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.

Joel Robinson

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

&nbsp;

Developer GURNER™ Group has revealed $1.65 billion in residential sales nationally across the 12 months to December 2025, driven largely by the continued momentum of its Docklands wellness-focused precinct, Elysium Fields.

The sales result was generated across seven projects in Victoria and New South Wales, headlined by Elysium Fields, GURNER™’s $2.75 billion mixed-use precinct planned for Harbour Esplanade in Docklands.

The project has recorded more than $500 million in sales across the first three towers, equating to around 580 apartments sold.

The first tower, Helios, has now sold out of its 240 private residences, with GURNER™ preparing to release a premium penthouse collection comprising 15 three-bedroom penthouses in coming weeks.

[smartcode_project:default project_id=144441 project_image_fid=370975]

Elysium Fields is being developed on the long-held 20,000 sqm Docklands site at 208-226 Harbour Esplanade, which had remained undeveloped for more than two decades prior to GURNER™ taking over the project around four years ago.

Construction has now commenced across four towers ranging between 18 and 30 storeys, with Hamilton Marino and Maxcon appointed as builders.

Once complete, the precinct is expected to comprise around 1,100 residences, alongside retail, hospitality and public realm uses integrated throughout the site.

[smartcode_project:default project_id=144441 project_image_fid=370981]

Designed by Fraser &amp; Partners in collaboration with GURNER™ Design House, the project has been positioned around the developer’s broader focus on wellness-led residential living.

“We don’t sell apartments. We create a true luxury lifestyle that simply doesn’t exist elsewhere in the market today,” Founder and Executive Chairman Tim Gurner said.

“To deliver that requires an extraordinary level of detail, coordination and discipline across multiple verticals, from design and hospitality through to wellness and service.”

“We’ve always believed that living extends far beyond the physical residence. It’s about how you feel the moment you arrive, how you live day-to-day, and the ecosystem that supports that.” 
[smartcode_project:default project_id=144441 project_image_fid=370977]

The project’s design places a heavy focus on landscaping, wellness amenities and biophilic design principles.

Plans include around 3,700 sqm of landscaped gardens and open space throughout the precinct, alongside a retail and dining offering spanning approximately 5,000 sqm.

The broader public realm strategy centres around what GURNER™ describes as the “Path of Life”, an urban forest and landscaped pedestrian environment intended to connect the various buildings and wellness spaces across the precinct.

The apartments themselves will incorporate a range of wellness-focused inclusions, including purified air and water systems, circadian lighting, antimicrobial surfaces, and optional in-home wellness upgrades.

[smartcode_project:default project_id=144441 project_image_fid=370980]

Gurner said the company’s experience through its Saint Haven wellness clubs had directly informed the residential offering now being incorporated into Elysium Fields.

“We’re seeing a clear global shift toward longevity, performance and proactive health,” Gurner said.

“Our role is to deliver that in a way that feels seamless, highly private and beautifully resolved within the environments we create.”

A large component of the wellness offering is planned through the resident amenity and health facilities proposed within the precinct.

That includes plans for bathing and recovery facilities spread throughout the towers, incorporating mineral pools, saunas, steam rooms, flotation therapy, red light therapy and wellness lounges.

The developer is also seeking approvals for what it describes as a “reverse ageing medical clinic” within the precinct.

[smartcode_project:default project_id=144441 project_image_fid=370978]

According to project information released by the group, the proposed facility would include cryotherapy, IV infusion therapy, infrared and dry saunas, PEMF beds, MRIs, DEXA scans, brain scans and blood analysis services.

Within the first tower, Helios, residents will also have access to a dedicated amenity offering known as the Sky Private Club.

The upper 15 levels of the building will include private lounges, dining spaces, rooftop amenities and optional private wellness studios integrated within residences.

The Helios tower itself comprises 260 apartments ranging between 60 sqm and 300 sqm, including a collection of penthouses.

That includes a planned two-storey penthouse spanning around 600 sqm with uninterrupted bay views.

The Elysium Fields precinct is being delivered in partnership with Digital Harbour Holdings, a consortium that includes the Liberman family, which controls the development rights across the Docklands site.

[smartcode_project:default project_id=144441 project_image_fid=370979]

The sales result comes as GURNER™ continues expanding its national development pipeline beyond Victoria.

“We have a strong pipeline across Australia and are now focused on scaling into key markets including New South Wales and Queensland, while continuing to build on our Melbourne base,” Gurner said.

“We currently have more than $3 billion in the market, growing to over $5 billion by October, and expect to materially outperform last year in the 2026 calendar year.”

The result also reflects the continued strength of the upper-end apartment market in Melbourne, particularly for owner-occupier-focused product with large-scale amenity and lifestyle offerings.

[smartcode_project_cta:default project_id=144441]

Record result anchored by the Group’s “utopian” Elysium Fields precinct – defying market headwinds in Docklands.

Elysium Fields drive Gurner to $1.65 billion in apartment sales over 2025

National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.

The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.

Multiplex has been appointed the builder, and construction is now underway.

[smartcode_project:default project_id=108274 project_image_fid=365784]

Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.

Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.

“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.

He said NAB’s early support was instrumental in helping establish the company’s development model.

“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.

“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”

[smartcode_project:default project_id=108274 project_image_fid=365771]

Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.

Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.

Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.

Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.

The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.

[smartcode_project:default project_id=108274 project_image_fid=365768]

Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more international and domestic flights.

Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.

Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.

[smartcode_project_cta:default project_id=108274]

NAB funds $1 billion Surfers Paradise apartment development, Palmera

Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.

The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.

The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" />

According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”

The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.

The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.

Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.

“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.

The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.

The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" />

The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.

While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.

“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.

According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.

“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.

“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”

The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.

Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.

&nbsp;

The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" />

St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.

Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.

The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.

More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.

First look: Aqualand joins St Leonards apartment party

Housing Prices

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GUEST OBSERVER
Data released showed that new home sales rose by 0.8 percent in April after falling by 1.1 percent in March. 
The number of detached house sales rose by 2.2 percent in April. Multi-unit dwelling sales fell by 1.2 percent in April. 
The home sales data has implications for banks, retailers, developers, building and building material companies. 
What does it all mean?
The latest lift in new home sales essentially doesn’t alter the trend. The housing sector has peaked in terms of activity and is likely to be more subdued over the coming year. It is important to keep in mind that overall new home sales remain healthy, but the macro-prudential measure and resulting tight lending standards adopted by the banks will have a more lasting impact on housing activity.
The focus for policymakers will be the mix of investor and owner occupier loans over the next six months and what happens to house prices. It is clear that housing activity is consolidating with potential home buyers being more circumspect on purchases, given higher home prices and the lift in borrowing costs. The softening in home building should lead to a much more sustainable housing market.
Importantly the pipeline of new home building remains solid and should support an array of sectors and broad- based activity. The latest data doesn’t have a great influence on the next interest rate decision. The Reserve Bank is comfortably on the interest rate side lines for the rest of 2017.
<a href="https://www.propertyobserver.com.au/images/2017/06/02/Screen%20Shot%202017-06-02%20at%2012.40.56%20PM.png" target="_blank">Click to enlarge</a>
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What do the figures show?
New home sales
In seasonally-adjusted terms, new home sales rose by 0.8 percent in April after falling by 1.1 percent in March. The number of detached house sales rose by 2.2 percent in April. Multi-unit dwelling sales fell by 1.2 percent in April.
 The Housing Industry Association reported: “Amongst the jurisdictions surveyed, New South Wales (+2.2 percent), Victoria (+14.3 percent) and South Australia (+7.0 percent) all posted improving sales figures for private detached houses in April, while both Queensland (-4.7 percent) and Western Australia (-12.7 percent) recorded falls.”
What is the importance of the economic data?
The Housing Industry Association releases data on the sales of new homes each month. The HIA collects the data each month from a sample of Australia's largest 100 home builders. The survey covers around 14 percent of the home building industry. 
Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a>
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jchancellor-FAypfDUnLy

Number of detached house sales lift: Savanth Sebastian

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Rising property prices, onerous deposits and competition from local and overseas investors has driven changes to the first home buyer grant system in New South Wales with a number of changes being introduced July 1, 2017.
Glenn Stevens, former governor of the Reserve Bank of Australia said as incomes have risen and preferences about housing have changed, the prices commanded by land in the most desirable locations have increased a great deal.
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"The NSW economy has been outperforming other regions of the country, helping incomes to rise and employment to grow faster than elsewhere, and attracting more people, particularly as the mining investment boom tailed off," he said.
"This came after a fairly lengthy period of underperformance in NSW following the 2000 Olympics – some of it is ‘catch-up’. 
"So in a way, some of what we see are the sort of challenges associated with a growth economy. 
"Most observers agree that the supply side of the market in general has struggled to keep up with demand. 
"To be sure, construction rates are presently at record highs. 
"But there is a stock issue: the previous period of underbuilding leaves a cumulative shortfall in the number of dwellings, estimated by the Department of Planning to be as large as 100,000 dwellings. 
"If our objective is housing being affordable in an environment of growth in population and income, we need to have the supply side able to respond to demand in a more elastic way. 
"Most importantly, NSW needs a plan for growth. 
"Leaders need to explain what we need to do to accommodate more people, why growth without a plan is a not a good outcome – but why an even worse outcome would be stagnation."
Change to stamp duty and concessions include:
• abolition of stamp duty for all new and existing homes up to $650,000, with stamp duty discounts for homes up to $800,000; 
• a $10,000 First Home Owners Grant available to builders of new properties worth up to $750,000 and purchasers of new properties worth up to $600,000; 
• abolition of insurance duty on lenders’ mortgage insurance; 
• a doubling of the foreign investor surcharge from four percent to eight percent on stamp duty and a rise from 0.75 percent to 2 percent on land tax; 
• the abolition of the off-the-plan transfer duty concession for residential purchases by investors. 
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In releasing the package, NSW Treasury said given that housing prices reflect supply and demand, this housing undersupply has meant that competition for housing is high and has pushed up prices.
"Over the past 25 years, NSW has experienced significant population growth," it said.
"From 1991 to 2016, the number of people living in the state increased by 31 percent – growing from 5.9 million to 7.7 million residents.
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"Sydney’s population growth was even stronger – rising 36 percent from 3.4 million to 4.7 million people over the same period.
"But as the population grew, the previous government failed to maintain sufficient supply of housing across Sydney and New South Wales.
"Between 2000 and 2010, dwelling completions across NSW declined substantially.
"In Sydney, the decline was even more severe with less than half the number of homes completed in 2010 as there were in 2000.
"NSW Treasury’s 2016 Intergenerational Report estimates there was accumulated undersupply of 100,000 dwellings by the end of 2015. That is, even if no one else moved to Sydney an additional 100,000 dwellings would be needed to meet this pent-up demand.
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"Since 2011, the NSW Government has made housing supply a priority. However whilst there has been a significant recovery in building activity in these last few years, the years of low activity between 2000 and 2010, combined with a growing population, has resulted in demand for housing remaining strong."
"In addition to the undersupply, an extra 725,000 dwellings are estimated to be required in the Greater Sydney area over the next 20 years to cater for projected population growth. 
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jonathanchancellor-7SQnKwU6yx

Rising property prices, onerous deposits and overseas competition drive NSW FHB grant changes

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The budget changes to negative gearing depreciation claim items will see investor demand for recently completed housing fall or flatline - and result in a cooling in the Sydney and Melbourne markets, according to SQM Research's Louis Christopher. 
Investors who own current properties, particularly newly built ones, will especially find it harder to buyers.
The new limits to the way expenses can be deducted against negative geared properties - which need to be legislated - will prove a turning point in the investment property market, he says.
The changes mean owners of any property not bought brand new will no longer be able to depreciate items like air-conditioners, cooktops and dishwashers, or shared equipment such as lifts in apartment complexes. 
Quantity surveyors and analysts said these form up to 50 per cent of depreciation deductions for investors.  
"I think there is enough in it here to slow the market down in the second half of the year," SQM Research's Louis Christopher said. 
"We will see a significant drop off in [investor demand] in the second half.
"I will be expecting there will be less investors in the market."
Christopher is changing his house price forecast with lower numbers to be released next week.  
The federal Treasurer Scott Morrison has confirmed the deduction benefits would be grandfathered but to prevent "double dipping" in depreciation, only the first investor of each new investment property can claim these deductions.
The federal government has also confirmed to The Australian Financial Review that subsequent investors of residential investment properties would not be able to claim depreciation to existing plant and equipment even if that equipment had not reached the end of its effective life. 
Investors could only claim depreciation on plant and equipment they had bought subsequent to their purchase.
Quantity surveyor Washington Brown fears the rules would affect off-the-plan investors who could potentially be unable to depreciate plant and equipment purchased originally by the developer. 
"I suspect that the legislation will be worded such that if the plant and equipment was in situ at the time of purchase, you can no longer claim it," director Tyron Hyde said in his note to clients. 
Christopher urged the federal government to make a swift clarification otherwise decisions would be made on "wrong information". 
"The Liberals have not intended for the policy to be draconian…and while saying they would leave negative gearing alone, have actually done the opposite."
Limiting previously generous plant and equipment depreciation deductions to only those expenses directly incurred by investors will impact on the Quantity Surveyor industry,
The blog of Pete Wargent noted data compiled by MCG Quantity Surveyors showed that their average claim for depreciation deductions was $9,138, up to half of which was typically for plant and equipment deductions. 
"For new individual Mum-and Dad investors - which is most of the landlord market - this is a fairly significant change to tax legislation," Wargent noted. 
"Overall, it may become more tax-efficient to purchase older style properties in order to renovate them, though for properties built before 1987 the building works component would already be fully depreciated over 40 years. 
"Some domestic investors may be inclined to steer clear of new properties for this reason, in turn hurting building approvals and dwelling starts, at least while the dust settles," Wargent advised.
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Demand and prices of recent new builds to fall after 2017 Budget depreciation negative gearing changes

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GUEST OBSERVER
The CoreLogic Home Value Index of capital city home prices rose by 0.1 percent in April and was up 11.2 percent over the year.
It was the smallest monthly lift in prices in 16 months. Prices rose in six of the eight capital cities. Regional house prices by 1.1 percent in March (latest available).
High end decline: Prices of homes in the upper quartile of properties by value fell by 0.4 percent in April – the biggest decline in 17 months.
Manufacturing: The Performance of Manufacturing index rose by 1.7 points to 59.2 in April – a reading just below 15-year highs. A reading above 50.0 indicates that the sector is expanding. This was the seventh consecutive month of expansion.
China data: The manufacturing purchasing managers’ index eased from 51.8 to 51.2 in April (forecast 51.6). The services index eased from 55.1 to 54.0. 
What does it all mean?
You can debate all you like about the accuracy of economic indicators. But it is hard to argue with surveys of businesses. The latest survey of manufacturers indicates that business conditions are around the strongest levels in 15 years. The NAB survey of a broader range of businesses suggest conditions are the best in at least 9 years. Overall, the economy is in good shape.
<a href="https://www.propertyobserver.com.au/images/2017/05/02/Screen%20Shot%202017-05-02%20at%207.58.58%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/02/Screen%20Shot%202017-05-02%20at%207.58.58%20AM.png" alt="">
Policymakers will be happy that home prices recorded more modest gains in April, especially the Sydney market. But there is more evidence that higher home prices in Sydney and Melbourne and spreading to other capital cities and regional centres. This was always on the cards with investors perceiving that Sydney and Melbourne markets had become more fully valued and shifting their attention to other markets. 
Annual growth in regional house prices is the strongest in 21⁄2 years with regional NSW leading the way. House prices in regional NSW are up 10.2 per cent on a year ago – the fastest growth in the eight years of records. And Hobart home prices are recording the strongest annual gains for over 12 years. 
What do the figures show?
Home prices
The CoreLogic Home Value Index of capital city home prices rose by 0.1 percent in April and was up 11.2 percent over the year. It was the smallest monthly lift in prices in 16 months.
In regional Australia, house prices rose by 1.1 percent in March and were 4.9 percent higher than a year ago. (Regional prices cover just houses and data is up to the end of March).
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<img src="https://www.urban.com.au/images/2017/05/02/Screen%20Shot%202017-05-02%20at%208.02.30%20AM.png" alt="">
In capital cities, house prices rose by 0.3 per cent in April while apartment prices fell by 1.2 per cent. House prices were up 11.9 per cent on a year ago and apartments were up by 6.2 per cent.
The average Australian capital city house price (median price based on settled sales over quarter) was $661,200 and the average unit price was $550,000.
Dwelling prices rose in six of the eight capital cities in April: Hobart (up 1.0 per cent), Adelaide (up 0.8 per cent), Brisbane (up 0.6 per cent), Melbourne and Darwin (both up 0.5 per cent). Sydney prices were flat while prices fell in Perth (down 1 per cent) and Canberra (down 2.8 per cent).
Home prices were higher than a year ago in six of the eight capital cities. Prices rose most in Sydney (up 16.0 per cent); followed by Melbourne (up 15.3 per cent), Hobart (up 13.6 per cent); Canberra (up 8.4 per cent); Adelaide (up 2.2 per cent); and Brisbane (up 2.1 per cent). Prices fell in Perth (down by 6.0 per cent) and Darwin (down 2.3 per cent)
Total returns on capital city dwellings rose by 14.9 percent in the year to April with houses up 15.5 per cent on a year earlier and units up 10.6 per cent.
Performance of Manufacturing
The Performance of Manufacturing index rose by 1.7 points to 59.2 in April. A reading above 50.0 indicates that the sector is expanding. This was the seventh consecutive month of expansion for the Australian PMI® and the strongest monthly result since February 2017 and before that, since May 2002.
AIG notes “All seven activity sub-indexes in the Australian PMI® expanded in April. New orders remained elevated (61.5 points) while sales surged higher (65.5 points), as did production (60.7 points), exports (58.6 points) and employment (55.9 points). Inventories eased to a more modest rate of expansion (51.2 points) in April.”
“Comments from manufacturers in April indicate demand continues to improve. Increasing exports are a key theme, with several manufacturers reporting success in new markets in Asia. Stronger output and prices in the local agricultural and mining sectors is supporting demand for some types of machinery, equipment and chemicals, while large public infrastructure projects are fuelling demand for building materials, metals, transport equipment and others. Cyclone Debbie appears to have dampening activity in Queensland and Northern NSW, although the direct impact on manufacturing has not been severe.”
What is the importance of the economic data?
The CoreLogic Hedonic Australian Home Value Index is based on Australia’s biggest property database. Unlike the ABS Index, which excludes terraces, semi-detached homes and apartments, the CoreLogic Hedonic Index includes all properties. Home prices are an important driver of wealth and spending. 
The Australian Industry Group compiles the Performance of Manufacturing Index (PMI) each month. The Australian PMI is the Australian equivalent of the US ISM manufacturing gauge. The PMI is one of the timeliest economic indicators released in Australia. The PMI is useful not just in showing how the manufacturing sector is performing but in providing some sense about where it is heading. The key ‘forward looking’ components are orders and employment.
<a href="https://www.propertyobserver.com.au/images/2017/05/02/Screen%20Shot%202017-05-02%20at%208.04.03%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/02/Screen%20Shot%202017-05-02%20at%208.04.03%20AM.png" alt="">
What are the implications for interest rates and investors?
The latest economic news is generally positive. Manufacturing is expanding solidly with exports leading the way. And home prices have flattened in the high-flying Sydney market. The thing to watch now is the extent to which high prices in the south-east spread across Australia.
The flattening out of home prices in Sydney and declines in apartment prices represent a wake-up call to investors. At present total returns on shares is out-performing returns on homes. The Reserve Bank has no need to lift or cut rates as yet. Rate hikes are still more likely to come in 2018 but the risk is that they arrive earlier rather than later. 
Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx">CommSec</a>. 
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Home prices flatten: Craig James

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The "policy approach" to regulatory restrictions on investor lending are limp and ineffectual according to managing director of Market Economics Stephen Koukoulas.
In an opinion piece published in The Guardian, Koukoulas said no sensible observer of the Australian housing market believes the regulators have it “right” when it comes to conditions attached to investor lending.
He said Australian house prices rose at a solid pace in 2016, defying many expectations for moderate price falls, including his own.
"It seems the error of my forecast was to misread the policy approach to regulatory restrictions on investor lending which, as it turned out, was limp and ineffectual," Koukoulas wrote.
"For years, smart people have been arguing for a tightening in prudential controls on lending to cool the housing market.
"The people who regulate the mortgage market have, however, taken only baby steps to address the issue and have failed to cool it. Investor loans have been roaring along since the middle of 2016.
"Some said prices would fall, but dwelling values rose by more than 15 percent and 13 percent respectively in Sydney and Melbourne
"Another important factor behind the resilience in house price growth was the shock interest rate cuts from the Reserve Bank of Australia during 2016 as it reacted to the surprising slump in inflation and wages growth. These low interest rates fuelled extra borrowing capacity, some of which fed into house prices.
"Oversupply from the apartment construction boom, which I also thought would start to bite in 2016, looks to be more of an issue for 2017 even though apartment prices fell in most major cities in the latter part of 2016. Prices for freestanding houses were particularly strong.
"No sensible observer of the Australian housing market believes the regulators have it “right” when it comes to conditions attached to investor lending. Just about anyone with a few assets and a half decent income can get a loan for investment purposes despite the pretence of “tighter” lending conditions. The negative gearing rules only add to such demand.
"While that remains the case and while there is strong demand relative to the growth in housing supply, price pressures will be skewed to the upside.
"With 2016 behind us, there are grounds to think that 2017 could be the year of the great house price moderation. While the Reserve Bank appears to have official interest rates on hold, the sharp jump in bond yields over the past few months is feeding into bank funding costs. This higher cost of funds has already filtered through to higher fixed-mortgage interest rates which, unchecked, will erode housing demand.
"Also acting as a likely dampener for demand is the sponginess in the labour market, with wages growth hovering at record lows, full-time employment sluggish and the unemployment rate high.
"Potential purchasers of dwellings, already constrained by high levels of debt, have only limited ability to add to their leverage, at least in the near term.
"And then there is dwelling supply. Building approvals reached record levels in 2016 and, once those approvals turn into finished dwellings ready for owner-occupiers or renters to move into, there is likely to be excess supply in several major cities. This will, at least in the short to medium term, undermine prices.
"While supply and demand remain the dominant long-run drivers of house prices, interest rate changes, macroeconomic conditions and prudential changes can all have a short-term impact.
"The supply and demand dynamics are pointing to a moderation in house prices, as are changes to interest rates and what looks to be a soft economy with a weak labour market. 2017 is set to be the year of weaker house price growth, perhaps even price falls.
"If the moderation is orderly, without much in the way of forced selling, it will actually be good news for the economy. Some prudential risks will ease, affordability will further improve and the housing market will move towards balance.
"The government and regulators could help to lock this in if they are bold enough to tighten lending and tax rules to reduce some of the investor demand which has, in recent times at least, distorted the market."
To read the original article <a href="https://www.theguardian.com/australia-news/2017/jan/05/why-i-was-wrong-on-house-prices-in-2016-and-why-i-might-still-be-proved-right" target="_blank">click here</a>.
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Stephen Koukoulas on the prospect of house price moderation in 2017

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Raby, Surry Hills, Mount Annan. It's not just harbourfronts that set fresh price records across Sydney during the blockbuster spring selling season.
Stellar prices have been paid in suburbs north, south, east and west, all caught in the wave that sees Sydney's annual price growth at 13 percent higher than the same time last year.
Another record price seems likely tomorrow when a lavish Abbotsford home goes to auction having been listed by spiritual healers Mina and Yvon Attia.
Waterfront homes continue to carry the required cache for record prices, but they needn't look out onto the Sydney Harbour Bridge. 
A six bedroom waterfront at <a href="https://www.realestate.com.au/sold/property-house-nsw-sans+souci-123847178" target="_blank">Sans Souci</a> smashed the suburb record when it sold last month for $9,105,000, bettering the previous record by over $3 million.
McGrath agent Liam Tsaprazis secured the sale of the home, complete with boating facilities including a slipway.
The four level home with views of Kogarah Bay features a state of the art cinema. Plus pool and spa.
<a href="https://www.realestate.com.au/sold/property-house-nsw-mount+annan-123959490" target="_blank">Mount Annan</a> has just seen its first sale over $1 million.
<img src="/images/2016/12/07/Mount%20Annan.jpg" alt="">
The six bedroom home opposite Mount Anna Botanic Gardens fetched $1.07 million when it sold last month.
A granny flat sits on the large 1,187 sqm parcel.
A grand family residence with six living areas in <a href="https://www.realestate.com.au/sold/property-acreage+semi-rural-nsw-raby-123754354" target="_blank">Raby</a> has fetched $1.36 million, its first sale since 1986 when it traded for $64,000.
Set on a vast 5,356 sqm block, the grand family residence has six bedrooms, three bathrooms and a salt water swimming pool. 
Of course Altona, one of Sydney's most iconic trophy homes, fetched just over $60 million in a recent deal, beating its own prior suburb record when it sold for $52 million in 2013.
It ranks as second place in Australia's most expensive homes, behind James Packer's hillside Vaucluse home, La Mer, that sold for $70 million last year.
A <a href="https://www.realestate.com.au/sold/property-house-nsw-drummoyne-123306226" target="_blank">Drummoyne</a> waterfront set a suburb record when it sold for $8.05 million in September.
The four bedroom home, that last traded for $1.5 million in 1998, was advertised by Ward Partner's agent Matthew Ward for potential buyers to "start preparing to host a New Year's Even party."
North of the bridge the Berlin-bound Justin Reizes, who recently retired as head of equities giant Kohlberg Karvis Roberts, set the <a href="https://www.realestate.com.au/sold/property-house-nsw-northbridge-123307134" target="_blank">Northbridge</a> record again when he sold his home for $15.25 million.
He set the record in 2008, which has stood until its recent sale, when he bought the six bedroom, five bathroom home for $9.08 million. 
The Coolawin Road home is set on a private beach with a boatshed and pontoon on 1700 sqm. 
It's actually the third time the home has set the record, having sold for $7.13 million in 2003 by the Salteri family.
Not far away a five bedroom luxury home in <a href="https://www.realestate.com.au/sold/property-house-nsw-middle+cove-123750414" target="_blank">Middle Cove</a> broke the suburb record when it sold under the hammer for $4,315,000 through local agent Mark O'Brien.
The 2010 build with a heated swimming pool and sunken eight person spa is the first in the suburb to surpass the $4 million mark, blitzing the previous $3,575,000 set in 2008.
There were no suburb records for Mosman this spring, however they did achieve their highest auction sale ever when a Morella Road home sold for $14.5 million.
Set overlooking Chowder Bay home on Sydney's lower north shore it was bought for $14.5 million by a Chinese-origin buyer with residency. 
Non-waterfront homes are also setting records across the city.
A home in Kyle Bay broke the suburb record for a non-waterfront when it sold for $3.78 million.
Set on 1,012 sqm, the five bedroom home captures a vista across <a href="https://www.realestate.com.au/sold/property-house-nsw-kyle+bay-123482798" target="_blank">Kyle Bay</a> from its three levels and infinity pool.
<img src="/images/2016/12/07/Kyle%20Bay.jpg" alt="">
Strathfield saw two record setters within a month, the first equalling the record, the second blowing it out of the water.
A four bedroom Newton Road home sold for $6.8 million in August, a joint record price that had stood since 2014.
But less than a month later the $6.8 million sale was smashed by a vast eight bedroom Llandilo Avenue grand manor with swimming pool that sold for $7.3 million. 
The Belrose record is set to be broken with the listing of Kameraigal which has a price guide of $8.75 million.
It appared in the fifth season of the television series Underbelly starring Jonathan LaPaglia being shot in the house in 2012.
A Kurraba Point record was broken earlier this week when a renovated three bedroom Penshurt Avenue home sold for $4,275,000, breaking the suburb's townhouse record.
It was sold by Flavour of India founder Lola Crossingham who will now move onto another property project.
The first spring Saturday saw a record warehouse sale in Surry Hills, where The Carriageworks sold for $7.95 million, which bettered the prior record of $7.55 million set in 2015.
The mid 19th century warehouse was reinvented by renowned designers Hare &amp; Klein comprises three levels, four bedrooms and an artist's studio.
This article appeared in the Saturday Daily Telegraph.
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Record price in Sans Souci and across Sydney

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GUEST OBSERVER
Sydney and Melbourne continue to show solid house price growth while Adelaide, Brisbane and Perth are much weaker.
Even within cities there is divergence, with oversupply in some apartment markets, while detached house markets lack supply.
We forecast national housing price growth to slow from 7 percent in 2016 to 2-5 percent in 2017; trends across and within cities to vary.
<a href="/images/2016/11/25/Screen%20Shot%202016-11-25%20at%2012.23.38%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/11/25/Screen%20Shot%202016-11-25%20at%2012.23.38%20PM.png" alt="">
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Still cooling, but with divergence across markets
It has always been a misconception to refer to Australia as having one housing market. After all, Australia's population is strewn across a whole continent and each region is affected by different forces. The cycles in Western Australia and Queensland have been driven by mining, while the south-eastern states have larger services sectors.
<a href="/images/2016/11/25/Screen%20Shot%202016-11-25%20at%2012.25.11%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/11/25/Screen%20Shot%202016-11-25%20at%2012.25.11%20PM.png" alt="">
Being a currency union, there are clear unifying features, such as the common currency, interest rates and federal fiscal policy and free movement of labour, among other things. As a result, over recent decades, a key rule of thumb has been that mortgage rates drive the national housing price cycle. But this relationship has become more complicated recently, thanks to an unusually large cycle in commodity prices, persistent low global and local interest rates, rising foreign buyer activity, and increased use of prudential settings to tame the lending market.
<a href="/images/2016/11/25/Screen%20Shot%202016-11-25%20at%2012.26.12%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/11/25/Screen%20Shot%202016-11-25%20at%2012.26.12%20PM.png" alt="">
A key driver of trends over the past five years has been the rebalancing of growth towards the housing and services sectors, supported by the lower interest rates and AUD following the end of the mining boom. This has driven a substantial ramp-up in housing prices in Sydney and Melbourne since mid-2012, up 66 percent and 49 percent, respectively. Over the same period, housing prices in Brisbane, Adelaide and Perth have risen by only 19 percent, 9 percent and 5 percent, respectively.
<a href="/images/2016/11/25/Screen%20Shot%202016-11-25%20at%2012.27.20%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/11/25/Screen%20Shot%202016-11-25%20at%2012.27.20%20PM.png" alt="">
The worrisome pace of Sydney and Melbourne price growth, particularly in 2014 and 2015, motivated a tightening in prudential settings, starting in late 2014, which has seen some moderation in loan growth. As a result, both cities saw housing price growth slow from double-digit growth last year to high single-digit rates this year. We expect low single-digit rates of housing price growth in these cities in 2017, although trends are expected to vary across the apartment and detached house markets.
<a href="/images/2016/11/25/Screen%20Shot%202016-11-25%20at%2012.28.25%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/11/25/Screen%20Shot%202016-11-25%20at%2012.28.25%20PM.png" alt="">
A national apartment building boom, which has been part of the rebalancing act, is likely to deliver some oversupply in the Melbourne and Brisbane apartment markets, which is expected to see apartment price falls in these markets. Detached dwelling markets across the country are set to see further price growth, albeit moderating.
 <a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">PAUL BLOXHAM</a> IS CHIEF ECONOMIST (AUSTRALIA AND NEW ZEALAND) FOR HSBC. 
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Low single-digit rates of housing price growth in 2017 for Sydney, Melbourne: HSBC's Paul Bloxham

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<img src="https://counter.theconversation.edu.au/content/66410/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Many housing types are totally at odds with how people live today because people don’t have as many material goods as they used to. 
Those under 30 may not own much at all. Music is digitised and streamed (Sonos, Spotify), treasured photo albums live in the cloud or within applications (Dropbox, iPhoto), tools are pooled (Open Shed), vehicles and rides are shared (Flexicar, BlaBlaCar, Uber), there’s no landline phone or TV cable, kitchen appliances are redundant with the ubiquity of food delivery services (Foodora, Deliveroo) and pets are borrowed (DogVacay, BorrowMyDoggy). 
The young are also likely to be renting their accommodation. Data from the Melbourne Institute of Applied Economic and Social Research reveal that barely 50 percent of Australians lived in a house they owned in 2014. If this trend continues, many of today’s young Australians will never own their own home.
With transformations in digital technologies and housing-price pressures changing living habits, people will not only possess fewer physical objects in the future, but new apartment dwellers will be more likely to occupy less space at a later age. These private domestic spaces are decreasing in size to become more efficient, hopefully more affordable and, for some restless millennials, more desirable.
<h2>Corporatising the co-living model</h2>
One model to emerge in the trend towards downsizing private domestic space is branded co-living spaces. Examples include The Collective (London), Zoku (Amsterdam) and Roam (London, Madrid, Miami, San Francisco, Tokyo, Ubud). In the corporatised co-living model, occupants rent private bedroom space (some bedrooms are as small as ten square metres) on a rolling contract for weeks or months, but share living and working spaces. 
These collective spaces are often programmed with extracurricular activities such as yoga, business workshops, cooking classes and guest talks that promote social exchange between renters. 
Systems of logistics, such as apps and chat platforms, facilitate the sharing of objects and space. Access to the co-living space is granted if you are part of a tribe (students, communes, families or business people). 
One of the global market leaders in co-living arrangements is the Chinese You+. The company has built over ten co-living spaces and claims to house more than 10,000 people across 25 branches. Private bedrooms (with bathroom) range in size from 20 to 50 square metres. The minimum stay is six months at an average monthly rent of A$470. 
At You+, people over 45 are discouraged. Couples with children or those who are anti-social are not permitted. Tech entrepreneurs tend to be given preference.
Subscribing to a co-living or dormitory arrangement such as You+ can mean lower rental costs (relative to renting a single-bedroom apartment on an above-average income), a surfeit of potential friends and a flexible rental contract. For some, this may be a genuinely desirable option. For others it may be the only option in a competitive rental market at a time when there are few affordable housing options.
<h2>Blurring the public-private divide</h2>
As private interior space contracts and shared domestic spaces become more common, the public realm is also changing.
Formerly private activities such as working and communication are occurring more frequently outside of the home, while the public sphere is taking on characteristics of interior or domestic settings: intimate spaces, interior furnishings and finishes, pocket parks, guerrilla gardening. The idea of what constitutes a home may be changing and expanding to consider urban space.
A lot of hyperbole surrounds the branded co-living spaces like You+ that have emerged under the so-called sharing economy – also known as the communal, collaborative, inclusive, gig or social economy. But there is a tension between the realities of the model and the benevolence of the act of sharing. 
At the behest of the property owner, co-living spaces tend to have less fixed furnishings and cheaper construction. They also have more occupants because typical apartment spaces (living room, laundry, kitchen) are compressed. Behind You+ and its ilk there are venture capitalists looking for high returns.
Co-living arrangements are transforming the physical typologies and financial models of housing and are the latest in a long tradition of collective housing arrangements, from the kibbutz to student dormitories to share houses, baugruppen and boarding houses. 
With lone-person households to account for more than a quarter of all Australian households by 2031, according to the Australian Bureau of Statistics, we need to rethink how we build collective and individual space in a denser city that reflects how many people want to live today – and tomorrow. 
We can see that market and societal demands are pushing people towards sharing space, but many co-living arrangements do nothing to improve housing affordability in the long term.
Timothy Moore is PhD candidate, Melbourne School of Design, University of Melbourne and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/timothy-moore-292089" target="_blank">here</a>.
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Reinventing density: co-living, the second domestic revolution

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Knight Frank's Global House Price Index for Q1 2016 reports Asian markets are stumbling.
In the 6th position on the index, house prices in Australia increased 8.7 percent year-on-year, down from the 4th position in the previous quarter, although growth is still trending above the 10-year annual average of 4.2 percent. Looking back, the last previous low of 5.1 percent annual growth for houses was recorded in January 2014. 
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<img src="/images/2016/06/16/Screen%20Shot%202016-06-16%20at%2011.08.57%20AM.png" alt="">
Singapore, Hong Kong and Taiwan have all seen prices decline by between 3 percent and 6 percent in the year to March 2016, a combination of sluggish economic growth, regulatory measures and new supply are restraining price growth.
Nicholas Holt, Head of Research for Asia Pacific, says the slowdown in growth across many emerging Asian economies has weighed on residential property markets.
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<img src="/images/2016/06/16/Screen%20Shot%202016-06-16%20at%209.40.45%20AM.png" alt="">
Indonesia and Malaysia are feeling the impact of the wider macro-economic slowdown.
India continues to suffer from pockets of oversupply and a gap in pricing expectations between developers and buyers.
"The Chinese market is still seeing polarised performance, where Tier-1 and large Tier-2 cities are seeing price growth; whilst smaller Tier-2 cities, Tier-3 and Tier-4 cities are struggling with high unsold inventory.”
The index grew by 3.4 percent on average in the 12 months to March 2016, but top performing countries such as Australia are seeing their rate of annual price growth slow.
According to Michelle Ciesielski, Director, Residential Research Australia the overall growth in annual capital values has returned to more sustainable levels in 2016 – close to that experienced just over two years ago in the Australian mainstream housing market.
“Despite confidence from better-than-expected GDP growth in the March 2016 quarter (to 3.1 percent), a fall in unemployment (to 5.7 percent) together with the cut of 25 bps to the official cash rate in May 2016 to 1.75 percent, it is possible we will see a further uptick in investor lending, and modest growth in capital values along the Australian east coast in the coming months.
“However, it is unlikely we will see price growth as strong as experienced in the peak of mid-2014 and late-2015.” 
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Kate Everett-Allen, Partner, International Residential Research, noted the US and the UK are largely treading water, price growth in the first three months of 2016 equated to 0.9 percent and 1.6 percent respectively, linked in part to political worries, notably potential Brexit in the UK and the US presidential election.
House prices in New Zealand increased 11 percent year-on-year but have slipped marginally from their peak in Q3 2015.
Weaker economic growth and regulatory changes in the form of higher deposits for investors have dampened demand. 
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Economic uncertainty is filtering into global house prices: Knight Frank

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GUEST OBSERVER
Following the end of the mining boom, Australia’s growth has been rebalancing towards housing and the services sectors. The first part of the rebalancing act involved a significant rise in housing prices and housing construction. 
Housing prices have risen by 30 percent since mid-2012, led by Sydney and Melbourne. Most of the rampup in building has been apartments in the major cities. 
The housing market is now cooling, as a result of tighter prudential settings and the boost to housing supply.
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<img src="/images/2016/04/22/Screen%20Shot%202016-04-22%20at%208.43.29%20AM.png" alt=""> 
Although the housing upswing has been a necessary part of the rebalancing act, it also drove a rise in household debt. The household debt-to-income ratio has risen from 167 percent in 2011 to 186 percent in 2015. Australian household debt levels are among the highest in the world. However, high household debt is not, in itself, a problem, as long as the debt is held by households that can service it. In Australia, the distribution is fairly favourable, with high income earners holding most of the debt.
Institutional features also matter. In Australia’s case, all mortgages are full recourse, significantly reducing the incentive to default. Australia does not have sub-prime mortgages. Australian households also use their mortgage to save, given the tax benefits available for doing so. This has meant that the average mortgage is currently more than 2.5 years pre-paid, leaving households with a significant equity buffer to draw down, if needed. The prudential regulator has also been tightening lending standards over the past 18 months, particularly for investors, reducing the risks involved with the new lending. Loan-to-valuation ratios on new loans have fallen.
We expect housing price growth to remain subdued in coming quarters. We see some risk that apartment prices could fall, given signs of over-supply of apartments, particularly in Melbourne and Brisbane. However, we view these apartment markets as somewhat segmented from the detached housing market. Significant foreign investment in new apartments also limits domestic financial system exposure.
Overall, we see mortgage debt as generally well distributed to households that can  afford to continue to service it and see the financial stability risks as moderate.
Australia’s housing market is cooling 
National housing prices have been broadly steady over the past six months, following strong growth over recent years (Chart 1). 
The slowdown has been most vivid in Sydney and Melbourne, where housing prices have been flat since October, following annual average growth of 10 percent and 6 percent over the previous four years (Chart 2). Housing price growth has been much more modest in the rest of the country at around 3 percent a year over the same period.
Apartment prices have generally risen by less than detached housing prices in recent years, and are slowing down by more than detached housing prices in some of the major markets.
The slowdown reflects a range of factors, including tighter prudential settings, particularly for investors, and rising housing supply. We expect these factors to continue to constrain housing price growth in coming quarters and forecast that national housing price growth will run at low single-digit rates this year and into 2017, following growth of around 10% in 2015 (see Downunder Digest: Australia’s housing market cools, 11 December 2015).
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<img src="/images/2016/04/22/Screen%20Shot%202016-04-22%20at%208.45.21%20AM.png" alt="">
Household debt has risen, but it’s the distribution that matters
The housing price boom has led to rising household debt. The household debt-to-income ratio has increased from 167% in 2011 to 186% in 2015, mostly led by a pick-up in lending to investors (Chart 3 and 4). This makes Australian household debt levels amongst the highest in the developed world (Chart 5). Of course, given the rise in housing prices, the household debt-to-asset ratio has been more subdued: it has actually fallen from 24% in 2011 to 22% in 2015.
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<img src="/images/2016/04/22/Screen%20Shot%202016-04-22%20at%208.46.38%20AM.png" alt="">
High household debt levels can make an economy more vulnerable in the face of a shock.
However, it is unusual for the high debt levels, in themselves, to be the driver of a downturn. The US sub-prime crisis was a rare example of this situation. Importantly though, even in the US, it was not the level of aggregate debt that mattered most, but the distribution of debt. In Australia’s case, most of the debt is held by higher income households. Numbers for 2010 showed that, at that time, around 72% of the household debt was held by the top 40% of income earners (Chart 6). Less than 4% of the debt attributed to the lowest 20% of earners.
Australia’s financial system also has institutional features that help to reduce the risk that household debt could become concerning. For a start, all mortgages are full recourse.
Australia’s tax system also favours paying down mortgages ahead of schedule as interest payments and expenses on owner-occupied properties are not tax-deductible. 
The latest numbers suggest that the average mortgage in Australia is currently over 2.5 years pre-paid, leaving households with a significant buffer in the face of the risk of rising unemployment.
Lending standards were tightened as investor borrowing rose
Despite these factors, the strong rise in lending to housing investors through 2013-15 raised concerns that the new lending could increase the risk to the overall mortgage book. Concerns increased partly because the ramp-up in debt was quite geographically concentrated in New South Wales and, to a lesser degree, Victoria, and because the strong investor interest was helping to fuel double-digit housing price growth in these markets (Chart 7).
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<img src="/images/2016/04/22/Screen%20Shot%202016-04-22%20at%208.48.14%20AM.png" alt="">
As a result of these concerns, the authorities tightened prudential settings. This included: requiring the banks to test new borrowers for a higher mortgage rate than offered; requiring the banks to slow the growth in their lending to investors to below 10% y-o-y; and, requiring the banks to hold more capital (which saw effective mortgage rates rise). Tighter prudential settings have seen a clear pullback in lending to investors (see Chart 7). There has also been a fall in the proportion of lending at loan-to-valuation ratios of over 90% and a decline in ‘interest only’ loans (Chart 8). This should help to reduce the risks associated with recent new lending.
Apartment over-supply presents a risk
To the extent that there are risks, the key focus is on the apartment markets in the major cities. Apartment building has picked up substantially in the major cities (Chart 9). Importantly, our view remains that the national detached housing market is not over-supplied, which means the overall housing market is not yet showing signs of being over-supplied (see Downunder Digest: Australia’s housing supply ramp-up, 9 September 2015). As Chart 9 shows, there has only been a modest rise in construction of detached dwellings in recent years.
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The risk of a potential over-supply of apartments is largest in Melbourne and Brisbane, where apartment building has been at record highs as a share of the existing stock (Chart 10). There is also some risk of over-supply in Perth, where apartment building has been strong.
To some degree, the detached and apartment markets are segmented, given the lack of perfect substitutability. For example, buyers of detached dwellings in the suburbs tend to be quite different from buyers of inner-city apartments. So a possible decline in apartment prices, due to over-supply, would not necessarily translate into a matching fall in detached housing prices.
This is particularly the case, given that there has only been a limited pick-up in detached home building in recent years. The tightening of prudential settings and falls in loan-to-valuation ratios also help protect the financial system from any decline in apartment prices as new borrowers would need to see larger price declines before they fell into negative equity.
Strong foreign investor involvement in the major city apartment markets, particularly from China, may also limit the exposure of the domestic financial system to the impact of any falls in apartment prices in these markets. Government approval numbers show that there has been a strong rise in foreign purchases of new dwellings in Australia over the past year (Chart 11).
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Many of these purchases are off-the-plan apartments, partly because foreigners are restricted to purchasing newly constructed dwellings.
In its recent semi-annual financial stability review, the Reserve Bank of Australia (RBA) noted that ‘the Australian banking system has little direct exposure to Chinese investors’. Foreign buyers may also have different motivations for purchasing, with some looking to invest in property as a store of value, rather than for speculation. This could limit the willingness of foreign investors to divest, even in the event of some capital losses.
Falling apartment prices could also put pressure on developers’ balance sheets, with many of the apartments having been sold ‘off the plan’. Again, the RBA recently noted that its liaison suggested that ‘settlement failures have, to date, remained uncommon and are generally expected to increase significantly only if housing prices fall substantially’.
Related risk in commercial property
Global demand for commercial property assets has also somewhat displaced Australia’s commercial property market. Commercial property prices have risen well ahead of rents in recent years, as global investors ‘search for yield’ pushes Australian yields down to global levels, which are around historical lows. The ramp-up in commercial property prices (and fall in yields) has come despite office vacancy rates that remain elevated, with particularly sharp increases in Brisbane and Perth.
This could have a bearing on the domestic apartment market as there may be some substitutability between office and apartment buildings. A retreat in commercial property prices could put some downward pressure on apartment prices. However, much like the apartment market, foreign investor involvement in the commercial property sector has been significant, which could limit the risks to the domestic financial system.
Mortgage loan arrears are still falling
Finally, it is worth noting that mortgage loan arrears have continued to fall since their peak in 2011 and are at very low levels (Chart 12). What is most interesting is that arrears continued to decline despite the rise in the unemployment rate over recent years. This is likely to reflect the support from falling interest rates over that period. The recent decline in the unemployment rate should help to support loan servicing and potentially limit concerns about household debt levels.
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<img src="/images/2016/04/22/Screen%20Shot%202016-04-22%20at%208.51.42%20AM.png" alt="">
Paul Bloxham is chief economist (ANZ) for HSBC . Daniel Smith is economist. They can be contacted <a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">here</a>.
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