Macquarie York has appointed Roberts Co to as the Early Contractor Involvement (ECI) partner for its upcoming new Surfers Paradise apartment development, Sunset Residence.

Located at 50 Sunset Boulevard, Sunset Residences is a riverfront, design-driven tower set to elevate one of Surfers Paradise’s most rapidly transforming enclaves. The refined scheme, designed by Plus Studio, features 72 luxury residences, enhanced amenity, and improved connectivity to the Nerang &nbsp;River.&nbsp;

As ECI partner, Roberts Co is working closely with Macquarie York and the design team to optimise buildability, program, staging and procurement strategies ahead of construction commencement.&nbsp;

&nbsp;

Macquarie York Director, Roy Skaf, said Roberts Co’s early engagement will help ensure the landmark development realises its full potential.&nbsp;

“Sunset Residences is a signature project for Macquarie York, a chance to define a new level of riverfront living in Surfers Paradise," Skaf said.&nbsp;

&nbsp;

&nbsp;

<img alt="Roberts Co appointed Early Contractor Involvement partner for Macquarie York’s Sunset Residences on the Gold Coast" data-entity-type="file" data-entity-uuid="3dd22a45-168b-4e00-b6d2-4e7310b02084" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/SunsetResidences_Interior.jpg?VersionId=NAWvGq7l6BFB4vvh6u0xXWWISboHTi6q" />

“Partnering with Roberts Co under an ECI arrangement gives us the confidence that design decisions, construction methodology and programming are being rigorously considered from day one. Their collaborative mindset and technical capability are exactly what a project of this quality demands.”&nbsp;

&nbsp;

Construction is expected to commence following completion of the ECI phase and final design resolution.

Sunset Residences is one of three projects Macquarie York has locally. They have Rana Palm Beach, 60 apartments on Twenty Third Avenue, and Azariah, just nine residences on the dress circle Jefferson Lane, also in Palm Beach.

Joel Robinson

Macquarie York appoints Roberts & Co for early works agreement at Sunset Residences

Few developers in South East Queensland have shaped the new development apartment market as profoundly, or as consistently, as Mosaic Property Group. In 2025, the business delivered another very strong year across Brisbane, the Gold Coast, and the Sunshine Coast, building on the foundations of nearly two decades of discipline, long-term thinking, and relentless refinement of its craft.

Their continued success is driven from the top. Founder and Managing Director Brook Monahan, very much credits the success to a workforce of “massive grafters”, and a culture where complacency simply doesn’t exist.

“In every part of our business, we’re constantly pushing to get better” Monahan told <a href="http://apartments.com.au">Apartments.com.au</a>. “We never rest on our laurels.”

The company’s growth continued its upward trajectory, with the developer completing six luxury projects in 2025, representing approximately $850 million in value and delivering 536 new luxury homes. Mosaic also sold over $1.4 billion worth a new luxury apartments at an average price point of $3.41 million in 2025.

Heading into 2026, they have a further five projects under construction and an immediate pipeline across Brisbane and the Gold Coast, representing just shy of $2 billion in value. I spoke with Brook about everything from the evolution of Mosaic’s business to the fundamentals driving the SEQ property market.

<hr />
<h2>A market defined by two forces</h2>

The fundamental drivers of SEQ’s housing dynamics in 2025 are straightforward: a generational transfer of wealth on a scale Australia has never seen, and migration numbers that continue to exceed expectations.

“An enormous amount of wealth will move through the next decade,” Monahan explains. “That wave isn’t going anywhere.” Simultaneously, “you can’t run migration at the numbers we’re seeing, while also having a generational shift of wealth from boomers, and not expect demand to remain strong. People move here, they bring money, they want to buy a home and create a future.”

While top-end product in some pockets has softened from the frenzy of 18 months ago, Monahan believes&nbsp; the wave will remain “pretty strong,” especially for developers with brand trust and a long-term track record.&nbsp;

“The $4 million to $10 million segment remains fairly robust, but buyers are much more educated now than they’ve ever been. They have access to information and they’re smart people. They’re generally not&nbsp; willing to trust a new entrant asking $15 million with no track record.”

This heightened consumer discernment, he notes, is reshaping how premium projects are evaluated by developers.

<hr />
<h2>The problem behind the crisis</h2>

Despite strong demand, SEQ’s housing market remains severely undersupplied. Brisbane needs around 12,000 new homes per year, yet delivered only 4,000 last year. The Gold Coast requires around 6500 but delivered less than half of that. The backlog is massive.

“We’re probably 54,000 homes short in the next five years in Brisbane alone,” Monahan estimates. “Maybe 100,000 across the whole of Queensland.”

The core issue however isn’t planning.&nbsp;

“The planning environment is actually super supportive right now,” he says. “Approvals aren’t the problem. It’s turning approvals into real supply.”

The gap between development approvals and project starts has widened significantly as construction costs escalate, contractors disappear from the market, and inexperienced developers try, and fail, to bring projects to life.

“A development application (DA) is only part of the equation, it means little without the ability to deliver,” he explains. “Many applicants underestimate the complexity involved. It’s not just about securing a site; you need the right formula and all the right ingredients to make it work. Without that, the end result will fall short of expectations and increase the risk of project failure.

The result is market distortion: sites tied up by entrants who lack experience, capital certainty, construction understanding, or a realistic feasibility model. “It’s not good for the industry,” he says. “You get more and more mooted supply but very little real delivery.”

<hr />
<h2>Construction realities and the coming resource crunch</h2>

Beyond development capability, SEQ faces macroeconomic pressures. Over $7 billion must be delivered by late 2031 just for Olympics-related obligations. Add $18 billion in hospital and health infrastructure, and the region faces a “resource drain” Monahan believes will reshape delivery timelines and construction pricing for years.

“It will ultimately be great for SEQ for the next 20 years,” he says. “But it puts enormous pressure on an already chronically undersupplied housing market.”

This pressure will inevitably influence pricing. Double-digit growth cannot continue indefinitely, but Monahan sees no path to meaningfully lower construction costs. “It’s impossible to meet demand at a cheaper price point given labour capability and resource competition,” he says.

“Those who can afford it will keep paying more and the rest are fighting to get a foothold. That’s why the market keeps creeping upward.”

<hr />
<h2>Mosaic’s disciplined blueprint: Only A-Grade, iconic, irreplicable</h2>

With a long track record of delivery and in-house construction expertise, Mosaic works backwards from the cost of delivery to determine the right price for a site—a disciplined acquisition model they’ve adhered to from day one.

&nbsp;“We’re never out of the market,” Monahan says. “But we’re extremely disciplined. We don’t buy B+ sites. We won’t buy run-of-the-mill locations. Ever. That’s not our brand and it’s also not economically viable for us in most instances.”

Mosaic’s nine current developments illustrate this discipline:

<ul>
	<li aria-level="1"><a href="https://www.apartments.com.au/new-apartments/lily-by-mosaic-4-rosewood-avenue-broadbeach-qld-4218">Lily</a> and <a href="https://www.apartments.com.au/buildings/marella-146-surf-parade-broadbeach-qld-4218">Marella</a>, Broadbeach: Two 30-storey buildings with permanently protected views over parkland, beach and coastline 
	&nbsp;</li>
	<li aria-level="1"><a href="https://www.apartments.com.au/new-apartments/isabel-by-mosaic-96-the-esplanade-burleigh-heads-qld-4220">Isabel</a> and, <a href="https://www.apartments.com.au/new-apartments/josephine-by-mosaic-166-the-esplanade-burleigh-heads-qld-4220">Jospehine</a>, Burleigh Heads – all “masterpiece” sites on the Esplanade with enduring view corridors of beach, water and coastline in the heart of Burleigh 
	&nbsp;</li>
	<li aria-level="1"><a href="https://www.apartments.com.au/new-apartments/sophia-by-mosaic-1357-gold-coast-highway-palm-beach-qld-4221">Sophia</a>, Palm Beach- directly on the dunes of the most highly sought after stretch of northern Palm Beach beachfront real estate 
	&nbsp;</li>
	<li aria-level="1"><a href="https://www.apartments.com.au/new-apartments/madeline-by-mosaic-22-mary-avenue-broadbeach-qld-4218">Madeline</a>, Broadbeach – “180 degrees beach, water and coastline views, great walk score” 
	&nbsp;</li>
	<li aria-level="1"><a href="https://www.apartments.com.au/new-apartments/the-bedford-by-mosaic-16-30-prospect-street-kangaroo-point-qld-4169">The Bedford</a>, Kangaroo Point – a site Mosaic first identified in 2016. Amazing walk score, views and inner city connectivity 
	&nbsp;</li>
	<li aria-level="1"><a href="https://www.apartments.com.au/new-apartments/the-carter-by-mosaic-77-linton-street-kangaroo-point-qld-4169">The Carter</a>, Kangaroo Point – in between the Gabba and the Kangaroo Point peninsula with amazing walk score and uninterrupted and expansive northern city and river views 
	&nbsp;</li>
	<li aria-level="1">South Brisbane (launching 2026) – core inner-city Brisbane river waterfront site on the northern end of the peninsula with amazing river connection and permanent river and city views, amazing walk score</li>
</ul>

“Nothing we buy is guesswork,” Monahan says. “It’s always an iconic suburb where people genuinely want to live, with strong connections to water, lifestyle, amenity, or permanent view corridors.”

“Mosaic’s two most recent Brisbane acquisitions were several years in the making. The Bedford, launched on the prestigious Kangaroo Point peninsula and achieving 90 per cent sales within months was a site they identified back in 2016. The second, which is the yet to be released at 91 Montague Road in South Brisbane, has been on Mosaic’s radar since 2017.&nbsp;

Arguably one of Brisbane’s last great inner city riverfront sites, it sits within the city’s most dynamic cultural hub, offering unrivalled connectivity, lifestyle, and amenity, and standing as a landmark opportunity to define the next era of riverfront living.

“We know exactly what is and isn’t a Mosaic project. Strategic site selection is the critical foundation of everything we do. We’re always assessing opportunities, but based on our two most recent Brisbane acquisitions, it’s entirely possible that the sites we’re looking at today won’t transact for several years. That discipline is what ensures every project meets our exacting standards.”

<hr />
<h2>The Mosaic engine: Consistency, capability, and relentless execution</h2>

What separates Mosaic in a crowded field is not the ability to attract capital or buy a site, but the ability to deliver highly complex high end buildings, whether that is 37 storeys or 18 storeys, repeatedly and consistently.

“These buildings are inherently complex to deliver well,” Monahan says. “It takes a long time to know exactly what the market wants, how to deliver it, how to secure the right contractors and consultants, and how to align the product with what the market is actually willing to pay and can afford.”

With so many contractors exiting the market in recent years, genuine delivery capability has become increasingly rare. Monahan welcomes credible new entrants but cautions that underestimating the complexity of luxury development can lead to poor outcomes.&nbsp;

“It’s easy to assume high-end projects equal high returns, but without the right experience, track record, and capability, it’s a tough road. Attracting capital is one thing—delivering on expectations is another, and when that doesn’t happen, it impacts the entire market.’”

<hr />
<h2>Looking to 2026: A pipeline built on patience and precision</h2>

As 2025 draws to a close, Mosaic stands at the strongest point in its history. Since 2012 alone, the company has completed more than $2 billion in projects and is set to deliver another $2 billion worth of developments, hundreds of luxury apartments, all bearing Mosaic’s hallmark of impeccable delivery.&nbsp;

Next to launch are two standout projects: Josephine, an exclusive collection of just 30 half- and full-floor ultra-luxury residences coming soon to the Burleigh Heads beachfront, and a landmark tower on Montague Road in South Brisbane, comprising 204 apartments in the heart of the city’s cultural hub on the banks of the Brisbane river.

“We never arrive. There’s no finish line for us,” said Monahan. “Our focus is on continuing to evolve in the luxury space, creating incredible, design- and lifestyle-led properties that people love living in and that stand the test of time.” 
&nbsp;

What’s ahead for South East Queensland’s next development wave: Five minutes with Mosaic’s Brook Monahan

Developer Third.i has topped out its luxury Potts Point apartment development, <a href="https://www.apartments.com.au/new-apartments/muse-potts-point-30-34-brougham-street-potts-point-nsw-2011">Muse</a>.

Under construction by Dilcara and expected to complete in mid-2026, Muse comprises just 13 apartments designed by acclaimed architects <a href="https://www.apartments.com.au/architects/wmk-architecture">WMK Architecture</a> and Mathieson. The building’s design celebrates Potts Point’s heritage character while introducing refined modern elements like advanced building technology and private balconies and terraces that offer views of the Sydney city skyline.

[smartcode_project:default project_id=112613 project_image_fid=231687]

Luke Berry, Director &amp; Co-Founder at Thirdi Group, said Muse is a celebration of Potts Point’s unique character and charm.

"With only 13 residences, we’ve created something truly special for those who appreciate exclusivity and design excellence," Berry says"

"The views, the location, and the lifestyle make Muse a rare opportunity in Sydney’s property market. We’re thrilled to see the project take shape and look forward to welcoming our residents in mid-2026.”

[smartcode_project:default project_id=112613 project_image_fid=231686]

Only a limited number of residences remain at Muse.

Third.i recently launched The Rushcutters nearby, also just 13 large-scale apartments. The two-bedroom apartments were all snapped up in double-quick time. The three-bedroom apartments are priced from just under $5 million.

Potts Point has always been popular for apartment living, but given the lack of suitable development sites in the affluent suburb, new apartment developments have been few and far between.

Early next year Ceerose will launch <a href="https://www.apartments.com.au/new-apartments/belgravia-potts-point-117-victoria-street-potts-point-nsw-2011">Belgravia</a>, a mix of two- and three-bedroom apartments on Victoria Street.

[smartcode_project_cta:default project_id=112613]

Staff Writer

Third.i tops out Muse, Potts Point apartments

Buyer interest in Capital Corporation’s <a href="https://www.apartments.com.au/new-apartments/the-residences-at-wahroonga-estate-169-fox-valley-road-wahroonga-nsw-2076">The Residences at Wahroonga Estate</a> has been gaining momentum following the recent groundbreaking and the commencement of construction.

Enquiry data has pointed to a clear theme: larger apartments are leading demand, particularly among downsizers who want to remain on Sydney’s Upper North Shore.

Since June, three-bedroom layouts have attracted the highest level of enquiry. The three-bed, two-bath, two-car apartments priced from $1.69 million generated the most enquiries, the highest of any floorplan, followed by the larger three-bed garden residences which are priced at $2.25 million.

It's been a prevailing theme for Capital Corporation, who, in the early stages of marketing, reacted to buyer feedback to create more three-bedroom apartments.

The numbers echo what <a href="https://www.apartments.com.au/developers/capital-corporation">Capital Corporation</a> has observed since the project’s early stages. Buyers want generous internal space, established amenity and the ability to age in place without leaving the area.&nbsp;

[smartcode_project:default project_id=135247 project_image_fid=284378]

Capital Corporation Managing Director Jim Hunter said this was a major factor in the estate’s momentum, noting that “the combination of premium design, convenience and direct access to Sydney’s leading private hospital has proven to be a major drawcard”.

That connection to health and wellbeing has proven especially influential for older owner-occupiers. Research commissioned by Capital Corporation found that one in three Australians downsizing do so for health-related reasons, with a third specifically seeking proximity to medical facilities.&nbsp;

[smartcode_project:default project_id=135247 project_image_fid=262185]

The buyer profile emerging at <a href="https://www.apartments.com.au/developments/wahroonga-nsw-2076">Wahroonga</a> Estate reflects this shift. Local residents Peter and Corinne Collins, both in their mid-70s, are among those who chose to downsize within the suburb after decades in their family home. They secured a top-floor three-bedroom apartment after queuing on launch day in March, citing the bushland setting, walkability, and peace of mind of being close to medical services as key reasons for their purchase.

“Being able to walk everywhere, including to the hospital if we need to, really gave us peace of mind,” Corinne told Apartments.com.au.

Read more: <a href="https://www.apartments.com.au/news/nsw/from-family-home-to-bushland-retreat-why-peter-and-corinne-chose-the-residences-at-wahroonga-estate">From family home to bushland retreat: Why Peter and Corinne chose The Residences at Wahroonga Estate</a>

[smartcode_project:default project_id=135247 project_image_fid=3629]

Architecture firm <a href="https://www.apartments.com.au/architects/group-gsa">Group GSA</a>&nbsp;are behind the design at The Residences at Wahroonga Estate. There are 128 one-, two-, and three-bedroom apartments, complete with interiors&nbsp;by <a href="https://www.apartments.com.au/interior-designers/coco-republic-interior-design">Coco Republic</a>. Floor-to-ceiling glass maximises views of the bushland ridgeline, while on-site amenity includes a residents’ lounge, pet-friendly Green Spine, BBQ pavilion and direct access to Coups Creek bushland and walking tracks.

Gold Star iCIRT-rated builder&nbsp;<a href="https://www.apartments.com.au/builders/dasco-australia">DASCO</a>&nbsp;was&nbsp;appointed earlier this year to deliver The Residences at Wahroonga Estate. They are expected to complete the building in late 2027, with residents to move in shortly after.

[smartcode_project_cta:default project_id=135247]

Downsizer demand continues to shape The Residences at Wahroonga Estate

With Brisbane’s housing market soaring and home ownership becoming increasingly out of reach for many buyers, townhouses have emerged as the new urban dream, offering private, low-maintenance retreats complete with pools, parklands, and lifestyle amenities.

As Brisbane faces a growing shortage of quality new residential offerings, <a href="https://www.apartments.com.au/developers/honeycombes-property-group">Honeycombes Property Group</a> has released to the market Songbird Terraces, a boutique development of just 34 terrace homes in the heart of the leafy residential enclave of Oxley.

Offering a more affordable option to the white picket fence house, buyers can purchase a brand new architecturally designed three bedroom terrace home overlooking park and bushland with a communal heated pool, BBQ terrace, private parklands and an on-site café, while being just minutes from <a href="https://www.apartments.com.au/developments/oxley-qld-4075">Oxley</a>’s village centre, train station, and a range of schools and amenities.

[smartcode_project:default project_id=149443 project_image_fid=5241]

Each of the spacious three bedroom plus multi purpose room or four bedroom townhomes feature premium finishes, landscaped courtyards, designer kitchens, two-car accommodation, and optional upgrades for tailored living.

Honeycombes Property Group Managing Director Peter Honeycombe said with completion anticipated in early 2027, this was an incredibly rare chance to buy a fixed-price, brand-new, off the plan home in one of Brisbane’s most tightly held and liveable suburbs, without the stress of auctions and chaotic open homes.

“With prices starting from $1.195 million, <a href="https://www.apartments.com.au/new-townhouses/songbird-terraces-oxley-10-honeyeater-circuit-oxley-qld-4075">Songbird Terraces</a> are designed for owner occupiers seeking space, style and lifestyle, without the maintenance,” Honeycombe said.

“Surrounded by natural bushland and close to manicured parks, walking trails, boutique shops, cafes, cinemas and golf courses, Oxley continues to stand out as one of Brisbane’s most liveable suburbs.”

[smartcode_project:default project_id=149443 project_image_fid=355541]

<a href="https://www.apartments.com.au/project-marketer/colliers">Colliers</a> Residential Director Andrew Scriven said with a limited number of homes available, Songbird Terraces was attracting strong interest from families, upsizers, first home buyers and downsizers looking for quality, location and long-term value.&nbsp;

“Demand is high, supply is low, and the market is crying out for high-quality homes in established well connected areas like Oxley,” Scriven said.

“What was once seen as a compromise between a house and an apartment a townhouse has now become a lifestyle choice, more and more homebuyers are shifting their focus from traditional detached houses to modern, low-maintenance townhouses that offer greater value and convenience.

“As the city’s population grows and urban sprawl becomes less sustainable, Brisbane’s townhouse market is set to expand even further.&nbsp;

“There’s definitely a panic from buyers who’ve been pushed out of the house market but still want to stay in well-connected suburbs with great schools and amenities, they are worried they will miss out as property prices continually rise.”

[smartcode_project:default project_id=149443 project_image_fid=5238]

After eight years of calling Australia home, Agnes Skoraczewska and Matt Biskupski decided it was finally time to take the next step and purchase a home of their own. With property prices continuing to climb, the couple didn’t want to wait any longer and secured a three-bedroom plus multi purpose room townhouse at Songbird Terraces, locking in a fixed price ahead of their move in 2027.

“The truth is, we didn’t want to wait any longer,” Biskupski said. “Seeing what was happening in the market, we realised now was the right time to buy. It gives us peace of mind knowing we no longer have to worry about renting.”

When they discovered Songbird Terraces, the decision came easily.

“The area is lovely and quiet, yet still so close to the city, it’s the perfect balance for work and life,” Skoraczewska said. “It’s a place where we can recharge our batteries while staying connected to everything we need.”

[smartcode_project:default project_id=149443 project_image_fid=5237]

For Agnes and Matt, buying off the plan offered the ideal solution, the confidence of securing their dream home at today’s prices, and the excitement of planning for the future in a community that perfectly fits their lifestyle.

As the final residential precinct within the Songbird Oxley master plan, Songbird Terraces will continue to breathe new life into the area and help create a suburb destination rich in lifestyle amenity.

Colliers Residential Director Lily O'Connell said Songbird is positioned to take full advantage of elevated north and east-facing parkland views, the homes feature low-maintenance design and high energy efficiency to reduce ongoing costs while enhancing everyday comfort.

“And with an array of layouts, catering to a diverse range of lifestyles this is an offering for all,” O'Connell said.

“This is the final release in a masterplanned community that’s become one of Oxley’s most desirable addresses, offering a last chance to enter this community where opportunities are few and far between.”

The homes will be delivered by Clearcon Builders, specialists in premium townhome construction. They will commence construction before Christmas, and is aiming to complete the development in early 2027.

<h2>Songbird Terraces Snapshot</h2>

<ul>
	<li>34 architecturally designed 3 bedroom + multi-purpose room terrace homes.</li>
	<li>An array of layouts, catering to a diverse range of lifestyles.</li>
	<li>Perfectly positioned to take advantage of north and east views over park and bushland.</li>
	<li>A multi-purpose room, which can serve as a second living area, teen retreat, study or fourth bedroom.</li>
	<li>Designer kitchens featuring high quality engineered stone benchtops and European appliances.</li>
	<li>Spacious outdoor living areas and landscaped courtyards perfect for alfresco dining.</li>
	<li>Generous internal and external spaces, designed to take advantage of views overlooking park and bushland.</li>
	<li>Low maintenance, energy efficient &amp; two car accommodation.</li>
	<li>Access to a heated resort-style pool, outdoor entertaining terrace and beautifully landscaped gardens and park.</li>
</ul>

[smartcode_project_cta:default project_id=149443]

Songbird Terraces offer 34 architect-designed townhomes in private enclave, surrounded by bushland, parks and resort style amenity

Townhouse living, Brisbane’s new affordable urban dream?

Housing Supply

A key reason why fundamental problems in the housing market are never solved is because people seek to treat the symptoms rather than the cause.

This is true in business and in life, as much as it is in the housing market. It makes little sense to take medication for high blood pressure if the underlying cause is that you&rsquo;re overweight because you have a bad diet and you don&rsquo;t exercise.

People who hover around the sidelines of the real estate industry, sniping at things they don&rsquo;t like, are highly prone to demanding actions on the symptoms of a perceived problem when they should be addressing the underlying causes of the symptoms.

Treating symptoms, while ignoring causes, has a tendency to make problems worse. Right now, we have spectators to the housing market demanding controls on landlords because rents are rising.

Other spectators want draconian measures from regulatory authorities because prices are rising, bringing howls of outrage about housing affordability.

In both cases, their targets are investors, always a popular choice as scapegoats when there&rsquo;s growth in housing markets and it&rsquo;s characterised in media as a crisis.

[smartcode_project:default project_id=94542]

The natural impulse of the sideline whingers is to demand a crackdown aimed at investors, because they&rsquo;re always seen as the villains.

The reality for the issue of rapidly rising rents is that we need to be encouraging investors, not attacking them.

The symptoms of the problem are rising rents, but the cause is a chronic shortage of rental properties.

In my four decades of researching and writing about housing markets, I&rsquo;ve never seen vacancies so low in so many places.

Anyone genuine in their concerns (rather than having a whinge or grandstanding for political reasons) should be asking why we have such a shortage and how we can fix that fundamental problem.

Rental control is a quick fix medicine to treat the symptoms, while ignoring the underlying market health issues. It will make the problem worse by exacerbating the fundamental problem, which is that Australians have been massively discouraged from becoming investors.

Rental vacancies are a function of the activity of property investors. When people buy dwellings and make them available for rental in large numbers, there are ample properties for everyone who wants or needs to be a tenant, and rents are likely to be stable.

[smartcode_project:default project_id=600]

But investors have been largely absent from the market in recent years. There has been a growing raft of disincentives to property investment over the past five or six years &ndash; including a series of negative measures by APRA, negative changes to depreciation rules and menacing political rhetoric at the last two federal elections, notably from the ALP which has been intent on scrapping negative gearing and increasing capital gains tax.

We&rsquo;ve also had state governments discouraging investors by hitting them with new taxes, fees and charges. The impact of all those different milestone events since 2015 has been a profound discouragement to investment. Some sections of media have characterised property investment as something akin to a criminal activity, abetted by politicians who have claimed the average investor is a rich greedy bastard who owns 15 or 20 properties and is ripping off the system &ndash; a blatant lie (the official data shows 75% of investors have average incomes and own only one or two properties) but lapped up by a careless media.

The short-term consequences include a rental shortage crisis and the long-term outcomes include fewer Australians who will be self-funded in retirement and will need to be supported in growing numbers by taxpayers. If governments respond to the twits on the sidelines and enforce controls on rental levels, rather than allow market forces to set them, that will be yet another disincentive to investors &ndash; and the problem will get worse.

[smartcode_project:default project_id=100322]

Limiting how much a tenant has to pay in rent is worthless if the prospective tenant can&rsquo;t find a vacant property at any price. That&rsquo;s the reality at the moment. There are so few vacant properties that there are dozens of applicants for every listing and people who desperately need a home keep missing out. Rents are rising because people are offering more than the asking rent in an effort to out-bid their competitors, not because landlords are asking extortionate rents.

And, as an aside, increasingly businesses can&rsquo;t fill job vacancies because willing applicants can&rsquo;t find anywhere to live. The only answer to this problem is to increase the supply of rental properties. And that means introducing measures that encourage property investors.

That will elicit further howls of indignation from the chattering economists and other sideline snipers, but it&rsquo;s the only way to fix this problem.

Rental control is a quick fix medicine to treat the symptoms, It will make the problem worse by exacerbating the fundamental problem, which is that Australians have been massively discouraged from becoming investors

terryryder

Why is there a housing shortage and why will government controls make it worse? Hotspotting's Terry Ryder

<html><body>
GUEST OBSERVER
Despite repeated warnings around apartment oversupply and settlement risk, the number of dwellings being approved for construction across the capital cities remains unquestionably strong.
In July 2016, there were 17,380 capital city dwelling approvals which was the highest number of approvals since October 2015.  It was also the third highest monthly number of capital city dwelling approvals on record.  Despite a recent slowdown in capital city dwelling approvals there was a substantial rebound in July 2016.
<div>
<h3>Monthly and 6 month average number of capital city house and unit approvals</h3>
<a href="/images/2016/10/04/2016-09-26--image1.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/04/2016-09-26--image1.png" alt="">
<h3>6 month average number of capital city dwelling approvals</h3>
<a href="/images/2016/10/04/2016-09-26--image2.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/04/2016-09-26--image2.png" alt="">
Looking at the split between houses and units over the month, there were 6,482 houses and 10,898 units approved for construction across the combined capital cities.  There have now been more units approved for construction than houses across the combined capital cities for 22 consecutive months.  Over the 12 months to July 2016, 57.9% of all capital city dwelling approvals were for units.
<h3>6 month average number of capital city house approvals</h3>
<a href="/images/2016/10/04/2016-09-26--image3.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/04/2016-09-26--image3.png" alt="">
<h3>6 month average number of capital city unit approvals</h3>
<a href="/images/2016/10/04/2016-09-26--image4.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/04/2016-09-26--image4.png" alt="">
Over the past year, there have been 76,356 capital city houses and 104,835 capital city units approved for construction.  In each of: Sydney, Melbourne, Brisbane and Canberra there have been more units than houses approved for construction over the past year.
Sydney - there were 54,667 dwelling approvals over the past year which is 7.3% higher than the previous year.  This figure comprised of 16,360 house approvals (+3.2% yoy) and 38,307 unit approvals (+9.1% yoy).
Melbourne – over the year to July 2016 there were 57,428 dwellings approvals which was -0.2% lower over the year.  25,880 of these approvals were for houses and 31,548 were units, with the year-on-year changes recorded at +11.2% and  -7.9% respectively.
Brisbane – The 30,901 dwelling approvals over the past year consisted of 11,210 houses and 19,691 units.  Overall approvals are 4.0% higher over the year with house approvals -1.4% lower and unit approvals 7.4% higher. 
Adelaide – there were 6,119 houses and 3,899 units approved over the past year resulting in 10,018 total approvals.  Over the past year, dwelling approvals are 10.9% higher with house approvals up 9.3% and unit approvals 13.5% higher.
Perth – the number of annual dwellings approvals fell by -24.3% over the year to 20,963.  Over the year, the 14,202 house approvals were -26.7% fewer than the previous year and the 6,761 unit approvals were -18.6% less than a year ago.
Hobart – there were only 989 new dwellings approved for construction over the year, 799 of which were houses and 190 units.  House approvals were -22.7% lower year-on-year and unit approvals were down -10.8%.
Darwin – there were 1,304 dwelling approvals over the past year which was -12.7% lower year-on-year.  Over the year, the 657 house approvals was -22.8% lower than the previous year and the 647 unit approvals were 0.6% higher than the previous year.
Canberra – there were 1,129 houses and 3,792 units approved for construction over the past 12 months.  There were -8.1% fewer house approvals than over the previous year while unit approvals were 24.7% higher over the year.
Despite policy makers and analysts (including CoreLogic) voicing concerns about the level of housing construction currently underway, particularly for units, approvals in capital cities generally remain unquestionably strong.  From here it will be interesting to see how many of these approvals immediately progress to commencement and ultimately through to a completion.  Tighter lending conditions for both developers and purchasers for off-the-plan units is likely to result in a larger proportion of approvals that don’t proceed through to a finished product.  The data also reiterates why purchasers of off-the-plan units in major capital city housing markets should be very selective with regard to the types of units they purchase.
Importantly, oversupply concerns are most visible across specific and well defined geographic areas and product types. CoreLogic’s Settlement Risk Report identifies the Melbourne inner city and Brisbane inner city as the two markets where the largest amount of unit supply is likely to be delivered over the next 24 months.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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Capital city dwelling approvals rebounding: Cameron Kusher

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<div>
<div>
<div>
Based on the relationship between demonstrated housing demand and advertised stock levels we are seeing relatively more stock available for sale compared to demand for that stock across the capital cities at the moment.
The months of supply figure compares the number of unique properties advertised for sale to the number of transactions in the market. The analysis provides unique insight into how long it should take to clear the volume of stock currently available for sale. It is important to note that off-the-plan housing stock is typically not advertised for sale as individual properties and as a result is not included within this analysis.
Across the combined capital cities, there is currently 4.4 months’ worth of residential properties being advertised for sale. As the first chart shows, the months of supply is currently higher at this point of the year than it has been each year since 2012. The increasing months of supply is largely due to the slowing rate of transaction activity rather than a spike in properties available for sale, indicating demand has diminished relative to advertised supply levels which is pushing the figure higher. <a href="https://www.corelogic.com.au/resources/property-pulse/article-graphs-img/2017-05-15--image1.jpg" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/19/rsz_kusherchart.png" width="700" height="425">
Sydney – there is currently 3.0 months of established housing supply available for sale across the city. The city has seen consistently low months of supply over recent years however, the figure is currently at its highest level for this time of year since 2012.
Melbourne – established housing stock currently sits at 4.2 months of supply for the city. Supply levels remain quite low but are at their highest levels for this time of year in five years.
Brisbane – the city currently has 5.1 months of established housing stock available for sale. The months of supply figure is higher than it has been at this time of year for each of the past five years.
Adelaide – there is currently 3.7 months of established housing stock available for sale. Although stock levels are higher than they were at this time over the past two years, stock levels were higher over the three years previous to that.
Perth – at the moment there is 8.3 months of established housing stock available for sale throughout the city. This is a high months of supply figure relative to other capital but it is well down on the 8.7 months at the same time last year.
Hobart – the months of supply figure for Hobart is the lowest it has been for many years. There is currently 4.1 months’ worth of established stock available for sale which is down from 5.0 months a year ago and the 7.2 months the year previous.
Darwin – across the city there is currently 6.7 months of established housing supply which is well down on the 10.5 months at the same time a year ago and 7.5 months over the previous year.
Canberra – there is currently 2.6 months of supply of established housing stock for sale in Canberra. The months of supply level is the same as what it was a year ago but lower than the previous years highlighted.
Based on these figures it seems that the supply of stock for sale relative to demand is increasing in Sydney, Melbourne and Brisbane. Meanwhile demand is outweighing supply in Hobart and Canberra leading to a decline in the months of supply. In Perth and Darwin supply continues to dramatically outweigh demand but the balance is slowly improving. In Adelaide there has been little change in months of supply over recent years suggesting the market is in relative equilibrium.
Cameron Kusher is a research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/" target="_blank">here</a>.
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Fewer buyers results in greater months of supply: Cameron Kusher

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<div>Now the construction sector is expanding again per AIG.</div>
<div> </div>
<div>Some good analysis from AIG that is well worth a read - apartment construction is an obvious strong point, which makes the drag on second quarter GDP by dwelling construction something of a mystery.</div>
<div> </div>
<div>Perhaps the residential construction industry is operating at or close to its full capacity?</div>
<div> </div>
<div>In any case, I expect dwelling construction to contribute to the economic growth in the third quarter.</div>
<a href="/images/2015/09/09/PCI.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/09/09/PCI.jpg" alt="">
 
All three of AIG's Performance Indices are now in expansion territory - manufacturing, construction and services.
<a href="/images/2015/09/09/AIG.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/09/09/AIG.jpg" alt="">
Source: AIG
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. 
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.
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Construction expands in August: Pete Wargent

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GUEST OBSERVER
CoreLogic’s Accumulation Index looks at the total returns from the housing asset class factoring in the change in the value of the dwelling and the gross rental return from the property.
The CoreLogic Accumulation Index shows that nationally, the total returns from the housing asset class over the 12 months to August 2017 were 13.2%.  Because the return is calculated from value change as well as the gross rental yield, you tend to find that houses have a superior value growth performance while units offer superior rental returns.  
Over the past year, total returns for houses nationally have been recorded at 13.5% compared to a 12.0% return for units.  Over the 10 years to August 2017, the annual total returns for housing nationally have been recorded at 8.8%, split between 8.9% for houses and 8.5% for units.
<h3 class="text-align-center">Annual total returns from the housing asset class, National</h3>
Click to enlarge
<img src="https://www.urban.com.au/images/2017/09/20/2017-09-18-image1.png" alt="">
Total housing returns have generally been superior in capital cities to regional markets however, in the 2008 and 2010-11 downturns, returns slumped by a greater magnitude in the capital cities.  Over the past decade, combined capital city annual total returns have been recorded at 9.3% with returns of 9.5% for houses and 9.0% for units.  Over the 12 months to August 2017, total returns have been recorded at 14.0% for houses and 12.3% for units.  Like the national chart, the recent data for the combined capital cities shows that total returns have started to slow.
<h3 class="text-align-center">Annual total returns from the housing asset class, combined capital cities</h3>
Click to enlarge
<img src="https://www.urban.com.au/images/2017/09/20/2017-09-18-image2.png" alt="">
Regional markets are also beginning to see total returns slow however, the returns over recent years have generally not been as strong as those across the combined capital cities.  Over the past 12 months, total returns have been recorded at 11.7% for houses and 10.2% for units.  Over the past decade, annual total returns for housing outside of the capital cities have been recorded at 7.0%, 7.2% for houses and 5.6% for units.
<h3 class="text-align-center">Annual total returns from the housing asset class, combined regional markets</h3>
Click to enlarge
<img src="https://www.urban.com.au/images/2017/09/20/2017-09-18-image3.png" alt="">
Hobart has recorded the strongest annual growth of all capital cities over the past year and it also has some of the highest rental yields which has meant it has had the strongest total returns.  Total returns for houses over the past year have been above 10% in each of Sydney, Melbourne, Adelaide, Hobart and Canberra.  For units, double-digit total returns have been achieved over the past year in each of Sydney, Melbourne and Hobart.  Units in Darwin were the only capital city property type to achieve negative returns over the past year.
<h3 class="text-align-center">Annual total returns from the housing asset class, individual capital cities, to Aug-17</h3>
Click to enlarge
<img src="https://www.urban.com.au/images/2017/09/20/2017-09-18-image4.png" alt="">
With capital growth now appearing to have peaked and rental yields at record lows it is reasonable to expect a further moderating of total returns over the coming months.  
The other important thing to consider when looking at total returns is the calculation of the rental income.  Although rents are increasing in many areas, the assumption in a gross rental yield calculation is that the property is occupied for 52 weeks of the year.  In some parts of the country this is increasingly difficult to achieve and it can eat into the investment returns.
The total returns data, particularly for the past decade, shows why housing investment has been so popular and hit record highs.  
Returns have been fairly consistent and less volatile than equities however, the ongoing strength and the evidence of a recent slowdown should give investors pause for thought.  
With mortgage rates starting to increase for investors, record-high levels of new housing supply and value growth slowing, housing investors shouldn’t assume that the types of returns seen over recent years will continue to be replicated going forward.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/" target="_blank">here</a>.
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Total returns from housing are starting to ease: Cameron Kusher

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Housing undersupply not only in Australia but globally: Nerida Conisbee

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EXPERT OBSERVATION
The NSW Premier's priorities for the next four years do not include housing supply.
The previous priorities for the NSW Premier for 2015 - 2019 included a number of priorities around housing supply, but these have been left off the 2019 - 2023 priorities.
While many of the Premier's new priorities are laudable, the absence of any priority around housing supply seems to signal a lack of interest in how the state will house population growth in an affordable manner.
Premiers Priority 7 is about reducing street homelessness by 50% by 2025, and this is a laudable priority to pursue.
Urban Taskforce member Toga has led the way in this area with their Addison Project in Randwick, which provides accommodation free of charge in an old motel that is awaiting development.
Another Urban Taskforce member, PAYCE, supports the Sydney Street Choir and they run programs that help with homelessness.
The last round of Premier's Priorities included 'Making Housing More Affordable' (Including target housing completions per year) and "Faster Housing Approvals' and ‘Accelerated Rezoning for Housing' but none of these have been included in the latest priority list.
While housing value has decreased in the last few years, there is now a big housing approval shortage that will inevitably lead to an under supply in the years ahead. This will reduce the number of new homes required for population growth, and inevitably lead to housing prices going up again.
The priorities from the last four years that referred to housing supply related to the planning system seem to have been replaced by priorities for greener public spaces and for greening the city.
While these are worthwhile areas to aim for they do not compare to the economic importance of housing supply and housing costs.
Clearly how housing is managed in a time of high population growth is an important policy issue for the NSW Government that should be measured. As the Premier in her media Release said, 'What gets measured gets done'.
CHRIS JOHNSON is the Urban Taskforce CEO
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Berejiklian's priorities leave out housing supply: Chris Johnson

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The building of inner city apartments in Melbourne and Sydney has slowed to a dangerous level, according to The Australian columnist, Robert Gottliebsen.
He suggests governments are making the looming unit shortfall worse.
"Not only is substantial employment and business activity at stake in both states, but in Sydney the NSW government has dreamt up an unbelievable plan that will halt apartment construction in many areas, potentially for years," he wrote.
He says apartment building has slowed dramatically because communities and councils across the city are making it as hard as possible for high density living projects to find a way through the approval processes.
"Normally such decimation of an industry is caused by demand, but in June 2019 demand is not the problem."
The supply in both cannot be generated to meet looming demand.
He noted at the moment in both cities there is excess supply but demand momentum helped by the return of Chinese to the market has already lifted Sydney apartment prices by 10% after they had fallen by 20 to 30%.
"During 2020 the demand-supply ratio will change markedly."
In both Sydney and Melbourne it takes about three years for a development to get through the approvals, while in other states the apartment approval process takes less than a year, he said.
In Sydney the current approval mess means that production of apartments is now down 40%.
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Governments making the looming 2020 Sydney and Melbourne apartment shortfall worse: Robert Gottliebsen

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Sydney’s latest five-year housing supply forecast, written by the NSW Department of Planning and Environment, anticipates a solid pipeline of construction.
NSW Department of Planning and Environment Executive Director, Justin Douglas, said the new forecast shows almost 192,000 new dwellings will be built across the city during 2018/19 to 2022/23.
Douglas said Sydney needs to build 725,000 new homes in the next 20 years, or around 36,000 per annum, to accommodate a growing population.
"We’re forecasting to meet that demand over the next five years, with just over 38,000 homes per year on average planned for the city," he said. 
He believes it's good news for first home buyers as supply levels are strong and there are more purchasing options.
The forecast shows the top five local government areas where additional new homes will be built over the next five years are Parramatta (22,100), Blacktown (18,300), Sydney (14,850), Liverpool (11,950) and The Hills (11,700).
<img src="https://www.urban.com.au/images/2019/6/7/Supply%20hotspot.JPG" alt="">
"The forecast helps to inform decisions on future land use zoning to ensure there’s a solid pipeline of new housing supply," Douglas said. 
"It takes account of current residential developments under assessment, approved but not commenced construction, and those under construction, as well as analysis of likely future development under current zoning and planning controls.
"The preparation of the forecast has involved significant input from local government, the development industry, service providers, and state agencies."
Click <a href="https://www.propertyobserver.com.au/images/2019/6/7/local-government-area-forecast-map-2400x1698.jpg" target="_blank">here</a> to enlarge
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/7/local-government-area-forecast-map-2400x1698.jpg" alt="">
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Parramatta and Blacktown top Sydney’s official housing supply pipeline forecast 

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EXPERT OBSERVATION 
The proposed changes by APRA to its guidance on restrictions on borrowers repayment obligations will help the supply of new housing.
The Australian Prudential Regulation Authority (APRA) has proposed changes to its guidance to banks and Authorised Deposit-taking Institutions (ADIs) that will increase the maximum borrowing capacity for borrowers in relation to housing.
The regulator believes that the measures that were introduced at a time of heightened risk can now be reduced.
Rather than using an interest rate of 7% ADIs would be permitted to set their own minimum interest rate floor for use in serviceable assessments. APRA does still propose a buffer on interest rates and while stating that risk has reduced APRA is still concerned about high house prices, low interest rates, high household debt, and subdued income growth.
APRA also commented that there was too big a difference emerging between owner-occupier principal and interest loans compared to investor interest-only loans.
The Urban Taskforce is very supportive of APRA’s proposed changes as clearly house prices have dropped significantly in cities like Sydney and this is reducing confidence in the new housing market.
The re-election of the Morrison Government means negative gearing and capital gains tax will not change so more certainty is coming into the housing market. This greater certainty along with APRAs changes are positive signals for the housing sector.
To fully lift housing supply to the levels needed will also need support at state government level to ensure that levies on new homes are not excessive.
In Sydney the state government’s proposal to lift the cap on local infrastructure contributions from July 2020 could add $60,000 to the cost of each home or apartment. All levels of government must do their bit to ensure housing supply matches the need.
CHRIS JOHNSON is the Urban Taskforce CEO.
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