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 internation 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]

Joel Robinson

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

<section data-scroll-anchor="false" data-testid="conversation-turn-5" data-turn="user" data-turn-id="e65dbe94-e3b6-47f7-b62a-9cbb30c9bf79" data-turn-id-container="e65dbe94-e3b6-47f7-b62a-9cbb30c9bf79" dir="auto">Time &amp; Place’s plans to transform the former David Jones factory building in Surry Hills into a mixed-use residential precinct have gone on exhibition through the NSW Government’s In-fill Affordable Housing pathway.</section>

<section data-scroll-anchor="false" data-testid="conversation-turn-6" data-turn="assistant" data-turn-id="request-WEB:f4d533b7-64a5-413d-86fd-5c99649c2b73-2" data-turn-id-container="request-WEB:f4d533b7-64a5-413d-86fd-5c99649c2b73-2" dir="auto">
The Marlborough House proposal, lodged for the <a href="https://www.apartments.com.au/new-apartments/marlborough-house-47-97-marlborough-street-surry-hills-nsw-2010">47-97 Marlborough Street</a> site, would see the adaptive reuse of the heritage-listed warehouse building alongside the construction of new residential additions and a separate apartment building on the northern portion of the site.

The proposal seeks approval for 172 apartments across three buildings, including 15 per cent affordable housing managed by a community housing provider for at least 15 years from occupation.

<img alt="Marlborough" data-entity-type="file" data-entity-uuid="5d1d3c2a-bf13-47d6-a335-7c01102cdee1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.36%E2%80%AFAM.png?VersionId=cjMYrbR.BLUlWH4dar0RVDDo0bG.u2YT" />

Interior view from the Northern Building Penthouse overlooking the park

&nbsp;

The redevelopment is planned for the prominent 3,413 sqm site bounded by Marlborough Street, Goodlet Street and Lansdowne Street, directly opposite Eddie Ward Park and around 200 metres from the Surry Hills light rail stop.

Time &amp; Place acquired the former David Jones building in 2024, marking the first time the property had changed hands in around 50 years.

Designed by Wardle, the proposal centres around the adaptive reuse of the former David Jones factory, originally constructed between 1913 and 1935 in the Inter-War Chicagoesque architectural style.

Wardle noted in its Architectural Design Report that the building “occupies a significant place in the industrial and cultural history of Surry Hills” and at its peak was “the largest department store manufacturing facility in Australia, employing over 800 people and fuelling the growth of Sydney’s fashion and retail industries.”

The practice said the project positions itself “not as an isolated intervention, but as a contributor to the civic, social, and architectural grain of the precinct.”

The proposal would deliver 75 apartments within the retained southern heritage building, 59 apartments within the central addition, and a further 38 apartments within the new northern building fronting Lansdowne Street.

Planning documents show the scheme would comprise a mix of heritage apartments, new-build apartments, townhouses and penthouses.

<img alt="Marlborough" data-entity-type="file" data-entity-uuid="57758518-40a3-4b83-958c-d06e96a2cffa" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.42%E2%80%AFAM.png?VersionId=VerlX9ST5xgBi8.1_YRsqdWTJeT6ygjs" />Interior View of the Heritage Building Apartment

The development would also include a ground-floor retail tenancy on the corner of Marlborough and Lansdowne streets, rooftop communal open space, a landscaped pedestrian link along the western edge of the site, and basement parking accessed from Lansdowne Street via a car stacker system.

&nbsp;

The scheme emerged from a competitive design process run by Urbis, with Wardle ultimately selected as the winning architect ahead of FJC Studio, TZG, Architectus and Wilkinson Eyre.

The Design Integrity Panel later described several aspects of the Wardle scheme as fundamental to the project, including “the stepped character of the new addition to the north of the site”, the landscaped western pedestrian link, and the “garden arrival” experience separating the original Marlborough House from the heritage addition.

Wardle’s design heavily references the site’s industrial and heritage history, while also responding to the surrounding Surry Hills streetscape.

The Architectural Design Report describes Surry Hills as “a finely grained neighbourhood with beautiful and expressive brickworks throughout the suburb,” with the proposal introducing a material palette intended to sit comfortably alongside the existing warehouse fabric and neighbouring terraces.

The report also outlines the project’s relationship with Eddie Ward Park and the broader landscape context of the area.

“Marlborough House occupies a site of deep cultural memory and the neighbouring Eddie Ward Park is of local ecological significance, where natural systems, topography, and stories have long shaped human experience,” Wardle noted in the report.

The architects said the proposal sought to “rebind built form to Country” through landscape, materiality and the adaptive reuse of the heritage structure.

<img alt="Marlborough House" data-entity-type="file" data-entity-uuid="9ae3f2f9-c85f-477a-a6f8-b43f6cb97c41" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.53%E2%80%AFAM.png?VersionId=B.qUCLqRvJOR.n9CvYcTpaknIX9LuqKZ" />

The project is also being progressed under the NSW Government’s in-fill affordable housing provisions, allowing developments that include affordable housing to access additional height and floor space incentives.

Under the plans, 2,593 sqm of the project’s floor space would be dedicated to affordable housing, slightly exceeding the required 15 per cent threshold.

In its Design Excellence Strategy, Urbis said the project aimed to “sensitively adapt and enhance the heritage-listed building on site through alterations and additions that preserve its historical significance” while delivering “high-quality market and infill affordable housing development in Surry Hills.”

Time &amp; Place has been one of the most active developers nationally in the last 12 to 24 months. Late last year they completed&nbsp;The Queensbridge in&nbsp;<a href="https://www.apartments.com.au/developments/southbank-vic-3006">Southbank</a>, a mixed-use tower with 353 apartments and a hotel. They are currently selling Park Modern, 246 apartments near the famous Botanic Gardens in&nbsp;<a href="https://www.apartments.com.au/developments/south-melbourne-vic-3205">South Melbourne</a>, and have future projects, <a href="https://www.apartments.com.au/new-apartments/the-wilmot-173-burke-road-28-hope-street-glen-iris-vic-3146">The Wilmot</a>&nbsp;in&nbsp;<a href="https://www.apartments.com.au/new-apartments/glen-iris-vic-3146">Glen Iris</a>, the redevelopment of the Northcote Plaza, and another tower in South Melbourne.

The developer broke into Sydney just a few years ago with Two Tides in Manly. They have another project nearby, which is at the ultra-luxury end of the market on&nbsp;<a href="https://www.apartments.com.au/buildings/shoreline-manly-beach-89-90-north-steyne-manly">North Steyne</a>, fronting the beach.

It is also continuing to work through the <a href="https://www.apartments.com.au/news/nsw/first-look-time-place-settles-on-design-for-the-chimes-potts-point-redevelopment">redevelopment of The Chimes building</a> on Macleay Street in&nbsp;<a href="https://www.apartments.com.au/developments/potts-point-nsw-2011">Potts Point</a>, as well as a project on <a href="https://www.apartments.com.au/news/nsw/time-place-to-take-on-mosman-apartment-market">Mosman's Redan Street</a>.
</section>

First look: Time & Place unveils Marlborough House redevelopment designs for former David Jones warehouse in Surry Hills

The residential transformation of St Kilda Road is set to continue into with more new apartment plans for the sought-after boulevard.

Wing Tai Asia has lodged plans for a major residential tower at 464-466 St Kilda Road, replacing the former VACC House with an 18-storey mixed-use development designed around a retained heritage podium and a sculpted contemporary tower.

The proposal, prepared under Victoria’s Significant Residential Development with Affordable Housing pathway, would deliver 325 apartments and ground-floor retail across the prominent 4,653 sqm boulevard site in Melbourne’s St Kilda Road North Precinct.

The project centres on the adaptive reuse of the site’s heritage-listed VACC Building, an eight-storey office designed by Bernard Evans that has occupied the address for decades. Planning documents state the development would involve “carefully dismantling and conserving off-site the original metal fabric of the podium visible from St Kilda Road,” before reinstating it as the defining frontage of the new scheme.

Above the restored podium, Wing Tai is proposing a curvilinear residential tower. The scheme includes 172 one-bedroom apartments, 63 two-bedroom apartments, 66 three-bedroom apartments, and 24 four-bedroom apartments, alongside two ground-floor food and beverage tenancies fronting St Kilda Road.

The tower has been designed with substantial articulation and variable setbacks to minimise perceived bulk and maintain view corridors along the boulevard. Urbis, which prepared the planning report, said the design “has been significantly articulated through a curvilinear design” with “an interplay with materials, façade expression and depth” to create visual separation and visual interest.

The proposal also includes 254 basement car spaces, landscaped pedestrian links connecting St Kilda Road and Queens Lane, and a biophilic landscape strategy featuring canopy trees, raised planters, cascading greenery and a glass oculus pool overlooking the eastern frontage.

Planning documents confirm the $270.1 million development will contribute 3 per cent of project costs to the Social Housing Growth Fund as part of the application process.

Wing Tai acquired the St Kilda Road property in 2018 alongside Abacus Property Group for $95.38 million, before later consolidating ownership of the site. The property previously served as the Victorian Automobile Chamber of Commerce headquarters for around 60 years.

The transformation of the St Kilda Rd boulevard is already beginning to materialise, with a number of high-profile projects recently completed, launched, or approaching launch as developers continue to back the long-term appeal of the precinct.

Among the most notable recent completions is Louise by Samuel Property Group, just off the strip on Queens Lane, the same pocket Hirsch &amp; Faigen recently launched The Queensbury. Mirvac is too on the same street with The Albertine, which is approaching completion.

Dexus recently secured approval for its slice of St Kilda Road, while Gurner also has approved plans for the precinct.

Wing Tai unveils 325-apartment St Kilda Road tower on former VACC House site

Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

Housing

<html><body>
GUEST OBSERVER
Despite a long history of research into poverty, no consensus yet exists on what constitutes being “poor” or “disadvantaged”. Measures of household wealth don’t go far enough in identifying those most at risk of being excluded from society. Nor do such measures explain the level of exclusion they face.
Significant numbers of people are at risk, however. Our research suggests that more than one in two people with a disability or long-term health condition and nearly half of people aged 65 and above experienced social exclusion in 2012.
A better way to measure poverty?
Monitoring changes in the prevalence and characteristics of poverty is crucial to keeping track of whether a society is really successful in tackling this problem. Traditional measurements have too narrowly focused on incomes and whether households can afford a minimum acceptable standard of living.
Broader concepts have emerged more recently. These recognise that socioeconomic disadvantage is much more complex. One more useful method is the concept of “social exclusion”.
The measure, which first emerged in Europe, encompasses not only income and other economic resources, but also dimensions of disadvantage – such as health and education – that determine individuals' ability to participate fully in society.
The <a href="https://www.bsl.org.au/research-and-publications/social-exclusion-monitor/" target="_blank">Social Exclusion Monitor</a>, developed by the Brotherhood of St Laurence and the University of Melbourne, has proven useful in Australia to measure the extent and evolution of a wider notion of poverty and disadvantage.
In contrast with income-based poverty measures, the monitor measures the accumulation of deprivation across seven life domains: material resources, employment, education and skills, health and disability, social connection, community and personal safety.
Considering a total of 29 indicators across these domains, it uses data from the national Household, Income and Labour Dynamics in Australia (<a href="https://www.melbourneinstitute.com/hilda/" target="_blank">HILDA</a>) survey. Since 2001, this survey has annually collected detailed socioeconomic data for a nationally representative sample of the population. This allows the monitor to study social exclusion since the beginning of the 21st century.
The latest issue of the Social Exclusion Monitor bulletin provides revealing insights into the nature and characteristics of disadvantage.
For 2012, the most recent wave of HILDA data, around 25% of Australians aged 15 years or above experienced some level of social exclusion: 20% were marginally excluded, 5% deeply excluded and almost 1% very deeply excluded.
This means that about 825,000 Australians experienced deep exclusion and more than 150,000 people were very deeply excluded.
 
<a href="/images/2015/07/23/image-20150721-24261-1kp0r3v.jpeg" target="_blank">Click to enlarge</a>
<img src="/images/2015/07/23/image-20150721-24261-1kp0r3v.jpeg" alt=""> 
Social exclusion worse for some
The monitor also provides valuable insights into trends over time. Overall, the impact of the 2008 global financial crisis was more limited in Australia than in many countries, but it marked a turning point in terms of social exclusion.
From 2001, the prevalence of exclusion steadily declined to reach a low point for the period in 2008. The decline in unemployment and the rate of jobless households, measured by the monitor’s employment domain as well as the fall in the proportion of people with a low level of education, contributed to the reduction in the number of excluded.
However, following the global financial crisis, the prevalence of marginal exclusion started to grow. It has remained above pre-crisis levels since then.
The Social Exclusion Monitor bulletin shows the risk of social exclusion is not the same for everybody. The demographic groups most likely to experience exclusion are people aged 65 and above – almost half experienced it in 2012 – and people with long-term health conditions or a disability – more than half experienced it.
The risk of exclusion also varies with the level of education. The prevalence of social exclusion among those with less than Year 12 is more than 2.5 times higher than among those with more education.
The type of households individuals live in also influences the risk of exclusion. Single parents and people living alone experience exclusion at higher rates than other families. Public housing tenants have higher rates of exclusion than those in other forms of housing.
There is also a gender gap. Women are more excluded than men in all age groups, overall by more than five percentage points. The difference is larger among people aged over 55.
The most prevalent indicators of exclusion are low education, long-term health conditions or disabilities and low wealth – each is experienced by at least 20% of people. These are the key to understanding social exclusion in Australia.
The sources of exclusion do vary over the life cycle, however. Education and employment are the main drivers of exclusion for those under 25, accounting for more than half of the exclusion of this age group. In contrast, economic resources, health and community engagement make the largest contribution to the exclusion of people aged 65 and above.
Unsurprisingly, some socioeconomic groups are more likely to experience persistent social exclusion than others. Analysis of the longitudinal information in the HILDA survey shows that older Australians, people living in highly disadvantaged areas as measured by the Socioeconomic Indexes for Areas, long-term unemployed and households with members who are jobless or have a disability are more likely to experience persistent exclusion.
The reason is twofold. People in these groups are both less likely to move out of poverty and, if they have managed to improve their circumstances, more likely to fall back into it.
This data reveals few surprises. The findings tell a familiar and consistent story about who is and isn’t excluded in Australia. However, the analysis of the sources of exclusion at different points in the life cycle and the findings in relation to persistent exclusion are especially important for developing polices to reduce social exclusion.
These findings underline the need to focus our policies and services on the places and groups where social exclusion is concentrated. We need to redouble our efforts to keep young people in education while also assisting them, and the long-term jobless, to find and retain employment.
We must ensure that older people with chronic health conditions and those with a disability are able to participate in the community while also addressing their health needs.
And if we were really smart we would invest in early intervention among these groups to prevent persistent social exclusion.
 
Francisco Azipitarte is Ronald Henderson research fellow, University of Melbourne and can be contacted <a href="https://theconversation.com/profiles/francisco-azipitarte-92300" target="_blank">here</a>.
Shelley Mallett is professorial fellow at the University of Melbourne and can be contacted <a href="https://theconversation.com/profiles/shelley-mallett-129018" target="_blank">here</a>.
Both are authors published in The Conversation.
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po-LsXgBTHBmX

Who’s on the outer? Uncovering poverty’s many faces

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GUEST OBSERVER
Australian housing finance approvals to owner occupiers fell sharply in May with the 6.1% fall coming below expectations of a 3% decline.
Weak industry data had indicated some downside risks to the month – these clearly materialised. 
The detail was also weak. New lending, ex refinance, recorded an even sharper 8.2% drop.
Construction-related approvals recorded a sharp fall as well, down 5.7%mth on a combined basis (i.e. approvals for construction and for the purchase of newly built dwellings). 
Owner occupier finance approvals declined across all states with falls (ex refi) ranging from –3.8%mth in Qld to –8.6%mth in WA.
The number of new finance approvals is down on year-ago levels in every state. 
Notably, the value of housing finance approvals to investors also declined in May, falling 3.2%mth. Although that still leaves lending in the segment up 19.4%yr, the tightening in lending criteria and APRA’s target of 10% growth in credit to the segment (i.e. total loans outstanding) means there will be further falls to come near term. 
The sharp fall in finance approvals in May reflects both the clear softening in buyer sentiment across owner-occupier segments since mid-2014 and the ‘macro-prudential’ measures aimed at containing investor lending.
Note however that the reading would have been unaffected by the RBA’s May rate cut which more timely auction market and price data suggests has driven some renewed momentum in housing markets through June-July. Details  Owner–occupiers (no.)    –6.1%mth, –1.9%yr   – ex-financing (no.)        –8.2%mth, –10%yr
Construction of dwellings (no.)  –8.3%mth, –9.7%yr    Purchase of new dwellings (no.)    0.3%mth, 3.4%yr                    
Value of loans:   Owner-occupiers ($bn)      –5.3%mth, 8.1%yr Investors ($bn)                –3.2%mth, 19.4%yr   Total ($bn)                     –4.4%mth, 12.6%yr   
<h2>Strategy</h2>
For the AUD 
AUD was trading just above 0.7480 as the housing finance was released. The currency fell around 5 pips as the headline fell by 6.1%m/m v the 3.0% consensus. The data however was overshadowed by the opening of the Chinese stock exchanges. Markets are also focusing on continued risk around Greece and Fed Chair Yellen speaking. 
MATTHEW HASSAN is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Australian housing finance May 2015: Matthew Hassan

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The average gross yield for a capital city house is now 3.5%, equivalent to the record last low in 2007, according to research released by CoreLogic RP Data. 
The CoreLogic RP Data Hedonic Home Value Index put the fall in yields due to housing values rising faster than weekly rents.
The average gross apartment yield within a capital city was 4.4%, the lowest grow apartment yield since 2010.
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“Melbourne continues to hold the unfortunate title of the lowest yielding capital city, but if current trends continue, it won’t be long before Sydney overtakes Melbourne due to the substantially higher rate of capital gain in the face of comparatively low rental appreciation” Mr Lawless said. 
"Brisbane is now recording the highest gross rental yield for apartments, at 5.4%, and the only capital city where gross rental yields have improved over the year has been Hobart which is now starting to rival Darwin as the highest yielding capital city for houses."
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mick.cee-iDmgDDAmu8

Brisbane has highest capital city apartment rental yields: CoreLogic RP Data

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Brisbane is the only capital city tipped to buck the national trend of easing median house prices in real terms over the next three years, according to housing forecasters, BIS Shrapnel.
But its housing market outlook has warned of a looming oversupply of inner city Brisbane apartments.
The BIS Shrapnel Residential Property Prospects 2015 to 2018 puts Brisbane's estimated median house price in this year at $520,000, which researcher Angie Zigomanis said that was still below Brisbane's June 2010 peak in real terms. Coupled with low interest rates, Brisbane's affordability was at levels seen in the early 2000s.
A total rise of 13 per cent in the Brisbane median house price is forecast over the three years to 2018, while the median unit price is forecast to rise by a total six per cent. Its new dwelling supply overall, without any significant rebound expected in population inflows, was set to move the Brisbane apartment sector nto oversupply, "with some impact across the broader market."
But significantly, Brisbane is tipped to be the only capital city that will not experience a decline in median house prices in real terms in the next three years.
Nationally low interest rates will support further price growth in undersupplied residential markets in 2015/16, but the spectre of tightening interest rates and deterioration of affordability will create conditions for price declines in a number of cities from 2017, according to the forecaster.
"But doomsday predictions for the residential market are likely to be overblown.
"Although Australia’s residential property markets are forecast to steadily weaken from 2016/17, as a combination of rising supply and the prospect of a tightening in interest rate policy impacts on prices, any downturn will be similar in magnitude to that seen over 2011-2012."
According to the company’s Residential Property Prospects, 2015 to 2018 report, Sydney and (to a lesser extent) Melbourne have broken away from the other capital cities, with both estimated to have recorded double-digit percentage rises in their median house prices in 2014/15.
Solid population growth, reasonably positive economic conditions and an underlying dwelling deficiency have underpinned this rise, and affordability is increasingly becoming a concern. In contrast, weaker recent price growth in the other capital cities means that affordability is not as strained, and it is subdued local economic conditions and/or an underlying excess dwelling stock that have impacted the market.
Angie Zigomanis, said that although low interest rates will continue to support prices, it was the demand and supply balance across the states that will play a part in the rate of price growth in the coming years.
"Moreover, the boom in apartment construction over the past couple of years is creating a disconnect in the supply balance between detached houses and units, with a resulting difference in their price outlook."
“Most capital cities are building apartments at record rates, driven by investor demand,” said Zigomanis. “As these projects are progressively completed, strong tenant demand will be required to support rents and consequently values upon completion.
“However, we are seeing population growth nationally begin to slow. Net overseas migration has fallen from a recent peak of 235,700 persons in 2012/13, to an estimated 184,000 persons in calendar 2014.
"With the majority of net overseas migration classified as ‘long term overseas visitors’, that is, temporary but not permanent arrivals, this reduction will impact most on the rental sector. Moreover, this slowdown in net overseas migration is most evident in the mining boom states of Western Australia, Queensland and Northern Territory.”
He noted the detached house market is less reliant on tenant demand and more exposed to owner occupiers. Together with the stimulatory effect of variable interest rates at more than 40-year lows, this is expected to support median house prices in most capital cities over 2015/16.
The strongest conditions over 2015/16 are forecast for New South Wales, Queensland and Victoria, where BIS Shrapnel estimates the markets are in overall deficiency at June 2015. 
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jchancellor-FAypfDUnLy

Brisbane house prices to buck national easing trend: BIS Shrapnel 2018

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GUEST OBSERVATION
The widening cracks in Australia’s housing system can no longer be concealed. The extraordinary recent debate has laid bare both the depth of public concern and the vacuum of coherent policy to promote housing affordability. The community is clamouring for leadership and change.
Especially as it affects our major cities, housing unaffordability is not just a problem for those priced out of a decent place to live. It also damages the efficiency of the entire urban economy as lower paid workers are forced further from jobs, adding to costly traffic congestion and pushing up unemployment.
There have recently been some positive developments at the state level, such as Western Australia’s ten year commitment to supply 20,000 affordable homes for low and moderate income earners. Meanwhile, following South Australia’s lead, Victoria plans to mandate affordable housing targets for developments on public land. And in March the NSW State Premier announced a fund to generate $1bn in affordable housing investment.
But although welcome, these initiatives will not turn the affordability problem around while tax settings continue to support existing homeowners and investors at the expense of first time buyers and renters. Moreover, apart from a brief interruption 2008-2012, the Commonwealth has been steadily winding back its explicit housing role for more than 20 years.
The post of housing minister was deleted in 2013, and just last month Government senators dismissed calls for renewed Commonwealth housing policy leadership recommended by the Senate’s extensive (2013-2015)  <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Affordable_housing_2013" target="_blank">Affordable Housing Inquiry</a>. This complacency cannot go unchallenged.
Challenging the 'best left to market' mantra
The mantra adopted by Australian governments since the 1980s that housing provision is “best left to the market” will not wash. Government intervention already influences the housing market on a huge scale, especially through tax concessions to existing property owners, such as negative gearing. Unfortunately, these interventions largely contribute to the housing unaffordability problem rather than its solution.
But first we need to define what exactly constitutes the housing affordability challenge. In reality, it’s not a single problem, but several interrelated issues and any strategic housing plan must specifically address each of these.
Firstly, there is the problem faced by aspiring first home buyers contending with house prices escalating ahead of income growth in hot urban housing markets. The intensification of this issue is clear from the reduced home ownership rate among young adults from 53% in 1990 to just 34% in 2011 – a decline only minimally offset by the entry of well-off young households into the housing market as first-time investors.
Secondly, there is the problem of unaffordability in the private rental market affecting tenants able to keep arrears at bay only by going without basic essentials, or by tolerating unacceptable conditions such as overcrowding or disrepair. <a href="https://www.ahuri.edu.au/publications/download/ahuri_51018_fr" target="_blank">Newly published research</a> shows that, by 2011, more than half of Australia’s low income tenants – nearly 400,000 households – were in this way being pushed into poverty by unaffordable rents.
Thirdly, there is the long-term decline in public housing and the public finance affordability challenge posed by the need to tackle this. In NSW, for example, <a href="https://www.audit.nsw.gov.au/publications/performance-audit-reports/2013-reports/making-the-best-use-of-public-housing" target="_blank">30-40% of all public housing is officially sub-standard</a>.
Why the 'build more houses' approach won't work
A factor underlying all these issues is the long-running tendency of housing construction numbers to lag behind household growth. But while action to maximise supply is unquestionably part of the required strategy, it is a lazy fallacy to claim that the solution is simply to ‘build more homes’.
Even if you could somehow double new construction in (say) 2016, this would expand overall supply of properties being put up for sale in that year only very slightly. More importantly, the growing inequality in the way housing is occupied (more and more second homes and underutilised homes) blunts any potential impact of extra supply in moderating house prices. Re-balancing demand and supply must surely therefore involve countering inefficient housing occupancy by re-tuning tax and social security settings.
Where maximising housing supply can directly ease housing unaffordability is through expanding the stock of affordable rental housing for lower income earners. Not-for-profit community housing providers - the entities best placed to help here - have expanded fast in recent years. But their potential remains constrained by the cost and terms of loan finance and by their ability to secure development sites.
Housing is different to other investment assets
Fundamentally, one of the reasons we’ve ended up in our current predicament is that the prime function of housing has transitioned from “usable facility” to “tradeable commodity and investment asset”. Policies designed to promote home ownership and rental housing provision have morphed into subsidies expanding property asset values.
Along with pro-speculative tax settings, this changed perception about the primary purpose of housing has inflated the entire urban property market. The OECD rates Australia as <a href="https://www.oecd.org/eco/outlook/focusonhouseprices.htm" target="_blank">the fourth or fifth most “over-valued” housing market in the developed world</a>. Property values have become detached from economic fundamentals; a longer term problem exaggerated by the boom of the past three years. As well as pushing prices beyond the reach of first home buyers, this also undermines possible market-based solutions by swelling land values which damage rental yields, undermining the scope for affordable housing. Moreover, this places Australia among those economies which, in OECD-speak, are “most vulnerable to a price correction”.
While moderated property prices could benefit national welfare, no one wants to trigger a price crash. Rather, governments need to face up to the challenge of managing a “soft landing” by phasing out the tax system’s economically and socially unjustifiable market distortions and re-directing housing subsidies to progressive effect.
A 10-point plan for improved housing affordability
Underpinned by a decade’s research on fixing Australia’s housing problems, we therefore propose the following priority actions for Commonwealth, State and Territory governments acting in concert:
<ul>
<li>
Moderate speculative investment in housing by a phased reduction of <a href="https://www.ahuri.edu.au/publications/download/ahuri_judith_yates_research_paper" target="_blank">existing tax incentives favouring rental investors</a> (concessional treatment of negative gearing and capital gains tax liability)
</li>
<li>
Redirect the additional tax receipts accruing from reduced concessions to support provision of affordable rental housing at a range of price points and to offer appropriate incentives for prospective home buyers with limited means.
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<li>
By developing structured financing arrangements (such as housing supply bonds backed by a government guarantee), actively engage with the super funds and other institutional players who have shown interest in investing in rental housing.
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Replace stamp duty (an inefficient tax on mobility) with a broad-based property value tax (a healthy incentive to fully utilise property assets)
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<li>
Expand availability of more affordable hybrid ‘partial ownership’ tenures such as shared equity – to provide ‘another rung on the ladder’
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<li>
Implement the Henry Tax Review recommendations on enhancing Rent Assistance to improve affordability for low income tenants especially in the capital city housing markets where rising rents have far outstripped the value of RA payments.
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<li>
Reduce urban land price gradients (<a href="https://www.ahuri.edu.au/publications/download/ahuri_51003_pp" target="_blank">compounding housing inequity and economic segregation</a>) by improving mass transit infrastructure and encouraging targeted regional development to redirect growth
</li>
<li>
Continue to <a href="https://www.ahuri.edu.au/downloads/publications/EvRevReports/AHURI_Final_Report_No191_Quantifying_planning_system_performance_and_Australia_s_housing_reform_agenda_an_investigative_panel.pdf" target="_blank">simplify landuse planning</a> processes to facilitate housing supply while retaining scope for community involvement and proper controls on inappropriate development
</li>
<li>
Require local authorities to develop local housing needs assessments and equip them with the means to secure mandated affordable housing targets within private housing development projects over a certain size
</li>
<li>
Develop a costed and funded plan for existing public housing to see it upgraded to a decent standard and placed on a firm financial footing within 10 years.
</li>
</ul>
While not every interest group would endorse all of our proposals, most are widely supported by policymakers, academics and advocacy communities, as well as throughout the affordable housing industry. As the Senate Inquiry demonstrated beyond doubt, an increasingly dysfunctional housing system is exacting a growing toll on national welfare. This a policy area crying out for responsible bipartisan reform.
Bill Randolph is Director, City Futures, Infrastructure in the Built Environment at UNSW Australia
Judith Yates is Honorary Associate Professor at University of Sydney
Michael Darcy is Director of Urban Research Centre at University of Western Sydney
Nicole Gurran is Professor of Urban and Regional Planning at University of Sydney
Peter Phibbs is Chair of Urban Planning and Policy at University of Sydney
Vivienne Milligan is Chair of City Futures Research Centre, Housing Policy and Practice at UNSW Australia
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Tackling housing unaffordability: a 10-point national plan

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Commentary on the affordability issue has become so twisted that media is quoting Sydney’s median house price as a relevant topic.
We recently had the Australian Financial Review, which should know better, writing about the level of income needed by a first-home buyer to afford the median Sydney dwelling, as well as the median-priced dwelling in the other capital cities.
My question is: how is this in any way relevant to the issue of affordability?
First-home buyers don’t buy at the median price, not in Sydney, nor in Melbourne, nor anywhere else in Australia. First-home buyers buy below the median, indeed well below it. Always have done – and, I dare say, always will.
The median price for dwellings in the major cities at the moment are $750,000 in Sydney, $570,000 in Melbourne, $465,000 in Brisbane and $510,000 in Perth. According to CoreLogic RP Data, the median across the eight state and territory capital cities is $570,000.
But the average first-home-buyer loan at present is $334,800, according to the latest figures from the Australian Bureau of Statistics. Assuming the typical first-timer has a 10% deposit, this means the median dwelling price for a first-home buyer is around $370,000.
Given that 25% of all residential sales are being made to first-time buyers, there’s are a lot of novice buyers out there acquiring properties at the lower end of the market. In the past year, around 120,000 Australians have made a first-time purchase.
Those numbers are relevant to the discussion. The median price in our most expensive city is not.
The Real Estate Institute of Western Australia published some numbers this week that also have some relevance to the topic. Good to see those people putting out material that’s actually useful to a sensible debate, unlike some of their recent talk-down-the-market nonsense.
REIWA president David Airey said, quite rightly, that it was important not to use the median price as the guide for the costs of getting into the market for first-home buyers and others.
Airey said the median was the middle point in the market and that half of all sales were under it. This means buyers don’t need to be able to afford the median-priced dwelling to enter the market.
I think it’s sad that anyone needs to make this point, which is so obvious it should be a given in the debate. But the media coverage of the issue has become so irrational that industry people have to go back to kindergarten levels to try inject some balance.
“It’s also important to recognise that first-home buyers, in particular, usually purchase homes well under the median price, with Office of State Revenue data for May showing the median point for entry-level buyers being $450,000 in Perth and $366,000 in the WA regions,” Airey said.
“Even the median purchase price for first-home buyers means that half of all entry-level buyers are paying under these city and country median prices for their demographic.”
Airey said it was more useful for first-home buyers to look at the lower quartile, or bottom 25%, of the more affordable homes in an area to get a better perspective of what was available at more accessible prices.
REIWA data for the year to March shows that the south-east sub-region of Perth through Gosnells, Armadale and Serpentine-Jarrahdale had the most affordable lower quartile, with  houses selling around $370,000. 
Apartments and land were most affordable in the south-west sub-region through Cockburn, Kwinana and Rockingham.
Airey said even within the various sub-regions around Perth there were individual suburbs which were under the lower quartile for their local area.
“For example, the central sub-region has a lower quartile of $550,000, but it’s possible to find houses in Balga priced at around $385,000.
“Similarly, while the median price for units in the south-west sub-region is $277,000, you can find them in Orelia at around $196,000.”
Airey said that buyers should not be put off by the median price for a region or suburb, and look to the lower quartile for opportunities in areas they might initially think are out of their price range based on the overall median.
So true, so bleeding obvious and so sad that anyone needs to stand up and say it. 
 
TERRY RYDER is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a> 
Terry was recently joined by Property Observer editor at large Jonathan Chancellor for a webinar on why research is the key to successful property investing in 2015. You can download slides and audio from the webinar here.
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terryryder-YECXbqmri2

Just stand up and say it: Terry Ryder

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$224,387 – that was the price of a typical house in Greater-Melbourne at the start of this Century. Scary, isn’t it? So, how has Melbourne’s property market performed since then and which have been Victoria’s best performers over the last fifteen years?
With a population of 4,085,849, Greater-Melbourne is fast catching up to Sydney. The 2.0% average annual population growth rate is above the 1.7% national average.
Melbourne’s median house value has increased from $224,387 to $683,599 during the fifteen year period. 2000-2014, 2001-2003, 2007 and 2010 all produced double-digit price growth.
As impressive as this data sounds, the average annual growth rate of 8.3% per annum is just below Australia’s combined capital city rate of 8.4% over the period.
Propertyology has recently completed an extensive study of the performance of property markets for each of Australia’s 550 local government authorities (LGAs). Given that some locations have higher growth and others have better yields, we’ve ranked the LGA’s from 1 to 550 based on their total return (average annual growth rate plus rental yield).
The regional town of Ararat (median house value $190,000) was Victoria’s best performing LGA and ranked an impressive 27th across all of Australia. And, if that surprises you, you’ll probably be shocked to hear that Ararat’s population actually declined from 11,510 to 11,184 over the last decade. Corangmite and Southern Grampians were equally surprising.
In stark contrast, the highly desirable location of Richmond (LGA of Yarra, median house value $934,000) experienced population growth above the national average yet was ranked 318th in Australia for total property return. ‘Affordability’ trumps ‘population growth’!
The best performing Victorian capital city LGA was Greater-Dandenong which ranked just scraped in to Australia’s Top 20% (98th out of 550 LGAs). The LGA of Knox was next best at 246th.
<img src="/images/2015/06/22/StateScorecard_Vic.1.jpg" alt="">
 
Every one of Victoria’s Top 10 performing LGA’s are regional locations. 
SIMON PRESSLEY is managing director of Propertyology, a REIA Hall Of fame Inductee, property market analyst, accredited property investment adviser, and buyer’s agent.
<a href="https://www.propertyology.com.au/more-than-a-buyers-agent/" target="_blank">Propertyology works exclusively with property investors</a> to purchase properties in strategically chosen locations all over Australia.
 
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spressley-sBoeMhannA

Victoria’s 15 year property market scorecard: Simon Pressley's hits and misses

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GUEST OBSERVER
Housing affordability continues to be an issue of importance to voters, with a recent Fairfax-Ipsos poll showing 69% of Australian capital city residents disagree that housing is affordable for prospective first home buyers.
Different countries have adopted varying approaches to improve access to affordable housing - with governments playing a central role in ensuring people are adequately sheltered, as well as being encouraged to buy housing where possible. In many countries there is an underlying desire by households to own their own home, although renting is the norm in others.
In each case there are specific and sometimes unique-to-that-country approaches that have helped address the issue of affordability. Here’s five.
Government intervenes in the rental market
In some countries there is a general culture of renting for accessing accommodation, rather than assuming all households should achieve home ownership. At times, renting is cheaper than buying. In Germany most households (54.1%) are renters due to the long-term intervention in the marketplace by the government, as well as the accepted culture that renting is suitable over the long-term. In Berlin a total of 84.4% of all households rent. Providing this amount of rental accommodation is a major challenge without substantial government intervention and/or provision of housing.
<img src="/images/2015/06/22/image-20150619-32105-131fh8.png" alt="">
 
For example, in Germany a housing allowance was paid to approximately 783,000 households in 2012, equating to 1.9% of all private households. However most of this funding was allocated to single person households (57%) unable to compete in the open housing market with multiple income households.
 
<img src="/images/2015/06/22/image-20150619-32098-10z2v9x.png" alt="">
Other countries have acknowledged the gap between (a) the maximum amount of rent a tenant can pay and (b) the minimum level of rent a landlord will charge. For example in the US, this gap is bridged by the widespread use of a voucher system which subsidies the payment of rent to private landlords. This system is funded by the US government and ensures tenants can access a minimum quality of affordable housing.
Government provides affordable housing
In Singapore there is a high level of government intervention in the market with the <a href="https://www.hdb.gov.sg/" target="_blank">HDB (Housing and Development Board)</a>providing approximately 80% of all housing in the country. Approximately 90% of households in Singapore own their own home and there are also grants for first time buyers and second time buyers in Singapore.
In Hong Kong about 29.7% of residents live in <a href="https://www.thb.gov.hk/eng/policy/housing/policy/lths/index.htm">PRH (public rental housing)</a> provided by the Hong Kong government. In Scotland a large proportion of the supply of affordable housing is undertaken by housing associations and local authorities. This collectively equates to about quarter of total housing accommodation in the market. However the recent trend for many countries, including Australia, has been the provision of less direct housing by governments.
<img src="/images/2015/06/22/image-20150619-32112-1chk2lk.png" alt="">
Cities embrace higher density living
There are numerous examples of global cities making better use of limited inner-city land supply by encouraging higher density living in high rise units or condominiums, especially in Asian cities including Hong Kong, Macau and Singapore. The provision of affordable housing for purchase or renting is therefore more likely to be achieved in these circumstances due to minimal land use and higher densities. However high-rise living is not commonly accepted in many European cities or in locations with a resistance due to cultural preferences for detached housing.
Public transport allows residents to commute to less expensive housing
The main driver of where a household lives is the need to be close to their workplace. As more affordable housing is usually located away from the central business district, households can buy cheaper homes but the trade-off is additional commuting time to work. When this extended commuting time (e.g. up to 2 hours each way) is combined with improved transport infrastructure such as in Japan, it is possible to access affordable housing in outlying satellite towns and cities where land is more affordable. Therefore governments which improve road and public transport infrastructure also increase access to affordable housing.
 
<img src="/images/2015/06/22/image-20150618-23259-gg7sqj.png" alt="">
Multiple person households are encouraged
Lower demand can be achieved by limiting population levels and underlying demand for housing. But while this may not be an option for many governments, another option is to encourage multiple person households which otherwise would remain as single person households. According to the ABS (2012) in 1911 the average persons per household was 4.5, decreasing to 2.7 persons per household by 1991.
List of countries by number of households
<img src="/images/2015/06/22/image-20150619-21446-109hpsk.png" alt="">
Richard Reed is Chair in Property and Real Estate, Deakin University. He can be contacted <a href="https://www.deakin.edu.au/profiles/richard-reed" target="_blank">here</a>.
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Five reasons housing is more affordable overseas

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That pesky property bubble is mainly contained to the investors chasing yields and taking advantage of a chronic under-supply which is driving up rents – well it was however, we are now starting to see rents flat lining given supply has significantly increased.
New lending initiatives are quickly changing the investor landscape where I suspect it will be a very long time before we see lenders offering 90 per cent loans as we are now seeing lending ratios sitting more around the 70% mark. <a href="/expert-insights/overseas-buyers-will-support-sydney-house-prices-during-apra-crackdown-nab">Overseas buyers will support Sydney house prices during APRA crackdown: NAB</a>; it is fair to say that the federal government won’t be tweaking the foreign buyer ratios (presently at 100 per cent) anytime soon.
There is a reason for this; Australia’s population is set to hit 40 million people by 2056. In order to meet this demand we will see the greatest infrastructure spending in Australia’s history given it’s been calculated that by 2056 Australia will need a further 1,100,000 apartments. Across Australia that means an additional 27,000 apartments each year for the next 41 years, it is expected Sydney and Melbourne will do the majority of the heavy lifting. This also plainly identifies why the Baird government wants to amalgamate the councils to ensure that these new developments keep getting approved.
The message is quite clear that if you want to reside in close proximity to the CBD you will have to live with an avalanche of high density developments.
This week the residential data from the 34th Property Directions Survey was released which is an industry based group comprising property experts – Valuers, Fund Managers, Property Analysts and Property Financiers.
<ul>
<li>58% of respondents stated that Sydney residential property was in or entering a bubble, while 53%t of the respondents believe that the Melbourne property market is in the same position. Seventy per cent of the survey respondents do not believe that the Brisbane residential market was in a bubble.</li>
<li>The majority of the respondents also believe residential property prices will continue to rise for 6 to 12 months. Fifty – three per cent of respondents believe that Sydney residential property prices will continue to rise for either 6 or 12 months with 26% stating 18 months. Respondents are more certain in their predictions for Melbourne residential property with 76%seeing prices continuing to rise for 6 to 12 months.</li>
<li>In 2016, Sydney residential property is seen as reaching the top of the property cycle and moving past the top in 2017. In 2016 respondents see Melbourne residential property having passed the top of the cycle but remaining close to the top through to 2017. Brisbane residential property is seen to be just nearing the top of the cycle.</li>
<li>All respondents to the Property Directions Survey see low interest rates as either a significant or very significant driver of demand for residential property in Sydney, while 95% also point to foreign investment being significant or very significant.</li>
<li>Respondents list a number of other factors they also believe play a role in increasing demand in Sydney, such as population growth, low supply over the past decade and the trend towards smaller households.</li>
<li>The major drivers are considered to be similar for the Melbourne residential property market however 94% see foreign investment as a significant or very significant driver and 87% sight low interest rates as significant to very significant.</li>
<li>A large majority of respondents see low interest rates as the main driver of demand and prices for Brisbane and Perth residential property; however this view is not as strong as it is for Sydney and Melbourne. The majority of survey respondents do not view foreign investment as a significant or very significant factor in driving demand in Brisbane or Perth, but believe negative gearing plays a bigger role.</li>
<li>Most respondents believe both interest rates and inflation will remain similar for next year, while moving higher in the next three years.</li>
<li>It’s a different story with foreign investment, with a small majority of respondents believing levels will remain similar for the next six months. Respondents are less certain over the next 12 months, but most see foreign investment at similar or higher levels. Respondents are even more uncertain about the outlook for 2018,</li>
<li>Some respondents listed current or emerging factors which they believe may have an impact on the Australian property market. Factors listed include a slowing Chinese economy, any increase in the unemployment rate and potential changes to foreign investment or immigration rules.</li>
</ul>
So the eastern seaboard is where we will see the majority of the new developments with NSW leading the way. This again will be investor led although it would be reasonable to suggest that with such a huge apartment platform the house prices will continue to rise with less single residential housing being built.
With that in mind it’s scary to think where prices will go for houses within a 15 kilometre radius of the Sydney CBD. Through the roof springs to mind.
As for that pesky property bubble – it won’t be doing any damage when the vast majority of suburbs across Sydney are posting record low stock levels. When markets are booming (or bubbling along) you see record stock levels which is the complete opposite to what we are seeing across Sydney at the present.
<h4>MOSMAN – 2088</h4>
• Number of houses on the market this time last year – 85
• Number of houses on the market last week – 55
• Number of houses on the market this week – 46
• Number of apartments on the market this time last year – 63
• Number of apartments on the market last week – 41
• Number of apartments on the market this week – 43
<h4>CREMORNE – 2090</h4>
• Number of houses on the market this time last year – 8
• Number of houses on the market last week – 7
• Number of houses on the market this week – 2
• Number of apartments on the market this time last year – 9
• Number of apartments on the market last week – 11
• Number of apartments on the market this week – 8
<h4>NEUTRAL BAY – 2089</h4>
• Number of houses on the market this time last year – 9
• Number of houses on the market last week – 3
• Number of houses on the market this week – 2
• Number of apartments on the market this time last year– 42
• Number of apartments on the market last week – 29
• Number of apartments on the market this week – 30
 
ROBERT SIMEON is a director of <a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> and has been selling residential real estate in Sydney since 1985.  He has also been writing real estate blog <a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> since 2000. 
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robertsimeon-hRNTwJyXkQ

Living with an avalanche of high density development: Robert Simeon

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The arguments Terry Ryder presents need to be anchored in facts, he urged last week, and we couldn’t agree more. The subject of Mr Ryder’s piece for Property Observer was about recent GetUp email on negative gearing and unfortunately the facts of the matter were the first casualty. 
Getting into the policy nuances of an issue as complex as housing affordability is challenging in a blog. What we have to do is cut through the haze of complexity, often used by politicians and lobbyists to diffuse popular calls for reform, and get to the heart of the issue in clear language, anchored in the facts. With the luxury of a few more words, let’s go through Mr Ryder’s statements compared to GetUp’s, and see which way the facts fall.
1. Mr Ryder said we were wrong to claim “millions of first home buyers” were priced out of the market, because: “Australia has 8.6 million households, of which 6 million are homeowners and much of the rest (according to the research) are renters by choice.”
Mr Ryder was looking at household data, not individuals - but if you look at individuals, the last census in 2011 <a href="https://www.abs.gov.au/websitedbs/censushome.nsf/home/factsheetshtdc?opendocument&amp;navpos=450" target="_blank">found about 2.3 million people in Australia rent</a> (and that figure doesn’t include the people who want to buy, but are living at home with their parents rather than renting). 
Mr Ryder does not provide any reference to the “research” allegedly showing most of these are “renters by choice.” However, a November 2014 report by the <a href="https://www.ahuri.edu.au/publications/download/ahuri_51002_fr2" target="_blank">The Australian Housing and Urban Research Institute</a>, under a section titled “deferring, not rejecting purchase”, shows renting for longer to save for a later purchase is one of several approaches would-be homebuyers are using to deal with higher prices.
It’s difficult to know for sure how many renters would rather be home owners, so we probably should have qualified it by saying “potentially” millions in our email, but when you look at the numbers and the research there are plenty of clues to suggest millions of renters would rather own their own homes. 
2. He claims, “25% of all current residential sales are to first-time buyers.” 
That’s wrong. The <a href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/5609.0Main%20Features3Apr%202015?opendocument&amp;tabname=Summary&amp;prodno=5609.0&amp;issue=Apr%202015&amp;num=&amp;view=" target="_blank">Australian Bureau of Statistics Housing Finance figures for April 2015</a> shows first home buyers made up just 15% of residential sales. The last time first home buyers made up 25% of the market was nearly five years ago, in October 2009. In fact, this precipitous drop in less than five years supports the proposition that would-be first home buyers are being pushed out of the market.
3. He questions the link between negative gearing and housing affordability, saying, “An 18-month federal parliamentary inquiry … couldn’t provide any definitive evidence that it did.”
Research from the Australian Bureau of Statistics shows housing finance for investment properties rose from 16% to over 40% over the past 25 years, with the proportion of people renting increasing over that period, too. In particular, rental loss reported through negative gearing exploded after the capital gains tax discount was introduced in 1999. All this points to more investors in the market bidding up the price.
4. Though it’s not a key point in our email, Mr Ryder takes issue with the implication that investors are buying a second or third property, referencing ATO data showing “three-quarters of investors own only one property.” 
But that ATO data refers to investment properties. Mr Ryder forgets most people who buy an investment property are also owner occupiers. So when they buy an investment property, it’s generally their second property.
5. Mr Ryder says “the [GetUp] claim about ‘a skyrocketing housing market’ is patently absurd, given that only one of the eight capital cities has a boom market.” 
If that’s true, we’re not sure what all the fuss is about in the media, every single day. But let’s look at the figures and listen to the experts.  
A fascinating article on 15 April by ABC Business journalist Michael Janda quotes:
<ul>
<li>RMIT housing expert Emeritus Professor Mike Berry: "Housing prices more or less doubling over the last 10, 12 years in the capital cities.”</li>
<li>ABS statistics: Australian capital city home prices rose 68% over the past 10 years, and 125% in the decade before.</li>
<li>
BIS figures: over the last 40 years Australia has seen stronger house price growth than anywhere except Norway.
</li>
<li>International property analysts at Demographia: Australia is one of the world's least affordable places to live, with their measure of median home prices to median incomes showing all five of Australia's biggest cities are "severely unaffordable," with Sydney and Melbourne in the world's top 10, along with Tweed Heads.</li>
</ul>
According to the International Monetary Fund, Australia has the third highest house prices, relative to the level of people's incomes, among 24 advanced economies.
Even if you limit the discussion to the Sydney and Melbourne property markets, that’s where more than nine million Australians live. Other capital cities, like Perth and Brisbane, have also seen<a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6416.0Dec%202014?OpenDocument#Time" target="_blank"> dramatic price rises</a> at times within the past 12 years (more than doubling and a 75% increase, respectively) that have made it very difficult for first home buyers. 
6. Mr Ryder disputes this statement: “A massive $4.2B in negative gearing tax breaks per year go to the top 10% of income earners.”
The $4.2 billion in tax breaks for the top 10% of income earners is the combined impact of the negative gearing and Capital Gains Tax (CGT) discount - we should have said this in the email (and have since done so on the web page). That figure comes from the GetUp commissioned Australia Institute report, ‘It’s the revenue stupid,’ released in May this year, which was cited in the email.
The wider issue is how negative gearing interacts with the capital gains tax discount to drive up prices. It is the two policies working together that makes property investment so profitable and means that more and more of it is happening. For this very reason, scrapping the capital gains tax discount is also part of the GetUp/Australia Institute policy recommendations. It is simply too difficult to tell that entire story in one blog (and many in the media have had the same difficulty), though we have information about it online.
7. Mr Ryder then cites ATO data to argue that most Australians who own an investment property earn less than $100,000. 
On this point it is essential to understand that one of the core purposes of using negative gearing is to reduce the investor’s taxable income (i.e. below $100,000, or $80,000, the marginal tax thresholds).
As ABC Business Journalist Michael Janda explains, “the “ATO's measure of ‘total income’ includes net, not gross, rent - that is, rental earnings or losses after deductions such as interest payments have already been removed. The very reason that many housing investors fall below the $80,000 threshold is because they have used negative gearing to slash their tax bill.”
For this reason, both Mr Janda and Greg Mckenna (in an article for Business Insider), point out that the HILDA survey data, used by the Reserve Bank of Australia (RBA), is more accurate. According to the RBA (as cited in Mr McKenna’s piece), “investor households with incomes in the top 20 per cent of the income distribution owe the bulk of the investor housing debt and over a quarter of total housing debt outstanding … The bottom 20% [of the income distribution] account for just 2% of investor housing debt.”
For further reinforcement, Professor Judy Yates, one of the country’s most respected housing experts, who was seconded by the Australian government to work on their National Housing Strategy, said: “the biggest benefits [of negative gearing] go to high-income households, lowest benefits go to lower-income households."
8. Mr Ryder next takes issues with our claim there’s a “consensus among housing experts and economists that negative gearing is one policy area driving unaffordable housing.”
In arguing this, he says only a minority are concerned about negative gearing, and describes highly respected economist, Saul Eslake, as being part of the “lunatic fringe”. (Who knew the chief economist at Merrill Lynch could possibly be considered fringe?) Nevertheless, here are a few other notable ‘lunatics’ who have shown concern about negative gearing:
<ul>
<li>Former Governor of the Reserve Bank Bernie Fraser </li>
<li>Former Commonwealth Bank CEO David Murray </li>
<li>ANZ boss Mike Smith</li>
<li>Australian Council of Social Service </li>
<li>John Daley, CEO of the Grattan Institute </li>
<li>The Australia Institute </li>
</ul>
We’d run out of pixels if we completed the list.
9. Mr Ryder claims “the GetUp campaign is based on the notion that eliminating negative gearing will somehow make housing cheaper.” 
Except, that’s not what we said. The GetUp/Australia Institute policy recommendation was to limit future negative gearing to new properties, which currently represent only six per cent of the value of negatively geared purchases. By driving investment dollars into new properties, the idea is to stimulate the creation of additional housing supply, which can help reduce prices and rents, as well as create construction jobs. This is also an approach that’s been put forward by the McKell Institute and is reportedly being considered by the Labor party.
But, to take Mr Ryder’s point on more directly, the logic is pretty straight forward. Reducing the tax incentives for investors buying second hand property will reduce demand for that property and therefore put downward pressure on prices. 
10. Finally, Mr Ryder takes issue with our reference to the property bubble. He says, “What we have seen throughout history is that boom markets eventually stop growing and prices level out. But we have never seen a crash, not in the history of this nation.”
In fact, RBA data shows several <a href="https://www.rba.gov.au/publications/rdp/1999/pdf/rdp1999-06.pdf" target="_blank">precipitous price drops in the history of the Australian property market</a>, including in 1891 and the Great Depression. And if we go just a bit outside the direct experience of our nation, the entire Global Financial Crisis was triggered by a property bubble and crash in just one country - the United States. As a reminder, that included the near collapse of some of the largest financial institutions in the world (only prevented through massive government intervention) and recessions in most industrialised nations of a scope and duration not seen since the Great Depression (prevented in Australia only by a $52.4 billion stimulus package). So property bubbles and crashes do happen and they can have pretty dire consequences.
Tens of thousands of Australians have signed the petition calling for reform to negative gearing - we’re disappointed to hear Mr Ryder doesn’t support it, but GetUp’s member driven, which means if members don’t support a campaign they are free not to. We welcome constructive criticism, but as Mr Ryder said, it needs to be grounded in the facts. 
Picture this: 43% of Australia’s wealth is held in real property now, compared to 30% of America’s wealth in 2001, just prior to the Global Financial Crisis. Australia also has just four banks holding 75% of all Australian mortgages. So, if you want to talk about systemic economic risks, then the property bubble would have to be at the top of your list. With that in mind, it makes sense why Saul Eslake, the RBA Governor and the Treasury Secretary, among others, have been so concerned.
In the context of so much risk, the burden is on Mr Ryder to explain what magical mechanism would prevent the Australian housing bubble from a price crash.
Mark Connelly is GetUp's Campaign Director. GetUp can be reached <a href="https://www.getup.org.au" target="_blank">here</a>.
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