bicycle spaces, with vehicle access from Railway Place. Communal amenity is distributed across the building, including a shared outdoor area on Level 1 and a rooftop terrace for residents.</p>

<p>Ground level uses include retail tenancies fronting Swan Street and the pedestrian link, a residential lobby, and a flexible commercial space positioned to support community-oriented uses. The planning report notes this space “could be offered as a flexible space within the development for community groups,” supporting short-term or longer-term occupancy arrangements.</p>

<p><img alt="First Look: Plans lodged for Ivan Filipović-linked Cremorne apartment project on Swan Street" data-entity-type="file" data-entity-uuid="8208bf7b-cc67-485d-ad0f-1d73a74c907f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/cremorne%20lane.png?VersionId=69ctjC0txXv0zCHy7qQUpJyGwvPAT7gw" /></p>

<p>The site sits within the Swan Street Major Activity Centre, surrounded by a mix of retail, hospitality, and emerging residential development, and directly opposite tram services along Swan Street. East Richmond Station is located to the south, providing strong rail connectivity, while the broader Cremorne precinct continues to evolve as a mixed-use hub.</p>

<p>I&amp;D Group, founded by Ivan Filipović, is regarded as one of Victoria’s largest formwork contractors, partnering with major construction firms across large-scale public and private developments. The Swan Street proposal signals a move into development-backed opportunities tied to strategic inner-city sites.</p>


First Look: Plans lodged for Cremorne apartment project on Swan Street

Housing Price

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<h3 class="post-title entry-title"><a href="https://petewargent.blogspot.com.au/2015/09/house-prices-rise-in-august"></a></h3>
<div>The Reserve Bank released its latest Chart Packs to 27 August, which showed that on a national basis house price growth has steepened.</div>
<h3 class="post-title entry-title"><a href="https://petewargent.blogspot.com.au/2015/09/house-prices-rise-in-august"></a></h3>
<div>This data is now presented on a log scale, which is just as well since Sydney prices were heading up almost vertically when presented on a linear scale.</div>
<h3 class="post-title entry-title"><a href="https://petewargent.blogspot.com.au/2015/09/house-prices-rise-in-august"></a></h3>
<div>Brisbane is finally now joining Sydney and Melbourne by shaping in an upwards trajectory.</div>
<div> </div>
<div><a href="/images/2015/09/04/6bl-houspri-small.gif" target="_blank">Click to enlarge</a></div>
<p><img src="/images/2015/09/04/6bl-houspri-small.gif" alt=""></p>
<p><em>CoreLogic-RP Data</em><span> also </span>released<span> its price indices for August 2015 over the last week.</span></p>
<div>Over the past quarter house prices have soared in Sydney (+7.4 per cent), Melbourne (+8.0 per cent) and Brisbane (+2.2 per cent).</div>
<div> </div>
<div>On the other hand, on a quarterly basis house prices declined in Adelaide, Perth, Canberra and Darwin.<br><br>Regional house prices in aggregate also declined over the past quarter.</div>
<div> </div>
<div><a href="/images/2015/09/04/RPD3.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/09/04/RPD3.jpg" alt=""></div>
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<div>
<div>On Twitter, Cameron Kusher of the same company updated his chart of home values since December 2008, which underscores the importance of capital growth to investors.</div>
<div> </div>
<div>While it was possible for investors to find a positive cash flow in Hobart back in 2008, since that time home values have been stone dead flat in the Tasmanian capital, while Sydney prices have burned up by 76.4 per cent.</div>
<div> </div>
<div>Brisbane appears most likely to be the next to go over just 9 per cent growth in home values since 2008.</div>
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<div>Click to enlarge</div>
<div><img src="/images/2015/09/04/RPD1.png" alt=""></div>
<div> </div>
<div><span>Looking at the split between house and unit price growth we can see that Sydney unit values exploded 9.2 per cent higher over the last 3 months (this had been evident for quite some time at auctions, and the index probably lags) as affordability constraints related to detached houses bites.</span></div>
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<div><a href="/images/2015/09/04/RPD2.jpg" target="_blank"><span>Click to enlarge</span></a></div>
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<div><span><img src="/images/2015/09/04/RPD2.jpg" alt=""></span></div>
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<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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pwargent-M4siyDbqQY

House prices rise in August: Pete Wargent

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<p>Realestateview.com.au is now offering a new tool to home owners and seekers that can, they claim, provide an accurate dollar value on their home </p>
<p>By partnering with CoreLogic, Australia’s leading property data provider, <a href="https://realestateview.com.au/" target="_blank">realestateview.com.au</a> has further developed its first-to-market 'Price Estimator' which provides property owners and property seekers with instant price value ranges.</p>
<p>Every address searched has a range of property data and demographic information relevant to the suburb where that property is located. G</p>
<p>“Over 40 percent of people visiting our site every month engage with a Price Estimator page. It’s extremely popular, and now with the experience being powered by CoreLogic, there’s even more reasons for consumers to rely on our site for address-level property insights and data,” said Toby Balazs, realestateview.com.au CEO.</p>
<p>“Being the number three property portal in Australia, realestateview.com.au is focused on delivering new and value adding experiences to keep our property-obsessed audience engaged with the site."</p>
<p>“The great thing about CoreLogic is that people know and trust the data, it’s referenced everywhere and in our industry, it has a reputation for quality and accuracy,” he went on to say.</p>
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RealEstateView partners with CoreLogic to release new property price estimator

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<div>House prices across Australia are tipped to grow in the next three years, with the exception of Sydney and Melbourne where they will continue falling in 2019, according to QBE’s Australian Housing Outlook 2018-2021.</div>
<div> </div>
<div>It reveals that over the next three years house prices are set to rise in Adelaide by 12.4 per cent, in Brisbane by 11.3 per cent, Canberra by 10.4 per cent, Hobart by 7.9 per cent, Darwin by 6 per cent and Perth 5 per cent after several years of stagnant conditions. </div>
<div> </div>
<div>Providing a 12-month window for first home buyers to pursue the Great Australian Dream, the primary drivers for a strengthening property market in these capital cities are affordability, increased demand and improving economic conditions. </div>
<div> </div>
<div>The report has been quickly labelled "<span>delusional reading."</span>
</div>
<div> </div>
<div>QBE Lenders’ Mortgage Insurance (LMI) CEO, Phil White, said the surge in first home owner lending proved the Great Australian Dream of home ownership was alive.</div>
<div> </div>
<div>“We haven’t seen the first home buyer market this strong since the Australian Government’s 2008 stimulus plan following the Global Financial Crisis, which saw $1.5 billion allocated to first home buyers,” Mr White said. </div>
<div> </div>
<div>“The increases in the volume of first home buyers has been supported by improvements in affordability and first home buyer incentives. </div>
<div> </div>
<div>“Record low interest rates in recent years had seen a surge in investor lending, but this year’s report shows investor lending scaling back, which should also provide further room for first home buyers over the next couple of years.</div>
<div> </div>
<div>“Lenders’ responses to regulatory restrictions have contributed to the softening of the market.  State government incentives have encouraged first home buyers to enter the market after several years of being pushed out by domestic and foreign investors.”</div>
<div> </div>
<div> </div>
<div>Adelaide is forecast to see the strongest growth of any capital city in the country, continuing its steady growth trajectory, but outpacing all other capital cities over the next three years.</div>
<div> </div>
<div>The outlook is less rosy for apartment owners, with unit prices set to fall in Brisbane by 5.1 per cent, Darwin by 4.5 per cent, Sydney by 3.1 per cent and Melbourne by 2.1 per cent. </div>
<div> </div>
<div>This is due to weaker demand from investors and an increase in supply of apartments. </div>
<div> </div>
<div>“We anticipate foreign investment will further dampen in coming years owing to a number of factors such as increased approval fees, stamp duty and land tax surcharges, as well as tighter capital controls from foreign governments, most notably China, which have impacted how much money they can take out of their country,” Mr White said.</div>
<div> </div>
<div>Over the next three years, the overall housing market will be supported by strong population growth, with net overseas migration forecast to remain high in the long-term, averaging 220,000 per annum over three years to 2020-2021, significantly higher than the prior 20-year average of 183,000 per annum. </div>
<div> </div>
<div>This growth will underpin demand for new dwellings and help meet the high level of new supply coming online in some markets. </div>
<div> </div>
<div><a href="https://www.qbe.com.au/lmi/news/reports/housing-outlook"> </a></div>
<div><span class="qbe-sub-heading">State-by-state highlights of the QBE Housing Outlook 2018-2021</span></div>
<p><span class="qbe-section-heading">Sydney</span></p>
<ul>
<li>Sydney’s house prices are expected to fall in the beginning forecast period and end up 1.2% lower to be at $1,090,000. </li>
<li>The unit market is expected to fall even further for Sydney with a forecast drop of 3.1% to 2021 to reach $745,000. </li>
<li>Affordability and first home buyer incentives are expected to continue to underpin first home buyer activity</li>
<li>After seeing the strongest price growth in the 12 months prior, Sydney’s inner and middle ring suburbs have seen the largest fall in prices over 2017/18 (falling by 8.1% and 10.6% respectively).</li>
<li>Outer Sydney saw a more moderate decline of 2.8% over the same period, which was likely supported by its relative affordability appealing to first home buyers.</li>
</ul>
<p><span class="qbe-section-heading">Melbourne</span></p>
<ul>
<li>Housing market prices to fall in Melbourne, with house prices expected to drop by 2.5% to $835,000 by June 2021. By means of comparison, Sydney house prices are expected to fall by 1.2% to June 2021.</li>
<li>Unit prices are also expected to decline 2.1% to $545,000 in Melbourne.</li>
<li>Continued population growth is expected to absorb some of the excess supply of units.</li>
</ul>
<div><span class="qbe-section-heading">Brisbane</span></div>
<ul>
<li>House price growth will continue and be 11.3% higher to $615,000 by June 2021. This is more growth than Canberra (10.4%), Hobart (7.9%), Darwin (6.0%) and Perth (5.0%). Only Adelaide (12.4%) is expected to outperform Brisbane house prices. </li>
<li>Oversupply of units will continue to put downward pressure on rents and prices of units to decline by 5.1% to $405,000. This is the greatest expected decline of all capital cities. </li>
<li>Greater competition for tenants of inner-city apartments is forecast to cause investors to lower rents to try to draw tenants from houses and more affordable city fringe locations. </li>
</ul>
<p><span class="qbe-section-heading">Perth</span></p>
<ul>
<li>Overall, the Perth market is expected to be at or near the bottom with houses and units expected to experience some growth in price to June 2021. House price growth in Perth will beat Sydney and Melbourne but underperform compared to Adelaide, Brisbane, Canberra, Hobart and Darwin. </li>
<li>Dwelling surplus in Perth looks set to remain in place for some time. </li>
<li>The forecast median house price of $550,000 at June 2021 will represent cumulative growth of 5% over the next three years, with unit price forecast to rise 3.7% to $405,000.</li>
</ul>
<p><span class="qbe-section-heading">Adelaide</span></p>
<ul>
<li>Adelaide is expected to record similar house price growth as the last three years and is forecast to grow by 12.4 per cent over the next three years, the highest of any Australian capital city. </li>
<li>Median unit prices are projected to rise by a slightly lower 6.3 per cent, making Adelaide the second strongest unit market after Hobart’s 9.3 per cent. </li>
<li>These positive forecasts can be attributed to Adelaide’s ongoing market affordability, coupled with low interest rates, despite South Australia’s generally depressed conditions. </li>
</ul>
<p><span class="qbe-section-heading">Canberra</span></p>
<ul>
<li>Growth in house prices forecast with median house price to increase 10.4% to reach $745,000. This is more than growth forecast for Sydney, Melbourne, Hobart, Darwin and Perth. </li>
<li>Unit price is forecast to reach $465,000, a cumulative rise of 5.9% to 2021. </li>
<li>Conditions in the house market in Canberra are expected to remain largely positive, driven by population growth, an undersupply of houses and strong employment prospects. </li>
</ul>
<p><span class="qbe-section-heading">Hobart</span></p>
<ul>
<li>Hobart’s median house price forecast to rise to $520,000, reflecting growth of 7.9% to 2021.</li>
<li>Median unit price in Hobart forecast to reach $420,000 at June 2021; a cumulative rise of 9.3%. </li>
<li>An undersupply of housing and better affordability relative to other capital cities is expected to continue to influence the property market</li>
<li>While all other states across the country saw declines in the value of investment loans, Tasmania’s strong capital gains in recent years meant it was the only state to see increased investor lending, of 9.7 per cent. </li>
</ul>
<p><span class="qbe-section-heading">Darwin</span></p>
<ul>
<li>This trend is expected to recover with house prices forecast to grow 6.0 per cent over the next three years.  </li>
<li>Unit prices are expected to fall 4.5 per cent over the same period. </li>
</ul>
<p><span class="qbe-sub-heading">State-by-state house price forecasts</span></p>
<p><span class="qbe-sub-heading"><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/2018/10/25/QBE%20HOUSE%20.jpg" alt=""></span></p>
<p><span class="qbe-sub-heading"><span>State by-state unit price forecasts</span></span></p>
<p><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/2018/10/25/QBE%20UNITS.jpg" alt=""> </p>
<p><span class="qbe-section-heading"> </span></p>
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Great Australian dream once again within first home buyer reach: QBE suggest

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<p>GUEST OBSERVER</p>
<p>The Sydney and Melbourne property markets have hotted up again and high house prices and household debt leave Australia vulnerable. But a property crash remains unlikely.</p>
<p>Expect average home prices to fall 5-10% once an interest rate tightening cycle gets underway in 2018-19. Sydney and Melbourne unit prices are most at risk.</p>
<p>More macro prudential measures to slow property demand are likely on the way. Alleviating poor affordability over the long term is best addressed by boosting supply. </p>
<p>The cooling in the Sydney and Melbourne property markets evident in late 2015 in response to macro prudential tightening deployed by APRA has proved ephemeral. Price gains have reaccelerated and auction clearance rates &amp; lending to property investors have rebounded. Over the last five years Sydney dwelling prices have risen a ridiculous 73 percent and Melbourne prices are up 47%. As a result the Australian housing market continues to cause much angst around poor affordability and high household debt. This note looks at the main issues. </p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/15/Screen%20Shot%202017-03-15%20at%2012.57.38%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/03/15/Screen%20Shot%202017-03-15%20at%2012.57.38%20PM.png" alt=""></p>
<p>Is Australian housing overvalued?</p>
<p>On most measures Australian housing is overvalued:</p>
<p>On the basis of the ratio of house prices to rents adjusted for inflation relative to its long term average Australian houses are 39% overvalued and units 13% overvalued.</p>
<p>According to the 2017 Demographia Housing Affordability Survey the median multiple of house prices in cities over 1 million people to household income is 6.6 times in Australia versus 3.9 in the US and 4.5 in the UK. In Sydney it’s 12.2 times and Melbourne is 9.5 times.</p>
<p>The ratios of house prices to incomes and rents are at the high end of OECD countries. </p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/15/Screen%20Shot%202017-03-15%20at%2012.58.38%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/03/15/Screen%20Shot%202017-03-15%20at%2012.58.38%20PM.png" alt=""></p>
<p>Why is it so expensive and household debt so high?</p>
<p>There are two main drivers of the surge in Australian home prices over the last two decades. First, the shift from high to low interest rates has boosted borrowing and hence buying power. This has taken Australia’s household debt to income ratio from the low end of OECD countries 25 years ago to the top end. Second, there has been an inadequate supply response to demand. The following chart shows a cumulative shortfall relative to underlying demand had built up by 2014 and is still yet to be worked off despite record construction lately. </p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/15/Screen%20Shot%202017-03-15%20at%2012.59.35%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/03/15/Screen%20Shot%202017-03-15%20at%2012.59.35%20PM.png" alt=""></p>
<p>Consistent with this, while vacancy rates have increased they have only increased to around average long term levels. In Sydney vacancy rates are below average.</p>
<p>What about investors and foreign buyers?</p>
<p>A range of additional factors may be playing a role in accentuating demand beyond that implied by population growth. These include negative gearing and the capital gains tax discount, foreign buying and SMSF buying. Negative gearing is just part of the normal operation of the Australian tax system.</p>
<p>However, the interaction with the capital gains tax discount by enhancing the after tax return available to property investment may be resulting in higher investment activity than would otherwise be the case. This may particularly be the case when past property price gains have been strong encouraging investors to think future gains will be too. While commitments to lend to property investors slowed in 2015 after APRA tightened macro prudential controls, this has since worn off. </p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/15/Screen%20Shot%202017-03-15%20at%201.00.29%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/03/15/Screen%20Shot%202017-03-15%20at%201.00.29%20PM.png" alt=""></p>
<p>Foreign buying is likely also impacting – with indications that it is around 10-15 percent of demand – but it is also concentrated in particular areas and SMSF buying appears to be relatively small. But like lower interest rates, all of these should have a less lasting impact if the supply response was stronger.</p>
<p>Is a crash likely?</p>
<p>The surge in prices and debt has led many to conclude a crash is imminent. But we have heard that lots of times over the last 10-15 years. In 2004, The Economist magazine described Australia as “America’s ugly sister” thanks in part to a “borrowing binge” and soaring property prices. Most recently the OECD has warned of the risks of a property crash. However, the situation is not so simple:</p>
<p>Firstly, we have not seen a generalised oversupply and at the current rate we won’t go into oversupply until 2018 and in any case approvals suggest supply will peak this year.</p>
<p>Secondly, mortgage stress is relatively low and debt interest payments relative to income are around 2003-04 levels.</p>
<p>Thirdly, lending standards have not deteriorated like they did in other countries prior to the GFC. In recent years there has been a reduction in loans with high loan to valuation ratios and interest only loans are down from their peak.</p>
<p>Finally, generalising is dangerous. While prices have surged in Sydney and Melbourne, they have fallen in Perth to 2007 levels and seen only moderate growth in other capitals.</p>
<p>To see a general property crash – say a 20 percent plus average price fall - we need to see one or more of the following: a recession - which looks unlikely; a surge in interest rates - but rate hikes are unlikely until 2018 and the RBA will take account of the greater sensitivity of households to higher rates; and property oversupply – this would require the current construction boom to continue for several years. However, the risks on the supply front are high in relation to apartments.</p>
<p>What can be done to fix it?</p>
<p>Recent RBA commentary strongly hints that more macro prudential measures to tighten lending standards are on the way. These could include a further lowering in the 10% growth cap on the stock of lending to investors and tougher debt serviceability tests. This is in part about reducing the risks to financial stability when it’s too early to consider raising rates.</p>
<p>More fundamentally, policies to help address poor housing affordability should focus on boosting new supply, particularly of standalone homes which have lagged. This includes relaxing land use restrictions, releasing land faster, speeding up approval processes and encouraging greater decentralisation. This is largely a state issue. Policies designed to make better use of the existing housing stock (eg, by relaxing constraints on empty nesters downsizing) could also help. </p>
<p>Policies that are unlikely to be successful include increased first home owner grants (as in periods of high demand they just result in higher prices) and allowing first home buyers to access to their super (again this will just result in even higher prices unless supply is fixed before and will mean less in retirement).</p>
<p>Tax reform should ideally be part of the package and include replacing stamp duty with land tax (again a state issue), removing the capital gains tax discount that is a distortion in the tax system and lower income tax rates to discourage use of negative gearing as a tax avoidance strategy. Piecemeal cuts to stamp duty targeted at FHBs will just result in higher home prices. Abolishing negative gearing would just inject another distortion in the tax system and could adversely affect supply (although I can see a case to cap excessive benefits).</p>
<p>What is the outlook?</p>
<p>Generalised price falls are unlikely until the RBA starts to raise interest rates again and this is unlikely until later in 2018, which after a few hikes will likely trigger a 5-10% pullback in property prices as was seen in the 2009 &amp; 2011 cycles:</p>
<p>Sydney &amp; Melbourne having seen big gains are most at risk.</p>
<p>Prices are likely to fall further in Perth and Darwin this year, but they are close to bottoming and should rise next year.</p>
<p>The other capitals are likely to see continued moderate growth this year and a less severe down cycle around 2019.</p>
<p>But units are at much greater risk given surging supply and this could see unit prices in parts of Sydney &amp; Melbourne fall by 15-20 percent as investor interest fades as rents falls.</p>
<p>What are the risks to the economy?</p>
<p>Slowing momentum in building approvals points to a slowdown in the dwelling construction cycle ahead. This combined with a slowing wealth affect from rising home prices means that the contribution to growth from the housing will slow. However, as this is likely to coincide with a fading in the detraction from growth due to falling mining investment and higher commodity prices it’s unlikely to drive a slowing in the economy. However, a likely decline in rents (as the supply of units hits) will constraint inflation helping keep interest rates low for longer. </p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/15/Screen%20Shot%202017-03-15%20at%201.01.58%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/03/15/Screen%20Shot%202017-03-15%20at%201.01.58%20PM.png" alt=""></p>
<p>A property crash would have bigger impact given the exposure of banks, but as noted above such a development is unlikely.</p>
<p>Implications for investors</p>
<p>While there is a strong long term role for residential property in investors’ portfolios at present their remains a case for caution. It is expensive on all metrics and offers very low net income (rental) yields of 2 percent or less. This leaves investors highly dependent on capital growth.</p>
<p>But it is dangerous to generalise. Apartments in parts of Sydney and Melbourne are probably least attractive. Best to focus on areas that have lagged behind.</p>
<p>Finally, investors need to allow for the fact that they likely already have a high exposure to Australian housing. As a share of household wealth it’s nearly 60%.</p>
<p class="p1"><span class="s1"><a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author"><em>SHANE OLIVER</em></a></span><span class="s2"><em> is head of investment strategy and economics and chief economist at </em><a href="https://www.ampcapital.com.au/home"><span class="s1"><em>AMP Capital</em></span></a><em> and is responsible for AMP Capital's diversified investment funds.</em></span></p>
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Sydney, Melbourne property market hot, property crash unlikely: Shane Oliver

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<p><span>Chief executive of McGrath estate agents John McGrath has said the Australian market is in different stages of recovery related to price ranges, with many metropolitan markets in the very early stages of their growth cycle - at best.</span></p>
<p><span>In the McGrath 2015 Report he noted the </span><span style="line-height: 1.3em;">Sydney and Melbourne have been the star performers with 62% and 32% growth respectively, since the GFC (2009-2015). </span></p>
<p><span style="line-height: 1.3em;">"However, if you look beyond the last few years and review growth </span><span style="line-height: 1.3em;">in both cities over the last decade, </span><span style="line-height: 1.3em;">it’s fair to say that longer term growth rates have not been as extraordinary. In fact, Australia’s two biggest cities both underperformed against their usual 10- year growth rates," he said.</span></p>
<p>"Looking around the country it’s just as clear that many other metropolitan markets are in the very early stages of their growth cycle at best – and in some instances as flat as the proverbial pancake. </p>
<p>"So if we drill down on Sydney, what seems to be driving this demand? It’s pretty straightforward"</p>
<p>There are five key drivers: </p>
<ol>
<li>
<p>Record low interest rates </p>
</li>
<li>
<p>Increased demand from small investors and SMSFs </p>
</li>
<li>
<p>An underlying shortage of property coupled with continued immigration </p>
</li>
<li>
<p>High demand from Chinese buyers </p>
</li>
<li>
<p>A stable economy (apart from a few recent economic tremors). </p>
</li>
</ol>
</div>
</div>
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